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Lewglasgow

The Major Impact of High Risk TradingI feel this post is well overdue, and considering the current market standing in cryptocurrency it couldn't have come at a better time. Today's post will be an eye opener for many, and others common knowledge. I hope you guys gain a lot of value from my insights and use this to your advantage in the markets. The following educational post relates to the trader behind the charts, it is not specific to one financial market meaning it applies to all but today, I will be talking about this in relation to the cryptocurrency market. The Major Impact of High Risk Trading Right now, the cryptocurrency market has lost 50%+ of its overall value, meaning a lot of new and existing traders are suffering huge losses (to anyone who comments "you only lose when you sell" - we'll talk about this later in the post) and their portfolios are in the red. I receive a lot of messages on a daily basis, recently they have been of the following context. Follower: "I'm holding XRP (BTC, ETH, TRX, ETN, LTC, the coin doesn't matter, the message does) from $3 and it's now at $0.70, should I sell?" I know most of these messages are out of panic, looking for an option, hopefully advice on how to regain those losses. Do I tell people to buy or sell? Of course not, it's their investment, however I do provide my insights on where the market is heading next to help them understand their situation. If you are this person, there is good news... You've already held through a serious correction, why are you thinking about selling now? Take a look at the chart shown, as you can see I have illustrated "percentage loss" which is of course the amount you have lost on one given position or your entire portfolio. We have "percentage difference from previous loss" now let's say for example you're holding XRP at a 33% loss and this quickly changes to a 50% loss, you can agree the difference is 17%. And finally we have "percentage gain to break-even", this points out the required increase in capital to regain the losses that have occurred. If you invested $1,000 in XRP $2 and sold at $1, you can agree this is a 50% loss in capital and you now have a $500 portfolio. To regain those losses and return to break-even you would need to gain 100% which is 2x. Let's start to break down the numbers. If your portfolio is down 33% you will need to gain 50% to get back to break-even. At this point, you are concerned but you're convinced the market will pick back up next week, so you don't take any action. The following week your portfolio declines a further 17% which brings the overall loss to 50%, to get back to break-even you need to gain 100%. This is when panic sets in, you've went from $10,000 to $5,000 in one month, the entire market is down and at this point you consider selling. Now, you can see where this is heading. The market declines a further 16% bringing your portfolio into a total decline of 66%. At this stage you now need to increase your portfolio by 200% to get back to break-even. What do you noticed when you get further and further down the list? The percentage difference becomes smaller but the percentage gain to return to break-even increases drastically. If you lose 83.3% of your portfolio, which I have witnessed, you will need to increase your portfolio by 500% which is 6x just to get back to break-even, a further 2.4% decline would require a 600% increase which is 7x. Am I telling you to sell? No, not at all, there is an extremely valuable lesson here. Let's say you are the person who has bought Ripple (XRP) at $3 and it's your only crypto, you're now holding at $0.70 which is a decline of 75%+ meaning you need to increase your portfolio by 300% to regain initial losses, which is 4x. Buying high is a rookie mistake, many people can't think of anything worse but I definitely can. Buying at the top followed by selling at the bottom. I will need to continue this idea in the updates section, it's too long.
BITFINEX:BTCUSDEducation
by LewisGlasgow
35
Why You're Failing as a Harmonic TraderWhy You're Failing as a Harmonic Trader There is an overwhelming amount of traders out there who are using harmonic patterns in the completely wrong way, I would like to address these issues individually to help all of the new traders out there who may not be aware of these mistakes. 1. Using the wrong ratios for each pattern. The most common issue with harmonic patterns, using the wrong ratios. It's scary, search the pattern you're trading and I guarantee you end up with 5 different sets of ratios, and you're left asking yourself which ones are correct? 2. Contradicting signals on multiple timeframes, going against the bigger picture. Harmonic patterns, which develop on different timeframes, may show conflicting signals. You may see a bullish and bearish pattern on two immediate timeframes, this may create confusion for a novice trader. 3. Misplacing stop loss levels, therefore increasing the likeliness of being stomped out. Common stop-loss rules are prone to easy manipulation by major players and can become a major drawback, this is why I have defined my own rules for stop loss and take profit targets. 4. Wanting the market to see your pattern. In your head, you want the market to see your pattern and you force it onto your chart. You try to make it fit the market rather than letting the market fit the pattern. Please understand, the market does not care how you think or feel, when you show up you need to bring your A game. 5. Not going with key support and resistance levels. Most novice harmonic traders assume that if they find a valid pattern it will automatically reverse once it reaches the potential reversal zone, however nothing else is indicating a reversal at that level. Always go with the key level in the market, if your D point aligns with a weekly level of support or resistance this provides strong reasoning for a reversal. I am available via private message for any questions you may have. Here's to your success!!!
