Get started

Community ideas

Dominate Gold the 15-Min Chart with SMC, Breakouts,Sharp Entry'sIntroduction In the fast-paced world of forex trading, understanding institutional moves is crucial. The 15-minute timeframe provides the perfect balance between actionable signals and structural clarity. By combining Smart Money Concepts (SMC), Change of Character (CHoCH), and Breakouts, you can build a robust strategy to identify high-probability trades with minimal risk. Why Focus on the 15-Minute Timeframe? Clarity in Price Action: Reveals institutional footprints like liquidity sweeps and order blocks. Less noise compared to lower timeframes (1-5 minutes). Faster Setups: Quick entry/exit compared to swing trading on higher timeframes. Perfect for traders who prefer multiple opportunities within a day. Scalability: Can be used for scalping or short-term intraday trading. Key SMC Concepts Explained 1. Change of Character (CHoCH) CHoCH is one of the most reliable indicators of a trend reversal. What is CHoCH? A shift from a bullish structure (higher highs and higher lows) to a bearish one (lower highs and lower lows) or vice versa. Indicates a potential reversal or start of a new trend. How to Identify CHoCH? Look for a liquidity sweep (stop-hunt) near significant highs or lows. Wait for the market to break the most recent structural high/low (depending on the direction). Confirm a new trend by observing a strong impulsive move. 2. Liquidity Zones Liquidity is where institutions execute their large orders. These areas act as magnets for price action. Common Liquidity Areas: Double Tops and Double Bottoms: Retail traders’ stop-loss zones. Trendline Liquidity: Stops placed along support or resistance trendlines. Session Highs/Lows: Focus on the Asian session’s range for liquidity traps. 3. Order Blocks (OBs) Order blocks represent areas where institutions place large orders before a significant move. How to Use OBs for Entries: Identify untested OBs near a liquidity zone. Wait for price to return and mitigate (test) the OB. Use CHoCH or a breakout confirmation for precise entries. 4. Breakouts Breakouts often occur after a liquidity sweep and signal continuation. However, combining breakouts with CHoCH gives them much higher reliability. Key Breakout Tip: A breakout should follow a liquidity grab and lead to a CHoCH for confirmation. Step-by-Step Strategy: Combining SMC, CHoCH, and Breakouts Analyze the Higher Timeframe: Use the 4-hour timeframe to identify the primary trend (bullish or bearish). Identify Liquidity Zones: Highlight key areas where liquidity may be resting (double tops/bottoms, Asian session highs/lows). Wait for a Liquidity Sweep: Watch for price to grab liquidity above/below these zones. Look for CHoCH: Bullish CHoCH: Price breaks a lower high (LH) after sweeping liquidity below a low. Bearish CHoCH: Price breaks a higher low (HL) after sweeping liquidity above a high. Confirm with a Breakout: Wait for price to break a significant level with momentum after CHoCH. Mark the Order Block (OB): Identify the last bullish/bearish candle before the impulsive move. Enter the Trade: Place a limit order at the OB. Stop Loss: Just beyond the OB. Take Profit: Nearest liquidity zone or a 3:1 risk-to-reward target. Example Trade Setup: Bullish Reversal Scenario: 4-hour trend is bullish, but the 15-minute chart is showing a pullback. Steps: Price sweeps liquidity below a double bottom. A CHoCH occurs as price breaks a recent lower high (LH). A 15-minute bullish OB forms near the breakout level. Entry is placed at the OB. TP targets the next double top or a key resistance level. Annotated Chart: (Include a chart with the liquidity sweep, CHoCH, breakout, OB, and TP levels clearly marked.) Pro Tips for 15-Minute SMC Trading Patience is Everything: Wait for liquidity sweeps and CHoCH before entering. Higher Timeframe Bias: Ensure your trades align with the 4-hour or daily trend. Use Volume Indicators: Spot strong breakouts with increased volume. Refine Entry Timing: Use the 5-minute timeframe for precise entries within the 15-minute OB. Journal Your Trades: Record setups to refine your understanding of CHoCH and SMC. Common Mistakes to Avoid Ignoring Liquidity Sweeps: Jumping into trades before a proper liquidity grab often leads to losses. Rushing into Breakouts: Many breakouts fail without CHoCH or a clear liquidity sweep. Neglecting Risk Management: Always set stops and respect your risk limits. Why This Strategy Works This approach combines: The precision of the 15-minute chart. Institutional trading mechanics (SMC and OBs). Clear reversal signals (CHoCH). The momentum of breakouts after liquidity grabs. Together, they create a strategy that aligns your trades with smart money while minimizing false signals. Conclusion The 15-minute timeframe offers a unique opportunity to blend precision and profitability. By mastering CHoCH, liquidity sweeps, and breakouts, you can elevate your trading game and consistently capture high-probability setups. If you enjoyed this guide, give it a like, share it with your trading community, and follow me for more insights!
TVC:GOLDEducation
by GentleGoldenEngine
40
Crypto market or Your dream world-Maybe it is Whale's Dream landHi in the Summary of what is going on on this Educational post we have these topics: 1. How much is percentage of BTC pump from low and is it saving spot here? 2. How did market react previous time when every one rush to buy crypto? 3. are these short-term falls and soon after that pump back above 100K$ any sign? 4. Future of Bitcoin(long-term)? 5. Where is better Buy zone for me to enter after i miss +600% 700% pump on most of the tokens? 1. How much is percentage of BTC pump from low and is it saving spot here? The answer is crazy +500% to 580% pump: from the low to ATH is something around 580% gain and from range zone of daily low to above 100K$ it would be around 500% rise. and if you take a look at that chart you can see at July 2024 we had short-term fall of 32% which is what i am looking for now, 30% dump here as a correction is nothing but it may definitely liquid so many Traders and new investors with Low leverage even. And we can not say how much it fall not sure to say 20% or 30% or 40% But it needs range or correction soon. 2. How did market react previous time when every one rush to buy crypto? you can read the chart the info and most investors feeling is also mentioned on the chart. 3. are these short-term fall and soon after that pump back above 100K$ any sign? I can not talk about this very sure because it may be sign for two possible scenarios: 1. the Bull candles and market is strong and every time it is getting back near ATH. 2. The Whales or ... are pumping it soon after they sell huge amount to New investors then after it pumps and so many other investor come To buy because it may break ATH and ... they sell huge more amount and this processes of selling usually takes a lot because we are talking about huge amount of sell and they need more investors to bring and sell them token and after that dump it and range it down there in -40% or more and get back their tokens. So yes i think the price is getting back up is Because of More sells to new investors which are rushing to come to the market.(But these are all my experience and you always do your own research) 4. Future of Bitcoin(long-term)? IF we are talking about long-term i should say my view is also Bullish. Why not we all know the benefits of Bitcoin and crypto market and we all know it is not like our money which we are using daily and banks can easily print them and ... and day by day the value of them decreasing and the amount of them are increasing But Bitcoin or most crypto the tokens are Fixed number and day by day they are getting more valuable and acceptable in world and......... 5. Where is better Buy zone for me to enter after i miss +600% 700% pump on most of the tokens? As i mentioned above this is my personal Analysis of where to buy and .. and it may be right and it may be false so always in market open different analysis and also do your own analysis and do research.(Because it is my analysis but that one in your hand is your money so take care) So i think the major buy zone and major daily support if it touches and also it holds is : 70K$ to 80K$ for now i may update after i see candles. Conclusion: Crypto market or Your dream world---Maybe it is Whale's Dream land The answer is this: Yes the crypto market is your Dream world + also it is Whales Dream world too(😊) And it is all about who hunt first? and who is hunted? Please if you like the content like this post also lets talk about your experience in market and any questions in comments Below. DISCLAIMER: ((trade based on your own decision)) and also remember this may happen or not and this was my own view so always keep searching and learning and good luck and i provide this post to give you some warning and learning about BTC or your own Tokens
Education
by MMBTtrader
11
Predicting Bitcoin's Cycle Using the Elliott Wave Theory, Part 3Hello Traders. With the new year upon us, I think sufficient time has passed for the charts to develop from our previous #Bitcoin analysis. Having accurately forecasted the macro trends for each pivot within a reasonable margin of error, I believe we're approaching another pivotal moment this year, aligning with our previous predictions. Please take this post with a grain of salt, and more importantly, please use it to add confluence to your personal theories. In this post, we will be diving deeper into the Elliott Wave Theory by also integrating the Wyckoff Market Cycle Theory. By combining the two theories, the chart below represents our current position within the final leg for what could be giving us signs of a possible reversal (again, within margin of error depending on how far wave 5 extends): Wyckoff believed that markets move in cycles, which arguably has a direct correlation to the Elliott Wave 5-wave/3-wave cycle. Wyckoff introduced a four-stage market cycle , attributing it to the actions of institutional players who strategically influence price movements to capitalize on the behavior of uninformed traders. Simply put, the theory gives us a further understanding of 'cause and effect' within the markets. In my view, the Wyckoff cycle also does a fantastic job of representing market psychology. And if intertwined correctly with the Elliott Wave Theory, price action tends to follow patterns in similar ways. The Elliott Wave Theory and Wyckoff Theory often overlap in their application and interpretation of market behavior, but they approach the market from different perspectives. Both theories aim to understand and predict market movements based on the behavior of market participants and price cycles, making them complementary in many ways. Commonalities Between the Elliott Wave Theory and Wyckoff Theory: Market Cycles - Wyckoff Theory identifies a four-stage market cycle: Accumulation, Markup, Distribution, and Markdown. The Elliott Wave Theory also emphasizes cyclic behavior through a fractal structure of impulsive and corrective waves within broader market cycles. - Both theories suggest that price movements are not random but follow identifiable patterns driven by market psychology. Psychological Basis - Wyckoff focuses on the interaction between "big players" (institutional traders) and "uninformed traders," highlighting group psychology and how institutional actions exploit public sentiment. - Elliott Wave focuses on the crowd psychology behind price movements, suggesting that mass investor sentiment drives waves in predictable patterns. **Both theories reflect the influence of human behavior and emotions on market prices.