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WHAT IS ATR AND HOW TO USE IT?Investing and trading in the stock market can be a daunting task, especially for those new to the game. With so many different indicators and metrics to consider, it can be difficult to know which ones to focus on. One key metric that traders often use to measure market volatility is Average True Range (ATR). In this blog post, we’ll explore what ATR is, how it’s calculated, why it’s important for analysis, and how it can be used as an exit strategy. We’ll compare ATR with other popular technical indicators as well, so you have all the information you need to make informed decisions about your trading strategies. Defining ATR Average True Range (ATR) is an important metric used by traders to measure market volatility. It’s a technical indicator that can provide insight into strength or weakness in the markets, and can be used to identify breakouts and set stop-loss points for trades. ATR is calculated as an exponential moving average of true range values over a given period. True range is defined as the maximum of three values: the current high minus the current low, the absolute value of the current high minus the previous close, and the absolute value of the current low minus the previous close. This calculation provides a more accurate reading than simply measuring one day’s trading range or attempting to track changes in individual stock prices. ATR values are generally presented in decimal form (e.g. 0.1 or 0.3) rather than percentage form (e.g. 10% or 30%). This allows for more precise measurements when tracking market movement, which can be especially important for day traders who need to act quickly on market changes and opportunities. Traders use ATR to gauge overall market volatility as well as individual stock movements over time; it can also be used for trend identification and momentum strategies when combined with other technical indicators such as moving averages and Bollinger bands. And because ATR takes into account both recent highs and lows, it can also help traders set stop-loss points for their trades – at least until they become comfortable enough with markets to make decisions without them. Whether you’re new to trading or seasoned professional, ATR is an invaluable tool that should be incorporated into your analysis strategy if you want to stay ahead of markets and take advantage of opportunities when they present themselves. How to Calculate ATR In conclusion, ATR is a valuable tool for traders and investors alike. It helps measure market volatility and can be used to set stop-loss points as well as combine with other technical indicators to get a more accurate picture of where the markets are headed. Understanding and employing ATR can help traders become better informed about their investments, allowing them to make more informed decisions when entering or exiting positions. Analyzing ATR in Trading When it comes to analyzing the markets for trading decisions, Average True Range (ATR) is an invaluable tool that helps traders gain insight into market volatility. By understanding how ATR works, investors can measure the current conditions of a stock or index in comparison to its past performance, allowing them to identify trends and set stop losses accordingly. It also provides them with an effective exit strategy so they can take advantage of opportunities while minimizing their risk exposure. Ultimately, having a good grasp of this indicator will allow traders to make more informed decisions when engaging in securities markets globally. Using ATR as an Exit Strategy Using ATR as an Exit Strategy Average True Range (ATR) is a powerful technical indicator that can be used to measure market volatility and identify trends. It can also be employed as an exit strategy in trading, allowing traders to determine when the best time is to exit their positions and take profits or minimize losses. When using ATR as an exit strategy, it is important for traders to set the parameters for their strategy correctly. The most common approach is to set a multiple of ATR for both profit taking and stop loss levels. For example, if a trader sets the multiple at two times ATR, then they will take profits when the price moves by two times the average true range from their entry point and cut their losses if it moves against them by two times the average true range. In addition to setting up these parameters in advance, traders should also consider any potential rewards and risks associated with using ATR as an exit strategy. On one hand, it can help protect capital from large losses due to quick market movements, but on the other hand, it may cause traders to miss out on larger gains if prices move further than expected. There are various types of ATR-based exit strategies that traders can employ. Some of these include: fixed percentage or dollar exits; trailing stops; dynamic exits; time-based exits; or support/resistance exits based on chart patterns or technical indicators such as moving averages. Each type of strategy has its own advantages and disadvantages depending on market conditions so it is important for traders to understand which one will work best for them before implementing it into their trading system. Finally, traders should look at real-world examples of profitable trades made using ATR as an exit strategy. By studying these examples they can gain insight into how successful trades were managed and use this knowledge when formulating their own strategies going forward. With enough practice and experience, traders will eventually become adept at using ATR as part of their trading system and be able to capitalize on profitable opportunities more effectively in future investments. ATR vs Other Technical Indicators Average True Range (ATR) is a technical indicator used to measure market volatility and identify trends. Unlike other indicators, ATR measures the degree of price movement instead of the strength or weakness of a trend; this makes it ideal for spotting trading opportunities in volatile markets. Compared to indicators like Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), ATR offers traders a greater understanding of market volatility so they can more easily recognize good entry and exit points. In addition, ATR allows traders to set stop-loss points that are tailored to their individual risk tolerance levels. This helps them reduce losses when prices move against them but still provides an opportunity for profits if prices turn back in their favour. Ultimately, ATR is not meant to be used as an isolated indicator when making decisions about trades, but combining it with other indicators will improve accuracy when entering and exiting positions. Overall, ATR is a powerful tool designed for those looking to gain insight into market volatility and make informed decisions about their trades. By using this indicator in combination with others, such as RSI and MACD, traders can better understand the kind of environment they are working with which can help them maximize profits while minimizing losses. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
16
HOW TO IDENTIFY ORDER BLOCKSHello traders! Today we are going to look at the pattern Order Blocks, what this pattern means and how to trade it. ✳️ What is Order Block? The largest (from open to close) closest bearish candle to support before a strong impulsive bullish move (last sell candle before the buy candle). The last falling candle before the impulse growth. The high of this candle must be broken by the next candle to confirm it is an order block. The largest (from open to close) closest bullish candle to resistance before a strong impulsive bearish move (the last buy candle before the sell candle). The last rising candle before the impulsive decline. The low of this candlestick must be broken by the next candlestick to confirm that it is an order block. Order blocks are those areas/zones where financial institutions have manipulated the price and where some of their orders are in drawdown. This "footprint" they are leaving is clearly visible in the order block. Price will usually return to these areas and we will react to this in some way. Order block is a sign of big players in the market. ✳️ The idea behind the pattern and why it works The movements triggered by big players leave open positions which must be closed. And in order to do that, the price has to test those levels. Smart money works according to certain algorithms, and we are trying to make money on this. Behind these candlesticks are financial institutions: they deliberately move the market, themselves falling into a drawdown, so they need to return the price to the order block with an imbalance, to reduce losses (to return their open positions to breakeven levels). Why not close manipulative positions earlier? There is no one to cover them. When we close large positions, the price automatically moves in the direction of the order block, and it is convenient for the large capital to close the previous manipulated positions, which causes a bounce which we want to jump into. In other words, we find a liquidity gathering point and wait for the return to it. Order Block is a level to enter or exit. ✳️ Order Block Trading Strategy Mitigation is a test of a supply/demand area. In our case a block of orders. Closing of old manipulative positions. 1) We are looking for a block of orders. 2) Were the stops pulled out (collecting liquidity, breaking through the obvious highs and lows)? If no, then it is not an order block, let it go. You are not sure? Do not enter. 3) If yes, we consider entering. A bullish block of orders: We enter - on price returning to this candle (at least to the high). Stop - for low. Take - the nearest level. A bearish block of orders: Entry - on the return of the price to this candle (at least to the low). Stop - behind the high. Take - the nearest level. Each Order block can be tested only once.
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Education
by DeGRAM
39
What is Heiken Ashi and how to use it?Are you looking for a new way to analyze the markets and identify trends? Heiken Ashi is a powerful charting technique that can help you do just that. It provides traders with an easy-to-read visual representation of price movements that can be used to make more informed trading decisions. In this blog post, we'll cover what Heiken Ashi is, why it's so beneficial, how to read the candlesticks, when to use it, and offer tips for trading with it. With this knowledge, traders can use Heiken Ashi to take their trading to the next level. Definition of Heiken Ashi Heiken Ashi is a charting technique used to identify trends and smoothen out price fluctuations. It was derived from the Japanese candlestick charting techniques, and it is based on open, high, low and close prices from the previous session. When these prices are averaged, they form Heiken Ashi candlesticks which can be used to analyse market movements. The colors of the Heiken Ashi candlesticks are determined by the relationship of the current open and close prices compared to the previous session's open and close price. If the current open price is greater than or equal to that of the previous session, then a green or blue candle will appear on your chart; conversely if the current open price is less than that of the previous session, then a red or yellow candle will appear. By using this information traders can make informed decisions about when to enter and exit positions in order to maximize profits. Heiken Ashi also helps reduce volatility in comparison with regular Japanese candlesticks as it takes into account both recent and historical information when plotting candles. This allows traders to see a clearer picture of what’s going on in their chosen markets without being overwhelmed by too much noise or irrelevant data points. Additionally, since Heiken Ashi plots values over time rather than simple one-time snapshots like traditional candlestick charts do, traders can use this information to better predict future trends in their chosen markets. Overall, Heiken Ashi is an incredibly useful tool for any trader who wants to accurately identify trends in their chosen markets and make more informed trading decisions based on real-time data analysis. By leveraging its capabilities traders can gain insight into market movements more quickly and accurately than ever before. Benefits of Heiken Ashi The Heiken Ashi charting technique is a valuable asset for traders of any skill level. It can help investors easily identify trends, smoothing out the price action to offer a clearer picture of the market. This strategy is especially useful in range-bound markets, where it can signal when trends are likely to change direction. Heiken Ashi also assists in identifying potential entry points with greater accuracy by recognizing patterns earlier on. In volatile markets, this technique can be even more beneficial as it helps traders prepare for sudden price movements before they occur. By combining Heiken Ashi with other strategies such as Fibonacci retracements and Elliot Wave Theory, traders have a better chance at predicting market direction and making sound trading decisions for increased profits. Overall, Heiken Ashi's ability to smooth out price action and recognize potential entry points gives investors an advantage in their chosen markets that unassisted candlestick charts cannot offer. With its multitude of benefits, traders of all levels may find this tool very advantageous when trying to achieve success in their investments and trades. How to read Heiken Ashi Candlesticks? Heiken Ashi candlesticks are constructed using open, high, low and close prices from the previous session. The colors of the Heiken Ashi candles indicate whether the current open and close prices are higher or lower than the previous session’s open and close price. Red/black Heiken Ashi candles indicate a bearish candle, while green/white Heiken Ashi candles indicate a bullish candle. If the red/black candle is followed by a green/white candle - this indicates an uptrend, while if the green/white candle is followed by a red/black one - it indicates a downtrend. The Doji candlestick is another type of Heiken Ashi candle which occurs when the opening and closing prices of a session are equal to each other - this typically indicates some indecision in the market. When trading with Heiken Ashi, it is important to always be aware of support and resistance levels as they can help you identify potential entry points in your chosen markets. Support levels occur when there is enough buying pressure to push prices back up after they have dropped below them, while resistance levels occur when there is enough selling pressure to push prices back down after they have risen above them. A break of either support or resistance could signal an impending trend reversal, so traders should always pay attention to these levels when trading with Heiken Ashi. Finally, traders should also be aware that false signals may appear on their charts due to lagging indicators like moving averages or oscillators; therefore it's important to use additional strategies such as Fibonacci retracements or Elliot Wave Theory in order to confirm any potential trade opportunities before entering them into your chosen markets. With this knowledge about how to read Heiken Ashi candlesticks combined with other strategies like Fibonacci retracements or Elliot Wave Theory, traders can make more informed decisions when trading with Heiken Ashi. When to use Heiken Ashi? When it comes to trading with Heiken Ashi, timing is key. The Heiken Ashi technique can be used to identify trends and trend