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Managing Negative Emotions - Psychology of Winning TradersHi Traders. When it comes to trading, psychology is often the biggest pieces among strategy and risk management. In this workshop, I will be breaking down 3 of the most common emotional issues happening on most retail traders. To becoming a consistently profitable trader, it's never about eliminating emotions. Emotions are biological not psychological, it exists within our body system, which cannot be removed completely. But what you can do is to condition your mind to organize its performance, and reduce emotions to the least possible. If you enjoy the content, make sure you follow my profile and give me a thumbs up for daily fx forecast & educational content. Trade safe and take care.
KRAKEN:BTCUSDEducation
by TraderNeoh
2
Leave Your Ego At The DoorAl Pacino played John Milton in the 1997 film the Devil’s Advocate. Milton ran a hugely successful law firm as a front. The fictional character was really the devil. The final line of the movie is, “Vanity is definitely my favorite sin.” Vanity is excessive pride in or admiration of one’s own abilities, appearance, or achievements. There is a fine line between vanity and ego. Ego is a person’s sense of self-esteem or self-importance. Vanity may be the devil’s favorite sin, but ego can be a trader or investor’s worst nightmare. Ego gets in the way of rational, logical, and reasonable conclusions because fear and greed can tug on our egos and cause us to make mistakes that are sins when growing our nest eggs. The quest to buy at the low- Ego leads us to state the market is wrong Looking to sell at the “high”- A recipe for disaster Following trends requires no ego at all Suppressing emotions is harder than you think Never listen to that voice on your shoulder- It leads you to make mistakes The quest to buy at the low- Ego leads us to state the market is wrong Human nature is a powerful force, but it deludes us to believe our gut instincts. When the price of an asset falls to a level where an investor or trader believes is a logical, reasonable, and rational low, they perceive the price as a bargain. After an initial purchase, if the price continues to fall, our emotions cause a dangerous impulse. The little voice in our heads declares that the market is wrong. The market price is never the wrong price. It is the level where buyers and sellers meet in a transparent environment, the marketplace. All of the fundamental analysis in the world can go out of the window when sellers overwhelm buyers. A perfect example occurred on April 20, 2020, in the crude oil futures arena. Who wouldn’t want to buy crude oil at zero? After all, what is the risk? Well, there turned out to be plenty of risk for those who purchased the nearby NYMEX crude oil futures on April 20, 2020, at zero, negative $10, negative $20, and even negative $30. Those with long positions on the expiring contract who could not store the energy commodity learned an expensive lesson. As the chart shows, a purchase of the expiring futures contract at zero looked more than ugly at negative $40.32 per barrel, the April 20, 2020 low. The oil example is dramatic. However, it is a reminder that the quest to buy the low in any market has everything to do with ego and little to do with making a profit. Looking to sell at the “high”- A recipe for disaster It is easier for most investors and traders to rationalize a long position as they assess the total risk from the current price level to zero. Oil was an exception to that assumption. Meanwhile, shorting an asset has the same ego dynamics. Bull and bear markets can take prices to levels on the up and downside that defy logic, reason, and rational analysis. There are many instances where prices rise to levels that make no sense. The lumber market in May 2021 is the perfect example. The annual chart of the illiquid lumber futures market shows the wood price never traded over the 1993 $493.50 per 1,000 board feet level before 2017. After falling to a low of $251.50 in early 2020 as the global pandemic gripped markets across all asset classes, the price took off on the upside. At $660 in August 2020, it reached a new record high. At $1,000 in September 2020, the price was irrational, and it more than halved in value, reaching a low of just over $490 in October 2020. In May 2021, the price exploded to $1711.20 per 1,000 board feet before collapsing. Lumber is a dramatic example, but it reflects the potential for the ego to trigger impulses that lead traders and investors to financial ruin. Selling short at $1000 the second time up and ignoring the power of the trend was disastrous. Just because a market price rises to a high, does not mean it cannot go higher a lot higher. Following trends requires no ego at all Following trends requires a special skill, which is no skill at all. Following trends allows us to go with the flow, ignore expert advice, the news, and any other exogenous forces. The only tool necessary is a simple chart that displays the path of least resistance of the price. And, it does not matter what the asset is; it can be a stock, a commodity, a currency, a bond, or any other product with liquidity that allows for effective execution of buy and sell orders. Following trends allow the markets to work for us instead of us slaving for the market. The process is entirely objective, while fundamental analysis is completely subjective. So many variables determine the path of least resistance of market prices, making it impossible to legislate for all potential outcomes. Experts may make a compelling case for buying or selling an asset, but they do not have a monopoly on the truth or offer any guaranty. James Surowiecki wrote The Wisdom of Crowds in 2004, arguing that the many are smarter than the few and how collective wisdom shapes business, economies, societies, and nations. A price chart is the roadmap of the crowd’s wisdom. Suppressing emotions is harder than you think Tucking away your ego takes practice. Understanding that ego triggers the emotions that lead to pushing the buy or sell button is the first step. Many investors wind up selling the lows and buying the highs in wild markets because they allow fear and greed to guide their behavior. Wild markets are the exception, not the norm. Training yourself to manage your ego objectively will reduce the odds of allowing it to destroy you when the you know what hits the fan in markets. Eliminating ego from all investment and trading decisions starts with ignoring the news, experts, and any inputs other than the herd behavior in markets. Since prices rise or fall to levels that many believe are not sustainable, following trends allows you to take advantage of their mistakes. Make a conscious decision that you will end the quest to pick a high or low in any market is a great place to start. Successful trend following will cause you to be long at the high and short at the low, but that is OK. It will also allow you to take the most significant percentage from a market move when trends emerge. Moreover, following trends is an automatic exercise that reduces stress. Never listen to that voice on your shoulder- It leads you to make mistakes Eliminate any thoughts about picking lows or highs. When I first began trading in the early 1980s, a colleague in London offered sage advice, saying, “Andy, when you look to pick a bottom, all you will wind up with is a dirty finger.” Ignore those voices in your head that appeal to your ego, trigger fear and greed, and lead you down a losing path. Never forget that your view has no relevance whatsoever. Vanity is definitely the devil’s favorite sin. Ego and vanity are dangerous. Follow those trends. Approach markets with a clear risk-reward plan where the rewards are equal to or greater than the capital at risk. Understand that you will be wrong all the time, but the market will never be wrong. The most successful traders do not make money on all of their trades or investment positions. Many will tell you that losers far outnumber winners. However, success depends on catching that wave or substantial trend that yields the most significant profits. Leave your ego at the door; it is your worst enemy, while the trend or the market’s wisdom is your only friend in the pursuit of profits. Use the link below to register for the Monday Night Strategy Call. You can also sign up for free using the other link to gain access to full articles. 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.
