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Strike a Perfect Balance Between Systematicness and AdaptabilitySuccessful, consistent trading in the long run demands a delicate balance between two key realms: systematicness and adaptability. You can neither be fully automated/robotic nor completely agile and without a plan. Radicalising either approach could lead to catastrophe. Thus, we must blend these elements into a cohesive strategy. The Notion of Systematicness 1) Risking 1% of the Total Capital per Trade You must remain consistent regarding your risk exposure per transaction. Defining your risk appetite beforehand and strictly adhering to these principles is crucial. Being flexible with this factor increases the likelihood of becoming overconfident and over-risking at times. 2) Trading Only One or Two Financial Instruments Every financial security has its own unique market dynamics. Sticking to one or two pairs allows for deeper understanding without overloading your watchlist with dozens of instruments. By taking a selective approach, you can develop a closer connection with those instruments and better understand their price behavior. In our practice, we focus on two pairs: EUR/GBP and USD/CHF. 3) Monitoring and Executing Trades Based on Two Timeframes Timeframes are interconnected. A daily candle comprises six 4-hour candles, and each 4-hour candle includes four 1-hour candles, and so on. By focusing on just two or three timeframes—one for direction and another for entries and target settlements—you cultivate a more minimalistic approach and a deeper understanding of price behaviour. 4) Thoroughly Journaling Every Transaction Journaling every trade, extracting key takeaways, and implementing optimisations is absolutely critical. A systematic approach to journaling helps improve your skills and understanding of the market over time. 5) Establishing Psychological Consistency Through a Set of Rules Your mental state directly affects your trading performance. That’s why it's often said to avoid trading when emotional, tired, or mentally clouded. Establishing and adhering to a set of psychological norms is crucial to maintaining consistency and avoiding emotional trading decisions. 6) Controlling Leverage and Margin Use Similar to risk management, using excessive leverage and high margin per trade can be detrimental. Define your leverage and margin criteria in advance and stick to them rigorously to avoid catastrophic losses. The Realm of Adaptability 1) Entering Trades Based on Ongoing Development If you adopt a fully static approach to trade execution, this rule falls under systematicness. However, if you prefer to read a chart like a book and make decisions based on price behavior, you're taking an adaptive approach. This means you trade what you see, not what you hope for. You must assess how price is developing and interpret its signals before taking action. 2) Conducting Early Closures Based on Market Build-Up Optimism can sometimes cloud judgment when setting target settlements. However, it's essential to remain flexible and know when to exit if the original plan becomes invalid. Recognising when to abandon a trade is key to protecting profits. 3) Setting Realistic Target Zones Based on Price Development Some traders aim for the same risk-reward ratio (e.g., 1:3) on every trade. However, it is often more effective to set realistic targets based on technical analysis, such as previous key levels or significant areas of interest. This flexibility allows for better alignment with current market conditions. 4) Placing Relatively Wide Stop-Loss Levels to Account for Potential Liquidity Grabs While some traders use a static stop-loss value, others take a more flexible approach. By adjusting the stop-loss based on price development, you can avoid liquidity grabs and give the trade more breathing room. 5) Refraining from Entering Positions When Indecisive Adaptability also applies to your psychological state. When you feel unsure or indecisive, it's often better to stay off the charts, allowing time for clarity and a fresh perspective before re-engaging with the market. 6) Making Optimisations Within the Trading Plan Over Time Trading success requires continuous improvement and optimisation. There’s always room for refinement, and adapting your plan as you gain experience is essential for long-term growth. Of course, every trader has his/her own approach within the market. In our case, we aim towards creating a feasible bridge between two universes - systematic and adaptive - and preserving consistent profitability in the long run.
MARKETSCOM:BITCOINEducation
by Investroy
A Simple and Effective Strategy to Outsmart Liquidity HuntingHave you ever encountered a scenario where the price hits your Stop Loss level first, only to then fully reverse and head in the direction of your target profit, ultimately reaching it? If the answer is yes, you’ve most likely fallen victim to what is commonly referred to as a 'liquidity grab'. In other terms, this phenomenon is known as 'stop-loss hunting', and it is an inescapable occurrence within the realm of trading. But why does it happen? The answer lies in the actions of big market players, such as banks and institutions, who need to fill their large positions. Simply put, for markets to function properly, there must be equilibrium - an equal number of buyers and sellers, a balance between supply and demand. For every buy-back and sell-off you conduct, there must be an opposing party willing to execute the trade with you. This is where brokers come into play, linking both sides of the transaction. When there is an imbalance between buyers and sellers, it leads to market inefficiency, which can result in excess supply or demand, distorting price movements. Market makers help prevent this by ensuring market stability and securing better pricing for executing large orders.
 For example, imagine you have analysed the sentiment and opened a SELL trade on USD/CHF at a key level, placing your Stop Loss just above the same zone. After some time, you notice the price impulsively moves towards your Stop Loss, triggering it and taking you out of the trade. Later, you watch the price flip and move in the direction you had originally predicted. Frustrated, you begin to blame the market, convinced it’s rigged against you. However, what really happened is that the price was pushed into an obvious pool of Stop Losses, allowing the positions you and many others sold to be bought back. This also enabled large institutional orders to be filled at better prices, while maintaining balance between buy and sell orders. How do you avoid this? The key is to better understand market dynamics and make more informed decisions. In this scenario, a smarter approach would have been to place your entry where the obvious pool of Stop Losses is located. By doing so, you could have captured a more favourable risk-to-reward ratio, perhaps achieving a 1:3 trade, as illustrated in the accompanying chart. So next time, before rushing into a trade, take a step back. Assess the situation with greater patience and clarity. Often, there’s an initial push, just as the price action indicates. This move entices traders into premature entries. Afterward, a sudden liquidity grab occurs, wiping out these traders before the market reverses in the anticipated direction. Be patient. Play it smart. Best wishes, Investroy
Education
by Investroy
Successful Trading Resembles a CardiogramI once came across a statement that went something like this: “Success is much more like a cardiogram than we realise. There are ups, downs, and periods of stability”. This made me wonder: "Why are the ups, downs, and phases of stability considered normal, rather than constant stability?" The answer was revealing: “If there are ups, downs, and phases of stability, it means you're alive and progressing. If everything is perfectly stable, it means you're stuck and not moving forward”. The process of successful trading within the financial markets closely resembles a cardiogram. From a custom-created graph illustration, each spike could represent an individual trade or even a monthly net total. Through big and small wins, small losses, and inevitable breakeven points, we achieve and maintain consistent long-term profitability. As a trader, this balance is essential. Unfortunately, distortions introduced by firms promising ‘get-rich-quick’ schemes and making unrealistic claims have led many to fall for the illusion of constant winning. In reality, prioritising a sound risk-reward strategy is far more important than focusing solely on win rates. In fact, with a feasible risk management plan, patience, discipline, and a rational approach to the market, one could be wrong half the time and still achieve long-term success. So, the next time you experience a losing streak or face psychological uncertainty, remember that setbacks are part of the journey. Over time, with the right mindset and strategy, everything will fall into place. After all, trading success is a dynamic process - much like the rhythm of a cardiogram.
