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How To Calculate Risk/Reward To Trade & Invest In Crypto MarketHi everyone: Today I want to make this educational video on how to calculate your risk/reward in trading and investing in the cryptocurrency market. Many newcomers in the industry are not aware of the importance of risk management. So today let's give out different examples of them on how to properly calculate the $, %, and setting the SL/TP. This video is intended to help traders and investors to understand how to calculate the amount to risk per trade, or per investment purpose. I will give different examples of going long and short in trading, as well as buying coins for the purpose of investment. Doesn't matter what crypto broker exchange you use, this calculation/formula will work, you will just need to do some simple math to get to the right numbers. Example 1: Want to go long on BTC in a trade Scenario: Trading Account $12,000 Risk 1% of your trading account Want to go long on BTC when price hits $70,000 You want the Stop Loss @$66,000, and a TP @ $80,000 Calculation: Calculate your 1% of the trading account: $12,000 Account x 0.01 $120 per trade Divide the $ you willing to risk to the SL amount $120 / $4000 = 0.03 Set your entry order or market order for 0.03 BTC @ $70,000 price 0.03 x $70,000 = $2,100 (This is the amount you will need in your trading account to execute this position. If you have leverage then its less $ needed) Set your SL at $66,000 If price hits your SL, your order would be 0.03 BTC x $66,000 = $1,980 $2,100 - 1,980 = $120 = 1% of your account Set your TP at $80,000 If price hits your TP, your order would be 0.03 BTC x $80,000 = $2,400 $2,400 - $2,100 = $300 = 2.5% of your account Example 2: Want to go long on ADA in a trade Scenario: Trading Account $800 Risk 1% of your trading account Want to go long on ADA when price hits $2.30 You want the Stop Loss @1.70 Calculation: Calculate your 1% of the trading account: $800 Account x 0.01 = $8 per trade Divide the $ you willing to risk to the SL $8 / $0.60 = 13.34 Set your entry order or market order for 13.34 ADA @ 2.30 price 13.34 x 2.30 = $30.68 (This is the amount you will need in your trading account to execute this position. If you have leverage then its less $ needed) Set your SL at $1.70 If price hits your SL, your order would be 13.34 ADA x $1.70 = $22.68 $30.68 - $22.68 = $8 = 1% of your account Set your TP at $4.00 If price hits your TP, your order would be 13.34 ADA x $4.00 = $53.36 $53.36 - $30.68 = $22.68 = 2.83% of your account Example 3: Want to go short on TRX in a trade Scenario: Trading Account $54,000 Risk 1.5% of your trading account Want to go short on TRX when price hits $0.11 You want the Stop Loss @ $0.13 Calculation: Calculate your 1.5% of the trading account: $54,000 Account x 0.0150 = $810 per trade Divide the $ you willing to risk to the SL $810 / $0.02 = 40,500 Set your entry order or market order for 40,500 TRX @ 0.11 price 40,500 x 0.11 = $4,455 (This is the amount you will need in your trading account to execute this position. If you have leverage then its less $ needed) Set your SL at $0.13 If price hits your SL, your order would be 40,500 TRX x $0.13 = 5,265 $5265 - $4455 = $810 = 1.5% of your account Set your TP at $0.07 If price hits your TP, your order would be 40,500 TRX x $0.07 = $2,835 $4,455 - $2,835 = $1,620 = 2% of your account Example 4: Want to buy ETH to hold for long term as investment Scenario: Investing Account $20,000 Risk 10% of your investing account Want to buy ETH to hold for long terms Want to enter when price hits $4,900 Calculation: Calculate your 10% of the investing account: $20,000 Account x 0.10 = $2,000 per investment Divide the $ you willing to risk to the price you want to enter $2,000 / $4,900 = 0.4082 Set your entry order or market order for 0.4082 ETH @ $4,900 price 0.4082 x $4,900 = $2000 (This is the amount you will need in your investing account to execute this buy.) You want to lose no more than 25% of your original $2,000 investment. $2,000 x 0.75 = $1,500 $1,500 / 0.4082 = $3,674.67 Set your alert and SL at $3,674.67 If price hits your alert/SL, your order would be 0.4082 ETH x $3,674.679 = $1500 $2,000 - $1500 = $500 = 25% of $2,000 You want to gain about 50% of your original investment before selling. $2,000 x 1.50 = $3,000 $3,000 / 0.4082 = $7,349.34 Set your alert and TP at $7,349.34 If price hits your TP, your order would be 0.4082 ETH x $7,349.34 = 3,000.00 $3,000 - $2,000 = $1,000 = 50% of $2,000 Example 5: Want to buy MATIC to hold for long term as investment Scenario: Investing Account $1,500 Risk 20% of your investing account Want to buy MATIC to hold for long terms Want to enter when price hits $2.25 Calculation: Calculate your 20% of the investing account: $1,500 Account x 0.20 = $300 per investment Divide the $ you willing to risk to the price you want to enter $300 / $2.25 = 133.34 MATIC Set your entry order or market order for 133.34 MATIC @ $2.25 price 133.34 x $2.25 = $300 (This is the amount you will need in your investing account to execute this buy.) You want to lose no more than 50% of your original $300 investment. $300 x 0.50 = $150 $150 / 133.34 = $1.1249 Set your alert and SL at $1.1249 If price hits your alert/SL, your order would be 133.34 MATIC x $1.1249 = $149.99 $300 - $149.99 = $150.01 = 50% of $300 You want to gain about 75% of your original investment before selling. $300 x 1.75 = $525 $525/133.34 = $3.9373 Set your alert and TP at $3.9373 If price hits your TP, your order would be 133.34 MATIC x $3.9373 = $525 525 - $300 = $225 = 75% of $300 Any questions, comments and feedback welcome to let me know. If you like more of these contents, like, subscribe/follow and comment for me to keep doing them. :) Jojo
BITSTAMP:BTCUSDEducation
by jojofang0901
35
Substitution Spreads Can Identify ValueMarket structure is the various puzzle pieces that can reveal valuable clues about the path of least resistance of prices. Fundamental analysis involves pouring through supply and demand data to forecast price direction. However, market structure can simplify the process as each jigsaw puzzle piece will complete an emerging picture. Market structure reflects price relationships that develop over time. Each commodity has idiosyncratic supply and demand characteristics. Price differentials in intra or intercommodity spreads can assist market participants in arriving at high-odds directional forecasts. Substitution spreads are another part of market structure The platinum versus gold spread- Financial substitution leads to value assumptions Oil, coal, and natural gas- Energy substitutes can reveal clues Think outside the box when analyzing a commodity- It’s all about choices Over the past weeks, we have looked at how processing spreads provide clues about the supply and demand side of a commodity’s fundamental equation. We looked at term structure, backwardation, and contango and how price differentials for one delivery date versus another are real-time indicators of deficit or glut conditions. Location spreads shed light on the price of a commodity in one region versus another, while quality spreads tell us how different compositions or sizes can influence prices compared to benchmarks and put upward or downward pressure on futures prices. Those spreads are all intra-commodity spreads. This week, we will investigate how inter-commodity spreads play a role in price direction. Substitution spreads reflect the price of one commodity versus another when they can serve the same or similar purposes when prices dictate. Substitution spreads are another part of market structure Markets reflect the crowd’s wisdom. Crowds tend to be wise consumers; they search for value and the best deal. When the price of a commodity rises to a level where a substitute makes more economic sense, many consumers will alter their buying behavior. Think of a trip to the supermarket. When shoppers plan to make a juicy steak for dinner and find out that a pork chop is a far better economic choice, they often choose pork over beef. I like to call the live cattle versus lean hog futures spread the what’s for dinner spread, and it is an inter-commodity, substitution spread. The quarterly chart of the price of live cattle futures divided by lean hogs shows that while the spread has an upward bias, the long-term average or pivot point is around the 1.40:1 level or 1.4 pounds of pork value in each pound of beef value. When the spread is above 1.4:1, pork is a wiser economic choice for consumers; when below the mean, beef is the optimal choice. While the spread can diverge from the midpoint, it has tended to revert to the norm since the turn of this century. The chart of the June 2022 live cattle lean hog spread shows the relationship is right around the long-term average, indicating that beef and hog prices are at a long-term “fair value” level. The beef versus pork spread is an inter-commodity barometer for consumer behavior. Meanwhile, the corn-soybean inter-commodity spread can serve as a guide for producer behavior. The chart of the price of nearby soybean futures divided by corn futures shows that the pivot point dating back to the late 1960s is around the 2.4 bushels of corn value for each bushel of soybean value. Farmers are business people who work each crop year to create the optimal return on their acreage. Many can plant either corn or beans on their land. They grow the crop that offers the best return. When the corn-bean ratio spread is above 2.4:1, soybeans tend to provide the best financial result; when below the pivot point, corn is the more profitable choice. The corn-bean relationship is most useful when looking at new crop futures before and at the beginning of the annual planting season. The chart of the price of new crop November 2022 soybean futures divided by new crop December 2022 corn futures illustrates at below 2.26:1, on November 12, 2021, farmers are more likely to plant corn than beans as the coarse grain is more expensive and offers a better historic return than the oilseed. The meat and grain inter-commodity spreads are guides. Many other factors could influence the levels, which are additional variables in the calculus of analyzing commodity prices. For example, a pork shortage in China because of disease could lift pork prices, or an outbreak that impacts cattle could do the same to beef. Since corn is the primary input in producing US ethanol, the shift in US energy policy could shift the