LEducation
by Andy_Hecht
31
CANDLESTICK PATTERNS BASICS | Engulfing Candle 📚 Hey traders, In this educational post, I want to discuss with you one of the most accurate REVERSAL candlestick patterns - the engulfing candle. On EURUSD chart, I spotted for you bullish & bearish examples of this pattern. The logic behind this pattern is quite simple: ⭐️In a bullish trend, after a strong directional movement, the price reaches some important structure level. Growing steadily and forming a sequence of green bullish candles the price suddenly forms a strong bearish candle. What is particular about that candle is the fact that its total range (distance from the wick high to wick low) & body range (distance from body open to body close) exceed the ranges of a previous bullish candle. 🔻Such a candle we will call a bearish engulfing candle. Most of the time it signifies a strong spike in selling volumes and willingness of sellers to push. With a high probability, such a formation leads to a pullback or even a trend reversal. ⭐️In a bearish trend, after a strong short rally, the price reaches some demand cluster. Instead of breaking that and going lower, the price forms a strong bullish candle. That candle engulfs the range of the previous bearish candle & its body size exceeds the size of the previous candle. 🟢Such a candle we will call a bullish engulfing candle. Quite often such a formation leads to a pullback or even a trend reversal. 🔔And there is just one single tip that will dramatically increase your performance trading the engulfing candle: It is recommended to rely on this pattern ONLY IF it is formed on a key level: ❗️Bullish engulfing candle must strictly form on a strong support. ❗️Bearish engulfing candle must strictly form on a strong resistance. Forming beyond key levels, the pattern occasionally will give false signals. ⏳Preferable time frames to trade engulfing candles are daily/4h. Learn to spot this pattern & you will see how efficient it is. What candlestick patterns do you want to learn in the next posts? ❤️Please, support this post with like and comment!❤️
Education
by VasilyTrader
28
Mastering One Strategy Dear traders, My name is KeySlot and I have been trading in the forex markets for over five years now and have gone threw a lot to get to the point I am at now. I have gone threw pretty much all of the common beginner mistakes from risking too much on a single trade, wanting to become a millionaire in one trade, or becoming too cocky and thinking that I am unstoppable have all been some of my downfalls in my journey and probably something that many of you are way too familiar with. Today I am going to be going over one of these major problems and will be going over more in the near future. I hope you get something out of me sharing my experience and problems I have gone through. Jumping from strategy to strategy: When starting off in the trading game everyone will go to Youtube and look up "best forex strategy" click on that video and try to copy their strategy. While sometimes you might get lucky and find a really good system there are a lot of systems that will work for one person but may not work for another. This does not mean that it is a bad strategy but it just might not be your style of trading, this is why I say everyone is different. Some people will be willing to risk a lot more money than some other people will want to do, some people will want to spend more time in a trade than others, and some people will want to trade other pairs than one another. This is why I fell in love with trading, every single person can see a pair a different way and approach that market a certain way, every one can be different for once. When I first started trading I also did the same thing, I went to Youtube and searched for a strategy and probably went through two or three different ways of approaching the market a week. After a few weeks of switching back and forth between strategies I realized that all of these indicators are not really doing anything for me, I thought that when they told me to buy price HAD to go up no matter what. But I quickly realized that this is not the case, indicators are lagging and cannot tell the price of the future or we would all be filthy rich. When I understood this concept that indicators could be actually hurting me more than helping me I ditched them completely, this is when I started to study the concept of Price Action. When I switched to price action the market just seemed so much clearer to me and a light bulb seemed to click suddenly in my head. But then I doubted my self again, I took a few trades using solely price action and they were all losing trades, guess what I did? I went right back to using the indicators that eventually lead to another losing streak. No matter what I had done I was always taking losing trades, it seemed like the market was out to get me and only me. After around a year and a half of trading I had finally gone back to price action and told myself this is something that I need to master. I wanted to learn how to read the market like a book and was ready to do anything to do so. It was only until I devoted all my time into learning this one continuation strategy using price action where I started to become a break even and eventually a profitable trader. I started to see the same setup over and over again but I learned what made my setup one I would take versus one I would not. This is where it became very useful taking a deep dive into one singular strategy, overtime I saw my setup time and time again but I began to notice that sometimes when my setup had formed there would be small details that would stick out to me after seeing it so many times. After doing a good amount of trades I was really able to pick out the really big winners and started to cut out the losers. I noticed that some pair just seemed to not work on certain pairs and this is when I started to narrow down my list. Becoming an expert in one list of pairs and one strategy allowed for me to become a more profitable trader by mastering a single strategy and being able to pick out a good trade with a higher probability and allowed for me to avoid getting into any losing trades as well. While it might sound stupid or too good to be true, focus on one strategy and a set list of pairs and only those things for one month and tell me if your results have improved. Another very important thing when starting out is keeping a trade journal, I will go more in detail on a journal in the upcoming week. I hope all of you have an amazing trading week. Thanks again, Keyslot