Education
by LewisGlasgow
13
Powerful Daily Affirmations to Transform Your TradingPowerful Daily Affirmations to Transform Your Trading Daily affirmations are a widely practised method for attaining success and accelerating your ability to achieve goals. The following affirmations are not stated for a sudden spark of inspiration, I want you all to take action and keep this positivity flowing throughout your entire trading journey. I want you to write them down, pin them to your wall or print them off right now... Make sure you place them somewhere in view of your trading desk and read them every single day. 1. I believe in my trading strategy. 2. I naturally make smart investments. 3. I am not emotionally affected by my profits or losses. 4. I have a very healthy relationship with money, I treat money with respect and handle it with confidence. 5. I will do whatever it takes to reach my objectives, my goals and my vision. 6. I will only take trades that give me a reward which clearly outweighs my risk. 7. I will surround myself with successful, positive people. 8. My finances are always in order, I am always in control of my spending. 9. I invest in my trading education and in myself. 10. I will only trade what I understand, and won't allow anyone to manipulate my trading beliefs. If you want to become a successful investor, you need to change your way of thinking. What are your daily affirmations? Leave a comment below.
Education
by LewisGlasgow
28
How to Use Fibonacci RetracementsHow to Use Fibonacci Retracements I'm back with another educational post after receiving a lot of requests and today's lesson is on how to use Fibonacci retracements. I've used a recent market example with NZD/USD to break this down for you. Let's get straight into the finer details before breaking down each section of the chart shown. Fibonacci retracement levels are amongst the invisible levels of support and resistance within the market, providing objective price reference points. Essentially where the flow of buying and selling is likely to change. The main Fibonacci retracement levels used are shown below. Fibonacci Ratios 0.382 (Indicating a strong trend) 0.50 0.618 Where can I find the tool? You can find the Fibonacci retracement tool in the chart section by going to your left sidebar, third section down and the icon is three horizontal lines. Upon your first use of this tool, you will want to edit the settings and add in the three ratios stated above if they are not already there, make sure you tick the boxes to use them. How do I use it? To apply the tool on your charts click from high to low to measure the full price swing. OR Draw in your tool from low to high depending on the market situation. Breaking down the charts If you're basing your trades off Fibonacci retracements they work at best in trending markets, but if it's used as a part of your strategy it can be effectively applied to any or most types of markets. Now let's look at the chart for recent examples of price reversals using Fibonacci retracements. If you look at the example on the left-hand side, I measured from high to low and price hit bang on the 0.618 retracement level. Your question right now will be... How did you know it was going to reverse? I personally go off the retracement level that is causing the most activity within the market. Have a look at price history and see what is happening at the particular level, is there a lot of stalling? Is it a key support or resistance level within the market? If so, price will more than likely reverse there in comparison to the other retracement levels. To validate the reversal you will, of course, want to analyse price action, what are the candlesticks telling you? Any signs of indecision or stalling at a certain level will help you make a solid choice whether to take the trade or not. Now let's take a look at the right-hand side, this time I have two examples (again I measured from high to low). You can see from the top example price pulled back to the 0.382 and 0.50 retracement levels not once or twice but three times before dropping. Indicating a very strong resistance level! The bottom example is a similar situation, price spiked up above the 0.50 retracement level (all candlesticks closed below) before heading in the opposite direction. To round of this educational post, I hope you found this extremely useful and you can now use Fibonacci retracements in your own trading. I am available via private message for any questions you may have. Here's to your success!!!