** Application Across Timeframes - Both theories are applicable across multiple timeframes, from intraday trading to long-term investments. This flexibility allows traders to use them in conjunction for deeper market analysis. Identification of Trends and Reversals - In Wyckoff Theory, phases like Markup and Markdown align with Elliott Wave's impulsive trends, while Accumulation and Distribution phases can correspond to corrective wave patterns. - Both approaches aim to identify key turning points in the market, helping traders anticipate trends and reversals. ----- The Four Stages of the Market Cycle According to Wyckoff Accumulation Phase This is a sideways range where institutional traders accumulate positions quietly to avoid driving prices higher. During this phase, the asset remains out of the public spotlight, and uninformed traders are largely unaware of the activity. On a price chart, the phase appears as a range-bound movement between areas of support and resistance. Markup Phase Following the accumulation phase, the market enters a classic uptrend. As prices rise, uninformed traders begin to notice and join in, further fueling the rally. Institutional players may take partial profits or continue holding for greater gains. Short sellers caught off guard are forced to cover their positions, adding additional buying pressure and driving prices to new highs. Distribution Phase After the uptrend loses momentum, the market transitions into a sideways range, marking the distribution phase. Institutional players use this period to offload their holdings, while uninformed traders, still expecting higher prices, continue to buy. Some institutional traders may also initiate short positions during this phase to benefit from the subsequent price decline. On the price chart, this phase appears as a reversal of the uptrend into a sideways range. Markdown Phase The markdown phase is characterized by a downtrend following the distribution phase. Institutional traders add to their short positions, while uninformed traders, recognizing the decline too late, sell in panic, creating further downward pressure. The market eventually reaches new lows as selling accelerates. The Model of Group Psychology After the markdown phase, the cycle often repeats, moving from accumulation to markup, distribution, and markdown again. The Wyckoff cycle offers a simplified perspective on market behavior, focusing on the psychological dynamics between two groups: institutional traders (the "big players") and uninformed traders (the "small players"). It highlights how the mistakes and emotional reactions of uninformed traders often benefit institutional players. The Wyckoff cycle provides valuable insights into market behavior but is not without limitations: Limitations of the Wyckoff Trading Cycle Difficulty in Identifying Phases Distinguishing between accumulation and distribution phases can be challenging. What appears to be an accumulation phase might turn into a distribution phase, with the market unexpectedly breaking lower. Timing Challenges Entering trades during accumulation or distribution phases is difficult due to the lack of clear stop-loss levels. Placing stops around support and resistance often leads to being trapped. Complexity in Trading Trends Trading the markup and markdown phases requires skill, as they are filled with complex price action patterns. Modern markets often experience frequent trend reversals, complicating trade execution. Irregular Cycles The market does not always follow the textbook sequence of accumulation, markup, distribution, and markdown. Variations such as accumulation followed by markdown or other combinations are possible. Despite its limitations, the Wyckoff cycle remains a useful framework for understanding market behavior. It is best combined with other strategies, such as price action and market dynamics, to enhance its practical applicability. While modern markets may reduce the cycle's predictive reliability, it still serves as a powerful tool for traders who know how to apply it effectively. Proper Application of the Elliott Wave Theory and Wyckoff Overlap (in Practice): Trend Identification: The Markup Phase in Wyckoff often aligns with Elliott's Impulse Waves (1, 3, and 5), while the Markdown Phase aligns with corrective waves or bearish impulses. Sideways Markets: Wyckoff’s Accumulation and Distribution phases correspond to Elliott’s Corrective Waves (A-B-C) or sideways consolidations (Flats and Triangles). Volume Confirmation: Traders can use Wyckoff’s volume analysis to validate Elliott Wave patterns, especially in identifying wave 3's (typically accompanied by high volume) and wave 5's (often showing declining volume). Timing and Execution: Wyckoff’s emphasis on identifying support/resistance levels and trading ranges can help refine the entry and exit points suggested by the Elliott Wave Theory. Combining the Two: Many traders find value in combining these theories: - Use Wyckoff to identify key price levels and market phases (e.g., when accumulation or distribution is occurring). - Use Elliott Wave to determine the broader trend structure and anticipate the next moves within those levels. - By integrating Wyckoff’s volume-driven approach with Elliott’s fractal patterns, traders can gain a comprehensive view of the market and improve their ability to time trades effectively. ---- By integrating the concepts from both theories and the outlined schematics, we can now take a closer look at how Bitcoin is behaving through the lens of these frameworks. As observed, Bitcoin appears to be nearing the completion of the potential 5th wave we've been discussing over the past year. In my view, a bear market (or at least a significant correction) may be approaching. While timing is uncertain due to the unlikely nature of extensions, we can use insights from both Wyckoff and Elliott Wave theories to gauge our current position. I believe we are likely in the Distribution phase, which aligns with the 5th wave. The 5th wave can extend as much as it wants, but it won't change the overall conclusion of the cycle. We still anticipate the cyclical behavior that Bitcoin has shown in the past. While past price action isn't necessarily a predictor of future movements, it often follows a similar pattern.
BINANCE:BTCUSDEducation
by XForceGlobal
6
Master the Market: Top Secrets to Prevent Losses in Any Trend! Common Reasons Why Traders Lose Money Even in an Uptrend Not Setting Stop-Loss: Not Conducting Technical Analysis: Going Against the Trends: Following the Herd: Being Impatient: Not Doing Homework or Research: Averaging on Losing Position: 'Buy low, sell high' is the motto. As simple as it sounds, why do most people lose money trading or investing? There are four major mistakes that most beginners make: Excessive Confidence This stems from the belief that individuals are uniquely gifted. They think they can 'crack the code' in the stock market that 99.9% of people fail to, with the goal of making a living from trading and investing. However, given that more people lose money in the market, this wishful thinking is akin to walking into a casino feeling lucky. You might get lucky and win big a few times, but ultimately, the house always wins. Distorted Judgments While simplicity is key, most beginners approach trading and investing with overly simplistic methods, hardly qualifying as trading logic or investment reasoning. They might spot a few recurring patterns in the market, akin to discovering fire. However, they soon realize that these "patterns" were not based on solid reasoning or, worse, were not patterns at all. Herding Behavior This behavior is rooted in a gambling mindset. Beginners are lured by the prospect of a single trade or investment that will turn them into millionaires. Yet, they fail to understand that trading and investing are not like winning the lottery. It's about making consistent profits that compound over time. While people should look for assets with high liquidity and some volatility, the get-rich-quick mentality leads to investing in overextended or overbought stocks that eventually plummet. Risk Aversion Risk aversion is a psychological trait embedded in human DNA. Winning is enjoyable, but we can't tolerate losing. As a result, many beginners take small profits, fearing they might close their positions at a loss, leading to trading with a poor risk-reward ratio. Over time, this reluctance to take risks results in losses. Depending on price action, traders go through seven psychological stages: Anxiety Interest Confidence Greed Doubt Concern Regret Lack of Discipline An intraday trader must adhere to a well-defined plan. A comprehensive intraday trading plan includes profit targets, considerations, methods for setting stop losses, and optimal trading hours. Such a plan offers an overview of how trading should be executed. Keeping a daily record of trades with performance analysis helps identify and correct weaknesses in your strategy. Discipline is crucial in trading to minimize losses and preserve capital. Not Setting Proper Trading Limits Success in intraday trading hinges on risk management. You should predefine a stop loss and profit target before entering a trade. This is a part of trading discipline where many fail. For example, if you suffer a loss in the first hour, you should close your trading terminal for the day. Setting an overall capital loss limit also protects against further trading losses. Compensating for a Rapid Loss A common mistake among traders is attempting to average down a position or overtrade to recover losses. This often leads to greater losses. Instead of overtrading, accept the loss, analyze your strategy, and make improvements for the next trading session. Heavy Dependency on Tips With the abundance of intraday tips on digital media, it's tempting for traders to rely on these external sources. However, it's advisable to avoid this. The best way to learn intraday trading is by understanding how to read charts, recognize structures, and interpret results independently. Tools like the Beyond App by Nirmal Bang provide insightful market research, but practical experience is irreplaceable. Not Keeping Track of Current Affairs News, events, and global market performances influence stock movements. Intraday traders should monitor both Indian and global markets. Make trades after announcements rather than speculating based on news. Intraday trading is a skill, not a gamble, requiring time to develop proficiency. Expecting rapid results is unrealistic. The reasons listed above are why many intraday traders lose money; discipline, strategy adherence, and regular strategy analysis are key to success. We will discuss 3 classic trading strategies and stop placement rules: Trend Line Strategy Buying: Identify the previous low; place your stop loss strictly below that. Selling: Identify the previous high; place your stop loss strictly above that. Breakout Trading Strategy Buying: Identify the previous low when buying a breakout of resistance; stop loss below that. Selling: Identify the previous high when selling a breakout of support; stop loss above that. Range Trading Strategy Buying: Place stop loss strictly below the lowest point of support. Selling: Place stop loss strictly above the highest point of resistance. These stop placement techniques are simple but effective in avoiding stop hunts and market manipulations. What Is a Stop-Loss Order? A stop-loss order is placed with a broker to buy or sell a stock once it reaches a predetermined price, designed to limit an investor's loss. For instance, setting a stop-loss at 10% below your purchase price limits your loss to 10%. If you bought Microsoft (MSFT) at $20 per share, placing a stop-loss at $18 would trigger a sale at the market price if the stock falls below $18. Stop-Limit Orders are similar but have a limit on the execution price, involving two prices: the stop price, which turns the order into a sell order, and the limit price, which specifies the minimum acceptable price for execution. Advantages of the Stop-Loss Order Cost-Effective: No cost until the stop price is hit. Convenience: No need for daily market monitoring. Emotional Insulation: Helps maintain discipline and prevent emotional trading decisions. Strategy Enforcement: Ensures adherence to your investment strategy, though less useful for strict buy-and-hold investors. Types of Stop-Loss Orders Fixed Stop Loss: Triggered at a set price or time, ideal for giving trades room to develop. Trailing Stop-Loss Order: Adjusts with price increases to protect gains while allowing for market downturns. Stop-Loss Order vs. Market Order Stop-Loss: Aimed at reducing risk by selling at a specific price. Market Order: For buying or selling at the current market price to increase liquidity. Stop-Loss Order and Limit Order Limit Order: Executes trades at or better than a specified price to maximize profit or minimize losses. If you appreciate our content, please support our page with a like, comment, and follow for more educational insights and trading setups.