Education
by KeySlot
What Is A Buy & Sell Stop Order?Both Buy and Sell Stop Orders are trade order set before current price hits those orders and gets you into a new trade. Buy Stop Order: An order that is executed at a specific predetermined price that is above the current price. Sell Stop Order: An order that is executed at a specific predetermined price that is below the current price. NEVER chases price when making a Forex trade, let price action come to your entry by setting either a Buy or Sell stop order. Then make sure you set your stop loss and targets at that time too. A.C.E. Strategy is: 1) Alert candle 2) Confirm candle 3) Enter candle
Education
by Anbat
What Are 10 Things You See On Daily September Chart? Add YoursExamples: Do this on daily charts- understanding candlestick language will assist you in trading and risk management. 1) Supply Zone/Resistance area 2) Demand Zone/Support area 3) Trends- bearish or bullish 4) Price Action? Top to bottom how many pips? 5) Any Engulfing Candlestick patterns? 6) Any Harami Candlestick patterns? 7) Any Pinbar Candlestick patterns? 8) And Doji's (undecided) candlesticks? 9) From 1st day to last day of September- was it bearish? was it bullish? or doji (monthly candlestick?) 10) Where are critical price line levels (round numbers or psychological numbers) 11) ADD YOURS... PLEASE ADD IN COMMENTS: What do you see on attached naked or price action only chart of AUDJPY- thanks!!! Where and How could you have entered into a trade on this chart, with enter, stops and targets set up and make a profit?
Education
by Anbat
1
Break & Retest Strategy (Should Be A Favorite)Break and Retest Strategy: Bullish example on chart: 1) Quick price action move or continuation phase on chart 2) Price action protected the critical line, structure and future stop loss of 119.000, during exhaustion phase. Could use a fib ret 50%-61.8% for entry. 3) Showed a great two day Engulfing pattern on chart for entry for buy market trade at close of that candlestick. (I use harmi, engulfing and pin bar candle stick patterns to entry all trades, especially on this break and retest strategy) 4) Stop loss would have been at 119.00 (yes, that is 88 pips from entry) 5) Targets 1st target 88 pips from entry, 2nd target 176, 3rd target 264 and 4th target is 352. Related to daily chart, adjust your risk management appropriately just like all trades you do- is at beginning of trade set stops, entry, targets.
Education
by Anbat
6
Picking Out The Strongest 123 Forex SetupsHow To Pick Out The Strongest 123 Forex Setup: The Most Powerful Trading Setup In Forex!!! 1) The 1 needs to be at the extreme high or low of chart (on chart example a bearish 123 setup). 2) The 2 needs to be lower then 1 on chart and turn around to the 3 3) The 3, but 3 can not be higher then 1 on chart 4) From 3 to 4, you can (if aggressive entry) enter bearish trade at 50% to 61.8% area (see chart) or conservative entry at horizontal break of 2 on chart. Then enter the trade. This trade depending on your entry to trade would have been 1:1 to 1:2 risk reward setup. 5) This happened in between the high liquidity and volume areas between Tokyo end to London end, which is where most scalping or day trading should happen, when big banks and hedges are trading most of the Forex daily rollover of $6 trillion dollars. Just get a piece of pip pie, do not be greedy.
Education
by Anbat
3 Bar Reversal Pattern A.C.E. StrategyChart is example of a 3 bar reversal pattern A.C.E. Strategy. 1) Alert Candle - Large red candle ( wick to wick or bottom to top of candle) 2) Confirm Candle- Smaller red candle ( doji is a very good sign and candlestick) 3) Enter Candle- Larger blue (green usual) that is larger then Alert candle When 3rd candle of this three bar reversal pattern hits the open of 1st candle of this pattern- ENTER buy signal for bullish trade. Place stop loss below this 3 bar reversal pattern, I place them at quarter levels: example (.xx000, xx125, xx250, xx375, xx500, xx625, xx750 & xx877), on Eur pairs and or chart example of EurCad (see chart). The setup would be 1:2 or 18 pip stop vs 39 target. Noted chart stop loss is 1.43125. Use always right risk management and lot sizes etc... for time frame of chart used and ATR for setting stop losses and targets too.
Education
by Anbat
1
Why Do Traders Fail?Most of the novice traders believe that trading FOREX is a gamble! Why do traders fail? 1) They trade with the aim of getting luck to make money. 2) Their greed exceeds their need. 3) They think trading is a game of chance and luck and do not get the proper education to succeed. 4) They do not favor to invest enough time and amount for education and mentor-ship to get basic knowledge. 5) They have poor focus. 6) They are more emotional than intellectual. 7) After failing, they want to make up their loss; therefore they may further incur loss.
Education
by Anbat
2
The biggest “MYTH vs REALITY” in tradingDear traders, happy Friday and welcome on our Educational Post for this week. Today we will be talking about the most popular myths in the trading world and compare it to the reality. “99.99% win rate”, “50 trades winning streak”, “100% monthly return”. Do these phrases sound familiar? All of us have come across people and companies promising that they accomplish the above stated proclamations GUARANTEED. These individuals tend to deceive the beginners and sell them a fake dream. However, trading does not work like that. If we take a look at the chart, we can see the 4H timeframe graphic of GOLD. We decided to use this graph to illustrate the idea. On the left hand side of the chart, we can see an example of the strategy that the above stated type of individuals use to deceive a huge mass of people. Fake and unrealistic risk-to-reward ratios, impractical percentage returns and other tricks appeal the newcomers and lead them to the mousetrap set by the so-called “gurus”. On the other hand, on the right side of the screen, we can see the reality of trading. Not every trade will be a winning one. The most important thing is to follow the principles of risk management, have patience and discipline! We hope you enjoyed this educational post! If you have any proposals on what should our next educational post be about, please feel free to write down the topics of your interest in the comment section below. Investroy team is wishing you all a great upcoming weekend!