MARKETSCOM:BITCOINEducation
by Investroy
Technical Analysis is NOT What the Majority Thinks It Is One of my favourite activities during my free time is sitting on the sofa and finding analyses on TradingView that resemble the one portrayed on the left-hand side of the illustration. My goal is to try deciphering what a given author is trying to convey to us, the audience. As you know, the more noise there is on the charts, the blurrier the picture becomes. The blurrier the picture, the more there is room for curiosity and discovery. Over the years, I’ve become more convinced that less is more and that you don’t need to clutter your charts with an abundance of instruments while conducting a technical orchestration. In fact, most people have false expectations regarding how proper technical analysis should be conducted. Many think TA is all about lines and boxes when, in reality, it’s about understanding price behaviour and making educated guesses with pre-calculated risk. Therefore, the aim of this brief educational article is to contrast two types of traders – let’s call them Average Joe and Experienced Joe – and provide professional insights into how technical analysis really functions and should be practiced. Let’s start by scrutinising the scenario on the left. The author has identified some critical regions, drawn a few lines, and highlighted a Fibonacci retracement level of importance. Then, they sketched a game plan using arrows to indicate how the price might behave next. What’s wrong with this approach? In short, everything. The longer answer: there’s a lack of necessary technical interpretation combined with unnecessary efforts. Although some analytical tools are present, they don’t offer any depth in terms of what the price behaviour might be orchestrating. Nor do most of these instruments serve any purpose when applied in a scattered manner. Now, let’s analyse what Experienced Joe – the trader behind the right-hand side of the screen – has put together. He has identified key regions and utilised a few tools for mapping purposes. However, his primary focus is understanding price behaviour by interpreting movements on the weekly-timeframe chart. Since he has traded the same handful of financial securities for years, he is experienced in reading charts like a book and grasping the logic behind price action. After understanding what’s unfolding, the trader finalises his game plan and executes positions. Comparing the two traders, we can see a significant difference between using technical instruments in abundance without comprehension, and using them in moderation with the real goal of understanding price behaviour.
With that said, here is a 3-step guide on how to properly utilise technical analysis when studying a financial instrument and entering trade positions: Step #1 - Read the chart like a book. Where is the price potentially headed? What has been happening recently? What economic event caused the massive candle spike? Does it look like the price is correcting a recent impulse? Take a glance at the graph and try to understand the overall situation. Step #2 - Highlight key zones and sketch a game plan. This is a crucial level that the price has respected for a significant amount of time.
Here, the price printed a liquidity grab, so I’ll mark that.
The price is forming a reversal bottom, so I’m preparing to go long from here.
The 0.84 region looks like a solid initial target. Sketch a preliminary game plan based on your analysis and focus on execution. Step #3 - Execute a trade position at pre-calculated risk (usually, 1-2%). Set your entry. Place your Stop Loss. Execute the trade. In conclusion, technical analysis is not just about drawing some lines and shapes. It’s time to change the stereotype and emphasise the real utility of technical analysis. After all, trading without trying to understand price dynamics—especially if you are a technical trader—is like blindly memorising driving rules without understanding their purpose. Of course, there’s no secret recipe that works 100% of the time, including technical analysis. However, by sticking to a consistent approach and being patient, we can aim toward achieving long-term profitability.
CRYPTO:BTCUSDEducation
by Investroy
The Art of Trading: Parallel Between Master Artists and Traders The world of trading, much like the realm of art, is filled with uncertainty, complexity, and the need for creativity. Both traders and artists embark on journeys of discovery, seeking to master their crafts and find a unique approach in their respective fields. Without further due, let’s delve into the fascinating parallels between the practices of famous artists and the strategies employed by successful traders, uncovering lessons that can be applied to excel in the volatile world of trading. 1. The Picasso Perspective: Pablo Picasso, a pioneer of modern art, was never afraid to take risks and break away from conventional artistic norms. His innovative spirit led to the creation of Cubism, a radical departure from traditional art forms. Trading Lesson: Just as Picasso embraced risk to innovate in art, traders should cultivate a willingness to take calculated risks and explore unconventional strategies. The key is to manage risk effectively, ensuring that potential rewards justify the risks taken (we would strongly encourage 1% risk with risk/reward ratio of 1:3.5+). 2. The Van Gogh Paradox: Patience in the Midst of Turbulence Vincent van Gogh’s life and work exemplify the importance of patience and perseverance. Despite facing rejection and lack of recognition during his lifetime, Van Gogh continued to paint, ultimately leaving behind a legacy of masterpieces. Trading Lesson: We can learn from Van Gogh’s unwavering commitment to his art, understanding that success in trading often requires patience and resilience. Even in turbulent markets, maintaining a long-term perspective and sticking to one’s trading plan can lead to eventual success. Although it is pretty common to see backlash from family and friends, if you stick to your goals and passion, there is no doubt you can be the next Van Gogh of trading. 3. The Da Vinci Code: Leonardo da Vinci, a true Renaissance man, was known for his disciplined approach to art and his insatiable curiosity. He meticulously studied various subjects, from anatomy to aerodynamics, to enhance his artistic abilities. Trading Lesson: Traders can draw inspiration from Da Vinci’s disciplined nature and commitment to continuous learning. Staying informed about market trends, refining trading strategies, and maintaining discipline in executing trades are crucial for trading success. As cliché as it sounds, consistency is the key. Creating the trading plan is not that hard, sticking to it is what makes the real difference. 4. The Monet Method - The Beauty in Patterns and Trends: Claude Monet, a founding father of Impressionism, was renowned for his ability to capture the subtle nuances of light and color, often painting the same scene multiple times to depict different lighting conditions. Trading Lesson: Just as Monet focused on patterns and trends in his artwork, traders should develop a keen eye for recognizing market patterns and trends. Technical analysis can be a powerful tool in a trader’s arsenal, helping to predict future price movements based on historical patterns. 5. The Matisse Approach - Simplicity and Clarity: Henri Matisse was known for his use of bold colors and simple shapes, stripping away unnecessary details to focus on the essential elements of his compositions. Trading Lesson: In trading, simplicity can be a virtue. Traders can learn from Matisse’s approach by simplifying their trading strategies, focusing on key indicators, and avoiding unnecessary complexity. A clear and straightforward trading plan can lead to more consistent results. 6. The Michelangelo Mindset - Mastery Through Practice: Michelangelo, one of the greatest artists of all time, spent countless hours perfecting his craft, from sculpting masterpieces like David to painting the Sistine Chapel ceiling. Trading Lesson: Trading mastery, much like artistic mastery, requires extensive practice and dedication. Traders should commit to honing their skills, practicing their strategies, and learning from both successes and failures. The journey to trading excellence is a marathon, not a sprint. Try having small positive months in a row, instead of 1 month with +100% return and account blown right after. 