reversals, allowing traders to make more informed decisions about when to enter or exit the markets. It is especially useful in volatile and ranging markets, where traditional analysis techniques may not provide enough information to accurately predict price movements. Heiken Ashi candles can also help traders identify entry and exit points. By looking at the color of the candles, traders can determine whether a trend is likely to continue or reverse. For example, if the most recent candle is red, indicating a bearish trend, then this could signal an upcoming reversal in price. Similarly, a green candle indicates that the current bullish trend may continue for some time longer. However, it’s important to remember that Heiken Ashi signals should only be used as part of a larger trading strategy; they should not be relied upon alone as they do not always accurately indicate future market direction. Many traders use additional indicators such as Fibonacci retracements or Elliot Wave Theory in combination with Heiken Ashi candles for even more accurate signals. When combined with other analysis techniques such as support and resistance levels or moving averages, Heiken Ashi can provide valuable insight into potential entry and exit points in any given market. Additionally, traders should pay attention to volume when using Heiken Ashi candles; if there is an unusually high volume on a particular day this could indicate that there are larger players at play who may influence future market direction. Finally, it’s worth noting that although Heiken Ashi works on all timeframes from one minute up to monthly charts, it tends to be more accurate on longer timeframes such as daily or weekly charts due to its smoothing effect which reduces noise from shorter-term fluctuations in prices. Ultimately however which timeframe you choose depends on your personal trading preferences and goals; so experiment with different settings until you find something that works for your particular situation. Tips for Trading with Heiken Ashi Using Heiken Ashi in trading can be a great way to identify and take advantage of market trends. Here are some tips for using Heiken Ashi in trading: Utilizing Trend Lines: Utilizing trend lines is an important part of trading with Heiken Ashi. When the candles begin to form a pattern, traders should draw trend lines to better understand the direction of the market. These trend lines can help traders identify potential entry and exit points, as well as any potential stops that need to be set. Pay Attention To Color and Direction: Traders should pay close attention to changes in color and direction of the Heiken Ashi candles. When there is a change in color or direction, this could be an indication of a potential reversal or continuation of a trend. Multiple Time Frames: Using multiple time frames can help traders get an overall picture of the trend they are looking at. For example, looking at both daily charts and hourly charts may give traders an idea of whether current trends will continue or if they have reached their peak. Risk Management: Practice risk management when trading with Heiken Ashi. Risk management includes setting stop loss orders to protect against possible losses due to sudden price movements, utilizing proper position sizing according to your current account balance, and keeping emotions such as fear and greed out of your trading decisions. Setting Stop Loss Orders: Setting stop loss orders can help protect against unexpected losses due to sudden price movements. By setting these orders ahead of time, it allows traders to minimize their losses if the trade does not work out as expected. By following these tips for trading with Heiken Ashi, traders can use this technique effectively when making more informed decisions about their trades. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
19
TRADING ON THE WEEKLY CHARTToday we're going to talk about how to trade on the weekly timeframe. Trading on the weekly chart makes it clear that this trading strategy is for those who are patient, do not rush anywhere, and are willing to wait for signals for weeks or even months. The idea behind the trading system So, it is designed for those who have no hurry, or vice versa, for those who have very little time, and they can check the charts for a minute on weekends at most. Trades on this strategy are made once a week. It is possible to enter at the opening of the market, but the best entry will be on Monday morning; at this time prices are more attractive, and the entry time does not make any sharp moves in the weekly timeframe. The strategy is very simple, and it is possible to trade "anything that moves", because the system is based on a simple and plain idea. We wait until the weekly chart shows three candlesticks in a row in the same direction, either bullish or bearish, and then we enter in the same direction. That's it. That's how easy it is. The fact is that this pattern of three consecutive weekly candlesticks in one direction shows that there are a large number of big traders buying or selling. Because it takes a lot of money to move the price three weeks in a row in one direction, when that happens, it means that someone really needs the price to move. And this impulse attracts other participants into the market. Not necessarily a very strong trend is formed. But one can count on the continuation of the movement equal to the found formation from the opening of the first candle to the closing of the third one, without tails. It is often possible to see stronger movements. Once again, the idea is very simple: if we see three weekly candlesticks in a row in one direction, it means that there is a lot of money in the market, which pushes the price in this direction. Strategy Rules The basic rules you've probably already figured out are: we wait for three one-way candlesticks in a row, and then we enter on Monday morning in the same direction. The candlesticks must be obvious and clean; their bodies should be visible to the naked eye without zooming in on the chart. The doji with practically no body is not considered. Moreover, if the candle's body is not visible on the distant chart and interrupts our formation, then we start the counting of three candles in a row again. In other words, it should be obvious even to a child who has won this week with the bulls or the bears. A stop-loss should be placed right after the formation. It will not trigger very often because the strategy is very reliable, but sometimes it still happens. Take profit is set at a distance equal to the formation. As a result, it turns out that the stop-loss and take-profit ratios in the strategy are approximately 1 to 1. You can, of course, experiment with your own variations, but this approach is the most effective in terms of winrate. If, after the signal is worked out, we see three candles in a row in the same direction again, it may be too risky to re-enter. It is more reliable if there is at least one opposite candle between two unidirectional signals that the market still needs to correct. If the price missed taking profit just a bit and started to correct, you'd better exit. The profit may be somewhat smaller, but it will still be there. This method protects not only from losing profits but also from triggered stop-losses. Those who use classic price action can also monitor strong levels, and if the price hits one of them, they can exit with a smaller profit. In case the opposite entry signal for this strategy was formed before our trade closed at take profit or stop loss, it is better not to argue with the market. Close the current trade and enter immediately on the new signal. Money Management Strategy Money management is very important in this system. The strategy uses large take and stop positions, so the lots should be small. Fortunately, small capital allows for competent money management even with a $100 deposit. The trade volume should not exceed 1% of the capital. For an exact calculation, it is better to use the lot calculator. Examples of trades On the weekly timeframe of the GBP, three bearish candles were formed in a row. We wait for Monday morning to enter; the quotes open with a gap, but taking into account the target take level of 382 pips, the order accuracy does not play a big role in the trade. After selling GBPUSD, set a take profit equal to the distance from Friday's closing price to the opening price of the first of the three candles of the pattern. We put a stop just above the upper tail of the first candle. Despite the long fall, the quotes have not reached take-profit. This is exactly the case when it is worth going out and not waiting. As described above in the strategy rules, if a candle visually misses the take-profit mark, we exit the trade. The trader who left the short would have to close the trade with a loss due to the opposite signal. Three rising candles are a signal to close any opposite positions and open a long position in GBPUSD. As we can see from the chart, the pound did not go up, and the trade was closed with a stop loss. The rules of the trading system do not override the principles of technical analysis, which can be seen in another example of using this strategy when trading gold. Three candles in a row, the first of which passed the minimum "body visibility" requirements, gave a buy signal. After one week of fall, quite far from the set take profit, a reversal pinbar is formed. In favor of fixing the position at the support level. The trader would have received a stop if he had not exited the position. On the same chart later, the quotes again give a signal to go short, but in this case, the bears manage to break the support. On the next wave, the traders break through the suppport with momentum, and the price eventually reaches our take profit. Above are specially cited examples of complex cases; as the setups can be seen with the naked eye, you can find more simple examples on your own. Conclusion The strategy works flawlessly on the major currency pairs. Even on such volatile days. The weekly strategy is also suitable for very aggressive instruments, such as gold. Stop-losses, of course, will be knocked out a bit more often than on more "calm" instruments, but the trading system remains effective. In addition, it perfectly protects against a flat, as three unidirectional candles clearly indicate the end of the consolidation and the formation of a trend.
Education
by DeGRAM
17
CONFLUENCE IN TRADINGHave you ever wondered what confluence in trading is? How can you combine several elements into one to increase your chances of making significant profits? Regardless of what type of trader you are or what your trading goals are, a confluence is always a great choice for many reasons, which we will discuss below in this post. A definition of confluence in trading is the combination of more than one trading technique or analysis to increase the chances of winning a trade when you use multiple trading indicators that give the same "signal" as the best way to confirm the validity of a likely buy or sell signal. This applies to any situation where you see multiple trading signals lining up on a chart and signaling you to take a trade. ✳️ WHEN DOES THIS HAPPEN? It occurs when several technical analysis methods give the same trading signal. Often, these are technical indicators. They can also, however, be combined with the following things: Price action Chart patterns Indicators or oscillators ✳️ A BRIEF EXAMPLE OF CONFLUENCE IN TRADING Suppose you use one technical analysis tool that provides 40% accuracy in predicting the correct price movement. In addition, you use a second, correlating technical analysis tool to better filter your decision. In this way, you increase your chances of making a profit. In this way, you use the concept of synthesis to find a trading setup using multiple technical analysis methods. Keep in mind that all of these analyses signal the same price direction. This can occur when support and resistance levels are closely related to expansion levels and Fibonacci retracements. The following things can also act as areas of interest: Dynamic support and resistance levels such as Moving average Bollinger bands Previous highs and lows Psychological levels When these levels follow each other, they form more significant resistance and support levels. All of these can be used as take profit levels or entry points. ✳️ FOUR METHODS OF PRICE ACTION FOR TRADING The main four levels or areas in which a confluence can occur are as follows: Resistance levels Support levels Fibonacci levels Trend Lines In short, price action confluence trading is a technical analysis method for observing. To trade on price action, it is important to have the ability to detect price "confluence" as soon as resistance levels, support levels, trend lines, Fibonacci lines, etc. bring the price to a confluence point. So, what are some of the most effective confluence trading strategies that every trader should know about? ✳️ BASIC STRATEGIES FOR CONFLUENCE Here are some of the most valuable confluence strategies in trading that you can consider for your trading goals and objectives: ▶️ Market Structure (Support and Resistance) Market structure is a collective reference to support and resistance. These areas in the market act as walls, especially ceilings and floors, that try to prevent price swings up and down. ▶️ Areas of supply and demand Supply and demand areas are another useful example of trading. They represent a more prominent form of resistance and support and act as a solid barrier to price. In most cases, these are reversals or complete trend reversals. ▶️ Direction of the primary trend One of the most favorable variables for this type of trade is the direction of the main trend. ▶️ Price action patterns If you, as a Forex trader, know the different price action patterns, this will allow you to predict and assess the trend reversal. Keep in mind that this is a crucial variable in the confluence list in trading. ▶️ Candlestick Patterns When it comes to candlestick patterns, it is important to understand that they are important as patterns of price action or even more. If you understand what price is doing and the fundamental philosophy behind the various candlesticks, you can gain an advantage over the market. Thus, this is one of the basic methods of the confluence trading strategy. ▶️ Trend Lines The trend line and moving averages are also defined as "market structure." The reason for adding market structures to the list is the same as for adding trend lines and/or moving averages. Remember, the main reason for all of this is the underlying market structures, which are horizontal. However, they can also be diagonal in the form of a trend line or dynamic in the form of a moving average. ▶️ Price reversal zones with Fibonacci retracement Fibonacci retracement zones represent the most important confluence of trading variables that traders should consider, especially when the trading structure has 61.8%, 50%, and 38.2% levels. ▶️ Price rejection A price rejection indicates that the market is having difficulty breaking through one particular structure. In this case, the price is likely to rebound from the structure, while all price rejection candlesticks come in different shapes. ▶️ Indicators Nevertheless, the list of confluence trading strategies is complemented by forex indicators, which are generalized graphical representations of past candle data. Traders mostly use these indicators to help themselves understand exactly what the market is doing. ✳️ How can you use confluence to place a good trade in forex? Suppose you use price patterns formed by candles on your chart, and then you see a pattern that is a buy signal. You may have found that pattern confirmation and confluence may help you be right 70% of the time. Also, if you have tested and found that Fibonacci retracement levels can help you in the right context, you can expect the following. If your price pattern signals to buy and coincides with a Fibonacci level, this is a great example of an "A" trade. All you can see are price patterns. You only overlay an indicator when you want to check for the right context around a price pattern. If you notice that the pullback level confluences with the pivot point you have been following, keep in mind that this is another form of confluence and that there are numerous other examples of confluences that result in great forex trades. ✳️ Some examples: USD/CHF 1H AUD/JPY 4H UKOIL D NZD/JPY 4H GBP/AUD 4H EUR/NZD 4H