OANDA:XAUUSDEducation
by Investroy
6
What Is Capital Partitioning ? How will it help you as a trader?Hi everyone: Let's talk about capital partitioning, which is a risk management approach for consistent traders to utilize to allow them to leverage their capital. You may ask what exactly is capital partitioning ? well to simply put it in words, it is basically divide up your trading $ in the current trading account into 2 or more sub accounts. So what's the point of doing that you may ask ? Well, with leverage, a consistent trader does not require to have their entire money deposit into one trading account. They can allocate the asset into different trading accounts to reduce risk as well as trading different markets available Let's take a look here: Say I have a $100,000 trading capital. I understand risk management, trading psychology, and will not over trade, over risk and revenge trade. Hence, it's in my best interest to divide the $ in this account into a different accounts, or simply in a liquid-able account such as a savings account, stocks, bond..etc Here are a few scenarios that you can implement into your trading accounts. Understand that the % to allocate, what other trading accounts to deposit $ into, and how to move around the $ is totally up to you as a trader. The most important is to make sure you are a consistent trader before you approach this type of method. As more accounts you divide your capital into, the more % you will need to risk per account as you need to open bigger position sizes now. Any questions, comments, or feedback welcome to let me know. Thank you I will share other risk management educational videos that can be helpful for you. Risk Management: When/How to move SL to BE and to profit in a running trade ? Risk Management: How to filter trading opportunities if multiple setups are presenting entries: Risk Management: 3 different entries on how to enter the impulsive phrase of price action Risk Management 101 Risk Management: How to set a Take Profit (TP) for your trades Risk Management: How to Enter and set SL and TP for an impulse move in the market Risk Management: How to scale in the impulsive phrase of the market condition? Risk Management: Combine everything you learn to prevent blowing a trading account
BITSTAMP:BTCUSDEducation
by jojofang0901
27
Bearish Evening Three Candle (Reversal Pattern)Evening Three Candle (pattern) How To Trade: Evening Star- is a three candle pattern with the highest middle candlestick, but also the smallest body and slight shadows/wicks. The third candle goes below the bottom half (1/2) of the body of the first candle and its opening FALLS below the opening price of the middle candle. The evening star is a reflection of the morning star formation. How To Trade: 1) On 4th candle open,use a sell market order to get into trade 2) Set stop loss higher then sell market order, give around top of 3rd candle (could be large, so adjust stop loss and risk management appropriately). You can find these bearish evening candles on lower time frames, but hourly, 4 hour and daily are better and more reliable, then lower time frames. 3) Set targets at least 1:1 to 1:3, stop loss and use ATR to get daily volatility range too.
Education
by Anbat
How Do You Build A Position With Pyramiding?As a trader, it’s a general rule of thumb that we should always be looking to maximise potential returns (per unit of risk) with each transaction. We should always be looking to squeeze as much out of the market as we can. There are times when this can occur by simply letting the trade run its course. However, sometimes market conditions align perfectly for savvy traders to “press the trade” or Pyramiding into the trade. Don’t press your luck; press the trade instead! Attempting multiple entries in the direction of a trend is one strategy savvy traders use in an attempt to maximise return (otherwise known as Pyramiding). The problem with this tactic is that while it may increase the potential reward, having a larger position in the market also opens you up to more risk. As a trader, you need to find the perfect balance of pressing the trade while not pressing your luck. There are a few ways to achieve this: If the market is moving at a snail’s pace, and not much movement has been made from the initial entry, any additional entry should be minor. If, however, a decent distance has been travelled, a trailing stop will secure more profit, and any additional entry can be larger. In essence, any additional position sizes are partly dependent on the distance between the initial entry position to stop loss. Ensure you have a strong driver that pushes prices along. Simply pressing trades at random is not good risk management. Reduce risk on entry by only adding additional positions when the stop loss on the first position can be trailed. Pick your battles carefully when Pyramiding You may find that as time wears on, you’re left with a large portion (>2% of total equity) in a single trade. The tactic of adding exposure will generally make for a “short” pyramid, which typically won’t grow over 2.5% of overall equity. This Pyramiding tactic ensures you’re exposed to additional upside while minimising downside to a level with which you’re comfortable. Here are a few things to be wary of: Keep an eye out for drivers that influence market psychology: This is when momentum and volatility will be high, allowing you to pyramid into a move more easily. For the technical traders, you may prefer to avoid day-to-day shifts by taking in a broader market view. Diversify: as with any investment, don’t place all your eggs in one basket. Diversification is key to keeping overall risk low. Have strict risk limits in place: With 2.5% in one pyramid, another 2.5% in another – next thing you know, your overall portfolio heat is close to 10%. That’s a high amount of risk to carry around with you. Consider minimising position sizes of certain trades to reduce overall risk. Consistency is key with position sizes: If your initial entry is $100k and your second is $300k, you’re off to a lousy start in building your pyramid. Final Thoughts on Pyramiding Remember always to start small and slowly. There’s no need to rush in. Experiment with pyramiding until you’re comfortable with your approach. Always remember the two key elements to consider: Resist the temptation to take profit early when the opportunity arises. Sometimes it’s best to sit on an existing trade. Be wary of adding to your trade at “worse” levels. Trends will always end at a certain point, so you don’t want to be pyramiding into an extended, ongoing trend. Look for new trends to pyramid in, which will reduce your overall risk.