BITSTAMP:BTCUSDEducation
by CRYPTOMOJO_TA
Altcoins: What Comes Up Must Go Down?Giant Flat Correction could be built on the altcoins chart (less Ethereum) Indicators: -Collapse in three waves in 2021-2022 (wave A) -Retest of 2021 peak in three waves in 2023-2024 (wave B) -wave B retested the start of wave A and failed to grasp the bullish ground beyond -first move down and small correction that keeps below all-time high could be the harbinger of new five waves down in wave C Large wave C should at least retest the valley of wave A at 288b cap What could be the reason? -Altcoins could lose its shine as institutions prefer only BTC -Some huge risk aversion in global economy You are welcome to share your views in the comments below to enrich our outlook.
CRYPTOCAP:TOTAL3Education
by aibek
2
The Purchasing Managers’ Index (PMI): What Does It Tell Traders?The Purchasing Managers’ Index (PMI): What Does It Tell Traders? The Purchasing Managers’ Index (PMI) is a widely watched economic indicator that helps traders assess the overall health of the economy via an early snapshot of business activity. Traders often use this data to analyse potential market movements across different asset classes, from equities to forex. In this article, we’ll explore what the PMI is, how it works, and why it matters for traders. PMI Definition The Purchasing Managers’ Index (PMI) is a key economic indicator that offers insight into the business conditions of the manufacturing and services sectors. It’s derived from monthly surveys sent to purchasing managers at various companies, who provide data on several aspects of their business activities. The idea is to get a snapshot of how the economy is performing based on the people making the procurement decisions. PMI data is released in various countries, including majors. PMI is calculated by analysing five main components: - New Orders: Measures the level of new orders received by businesses, indicating future demand. - Inventory Levels: Looks at the stock of goods that companies have on hand, reflecting production expectations. - Production: Assesses the output levels of companies, showing current economic activity. - Supplier Deliveries: Tracks the time it takes for suppliers to deliver goods, which can signal supply chain conditions. - Employment: Monitors hiring levels, providing clues about the labour market. The PMI is reported as a number between 0 and 100. A reading above 50 suggests that the sector is expanding, while a figure below 50 indicates contraction. There are different types of PMIs to be aware of: - Manufacturing PMI: Focuses on the manufacturing sector and is often watched closely because manufacturing is a significant part of many economies. - Services PMI: Covers the services sector, which includes industries like finance, healthcare, and retail. - Composite PMI: Combines data from both the manufacturing and services sectors to give a broader picture of overall economic health. How the PMI Is Calculated The PMI economic indicator is calculated using survey responses from purchasing managers who report whether conditions have improved, remained the same, or worsened. Each response is assigned a score: 1 for improvement, 0.5 for no change, and 0 for deterioration. The PMI is then calculated using the formula: PMI = (P1 × 1) + (P2 × 0.5) + (P3 × 0) Where P1, P2, and P3 represent the percentages of each response. PMI as a Leading Economic Indicator The PMI is widely regarded as a leading economic indicator, meaning it often signals shifts in the economy before other data figures catch up. This is because it’s based on real-time data from purchasing managers, who have a front-row view of their companies’ supply chains and business activity. Early Signals The PMI often catches shifts in the economy before broader indicators like GDP can reflect them. For example, there may be a multi-month decline in the PMI index, meaning that an economic slowdown is coming, giving traders a chance to adjust their positions before the data is widely recognised. Global Comparisons PMI isn’t just available for one country; it’s tracked across the world. Comparing PMI data from different regions allows traders to see how various economies are performing relative to each other. For instance, if the Eurozone PMI is climbing while the US PMI is dropping, it might indicate stronger growth prospects in Europe. Correlation with Broader Economic Trends PMI trends are often correlated with other major indicators like GDP growth, inflation, and industrial output. For traders, this makes the PMI a useful tool to anticipate how markets might react to upcoming economic reports. If the PMI has been rising, GDP or job growth numbers are likely to follow suit, offering a way for traders to estimate upcoming economic releases. Why the PMI Report Matters to Traders The PMI indicator is a valuable tool for traders because it provides early insight into the state of the economy. Here’s why traders pay attention: - Economic Sentiment: A rising PMI suggests that businesses are seeing higher demand and increasing production, which can boost confidence in economic growth. On the flip side, a falling PMI can hint at slower activity, creating caution among traders. - Stock Market Reactions: Traders often see PMI data as a way to gauge how different markets might respond. For instance, if the PMI shows strong expansion, stock markets may react positively, especially in sectors sensitive to economic health like manufacturing or retail. Conversely, a weak PMI could lead to declines as concerns about slower growth set in. - Currency Impact: Currencies tend to strengthen when PMI data indicates economic expansion, particularly for major economies like the US or the Eurozone. This is because higher economic activity usually leads to higher interest rates, which can make a currency more attractive to investors. - Commodities: In commodities, a strong PMI often means higher demand for raw materials like oil and metals, while a weaker PMI could signal reduced demand. If you’d like to see how past PMI releases have impacted markets, head over to FXOpen to explore a world of stocks, currency pairs, commodities, and more. Interpreting the PMI in Trading When traders look at PMI data, they’re not just interested in whether the number is above or below 50—they’re looking for trends and context. As mentioned, a PMI above 50 generally signals economic expansion, while below 50 suggests contraction, but the details matter. Key Thresholds While 50 is the main dividing line, traders often watch for more specific levels. For instance, if the PMI climbs above 55, it usually points to strong growth. If it dips below 45, it could indicate a deeper economic slowdown. Traders pay attention to these shifts because they can signal changes in market sentiment. Month-to-Month Changes It’s not just about the latest PMI reading but how it compares to previous months. For example, a PMI of 52 might still suggest growth, but if it’s down from 57 the month before, traders may see it as a warning sign of slowing momentum. Conversely, an increase over several months can signal improving conditions. Market Reactions to Surprises Market expectations play a huge role in how PMI data is received. If the PMI reading is significantly higher or lower than expected, markets can react swiftly. A higher-than-expected PMI might push stock prices up as traders anticipate stronger economic growth. Conversely, a lower-than-expected PMI could spark sell-offs in risky assets​. Sector-Specific Insight Traders don’t just look at the headline PMI—they break down the numbers by sector. For example, if the manufacturing PMI is rising but the services PMI is stagnant or falling, it could mean that only certain parts of the economy are doing well. This helps traders understand which sectors might perform better in the short term. Global Context PMI data from major economies like the US, China, and the Eurozone can influence global markets. For example, strong US PMI data could push equities higher around the world, while weak data from China might affect commodity prices like copper or currencies like the Australian dollar. The Limitations of Using PMI While the PMI is a useful tool for understanding economic trends, it’s not without its limitations. Traders need to be aware of potential pitfalls when using this data in isolation. - Sector-Specific Focus: PMI primarily covers manufacturing and services, which means it might not fully represent the broader economy, especially in economies where other sectors, like technology or agriculture, play a significant role. - Short-Term Volatility: PMI data can be sensitive to short-term factors, such as seasonal demand fluctuations or temporary supply chain disruptions. These one-off events can distort the numbers, making it tricky to draw long-term conclusions based on a single month’s report. - External Factors: Sometimes, external factors like geopolitical tensions or sudden policy changes can have a bigger impact on markets than the underlying economic trends reflected in PMI. It’s always wise to consider the broader context. - Complementary Analysis Needed: Relying solely on PMI data without looking at other economic indicators, like employment figures or consumer spending, can lead to a narrow view. Therefore, it’s usually used as part of a broader economic analysis. The Bottom Line The PMI offers valuable insights into economic trends, helping traders analyse potential market movements across various asset classes. While not without its limitations, it's a key indicator for understanding market sentiment. For those looking to take advantage of PMI data in their trading, opening an FXOpen account provides access to more than 700 markets and low-cost, high-speed trading. FAQ What Does PMI Stand for in Markets? PMI stands for Purchasing Managers’ Index. It reflects the sentiment of purchasing managers who are responsible for buying goods and services in various industries. Their responses to monthly surveys form the basis of the PMI data, meaning traders can better understand which sectors are expanding or contracting. What Does PMI Mean in Trading? In trading, the PMI meaning refers to the Purchasing Managers’ Index, a key economic indicator that traders use to assess the health of the manufacturing and services sectors. It helps traders gauge economic growth or contraction, which can impact asset prices like equities, currencies, and commodities. How to Use PMI in Forex Trading? In forex trading, PMI data is closely monitored because it provides insight into economic strength. A higher PMI typically signals economic growth, which can strengthen a currency. Conversely, a lower PMI may suggest weaker economic activity, potentially putting downward pressure on the currency. How Does the PMI Index Work? The PMI index is calculated from monthly surveys of purchasing managers in manufacturing and services. The data covers areas like new orders, production, employment, supplier deliveries, and inventory levels. Readings over 50 demonstrate an expanding economy, while below 50 indicate a contracting economy. What Is Manufacturing PMI? Manufacturing PMI focuses solely on the manufacturing sector. It tracks changes in production, new orders, inventories, and more to reflect the overall health of the manufacturing industry. What Is the Difference Between the ISM and PMI Index? The ISM PMI index is produced by the Institute for Supply Management and focuses on the US economy, while PMI is a broader term that refers to similar indices in other regions, like IHS Markit’s global PMI. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