corn-bean spread for fundamental reasons. However, these types of spreads that measure current price relationships versus historical means can be a helpful tool that may validate other assumptions. The platinum versus gold spread- Financial substitution leads to value assumptions In the world of precious metals, platinum and gold have far different supply and demand characteristics, but the two precious metals share some similarities. Platinum and gold have industrial applications, while they also have financial properties as means of exchange and stores of wealth for investors. It is a challenge to label the price of any commodity cheap or expensive because the current market price is always the correct price as it is the level where buyers and sellers meet in a transparent market, the exchange. However, comparing the price of gold to platinum allows us to use the terms cheap and expensive on a historical basis. The chart of the nearby platinum futures price minus the nearby gold futures price dating back to the early 1970s shows that from 1974 through 2014, platinum mostly traded at a premium to gold. While the spread has been as high as over a $1,000 premium for platinum to as low as a $1,000 discount to gold over the period, over the past 47 years, platinum has traded at a premium to gold nearly 85% of the time. It has only been over the recent seven years, since 2014, that platinum has been lower than the yellow metal. Many factors can explain platinum’s weakness versus gold, but on a historical basis, platinum is historically inexpensive compared to its precious yellow cousin. At a $780 discount for platinum compared to gold, some investors have been stockpiling platinum because the inter-commodity spreads reflect compelling historical value for the metal. Oil, coal, and natural gas- Energy substitutes can reveal clues Energy prices can be highly volatile. While the world moves to address climate change by reducing the production and consumption of fossil fuels in favor of alternative renewable energy sources, hydrocarbons continue to power the world. When it comes to electricity production, power generation can come from many different sources. The world may be moving towards solar, wind, hydroelectric, and nuclear generations, but oil, gas, and coal continue to be significant energy sources. Coal has been a four-letter word for many years, and many mining companies abandoned coal mining. The recent surge in oil and gas prices caused an almost perfect bullish storm in the coal market. Low supply levels and rising demand pushed prices to record highs in October. The chart of thermal coal for delivery in Rotterdam, the Netherlands, shows the rise to a high of $280 per ton in October 2021, surpassing the 2008 $224 previous high. The spike higher in coal was a function of rising oil and gas prices, which is the essence of the inter-commodity spread within the fossil fuel sector. Crude oil and natural gas are highly volatile commodities. There is always the potential for substitution when prices diverge from historical means. The quarterly chart of the price of nearby NYMEX crude oil futures divided by the price of nearby NYMEX natural gas futures shows that the average of the high and the low since 1990, when natural gas futures began trading, is around the 20-25:1 of the natural gas price measured against the crude oil price. Below that band, natural gas tends to be historically expensive, while above the average level, crude oil becomes historically expensive compared to gas. The daily chart of the relationship in the December futures contracts shows below the 17:1 level; natural gas is cheaper than oil based on the historical relationship over more than three decades. Think outside the box when analyzing a commodity- It’s all about choices Inter-commodity or substitutions spreads create a basis for comparison. Many other factors can explain deviations from historical norms but understanding and comparing the current levels to history is a valuable tool that can lead to a more robust level of analysis. On their own, substitution spreads are insufficient to make conclusive trading or investing decisions as deviations can last for years or even decades, moving pivot points higher or lower. However, used in conjunction with processing spreads, term structure, location, and quality spreads, they are another puzzle piece that can reveal and validate assumptions about the path of least resistance for a commodity’s price. I will be off next week but will return on Monday, November 29, with the final piece in this series and the final piece of the puzzle, the power of the crowd. --- Sign up for our Monday Night Call using the link below. You can also sign up to receive these articles early using the other link provided below. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
NYMEX:CL1!Education
by Andy_Hecht
2
Why Do You Need a Trading Journal? 📝 Hey traders, 📖 Trading Journal is a crucial element in your trading education. Even though the majority tends to neglect it, in fact, it is considered to be the essential part of a daily routine of a professional trader. In this post, we will discuss why you should keep a trading journal & how it enhances your trading performance. Let's start with the obvious: ✍️ Trading journal is applied for recording your trading positions: winning and losing ones. With that, you can monitor your current performance, identify the mistakes that were made and examine your decisions. ❌ Analyzing the errors you learn your weaknesses & the situations when it is preferable not to trade. You adjust your trading strategy accordingly in order to avoid similar mistakes in future. 💪 Examining the winning trades you learn about your strengths. You identify the trading instruments, the trading setups where your strategy reaches the highest accuracy. ⚖️ Working with the numbers you can measure your investing exposure and calculate your account drawdowns. You can analyze your losing streaks & your long-term/mid-term/short-term account statistics. 📈 Analyzing the figures you can measure your progress over time by comparing your current results with the old ones. 😡 Keeping the record of your emotions, you can measure & quantify the psychological element of your trading. You may calculate the percentage of emotional decisions being made and their effect. 🌟 Consistent journaling makes you disciplined. It teaches you to strictly follow the rules of your trading plan & constantly learn from your mistakes in order to hasten the path towards a more disciplined and profitable trading career. A trading journal should be simple and tailored to your specific trading style and the goals you would like to achieve. I hope that my words will inspire you to keep a trading journal! Do you have the one already? ❤️Please, support this idea with like and comment!❤️
OANDA:XAUUSDEducation
by VasilyTrader
102
Ichimoku StrategyI have been asked how to use the Ichimoku Strategy so here is a quick breakdown on how the cloud works. Included is a picture Displaying the different aspects of what o look for and the terminology used. I am also including a few links to two youtube videos and websites/articles I have used to better understand this strategy. I have only been using this strategy for about two months so I am by no means a master of it. Also, don't forget to use indicators for strength and to use technical analysis to decide on a trade path. While the cloud works great, trades can be missed due to the following rules. A general rule of thumb, don't take a trade unless your trading with the trend as well as at a good entry as defined further along in this discussion. A few things to remember, never trade if the Chiku Span, Tenken Sen and/or Kijun Sen are inside the cloud. If one of these lines has not crossed over for your trade setup, long or short, don't enter wait until all three pass through the cloud. The indicator as to whether you want to short or long is determined by Senkou A. If Senkou A is above Senkou B, a green cloud, a long position is most desirable, if Senkou A is below Senkou B, a red cloud, a short position is most desirable. Pay attention to Tenken Sen and Kijun Sen as they can help determine a desirable entry vs a non desirable entry. If Tenkan Sen is above Kijun Sen, look for long position. If Tenkan Sen is below Kijun Sen a short would be more favorable. Another aspect to keep in mind for entering a trade if it is passed through the cloud and the original entrance was missed is waiting for Tenken Sen to cross below Kijun Sen and to then start to cross over for a long position. For a short, wait for it to cross above and then cross back over and dip below. sometimes a trade can be favorable when Tenken Sen and Kijun Sen almost meet then diverge apart continuing in the same direction. Chiku Span is useful in seeing the action of the trade. It shows what is occuring in a clearer fashion than studying the chart solely. If Chiku Span starts to move sideways and catches up to the candles, Tenken Sen and Kijun Sen then it might be a good time to look at closing a trade. These are a few resources I have used to help better understand the cloud. www.investopedia.com www.fidelity.com www.youtube.com www.youtube.com
Education
by UmbraAscensor
5