Education
by DeGRAM
6
HOW TO INCREASE TRADING EDGETrading in the financial markets is a highly competitive and ever-changing landscape, where the difference between success and failure can be razor-thin. To succeed as a trader, you need to have a trading edge, which is essentially an advantage that gives you a higher probability of success in the markets. In this post, we will discuss three ways to increase your trading edge. ✳️ Define Your Trading Strategy If you want to up your trading game, there are a few things you can do to improve your approach. First off, make sure you take the time to define your trading strategy. This means getting a clear understanding of the markets you'll be trading in, the timeframes you'll be working with, and the trading styles you'll be using. By doing this, you can focus on the markets that work best for your approach and avoid making rash trades based on emotions or incomplete information. But that's not all. Having a solid trading strategy is just one part of the equation. You also need to have a solid risk management plan in place to help you manage your risk and protect your capital. This can include setting stop-loss orders to limit your downside, keeping tabs on your trades to catch any potential issues early, and adjusting your position size based on market volatility to stay on top of market movements. There are also some other things you can do to give your trading edge a boost. For example, doing some in-depth market research can help you stay up-to-date on the latest trends and developments. You could also invest in some advanced trading tools and software to help you make better decisions. And don't forget about tapping into the knowledge of other traders and industry experts by networking, attending trading seminars or workshops, or getting some guidance from a professional trading coach or mentor. In the end, there are loads of ways you can improve your trading edge. By taking a comprehensive approach that includes strategy, risk management, research, and ongoing learning and development, you can set yourself up for long-term success in the markets. ✳️ Stay Informed and Educated The second way to increase your trading edge is to stay informed and educated about the markets. You need to have a deep understanding of the factors that affect the markets you trade, such as economic data, geopolitical events, and market sentiment. Keeping up to date with financial news and events will help you to make informed trading decisions and adjust your strategy accordingly. Moreover, you need to invest in your education and continuously improve your trading skills. Read trading books, and follow trading blogs and maybe forums. By doing so, you will learn from experienced traders, gain insights into market trends, and develop new trading strategies. ✳️ Keep a Trading Journal There are several ways you can improve your trading edge, and one of the most effective is to keep a trading journal. By maintaining a record of your trades, including the reasons for entering and exiting each trade, the market conditions at the time, and the outcome of each trade, you can gain valuable insights into your trading patterns and behavior. In addition to helping you identify patterns and learn from your mistakes; a trading journal can also help you develop discipline and consistency in your trading. By reviewing your journal on a regular basis, you can identify areas where you need to improve and adjust your strategy accordingly, ultimately leading to better trading results. But the benefits of a trading journal don't stop there. By keeping a detailed record of your trades, you can also track your progress over time and monitor your overall performance. This can be especially helpful when evaluating the effectiveness of a new strategy or approach to trading. In short, if you're serious about improving your trading edge, keeping a trading journal is a must. It's a simple yet powerful tool that can help you gain a deeper understanding of your trading habits and ultimately make better, more informed trading decisions. ✅ Conclusion To succeed as a trader, you need to have a trading edge, which is essentially an advantage that gives you a higher probability of success in the markets. In this post, we have discussed three ways to increase your trading edge. By defining your trading strategy, staying informed and educated about the markets, and keeping a trading journal, you can improve your chances of success in the financial markets. Remember, trading is a journey, and the key to success is to keep learning, adapting, and improving your skills.
Education
by DeGRAM
4
HOW WILL AI AFFECT FINANCIAL MARKETS?Artificial Intelligence (AI) is revolutionizing the financial markets, with its algorithms and automated systems allowing for faster and more accurate trading decisions. AI technology has already seen success in stock market trading, but it is now being used to analyze data from all areas of finance, including banking and investments. In this article, we will explore the advantages and challenges posed by AI-based trading systems, as well as potential opportunities for AI in the future of financial markets. Finally, we will provide guidance on how to prepare for the impact of AI on financial markets. 1. Understanding AI and its Impact on the Financial Market Artificial Intelligence (AI) is an advanced technology that has been used in a variety of industries to automate tasks and make decisions. In the financial markets, AI can be used to analyze large amounts of data quickly and accurately. It can recognize patterns, identify trends, and even predict outcomes in order to generate trading signals for investors. The potential implications of AI in the financial markets are vast. AI-based systems can be used to streamline trading processes, reduce risk, and increase profitability. However, there are also drawbacks associated with using AI in finance that must be considered. For example, AI systems may lack the human intuition needed to make sound decisions during volatile market conditions or when dealing with complex security types. AI-based systems have already demonstrated their ability to recognize certain trends and patterns in financial data. For instance, AI has been used successfully by traders to detect price movements before they occur and capitalize on them accordingly. Similarly, these systems can also identify correlations between different asset classes or sectors over time, allowing investors to diversify their portfolios more efficiently. Finally, there are a number of examples of successful applications of AI in finance already taking place around the world. Hedge funds have adopted machine learning algorithms for portfolio optimization; banks have leveraged natural language processing (NLP) technologies for customer service; and stock exchanges have implemented automated surveillance solutions for fraud detection. All of these examples demonstrate how powerful AI can be when it comes to making decisions within the financial markets. 2. Advantages of AI in Trading AI has the potential to revolutionize how trading is conducted in financial markets. By leveraging the power of AI, traders can gain an edge in the markets and improve their chances of success. Here are some of the main advantages of using AI in trading: 1. Quick and Accurate Analysis: AI-based systems are capable of quickly analyzing large amounts of data and providing accurate market insights. This helps traders make faster, more informed decisions about when to buy or sell a particular asset. It also reduces the risk associated with manual analysis, as there is less chance for human error to enter into decision making processes. 2. Identifying Profitable Opportunities: AI-based systems are able to identify profitable opportunities that may otherwise be overlooked by manual analysis. This allows traders to capitalize on positive trends and maximize returns from their investments. 3. Identifying Risks: AI-based systems can also help identify risks associated with certain trades or investments, allowing traders to mitigate these risks before acting on them. This helps reduce losses and improves overall profitability for investors and traders alike. 4. Automated Decision Making: AI-based systems can automate certain aspects of trading decisions, eliminating the need for manual input or assistance from a human trader/investor. This reduces errors associated with manual decision making processes, while increasing efficiency and accuracy when it comes time to execute trades or invest in assets. 5. Lower Overall Costs: Finally, using an AI-based system helps reduce overall costs associated with trading due to its ability to automate certain processes and eliminate errors associated with manual decision making processes. This can help improve profitability for investors/traders over time by reducing expenses related to trading activities such as commissions, fees, etcetera 3. Future Opportunities for AI in Financial Markets The potential of Artificial Intelligence (AI) in the financial markets is immense. It has the power to revolutionize how traders and investors make decisions, identify new opportunities, and reduce risk. AI-based systems are able to automate processes and improve accuracy in decision making - providing a competitive advantage to those who utilize it. Additionally, algorithmic trading can give an extra edge by increasing efficiency when predicting market trends and stock prices. Synthetic assets are another way that AI is being employed in the financial sector. These products can provide investors with exposure to investments not typically offered on traditional markets or products. Furthermore, AI helps organizations create effective risk management strategies by recognizing potential risks quickly and offering guidance on how to prevent them from occurring. AI has already been utilized by some of the world's largest banks as a way to gain insight into the complexities of financial markets; giving businesses access to innovative investment strategies and new growth prospects within their organization. As this technology develops further, now is the perfect time for corporate entities to prepare for its impact on their operations so they can take full advantage of its many advantages when they arise. In summary, AI offers a great opportunity for traders and investors alike in terms of achieving higher returns while minimizing losses through improved decision making processes, enhanced analysis effectiveness, and more precise predictions about stock prices and market trends. With its rapid evolution continuing apace, it’s essential for companies operating in the financial industry to start preparing now for what lies ahead so they can capitalize on all that this powerful technology has to offer them in future years! 4. Challenges Faced by AI in Financial Markets AI is a powerful tool for understanding and predicting financial markets, but it does come with certain challenges that must be addressed in order for it to become a viable tool. Below, we will explore the five main challenges facing AI when applied to financial markets. Developing Reliable Algorithms: Developing reliable algorithms is essential for successful AI trading systems. It is important to ensure that investors are not exposed to unnecessary risks due to inaccurate predictions or unreliable models. In order to minimise such risks, developers need to carefully tweak existing AI algorithms and develop new ones that can accurately predict market outcomes. This requires complex mathematical models as well as an in-depth understanding of the data being analyzed. Ensuring System Security: Financial markets involve sensitive information which needs to be kept secure at all times. As such, security should be one of the top priorities for any organization utilizing AI in finance. Strong passwords and authentication protocols should be implemented and regularly tested, while any vulnerabilities should be actively monitored and patched immediately. Additionally, organizations should use encryption techniques such as Secure Socket Layer (SSL) or Transport Layer Security (TLS) whenever possible when transmitting or storing data on their servers or networks. Predicting Ethical Implications: The ethical implications of using AI in finance also need to be considered before integrating these technologies into existing systems and processes. This includes analyzing how decisions made by these systems could affect individuals or groups of people – both positively and negatively – as well as exploring potential legal ramifications of using AI-based trading systems. Organizations must consider these issues carefully before deploying any new technology in their operations and ensure they have the necessary safeguards in place if needed. Responding To Unstructured Data: Another challenge associated with using AI in finance is its ability to handle unstructured data accurately in real-time. Unstructured data can come from sources such as news stories, social media posts, customer feedback surveys etc., all of which can offer valuable insights into current market trends and conditions that may not otherwise be apparent from structured numerical data alone. As such, developing algorithms which can effectively interpret this type of data is an important area of research for financial institutions looking to utilize the power of AI in their operations. Exploring Long-Term Implications: Finally, organizations must consider the long-term implications of utilizing AI technologies when making decisions related to their financial operations. This includes considering whether there will be any unintended consequences associated with relying too heavily on automated decision making processes; whether there are sufficient safeguards against manipulation by malicious actors; and whether there are strategies in place which enable companies to remain competitive over time without sacrificing customer privacy or other ethical considerations.. Ultimately, organizations need to think carefully about how they integrate AI into their existing infrastructure before taking action so they can make informed decisions about how best utilize this technology going forward 5. How to Prepare for the Impact of AI on Financial Markets As AI continues to gain prominence in financial markets, companies must be proactive in understanding the risks and benefits of incorporating it into their trading strategies. To get ready for the impact of AI on financial markets, a strategic approach is necessary that includes comprehending how regulatory bodies interact with this technology, identifying potential partners who can help navigate its complexities, and remaining aware of advancements with AI. Here are several tips to prepare: 1. Assess Risks & Benefits: Investigate current trends in AI to detect both possibilities and drawbacks. Additionally, familiarize yourself with rules or laws related to using AI in finance industries so you can ensure following regulations while still gaining from its benefits. 