TVC:GOLDEducation
by BlackBull_Markets
2
BTC.D : A quick note on bitcoin dominance and altsCRYPTOCAP:BTC.D Hello everyone 😃 Before we start to discuss, I would be glad if your share your opinion on this post and hit the like button if you enjoyed it ! It is inevitable that at some points in the cycle, Bitcoin will outperform almost everything. With a few outliers of course. However, it's important that this doesn't change your game plan. Your game plan should already be set in motion. If you track your portfolio daily, both in USD and BTC, there are always fluctuations if you are holding a mixture of BTC, Alts and USD. It would be near impossible to maintain your portfolio's equivalent BTC value round the clock, unless of course you were all in BTC. I personally hold BTC as my base asset during bull runs (switching to USD at local tops or as near as I can) as well as moving to ETH as my base asset when ETHBTC looks set to out perform. However, it is inevitable that my alt coin holdings (spot) that I have accumulated will take a hit during a strong BTC run - so you may see your 'BTC worth' drop at times; However, I think of alt holdings like a coiled spring. When under pressure BTC, they bleed - and are suppressed. If you've accumulated at support, you need not to worry about the temporary drawdown in BTC, because in general alt coins out perform BTC in the right conditions, and so when bitcoin puts in a local top, altcoins regain their dominance and begin out performing. HOWEVER It is important not to be 'alt heavy' at times when the BTC dominance is at support. It is important to rotate the ratio of BTC:ALT:USD holdings to lessen the impact of alts bleeding at certain times in the market. For example, in January of this year, it was an amazing time to load up on altcoins given that BTC dominance was at resistance. We then saw astronomical gains in alts across Feb/March when BTC.D dropped like a rock. Then, in May when BTC.D hit support, the whole market tanked but alt coins got hit the hardest. Alts will lose value when BTC is volatile, in either direction. So it's important to balance the ratio of your holdings across BTC, alts and stables at certain times in the market. I pay attention to Bitcoin dominance more so for my spot holdings. For my trading account, every asset is simply a method of making a profit on percentage gains. So whether I'm trading BTC, ETH or alts - it doesn't matter as much. But for spot holdings, I generally want to cycle my ALT:BTC or ALT:USD holdings. When BTC.D is at support, I want to hold less alts. When BTC.D is at resistance, I want to load up on alts.
CRYPTOCAP:BTC.DEducation
by Helical_Trades
17
Trading Basics | Your Main Trading Time Frame ⏳ Hey traders, You frequently ask me what is the most important time frame to analyze and follow. And even though I must admit that multiple time frames must be taken into consideration for successful trading like weekly/daily/4h/1h. Among them, there is the one that is universally considered to be principal. That is a daily time frame. There are a lot of reasons why so many traders rely on a daily time frame: 1️⃣ - Daily time frame shows a global market trend at the same time reflecting a mid-term and short-term perspective letting the trader catch trend following moves and spot early reversal signs. 2️⃣ - Covering multiple perspectives, daily time frame is the foundation of the majority of the trading strategies being the main source of key levels & pattern analysis. 3️⃣ - Daily time filters out news events that happened during the trading day. It shows the composite reaction of the market participants to all the data posted in the economic calendar. 4️⃣ - Daily time frame reflects all trading sessions. Within one single candle, we see the outcome of the Asian, London, and New York Sessions. 5️⃣ - Daily candle filters out all the noise from lower time frames & intraday price fluctuations and sudden spikes & rejections. 6️⃣ - Covering all the trading sessions, daily time frame mirrors the activities of big players like hedge funds and banks. Showing us the flow & direction of big money. ⚠️Being so important for analysis, do not neglect other time frames. The most accurate trading decision can be made only relying on a combination of intraday and daily time frames. What is your favorite time frame to trade? ❤️Please, support this idea with like and comment!❤️
OANDA:XAUUSDEducation
by VasilyTrader
26
Time & Price Strategy (Box Breakouts)Time & Price Strategy (Box Breakouts) rules: 1) If scalping and/or day trading 2) Use Forex pairs with high ATRs or over 90, now GBP and EUR pairs 3) Use hourly charts 4) Use Naked charts (only price action on them) 5) Add vertical lines every 4 hours from session open . Chart is 2pm, 6pm, 10pm, 2am, 6am & 10am. (Every 4 hours- from beginning of new session) Chart look at smiley faces as times you should and should not trade r/t liquidity and volatility- red not trade, yellow maybe and green trade. 6) Add horizontal lines every 12.5 pips or as follows: 000, 125, 250, 375, 500, 625, 750, 875, so EIGHT lines. Example: 1.58125 as on chart. The above will give you boxes of both 4 hour times (vertically) and 12.5 pips (horizontal). Example hourly chart of EURAUD, on Friday gave you four possible trades to enter, place stops and exit with a profit. Three bullish and one bearish trade. 1) Trade with trend, momentum, support and resistance or breakout 2) Once price action hits or breakouts a box, then enter with stop at other end of box, three bullish trades use lower end of box for stop losses. 3) one bearish trade use upper end of box for stop loss. KEEP TRADING SIMPLE- you do not need to complicate Forex trading. Focus on price action, trends, momentum, support and resistance & risk management. Best times to trade everyday is in-between Tokyo end to London end related to high liquidity and high volatility.