Education
by LewisGlasgow
25
The Power of Compound Interest“Compound interest is the eighth wonder of the world. He who understands it, earns it... He who doesn’t... Pays it” . The idea of compound interest is simple, use your profit to make more profit instead of spending it... You can do this whilst making small regular withdrawals! BUT Too many traders try to get-rich-quick and in turn blow their trading account. Instead of focusing on medium to long term returns and make their profits do the work. Every trader knows that it is possible to turn a small amount of capital into 6 or 7 figures if they trade patiently. However, most of them always look for a faster way to become wealthy by oversizing positions to seek out a lottery win. In fact many traders repeat this process multiple times, with the exact same end result... Blowing their account. This is why I have written this post, which is primarily aimed at all of the traders starting with a small amount of capital £1,000 or less... You need to start setting monthly % targets. Everyone wants to make a million, that's a common fact but how are you going to get there? What monthly % do you need to grow your account at and over how many years? You need to start mapping out your journey, track your progress and be measurable. The illustration shown highlights the potential growth within a 12 month period using a starting capital of £1,000, growing your account by 20% per month and withdrawing £50 every single month. If you can maintain this level of growth throughout the year, you will have withdrawn £600 and have a trading account value of £6,937. And it all started with £1,000 :) To round off this post I truly hope this explained the power of compound interest. I am available via private message for any questions you may have. Here's to your success!!!
Education
by LewisGlasgow
19
Intermarket Analysis for BeginnersWhat is Intermarket Analysis? Intermarket analysis is a relationship, or a measurable correlation between four major asset classes: stocks, bonds, commodities and currencies. The majority of forex traders assume that currency markets move in isolation from all the other capital markets... This is entirely wrong as the foreign exchange market underlies every other market in the world, thus creating a complex network of intermarket relationships which dictate the ultimate flow of capital from one market to another. Understanding these relationships can help you determine the stage of the investing cycle, select the best performing sectors and avoid the worst. It is an extremely valuable tool for long-term analysis! The relationship we are focusing today is the between USOIL and USD/CAD. Why does this relationship exist? Trends in commodities and the U.S. Dollar tend to be negatively correlated, this intermarket relationship implies that if the U.S. Dollar has been falling recently, that fact is seen as bullish for commodity prices (as shown on the chart). The price of oil and the value of the Canadian Dollar tend to be positively correlated. This relationship is due to Canada’s status as one of the world’s top oil exporters, selling roughly two million barrels of oil each day to the United States alone. Rising oil prices will therefore tend to reduce the USD/CAD exchange rate as the Canadian Dollar strengthens. You can clearly see from looking at the chart below that a long-term intermarket relationship is present, one which is negatively correlated. To round off this post I truly hope this explained the use of intermarket analysis, there are numerous relationships which you can exploit and use to benefit your own trading. I am available via private message for any questions you may have.
Education
by LewisGlasgow
10
Foundation of Successful TradingThe Three A's It is a known statistic that over 90% of traders fail and I covered the three main reasons why in my previous educational post (shown below). Now that you know the main reasons why traders fail, it's time to lay the foundation for successful trading. This can be structured and defined by something I call the three A's. #1: Approach Firstly, identify your personal goals and align them with your trading. This is your "preparation step" You need to define your approach, how are you going to trade the market? Use the following checklist as a guide. 1.What is your trading personality/style? 2.Identify which timeframes you will focus on. 3.How will you analyse the market? 4.Develop/follow a trading strategy. 5. Back-test, back-test and back-test. 6. Create your trading plan (including risk management rules). #2: Attitude You now know what to expect from your system. …BUT 90% of trading is psychological Your attitude and mentality towards investing is absolutely key to ensuring your success as a trader. Here are the key components. 1. Realistic expectations. 2. Paitience. 3. Discipline. 4. Commitment. 5. Focus. 6. Emotional control. #3: Application Your final step... Application. At this point, you have put in all of the groundwork and now everything needs to be put into motion. …And for most traders this is where it all goes wrong. Use the following checklist as a guide. 1. Focus on your own trading. 2. Demo before live. 3. Plan your trade, trade your plan. 4. Once consistently profitable, go live. 5. Keep your emotions in check. 6. On-going risk control. I am available via private message for any questions you may have. Here's to your success!!!