Trading Success Isn't As Smooth As You Imagined!Hi traders, here we are on another workshop. In this workshop, I will be elaborating my personal trading journey with my sincerest opinion. Here are 5 stages you will go through becoming a Consistently Profitable trader Phase 1 - Constantly losing big • This phase is where your trading journey begin. You're filled with passion, your subconscious & conscious mind are blinded by the imagination of trading success. • You believed that trading isn't that difficult, and you're one of the top 10% that will achieve consistent profitability within a short period of time. Most of my students and members approached me during their first year of trading, fueled with passion, and thought that they should be achieving their trading goals with limited effort. But the ugly truth is, 80% - 90% of them got smashed by the markets pretty harsh, and left trading later on. • You have no idea what you're doing, you have little to no knowledge and experience. - If this is you, what you should be doing now, is to absorb information like a sponge and keep striving. Phase 2 - Losing less • This is when you come to a realization that you're no different than most of the traders. You're probably scared by the markets, you begin stepping back a little bit. • You realized if you keep doing what you're currently doing, it's just the matter of time you will blow up more accounts again, and again. You clearly know what you're not supposed to do and what you're supposed to do, but with a lack of direction. You absorb everything and you test out whatever information you received. You jumped from strategy to strategy, courses to courses, and webinars to webinars. - If this is you, you should be focusing on identifying your strength & weakness, and stop confusing yourself with overloaded information. Spend more time on reading yourself, and admit your mistakes. Phase 3 - Breakeven • Most traders at this stage have a clear goal and understand what they're doing wrong. But most of them have no clear direction and resources on where and how to begin with. • You probably have a proper trading plan, money management skill, and a healthy mindset, but you just need guidance. - If this is you, I'd suggest you to find mentorship to fast-pace your learning curve. List out all your strategies to examine which one works best by reviewing your journal. Phase 4 - Inconsistent wins • If you're able to achieve this phase, you are one of the very top traders. • Traders at this stage should have a proper trading plan, a specific trading system/ style, with an unbeatable mindset. Remember to NEVER distract yourself again with excess information. - If this is you, you should be working on refinement and improvement. Focus on the details such as the probability of success on each setup, breaking them down into various parts, such as entry timing, effective Trade Management (Scale-in & Scale-Out), exits, etc... - If you are at this stage, remember to NEVER distract yourself again with excess information. Focus. Phase 5 - Consistently profitable • Successful traders 'dance' with the market. Trading has become a systematic process with little to no emotion attached. - What you need to do now, is to focus on scaling up your trading size. You can either compound your account slowly, or start building a solid track records and start finding potential investors. Good traders always trade big, because the ultimate goal of trading is to make money. Do not have the misperception that once you've reached the consistently profitable phase, you should be making a lot of money. Good traders are those who never deviate from their trading plan, with consistency and full of motivation. It's always fine to step back a little bit, as long as you're progressing. Comment down below where are you at in your trading journey! Do not forget to like if you enjoy the sharing. Trade safe and take care.
KRAKEN:BTCUSDEducation
by TraderNeoh
1
Skill VS Luck - Becoming a Consistently Profitable TraderHi traders, here we are on another workshop. Today I'll be sharing some of the points on differentiating skill or luck trading. Majority of the traders have absolutely no clue on are they doing the right things or not? Here's a few key points: Skill 1. Winners and Losers - If you are a skilled trader, you're someone who understand the probable and possible in trading. There's no guarantee on any single trade whether it's a winner or loser. Remember, the short-term outcome in trading is completely random, what's more important is to come out being profitable in the long-term. Never judge your performance based on the short-term outcome, think long-term. 2. Good Risk Management - Good traders always have effective risk management in place. Not any single trade is able cause damage on their capital, and they truly understand how to detach themselves from negative emotions. 3. Repeatable - Good traders have a repeatable process, that allows them to tackle the market in the same way every single day. 4. Proper Planning - Good traders rarely deviate from their initial plan, as they understand that a planned trade is a good trade regardless of the outcome. Any trade taken out of impulsive behaviour, is considered a bad trade regardless of the outcome. 5. Consistency - Good traders have a set of routine and action plan. To achieve consistent results, you must have a consistent performance. 6. Execution - Good traders have little to no hesitation when it comes to executing their trades. They execute their plan without second guessing or doubt. Luck 1. No loser - Most gurus' or lucky traders would promote themselves having 80% - 90% strike rates, which could never happen in reality. The only way you can achieve such a high win rate is to have a Profit Factor of less than 1. In fact, most of the best traders out there have a strike rate of 40-50%. 2. Excessive Risk Exposure - Losing traders have no idea how to isolate themselves from a bad state of mind. They're constantly putting up a lot of risk on the table regardless of having no clue on what's going on in the markets. The sense of urgency is rushing them on taking unnecessary risk. 3. Unrepeatable - Losing traders constantly take trades out of their trading plan, which is not duplicable. If you're taking trades that is unrepeatable, most likely it's a lucky trade and you shouldn't be happy about it even if it turns out to be a winning position. 4. Impulsive Behaviour - Losing traders deviate from their initial plan due to uncontrolled emotion. They're taking trades they're not supposed to take, then regrets later on. 5. No routine - Losing traders have no daily routine. They're always blind firing all over any 'seems' profitable position. Most of them possess of potential over-trading habits. 6. Hope & Praying - Losing traders are constantly looking for the 'best trade' that'd give them an enormous return. Most of them have no trading plan and proper Risk Management in place, causing them to experience an emotional rollercoaster on any particular position when it gets out of hand. "Chains of habit are too light to be felt until they are too heavy to be broken." - Warren Buffett Let me know in the comment below what's your worst trading nightmare! If you enjoy the content, make sure you follow my profile and give me a thumbs up for daily fx forecast & educational content.
KRAKEN:BTCUSDEducation
by TraderNeoh
60
8 Trading Habits of Successful TradersConsistently profitable traders have a lot of things in common. Watching how they act and following their ideas & thoughts we can spot a lot of commonalities among them. In this post, I have collected 8 trading habits that a trader should have to become successful. 1️⃣ - Realistic Expectation & Vision Many traders, most often beginners, commonly fall for the trap of wishful thinking. When analysing the charts, they usually only view the market from one bias and only perceive price heading in one direction. And this is typically the one that their own analysis is pointing towards. However, going into each trade with a realistic expectation that the market doesn't care what you think may happen, and being prepared for a trade to go wrong will help keep you level headed. 2️⃣ - Anticipation of Different Outcomes Anything can happen in financial markets and for this reason, professional traders always justify their decisions in probabilities. They understand that 100% chances do not exist so looking at all possible probabilities before entering any trades, the trader is always ready for completely different outcomes and accepts each and every move given by the market. 3️⃣ - Emotional Stability The market is a wild beast who always wants to bite us and most of the time it manages to do that e.g. drawdowns & losing streaks... Those who trade for at least 1 year know how unpredictable and unstable the market can be. A perfectly looking trading setup can easily turn into a big losing trade. Of course, that is painful and of course with more & more losses, the anxiety will begin to chase us, the stress will overwhelm us and you may begin to start second guessing yourself. Only by remaining stable and calm, you will manage to overcome the negative periods. Learn to control your emotions, learn to take losses! 4️⃣ - Continuous Learning The markets are infinitely deep in their nature. Trading & constant monitoring of the market always unveil new, uncharted elements and things. Throughout all my years of day trading, I can't help wondering how many new things I learn each and every day. With continuous learning you evolve, you become better and it improves your trading performance & results. 5️⃣ - Flexibility & Adaptivity The markets are always changing. If you were trading before COVID crisis, I guess you feel how the reality among us shifted. With fundamental changes in our daily lives, the markets changed as well. It is hard to say what exactly has altered though, however, we all can feel it. In order to survive in a constantly changing environment we must always be adapting and never stagnant. 6️⃣ - Trade Journaling Pro traders always assess their past performance & results. They track each and every trading position that they opened. Both losing trades and winning trades require analysis and observations. Only by studying the past results the trader can improve his trading performance and evolve. Only by identifying mistakes & peculiar commonalities, the trader learns to lose less than he makes. 7️⃣ - Risk Management 90% of traders lose 90% of their funds within 90 days and under 90 trades . This is a well known statistic in the trading industry and aside from psychological factors, it mainly boils down to incorrect risk management. If you're looking to survive in this game and have a long, prosperous career in trading. You must have your risk management locked down. One beneficial risk management habit to develop is to not enter any trades unless they have a risk:reward ratio of at least 1:3+ . 8️⃣ - Trading Plan Sticking to your trading plan is one way of promoting long-term success throughout your trading journey. Undoubtedly, you will go through many psychological ups & downs, mental battles and periods of low confidence. Abiding by your own trading plan will help assist in ensuring that you don't step out of line from your own trading rules and allow you to stop yourself from developing bad habits overtime. 9️⃣ - Constant Practice Professional traders never stop, they always watch the charts, they always monitor the prices, and follow the market. Trading requires constant TRADING. Just spending one single week on a vacation without charts, you can not imagine how hard it is to return back. The trading skills must be constantly maintained.