2
Mastering Fibonacci in TradingMastering Fibonacci in Trading Unlock the secrets of Fibonacci and its applications in trading. Learn how to utilize this powerful tool to find optimal entry and exit points, manage risks, and enhance your trading strategies. What is Fibonacci? The Fibonacci sequence is a series of numbers where each number is the sum of the two preceding ones. The sequence begins as follows: The sequence is named after the Italian mathematician Leonardo Fibonacci, who introduced it to Western mathematics in his book Liber Abaci in 1202. One of the fascinating properties of this sequence is the ratio between successive numbers, which converges to approximately 1.618—known as the Golden Ratio . The Golden Ratio and Its Significance The Golden Ratio (1.618) and its inverse (0.618) appear frequently in nature, art, architecture, and financial markets. In trading, these ratios, along with derivatives like 0.382 and 0.786, are used to identify potential support and resistance levels. How Fibonacci Became a Trading Tool Traders and analysts observed that price movements often respect Fibonacci levels, retracing or extending along these key points. This led to the creation of Fibonacci-based tools, such as: Fibonacci Retracement : Used to identify potential reversal levels during pullbacks. Fibonacci Extension : Helps forecast profit-taking levels during trends. Fibonacci Arcs, Fans, and Time Zones : Advanced tools for multi-dimensional analysis. Using Fibonacci in Trading Step 1: Identifying the Swing High and Swing Low Select a clear price movement, either an uptrend or a downtrend, and mark the highest point (swing high) and lowest point (swing low). Step 2: Applying Fibonacci Retracement Using the Fibonacci tool on platforms like TradingView, draw from the swing low to the swing high (for uptrends) or from the swing high to the swing low (for downtrends). Key levels to monitor are: 0.236 (23.6%) 0.382 (38.2%) 0.5 (50%) 0.618 (61.8%) 0.786 (78.6%) These levels often act as support or resistance zones. ICT Optimal Trade Entry Zone Fibonacci retracement levels have been widely used by traders, from traditional to Smart Money concepts. While technical analysis has evolved, traditional tools like Fibonacci retracement levels still hold their relevance. A modern adaptation of this is the ICT Optimal Trade Entry (OTE) concept. The Fibonacci level range from 62% (0.618) to 79% (0.786) is known as the Optimal Trade Entry Zone . This zone is critical for identifying high-probability reversal points during retracements. Bullish Setup : In an uptrend, the OTE zone provides a favorable entry point when the price pulls back to this area, indicating a potential continuation of the bullish trend. Bearish Setup : In a downtrend, the OTE zone serves as a resistance area where the price is likely to reverse and continue its downward trajectory. The Golden Pocket The zone between the 0.618 and 0.650 levels is also referred to as the "Golden Pocket," emphasizing its importance as a high-probability area for price reversals or trend continuation. Combining Fibonacci with Other Tools Fibonacci works best when combined with other technical analysis tools: Candlestick Patterns : Confirmation signals for reversals or continuations. Trendlines : Validate key Fibonacci levels. Volume Analysis : Assess the strength of price movements near Fibonacci levels. ICT Strategies : Use concepts like mitigation blocks or liquidity voids to refine entry points in the OTE zone. Practical Applications Scalping: Use Fibonacci on shorter timeframes to identify intraday opportunities. Swing Trading: Combine Fibonacci retracements with trend analysis for multi-day trades. Long-Term Investing: Employ Fibonacci on weekly or monthly charts to identify major turning points. Conclusion Fibonacci tools are essential for any trader looking to enhance their market analysis. By mastering these tools, including the ICT Optimal Trade Entry concept, you can: Identify optimal entry and exit points. Manage risks more effectively. Gain deeper insights into market behavior. Start experimenting with Fibonacci today on TradingView and discover how it can transform your trading strategy!
Education
by BigBeluga
Timing is Everything: When to Invest in the Stock MarketWhen to Invest and When to Hold Back: A Comprehensive Guide to Market Timing Determining the right time to invest in the stock market can be challenging. Should one enter when prices are low or during market upswings? While there's no foolproof way to ensure investment success, grasping market dynamics and trends can provide a significant advantage. To navigate stock market investments effectively, it's essential to understand its structure and functioning. By examining prevailing trends and identifying potential opportunities, you can make well-informed decisions that may improve your financial outcomes. This article covers the fundamentals of stock trading and highlights the critical factors that contribute to successful investing in the stock market. While perfect market timing is nearly unattainable, recognizing critical indicators and trends can enhance your investment strategy and facilitate wealth accumulation over the long term. Understanding the Stock Market The stock market serves as a global platform where investors and traders exchange shares of publicly traded companies. It reflects overall economic health, corporate performance, and geopolitical developments. Beyond being an economic gauge, the stock market is a powerful mechanism for wealth creation over time. Differentiating between stock trading and investing is pivotal. Stock trading typically involves buying and selling shares frequently to capitalize on short-term price fluctuations. In contrast, share market investing emphasizes a long-term strategy, focusing on holding stocks to achieve steady growth. Historically, investing in the stock market has proven beneficial, often generating higher returns compared to other investment vehicles like bonds or savings accounts. With effective compounding and diversification, stock investments can play a crucial role in realizing financial objectives. Regardless of your experience level, understanding the stock market's fundamentals is a vital first step. The Importance of Timing in Stock Market Investing Timing is essential in stock market investing, as it involves identifying optimal moments to buy or sell. While accurately predicting the perfect timing is unrealistic, a solid understanding of market conditions can help prevent common mistakes and inform better investment decisions. One common pitfall is the attempt to time the market too precisely, which can be detrimental. Emotional decisions, such as panic selling during downturns or succumbing to greed during a market rally, can lead to missed opportunities and financial losses. Investors driven by fear or greed rather than rational analysis may find themselves in unfavorable positions. Strategic timing, however, remains valuable. By observing overarching trends and economic signals, you can make more informed decisions. For instance, bear markets—characterized by declining prices—can provide opportunities to acquire quality stocks at lower prices. Historically, investments made during downturns often yield significant returns when the market rebounds. For example, those who invested in early 2009 after the 2008 financial crisis experienced substantial growth over the subsequent decade. Similarly, investors recognizing the potential of tech giants like Amazon and Apple during the late 1990s saw considerable rewards. Weekly chart Amazon From 2008 - 2025 Weekly chart Apple Inc. From 2008 - 2025 Ultimately, while timing is important, it is crucial to prioritize long-term growth over short-term speculation. Staying informed, disciplined, and basing decisions on comprehensive analysis rather than fleeting market sentiment will yield more favorable outcomes. Read Also: Key Factors Influencing Investment Timing Investing wisely in the stock market necessitates an awareness of various factors that can influence market behavior. These elements serve as indicators, guiding investors on when to enter or exit the market for maximum gains. Market cycles are among the most significant influences on stock trading. Bull markets, defined by rising prices and optimism, create favorable conditions for investment. Conversely, bear markets, marked by declining prices and caution, can present value-driven investors with attractive opportunities. Economic indicators are also fundamental in shaping investment choices. Metrics such as GDP growth, interest rates, and inflation levels yield insights into the overall economic landscape. For instance, low interest rates generally stimulate market activity, while high inflation may erode investor confidence. Read Also Corporate earnings reports are critical as well, revealing a company’s financial health, which directly affects its stock price. Positive surprises in earnings can drive share prices up, whereas disappointing results often lead to declines. Geopolitical events and global occurrences play a substantial role in market conditions too. Events like elections, conflicts, and even pandemics can introduce significant volatility. For instance, uncertainty surrounding elections can create market hesitance, while global crises might result in both risks and fresh investment prospects. Key Indicators for Stock Market Investment Identifying key indicators is essential for uncovering promising investment opportunities. These tools and metrics can enhance clarity amid market noise, enabling informed decisions. Valuation metrics such as the price-to-earnings (P/E) ratio are widely utilized indicators. A low P/E ratio may indicate that a stock is undervalued, while a high P/E might suggest overvaluation. Dividend yield trends offer additional insight, especially for income-focused investors. A consistent or increasing dividend yield could signify a stable and profitable company, making it an attractive investment. Market sentiment and news trends provide context that shapes stock prices. Positive news regarding a sector can lead to price increases, whereas negative sentiment may offer contrarian investors a chance to buy at a lower price. Technical analysis tools are beneficial for traders seeking short-term opportunities. Indicators like moving averages and support and resistance levels can assist in identifying potential entry and exit points. Long-Term Investing vs. Short-Term Trading Choosing between long-term investing and short-term trading is a critical decision shaped by your financial goals and risk appetite. Long-term investing involves holding stocks for extended periods, capitalizing on compound growth and riding out market volatility. The simplicity of this approach minimizes the need to time the market precisely; instead, consistent contributions and patience can yield substantial rewards. Conversely, short-term trading involves capitalizing on swift market movements, often within days or hours. While this can enable rapid profits, it necessitates rigorous