Education
by LewisGlasgow
3
Three Reasons Why Most Traders FailThree Reasons Why Most Traders Fail Hello traders, I'm back with another educational post after receiving a lot of positive feedback. Today I'm going to break down three reasons why most traders fail! Traders Fail?! Yes most do, it is believed over 90% of new traders fail (this is an ongoing debate) but why is that? I personally believe it comes down to these three reasons. 1. Trading without a plan The very first step in achieving success is to create and follow a trading plan , one that is specific to your personality, lifestyle and goals. …BUT Many new traders try to rush the process and simply do not plan for success. “If you fail to plan, you are planning to fail”. - Benjamin Franklin A successful trader works within a well-structured plan, just like a business. Every plan should include trading related goals, a trading strategy and risk management rules. You need to be extremely disciplined when trading and follow your trading plan down to a T. 2. Emotionally Dictated Trading As you may know 90% of trading is purely psychological and I firmly believe this is the main reason why so many traders fail. Allowing adrenaline, fear, elation or greed to compromise their analytical ability. Traders who make emotional based decisions show indecisiveness, close positions too early and do not follow their trading plan ... *FACE PALM* Experiencing a consecutive series of losing positions will test your patience and confidence. Many traders will never overcome their inherent emotional biases, therefor you should seek to understand the range of emotions you may experience as an investor and how it affects your interactions within the market. You can learn what emotions you may face by checking out my idea "The 14 Stages of Investor Emotions". 3. Over Sizing Positions Traders should put as much focus on risk and money management as they do on developing strategy. Over sizing positions is nothing new, I see it all of the time with new and amateur traders. They cannot help themselves and want to trade big, they want the lottery win! ...BUT As you all know seeking out a lottery win in the forex market ends in disaster, accounts end up blown and dreams shattered. At this point many individuals give up and decide trading isn't for them or it doesn't work. The most effective way to deal with this problem is to lower the leverage and risk a maximum of 2% per trade. I am available via private message for any questions you may have. Here's to your success!!!
Education
by LewisGlasgow
1
A Simple Lesson in Risk ManagementUtilising a Risk to Reward Ratio How many of you obsess over an 80% profitability rate? You may feel the need to be right all the time and cannot accept a large amount of losing trades. OR You may think in order to become a profitable trader you need to win more than you lose. Well it's time to put that aside. You do not need to have a high profit/loss ratio or profitability rate to become a profitable trader, you can be right just 50% of the time (as shown on the chart) and still make an excellent profit by utilising a strict risk to reward ratio when trading. You can actually have a profitability rate of 40% with a 1:2 risk to reward ratio and still be in profit! The higher your risk to reward ratio the less you need to be right, many professionals use a minimum of 1:3 meaning they will risk 100 pips to make 300 pips. I personally use a minimum risk to reward ratio of 1:2... But in order for you to do the same, it has to align with your trading strategy. Do not set unrealistic profit targets in which you will not achieve! To round off this post I truly hope this explained the positive effects of applying a strict risk to reward ratio in your own trading. I am available via private message for any questions you may have. Here's to your success!!!
Education
by LewisGlasgow
17
How to Trade the AB=CD PatternHow to Trade the AB=CD Pattern Hello traders, following up from my previous educational post I received several requests via private message for my take on the AB=CD pattern. This structure represents the basic foundation for all harmonic patterns, it is one of the classic chart patterns which is repeated over and over again. It was developed by Scott M. Carney and Larry Pesavento after being originally discovered by H.M Gartley. Firstly to spot this chart pattern like any other, you need to train the eye. It may be difficult at first but over-time it will become natural through repetition. How do I measure the move? Grab your fibonacci retracement tool and draw from point A to point B of the initial move or impulse leg to get point C. This must hit the minimum 0.618 (61.80%) retracement of the A to B move but not exceed 0.786 (78.60%). A valid C point is illustrated on the chart with two horizontal lines and a grey box. You're now looking to complete the pattern by locating the D point which is the potential reversal zone (PRZ), this represents a critical area where the flow of buying and selling is potentially changing. The D point is an extension of the A to B move that must hit the minimum 1.272 (127.20%) extension but not exceed 1.618 (161.80%). A valid D point is illustrated on the chart with two horizontal lines and a grey box. Or alternatively you can measure this move by using the ABCD pattern tool provided by TradingView. To summarise, the measurements for a valid AB=CD pattern are detailed below. C: 0.618 - 0.786 D: 1.272 - 1.618 The measurements for a perfect AB=CD pattern are detailed below. C: 0.618 D: 1.618 Trading Rules Wait until the pattern fully completes at the D point before buying or selling. Here are a few tips on finding a pattern with a higher probability rate (although not essential for a valid pattern): The length of line AB should be equal to the length of line CD. The time it takes for the price to move from A to B should be equal to the time it takes for the price to move from C to D. Stop Loss When looking to place your stops there are many ways this can be done depending on your trading plan, but it should always be placed below the D point. Your risk to reward ratio should be a minimum of 1:2 on every trade, if this cannot be achieved then I would not personally take the trade. Take Profit When using take profit targets I highly recommend having two and not just one, meaning you can close the trade after your first target has been reached or move your stop loss into profit (risk free trade). Just like your stop loss there are many ways this can be done depending on your trading plan, but I recommend setting your take profit levels at the highs or lows of C & A. Timeframes & Currency Pairs This pattern like any other and is more profitable with certain currency pairs and timeframes, you should do your own back testing before trading the pattern. Personally speaking this pattern holds and better structure and performs best on higher timeframes such as the 4h and daily rather than the 5m. To Round Off I truly hope this post explained how to trade the AB=CD pattern. I am available via private message for any questions you may have.