Education
by NimmoCapital
Don't wait too long for "CONFIRMATION"!​Hi Guys A popular concept in the world of trading, especially among technical traders and chartists is to wait for confirmation before entering a trade. This means you have a Signal, for example, a price action pattern and now you wait for the markets to confirm that pattern before you enter. The idea, of course, is to filter out bad trades this way and to gain confidence before entering the trade. But that confidence might come at a very high price in the long run. The problem with waiting for the market to confirm your trading idea is that this "Confirmation" often already is your profit! In other words, the Signal has worked and you would have been paid to take the risk and trade it. And that's what you get paid for as a trader, you try to anticipate a price move you believe is going to happen before everyone else does. Please notice that this is true despite your trading style. You might hear statements like „I just follow the markets, I don't try to anticipate what's going to happen." (usually, these come from traders following some kind of trend following approach). But what they really mean is that instead of trying to get into a trade early anticipating the markets to reverse direction, they get in late anticipating that the markets will move even further in the direction it has already been moving. Of course nothing wrong with that, but in either case, traders anticipate a future price move they want to profit from and it's important to be aware of that fact. Another example is trading a specific support/resistance level. Sure the risk to buy into a support level while the market is in free fall is risky. But that's precisely why these trades often offer you great profit potential. In case the trade works out, you'll get paid for the risk you took. But again…once you see that huge reversal price bar on your chart that bounced nicely off that support level - you probably already missed the opportunity. You now know that you've been right. That really was a support level and market participants bought again at that price. Because of that price moved up and that's why you now see that huge reversal bar. But that move is over now…and those who took the risk and bought at the level are now taking their profits - hopefully, you're not the one buying from them now. I could come up with many more examples like waiting for an indicator to confirm a trade etc, but the point to consider is that whenever you wait for confirmation you give up a significant amount of potential profits. And more often than not, these potential profits cost more than a couple of losing trades you might filter out waiting for confirmation. Your job here is to find a good compromise between getting in too early due to a Signal coming from market noise and getting in too late due to a Signal that misses most of the opportunity. The Ambush trading method, for example, is an extreme case, it gets into trades again the ongoing short-term trend all the time. But that's precisely the idea behind it, trying to anticipate where that short-term trend is likely to end. Sounds risky? Well, looking at the long-term results it's actually a lot riskier to be on the other side of these trades ;) DO YOU BELIEVE CONFIRMATION?
COINBASE:BTCUSDEducation
by seyed_mehdi
Three Steps to Become A PROFESSIONAL TRADER 👨‍💻👩‍💻 Hey traders, The road to consistently profitable trading is hard and dangerous. This path can be split into three main milestones. Each of those requires discipline, time & patience. 📚The first step is your trading education. Starting with a basic understanding of what are the financial markets & how they work and finishing with the sophisticated techniques of risk management, so many things must be learned. In the beginning you will be most likely paralyzed by the complexity of the whole system. Even the choice of a trading education provider is not that simple taking into consideration the sheer amount number sources that could be found on the internet. It is highly advisable for you to accompany your trading education with demo account trading so that you could apply what you’ve learned in practice. 💸It is imperative to invest in your education, while simultaneously saving up for your first(but not last) real trading account. Spending your money on education & then saving in order to build your first trading account, a sufficient amount of money is required. Be prepared for failures. Be prepared to blow your first and second trading account & fund it again. Be prepared that the majority of premium educational sources won't meet your expectations. I don't know any trader who succeeded in trading without investing a huge amount of money in that. 👨‍💻With the money being invested & with the knowledge gained, you must practice on a real account. You must choose the trading strategy that is appealing to you and start trading with that. Quite soon you will realize that theoretical knowledge has nothing in common with real market conditions. You will change trading strategies one after another until you finally find the one that truly makes sense to you. Then you will spend a couple of years playing with that, learning the rules & constantly polishing your trading plan. 🏁At some moment you will stop losing. At some moment your trading account will start growing steadily and you will become a consistently profitable trader. As the market conditions change constantly. You must be vigilant & learn to survive in a changing environment. Education, active investing & practice are required from you to keep being afloat. I hope that this article will help you to build realistic expectations concerning trading. If you are ready to learn a lot, invest money & practice many years not making a dime, then one day you will definitely make it. Do you agree with my thoughts? ❤️Please, support this idea with like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
38
5 Key Advices To Share With Trader Who Is Struggling In TradingHello everyone: Lately many of you have messaged me about getting FOMO and entering trades without confirmations. In addition you can't seem to “not” enter trades when the market hasn't shaped up to your strategy and entry criteria. I am hoping in today’s educational video it can help some of you guys to get back on track. I want to share 5 main pieces of advice that can help out traders who are currently struggling. These are experiences and lessons that I accumulate throughout the 8 years of trading and in hope to help some of you who are struggling in your current journey of trading. 1. Do “NOT” think about get rich quick in trading -Trading is a marathon, not a sprint -90-95% traders fail due to a combination of: Greed, FOMO, mindset/emotion, risk management, trading psychology. -Trading is not a get rich quick scheme, but it can produce consistent, sustainable passive income if you can put in the time and effort -Most try to jump to the result right away, without going through the journey, that is not how life works. 2. No trading strategies, style, method can give you 100% strike rate -Trading is probability, not right or wrong. -Understand you can have the best strategy in the world, and still not be profitable. - Technical, Fundamental, Algo, EA...etc can all not work. This is why risk management is important to not over risk, over trade, over leverage your trading account 3. Backtest and journal -Backtest your strategy so your brain acknowledges and recognizes it over and over again. -Slowly build up confidence in your strategy and method. IT will come to you like second nature -Journal all your wins and losses so you can review them. Work on them, accept your mistakes to grow and improve. 4. Control your EGO -Human beings have ego to prove others are wrong and they are right -We refuse to admit we made the error/mistakes, and blame others/external as the cause. -Acknowledge that in trading, stop blaming the market, the broker, the mentor, the strategy...etc. -Don't take things personally and be offended by it. 5. Never Give Up -I blew several accounts in the beginning of trading career, gave up and quit trading multiple times -I always ended up coming back to trading. After taking time off. Whether that is weeks or months in the beginning journey. -No one is born into a trader, just like no one is born into a doctor, lawyer. -If trading was that easy, then everyone would be rich. -Success is measure by how many times you get back up when you failed I hope these pointers can help you guys to get more focus and get back on track in trading. Any questions, comments or feedback welcome to let me know, thank you Jojo Below I will share others educational videos that have direct relations to the topics above: Trading Psychology: How to deal & manage losses/consecutive losses in trading ? Trading Psychology: Revenge Trading Trading Psychology: Fear Of Missing Out Trading Psychology: Over Leveraged Trading Trading Psychology: Is there Stop Loss Hunting in Trading ? How to deal with it ? Prevent Blowing an account by backtesting: Risk Management 101