Education
by Anbat
TRADING HIERARCHY | KNOW WHAT MATTERS THE MOST ⚠️❗ Hey traders, I vividly remember how I started to trade 8 years ago, how I was learning, and the things that I was doing. Contemplating my old self, I notice a dramatic shift in my mindset in regards to trading. Staring at the charts and desiring to make money on price action, I wanted to become a consistently profitable trader. Making the priorities, I decided to sacrifice my time on studying technical analysis totally neglecting trading psychology and risk management. Learning different trading strategies I always came to the same result: the account went blown and nothing seemed to work. Strategies of fancy traders on YouTube, strategies from best-selling books on Amazon, nothing could produce any penny. Not giving up and pursuing my ultimate goal I came to the conclusion that I set my priorities absolutely incorrectly. To be honest, I always thought that trading psychology (like psychology in general) is s*cks. Moreover, I considered risk management to be kind of obvious, banal topic not deserving much attention. Learning risk management techniques, applying them in day trading I finally saw a glimmer of hope. Reading dozen of books on trading psychology, contemplating my mistakes, and observing my behavior I noticed so many wrong, incorrect things that I did on a daily basis. With time and practice, my mindset shifted. I realized that most of the strategies that I applied and that seemed losing to me, in fact, were decent. It turned out that mastery of technical analysis is not enough for profitable trading. Instead, that is just a tiny part of what must be learned. Now, when my students ask me about the most important things to learn & study in trading, I always say: trading psychology and risk management go first, technical analysis is the secondary. ❗ Do not neglect these topics and give them due attention. They are an essential part of your success in trading. 🤔 Do you agree with the pyramid that I drew? ❤️Please, support this idea with like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
44
Performance distribution of retail investors and hedge fundsMy thoughts about performance. This kind of info is not very available so I have to do some guesswork. We that spend all day in front of the computer expect to get better returns than 10% a year. But we have no idea what is possible and where we "rank" compared to others. All academics look at ever is day traders, yes 99% of day traders lose money and 1% earn peanuts while taking huge risk, we get it. And sometimes they look at passive investors. Cool. But no one ever says anything about active investors or Forex speculators, just that "on average active retail investors outperform", how wonderful, the average, yes I'd call myself the average normie definitely LOL! And regulators are even worse, all they care about is protecting dumb money and scaring people away from day trading. The french "market authority" on television was literally screaming "flee Forex it is dangerous, you should fleeeeeee!", I kid you not. First we look at retail investors. So the french "market authority" (AMF) looked at FX & CFD brokers representing about half of the individual FX & CFD investor population. 14799 persons in the 2009-2013 period. They found that over 4 years close to 90% of traders lost money. This is another of their deceptive tricks. It's just as with science these days, the data says something, the abstract says the opposite. So according to the extremely biased french AMF OWN DATA: - 30% of traders are in the "0" column, and according to their own data there aren't that many traders with tiny accounts, so ~30% breakeven. - They refuse to give any % result, some may be recalculated by overall we do not know, therefore I will assume it does not look as bad (or they'd show) - 5% of all investors make 2/3 of the losses, or at least half - 1% of all investors only are actually making significant returns (and 2/3 of the total) - As always day traders that destroy the stats are mixed with the rest - Most "winning" traders are barely above 0, making just a few hundreds to thousands a year www.amf-france.org From other sources and the AMF sort of confirms this, we know that: - Losers (especially big losers) that stick to investing, the ones that never give up never surrender in the face of adversity, the courageous ones with "heart", ye these guys, their losses get bigger and bigger actually. - Most winners continue to win and their profits get bigger. Here page 19, this is for stocks, we can see the net monthly market-adjusted returns of 62,439 households a large discount brokerage firm from January 1991 to December 1996: - On average, as they keep hammering us with, they underperform the market by 0.14% (each month!) - The average individual investor gross returns are slightly above the S&P 500 index returns (page 3) - The average individual investor net returns are slightly below the S&P index returns (about 91% of the S&P) - The S&P returns a bit less than 1.5% monthly - The worst of the worst managed to return -20.85% below index monthly, probably a permabear day trader or something - The 1st percentile is at -4.86% below market, 5th at -2.45%, and 25th -0.73% - The 99th percentile is at +4.44%, 95th +2.15%, 75th +0.50% - The best individual investor got 48.35% above market MONTHLY - The best individual investor difference between net and gross is minuscule, obviously it is not a day trader, probably some lucky investments - The gross median return is at -0.01%! faculty.haas.berkeley.edu So it seems this is how it goes, a normal distribution: We do not have that much info, and what little there is is rather hard to find, and hidden behind mountains of trashy scams "how much money can I make day trading join my course". I really only care about my own performance but it's always interesting to see how it's all distributed, what is possible, etc. For some reason I am interested in patterns and statistics. Funny. The info does not get shared a lot. Based on research and what gets exchange it seems most "traders" are VERY interested in money and "lambos" and very few are interested in stats, patterns, numbers. Ye I mean what do stats and figures have to do with investing right? It's not about some numbers it's about how much money you can make trading on a phone and what you will do with all of that money right? Honestly if we eliminate day traders that already make up at least 2/3 of FX investors, and all the lambo trolls that hate numbers but "it's ok I manage my emotions", it's not 10% making money but 30% at least I am sure, and 10% making decent money (enough to start a real career). Would be nice if they could just once separate day traders and look at FX investors with a time horizon greater than 1 day. All we can do is guess more or less, obviously more than 10% of these make money, but has to be less than 50% very probably. 10 to 50%, that's pretty wide. Probably in the 20-40 range, that's all I can say with high certainty. Hedge funds next. Hedge funds were doing great in the 90s and Morgan Stanley has a doc about them here: www.morganstanley.com Page 6 we can see discretionary funds making 18% a year with a max drawdown of only 5%. For all strategies except perma-bear the max drawdown is smaller than the annual returns. With all the regulations and harder market (and little fixed income) the results today are probably not as good but I do not think they are extremely different either. My guess on how hedge funds fulfill their max drawdown obligations is they place most the money somewhere safe (92% of the whole in case of an 8% drawdown) and then they risk the entire 8%, they might give a bit of it to each of their traders that go aggressive, and if they return 100% on the 8% that's an 8% return overall. I'm pretty sure that's the idea. But they might not freeze the entire capital and go 10X leverage, maybe they do something more complicated, with 50% in cash/bonds, 30% in "safe enough" investments, and 20% in high risk active trading with a max drawdown of 25% on these 20% (so 5% overall). The definitely do something like this, have to. The serious ones at least. The S&P returned 17.2% with a max drawdown of 15.4%, and page 4 we can see again a normal distribution: - The median directional return yearly was 16.3% (0.9% below market!) and median max drawdown 28.5% - The 75% percentile made 20.5% (3.3% above market), remember retail 75ers were 0.50% above mkt monthly - The 25% bottom only make 11.1% which is 6.1% below market for the year - Stock selection has similar drawdown and the returns of the 25, 50, 75 are 12, 17.2, 20.9 - There are no giant losers or giant winners but there aren't 66000 funds, and they have restrictions - In particular So actually pretty similar thing. The major difference is around 15% of the retail stock investors lost money in a raging bull market and no hedge funds did (except the few bears I guess). Otherwise, same normal distribution but with less extremes for hedge funds, they're more compact around the center (market).