2. Design Strategies: Develop tactics that maximize advantages while minimizing risks. This may include automating processes or creating algorithms that enable you to recognize opportunities quickly and make wise decisions faster than before. Consider partnering up with experts who understand integrating AI into existing infrastructure and procedures. 3. Stay Updated: Companies running finance businesses must be cognizant of new technologies like artificial intelligence so they remain competitive without compromising customer privacy or other ethical standards--this entails subscribing to industry news sources, attending conferences such as FinTech Connect Live!, reading industry blogs such as FintechToday or TechCrunch’s Fintech section among other options! 4. Analyze Regulatory Bodies: Organizations operating within the finance sector should have an idea on how regulatory bodies view machine learning applications when it comes to making decisions within the organization--this data will help them stay compliant without sacrificing customer confidentiality or other moral considerations by providing guidance on acceptable usage policies or suggesting alternate options if one is disapproved by a certain body plus researching various jurisdictions' regulations depending where services need be offered globally.. 5. Find Partnerships: Experienced partners may be essential when introducing artificial intelligence into your operations--not only they provide technical support but also share advice on merging machine learning applications into existing infrastructure and processes as well as helping produce suitable usage policies meeting all applicable regulation standards across global locations.. Cooperating allows leveraging resources more efficiently plus benefiting from shared experiences thus increasing success chances! By taking these steps, companies operating within financial sectors can benefit from any opportunities presented by artificial intelligence while avoiding associated risks—ensuring their compliance is met without endangering customer confidentiality or other ethical issues along the way! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
SP:SPXEducation
by Lingrid
14
DEVELOPING A CONFIDENT TRADING MINDSET✳️ One of the key ingredients to successful trading is confidence, but many people lack it. Why? I'll be talking about this in this post. Having a plan is the fundamental cornerstone of confidence. Fear and hesitation are caused when you are unsure about what to do. I'm surprised by how many traders just work without a defined strategy. Your trading plan should be written down as the first phase. It should be as simple as, "If A occurs, I will do B; if B does not occur, I will do C." You must eliminate every assumption. This is the strength of pre-established rules, and after they have been tested and proven, they will support your future confidence and discipline. ✳️ Backtesting and optimization of the system You won't have any confidence moving forward if you haven't tested your plan, established its historical viability, and optimized it to the best of your ability using the data. This is because you need to know what you're doing and what to anticipate. Your confidence will be built on the basis of a strategy's study, testing, and optimization steps. By missing this step, you are demonstrating a lack of dedication to your trading business and, thus, are not treating it like a business. Starting with the company comparison. Would you launch a company and sell a random product before spending the time and effort to demonstrate its viability? Obviously not. And it needs to be similar to trading. If you don't test, you simply don't want it badly enough, and I encourage you to stop right away. There is no fast way to success; you must be prepared to put in the time to test, develop, and comprehend all of the system's elements. ✳️ The source of confidence is the outcome Results provide extra confidence, so you must see your strategy in action before you can follow it. As a result, you must be able to stick to your method until you have a large enough sample size to notice the benefits. You must proceed gently and progressively raise your exposure as your method establishes itself. This is one way to build confidence, but how will you get there if you give up after a couple of losses, particularly big losses, all because you got into live trading too much early on? So, this is an important one thing: you must let the strategy show you that it works. As the method works, gradually increase the exposure. You want to start live trading with the smallest amount affordable. My advice is to increase up in increments of 0.05% 0.10% 0.25% 0.5% 0.7% every time the technique produces X- Amount, for example, 10%, and so on until you find the risk that you are most comfortable with trading. Remember that the ultimate amount should be one that you can afford to lose no matter how much you lost. You should be able to get a good night's sleep. Confidence is gained gradually through testing and allowing the system to give proof, as well as gradually increasing exposure to your acceptable risk limit. Taking the right risk that will not cause you feelings of anxiety is critical to maintaining your confidence. If you lose 50% of the amount you have in a single losing trade, you're unlikely to be very confident, and if you're diving into trading with full risk, it's an indication of a lack of emotional control and an attempt to speed up the process. You must ask yourself why. And how badly do you want to be a trader? Because failing to complete the homework indicates a lack of dedication. ✳️ Evidence gives you confidence in trading Starting into trading with no past performance or live data is one of the main reasons most people lack confidence. However, if you go in with a well-researched and tested plan, you will have something to refer to in your live trade. Are you experiencing a drawdown? So, what does my data indicate? Oh, that's completely typical. Okay, keep going. Instead of rejecting the plan or altering the system, as 95% of people do. Instead, you are now confidently pushing forward because you have the data and statistics to back you up. Once you have the statistics, you will have confidence, and when you are going through a difficult period, such as a drawdown, you will only have to ask yourself these two questions. ▶️ Am I sticking to the trading plan? ▶️ Am I controlling my risk? If you can respond yes to both questions, you are safe. Continue your trading journey.
Education
by DeGRAM
5
Importance of Comparing Automated Trading Strategies to Buy&HoldImportance of Comparing Automated Trading Strategies to Buy&Hold | 04/15/23 Recently, TradingView introduced a new backtesting feature that allows traders to compare their trading strategy to simple "buy and hold" strategies. This has proven to be very useful for our trading team and crypto community, especially when attempting to find the best settings for manual and automated trading scripts, such as our Ninja Signals V4 script, so we wanted to highlight this awesome new feature. In this example, we used TradingView's new 'Compare to Buy & Hold' feature to compare our chosen configuration settings for our Ninja Signals V4 automated trading script and backtesting strategy. As you can see, our chosen settings have performed significnatly better than simple "buy and hold" strategies over the last several years (compare the green strategy profit line to the blue "buy and hold" profit line). This new TradingView feature is very powerful, because it helps traders determine if a trading strategy is more or less profitable than simply buying and holding. Just because a trading strategy produces some profit does not mean that it is worth trading, especially if simple "buy and hold" strategies out-perform your chosen trading settings. The settings used in this chart performed well even the recent bear market. As you can see in the strategy statistics, as "buy and hold" strategies were losing profit, the settings we used for our Ninja Signals V4 trading script were actually gaining profit. This new TradingView tool improves our ability to find good settings for both manual and automated trading strategies, and gives additional confirmation that profitable trading settings are better than simple "buy and hold" strategies. Furthermore, the settings we used in this chart have compounding turned off, meaning each trade is the same order size, without any reinvesting of profits. Even as our trading fund grows from this profitable trading strategy, we continue to simply place orders for the same amount each time, rather than re-investing profits to trade larger and larger amounts (known as "compounding"). If compounding is turned on, profits grow much faster, but that is beyond the scope of this publication. We will publish a separate educational idea in the future about the importance of comparing "compounding" vs "non-compounding" settings when backtesting, but for the purposes of this chart, we simply wanted to share that we were able to achieve significant profits, even in a bear market, and even with no compounding (no reinvesting of profits). In conclusion, the new TradingView "Compare to Buy & Hold" backtesting feature gives traders a powerful new tool to find better settings for their chosen trading strategy, and additional confirmation and confidence that live trading will be successful. We thank the TradingView team for adding this powerful new feature!
Education
by Bitcoin_Ninjas
1
What influences the price of OIL?In today’s volatile global market, the price of oil can be affected by a variety of factors. From wars and international trade agreements to financial market dynamics and global economic outlook, understanding what influences the price of oil is essential for both governments and individuals alike. In this post, we will look at how geopolitical factors, financial market dynamics, the global economy, oil producers’ strategies, and weather events all play a role in determining the cost of one of our most valuable resources. By examining each factor in turn, we can gain insight into why prices fluctuate so drastically over time and how to respond appropriately when they do. Read on to learn more about what influences the price of oil. Geopolitical Factors: Geopolitical factors have a major impact on oil prices, as the global demand for oil is heavily influenced by political events and decisions. The instability of certain regions and countries can reduce their production levels, leading to a rise in prices. International trade agreements can also affect oil prices: the recent US-China trade war has had a significant impact on oil markets, with supply chain disruptions causing uncertainty and increased volatility. The presence or absence of certain governments in oil-producing nations can also influence prices dramatically. For example, the toppling of Muammar Gaddafi's regime in Libya caused a sharp spike in global crude prices due to its immediate effect on oil production levels. Similarly, political unrest in Iraq and other Middle Eastern countries have resulted in supply disruptions that have pushed up prices. Lastly, global political events such as wars, coups, and other acts of aggression can disrupt the production of oil and drive up its price. For instance, when the US imposed sanctions on Iran following its nuclear program activities, it caused an immediate jump in crude prices due to fears about potential supply disruptions from Iran’s fields. In addition to these direct effects on production and supply levels, geopolitical events often lead to market speculation which further drives up prices even if there is no actual disruption to supplies. Supply and Demand The balance between global supply and demand for crude oil plays a key role in determining the price of oil. Changes in global supply can cause shifts in prices, such as when OPEC (Organization of the Petroleum Exporting Countries) countries agree to reduce production, or natural disasters affect output from offshore rigs or refineries. On the other hand, changes in global demand can also have an impact on oil prices. For example, economic booms can cause an increase in demand for fuel, while recessions tend to weaken it. When demand is high and supply is low, then oil prices tend to be higher as customers are willing to pay more for limited resources. Conversely when supplies are plentiful and demand is low, then prices decrease as suppliers compete with each other by offering lower rates. The interplay between these two factors is what drives the price of oil. It's important to note that both short-term and long-term forces influence the price of oil; geopolitical events may create temporary disruption but underlying trends are always at play too. For instance, if there's a sudden increase in production due to new technologies used by producers or a drop in consumption due to changing energy needs, then this could result in long-term changes to the price of crude oil. In addition to this kind of market fundamentals affecting the cost of oil on a macro level, some countries may choose to manipulate their own domestic supplies which can have significant implications on regional markets as well as global ones. Some governments even use subsidies or taxes on petroleum products as part of their fiscal policy strategies – practices which can help cushion consumers against fluctuations in international markets but could also lead to imbalances over time if left unchecked. Overall, understanding how supply and demand dynamics interact with one another helps explain why prices may go up or down depending on current events and market conditions – knowledge which provides valuable insight into how companies should approach pricing strategies for their goods and services around energy costs. Economic Sanctions Economic sanctions are a strategic tool wielded by governments to implement international law or force compliance. This approach can take the form of trade restrictions, investment prohibitions, financial transaction limitations, travel bans and technological access constraints. The application of economic sanctions can have a major effect on global oil prices - as evidenced in 2018 when US-imposed sanctions caused Iranian exports to plunge, with an ensuing surge in oil prices across the world. Similarly, US-driven sanctions against Venezuela had a similar effect on pricing the following year. It is not only reductions in production that influence price movement; sentiment can also play a role. Sanctions against Iran saw market sentiment affected, resulting in increased volatility and more expensive oil for consumers. If an embargo were imposed on a major producer such as Saudi Arabia or Russia there could be widespread disruption to supplies and increased pricing for everyone involved. Even if production isn't hit directly by particular sanctions then long term trends may still be affected: An embargo on Saudi Arabia would likely lead to reduced crude inventories over time as production levels adjust accordingly causing higher prices across the board down the line. This could stimulate demand for renewable energy sources like solar or wind power which would decrease global demand for fossil fuels while bringing down crude costs overall. Overall it is clear that economic sanctions can have both short term and long lasting effects on global oil prices - depending upon their scope, duration and