BITSTAMP:BTCUSDEducation
by jojofang0901
43
The Opening Range TradeThis is one of my favorite trades to make because of the outsized risk reward ratio that it can offer. We're talking 10:1 or better some days. We are going to look at an example of an opening range trade in the S&P 500 E-mini this past Friday, October 29, 2021. What is the opening range? In the days of screen trading, the opening range can be considered the first 60 seconds of the normal cash session. This is when all the orders that were set to trigger on market open come flooding in. You can think of this as the moment when ALL of the institutional traders begin to step in and have an opinion about what happened in the overnight session. It is very telling therefore to see how big of a bite this opening range carves out of the orderbook. On a very directional day, this opening range will be left as the high or low of the session. This is even more likely to happen if we are opening with a gap from the previous day's range and value. When to take an opening range trade: 1. The opening 1 minute range is narrower than 2x your risk tolerance for stop loss placement. 2. The opening range is left at the high or low of the session. 3. The opening range leaves a gap from the previous day's cash session. Rule 1 and 2 must always be true, while you can think of rule 3 as an additional validator. How to take an opening range trade: See the chart above for reference. We are opening within yesterday's range, so no gap. We wait for the 08:30(central) 1 minute candle to paint itself as the market opens. As soon as the candle is complete we mark it's high and low. We have a fairly large range of 20 ticks. The next 1 minute candle dips back into the opening range before extending above it. Because this candle does not reach the center of the opening range, we can go long when it begins to extend above. We set our stop loss at the center of the opening range. A note about stop placement: For what it's worth, I was taught, (and most traders I know do it this way) to use the ENTIRE opening range for my stop loss. What I've noticed however, is that if price action returns to the center of the range, there is a high probability of it violating the other side. Therefore, you can use half the opening range, thus cutting your risk in half, and the money saved will by far outweigh the handful of trades per year that you miss due to being stopped out. You could have taken this trade for very little risk and carried it all the way to the close for a 10:1 reward over risk. The opening range trade is simple to implement, and you won't have to wait very long to find out if you're right or not. Typically, if this trade is wrong then you'll be stopped out in a few minutes and can move on. If the opening range IS left as the high or low of the session, then you can expect a substantial move in your favor. Now you have one more tool to keep in your toolbox. I hope it helps. Trade well everyone.
CME_MINI:ES1!Education
by iamroot
4
BTC/USD Binance.US - This is why I do not use stop losses.. I must start by saying that I believe Bitcoin and cryptocurrency investing offers the greatest opportunity for the common man to build wealth to have ever existed in the history of the world. Yet, it is still an endeavor that must be entered into cautiously and with research if one is to be successful. The Daily Chart for BTC/USD on (the pathetic excuse of an exchange) Binance.US, serves as a teachable moment that should not be ignored. This chart demonstrates that if you cannot go to sleep peacefully without having a stop loss in place then you may need to reconsider being in this game. The traditional methods of trading securities that were used in the regulated stock markets of the world and which subsequently made a lot of the famous traders of old very rich, predated high frequency trading and algorithmic trading bots on these mostly unregulated cryptocurrency exchanges. Yet, these outdated methods are currently being peddled and taught by the get-rich-trading-crypto-gurus today as the "secrets to crypto trading profits", despite this being 20th century methods that will cause you to lose your shirt if adhered to when trading crypto. Any endeavor to read and learn about crypto trading will, almost without fail, lead to a regurgitated list of the same old trading clichés. One such example: the so-called number one rule of trading. Always use a stop loss. The number one rule of successful trading is undoubtedly to limit your losses. This may be true, but if you are doing that with a stop loss on an exchange then you are asking to be robbed. Yes, you have to know when to cut your losses and move on, but unfortunately, because of the nature of swimming these dangerous financial waters, the sharks in the crypto space will eat your lunch, steal your crypto at bargain prices and laugh as you weep over what could've been. The order books are open. Anybody with a desire to do so can launch a trading "bot" using an API on most any crypto exchange. If that person or entity happens to have enough capital to clear the buy or sell side of the order books of an exchange, then they are free to do so. Once this is done, your crypto is gone at a bargain price with the classic stop loss shake out. Which is why if I cannot hold it without a stop loss, then I don't need it. If a drop in price doesn't present an opportunity for me to buy more, then I don't need it. If I'm not confident that it will be around in 2-5 years from now, then I don't need it. To limit losses, set a price alert on Tradingview, CoinGecko, or your exchange watchlist. If you are afraid it will drop too much before you can act on it, or if it suffers from a lack of volume and thus has a lack of liquidity, then perhaps it's best to HODL or leave it be. If you don't know what any of this means, then that could be a sign that you may need to do a little more due diligence.
BINANCEUS:BTCUSDEducation
by John_E_Crypto
Mentality - Identify Right or Wrong DecisionHi Traders. Here's a very impromptu topic regarding how do you know if you're doing the right thing or not. Often, most of us fail to differentiate whether are we making the right decisions or not, because of the outcome - profits. One main thing you must understand is that, trading the financial markets are all about the probable & possible. Short-term outcomes are completely random, what separates you from 90% of losing traders, is your trading edge, consistency and emotional detachment. If you are 'lucky' enough to make money not following your plan, are you able to duplicate this into the long-term projection? Ultimately, markets will reward discipline traders, so stick to your plan and keep grinding! Comment down below what's the worst trading decision you've ever made. Do not forget to like if you enjoy the sharing. Trade safe and take care.