7. The Pollock Principle - Embracing Uncertainty: Jackson Pollock, famous for his abstract expressionist drip paintings, embraced randomness and uncertainty in his creative process, allowing the paint to fall where it may. Trading Lesson: The financial markets are inherently uncertain, and traders must learn to embrace and navigate this uncertainty. Developing a robust risk management strategy and maintaining a balanced portfolio can help traders manage uncertainty and protect their capital. As you have probably heard from many other specialists: “Trading is the game of probability”. 8. The O’Keeffe Outlook - A Unique Perspective: Georgia O’Keeffe is celebrated for her distinctive style and her ability to see beauty in the simplest of forms, often magnifying flowers and other natural elements in her artwork. Trading Lesson: Developing a unique trading perspective can give traders an edge in the markets. Traders should strive to think independently, conduct their own analysis, and avoid getting swayed by the crowd. A unique and well-informed perspective can lead to more profitable trading decisions. There is nothing wrong with being inspired by a post made by a well-known TradingView author, but that shouldn’t prevail over your own common sense and judgement. 9. The Warhol Way: Capitalizing on Trends: Andy Warhol was a master of identifying and capitalizing on cultural trends, turning everyday objects like Campbell’s soup cans into iconic works of art. Trading Lesson: Identifying and capitalizing on market trends is a key skill for traders. By staying attuned to economic indicators, news events, and market sentiment, traders can position themselves to profit from prevailing trends. Just as Warhol transformed ordinary objects into valuable art, traders can turn market movements into trading opportunities. Don’t fight the trends, it’s a losing battle you don’t want to be a part of. In the fast-paced world of trading, the ability to adapt to changing market conditions is vital. Put the ego aside, if the trade is going against your initial plan, close it, reevaluate, and make proper adjustments. If you made it all the way here, we would like to thank you for taking the time and reading our write-up all the way and we hope you have a wonderful trading week ahead!
BITSTAMP:BTCUSDEducation
by Investroy
1
Avoid getting trapped and hunted by market sharks!Stop Loss Hunt, Liquidity Sweep, Market Manipulation - all of these are fancy names of a highly frequent act performed by big sharks of the market to target the retailers. - "Oh, do you think they care about my 0.01 lot size?" Individually, not. In big volumes, yes. Textbook chart patterns that are so prominent to us are all subject to going through a liquidation phase. Hence, let's look at some graphical examples that will also be supported by real-market instances: 1) "Head&Shoulders" liquidation Upon forming a right shoulder and showing initial bearish moves, market participants tend to execute short positions and place their Stop Loss order above the freshly formed shoulder. In that case, there is a high probability that the price will get driven towards the Stop Loss pool, grab liquidity, then continue impulsing in the pre-determined destination. A live-market example: EUR/GBP Daily Timeframe (period: 28/06/2023 - 16/08/2023) 2) Double Top liquidation Similar to the previous point, upon forming two tops/heads/reversal points, the price shows some bearish moves and invites sellers to take action before we witness the price impulse towards the upside and grab liquidity where masses have set their Stop Loss levels before resuming its bearish moves A live-market example: USD/CHF Weekly Timeframe (period: 09/05/2022 - 07/11/2022) 3) Parallel Channel liquidation Trading within two boundaries of a parallel channel, oftentimes, we may witness how wick spikes are printed and liquidity is grabbed. A live-market example: USD/CHF Weekly Timeframe (period: 16/01/2023 - 21/08/2023) 4) Ranging Market liquidation Being stuck in a sideways-moving liquidation box, it is commonly evident how the price triggers the sea of retail Stop Loss orders to both sides of the rectangle with a sole purpose of taking out early entrants before moving in the pre-orchestrated destination. A live-market example: USD/CHF 8H Timeframe (period: 16/06/2023 - 10/07/2023) To put all in a nutshell, be careful in order to not fall into the Liquidity Aquarium.
BITSTAMP:BTCUSDEducation
by Investroy
13
12 Habits of a Successful TraderHey, TradingView community! In this article we are going to go over 12 things that complete our trading style here at Investroy. Navigating in financial markets can be highly rewarding, but it also comes with its fair share of challenges and risks. Successful traders are not only armed with a deep understanding of market dynamics but also possess certain habits that contribute to their consistent success. Whether you're a novice or a seasoned trader, incorporating these habits into your trading routine can significantly enhance your chances of achieving your financial goals. Without further due, let's get started! 1. Continuous Learning: Successful traders are lifelong learners. They dedicate time to stay updated with the latest market trends, economic news, and trading strategies. They are open to learning from both their successes and failures, constantly refining their skills to adapt to changing market conditions. 2. Disciplined Approach: Discipline is the cornerstone of successful trading. Establishing a well-defined trading plan, setting clear entry and exit points, and adhering to them helps traders avoid emotional decisions driven by fear or greed. 3. Risk Management: Prudent risk management is non-negotiable for successful traders. They never risk more than a small percentage of their trading capital on a single trade. This approach safeguards their accounts from catastrophic losses and allows them to weather market fluctuations. 4. Patience Pays Off: Impulsive trading rarely leads to success. Successful traders exercise patience, waiting for high-probability trade setups that align with their strategy. This prevents them from overtrading and falling into traps set by the market's volatility. 5. Emotional Control: Controlling emotions like fear and greed is a critical habit. Successful traders remain level-headed, even in the face of unexpected market moves. They make decisions based on analysis and logic rather than succumbing to emotional impulses. 6. Adaptability: Markets are dynamic, and successful traders know how to adapt. They recognize that what works in one market condition might not work in another. Being flexible and open to adjusting their strategies helps them stay ahead of changing trends. 7. Journaling and Analysis: Keeping a trading journal is a habit embraced by top traders. They meticulously record their trades, including entry and exit points, reasoning, and outcomes. Regularly reviewing this journal helps them identify patterns, strengths, and weaknesses, facilitating continuous improvement. 8. Mindfulness and Self-Care: Trading can be stressful, and successful traders prioritize self-care. Engaging in activities like exercise, meditation, and spending quality time with loved ones helps them maintain a healthy work-life balance and reduces burnout. 9. Long-Term Perspective: Successful traders don't get discouraged by short-term setbacks. They have a long-term perspective and focus on consistent, incremental growth. This perspective helps them navigate through losses and keeps them motivated during winning streaks. 10. Cultivating a Growth Mindset: Successful traders embrace challenges as opportunities for growth. They see losses as lessons rather than failures and are always seeking ways to improve. This growth mindset helps them adapt to changing markets and fosters resilience in the face of setbacks. 11. Diversification: Top traders don't put all their eggs in one basket. They diversify their portfolio across different assets and industries, reducing the impact of a single market's volatility on their overall capital. 12. Position Sizing: Successful traders adjust their position sizes according to market conditions. During high volatility, they reduce their position sizes to manage risk, while during calmer periods, they may increase exposure (within 1-2% obviously). Becoming a successful trader requires more than just understanding market mechanics. It's about cultivating the right habits that promote discipline, continuous learning, and emotional resilience. By incorporating these 12 habits into your trading routine, you'll be better equipped to navigate the complex world of trading and increase your chances of achieving your financial goals.