severity. Therefore businesses tied up with energy trading or others parts of the industry should stay vigilant regarding these types of events so they are prepared for any disruptions that may arise from them ahead of time. Political Unrest Political turmoil can have a significant influence on the cost of oil, producing instability in the market and creating price volatility. Elections, uprisings, strikes or civil wars can cause disruptions to supply chains, resulting in higher costs for purchasers. Additionally, alterations to United States foreign policy and government regulations can also affect the oil industry. For instance, when the US exited the Iran nuclear deal in 2018 and placed sanctions on Iranian oil exports, international petroleum prices rose significantly. Oil is traded globally so unrest in one country may cause an impact on oil costs around the world. In 2019, demonstrations against fuel tax hikes precipitated a global crude oil increase due to worries about supply interruptions from Total SA's leading refinery in France. Similarly, Yemen’s civil war has caused upheaval across the globe - with Saudi Arabia stopping most of its crude shipments via the Red Sea due to safety issues connected to Houthi rebels. Political turbulence could also lead to a decrease in investment into energy infrastructure projects such as pipelines or refineries - meaning that even if there is demand for petroleum products they might not reach customers because of logistics issues. This could result in shortages of certain goods and consequently greater fees for buyers. Overall it is evident that political unrest has wide-reaching consequences for the price of oil both locally and internationally. It is crucial for businesses working within this sector to keep up with current events so that they are better prepared for any potential disturbance or cost variations that may occur as a result of political instability around the world. Financial Market Dynamics: Financial markets play an important role in influencing the price of oil. Large institutional investors, such as pension funds and hedge funds, often make decisions based on short-term trends in the energy sector. When these investors buy or sell futures contracts for oil, it can affect the supply and demand balance of crude oil and thus its price. The futures market is another factor that affects the price of oil. Futures traders purchase contracts to buy or sell oil at a later date, which impacts crude supply and demand levels. Speculation on OPEC production cuts can also have an effect on oil prices, as can political unrest or economic sanctions against certain countries. Weather and natural disasters are another important factor to consider when discussing financial market dynamics. In some cases, extreme weather conditions can lead to disruptions in production, supply chain issues, or increased demand due to cold snaps or heatwaves. Natural disasters such as hurricanes or floods can also cause major disruption to infrastructure and temporarily reduce supplies of certain commodities including crude oil. Finally, global economic outlooks may influence both investor sentiment and consumer spending patterns which could lead to changes in demand levels for commodities like oil over time. As such it is important for businesses in the energy trading industry to stay up-to-date with global developments so they can make informed decisions when it comes to pricing strategies related to energy costs. Hedge Funds and Speculators Hedge funds and speculators are influential participants in the energy market. They are responsible for buying and selling oil contracts as well as futures to take advantage of price fluctuations. By doing so, they can make profits from their trades but also assume risk if markets turn against them. Moreover, their activities may be affected by external developments such as geopolitical events or economic sanctions imposed by governments. Therefore, it is important for investors to keep a close eye on these factors in order to make informed decisions about pricing strategies for oil-related goods and services. Futures Markets Futures markets are an important factor in influencing the price of oil, as they can provide a platform for buyers and sellers to make profits or protect against price fluctuations. A futures market is a type of financial market that enables participants to buy and sell commodities, such as oil, at predetermined prices for delivery on a future date. In the energy sector, large institutional investors and hedge funds use futures markets to speculate on the direction of oil prices. By buying contracts today with an expectation that prices will rise in the future, these investors can increase their profits from rising oil prices. On the other hand, hedgers use futures markets to protect themselves from unexpected drops in price by locking in current prices for delivery at a later date. Speculative activity in futures markets can lead to large swings in the price of oil because participants have greater influence on pricing than actual demand and supply. This means that speculation can cause oil prices to move independently of actual supply shortages or excesses. Regulatory bodies also use futures markets to set limits on trading and production levels, which impacts prices and volatility levels. For businesses involved in energy trading it is important to keep track of developments in futures markets as these movements can have significant impacts on pricing strategies. Businesses should also be aware of speculation by large institutional investors who are looking to profit from changes in oil prices over time. Understanding how these activities are impacting market sentiment will help businesses make informed decisions about pricing strategies related to energy costs. Global Economy: The global economy is a major factor in the fluctuating price of oil. Investor confidence, currency values, GDP growth and trade disruptions all have an impact on pricing. Additionally, as alternative energy sources become more accessible and affordable they can contribute to a decrease in demand for traditional fossil fuels such as oil. Companies involved in energy trading must stay informed of these developments to ensure their goods and services related to energy costs remain competitively priced. Currency Values The value of a country’s currency can have a direct impact on the price of oil, with fluctuations in exchange rates influencing import costs and buying power. A stronger currency will enable an importing nation to buy more oil for less money, whereas a weaker currency will require more of the local currency to purchase the same amount of oil from other countries. Currency devaluation can also affect the cost of imported goods, as it reduces the buying power of a nation’s citizens and businesses. This means that each dollar or euro is worth less on the global market and makes it more expensive to purchase foreign-made goods, including oil. If countries devalue their currencies, they may have to pay higher prices for imports, which could cause oil prices to rise as well. On the other hand, when a country’s currency appreciates in value, it can help reduce import costs and increase buying power. This makes imported goods cheaper for consumers and businesses alike, which could lead to lower prices for oil in those countries. In addition, appreciation of a nation’s currency can make its exports more attractive to foreign buyers who can now obtain them at relatively lower prices than before. This could help drive up demand for domestically produced crude oil and result in increased revenues for exporting nations. When considering how currency values can influence the price of oil, it is important to remember that these effects are often short-term in nature and only apply when purchasing from abroad. Furthermore, changes in exchange rates are not necessarily an indication that domestic production costs have changed significantly - rather they reflect shifts in market sentiment towards one particular currency compared with all others around the world. Therefore companies should remain aware of current exchange rate trends while also monitoring their own costs over time so they are able to adjust pricing strategies accordingly depending on changing market conditions Oil is now the biggest staple on the world stage. Its importance is difficult to overestimate. The entire economy is based on indicators related to oil. But time passes and the economy changes its face and new favorites enter the arena. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
TVC:UKOILEducation
by Lingrid
10
Price Action: How to Trade ReversalsTrading on key levels is one of the basic principles of Price Action trading in the financial markets. There are two main ways to trade on levels: on the breakout and on the reversal. How to distinguish a correct signal to enter the market from a false one, how to set stop-losses and take-profits and what other nuances should be considered when trading in this style? 🔷 Specifics of trading from levels Key price levels are present in any financial market, including Forex. Often, these horizontal lines act as either support or resistance to further price movement, which is why traders are so interested in them. These key lines are formed due to the large accumulation of buy and sell orders. When the price reaches such a congestion, the current strength of the trend, as a rule, is not enough to close all these orders and move the price further. Therefore, if the movement does not get support, the price will turn in the opposite direction. If there are new volumes that are able to break through a great accumulation of orders, it is likely to happen that the trend strength is enough for the further movement, i.e. a strong breakout level will occur. Of course, events do not always develop only according to these scenarios, but these are the two most likely variants. There are big players at the market whose orders influence the price due to big volumes. Because of this, experienced traders only need to correctly identify such levels and signals that the price is most likely to reverse. The classic level is an area based on the opening or closing candlestick prices (not the high/low), which the chart has already touched before. That is, if the chart, having risen to a certain level, rolled back and then approached that level again, the price value at the extreme point will be that level. 🔷 Entering the market The main condition for entering the trade at the reversal from the level, it is necessary to make sure that it is exactly the reversal. If the price is just approaching the key level, it is too early to open a trade. The trader must form a reversal pattern of Price Action in order to be sure that the position opening is correct. It may be the following patterns: 1. A Pinbar (a candlestick with a long shadow, level breakout and a small body); 2. Engulfing (the next candlestick is directed in the opposite direction, its body and shadows are bigger than those of the previous candlestick); 3. Tweezer top/bottom pattern (alternation of bullish and bearish candlesticks with the same lows and highs); Once the pattern is formed, a trade can be opened. For example, the screenshot above shows a pin bar with a large upper shadow breaking through the resistance level, then rolls back down and the candle closes in bearish status. At the opening of the next candle you can enter the sell trade. 🔷 Setting Stop Losses and Take Profits Stop Loss should be set in such a way that a random movement against the direction of the trade, such as a level retest with a false breakout, does not knock the trader out of the market. It is impossible to set a specific value (e.g. 10 pips) for this trading style, the stop should be set based on the chart and "tails" of the candles in the visible proximity. As for take profit, there are no strict rules for its setting. You can use the standard technique, multiplying the value of the stop-loss by 3 or 4 and set a TP on the resulting distance. This is correct from the money management point of view. However, in each situation there may be conditions for greater profits than the standard stop-loss. For example, you can focus on the next key level in the direction of the trade. However, unlike a stop, a TP should be set so that the price is guaranteed to hit it when approaching the key level. 🔷 Important points 1. It is worth paying attention to the strength of the level and the likelihood that it will break or hold. There is a common misconception that the more price reversals from a level, the more likely it is that the level will remain intact. In fact, if the price keeps testing a certain level over and over again without going into the opposite trend, it means that it is likely to be broken. In practice this means that it is better to skip the third and the next attempts of a level bounce, trading on the second one only. 2. One should not draw a distinction between a classic reversal from a level and a retest of the level after it has been broken, when, for example, support becomes resistance. Such a retest is an even stronger signal than a simple reversal. The probability of a successful trade is even higher if we obtain a clear signal for reversal after an unsuccessful attempt to break through the level in the opposite direction. 3. The probability of a reversal or breakout of the level can be assessed based upon the movement towards the key level. If the previous candlesticks were small and differently directed, but the price has still reached the level, a breakout is quite probable. If the trend was strong and confident and the level was reached in just a few candles, but was not broken through, most likely, it won't be broken through. This phenomenon can be explained by the fact that market makers are trying to mislead small traders, playing on visual triggers. Seeing a strong movement, the trader unconsciously waits for a breakout and as a result suffers losses giving his money to the market maker. According to this logic, the conclusion can be made that if a big candle has reached a level, stopped in it, and closed without breaking through it, a breakout will probably never happen. But if a powerful candle has broken through the level, passed some more points (or tens of points), and closed on the other side, the breakout can be considered to have taken place. 4. When opening a trade, attention should be paid to the extrems of the nearest candlesticks. If the maximums (when testing the resistance) are approximately equal, or differ by 1-2 points, this supports the signal for the reversal and the pullback. The same is true for candlestick minimums when testing support. 🔵 Conclusion All other things being equal, a reversal of the level is more probable than its breakthrough. Such statistics gives a trader the reason to count on more signals and following the strategy rules will ensure profitable trading. However, one should keep in mind that trading from levels is a tactic that requires a trader's experience to be able to make decisions according to the situation. Despite the presence of rules, there is no clear algorithm that would regulate the actions in any situation. And due to this, a trader who uses the analysis of levels in his trading system, can count on the success of his trade. Most trading systems, allowing to open trades on an automatic basis, very quickly lose their validity, as well as trading robots based on these algorithms. The market is constantly changing, and only the ability to adjust to these changes and make decisions depending on the situation provides professional traders with a stable and high income.