KRAKEN:BTCUSDEducation
by TraderNeoh
7
DEVELOPING YOUR TRADING PLAN | Your Whys and Hows 📝 Hey traders, To trade the market profitably you need to have a plan. A set of rules & conditions to rely on each and every time when you are searching for a trading opportunity. A trading plan of a professional trader is very sophisticated. It consists of various different elements. The precision there is pushed to the limits. In this article, we will discuss a trading plan of a newbie trader. A trader who just completed a basic educational course and looks for a trading strategy to trade with. The proposed trading plan will be based on very very essential elements that must be included in any trading plan. 💱Know what you trade. Know exactly what market are you focused on and which trading instruments are on your radar. For example, being a stock trader, you can not follow all the world stocks, you should narrow down your list and specify that. ⌛Know what time frame you analyze. There are multiple styles of trading. Trading style can be defined by a trading time frame. Trading setups taken on a daily time frame are dramatically different from setups spotted on 1-hour time frame. 📈Know exactly the desired market conditions. There are two main states of a market: The market can be in a trend and the market can consolidate. Depending on the state of the market the trader can look for trend-following opportunities; trade the ranging market or look for reversal counter-trading setups. 💸 Know your desired risks. The max amount of active trading positions, risk percentage per a single transaction, max allowable drawdown. All these numbers must be considered & calculated precisely. 💡Know your entry reasons. There are thousands of different reasons to open a trading position. However, they can be easily sorted by various categories. Three universally accepted categories of entry conditions are: patterns, indicators, fundamental news. The trader must strictly know in advance the conditions that he is looking for to open a trading position. 🛑Specify your stop placement rules. Losses are inevitable and must be strictly controlled. As with the entry reasons, there are a lot of different stop placement techniques. You must know exactly what do you rely on to place your stop wisely. 3 most common stop placement techniques are: pip-based, structure-based and indicator-based. 🟢Know your targets. Opening a trading position and catching a rally the trader must have strict rules for profit-protection/profit-taking. The two most common ways of profit protection are take profit levels based on fixed levels/pip numbers & trailing stop. All these elements must be strictly included in your trading plan. If at least one of them is missing, don't trade. With time, as you mature, you will have more and more elements & conditions in your trading plan. That will make your trading more precise & consistent. Do you have a trading plan? ❤️Please, support this idea with like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
59
3 Ways To Invest In Crypto Market WITHOUT Education 💡You got a busy life and you don't have time to research and learn about thousands of cryptos, Or you maybe don't see yourself and your life a trader, Maybe aren't even interested in capital market. You just heard Crypto Market is gaining a lot of profit and you just don't want to miss it.. You know what?? You hear from a Shit Coin.. You buy some.. And You will lose most of or maybe all your money .. This IDEA will guide you through this situation, it will let you know how to invest successfully (probably), in crypto market. I tried to minimize the risk for you.. SHALL WE BEGIN??? There are three possible ways, the First one will cost you money, the Second and the Third are free of charge. FIRST: Go to an expert consultant. The only thing you need to do, is to research and find suitable expert consultant for yourself. After that everything is done. He/She, will gather some of your personal information to know you better to arrange a personal crypto portfolio.. This type of portfolio is uniquely designed for you and your personal goals.. And of course this way will cost you money due the type of expert you find. SECOND: Bitcoin & Ethereum. Clear your mind from whatever exciting coin and token you hearing all around the social media or you friends.. Bitcoin and Ethereum are the King and the Queen of the market, AND NOTHING ELSE MATTERS... Try to calculate how much money can you HOLD or HODL for at least 5 YEARS . Buy Bitcoin/Ethereum with that money and store it in a safe place and just don't think about it anymore until that 5 year deadline comes up. I believe you will be surprised when you see the outcome of your investment. And don't remember that at least 5 year is so important. free of charge this one. THIRD AND LAST: DCA, Dollar-Cost Averaging. Did you remember older members of the family always told us, don't spend all your income. Put some of your income into the bank, monthly. It'll come handy some day. Dollar Cost Averaging is something like that, and you know what?? It will work perfectly on Cryptos. The only thing you need to do, is to calculate you monthly costs and income. After that promise something to yourself, I WILL SAVE SOME OF MY INCOME INTO CRYPTO EVERY MONTH. It can be %5, %10, %15,... whatever number you and your life feel comfortable with. This DCA needs Three situations for you to concentrate on. First , You should keep your promise and buy crypto every month no matter what happens. Second , you should again wait at least 5 years . But don't worry the results will make you satisfied. And Third , Just buy Bitcoin or Ethereum again and nothing else. Don't remember The KING and The QUEEN. Why it is called AVERAGING??? because, no matter what is the price your filling your bag every month, so you will buy bitcoin in the deep, in the middle and in the top. This way you will buy your asset in an average price, without even knowing anything from the market. This one was free of charge too, and I believe from bottom of my heart you will be excited from the result.. This is it.. I hope you enjoyed this IDEA.. If you did so, push the LIKE button and feel free to talk to me in comment section :)
BITSTAMP:BTCUSDEducation
by ArshiaZojaji
2
10 Rules for Every TraderI have on the wall next to my trading desk a list of 10 rules which I remind myself of every day. These are rules that I've come up with as a result of mistakes that I've made in the past. New traders often have misconceptions about what good trading looks like, or how a successful trader behaves. The barriers to getting into trading today are low, but the learning curve is still just as steep. You can save yourself considerable time and money by learning from others. I'm sharing this list mainly for new traders, but anyone can benefit. So, without further ado: 10 Rules For Every Trader 1. Price doesn't HAVE to do ANYTHING. A common misconception among very new traders is that skilled traders are able to 'predict' the market. This is not true. This is not even possible. As a trader, your job is to deal in probabilities and risk-management. 2. Ranges are more common than breakouts. In any given market, for every successful breakout and acceptance of new price, you will find 3-5 failed breakouts. New traders often prefer breakout trades because they happen fast, they're exciting, and there's a certain thrill to profiting off of a sudden move that you know caught a lot of other traders with their pants down. Remember that price action stays rangebound by default, until a demand imbalance pushes the auction process to a new range. Range bound trading is a boring grind, but it's also the easiest money you'll make. 3. You will be wrong at least 50% of the time. Keep your risk tight! So, it's not necessarily true that you'll be wrong more than you are right, however as a new trader it's highly probable. This is however the mindset that I adopt when I am evaluating the risk of a potential trade. With any trade I take, I assume that I've got a greater chance of being wrong than being right. When you think about your trading this way, I guarantee that you'll tighten up your risk management game. 4. Check your ego at the door. You're here to make money. That's all. The market is not here to offer you self-validation. The market doesn't care about your need to prove anything. Stay humble, and always keep the possibility of being wrong in the forefront of your mind. 5. Take what is offered. This goes hand in hand with rule one and rule four. A common saying is 'follow the signals, not the cents'. I've let winners turn into losers in the past because I FELT (rule 4) like price action HAD (rule 1) to go farther before rolling over. Take what the market offers, and see the next rule. 6. There will ALWAYS be another opportunity. FOMO (fear of missing out) is very real. It will also lead you to get cut to pieces in a leveraged market. If you missed your ideal entry, don't chase. You didn't just miss the last and only good trade in the world. Think of your risk capital like ammunition. Save it for tomorrow. 7. Winners add to winners. Losers add to losers. What more can I say? If you're adding to a losing position with the intent to move your average entry price, you're already in trouble. Every time you think about adding to a position, I want you to hear this rule in your head. "Winners add to winners. Losers add to losers." Close that losing trade. Save your capital for the next opportunity. 8. Be greedy with your entries: fight for price. If your trading thesis requires price to reach a certain level to validate your entry criteria, then wait for that level. Remember, don't FOMO into a trade. See rule six. 9. Be patient with your entries: Being early is the same as being wrong. Similar to rule 8, no FOMO! Have you ever taken a trade and then been stopped out before the market makes the move you were expecting? You're trying to predict the market instead of reacting to what it is showing you. Slow down, and remember that acceptance of price is validated by both time and volume. 10. Hope is NOT a strategy! This is the difference between trading and gambling. Good trading looks very boring. As a general rule of thumb, if it's exciting, you're probably gambling and not trading. If you don't have a solid 'if this, then that' thesis about the market you're looking to trade, then you don't have a trade to make. These rules are meant to be guidelines for self-improvement as a trader. Write them down. Add your own personal rules. Print them out and put them where you will see them every day. Look at them before you trade and while you manage your positions. At the end of the day, evaluate how well you followed them and record your thoughts in a trading journal. I promise you that if you incorporate these rules into your trading plan, and make them a part of your thinking, you will find success as a trader. Trade well everyone.
TVC:SPXEducation
by iamroot
320
Examining Rejections - Probability of SuccessHi Traders. Today, we are going to discuss about Type 1, Type 2 & Type 3 Rejections that I personally examine prior to taking any Reversal setups. Are you someone who has multiples reversals strategies, but often when the trade lines up, you find it difficult to determine whether you should pull the trigger or not? If that's the case, there are two possible issues you are facing A. You did not back-test the strategy - Backtesting gives you to necessary confidence to take any setup without hesitation B. You do not know exactly what you are looking for - Due to the lack of research, backtesting and experience, you find it confusing to identify whether an entry trigger is valid or not Below, I will be breaking down the logic behind these 3 different types of rejections, and which one had proven to give me a better Probability of Success over the long-term Type 1 : Price just tap a Resistance zone , then begin showing signs of exhaustions • This type of rejection often attracts traders who are FOMO (Fear of Missing Out) or have the sense of urgency to quickly get involved • My data shows that Type 1 rejection gives the least success rate, often price tends to move sideways after the rejection, then slowly grind back up digesting the entire candle • It is the weakest rejection due to the liquidity purposes (not always). It is not easy for a market to completely reverse into the opposite direction without attracting traders onto the wrong side Type 2 : Price pierces through a Resistance zone , then showing strong sign of rejection closing back below • e.g. Pin-bar, Doji , Spinning Top , etc • It usually wick through the previous high, and wipe off traders who place their SL just slightly above the structure • This type of rejections is often what I personally enjoy trading the most too, as it shows extreme price disagreement. • Price attempts to break above the Resistance zone , but faced immediate opposing pressure defending the price zone, showing solid rejection Type 3 : Price closes above the Resistance, then pop back below • Commonly referred as a "Fakeout" • The logic behind this is great as well. Price closes above a Resistance zone attracting more fresh buyers in, Buyers who bought at low would scale-in, Breakout traders would try to chase the aggressive buys • All of a sudden, buying pressure turns off, Big Boys step in immediately reverse the market into the opposite direction • Think about the amount of selling volume requires to shut down that huge amount of Bullish momentum • A very reliable reversal entry trigger too In this example, I am using a Bearish reversal scenario. It works the same way in a Bullish reversal environment too. Comment down below which one is your favourite rejection trigger? Do not forget to like if you enjoy the sharing. Trade safe and take care.