BITSTAMP:BTCUSDEducation
by Investroy
13
Here is what we learned from 1000 Publications on TradingViewAs Investroy, a company dedicated to financial education, we are thrilled to celebrate our remarkable milestone of 1000 publications on TradingView. This achievement symbolizes our ongoing journey of learning and growth in the world of trading. Throughout these years, we have accumulated invaluable insights into the psychological aspects of trading, the importance of publishing quality content, and the significance of fostering a supportive community. In our 1000th post, we would like to share the lessons we have learned, offering guidance to fellow traders, educators, and community members. (Publishing Quality Content) At Investroy, we believe that sharing educational content on TradingView allows us to contribute to the trading community while continuously learning something new ourselves during the research. To ensure the highest quality of content, we have learned the following lessons: a. Thorough Research: We understand that conducting in-depth research and analysis is essential before presenting any trading idea or concept. By providing accurate information and data-backed insights, we strive to add value to the community and enhance our reputation. Here, it is important to understand that some strategies or pointers you may deploy might be subjective and not so widely accepted by everybody, so stay mindful and respectful of the feedback you get. b. Clarity and Simplicity: We have come to appreciate the significance of communicating complex trading concepts in a clear and concise manner. Our aim is to help readers understand and apply the information effectively. Through the use of charts, diagrams, and visual aids, we can enhance the clarity of our articles. Rule of thumb, don’t use millions of indicators on a chart unless you really know what you’re doing. That will not only clog up your vision, but will also make it harder for everyone else to understand what you’re up to. c. Continual Learning: We recognize that staying up-to-date with the latest market trends, trading strategies, and financial news is crucial for producing relevant and valuable content. Engaging in ongoing education and seeking feedback from the community have been essential in helping us improve and refine our content. (Building a Supportive Trading Community) We firmly believe in being an active and supportive member of the TradingView community. By fostering a positive environment, we all should contribute to the growth and development of fellow traders. Here are the lessons we have learned: a. Encouragement and Constructive Feedback: We have witnessed the power of providing encouragement and constructive feedback to fellow traders. By creating a supportive atmosphere, we inspire and motivate others on their trading journey. Celebrating successes and offering helpful suggestions become catalysts for growth. This doesn’t include spamming everybody with “GOOD JOB”, “AWESOME CHARTWORK”, but rather providing insight on your opinion or politely sharing on how they can improve the content quality. b. Collaboration and Knowledge Sharing: We have found that collaborating with other traders and sharing insights fosters a spirit of collaboration and mutual growth. Actively participating in discussions, engaging in chats, and offering valuable additions have contributed to creating a vibrant and active community. Thankfully, TradingView administration is quite good with listening to advice from community members and accommodating for them. c. Respect and Professionalism: At Investroy, we hold immense respect for diverse perspectives. We understand the importance of maintaining professionalism in all interactions and adhering to community guidelines. By treating others with kindness and empathy, we strive to create a welcoming environment for all traders. If you’re here to troll, just go to reddit or something instead. A big majority of people here are doing something about their lives and if you’re making fun of them, then that should be a reason to start reevaluating your priorities. Reaching the milestone of 1000 publications on TradingView is a testament to our unwavering commitment to trading education, content quality, and community support. Our journey has revealed the significance of nurturing psychological resilience, publishing high-quality content, and building a supportive trading community. By integrating these lessons into our trading practices and community engagement, we remain dedicated to the growth, learning, and success of fellow traders and the broader trading community. Together, we can continue to empower one another on this transformative journey of financial education and trading excellence. Have an awesome weekend ahead and hopefully you enjoyed the read!
BITSTAMP:BTCUSDEducation
by Investroy
7
Decoding Forex Mysteries: USDCHF & EURGBP Reaction to Rate HikesWelcome to the intriguing world of Forex, where currencies act at their own rhythm, sometimes defying expectations and confounding even the most experienced traders. In this article, we are going to unravel the “mysteries” surrounding the reactions of USDCHF and EURGBP to recent interest rate hikes. We will dive into the realms of market anticipation, monetary policy statements, and the significance of staying ahead in this dynamic landscape. 1. The Resilience of USDCHF As the Swiss National Bank (SNB) raises interest rates from 1.5% to 1.75%, market observers brace for the anticipated downward movement of the USDCHF. However, contrary to expectations, the currency pair displays remarkable resilience. Let's explore the underlying factors: a) Priced-in Expectations: The forex market is renowned for its ability to assimilate information in advance. It is likely that market participants had already factored in the interest rate hike, blunting the immediate impact on USDCHF. Such anticipatory behavior highlights the importance of staying attuned to prevailing sentiment and analyzing market positioning. b) Comparative Interest Rates: Understanding the relative interest rates of different currencies is paramount. If the rate hike in Switzerland was aligned with or lower than market expectations, and other major currencies offered more attractive rates, investors might have favored those currencies, mitigating the downward pressure on USDCHF. c) Monetary Policy Statement Outlook: Monetary policy statements accompanying interest rate decisions provide crucial insights into central banks' future intentions (you can usually watch them live on YouTube 30 minutes after the data release or on Bloomberg type of channels). Since the SNB's statement revealed a cautious and neutral stance, it has tempered the impact of the rate hike on USDCHF. Market participants pay close attention to forward guidance, as it shapes expectations regarding future policy actions and influences currency movements. 2. The Curious Behavior of EURGBP Let us now turn our attention to EURGBP, which failed to sustain a short sentiment following the Bank of England's interest rate hike from 4.5% to 5.00% (versus the expected 4.75%) and left a nasty week. To understand this curious behavior, we delve into the following factors: a) Market Expectations: The forex market is often driven by expectations and anticipatory positioning. If traders had already priced in the interest rate hike, the actual announcement might not have triggered a significant market reaction. Therefore, the lack of sustained short sentiment in EURGBP could be attributed to market participants adjusting their positions in advance. The GBP was up already by 4% within the last month against major currencies, so a big chunk of market was already longing EG for the expected short term recovery (guilty, but we also made a 2.9% profit closure on this). b) Monetary Policy Outlook: Beyond interest rate changes, central banks' monetary policy outlooks play a vital role in shaping currency dynamics. The accompanying statement from the Bank of England, which shed light on their future plans, indicated a more gradual approach to tightening or expressed concerns about economic conditions. Such cues influence market sentiment and limit the downward pressure on EURGBP. In case of UK, this is already not a good look with their inflation rates :/ Now, you may ask: “Investroy, what do we do if fundamentals don’t exhibit the expected economical impact?” Don’t worry, we got you! A Prerequisite for Success In the ever-evolving forex market, staying ahead of the curve is crucial. To navigate the intricacies and maximize opportunities, traders must adopt a proactive approach: a) Monitor Central Bank Communications: Understanding central banks' intentions requires careful analysis of their policy statements, speeches, and press conferences. These sources provide valuable clues about future policy decisions and can guide trading strategies. b) Assess Economic Indicators: Keep a keen eye on economic indicators that impact currency valuations, such as GDP, inflation, and employment data. These indicators provide a foundation for understanding a country's economic health and can influence currency movements. c) Stay Informed of Geopolitical Developments: Geopolitical events, such as trade disputes or political instability, can significantly impact forex markets. Being aware of these developments and their potential consequences on currency movements is crucial for staying ahead. d) Analyze Market Sentiment: Sentiment analysis, gauging the collective psychology of market participants, can offer valuable insights. Monitoring market sentiment through various indicators, such as positioning data and sentiment surveys, helps identify potential shifts and align trading strategies accordingly. e) Embrace Technological Tools: Utilize advanced trading platforms and tools that provide real-time data, customizable charts, and algorithmic trading capabilities. These resources empower traders to analyze market trends, spot patterns, and execute trades swiftly. Bonus) this one is a little subjective, but markets are very cyclic, if something is oversold, but everybody is expecting further bearish move, be sure there is a retracement coming before that happens 😊 Stay safe and enjoy your day!