Editors' picks
Education
by DeGRAM
42
How Much Time Do You Need For Trading?Hello trader! How much time do you usually need to spend studying charts and watching the currency markets? I'm sure many of you at the beginning of your trading career literally stuck to your computer screens for days on end, obsessing over charts, drinking large amounts of coffee and constantly placing orders throughout the day, but is this the only, realistic approach we have? In this post, I will show you an alternative way to track your charts, using various methods and tools to develop a much more nimble, calm and productive approach to trading. I will show you that you shouldn't be stuck at your computer screens all day, while still using your time rationally. ✳️ Timeframes and Currency Pairs The timeframes that you use when trading determine the frequency with which you check the charts. So, it goes without saying that if you trade on a 5-minute chart, you have to check the charts much more often than if you trade on a daily timeframe. Your workload is also affected by the number of currency pairs you trade, i.e. the more currency pairs you will use to trade, the more charts you have to analyze. This does not mean that you cannot trade on 20 currency pairs or more, it simply means that you have to have a ready-made system in which you can monitor each currency pair effectively. Say, when trading on M15 it is difficult to keep track of 20 currency pairs, but when you work on D1 it is quite convenient. ✳️ Analysis Over time, you will develop your own expertise and confidence in being able to analyze markets consistently and quickly. Knowing where and when to "hunt" for a trade and when to properly use lower timeframes will help you save a tremendous amount of time for looking at charts. Having a clear idea of where you will look for price signals to open positions will allow you to plan ahead and choose your desired positions, and will prevent you from having to constantly monitor the markets. On the other hand, traders who monitor the markets carefully and for long uninterrupted periods of time can fall prey to opening positions that they probably tend to find unreasonable, this may be due to the fact that traders feel pressure: because they HAVE to open a position to justify their time sitting behind the monitor. So, you need to know where and when to look for trading signals. For example, if you trade the cross of the 200th Average, of course, if the price is very far from this average, you understand that the next ten candles do not make sense to look into the terminal. And you do not waste your time and attention. ✳️ Price Alerts and Pending Orders Price alerts play a great role in saving the time needed for analyzing charts. The way they work is very simple: as soon as you have analysed every currency pair you wish to trade, you can set up an alert signal at a price level you think is good for opening a position in that particular pair. When the price reaches the desired level, a price alert is triggered and you are notified by email or text, after which you can check the pair for any price movement signals. Trading signals also play a role in position management: you can set alerts for stop loss level, entry level, profit taking, which means that you can leave your position and make changes to it only when the price reaches your targets. ✳️ Trading on the go Before the rise of smartphones and tablets, trading on the go was not an option, however, modern technology and communication tools make trading on the go very easy. The ability to open and close positions or reduce a stop loss wherever you are generally meaning that you don't have to stick to your computer screens to trade. As a result, this has led to traders being able to trade almost anywhere they like from now on. Getting all the latest information and staying up to date with current market movements, thanks to advances in technology and global access to the Internet, has freed traders from their screens and given them a degree of freedom that we all long for. Due to the fact that each broker offers its own application for trading, which you can download to your phone or tablet, trading has now become a fairly universal and accessible business, which can be engaged anywhere. ✳️ Have a trading routine If you treat trading like a real business, you'll find that an important and necessary issue is having a set routine and appropriate working hours, as well as understanding when to work and when to rest. It is very easy to get caught up in the markets and feel as if you have to monitor the charts 24/7 so that you don't miss a single trade. This is a dangerous habit to develop because getting too involved in the markets will burn you out and exhaust you very easily. If you find that the markets are starting to dictate your lifestyle (a classic example is when you stay up all night just to catch a good time to enter the market), then you've gotten too deep into trading. You should know when to turn off the trade, be able to turn off the charts, and get a good night's sleep. Be reasonable, set your own working hours and stick to them, even if trading is your main occupation, set aside a certain amount of time every day during which you would have worked in the markets and try to stick to it consistently. ✳️ Take a day off Once a week you should take a day off from trading. No reading on forums, no studying strategies, no browsing charts, no testing Expert Advisors. Nothing related to trading at all. The best thing would be to go to the nature, go for a walk in a strange place, read a fiction book, visit the theater, spend time with family or friends. Such "days of unloading" help our brain to rest, process the accumulated information and experience to work more productively in the future. ✳️ Do you spend too much time analyzing charts? The purpose of this post is to show you how flexible trading can be and that you don't have to be glued to your computer monitor working 24/7 to get results. Even if trading is your main occupation, it can be scheduled in parallel with your other activities. It shouldn't look like an all-or-nothing proposition, because the forex market allows us to choose when to trade, so you can appropriately structure your trading hours to suit your own needs. You can't get around the fact that you need to spend a tremendous amount of time constantly learning the aspects of forex trading in order to execute effective trading, but once you have accumulated the necessary skills and confidence in your own skills, you will actually need a much smaller amount of time needed to directly trade. Trading may even seem like something boring to you, but that's only because you just understand and accept what the markets really are, realizing that it's not a game, but just a business. The main goal that attract people to trading is the promise of financial freedom and an attractive lifestyle, but trading can have the opposite effect and can sometimes become an obsession that completely drains the trader. You must know when to work and when to play. Setting in place a set order/trading clock brings into your daily life the routines every trader needs to maintain a healthy and productive workload. Time is a very valuable commodity, in our modern lives the day is already filled to the brim with so many other commitments and activities, and managing it wisely is key to success. So, if you find yourself spending too much time on charts, there are things you can do to reduce your trading load, it will give you the freedom to step away from your screens. These include the following: 1. Using price alerts and pending orders, which are probably the biggest time-saving factor. 2. Focusing on higher timeframes while carefully using lower timeframes as well. 3. Having a fixed schedule of trading hours which you should stick to. 4. Using trading applications that allow you to stay connected when you are away from your computer. Applying these recommendations to trading will allow you to stay in contact with the markets without physically sitting in front of charts for days on end. What is the point of looking at charts if currency pair prices are not in a zone where you are not waiting for a signal? Why waste your time watching the price movements, if you are not going to trade any time soon anyway? Instead, let price do its thing, and on occasion enter the market in the area where you are waiting for a signal, that would be exactly the time when you should switch to the charts and hunt for pips. Remember, you are the main figure (not the markets!) and you are the one who keeps the trading procedure consistent and tight, be patient.
Education
by DeGRAM
6
PULLBACK TRADINGTrading on a pullback is one of the options for trading in Price Action patterns. Like trading on a breakout, this style implies the use of pending orders. Trading on a pullback is more popular than on a chart breakout. If Price Action signals are used correctly, it can bring more profit with less risks. 🔵 Characteristics of the strategy of trading on a pullback This strategy, as well as all other trading strategies based on Price Action, is considered universal and multicurrency, suitable for any asset and timeframe. However, it is recommended to trade on liquid currency pairs, such as EURUSD or GBPUSD on hourly or four-hour charts. The daily D1 is also suitable for trading. When trading on a pullback, traders place limit orders (as opposed to a breakout, where stop orders are used). 🔵 The principle of trading on a pullback and the algorithm of placing orders The basic idea of the strategy is that the price, before it goes in the necessary direction after the formation of the pattern, usually pulls back, and if you catch the moment trend continuation, you can enter the same trade on more favorable conditions, with a smaller stop-loss and larger take-profit. Trading on a pullback is performed as follows: 1. A Price Action pattern appears on the chart. This can be a pattern of engulfing, a doji candle on a trend reversal, etc.; 2. At the opening of the next candle, a Limit pending order is placed (to buy, if an uptrend is expected, and to sell, if a downtrend is in progress). The order is placed approximately in the middle of the signal candle; 3. Stop Loss is set a few points beyond the extremum of the signal candlestick (below the minimum if trading to buy, above the maximum if trading to sell); Take Profit is set at trader's discretion. As an alternative, you can multiply the value of a stop-loss by 3 or 4, or set the take profit at the next key level, so that the price is guaranteed to catch it when it reaches this level. 🔵 Example of pullback trading As an example, we will consider trading on a pullback on the hourly chart of the EURUSD in detail. As an alternative, we will also consider the variant of opening a breakout order in this situation and compare the results. Events have developed as follows: 1. After a bullish move, a bearish doji candle was formed, signaling at least a correction; 2. At the opening of the next candle a Sell Limit order was placed (in this case the order was opened at the market, since the price at that moment was at the level of the supposed pending order); 3. Stop Loss is set above the maximum of the signal candle, Take Profit - in the area of the nearest support level; 4. The stop loss ratio is approximately 1:2.5, which provides a positive mathematical expectation of the trade; 5. After 6 hours the deal closed in profit. In this case both trades would be profitable, but profit on breakout of the support level would be almost twice less, and the stop/stop profit ratio would be 1,5:1 not in favor of take profit, which is considered inappropriate from the money management viewpoint. 🔵 Additional details of pullback trading Despite the fact that, in the example above, trading on a pullback was more profitable than trading on a breakout, it cannot be argued that this style is absolutely better. There are drawbacks to trading on a pullback as well. Unlike trading on a breakout which can be applied to all possible Price Action patterns, limit trading is not possible in every situation. Due to this the number of signals and possible transactions is reduced, and therefore the potential profit will also be less. In spite of the fact that as a rule the take profit at breakthrough trading is less than at limit trading. As we have more trades during the same test period, trading on the breakout can bring more profit. For example, the screenshot above shows the trend continuation pattern of an inside bar. When trading on the breakout, a pending order is placed above the maximum of the parent bullish candle which opens after several hours and the trend goes upwards, bringing profit to the trader. There are no reasons for the limit trade in this situation. It is impossible to place a pending order in the middle of the inside bar, and there is no logical reason to place it in the middle of the mother candle. It happens that the signal not to open a trade on a pullback on the limit order does not work, even when there are all the conditions for it. For example, during the formation of an engulfing pattern on the screen above placing a limit order in the middle of this pattern was quite logical. However, the signal candle turned out to be too strong, the pullback movement has not reached the pending order placed and the trade was not opened. In the same situation when trading on the breakout the trade would have been opened on the next candle, and in a few hours the trader would have fixed the profit. 🔵 Conclusion Trading by Price Action on a pullback has both advantages and disadvantages. On the one hand, this style allows you to make more profits with less risk in the same situation, when trading on the pullback shows less attractive dynamics. On the other hand, not all price action patterns are suitable for this style, in addition even suitable signals sometimes do not work, leaving the trader without profit. The choice of trading style largely depends on the trader's temperament. The pullback method suits the patient and conservative traders who are willing to wait for the signal for days and even weeks. As a result, such waiting will be rewarded with high profits on each of trades. More aggressive traders would be better suited to trading on the breakout which allows them to enter the market more often compensating the small profit and probable losses with the number of profitable trades.
Editors' picks
Education
by DeGRAM
13
WHAT ARE THE FIBONACCI LEVELS? 🔵 We are not going to focus on the Golden Ratio and the Fibonacci sequence in nature or around us. You can read about it in various books or on the Internet if you are interested. We will find out how these numbers can help in forex trading. Now, let's talk about Fibonacci retracement levels. Now let's get straight to the point. Fibonacci retracement levels look like this: 0.236, 0.382, 0.500, 0.618, 0.764 The Fibonacci extension levels are as follows: 0, 0.382, 0.618, 1.000, 1.382, 1.618 And these are the extension levels used in forex to set orders like "take profit". In other words, according to them, the price often reaches these levels, which should be taken into account in the analysis. Let us agree that Fibonacci levels are an instrument for trend analysis and are not suitable for consolidation. The point is that when the trend is upward, Similarly, for a down trend and support. We find the lower swing levels, then the upper swing levels, and draw a grid between them. 🔵 Fibonacci in a downward trend Let's act in the same way and draw the grid between the two candlestick patterns-swings, but downwards. The chart of EUR/USD, 4-hour timeframe. The assumption is that as the price rebounds upwards, it will hit one of the Fibonacci resistance levels, since the general trend is very strong downwards. Let's see what happened next. The pullback really came and the market slowed down below 0.382, an early hint of exhaustion of the bulls' forces. Finally, at 0.500 the bulls ran out of steam and the level worked as a resistance. And these two levels, 0.382 and 0.500, interact with each other. Their main purpose is as temporary support and resistance. We all know about the resistance and support, so do not expect the price to bounce from these levels. No. These are, first of all, the zones of trader's interest. Therefore, the price at these levels likes to consolidate into micro-channels before it moves on. As you well know, price can break both support and resistance. That means it will similarly break through Fibonacci levels. So, these levels are a guideline, but not an absolute guarantee of pullbacks and reversals. Sometimes levels are broken through, sometimes instead of 0.500 a bounce occurs from 0.618 and lots of other examples. Sometimes the price doesn't care about these levels. The price, as such, moves between levels, and some levels are more significant for it at a certain moment in time, and some are less significant for it. So, in using Fibonacci levels, you will benefit from all the tools in your arsenal that we already know about. The tools we use to filter inputs from support and resistance levels, whether it's Fibonacci or conventional. Say, oscillators with their divergences, price action patterns and more. In fact, let's combine Fibonacci levels with support and resistance. 🔵 Fibonacci retracement with support and resistance levels We have already learned that Fibonacci retracement levels are quite subjective. Like everything in technical analysis, we shouldn't just use them. In this case, we need a level enhancer. This is when ordinary support or resistance is well combined with Fibonacci retracement levels. An uptrend, so many green candles. it's all very nice, but where to enter? Especially since the price clearly went with low volatility. We use the Fibo and let's add a mirror level, where resistance has become support. It can be seen very well. Notice how it combines with the 0.5 level. Now we have to wait for the price to interact with this level. As you can see, the price really respected that level, it worked as support and did not let the price go further up. As you understand, support and resistance are, first of all, the zones of interest. The area that triggers the maximum reaction of the price. Not the least of the reasons is that everyone uses these levels. And, consequently, the more institutional traders apply Fibonacci levels, the more these levels influence price behavior. There is a direct correlation. This is why simple support and resistance levels also work. Of course, there's no guarantee that these levels will bounce the price, but we don't need guarantees, because we don't know that they don't exist in trading, do we? We know very well. But here is the zone where the price should be watched closely Fibonacci levels are quite suitable for that. 🔵 Fibonacci levels and trendlines Another way to apply Fibonacci levels is with another basic technical analysis tool. And what tool comes after support and resistance? That's right trendlines. Many traders use Fibonacci retracement levels exactly in an uptrend or downtrend, so combining them with trendlines makes confluence. Let's take a look at the next chart. We should take a trade, if such a situation arises, let's say, when the price touches the trendline. However, let's add Fibonacci retracement levels and see what happens. And we will get a more accurate entry zone. Let's use two swing values and watch what happens. We are especially interested in the levels of 0.500 and 0.618. Here we have it, the level 0.618 (61.8%) worked out as support, and it is right on the trendline. It's time to enter to further increase the trend. Two simple tools sometimes give equally simple results. Similarly, you can use the Fibonacci levels with horizontal support and resistance. In this case, Fibonacci will act as another way to filter entries at support and resistance levels. ✅ Conclusion Keep in mind that Fibonacci levels should not be used alone, you will lose everything. They should be combined with other elements of technical analysis, such as indicators, trend lines, Price Action patterns, etc. They are auxiliary tools and you should always remember about it.