KRAKEN:BTCUSDEducation
by TraderNeoh
11
How to analyze the market from scratch (Impulse & Correction)Hello everyone: Many have asked me about demonstrating how to analyze the chart from complete scratch. When looking at my chart and educational video, it all seems very simple, but many are telling me they are struggling to identify the market. Today I will go over how I analyze the chart, from the Higher time frame down to lower time frame by using multi-time frame analysis, top down approach. Specifically by identifying price action, impulse and correction phases of the market. 1. Start from the Higher Time Frame (HTF): HTF can be any time frame higher than the daily chart, such as monthly, weekly, daily. Personally I like to use daily as a go to time frame as it is widely used by traders. 2. Identify the impulse phase of the market. Understand the impulse phase is a period of fast momentum, price is either pushing up or down very aggressively, and not much consolidation visible on the HTF. 3. Identify a period of consolidations. Using trendlines, connect the swing highs and lows of the price. This is to identify the correction/consolidation phase of the market. Which is the most important aspect in price action analysis. You will need to be very knowledgeable on the type of continuation, reversal correction patterns/structures the market usually will form. (I will share many price action patterns/structures that I identify and use in the market below) 4. Once you identify the HTF phase of the market, you will then go down to the Lower time frames (LTF). LTF can be anything under 2/1 HR, 30/15 Min charts. It's not a specific time frame, rather “Multi time frame analysis”. You will also identify the impulse phases & Correction phases on the LTF and use trendlines to connect the swing highs and lows of the correction/consolidation phase, just like what we did on the HTF. 5. Now that you have both the HTF and LTF charts drawn out, the key here is to have both the HTF and LTF tell you the same direction/bias. They should align up and have the same bullish/bearish bias. This will strengthen your probability of success. I always make sure when I am about to enter any trades, I want the multi-time frames all telling me the same story. Same bias, same direction. 6. Now all that comes down to is forecasting the possible entries, which I have made many videos on this topic and I will share some below. Understand you would always want to make sure you are either entering during the impulse phase on the LTF, or the price is about to start the impulse phase to gain the upper hands in the market. You do not want to enter when the price is in a consolidation which is why many traders end up losing money, stuck in the correction and price isn't moving too much, rather just sideways. 7. Continue to work on analyzing the chart from scratch, get comfortable at identifying the impulse phase in the market, and do backtesting continuously so you identify the corrections in the market. This will make you see the chart and the market completely different than before, and you will have a much better probability of entering trades that work out in your favour. Any questions, comments or feedback welcome to let me know. Jojo Below I will share many educational videos that will help you to understand more on price action analysis, impulse/correction phase, entry, forecasting, backtesting and more. Continuation and Reversal Correction Identify a correction for the next impulse move in price action analysis Multi-time frame analysis Continuation Bull/Bear Flag Parallel Channel (Horizontal, Ascending, Descending) Reversal Ascending/Descending Channel Reversal Rising/Falling Wedge Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Continuation/Reversal Expanding Structure/Pattern Risk Management: 3 different entries on how to enter the impulsive phrase of price action Risk Management: How to Enter and set SL and TP for an impulse move in the market Risk Management: When/How to move SL to BE and to profit in a running trade ? How forecasting can benefit your trading journey Backtesting & Chartwork on Forex Market Backtesting & Chartwork on Indices Market Backtesting & Chartwork on Crypto Market How & Why I backtest:
OANDA:XAUUSDEducation
by jojofang0901
40
Processing Spreads Provide Fundamental CluesSome futures markets offer contracts that are related to others and are processed products of the commodity. Understanding the price relationships, history, and paths of least resistance of the processed product versus the original input can provide valuable insight into supply and demand fundamentals. Moreover, these relationships shed light on other related assets. Market structures are the pieces of a jigsaw puzzle Processing spreads are real-time supply and demand barometers The soybean crush spread Gasoline and distillate crack spreads Monitoring corporate profits There is so much data at our fingertips, but we need to understand how to use and interpret the information. Processing spreads are invaluable tools as they are critical variables for market calculus when forecasting the path of least resistance of prices. The crude oil and soybean futures markets offer liquid futures contracts in products that can reveal significant trends, warning signs, and calls to action. Anyone who undertakes a home improvement project knows that the job will not go well without the correct tools. Trying to hammer in a nail with a screwdriver is far from optimal. Tightening a bolt with an ax is a disaster. The best tool leads to the optimal result. The processing spread is one of the most critical tools in my investment and trading toolbox. Market structure are the pieces of a jigsaw puzzle In the world of commodities, market structure are integral pieces of a puzzle. When put together, they provide clues about the path of least resistance of prices as they reflect and can be real-time indicators of supply and demand fundamentals. A commodity’s market structure includes: Term structure- Price differentials for nearby versus deferred delivery periods. Location differentials- Price differentials for delivery of a raw material in different regions. Quality differentials- Price differentials for differing grades, sizes, or composition of the same commodity. Substitution spreads- The price comparison of one commodity for another that can serve as a substitute. Processing spreads- The margin or differential for refining or transforming one commodity into its products. Together, the various pieces that comprise a market’s structure create a picture that often points to higher or lower price paths. Processing spreads are real-time supply and demand barometers The processing spread is one of the valuable tools in an analysts’ toolbox. It tells us if demand for the products is rising or falling. Consumers often require the processed product instead of the raw commodity. The differential between prices of the input, the commodity, and the output, the product, is a critical fundamental measure. Narrowing processing spreads signal falling demand while widening spreads are a sign that supplies are not keeping pace with requirements. Since futures contracts prices are constantly changing, processing spreads can be volatile. When the commodity and product trade in the futures market, the differentials provide a unique supply and demand perspective for traders and investors. There can be many reasons for price variance in processing spreads. However, comparing them to historical levels can serve as real-time indicators of fundamental forces that determine the underlying commodity’s price direction when exogenous factors are not impacting the overall refining or treatment process. Many commodities do not offer futures contracts in the products. The soybean and crude oil markets are exceptions. The soybean crush spread Soybean futures trade on the CME’s CBOT division. Soybean products, soybean meal, and soybean oil also trade in the futures markets on the CBOT with separate and independent futures contracts. Soybean meal is a critical ingredient in animal feed, while soybean oil is cooking oil. Both have other uses. Processors crush raw soybeans into the two products; the oil is the liquid from the crushing process, while the meal is the solid substance. The soybean crush spread can be highly volatile. The monthly chart shows the soybean crush spread over the past fifteen years. The spread traded to a low of a quarter of one cent to as high as $2.1950. The low was in 2013 when soybean futures were trending lower from the all-time high in 2012 at $17.9475 per bushel. The high was in October 2014 when soybean futures were consolidating at lower levels. The move to the high was because consumers bought soybean products at lower prices around the $10 per bushel level. More recently, the crush spread signaled that soybean futures had run out of downside steam. After trading to a high of $16.7725 per bushel in May 2021, the oilseed futures fell below $12 in October. When soybeans were on the high in May, the crush fell to a low of 52.75 cents. At high soybean prices, consumers backed off buying the oilseed products, leading to a price correction that took the price below the $12 per bushel level in October. Meanwhile, falling prices caused demand for products to return. The crush spreads traded to the most recent high at $1.9050 during the week of October 18. The rising crush spread was a sign of robust demand that lifted the raw soybean futures from the recent low. The November soybean futures chart shows the rise from a low of $11.8450 to the $12.50 level. The price action in the crush spread was a signal that demand for products would lift the soybean futures price. The processing spread action signaled the price bottom over the past weeks. Gasoline and distillate crack spreads Crude oil refiners process the raw energy commodity that powers the world into products, gasoline, and