Education
by LewisGlasgow
4
How to Trade the Inverted Head and Shoulders PatternHow to Trade the Inverted Head and Shoulders Pattern Hello traders, following up from my educational post on the Head and Shoulders pattern I felt I should provide you with the bullish equivalent... The Inverted Head and Shoulders pattern. Featured on the chart is an illustration of a complete Inverted/Inverse Head and Shoulders pattern including the rules I personally use to trade it. This is an easily identifiable pattern which can be traded across various timeframes which means it can be used by day traders, swing traders or even position traders. Why the Head and Shoulders pattern? It has an excellent risk:reward Appears on all timeframes and markets Easy to remember and find It has a precise entry, stop loss and take profit This formation is mainly seen at market bottoms. It is rarely perfect in appearance and you may need a good eye to spot one (check my inverted head and shoulder trading ideas for an example). You can draw this pattern by using the TradingView tool found on the chart section named "Head & Shoulders" or by using trendlines. From personal experience the best performing Head and Shoulders pattern will have a right shoulder that is a 0.618 retracement of the head. The correct way to trade this pattern is to wait until the entire pattern has formed, then once price closes above the neckline... You can enter your position :) To round off this post I truly hope this explained how to trade the Inverted Head and Shoulders pattern so you can use this for your own trading. I am available via private message for any questions you may have.
Education
by LewisGlasgow
5
Trader QuestionnaireTrader Questionnaire The purpose of this post is boost your overall confidence as a trader, to show you how much you have achieved since the beginning of your journey. A personal assessment review is an excellent way to outline your personal beliefs and expectations of trading in general. Write down your own answer to each individual question and review these questions/answers from time to time as you progress throughout your trading career. 1. When did you start trading? 2. What is your favourite trading pair or asset? 3. What is your preferred timeframe for trading? 4. What was your best trade? 5. What was your worst trade? 6. What is your greatest trading strength? 7. What is your greatest trading weakness? 8. What areas of trading do you think you need to learn more about? 9. What is your greatest benefit of trading outside of the money? 10. What do you expect to get out of trading? I am available via private message for any questions you may have.
Education
by LewisGlasgow
6
10 Rules of Successful Trading10 Rules of Successful Trading I personally feel these are the 10 most important rules to follow, especially as a beginner in order to become a consistently profitable trader. You can refer back to these rules whenever you feel lost or confused about what’s going wrong with your trading. 1. Stick to one strategy, and master it. 2. Plan your trade, trade your plan. 3. Never trade without stops and limits. 4. Record, journal and review your trades. 5. Find a mentor. 6. Don't let your emotions dictate your trading. 7. Never risk more than 1-2% of your account. 8. Accept that losses will occur. 9. Don't focus on the money, focus on the trade. 10. Be patient, be consistent, be disciplined. Here's to your success!!!