Education
by DeGRAM
1
banks are on fire again...The banking system is bursting at the seams again. It all started with the recent series of bankruptcies of several American banks at once and it happened in just a week, which was an echo of the problems of the 2007 crisis, which, as people hoped, we were able to solve. The main signal of the disaster was a sudden failure in the Silicon Valley bank. On March 9, people's deposits disappeared, losses totaled an incredible $42 billion, which brought out an underestimated risk in the system. The problem was hidden in long-term bonds, in which the bank invested during a period of low interest rates and high asset prices, and when the Federal Reserve System sharply raised rates, the bank began to have problems. As a result, the bank was left with huge losses that were not previously recognized due to the fact that American capital rules do not require most banks to report a drop in the price of bonds that they plan to hold to maturity. 620 billion dollars – that's how many unrecognized losses were in the entire banking system of America at the end of 2022. To understand how much it is: this amount is equal to about a third of the total capital stock of American banks. The pandemic has brought even more problems to the economy, and the banking system has become even more shaky. A large volume of new deposits poured into banks, and the Federal Reserve's stimulus measures pumped cash into the system. These deposits were directed by banks to purchase long-term bonds and government-guaranteed mortgage-backed securities, and all this increased the risk of ruin in the event of an increase in interest rates. Having bought bonds with depositors' funds, the bank essentially used other people's funds, but the problem was not that, but that holding bonds to maturity requires matching them with deposits, and as rates rise, competition for deposits increases. At large banks, such as JPMorgan Chase or Bank of America, rising rates tend to increase their earnings thanks to floating-rate loans. However, in about 4,700 small and medium-sized banks with total assets of $10.5 trillion, rising rates tend to reduce their margins, which helps explain why stock prices of some banks have fallen. Another problem for banks is the risk that depositors will start withdrawing their deposits during the crisis, which will force the bank to cover the outflow of deposits by selling assets. If this happens, the bank's losses loom, and its capital stock may look comforting today, but most of its filling will suddenly become an accounting fiction. That is why the Federal Reserve System acted this way last weekend, being ready to provide loans secured by bank bonds. By providing loans with good collateral to stop the flight, the Fed is right, but such easy conditions come with certain costs. By creating the expectation that the Fed will take on the risks of interest rate changes in a crisis, they encourage banks to behave recklessly. The coming year requires regulators to make the system safer and less risky for the people. It is necessary to abolish some strange rules that do not require reporting and answers for increased risks that relate to small and medium-sized banks, Now the government has announced its intention to rescue depositors of the Silicon Valley Bank, which indicates that such banks carry a systemic risk and they need to be rescued in order not to destroy the entire economy of the country. But saving depositors is only half the job, in order to eliminate the repetition of today's and past problems, it is necessary to introduce the same accounting and liquidity rules that big banks follow, as is the case in Europe, and will have to submit plans to the Fed for their orderly resolution if they fail. These decisions and actions concern not only the United States, these rules should require the entire banking sector to recognize the risks associated with an increase in interest rates. Unrealized losses carry the risk of bankruptcy and banks with such losses should be confirmed by more thorough control and verification than those who do not have such losses. Timely testing will help to avoid bankruptcy, which would simulate a situation in which the bank's bond portfolio is released to the market, while rates rise even more. After that, it would be possible to determine whether the system has sufficient capital to avoid bankruptcy or not. Banks, of course, will resist additional control, increasing capital reserves, but all this will help to improve the quality of system security. Depositors and taxpayers around the world face intense fear, and they should not live with the fear and fragility that they thought had gone down in history many years ago.
SEducation
by Lingrid
7
Timeline for an ideal trading dayEvery day, traders around the world wake up and begin their day with the same goal: to make money. But how do they go about doing that? What is the ideal timeline for a trading day? In this blog post, we'll outline the perfect day for a trader, from start to finish. Wake up It's no secret that successful traders need to be up bright and early to get a jump on the day's market action. But what many people don't realize is that there's more to it than just setting an alarm clock and getting out of bed. To start the day off right, it's important to do some light exercises to get the body moving and the blood flowing. A quick jog or some simple calisthenics can make a big difference in terms of energy levels and mental acuity. Just as important as physical activity is eating a healthy breakfast and drinking plenty of coffee. Breakfast provides the body with much-needed nutrients after a long night's sleep, while coffee helps wake up the mind and get those creative juices flowing. So there you have it: the perfect way to start your day as a trader. By following these simple tips, you'll be well on your way to making money in the markets. Check the news As a trader, it's important to start your day by checking the news for any major announcements or news stories that could affect the market. You should find a reputable source for business news and look for any breaking news stories that could impact the stocks on your watchlist. This will help you be more informed and prepared when making trades throughout the day. Make a watchlist When making a watchlist of stocks to trade, there are a few key things to look for. First, you want to find stocks that are trading at new 52-week highs or lows. This can be a good indicator of a stock that is starting to move in a particular direction and could be worth watching. Another thing to look for is stocks that have unusual volume. This could be an indication that something is happening with the stock and it is worth keeping an eye on. Additionally, you want to look for stocks that are making large percentage moves. This could be an indication that there is some momentum behind the stock and it could be worth taking a closer look at. Finally, you want to identify stocks that are breaking out of chart patterns. This could be an indication that the stock is about to make a move and it would be wise to keep an eye on it. Plan your trades When planning your trades, the first thing you will need to do is take a look at your watchlist and identify which stocks look like they are ready to make a move. You can use a variety of indicators to help you with this, such as 52-week high/low, unusual volume, large percentage moves, or breakouts from chart patterns. Once you have identified which stocks look promising, you will then need to review your charts for those stocks and identify potential entry and exit points. Once you have found potential entry and exit points, you will then need to calculate the risk/reward ratio for each trade. This will help you determine whether the trade is worth taking. To calculate the risk/reward ratio, you will need to find out how much you are willing to lose on the trade and how much you think you can gain. For example, if you are willing to lose $100 on a trade but think you could gain $200, then the risk/reward ratio would be 1:2. After calculating the risk/reward ratio, you will then need to decide which trades you are going to make. You should always consider your risk tolerance when making trading decisions. Once you have decided which trades to make, you will then need to place your orders. Execute your trades When it comes time to execute your trades, there are a few things you need to keep in mind. First, you need to find a stock that you want to buy or sell. You can do this by researching the stock and watching for market trends. Once you have found a stock that you want to trade, you need to place an order with your broker. Your broker will then execute the trade on your behalf. Once the trade is executed, you will have a position in that stock. You can then exit your position by placing another order with your broker. It is important to remember that you should only trade with money that you can afford to lose. Trading is a risky investment and there is always the potential for loss. Before making any trades, be sure to do your research and understand the risks involved. Review your trades As a trader, it is important to review your trades at the end of the day. This will help you learn from your successes and failures, and make better trades in the future. When reviewing your trades, there are a few things you should keep in mind. First, consider whether you made the right decision in entering the trade. If not, what could you have done differently? Second, think about whether you exited the trade at the right time. Did you give the trade enough time to play out? Were there any warning signs that you missed? Finally, reflect on what you learned from the experience. What went well? What could have been done better? Taking the time to review your trades at the end of each day is an important part of becoming a successful trader. By learning from your mistakes and celebrating your successes, you will be able to make more informed and profitable trades in the future. End of day As the end of the day approaches, it is important for traders to take some time to review their trades and assess their performance. This process allows traders to determine what they did well and what they can improve on. It also helps traders organize their thoughts and trading strategies for the next day. Taking the time to review your trades at the end of each day is an important part of becoming a successful trader. When reviewing your trades, you should consider factors such as whether you made the right decision in entering the trade, whether you exited the trade at the right time, and what you learned from the experience. By taking the time to review your trades on a daily basis, you will be able to learn from your successes and failures and become a better trader. After you have reviewed your trades, it is also important to take some time to relax before going to bed. This will help you be fresh and ready to start trading when the markets open. Trading is a demanding activity that requires focus and concentration. If you are not well-rested, you will not be able to perform at your best. So make sure to take some time to wind down before bed so that you can be ready to start fresh tomorrow. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
11
WHAT YOU NEED TO KNOW ABOUT TRADING FOREX ON FRIDAY🔵 Friday is a relaxed day with the weekend ahead, followed by a working Monday. How does this affect the market? How do the big players behave on this day? Who holds positions over the weekend, taking risks? Today we will figure out what to keep in mind when trading Forex on Friday, why this day's candle is important, what tips can be extracted from the price direction on this day, and consider a few more important nuances that you are unlikely to think about. ▶️ The Friday news and the NonFarm. Also, newbies should remember that Friday in America on the dollar there are often significant news releases, such as non-farms, which can really shake the market. So, on Friday, don't forget to check the economic calendar. Notice if there are any significant news marked with three red dashes on the calendar. So, there is no point in trading or following the market today. You can calmly leave it and go have a rest. ▶️ The direction of the movement in the second half of the day is the key to the momentum on Monday. The next thing you need to pay attention to is the movement in the second half of Friday and up to the market close. If the price is steadily moving up in that period, we should expect it to continue on Monday. Correspondingly, if the price is steadily going down, we can expect this impulse to go on at least during the first half of Monday. And we are interested in a clear and directed movement. Why it happens, I think, is clear: the big players are buying without fear that something will happen over the weekend. In other words, they are confident in the absence of news, they confidently buy or confidently sell and this means that on Monday we can expect the momentum to continue. ▶️ Weekly candlestick formation In general, the market does not like to change the shape of the weekly candlestick on Friday. Therefore, looking at the chart on the W1 timeframe, and looking at the practically formed weekly candlestick, we can assume what the movement will be at the end of the day. For example, this Friday, at noon on the EURUSD chart, the weekly candlestick has a rather long tail, which indicates that the bulls have already been taken out. Plus, a pretty deliberate downward price move. Even if you take into account the non-farms, often they only take out the stops and then the price recovers in just a couple of hours. So, most likely, the downside movement will continue till the end of the day or the price will stay at the same level. But we should not expect any appreciable rise. Or the weekly candlestick by 12:00-14:00 GMT on Friday is full-body bullish, or full-body (large body, small shadows) bearish, you should not expect a significant price movement in the opposite direction till the end of the day. Accordingly, in this case, if you trade within the day, it makes no sense to look for sell trades, if the weekly candlestick is obviously bullish. Of course, if the weekly candlestick is indistinct, for example something like a doji, the price may go in any direction, and it is difficult to predict anything reliable by such a candlestick. But a solid weekly candlestick allows to rather accurately predict the market behavior on Friday afternoon: a bearish one is down, and a bullish one is up. Or almost no change, which happens more often than we'd like. ▶️ Why is Friday so significant? A huge amount of forex trading is intraday trading. High-frequency and intraday traders account for up to 80% of transactions in the market. And they all get out of the market before Monday. So, who are they those people who open positions on Friday and leave them for the weekend? After all, anything can happen over the weekend. They are the big traders, various serious institutions who have more information than us or the media. At the same time, they agree to the risk of transferring trades through the weekend, they pay swaps. That is, these are very significant traders and the direction of their positions is worth watching, at the very least. Therefore, what happens on Friday often has a significant impact on the further price movement, and can give an impulse for Monday and the whole next week. In addition, according to statistics, Friday is often the minimum or maximum point of the weekly candle. For this reason, we should expect the continuation of the directional movement of the price, if it is present in the weekly candlestick. If you take a single Friday candlestick of D1, in the case if it has any of the signals by your trading system, or by Price Action in general, it is worth paying close attention to it. ▶️ When to open a position with a signal on D1, on Friday or Monday? When it is better to open a position in the presence of a signal on D1 at market closing on Friday evening or at market opening on Monday? The answer is simple: we open positions at market opening on Monday. If there is a gap, we trade it, and if there is no gap, we trade our set-up. Because if you open a position on Friday night, a huge gap can simply take your stops out on Monday and you will make a loss (plus your order may slip). Therefore, if you see any signal on Friday night, you better open positions on Monday. ✅ Conclusion. In addition to the above, we should not forget that many traders close trades and fix profits on Fridays, not wanting to roll over positions through the weekend. This can be due to a possible gap, as well as with the desire to exit the position and quietly go to the weekend. So at the very end of the day if there was a clear bullish trend, price rolls back a bit (bulls fix profit), if there was clearly a bearish trend - price moves a bit higher (bears close positions).