Editors' picks
Education
by Investroy
23
The Trojan Horse of TradingThe Trojan Horse was a wooden horse used by the Greek army to enter the city of Troy and win the war. Although the inhabitants of the town had initially perceived the horse as a victory trophy, Greek fighters emerged from inside of it and destroyed the city. "Yeah, that's a nice story. But how the heck is it related to trading?" Let us clarify. Trading is generally considered as one of the "easiest hardest" ways of making money. Upon learning about the limitless number of opportunities provided by the financial markets, newbies get excited and believe in the false promises offered by some "John Smith FX Trader" on Instagram that drives a purple Lamborghini and posts demo account profits. To be less cruel and offending, newcomers think they can become consistently profitable full-time investors/traders almost instantly. Hence, we compare trading to the Trojan Horse that is full of "big sharks" such as institutional traders, hedge funds, market manipulating brokerage firms and so forth. In this case, retailers act as residents of the city of Troy and perceive the horse as a gift dedicated for the triumph. Undoubtedly, as already stated, the world of trading presents a vast number of opportunities that one can benefit and make profits from. However, the drawbacks should not be discarded either. Illustrated, we can find some of the hardships that are hiding behind the glamorous GUCCI bags, Shangri-La hotels, Michelin starred restaurants and Bentley sport-cars.
BITSTAMP:BTCUSDEducation
by Investroy
12
Swing | Intraday | Scalp: pros and cons of three trading stylesAs we all know, the three most popular trading styles are the following: Swing trading, Day trading, and Scalping. This educational post is concentrated on highlighting some of the pros and cons of all three techniques. When it comes to Swing Trading (middle to long-term trading), some of the advantages are less screen time, less anxiety, less risk, and less candle noise. This style of trading is beneficial for those individuals that do not have enough time to sit in front of the charts and execute positions on a daily basis. However, some drawbacks should be mentioned as well. In order to be a swing trader, one needs to master the skill of remaining patient, disciplined and cold-blooded. Swing trades can run from one day up to a week, and hence, it is crucial to know how to sit on your hands and do nothing upon witnessing slow price action, indecision, drawdown and so forth. Moving to intraday trading, no overnight and over-the-weekend risks can be associated with this style as executed positions are usually closed within a couple of hours when trading the H1 and lower-timeframe graphs. On the negative side, in order to make a living off day trading, a strong psychological temperament is needed along with a sufficient trading capital. If swing trading requires a minimum of a risk of 1-2% per trade, the number is lower for day trading. Hence, a bigger input (capital) is required in order to be able to make decent returns. Last but not least: Scalping. The fans of this style of trading usually dedicate their focus on timeframes as low as the M5 and M1. Aiming towards capturing 5-10 pip movements, scalpers use smaller lot sizes in comparison to swing and day traders. Nevertheless, this trading style comprises of drawbacks such as indecision and a high degree of emotional state. Since the main purpose of scalping is capturing small price movements identified on lower-timeframe graphics, the noise and confusion is relatively high. While all trading strategies have their own benefits and drawbacks, choosing a trading style that suits your goals and interests the most is highly linked with your personality. If you are a patient and, at the same time, a busy person, swing trading might be the best option for you. On the other hand, if you have enough time and patience to sit in front of the charts and execute trades on a daily and hourly bases, then either day trading or scalping might be the best variants to opt for. Either way, it all narrows down to patience, long-term vision, discipline, persistence, and risk management. Choose one or two securities that you like trading the most, do not get discouraged while experiencing losses and moments of hardship, remain cold blooded and long-run oriented. Investroy
Education
by Investroy
26
Mastering Trading Psychology: Overcoming Emotional BiasesWelcome to another edition of our educational articles that should help the TradingView newbies find an edge over the market and help strengthen the existing mentality for already successful traders. Trading is not just about having a winning strategy and implementing it correctly. Trading psychology plays a crucial role in trading performance. Emotional biases, such as fear, greed, and overconfidence, can lead to impulsive decisions that can hurt trading results. In this article, we will explore the most common emotional biases that traders face and provide strategies to overcome them (of course, we’ll do it step by step, so it is easier to follow). Step 1: Understanding Forex Trading Psychology Trading can be an emotional roller coaster ride, with traders experiencing a wide range of emotions, from elation to despair, in the course of a single trading day. In this section, we will take a closer look at the impact of emotions on trading performance, as well as the most common emotional biases that traders face. Now, I know some of you might be thinking, "Emotions? In trading? Ha! I'm a robot, I don't feel anything." Well, I hate to break it to you, but even the coldest and calculating traders out there have emotions. Unless you're literally a robot, in which case, congratulations on achieving self-awareness! But in all seriousness, emotions can have a significant impact on trading performance. Fear can cause traders to hesitate and miss out on profitable opportunities, while greed can lead to impulsive and reckless trades. And let's not forget about good old-fashioned FOMO (fear of missing out), which can drive traders to chase after trades that have already run their course. So, what are some of the most common emotional biases that traders face? Let's take a look: 1. Confirmation bias - the tendency to seek out information that confirms our preconceived notions, while ignoring evidence that contradicts them. This can lead to overconfidence and blind spots in our trading analysis. 2. Loss aversion - the fear of losing money, which can cause traders to hold onto losing positions for too long or exit profitable trades too early. 3. Anchoring bias - the tendency to rely too heavily on the first piece of information we receive, even if it's not the most accurate or relevant. This can lead to inaccurate price predictions and poor trading decisions. Now, don't worry if you see yourself in some of these biases. We all have them to some extent. The important thing is to recognize them and develop strategies to overcome them. In the next section, we'll explore some techniques for managing emotions and developing a strong trading mindset. But first, let's take a moment to appreciate the fact that even in the world of finance, emotions play a big role. Who knew we traders had feelings too? Step 2: Overcoming Emotional Biases Now that we've explored the impact of emotions on trading performance, it's time to look at some strategies for managing those emotions and overcoming the biases that come with them. Because let's face it, we traders may be good with numbers, but we're not always the most emotionally stable bunch. One effective way to overcome emotional biases is to develop a solid trading plan. Now, I know what you're thinking, "A plan? That's it? Where's the magic bullet? The secret sauce?" Sorry to disappoint, folks, but there's no magic formula for success in trading. It's all about good old-fashioned discipline and consistency. Another technique for managing emotions is mindfulness. Now, before you roll your eyes and start chanting "Om," hear me out. Mindfulness is simply the practice of being present and aware of your thoughts and feelings without judgment. By practicing mindfulness, we can become more self-aware and better able to recognize and manage our emotional