analysis, discipline, and swift reactions to market changes. Each strategy has its advantages and disadvantages. Long-term investing fosters stability and aligns with broader wealth-building objectives, while short-term trading may be thrilling and potentially lucrative, albeit with increased risks. Understanding your financial aspirations will guide you in selecting the approach that aligns best with your needs. Read Also Avoiding Common Mistakes When Timing the Stock Market Investors can fall victim to several traps when attempting to time the stock market, leading to costly missteps. Steering clear of these mistakes is vital for successful stock market investing. A prevalent error is chasing trends and following the crowd. Many investors succumb to the excitement of soaring stock prices, purchasing at inflated values, only to face losses when the bubble bursts. Instead of following the herd, focus on research and a solid strategy. Allowing emotions to dictate responses to market fluctuations is another common pitfall. Fear during downturns can trigger panic selling, while greed during bull markets can result in excessive risk exposure. A disciplined approach is crucial for navigating market volatility successfully. Lastly, neglecting diversification can expose your portfolio to unnecessary risk. Concentrating too much on a specific sector or asset type increases vulnerability to market shifts. A well-diversified portfolio reduces risk and enhances the potential for steady returns. Read Also: Crafting a Strategic Approach to Stock Market Investments Developing a strategic investment approach in the stock market involves aligning your choices with your financial objectives and risk tolerance. Recognizing your goals and comfort with risk will guide your decision-making process. Diversifying your investments across asset classes such as stocks, bonds, and ETFs is key for creating a balanced portfolio. Including a mix of well-established stocks and growth opportunities allows for both safety and potential returns. Modern investment tools can further refine your strategy. Robo-advisors offer personalized, automated portfolio management, while stock screeners help identify opportunities by filtering stocks based on various criteria. Technical analysis platforms can also provide insights into market trends and assist in timing your trades. Ultimately, having a well-considered plan is more beneficial than trying to predict every market movement. Commit to your strategy, regularly review it, and adjust it as your financial situation evolves. When to Hold Off on Investing While the stock market offers numerous opportunities, certain conditions may warrant caution. Timing may not dictate everything, but some scenarios are best approached with restraint. Investing during periods of extreme market volatility or panic selling is often unwise. Markets influenced by fear rather than fundamentals tend to be more unpredictable. Instead, consider waiting for calmer market conditions or look for long-term opportunities based on solid research. Personal financial instability also signals a need for caution. Investing should be done with disposable income, not funds earmarked for necessary expenses or emergencies. Without an emergency fund, you risk having to sell investments prematurely, often at a loss. Over-leveraging represents a significant risk, particularly during uncertain economic climates. While borrowing money to invest can amplify gains, it equally amplifies losses. Ensure any investments are manageable within your financial means. By understanding when to invest and when to hold back, you can navigate the stock market more effectively and work toward achieving your financial goals. ✅ Please share your thoughts about this educational post in the comments section below and HIT LIKE if you appreciate! Don't forget to FOLLOW ME; you will help us a lot with this small contribution
NASDAQ:AAPLEducation
by FOREXN1
3
Short Sellers: Liquidity Providers or Market Disruptors?█ Understanding Short Sellers: Liquidity Providers or Market Disruptors? Short sellers often have a controversial reputation, viewed by many as market manipulators who profit from falling stock prices. However, recent research sheds light on an unexpected and valuable role they play: providing liquidity to the market, especially during critical moments like news releases. Let’s break down this concept in a way that’s approachable for everyone while maintaining the insights of the academic findings. █ What Is Short Selling? In simple terms, short selling is a trading strategy where an investor borrows shares of a stock, sells them, and hopes to buy them back later at a lower price to pocket the difference. While this might sound straightforward, it’s a high-risk activity because the potential losses are unlimited if the stock price rises instead of falling. For long-term investors, the goal is usually to buy strong companies that will grow over time, benefiting from compounding returns and supporting broader economic growth. On the other hand, short selling tends to attract risk-seekers who aim to profit from price declines. Unfortunately, many inexperienced short sellers get burned by the complexities of market dynamics, including the balance of supply and demand for liquidity. █ Why Is Short Selling Important? Despite the risks, short sellers are essential to the financial markets. They help correct overpriced stocks and bring balance to valuations, contributing to more accurate pricing. Moreover, they provide critical insights during times of market euphoria or uncertainty. One example of their importance is the role of short sellers during events like the “short squeezes” in GameStop or Volkswagen. These situations occur when a stock’s price skyrockets, often fueled by retail traders or unexpected news, forcing short sellers to buy back shares at higher prices. While dramatic, such events highlight the complex interaction between short selling and market liquidity. █ A Fresh Perspective: Short Sellers as Liquidity Providers Traditional thinking often casts short sellers as aggressive traders who demand liquidity—placing orders that consume existing bids or offers in the market. However, a recent study challenges this view, showing that some short sellers do the opposite: they provide liquidity. Using transaction-level data, the study reveals that informed short sellers strategically supply liquidity by posting and maintaining limit orders. These orders help stabilize markets, especially during volatile periods like news days. This behavior contrasts with the common perception of short sellers as disruptive forces, instead positioning them as contributors to market efficiency. █ Key Findings from the Research The research, titled Stealthy Shorts: Informed Liquidity Supply, presents several critical insights: ⚪ Liquidity-Supplying vs. Liquidity-Demanding Short Sales: Liquidity-supplying short sellers place limit orders, offering to sell shares at specific prices. Liquidity-demanding short sellers use market orders, which take the best available prices. The study found that liquidity-supplying short sales are more predictive of future stock returns than liquidity-demanding ones. ⚪ Predictive Power of Liquidity-Supplying Shorts: Stocks with high levels of liquidity-supplying short sales underperform those with low levels over a 21-day holding period. This pattern suggests that these short sellers have a long-term informational edge. ⚪ Impact on Price Discovery: By providing liquidity, these short sellers help narrow bid-ask spreads, making it easier for other investors to enter or exit positions at favorable prices. ⚪ Informed Trading: Liquidity-supplying short sellers often act on information not yet fully reflected in stock prices. For example, they are particularly active and accurate around news days when fresh information enters the market. █ Implications for Investors and Regulators The findings challenge regulators and market participants to rethink their views on short sellers. While short selling is often criticized for its potential to destabilize markets, this study highlights a more nuanced role: informed short sellers contribute to market liquidity and efficiency. For everyday investors, this means that short sellers aren’t just betting against companies but also helping ensure that stock prices reflect their true value over time. █ Takeaways for Beginners If you’re new to investing, here’s what you should know: Short selling is risky and generally not recommended for beginners. The potential for unlimited losses makes it a strategy better suited for experienced traders. Short sellers play a vital role in financial markets by helping correct mispricings and improving liquidity. Understanding the mechanics of liquidity supply and demand can provide valuable insights into how markets function. █ Final Thoughts This research highlights the dual role of short sellers, particularly the most informed ones, as both traders and market stabilizers. By offering liquidity and acting on long-lived information, these traders help create more efficient markets, benefiting everyone from retail investors to large institutions. As always, a deeper understanding of market dynamics can empower better investment decisions and help you navigate the complexities of the financial world with confidence. ----------------- Disclaimer This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
SP:SPXEducation
by Zeiierman
Gann Astro Trading - Why Time is More Important than Price.Understanding Gann Astro Trading: Why Time is More Important than Price 1.Time and Price are Interconnected: - According to Gann, markets move in cycles, and these cycles are governed by natural and cosmic rhythms. The relationship between time and price is crucial, but time, as Gann states, is often the more significant factor. - While price shows the movement, it is the time element that reveals the true potential of a market cycle. Gann's theory posits that price will ultimately follow time-based cycles, meaning that a specific time point will have a more profound influence on future price movements than price levels alone. 2.Time: The Key Driver of Market Movements: - In his writings, Gann emphasizes the importance of specific time intervals, particularly geometric and astrological cycles, to predict price movements. Markets do not move in a vacuum; they respond to the inherent rhythms of time. - As described in The Tunnel Thru the Air and How to Make Profits in Commodities, Gann believed that understanding time cycles could help traders forecast market turning points more accurately than focusing solely on price patterns. 3.The Significance of Degrees and Cycles: - Gann used the concept of a "degree" to measure time in a circular manner. A degree represents a specific amount of time, where 360 degrees make a complete cycle. He applied this idea to market movements, showing how price and time could be mapped in a circular form. - Gann believed everything in the universe operates in cycles—astrological, physical, and even economic. Through his Gann Wheel, Gann demonstrated how specific degrees, such as 90°, 180°, and 360°, corresponded to important market levels and time intervals. 