Education
by LewisGlasgow
10
How to Trade the Head and Shoulders PatternHow to Trade the Head and Shoulders Pattern Hello traders, following up from my previous educational post I received several requests via private message for my take on the Head and Shoulders pattern. Featured on the chart is an illustration of a complete Head and Shoulders pattern including the rules I personally use to trade it. This is an easily identifiable pattern which can be traded across various timeframes which means it can be used by day traders, swing traders or even position traders. Why the Head and Shoulders pattern? It has an excellent risk:reward Appears on all timeframes and markets Easy to remember and find It has a precise entry, stop loss and take profit This formation is mainly seen at market tops. It is rarely perfect in appearance and you may need a good eye to spot one (check my head and shoulder trading ideas for an example). You can draw this pattern by using the TradingView tool found on the chart section named "Head & Shoulders" or by using trendlines. From personal experience the best performing Head and Shoulders pattern will have a right shoulder that is a 0.618 retracement of the head. The correct way to trade this pattern is to wait until the entire pattern has formed, then once price closes below the neckline... You can enter your position :) To round off this post I truly hope this explained how to trade the Head and Shoulders pattern so you can use this for your own trading. I am available via private message for any questions you may have.
Education
by LewisGlasgow
3
The 14 Stages of Investor Emotions"Master your emotions and you'll master the market" Hello traders, after receiving a lot of positive feedback from my TradingView educational posts I thought today I would break down a subject on trading psychology with the 14 stages of investor emotions. Learning how market cycles operate can be extremely beneficial to your trading, understanding the true influence of fear and greed. But... Controlling your emotions within the market is your main 'personal' objective, becoming an emotionless trader. It's what we're all told from day one right? 90% of trading is purely psychology. It is the main reason why so many traders fail as they let their trading become over-ruled by their emotions, thus making irrational decisions. Many traders will never overcome their inherent emotional biases, therefor you should seek to understand the range of emotions we may experience as investors and how it affects our interactions within the market. 1. Optimism: A positive outlook encourages us about the future, leading us to buy assets. 2. Excitement: Having seen some of our initial ideas work, we begin considering what our market success could allow us to accomplish. 3. Thrill: At this point we investors cannot believe our success and begin to comment on how smart we are. 4. Euphoria: This marks the point of maximum financial risk. Having seen every decision result in quick, easy profits, we begin to ignore risk and expect every trade to become profitable. 5. Anxiety: For the first time the market moves against us. Having never stared at unrealised losses, we tell ourselves we are long-term investors and that all our ideas will eventually work. 6. Denial: When markets have not rebounded, yet we do not know how to respond, we begin denying that we made poor choices. Our "long-term" view now shortens to a near-term hope of an improvement. 7. Fear: The market realities become confusing. We believe our positions in the market will never move in our favour. 8. Desperation: Not knowing how to act, we grasp at any idea that will allow us to get back to breakeven. 9. Panic: Having exhausted all ideas, we are at a loss for what to do next. 10. Capitulation: Deciding our assets will never increase again, we close all of our positions to avoid any future losses. 11. Despondency: After exiting the markets we do not want to trade ever again. This often marks the moment of greatest financial opportunity. 12. Depression: Not knowing how we could be so foolish, we are left trying to understand our actions. 13. Hope: Eventually we return to the realisation that markets move in cycles, and we begin looking for our next opportunity. 14. Relief: Having bought an asset that turned profitable, we renew our faith that there is a future in investing. To round off this post I truly hope this provided a more in-depth insight to the emotions which can occur during trading. I am available via private message for any questions you may have.
Education
by LewisGlasgow
33
Support & Resistance for Beginners Support and resistance acts as a barrier from preventing the price of an asset from getting pushed in a certain direction. It is one of the more difficult concepts within Technical Analysis, there are various ways to identify these price levels, and even after identified, there are plenty of ways of integrating and trading with them. Today I'm going to simplify it for all of the beginners on the platform (please remember to read the note provided). What is support? Support is the price level at which buying is thought to be strong enough to prevent the price from declining further. What is resistance? Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. The most common way to trade it is breakouts, this is when you buy or sell whenever price passes through a support or resistance level. As you may know support and resistance levels won't hold forever even though they can hold for a long time but the reality is... Eventually they will break and as a result of a breakout the moves can be really powerful. However there are some implications with this, many traders get in too quick. You may be thinking what should I be waiting for? Validation. As a key pointer wait until the candlestick has closed above resistance or below support until entering the trade, this way it will validate the price move up or down.
TVC:USOILEducation
by LewisGlasgow
9