biases. Of course, sometimes it's not just a matter of managing our emotions but overcoming them altogether. For example, fear can be a powerful emotion that can cause us to miss out on profitable trades. One strategy for managing fear is to set up a stop loss order. This will automatically exit a trade if it reaches a certain price point, helping to limit our losses and alleviate our fears. Finally, building discipline and consistency in our trading decisions is essential for overcoming emotional biases. As the saying goes, "Plan your trade, and trade your plan." Stick to your trading plan and strategy, even in the face of strong emotions like fear or greed. And remember, discipline is not just about making good trading decisions, it's also about being disciplined in other areas of your life, like getting enough sleep and exercise. Now, I know it's not always easy to overcome emotional biases, especially when there's money on the line. But with a little practice and discipline, we can become more effective traders and achieve better trading results. And hey, if all else fails, there's always therapy, right? Just kidding...kind of. Step 3: Staying Mentally Fit for Trading Success In this section, we'll take a closer look at developing a strong trading mindset, which is essential for long-term success in the forex market. One key aspect of developing a strong trading mindset is to approach trading as a business, rather than a hobby or a game. This means setting clear goals and objectives, developing a trading plan and strategy, and keeping detailed records of your trades and performance. And if you're serious about trading, it also means investing in the right tools and resources, like a reliable trading platform and access to up-to-date market news and analysis. Another important aspect of a strong trading mindset is the ability to stay disciplined and patient in the face of adversity. As traders, we all face losing trades and setbacks from time to time. But it's how we respond to those challenges that makes all the difference. It's important to stay focused on the long-term goals, rather than getting caught up in short-term fluctuations and emotions. Of course, maintaining a strong trading mindset is easier said than done. It's easy to get caught up in the excitement of the market and make impulsive trading decisions. That's why it's important to take breaks, practice self-care, and maintain a healthy work-life balance. As the saying goes, "All work and no play makes Jack a dull boy." And let's be honest, no one wants to be a dull trader. If you have any particular exercise you find useful for yourself, make sure to drop them in the comments below, so we can all try them out! Have an awesome weekend, family!
BITSTAMP:BTCUSDEducation
by Investroy
24
Trading is a game of numbers and probabilitiesFirst of all, let us clarify, that what we mean by a "bad trade" is simply a transaction that was unsuccessful . There are no "good" or "bad" trades as the whole system of trading is random and unpredictable. In other words, if we knew how to differentiate between bad and good trades, then technically, we would always choose to enter good trades, right? Or should we wait for our trades to close before we label them "good" or "bad"? Anyways, moving to the main part, we would like you all (especially beginners) to embed the following in their minds forever: trading is a game of numbers and probabilities. No, you will not have a 100% win rate. No, you won't be making 200 pips per day. Yes, you will have losses. Yes, things are gonna get emotional. The above-stated may seem bizarre to newbies. "Like, what do you mean I cannot make 200 pips per day? This Free Forex Signals group on Telegram shares 50 signals per day and promises me a 100% return per month and you are telling me I cannot make 200 pips a day? Hahaha, do not make me laugh". Been there, listened to that. At the beginning of our trading careers, we are greedy, emotional, and extremely optimistic about our skills and abilities. We get angry, question ourselves, change our strategy every second day and so forth. All that up until we get more mature and wise in the markets. With time, we gain experience and double up on our skills; and that is exactly when we become acknowledging the market for what it actually is and understand how it functions. Experienced traders think, move, and act in probabilities. They predetermine their risk, calculate all possible outcomes, execute at ease knowing that they are following their strategy. To put it into simple English, they do not get mad over one loss, because they know that their backtested and fully planned strategy is there to lead them towards long-term profitability and consistency.
BITSTAMP:BTCUSDEducation
by Investroy
7
HOW TO TRADE FIBONACCI RETRACEMENTS: THE SHORT GUIDEHey there, traders. One of the common tools we use for technical analysis are Fib retracements and a lot of you been asking on how to use them properly. Well, today is your lucky day :) Fibonacci Retracement is a technical analysis tool that is widely used by traders to identify potential levels of support and resistance in financial markets, including forex markets. The tool is based on the mathematical sequence known as the Fibonacci sequence, which is a series of numbers in which each number is the sum of the two preceding ones. The Fibonacci Retracement levels of 0.5 and 0.618 are two of the most important levels used in this tool. In this article, we will discuss how to use these levels for trading forex markets. Understanding Fibonacci Retracement Levels Before we dive into the specifics of using the 0.5 and 0.618 levels, let's briefly review the concept of Fibonacci Retracement. The tool is based on the idea that markets tend to retrace a predictable portion of a move, after which they may continue in the same direction or reverse. The retracement levels are calculated using the Fibonacci sequence, and they represent potential levels of support or resistance. The key levels are 0.236, 0.382, 0.5, 0.618, and 0.786. Using 0.5 and 0.618 Levels for Trading Forex Markets The 0.5 and 0.618 levels are particularly important because they are close to the midpoint of a move, and they are based on the golden ratio, which is a key number in mathematics and nature. The 0.5 level represents a 50% retracement of a move, while the 0.618 level represents a 61.8% retracement. To use these levels for trading forex markets, you can follow these steps: Step 1: Identify a Trend The first step is to identify a trend in the market. You can do this by analyzing the price action on a chart and looking for a series of higher highs and higher lows in an uptrend, or lower highs and lower lows in a downtrend. Step 2: Draw Fibonacci Retracement Levels Once you have identified a trend, you can draw the Fibonacci Retracement levels using a tool provided by your trading platform. You will need to identify the high and low points of the trend, and then draw the retracement levels from the high to the low in an uptrend, or from the low to the high in a downtrend. Step 3: Watch for Reversals at 0.5 and 0.618 Levels The 0.5 and 0.618 levels are potential levels of support or resistance, and they can act as turning points in a trend. If the price retraces to one of these levels, you should watch for signs of a reversal, such as a bullish or bearish candlestick pattern, or a divergence in an oscillator indicator or any other personal confirmation for potential entry. Step 4: Confirm with Other Indicators To increase the probability of a successful trade, you should confirm the potential reversal with other technical indicators, such as a moving average, a trendline, or a momentum indicator, check with the fundamentals and most importantly confirm that it aligns with your original bias regarding the pair. This will help you to avoid false signals and improve your trading accuracy. Step 5: Enter the Trade and Set Stop Loss and Take Profit Levels Since the entry was at the "Golden zone", the exit would be around the 0% Fib level. Yes, you just missed half of the trend, but it's a consistent tool that can help you get that edge over the market that you need. We hope you found this useful and please let us know on what you would want us to cover next!