4.Astrological Influence on Time and Price: - Gann integrated astrology into his market analysis, acknowledging that planetary movements had a direct influence on market cycles. For example, a planet returning to the same degree it occupied at the start of a cycle could be a strong indicator of a market shift. - By converting planetary positions into degrees and mapping them onto market time frames, Gann successfully predicted major market events. 5.Why Time is Critical: - Gann's extensive research showed that market trends often form at specific time intervals—regardless of the price level—such as at 90, 180, 270, or 360 degrees from a key turning point. -The timing of a market move can indicate a price reversal or continuation, and Gann believed that correctly identifying these time cycles allowed for more precise predictions. -The market’s response to time cycles reveals the true potential of price movements, as price action will follow these natural time-based rhythms. 6.The Gann Square and Time Cycles: -The Gann Square is another tool Gann used to analyse price and time. It is a geometric pattern based on the number 9, and each square corresponds to specific time and price relationships. By calculating the number of days or weeks that correspond with these squares, traders could better predict key market turning points. - Gann’s approach suggests that once a market has completed a cycle of 360 degrees (time), the next cycle could follow a similar pattern, reinforcing the idea that time leads price. 7. Converting Everything to Degrees: - Gann’s unique ability to convert price and time into degrees allowed him to identify specific turning points. Whether it was a stock chart, a commodity price, or even an astrological event, everything could be analysed using this degree-based methodology. - In his Master Commodities Course and Gann Master Charts, he elaborated on how these degrees could be used for precise timing and decision-making in trading. Each market action and reaction could be mapped along a 360-degree circle, giving traders a unique insight into future movements. -------------------------------------------------------------------------------------------- "Here is a trade example using the Gann Astro Trading Principle." "Using Gann Astro techniques, I accurately calculated the exact reversal time for Gold 2 hours in advance. Although my limit orders didn’t get filled, the market reversed precisely at the predicted time, showcasing the precision of intraday trading with Gann Astro trading and mathematical Models" OANDA:XAUUSD TIME OF REVERSAL CALCULATED 2 HOURS PRIOR - In the market, TIME is more important than PRICE. Most of you are misled by retail strategies that solely focus on the X-axis (price), which is fundamentally flawed. Markets move based on the function of TIME, not price, and certainly not by your lagging indicators or ineffective strategies focused only on price. The real truth lies in the Y-axis: TIME. TIME IS MORE IMPORTANT THAN PRICE - GANN WHEN THE TIME IS UP THE MARKET WILL REVERSE- GANN (Note: Emphasizes the precision of your calculation and method while acknowledging the limit order not being filled.) "YOU DON'T PANIC WHEN YOU KNOW THE GAME" ------------------------------------------------------------------------------------------------ Conclusion: Time, as Gann stated, is often the more important element in forecasting price movements because it reflects the cosmic and cyclical influences that govern all aspects of life, including the markets. By converting everything to degrees, Gann was able to map time and price in a way that provided clearer insights into market direction. Through his works, we see that the true key to success in trading lies not just in price levels but in understanding the cycles of time that drive the markets.
CAPITALCOM:GOLDEducation
by GannAstroTrader
5
Risk Management in Trading: Keeping It Simple and Stress-FreeIf you're new to trading, you’ve probably heard the golden rule: “Don’t risk more than 1-2% of your account on a single trade.” Sounds easy, right? But let’s be real—trading is way more than just crunching numbers. Let’s Break It Down 1. Don’t Bet the Grocery Money! 🍎 First things first: Never trade with money you can’t afford to lose. Imagine this—your rent is due next week, but instead of saving, you decide to trade all that cash because you’re feeling lucky. Spoiler alert: That’s not luck—it’s a one-way ticket to Stress City. When you trade money you can’t afford to lose, every market wobble feels like the end of the world. Keep your bills paid and your pantry stocked before you even think about trading. Example: Think of trading like buying lottery tickets. You wouldn’t spend your entire paycheck hoping to hit the jackpot, right? (Well, I hope not!) Treat your trading account the same way. 2. Discipline > Math 🧠 Sure, knowing the 1% rule is cool, but what really matters is sticking to it. Here’s the thing: Losing streaks happen to everyone—even pros. The question is, how many losses in a row can you handle without losing your cool and going all-in on a “revenge trade”? Example: Think of it like a diet. You promise to eat just one cookie, but after a bad day, you eat the whole pack. The same thing happens in trading if you’re not disciplined. One bad trade can lead to a whole bunch of bad decisions. 3. Trading Won’t Pay Your Bills (At Least Not Yet) 💸 Many people dream of quitting their job to trade full-time. Sounds great, but here’s the catch: You need a lot of money to make trading your main income source. The trader in the video suggests keeping a day job while learning the ropes. That way, you’re not relying on trading profits to survive. Example: Imagine opening a lemonade stand, but you only have two lemons. You can’t expect to make enough lemonade to pay rent! Work on growing your “lemon supply” (your trading skills and capital) before you go all-in. 4. Watch Your Trade Count 🕒 Making too many trades in one day is like eating too much junk food—it might feel good at first, but it’ll cost you later. Even small risks add up quickly when you’re overtrading. The pros call this “death by a thousand cuts.” Example: If you take 10 trades in a day, risking 1% each, you’re suddenly risking 10%. That’s like ordering 10 desserts because “they’re just tiny.” Spoiler: It adds up fast. 5. Learn from Poker Players 🎲 Ever watched poker pros on TV? They don’t bet everything on one hand—they manage their “bankroll” carefully, so they don’t lose it all. The same idea works in trading. Lower your position size when things aren’t going well so you can stay in the game. Pro Tip: Want a fun exercise? Use poker chips or fake money to practice “betting” on trades. Seeing your stack shrink will remind you why managing losses is so important. Simple but Powerful Lessons Build a Safety Net: Before you think about trading full-time, save up enough money to cover your expenses for a few months. This way, you can trade without freaking out over every dollar. Learn a Backup Skill: Trading takes time to master. While you’re learning, keep a steady job to support yourself financially. Focus on the Process, Not the Profits: Winning traders don’t obsess over the money—they focus on following their strategy and improving their skills. A Few Quotes to Keep in Mind “Risk management isn’t about numbers; it’s about discipline.” “If losing money makes you panic, you’re trading too much.” “Turn off the profit and loss display—focus on making good trades.” Final Thought: Keep It Chill Trading is like a marathon, not a sprint. Take your time, stick to your plan, and never risk more than you’re comfortable losing. If you approach it with patience and discipline, you’ll not only survive but thrive in the markets. Now, go grab a coffee (or lemonade) and plan your next trade with confidence! ☕🍋 Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
Education
by Crypto4light
Strategy testing: is it enough? Hey everyone, I wanted to touch on a topic that I don’t think is discussed nearly enough here, and that topic is backtesting. How reliable is it really? Most people would assume that backtest results are solid. You get a backtest with a 74% success rate, and you think you've won the lottery! However, there are some grey areas when it comes to backtesting. In fact, backtesting should only be the first step in multiple phases one should go through to ensure a strategy is indeed profitable. First, let’s dispel some myths about accuracy vs. profitability. High accuracy = high profitability? This is false. A high accuracy does not always mean profitability. The considerations that must go into this fact are: - At what point are you taking profits? If a buy signal occurs and you take profits at about 0.50 cents from the buy signal, then this is not a feasible strategy or one with a great risk-reward (R:R) ratio. - How long are you holding? If the strategy has high accuracy but requires you to hold for 2 to 3 years before seeing profits, then this defeats the purpose of most trading strategies, as this is simply an investment strategy, which, in itself, is a solid approach. These are two common issues I see in strategies that lead to misleading “accuracy” results. Low accuracy = not profitable. This is false. Low accuracy strategies tend to be the best strategies because the focus of these strategies is usually on holding for major targets, with strict stop-loss parameters. You will be profitable infrequently, but when you win, you will win big. A real-life example of this would be Michael Burry’s successful short. While his successful short became the story of books and movies, his multiple failed attempts at making major shorts before and after this trade have been overshadowed by his success in the 2008 bubble short. Thus, Michael Burry has a low accuracy but a high profitability factor. How can we better decide on successful strategies? This is the question that any day or swing trader should be asking: How do we validate the efficacy or efficiency of our strategy? This is where things get somewhat complicated. The emphasis I see in the trading community is on just general accuracy and profit factor. I also see some discussions on Sharpe ratios. I think it’s important to understand these concepts before we continue. Accuracy: Accuracy is simply the number of successful trades over the total number of trades, multiplied by 100. So, 49 successful trades out of 50 total trades would equal an accuracy of 98%. Profit factor: Profit factor is the total gross profits divided by the total gross losses over the course of the strategy testing period. For example, if over the last 4 weeks, you made $800 and lost $250, your profit factor would be 800/250 = 3.2. Sharpe Ratio: Sharpe ratios are slightly more complex. This ratio attempts to evaluate the risk-adjusted return of an investment/portfolio or trading strategy. It works by taking the average return of the strategy/portfolio or investment and subtracting the risk-free rate. The risk-free rate can be something like government bills or a simple high-interest savings rate. Then, you take the remaining value and divide it by the standard deviation of the investment/portfolio or strategy profits. For example, let’s say your strategy generally yields 10%. The risk-free rate of a high-interest savings account is 2%. The standard deviation of your profit strategy is around 15% (this would be calculated by taking all of your returns from your strategy, both positive and negative, and calculating the standard