Education
by MrRenev
1
[Advanced] How to aggressively grow a small (10k) account?Most of the time growing an account is a very slow grind. Make some, lose some, hope to make a little bit more than you lose. For example, with an average risk to reward of 1 to 5, and a win ratio of 21% (not counting once a year outliers), which is pretty good, breakeven being at 16.67%, after 100 trades the result will be - with a risk of 1% (flat) each time: - Profits = 21*5 = 105% - Loses = 78*1 = - 79% Net result = 26% Finding 100 good trades might take more than 1 year. With a theoritical compounding of 1% each trade the max profit would be: - Net = (1.05)^21 * (0.99)^79 = 25.94% Compounding is not always the magic trick. You might be looking at something like 20% a year. But once in a while, often in September-October, and sometimes at specific times such as March-April 2020, we get these monsters that go way further than usual. Often from a boring tight period, an explosion that grows exponentially, this pushes the reward dramatically. So we can end with a few winners at 10, 15R, rather than the usual ~5. So you can "easily" get the regular barely above breakeven 20% (for the example) with on top of that an occasional 10, 20, or even more, percent. On our small accounts these extras feel good, and they give a nice boost, but nothing dramatic. Growing a 10k account into 100k even with 50% a year will take 6 years. With 30% a year that would take 9 years. With 20% a year, 13 years. An experienced but poor investor, that spent years working on entries, exits, and so on, will need do something rather "dramatic" to grow his account. Doesn't have to be a complete gamble. An idea is after one of these "boost" periods, the investor could put all of that profit at risk. Say he made 32%, losing it all would be a major drawdown of 25%, but if the investor sees it as extra it is not the same as a crippling drawdown. Having a great period is nice (within years of moderate consistency), but it is not life changing. It might be a good idea to use that as some sort of springboard (or launchpad): - Losing that profit is a return to last step it is disapointing and the grind continues but even with an extra 30% the grind would still continue it wasn't going to be life changing. Maybe 6 months - 1 year worth of profit lost (but it was "extra" anyway). - Not losing it all (winning or even a period of breakeven) is great because it will allow the account to leap up suddenly, you quickly end up years ahead. So how does this work? Going to use an example. The investor gets 100 trades a year because why not (that's 2 a week or a little over 8 a month), has a reward 5 times the risk and a winrate of 21% (PF = 1.33). Account size = $10,000. Risk per trade = $100. The investor was able to grow 4000 into 10,000 over 4 years "slowly" (not that slow) but surely. The biggest drawdown ever was 20%. The yearly return is 26%. Over September to November he made $4000. He would "normally" make $1000 over 3 active months like this, but as is often the case, that period was violent with fear moves, winners just kept going and our investor that was able to add early ended up with 2 winners at 9+7 R each. So 32R. It can go very fast. 32%, on top of 8% on other grindy trades (over 3 months). Trying to catch whole trends and hold forever in my opinion is not realistic, but adding once or twice to winners is (talking about FX here), and winners (especially in March 2020 or September-October) going vertical does happen. So now how does the 10K investor scale up? Well $100 was 1%. 1% of 14,000 would be $140. but how about he more than doubles the risk?! So investor's profit in Sept-Nov was $4000 ("regular" $800 + "extra" $3200) and he/she decides to put it all at risk. He pushes the risk up to $280 which is now 2% of the new account size. After 12 loss in a row (down 3360) all the "extra" will be gone with only $640 profit left, the risk will then be reduced progressively, first down to 200 and if losses continue, 150 and finally back to 100. To attempt this our investor must have several years of results. From these years, taking out the handful of outliers, we know average RR & WR. The important question is what are the odds of 12 losses in a row? (With 21% WR) ==> First the probability of 12 losses in a row (if it was a random coinflip) are 6%. The odds are rather low. ==> Second the odds of exactly 11 losses out of 12 are 19%. In that case investor lost 1680/3360 -> Half. Still 6 lives left. ==> Once investor has 6 lives left the odds of losing all 6 times are 24%. Risking 280 rather than 140 means in 1 year rather than grow by 3640 (26%) the account will grow by 7280 (52%). Basically fast forward 1 year. In a way this is risking 1 year of profits to make 2. With something like 80% odds of making it. Aiming for much less than 12 lives is really gambling. An investor could also go for 20 or more lives but the higher the number the slower the grind. With 6 lives there is 1 chance in 4 to lose it all. But it would be a $560 risk, a huge increase from $100. Is there really a need to increase size by that much at once? It would not even accelerate growth that much. Our little investor can always make another jump after that first one. Because yes, that snowball can keep getting bigger. It is a terrible idea to keep going double or nothing, eventually it will be nothing, but we could find a compromise between being very careful and careless. We might not accept a 30% drawdown, or losing 3 years of very difficult very slow profit but if we can separate that say slow grindy 15% a year and go "I won't risk this" but the once a year or two monsters that provide 20%-40% at once (arbitrary numbers) we can see it as "extra", we got our account with 10k in in and the 4000 we just made well losing the 4000 technically would be a 30% drawdown on 14k but we can perhaps separate this, it was unexpected, and we put all of this capital at risk, without hurting our "main" capital. Might be a great way to boost growth without risking to blow up or being set back years. And if it works out. As I said the example investor (which is already at least in the top 5% by the way) made 7280 rather than 3640. An extra $3640. Actually since his account was $10,000 and he was supposed to make about 3600 in 1.25 year, but instead made 7280 + 4000 = 11,280, well that's an extra of about $7500. Last time investor risked 3400/4000 in 12 trades (6% odds of losing all 12 and perhaps ~15% odds of losing all that money over a longer time), maybe this time investor wants to risk 6000/7500 in 12 trades ($500 each!). 