BITSTAMP:BTCUSDEducation
by Investroy
13
Risk-to-Reward > Win RateWe have mentioned it in a list of our previous educational posts and we will state it again: your risk-reward plan is much more important than your win rate. You can have a 90% win rate and still be losing in the long-run. On the contrary, you only need a 35% win rate to be a consistently profitable trader on the longer term. Beginners mainly focus on winning as many trades as possible and it is totally understandable, because we have all been there. "The more trades I enter, the more money I will make" principle has destroyed many trading careers. The explanation to the "Why?" question is pretty simple: when we are new to trading, every win gives us euphoria and makes us think we are the rulers of the market. Guess what happens next, the market hits back, puts us in a position where we are stuck in a losing streak, and humbles us enough to quit trading and think it does not work. As we get more experienced, we lean towards the "Less is more" principle and believe that quality will always be over quantity. As an instance, we have orchestrated 2 scenarios on the graph. The example on the upper side of the screen shows how our trader has a 80% win rate but has yet failed to remain in profits due to the fact that he does not have a solid risk management plan. On the opposite side of the road, we have Trader B who is able to remain in consistent profits by winning only 20% of the executed transactions. All those minor losses that he made got covered by one big win, and as long as he keeps following the current risk management policy and strategy of his, he is sure that he will be consistently profitable in the long run.
BITSTAMP:BTCUSDEducation
by Investroy
11
Various phases of the market and identification of a trendThere is a famous saying in the world of trading: trend is your friend until it tends to bend. Following the mighty trend and riding its impulsive moves is one of the most satisfying feelings out there. There are several ways of identifying a trend and hoping on it. One group of people favours using indicators such as SMAs or EMAs for this case. Another group of traders prefers sticking with price action and technical analysis. In this educational idea, we are gonna show two techniques that can be utilised for determining a trend looking at multiple timeframes and examining various factors. First of all, for identifying a trend, we filter out all small timeframes and stick with the big ones like the Monthly, Weekly, Daily. STF graphs are filled with noise and indecision. Whereas, HTF charts show the bigger picture and make it easier for us to predict where the price is headed. Second, as we know, the market has three phases: uptrend (bull market), downtrend (bear market), range (kangaroo market). As long as the price keeps printing Higher Low and Higher High points, the market is in a bullish phase. Vice versa, if Lower Lows and Lower Highs are being formed, it signifies that bears are in control. Another method that we could utilise to determine a trend is by using line charts instead of candlesticks. Due to the fact that a line chart filters out all the noise, we get a clear picture of the ongoing trend. On the other hand, Differing from an actual trend, ranging markets are associated with indecision, choppiness, and imbalance. Such "kangaroo" markets are formed when bulls and bears fight each other over direction. This traps the price within borders of a sideways-moving rectangular range. All in all, even though the process looks simple, it can get tricky and confusing from time to time. Therefore, always and always, stick to the plan, be risk tolerant, remain disciplined and patient.
BITSTAMP:BTCUSDEducation
by Investroy
5
How to differentiate a fake-out from an actual break-outHappy Friday, sorcerers. Welcome on another educational post by Investroy! The trading and investing industry is a difficult one to succeed in as it has various complex details that you need to dig into both from technical and psychological perspectives. Predicting the price movement and understanding the logic behind it may be challenging at first. But as time passes and you gain experience, you understand the science behind price action and make more logical decisions. Today, we will talk about a rather puzzling issue faced by many beginning and experienced traders: the theme of differentiating fake price movements from real ones. Although, it is not always possible to separate the two to the full extent, it is feasible to build a plan around it and stick to it on a consistent basis. A fake-out is a failed attempt of the price to break above/below a key zone. Very often, it is associated with liquidity grabs and Stop Loss hunts. To demonstrate, looking at the illustration pictured on the chart, you can see how the price attempts to continue its bullish moves, but fakes out from the sideways-moving range and re-enters the borders of it instead. On the contrary, a breakout happens when price successfully penetrates a key level and continues its impulsive moves in the same direction Now, the question is: how to distinguish a real breakout from a fake one? Firstly, it has to be kept in mind that what goes up, must come down. In trading terms, after an impulsive move, a correctional one should come; after a breakout, a re-test should happen before continuing impulses. In order to identify whether a breakout is a fake or a real one, we should always look for a re-test of the penetrated zone after a break is completed. However, you have to keep in mind that it is not a 100% fact that a re-test will happen every time. Sometimes, breakouts will be so impulsive that price will not retrace back to re-test a penetrated zone. Nothing is 100% accurate in trading. Not every breakout will lead to a re-test before impulsive continuations. Not every fake breakout will seem like a fake-out at first. However, waiting for a re-test of a broken zone is a good way to evade fake breakouts and capture high risk-to-reward trades and opportunities. To conclude, if you want to make sure you don’t get faked out and liquidated, always wait for a re-test of a penetrated level before forming biases and executing positions.
BITSTAMP:BTCUSDEducation
by Investroy
9
Do not get caught in this trap!Good time of the day, friends! Rushing into trades is definitely among the top #3 common mistakes done by relatively newer market participants who we would call early sellers in this context. The chart/infographic above is pretty self explanatory, but let’s still cover some aspects of it by considering a following scenario: Market was moving sideways the whole week, you almost lost hope to finish the month in profits and now you see the up-trending channel with already 2 lower trend-line touches. You instantly get excited and set a long position in the area of a third touch. Well, next thing you know it plummets right past through it. Lesson learned, but what can be done to avoid that? Well, first of all “look for multiple confluences”. Does the third touch coincide with a potential support zone? If not, that already weakens the point. Was there any signs of bottom forming and reversal? Another strike if not. Did it coincide with any Fibonacci levels, for instance? No? You’re out. Going over mistakes is easy, as there are always so many things that can go wrong, but what’s an alternative then, you may ask. On the chart above, we also indicated a point where we would consider entering the mentioned trade. Patient execution with a proper Risk-Reward is a way to do it. Hope this helps, and tune in for more content for us!