deviation). In this case, the Sharpe ratio would equal 0.53. An excellent Sharpe ratio is >2. A Sharpe ratio <2 but >1 is considered good. The average Sharpe ratio for most returns is <1 and is more realistic. TradingView’s strategy tester actually provides you with a calculation of the Sharpe ratio. Simply apply a strategy to your chart and head over to the “performance summary” tab: In general, you should treat any Sharpe ratio >1 with extreme skepticism. So, are these approaches enough to determine how successful a strategy will be? No, absolutely not. Even with a good Sharpe ratio, an okay accuracy, and a high profit factor, you cannot be guaranteed that the strategy will be successful. Why not? This is a complex question, and I think it’s best answered from a biostatistics approach (mostly because this is my field, haha). In biostatistics and epidemiology, we have something that can be closely linked to stocks. It's called a “web of causation.” What this means is there are numerous factors that influence a person’s health, and it is very challenging to control and account for all these factors. Take a make-believe person, Mrs. Jones and her family. At first glance, Mrs. Jones and her family may appear well-dressed, affluent, well-groomed, and healthy. Now, let’s say we want to trade based on Mrs. and Mr. Jones’ likelihood of living to 80 years old (we are playing the insurance actuary’s job now, haha). The only information we have on this family is that they appear affluent, show no signs of illness, and they are pleasant people. Believe it or not, this is about all the information we have at a single point in time on a stock. That’s all we can really know at the time of trade execution. We can speculate further, but we can’t really know all of the impacting factors on the stock. Now, let’s say we buy calls on the Jones family living to 80 based on what we observe. Now, 12 years have passed, and Mr. Jones ends up ill and in the hospital. Two months later, he sadly passes away. Then, 1.5 years after that, Mrs. Jones sadly passes away from cancer. Your position is now worthless. What happened? We ignored and were not able to view the full picture. The Jones family had a lower socioeconomic status. Mr. Jones liked to drink over 4 alcoholic drinks per day. They lived in an older home that did not have sufficient insulation and protection from the elements. They also lived beneath a power grid distribution zone and right next to a high EMF emitting cellphone tower that was constructed right after the family moved in 11 years ago. Mrs. Jones’ family had all died 2 years ago, before the age of 68 from cancer, and Mr. Jones’ family had a history of health issues and alcoholism. We can visualize a web of causation through this image: Some of these things we could have found out, namely the socioeconomic status and Mr. Jones’ history of alcoholism. However, most of these things did not appear until midway through our bet. For example, at the time, we did not know that they would build a high EMF emitting tower right next to their house, and Mrs. Jones’ family did not die until 8 years into our position. So how could we have known? The truth is, we couldn’t have. It’s impossible! We could have done better due diligence by obtaining the current and most recent family history and socioeconomic situation. We could have obtained information on the location and house the family was living in. But most of these things happened along the way, and it would have been impossible to foresee them. This is the reality of stock trading. The issue with stocks is that it is impossible to know what the future holds for a company or the economy. The stock market has a multifaceted web of causations, such as the current economic status of a country, global affairs, war, presidency, a company’s overall financial stability, unexpected lawsuits, unexpected losses, bankruptcies, interest rates, and other economic disasters. Here’s what a web of causation could look like for the stock market: So, what can we do? Here are some tips for ensuring that we capture the most accurate picture we can of a strategy. We’ll start with some easy, quick-to-implement approaches and then go into some more advanced, higher-level approaches. Easier approaches: - Ensure you utilize a larger lookback period. TradingView has the ability to do what is called “deep backtesting.” This allows you to backtest a strategy from many weeks, months, and years in the past. Make use of this function! One of the biggest issues with strategy backtesting is focusing on a limited lookback period. This introduces bias and omits a vast amount of data. - Analyze the statistics presented in TradingView’s backtester performance summary. Be very skeptical of Sharpe ratios >= 1.2 and profit factors >= 1.5. Make sure you look at the entries and exits of the strategy, and the average trade length and profit: - Warning signs to look for are an abnormally long period of time in a trade (be sure it’s proportionate to the timeframe you are on—for example, 150 bars on the daily is almost a year!) and frequent trades with marginal profits. Advanced Approaches: Most quantitative traders and financial institutions apply something called forward testing. Forward testing includes a number of statistical tests that can determine whether the results of the backtest are statistically significant. For example, applying a simple Chi-Square test can determine whether there is a statistically significant difference between the number of winning trades and losing trades. A t-test can be applied to a bond/fixed interest rate account performance and your strategy to compare whether there is a statistically significant difference between the profits yielded by your strategy vs. a safe investment or high-interest savings position. These can be accomplished in Python, R, Excel, or even Pine Script (using my SPTS library, which gives you the ability to calculate a paired and one-tailed t-test right within Pine Script). The details on how to do this are higher level and beyond the scope of this article, but I will continue the series on backtesting/forward testing into the future with some examples of how one can forward test within Pine Script and Excel. Another method is by omitting future data points, testing the strategy's success over a specified period, and then executing it on the future points to see if the results compare. If you notice a marked difference between the previous period and the forward period, this should signal alarm bells. For example: The above chart shows the difference that can happen due to changing sentiments and economic circumstances, and that a strategy can be inconsistent and contingent on external factors beyond our knowledge or control. Conclusion And that’s it! This will mark my first educational article of 2025! Hopefully, you learned something and take this to apply to your trading. Be careful, and as always, safe trades, everyone!
NASDAQ:AAPLEducation
by Steversteves
10
Understanding and Using the Gann Fan in TradingThe Gann Fan is a powerful technical analysis tool developed by the legendary trader W.D. Gann. It consists of diagonal lines drawn at specific angles, which help traders identify potential support and resistance levels based on time and price. While the Gann Fan can be complex for beginners, mastering its use can provide valuable insights into market trends and turning points. --- What is the Gann Fan? The Gann Fan is a grid of lines radiating from a central pivot point on a price chart. These lines are constructed at various angles, representing the relationship between time (horizontal axis) and price (vertical axis). The most commonly used lines are: - 1x1 (45-degree angle): Represents one unit of price for one unit of time. It is considered the most critical line, reflecting a perfect balance between price and time. - 2x1: Indicates two units of price for one unit of time. This is a steeper line, suggesting faster price movements relative to time. -1x2:Represents one unit of price for two units of time, showing a slower price movement compared to time. Additional lines such as 3x1, 1x3, 4x1, and 1x4 can also be used to identify key levels of support and resistance. --- Principles of the Gann Fan W.D. Gann believed that price and time move in harmony, and market trends develop at predictable angles. The Gann Fan lines aim to represent this harmony and forecast potential market movements. The key principles include: 1.Balance Between Time and Price: When the price moves along the 1x1 line, it indicates a balanced market. 2.Support and Resistance Levels:Gann Fan lines often act as dynamic support or resistance. Prices tend to respect these levels, bouncing off or breaking through them. 3.Trend Reversal Indicators: A break above or below a fan line can signal a potential trend reversal or continuation. --- How to Use the Gann Fan Step 1: Setting Up the Chart To use the Gann Fan effectively, ensure your chart has an equal scaling ratio between price and time. This ensures that the angles are accurate. Many modern charting platforms, like TradingView, automatically adjust the scaling when drawing Gann Fans. Step 2: Identify a Significant Pivot Point Choose a notable high or low on the chart as the anchor point for your Gann Fan. This point is critical as it determines the origin of the fan lines. Step 3: Draw the Fan Lines Using the Gann Fan tool on your charting platform: - Start at the selected pivot point. - Draw lines radiating outward at the predefined angles (1x1, 2x1, 1x2, etc.). Step 4: Analyze Price Movements - **Support and Resistance:** Observe how prices interact with the fan lines. If the price approaches a fan line, it might act as support or resistance. - Breakouts: A breakout above or below a fan line may signal the start of a new trend. - Trend Strength:The slope of the line indicates the trend’s strength. Steeper lines (e.g., 2x1) reflect stronger trends, while shallower lines (e.g., 1x2) suggest weaker trends. --- Best Practices for Using the Gann Fan 1. Combine with Other Tools:Use the Gann Fan alongside other technical indicators like moving averages, Fibonacci retracements, or oscillators to confirm signals. 2.Backtest on Historical Data:Practice using the Gann Fan on historical price data to understand how well it works for a particular market or asset. 3.Focus on Major Lines: Start with key lines like 1x1, 2x1, and 1x2 before incorporating additional angles. 4.Adjust for Scaling Issues: If your chart appears distorted, ensure that both axes are equally scaled. --- Limitations of the Gann Fan While the Gann Fan is a useful tool, it’s important to be aware of its limitations: - Subjectivity:Choosing the initial pivot point can be subjective, affecting the accuracy of the analysis. -Scaling Challenges:Incorrect scaling can distort the angles and lead to unreliable signals. -Not a Standalone Tool: The Gann Fan works best when combined with other analysis techniques and market context. --- Conclusion The Gann Fan is a versatile and insightful tool for traders seeking to understand the interplay between time and price. By mastering its use and combining it with other analysis methods, traders can enhance their ability to predict market trends and make informed decisions. As with any technical tool, practice and experience are essential to unlock its full potential.