26R = $13,000. If it works out in 2 years investor's account went from $10,000 to $34,000 rather than $16,000. $24,000 profit rather than $6000 (or $10000 with the big winners). With what? 1 in 4 odds of only making 6000? It is still going to take years anyway, but it is possible to take ponctual big risks to try and jump up a few steps, without playing russian roulette either. Another quick example... I think this example is within the good compromise area. It would be possible to go "I will risk $1200 over the next 3 ($400 each)" but just 3 trades that gets rather random so it becomes gambling. Over several years risking "1200" (12% base account) over the next 3, well the randomness would even out but seems bad, better to have some sort of certainty. 4% and 6% odds to immediately fail means 94/96% odds of success, unless really bad luck that should rarely happen, this should work. Just not with rent money. And even if it fails the "base account" is still here, simply some unexpected profit evaporated. If it fails, can always re-try next time, after another while of grinding, making sure we are still actually profitable and it was just bad luck. On top of this whole concept of putting profit at risk for a boost, there are the very rare "generational" trades (George Soros versus BoE 1992), where risk is known to be limited (so no swiss tsunami), the odds are really high (way more than 21%), and the reward will be even better than 5R. Also more generally when having a great winning period, great conditions, but I would not trust anyone to be objective about that. Our eager investor that made 4000 could out 3000 at risk over 12 trades with $250 each, and leave the remaining 1000 for the "great ones" where maybe $300 can be risked at once (and if it works out a one time 1500-3000 boost), 300 being "only" 2% of 14000 so it's still fine, not completely crazy (we are talking about a serious investor that has been doing well for a few years not a retail day trader with a gambling addiction). Just like with trade selection strategies, there is no secret magic trick. This scaling strategy is honestly the best I can do. Maybe 1 last example... And finally, this can be tweaked. Rather than rambo the risk from $100 to $280 in the example I choose, still putting all or most of the 4000 at risk, an investor could first increase the risk to $190 (takes 20 losses to lose most of the 4000 rather than 12), and if that goes well, which if it's a profitable investor is more likely than not, then once at +5R (+$950) or so investor could then increase it $280 which overall is safer, and much more likely to work out. With $280 from the start 5R would be 1400 so investor left 450 on the table, not that big of a deal. From that point the next 12 will have a 280 risk, if unlucky then there is still profits left and we can drop to 190 before returning to only 100 which hopefully won't be the case, at least most of the time. Then stay at 280 a while (if it works out) and next time big profits appear, risk that + a part of the 4000, without touching the rest of the profit made in the meantime. Risking profits is really not the same as risking the "bulk" or "base" capital, that's a slippery slope... Rule number 1 = protect your capital Rule number 2 = do not lose money
Education
by MrRenev
99
Forex Trading System (Three Basics)Forex Trading System- All great systems have these basics in them: Entry rules, Exit rules & Money Management rules Anyone who is serious about trading needs to have a Forex Trading System that is tailored to them, but there is no reason to start constructing Forex trading system from scratch.There are some good Forex trading systems out there for you to work with. Some of them are free and some are very expensive, but the price tags don't always reflect the actual value of the Forex trading systems. Many of these systems won't work for you, and I am not talking about out-right dishonesty here, which can be a big problem when trading. Your ability to effectively trade with system you may be considering using or buying. You need to use a system that matches your life style and personality. Once you know what sort of Forex Trading System will work best for you, look at the components that make it work. Face it; if you are a new, or even a fairly serious, trader how likely are you to come up with a totally new concept? There are some very smart and wealthy traders out there. Why not use their ideas. All great Forex trading systems have these three basics: 1) Entry Rules- Based on choosing levels/level picking. Confirmation signals. Momentum entries. More mechanical the less emotions when trading. 2) Exit Rules- Based on risk to reward ratio. Can vary if you scalp, day trade, position or swing trade. take trades where risk-to-reward ratio is at least 2:1. 3) Money Management Rules- Proper position size for your account, most time 1% to 2% maximum risk. The idea of risk tolerance. This is how much a trader is ready to put to risk with one trade or during some period of time. It is often unrelated to a particular trading set-up, but can depend on trader's perception of probability for the current trade. Examples: 1% of account balance per trade; $100 per trade; 10% per week, etc.
Education
by Anbat