distillates. The NYMEX futures market trades contracts in crude oil, gasoline, and heating oil. Heating oil is a distillate fuel that is a proxy for other distillates, including jet and diesel fuels. Refineries process crude oil into the oil products by heating them to different temperatures in a catalytic cracker. The price differential between the input, crude oil, and the output, the products, are “crack spreads.” Rising crack spreads point to increasing demand for oil products. When they fall, it is a sign of oversupply or weak demand. Crude oil futures reached lows in April 2020 during the height of the global pandemic’s impact on markets across all asset classes. The NYMEX crude oil futures weekly chart highlights the bullish trend since April 2020 as the energy commodity has made higher lows and higher highs. The weekly chart of the gasoline crack spreads highlights the bullish trend since March 2020. Gasoline is a seasonal commodity that tends to reach highs during the spring and summer months and decline during the winter as drivers tend to put more mileage on their cars during the warm months. However, at the $17.63 per barrel level at the end of last week, the gasoline crack spread was appreciable higher than the peak in October 2020, when it reached $11.62 per barrel. The gasoline crack spread has provided bullish validation for the path of least resistance of crude oil’s price. The weekly heating oil or distillate crack spread chart also displays a bullish trend. Distillates tend to be less seasonal than gasoline as jet and diesel requirements are year-round. At the $22.53 per barrel level at the end of last week, the heating oil crack was far higher than its October 2020 peak at $9.96 per barrel. The crack spreads have supported the rising crude oil price as they point to robust product demand. Monitoring corporate profits While processing spreads can provide insight into the path of least resistance of prices for commodities that are inputs, they are also real-time earnings indicators for companies that refine or process the raw commodities into the products. Refiners or processors tend to buy the input at market prices and sell products at market prices. The refiners and processors make significant capital investments in refineries or other processing equipment. They make or lose money on the processing spread. When they widen, they experience a profit bonanza; when they fall, times can get rough. When the spreads rise above the cost of the process, profits rise. Low processing spread levels can lead to losses. Valero (VLO) is a company that refines crude oil into oil products. The chart shows that the high in October 2020 was at $44.88 per share. In October 2021, VLO was over the $80 level at the end of last week. Rising crack spreads have lifted profits for the oil refiner. Archer Daniel Midland (ADM) and Bunge Ltd. (BG) are leading agricultural processors. Soybean processing is one of the many business lines for the two companies. The rising soybean crush spreads have lifted profits for the companies. In October 2020, ADM shares reached a high of $52.05 per share. At the end of last week, the stock was at the $66.22 level. BG shares reached a high of $60.50 in October 2020 and were trading at the $88.33 level at the end of last week. The rise soybean crush spreads at least partially supported rising profits and higher share prices for ADM and BG. Processing spreads are real-time indicators for the demand of the commodities that are the inputs. They are also real-time earnings barometers for companies that process commodities into products. Any tool that improves your ability to analyze markets is worth keeping in that toolbelt. --- The full article and spread charts are available using the link below. You can also sign up for the Monday Night Strategy Call below. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
NYSE:VLOEducation
by Andy_Hecht
3
PRICE ACTION TRADING | RISING WEDGE PATTERN 🔰 Hey traders, Rising wedge pattern is one of the most accurate price action patterns. Being relatively simple to recognize, it is applied in various trading strategies. ⭐️The pattern itself signifies the exhaustion of bulls. Even though the asset keeps growing in value, the price action legs contract forming a narrowing channel. Being stuck between two contracting trend lines, one serving as support and one serving as resistance, the price forms a wedge pattern. 🔔The trigger that we are looking for to sell the market is a bearish breakout of the support of the wedge (candle close below). To not be caught by a false breakout, it is highly recommendable to wait for a bearish violation of the last higher low level as well. Only then the wedge breakout is confirmed. ⚡️Trading the market aggressively, one opens a short position on spot just after the candle closes. ⚡️The conservative trader will wait for a retest of the broken support of the wedge though for a safer entry. ✔️Safest stop will lie strictly above the highest wick within the wedge. ✔️Initial target will be based on the closest key structure support. Learn to recognize this pattern and be disciplined to wait for its confirmed breakout. Only then a high trading performance will be achieved. What price action pattern do you want to learn in the next post? ❤️Please, support this idea with like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
122
What are candlesticks in trading and how to use them?🕯 ✅The price dynamics of an asset are displayed on the chart in different formats, including bars, lines, or candles. The latter format is most popular among traders and is often used in technical market analysis. What are candles and how to work with them? 🟢Candlesticks (Japanese candlesticks) are a graphical way of displaying price dynamics, in which vertical rectangles and lines are used. This method was invented on the rice exchanges of Japan in the 17th century, from where it got its name. A price candle consists of two main elements: 1️⃣the body is a vertical rectangle that shows the opening and closing levels of trades; 2️⃣wicks (shadows, tails) - vertical lines from above and below the body of the candle, reflecting fluctuations in value in the interval between opening and closing. ❗️The main advantage of a candle over bars and a linear chart is that it allows you to get 4 important indicators for technical analysis at once: High - the highest price for the period; Low - the lowest price for the period; Open - the opening price of the period; Close - the closing price of the period. 🔴When using a linear graph to get the same information, 4 indicators would have to be displayed on the screen at once, which is inconvenient and complicates the perception of information. At the same time, candles display the process of cost formation in a specific time interval, so the position and appearance of candles on the hourly and daily periods will differ significantly Types of candles ⚠️Two main types of candlesticks correspond to market trends: Bullish candle - formed when the closing price of the period was higher than the opening price. On the chart, such a candle is displayed in green (on b / w - white) and indicates the victory of buyers in this time. A bearish candle - is formed if the period is closed at a price lower than it was opened. On the chart, bearish candlesticks have a red color (on b / w - black) and they show that sellers are dominating at the moment. ❤️ Please, support our work with like & comment! ❤️
Education
by UnitedSignals
15
Can You Profit Day Trading? YesKeep Trading Simple!!! Volume is the heart of trading Forex. This tells us how much interest is in a candle or at a price level zone- where big money and hedge firms are trading. On chart example: London and NY session overlap is a very high liquidity and volume time every day to trade. Only 4 hour period. Use only: 1) Simple Volume indicator 2) Session indicator 3) Bolliger Bands indicator Rules are: 1) Is price action over a critical price action level? yes- 1.55000 2) Is price action over 20 ema of Bolliger Bands? yes- over yellow line 3) Use ATR for stop loss, entry and targets- this is something that all Forex traders should know on pair that is being trader. 4) On chart is 25 pip stop vs 62.5 pip is risk reward 1:2.5 setup 5) Only find setup at around start of London/NY overlap and trade during this 4 hour time period. Close all trades at end on London session.
Education
by Anbat
Simple Forex (Support & Resistance) #1Support and Resistance Support occurs when falling prices stop, change direction, and begin to rise. Support is often viewed as a “floor” which is supporting, or holding up, prices. Resistance is a price level where rising prices stop, change direction, and begin to fall. Resistance is often viewed as a “ceiling” keeping prices from rising higher. If price breaks support or resistance, the price often continues to the next level of support or resistance. Support and resistance levels are not always exact; they are usually a zone covering a small range of prices so levels can be breached, or pierced, without necessarily being broken. As a result, support/resistance levels help identify possible points where price may change directions. Major vs. Minor Resistance/Support Minor resistance or support temporarily delays rising or falling prices within a larger market trend while major resistance or support altogether stops either rising or falling prices and larger market trend changes direction. Minor price resistance/support is an artificial horizontal line representing an area, which previously served as price support or resistance, and has now transformed to the other. If price was previously a support level, it is now a resistance level. Trade the “Bounce” Buy when the price falls towards support. Sell when the price rises towards resistance. Trade the “Break” Buy when the price breaks up through resistance. Sell when the price breaks down through support.
Education
by Anbat