BITSTAMP:BTCUSDEducation
by Cryptonic_Trading
Gold Update: Sideways Consolidation ^ $2,800 => $2,400-$2,500Gold futures follow the path posted earlier (see related). It dropped quickly and deeply within a correction to hit the $2,542 mark. Next was a strong rebound that stalled just above $2.7k Then we saw a series of zigzags that shaped a small consolidation All of this indicates of the sideways consolidation pattern which implies the box type flat correction with top and bottom of the range defined by all-time high ($2,802) and the valley at $2,542. The height of the range is around 300 bucks. Next step for the price to retest or only touch the all-time high, further we might face another drop to retest the valley of $2,542 or even lower to touch the bottom of the bullish channel. Another downside target is at 38.2% Fib at $2,400. After that, the consolidation could be over and the bullish trend to resume with new impulse.
COMEX:GC1!Education
by aibek
The Impact of Cognitive Biases on Trading DecisionsAre You Aware of How Cognitive Biases Shape Your Trading? 📊 Have you ever wondered why, despite having all the right tools and strategies, your trading decisions sometimes veer off course? The culprit might not be the market, but rather your own mind. I’m Skeptic , and I’m here to guide you through understanding cognitive biases—mental shortcuts our brains use to simplify decision-making—that can significantly impact your trading performance. By recognizing these biases and learning how to manage them, you can make smarter, more rational trading choices. Let’s dive in to explore how these biases manifest and, more importantly, how to outsmart them for better trading outcomes. What Are Cognitive Biases? 🔍 Cognitive biases are systematic errors in thinking that can affect judgments and decisions. While these biases help us navigate the complexities of daily life, they often lead to suboptimal outcomes in high-pressure environments like trading. Recognizing and mitigating their influence is crucial for every trader. Common Cognitive Biases in Trading 1. Confirmation Bias 📑 What it is: The tendency to search for, interpret, and remember information that confirms pre-existing beliefs. Actionable Tip: Seek out information that challenges your assumptions. Follow diverse sources and consider alternative viewpoints. A balanced perspective is key to sound decision-making. 2. Anchoring Bias ⚓ What it is: Over-reliance on the first piece of information (the "anchor") when making decisions. Actionable Tip: Regularly re-evaluate your positions using the latest market data. Stay flexible and adapt your strategies as conditions change. 3. Herd Mentality 🐑 What it is: The tendency to follow the crowd’s behavior instead of conducting independent analysis. Example: During the 2020 bull run, I blindly followed popular trading trends, which led to impulsive decisions and missed opportunities. Actionable Tip: Develop and stick to your own trading strategy. Trust your research and analysis over market noise. 4. Loss Aversion ❌ What it is: The preference to avoid losses rather than acquire equivalent gains. Actionable Tip: Set strict stop-loss orders and adhere to them. Accepting small losses is a natural part of trading and helps safeguard your capital. 5. Overconfidence Bias 💪 What it is: The tendency to overestimate one’s abilities or the accuracy of predictions. Example: Overconfidence often led me to take excessive risks and trade too frequently, ignoring clear warning signs and proper analysis. Actionable Tip: Maintain a trading journal to document your decisions and outcomes. Reflecting on past trades helps keep your ego in check and fosters continuous improvement. Practical Strategies for Outsmarting Cognitive Biases 🧠 Use Risk Management Tools: Employ stop-loss and take-profit levels to mitigate emotional decision-making. Pause and Reflect: Before making a trade, ask yourself if any biases might be influencing your decision. Practice Mindfulness: Regularly evaluate your emotional state to ensure you’re trading with a clear mind. Start Small: Test strategies in a demo account or with small trades to build confidence without significant risk. Conclusion: Trade Smarter by Outsmarting Yourself 🚀 Trading isn’t just about mastering the market; it’s also about mastering your mindset. By being aware of cognitive biases and actively working to counteract them, you can make more rational and informed trading decisions. Ready to level up your trading? Start by identifying one cognitive bias you’ve encountered and take steps to overcome it. Share your thoughts and experiences in the comments below—I’d love to hear your perspective! I’m Skeptic , and I strive to provide honest and straightforward trading insights. Together, we can navigate the challenges of trading and grow along the way :)
Education
by SkepticWise
1
Trading Resolutions for 2025The start of a New Year is always a time to not only look back on the old, but also look ahead to the new. Resolutions are often made during this period, so we wanted to provide some suggestions of what you could try from a trading perspective in the year ahead. 1. Keeping a Trading Journal: This doesn’t have to be as onerous as I’m sure you’re thinking! Every time you initiate a trade, write down in a notebook, on your phone or in a file on your laptop, why you’ve executed the trade, your expectations for the trade, the entry and stop loss level(s), possible objectives, the outcome of the trade, and finally your thoughts on what was right/wrong/or how things could have been improved. This will allow you to look back on all your trades, assess your trading strategy and check on how results have changed from trade to trade. Does one strategy consistently outperform the others? Are you making consistent mistakes with trades that lose you money? Are your stop losses being hit more than objectives? This can be performed on a daily, weekly, monthly, or even annual basis to provide valuable insights into what you may be doing wrong and, more importantly, what you are doing right 2. Never Trade Without a Stop Loss in Place: The first question you should always ask yourself before you hit the trade button, is where your stop loss needs to be. Choose chart levels that matter, like previous highs or lows, moving averages, or Fibonacci retracements. Setting a stop loss based solely on risk tolerance may place it above strong support or below strong resistance, where price reversals often occur after stops are triggered. Consider putting your stop loss just above resistance for short positions or just below support for long positions. 3. Determine the Size of Position You Take in Each Trade by Using The Stop Level: This follows on from number 2 above. Try not to go into every trade thinking, I’m prepared to lose X amount financially on each trade, so I will trade my usual size of the asset, which means the stop should be here. Consider whether a better approach maybe to identify where your stop loss should be before you trade an asset, then try adjusting the size of your position to suit where the stop loss level you identified should be placed. This way, your financial risk remains the same each trade, but your stop is in what you have identified as the correct position. 4. Establish a Chart Template on Your Pepperstone System Using Technical Indicators You Trust: Consider assessing what technical indicators you like and trust, be it for example Bollinger Bands, Moving Averages, Momentum and/or Trending indicators, or a combination of them. Whatever you feel works for you and you have a feel for. If you’re not sure which indicators work best for you and your trading, use a Pepperstone demo trading account to test out the technical signals you receive and see what does work for you in a risk free live environment. Remember you don’t have to overcomplicate things by always having all the indicators available to you on a chart. Consider keeping it simple with one momentum, one trending, one sentiment indicator, and an indicator that allows to gauge sentiment, such as Bollinger Bands. Take a look at our timeline where we have already covered several indicators and the types of signals they generate; over time we will add to this coverage. 5. If you like our posts, please hit the Rocket button so we know you like our work, or leave us a comment and let us know if you’d like anything in particular covered. The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Education
by Pepperstone
The easy appraoch of the market A simple way to determine overbought and oversold market conditions is to observe the market's behavior. When the market is overbought, we look for a selling opportunity, but the challenge is knowing when and where to place our entry. This indicator helps us easily get an idea of where to make our entry. On the other hand, the oscillator shows us the bullish and bearish sentiment, helping us determine whether the market will continue to rise or fall.
OANDA:XAUUSDEducation
by Islawterman
Trade trainingHello guys This time we came with classic price action training. As you can see, after a strong upward movement, the price entered suffering and made a ceiling and made a heavy fall, which caused the failure of the previous floor. Now we can enter into a sell transaction with the first pullback, and our target will be the defined support range. Now that the price has entered the channel after the spike, we can still enter into a sell transaction with any upward move until we see signs of trend reversal. *Trade safely with us*
Education
by TheHunters_Company