BITSTAMP:BTCUSDEducation
by Investroy
12
Exit Strategies to Consider on Each Trade: a Complete GuideEnter, monitor, and exit are three vital steps to follow while trading. While most traders focus on how and when they can enter a particular setup, they pay less attention to their exit strategy. Today, we are gonna look into some popular exit strategies that we utilise in our personal trading. 1) Breakeven closure When the price is moving in our direction and is already a few key zones away from the entry zone, we make the trade risk-free by moving the Stop Loss level to the price of entry. If the Stop Loss gets hit, we exit the trade with neither a gain nor a loss. 2) Manual Closure In the process of monitoring, if the price does not play out according to our plan, we tend to make quick decision and exit the trade earlier than planned. 3) Target Profit We set a Take Profit (TP) order that closes the transaction as soon as it gets triggered. 4) Stop Loss
 We set a Stop Loss (SL) order that closes the transaction as soon as it gets triggered.
BITSTAMP:BTCUSDEducation
by Investroy
16
How to calculate which lot size to useAs mentioned several times before, we risk 1% of our total trading capital per transaction. In simple terms, we risk 1 egg out of the 100 that we have in the basket in an attempt to get more eggs. However, even though the average price mark where we place our Stop Loss is 30-60 pips away from the entry price, SL levels set differ from one trade to another, and different currency pairs have various differences in pricing (major pairs have small differences for the most part, while minor and cross-pairs have big gaps in pricing). This article will demonstrate 3 random scenarios and illustrate which lot sizing is needed to be used based on the Stop Loss set and the percentage of the total capital risked while taking into account the size of the trading account. All numbers are imaginary in order to diversify the visualisation of the portrayed examples and give a better understanding of the case. Enjoy the idea and don't forget to drop your questions in the comment box below!
Editors' picks
BITSTAMP:BTCUSDEducation
by Investroy
43
FROM HERO TO ZERO: A COMPLETE GUIDE ON HOW TO BLOW YOUR ACCOUNTHappy new trading week, friends! As you can tell the text above is a satire. However, unironically some of us still make the mistakes above that take you from Hero to Zero. What are the most common mistakes we can avoid in our trading journey? Let's take a look. 1. Taking revenge or jumping into the market because you think you found the trade of your life is the worst thing you can do to yourself. Stay unbiased and keep that clear state of mind. 2. Don’t forget about Stop losses, losing 1% of your account is recoverable, but when you go into more than 10% drawdown, it gets mathematically and psychologically impossible to get back on the horse. 3. Take one trade at a time. The profits will come, focus on the journey. 4. Having trading plan is important but sticking to it is even more crucial. Most losses that I’ve seen come from trades that have been out of the trading plan and didn’t meet one the several entry criteria. 5. There are really good authors on TradingView, but once again they share “Opinions”. Always have your perception of market and stick to it. 6. If you need confluence, please stick to TradingView. The platform has a good ratio of professionals on it, unlike Reddit or any other forums where a 13 year old will convince you that lithium ion batteries are the future. 7. Check your fundamentals, they are as important as technicals. 8. Indicators are fine to use, but they’re like some authors, you still need your own voice of rationality. 9. Some traders spend too much time on external factors, looking for the most perfect trade of their lives, which will, unfortunately, never come. Work with the available market conditions. 10. Yes, having a larger screen does help. Dropping 10.000$ on equipment doesn’t help. This could have been an extra 1.000$+ per month to your income if it was deposited to your account. Keep it optimized.
BITSTAMP:BTCUSDEducation
by Investroy
24
4 COMMON YET EFFECTIVE TRADE ENTRIESHappy Chewsday, traders! Some of you reached out and asked for more educational articles and we’re here to deliver. Relatively simple but important topic of entries is going to be lightly covered today. The image above should be pretty self-explanatory, but to cover it in more details: There are 4 main entry types. - Range fadde is when we buy the bottoms and sell the tops of the range. Usually the box/rectangle isn’t large, so the risk-reward ratio is just not there for many traders. However, you can definitely put the stop loss a few pips out of the range and maximize the ratio. - Reversal is an entry at the most recent extreme, key level. Quite popular approach, but personally, it usually goes against our fight club rule #1: “never fight the trend, he’s your friend”. We do; however, look out for multi-day/week key levels in our ideas as well. - Breakout is an entry as the price breaks out of a range or any pattern. Very reliable option for beginners that are obsessed with finding repetitive reoccurrences in the market. For example, you can sell at the neckline of head and shoulders pattern and successfully profit from that. It is important to keep in mind that, the more complicated patterns you “notice”, the less people use them, thus, devaluing the importance of it. - Pullback is an entry after a minor reversal or retest. Statistically speaking, this is one of the most frequent entries utilized by us. It’s simple and you still follow the trend. Draw your key points, look for proper Fibonacci levels and make sure it’s not a complete trend reversal. Of course, you’ll miss out on a few pips this way, but this might change your long-term profit statement. What’s your favorite entry type?
BITSTAMP:BTCUSDEducation
by Investroy
14
"Stop it, Picasso! Trading should be kept simple."Quick question: which of the two illustrations portrayed on the graph do you enjoy more? If your preference is the one on the right, then you should have definitely continued the legacy of the Renaissance era artists. On the contrary, if you prefer the one on the left-hand side of the screen, let’s become friends. Starting with the portrait (let’s put it that way) on the left, we can observe how everyhting is illustrated in a crystal clear way. Firstly, no indicators have been used, which makes it easier for us to read the chart. Second, it has been shown that with as few as 2-3 confluences, a trade has been executed. On the opposite side of the road, we have the portrait which is depicted on the right side of the screen. We can see how blurry, messed up and confusing it all looks. Two random EMA’s crossing each other, ABCD patterns, Elliott Waves, tens of thousands of Fibonacci retracement levels, random Support&Resistance levels and many other indicators have been added into the chart with zero purpose. Yes, indicators could and should be used as confluences. However, by adding tens of indicators into your charts, you are not beating the market. Just like in real life, everything should be utilised in moderation. The purpose of this idea is not trying to damage the reputation of indicator trading, but to show that pure price action will always be the king. Many beginning traders get tricked into believing that by adding multiple indicators into their charts, they will have a high win rate, a successful trading journey, long-term profitability. Little do they know that many indicators contradict to each other and perplex novices into entering random positions. Of course, as we always say, if it works for you, then go for it. Chart analysis is only a part of your trading plan. There is also psychology, risk management, discipline and so forth.
BITSTAMP:BTCUSDEducation
by Investroy
47