Education
by DeGRAM
2
How to trade trending markets?A trending market is defined as a market where prices are moving in a consistent direction over a period of time. There are many different ways to trade in trending markets, but some common methods include using moving averages, identifying areas of value, and recognizing chart patterns. This article will discuss different aspects of trading in trending markets and provide tips on how to trade in these conditions. Whether you're looking to take profits or cut losses, this article will give you the information you need to make informed trading decisions. Moving averages Moving averages are one of the most commonly used technical indicators by traders. A moving average is simply a line that is plotted on a chart that shows the average price of a security over a certain period of time. The most common time periods used are 10, 20, 50, and 200 days. There are different types of moving averages, but the two most popular are the simple moving average (SMA) and the exponential moving average (EMA). The SMA is calculated by taking the sum of all prices over the specified time period and dividing it by the number of prices in that period. The EMA, on the other hand, gives more weight to recent prices. Traders use moving averages to help identify trends in the market. When price is above a moving average, it is generally considered to be in an uptrend. Conversely, when price is below a moving average, it is typically considered to be in a downtrend. One way to use moving averages is to look for crossovers. A crossover occurs when two different moving averages cross each other on a chart. For example, if the 50-day SMA crosses above the 200-day SMA, it could be indicative of a new uptrend forming. Alternatively, if the 50-day SMA crosses below the 200-day SMA, it might be indicative of a new downtrend beginning. Crossovers can also be used to generate buy and sell signals. For instance, if price is trading above both the 50-day SMA and 200-day SMA, then traders might look for buy signals when price pulls back towards either of those Moving Averages. Similarly, if price is trading below both Moving Averages, then traders might look for sell signals when price rallies back up towards either MA. Moving averages can also be used to help traders identify areas of support and resistance. If price has been trending higher and keeps bouncing off of the 50-day MA, then that MA could be acting as support in an uptrending market. Likewise, if price has been trending lower and keeps bouncing off of the 200-day MA, then that MA could be acting as resistance in a downtrending market. Area of value An area of value is simply a point in the market where traders believe the price is either undervalued or overvalued. Traders use this concept to find potential entry and exit points in a market, as well as to manage risk when trading in a trending market. When looking for an area of value, traders should consider both the price action and the underlying fundamentals of the market. For example, in a bullish trend, an area of value may be found at a support level where the price has bounced off multiple times. Alternatively, in a bearish trend, an area of value may be found at a resistance level where the price has failed to break through multiple times. It is important to note that areas of value are not static; they can move up or down over time as market conditions change. As such, traders should regularly monitor both the price action and the fundamentals to ensure that their areas of value are still valid. Once an area of value is found, traders can then look to enter into a position. When doing so, they should consider both their risk appetite and their desired profit-to-loss ratio. For example, a trader with a higher risk appetite may choose to enter at a point closer to the current market price, while a trader with a lower risk appetite may wait for the price to reach their area of value before entering into a position. Once in a trade, it is important to monitor the market closely and have exit strategies in place should the market move against you. If the market does move against your position, you can either cut your losses or ride out the storm and hope that prices eventually rebound back in your favor. Remember, however, that past performance is not necessarily indicative of future results so always do your own research before making any trades. Chart pattern Chart patterns are a useful tool that traders can use to signal future price movements. There are three main types of chart patterns - reversal, continuation, and bilateral. Reversal chart patterns occur when the price trend reverses direction. The most common reversal chart pattern is the head and shoulders pattern, which is characterized by a peak followed by two lower highs with a trough in between. This pattern signals that the current uptrend is coming to an end and that prices are likely to head lower in the future. Continuation chart patterns occur when the price trend continues in the same direction. The most common continuation chart pattern is the flag pattern, which is characterized by a period of consolidation following a sharp price move. This pattern signals that the current trend is likely to continue and that prices are likely to move higher or lower in the future. Bilateral chart patterns are characterized by a period of consolidation with support and resistance levels that converge towards each other. The most common bilateral chart pattern is the Pennant Pattern, which is formed when there is a sharp price move followed by a period of consolidation. This pattern signals that there is indecision in the market and that prices could move either higher or lower in the future. Tips for identifying chart patterns: - Look for well-defined patterns with clear support and resistance levels - Pay attention to volume; there should be an increase in volume when the pattern forms - Use Fibonacci retracement levels to help you identify potential support and resistance levels. Support and resistance When trading in trending markets, it is important to be aware of support and resistance levels. Support and resistance levels are price points where the market has difficulty breaking through. In a bullish trend, the support level is the lowest point that the market has reached before bouncing back up. In a bearish trend, the resistance level is the highest point that the market has reached before falling back down. Support and resistance levels can be used to signal future price movements. For example, if the market is approaching a support level, this may be seen as a buying opportunity as the market is likely to bounce back up from this level. Similarly, if the market is approaching a resistance level, this may be seen as a selling opportunity as the market is likely to fall back down from this level. It is important to note that support and resistance levels are not static; they can move up or down over time as market conditions change. As such, traders should regularly monitor both the price action and the fundamentals to ensure that their levels are still valid. When trading in trending markets, it is also important to have exit strategies in place should the market move against you. If the market does move against your position, you can either cut your losses or ride out the storm and hope that prices eventually rebound back in your favor. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
9
Why every trader need money management?Almost every trader, at some point in their career, wonders if they need money management. The answer is a resounding yes! Having the proper business mindset is essential to success in trading. This includes having the right attitude, being disciplined, and knowing how to manage your emotions. Without these things, it is very difficult to be successful in the markets. In this article, we will discuss why every trader needs money management. We will talk about the importance of having the proper business mindset, and we will also discuss some of the key components of an effective money management plan. By the end of this article, you will have a better understanding of why money management is so important for traders, and you will be able to start implementing some of these concepts into your own trading strategy. Business mindset Trading is a difficult business. It requires long hours, dedication, and a lot of hard work. But even with all of that, most traders still fail. Why is that? The answer is simple: they don't have the proper mindset. In order to be a successful trader, it is important to have the proper mindset. This means having the right attitude, being disciplined, and knowing how to manage your emotions. If you can master these things, you will be well on your way to success in the markets. Attitude is everything in trading. You have to be positive and believe in yourself, even when things are tough. Discipline is also key. You need to be able to stick to your trading plan, even when you are losing money. And finally, you must be able to control your emotions. Fear and greed are two of the biggest enemies of traders, so you must learn how to control them. If you can develop the proper mindset, you will be well on your way to success in trading. So what are you waiting for? Start working on developing the right attitude today! Manage losses When trading, it is essential to have a well-defined money management plan in place. This plan should include setting stop-loss orders and taking profits at predetermined levels. By having a plan in place, you can help keep your emotions in check and make more informed decisions about when to enter and exit trades. Stop-loss orders are placed with a broker in order to limit losses on a trade. When the price of the security reaches the stop-loss price, the trade is automatically sold. This type of order can be very helpful in managing risk, as it takes the emotion out of the decision of when to sell. Taking profits at predetermined levels is also important in money management. By doing this, you can take some emotion out of the decision of when to sell and lock in profits. It is important to remember that no one knows where the market will go in the future, so it is important to take profits when they are available. It is also essential to have a risk management strategy in place. This strategy should define how much capital you are willing to risk on each trade. It is important to remember that even the best traders lose money on some trades, so it is important not to risk more than you are comfortable with losing. By having a well-defined money management plan, you can help keep your emotions in check and make more informed decisions about when to enter and exit trades. This can ultimately help you improve your overall success as a trader. Confidence and self-control Confidence is key for any successful trader. A clear understanding of the market and your personal trading strategy is essential to maintaining a level head and making sound decisions. Being mindful of your successes as well as your failures allows you to learn from your mistakes and build upon your strengths. Practicing in a simulated environment gives you the opportunity to become more comfortable with the decision-making process before putting real money on the line. Self-control is another important aspect of trading. Emotions such as fear and greed can cloud your judgement and lead to poor decision making if left unchecked. Having a plan in place and sticking to it can help you stay focused on your goals even when things get tough. Diversifying your portfolio is also crucial in managing risk and ensuring that you don't put all of your eggs in one basket. By developing confidence and self-control, traders can set themselves up for success. These qualities can help them make sound decisions, manage risk, and stay calm in the face of market volatility. Keeping emotions out of trading When it comes to trading, one of the most important things that you can do is keep your emotions in check. This can be difficult to do, but it is essential for success. One of the best ways to keep your emotions in check is to have a system or strategy in place that you stick to no matter what. This will help take the emotion out of the decision-making process. Additionally, it is important to know when to walk away from a trade. If you are feeling emotional about a trade, it is often best to just step away and take a break. It is also important to have the discipline to stick to your system or strategy even when it might not seem like the best thing to do in the moment. By keeping your emotions out of trading, you will be more likely to make sound decisions and be successful in the long run. Decision making Traders need to be aware of their goals if they want to be successful. This means having a clear understanding of the risks and rewards involved in each decision. It is also important to have a plan for how to execute each decision, as well as being prepared to accept the consequences of those decisions. Making sound decisions is crucial for traders. What are your goals? Are you looking to make a quick profit or build your portfolio over the long term? Once you know, you can develop a plan that takes into account the potential risks and rewards involved in each decision. For example, if you are looking to make a quick profit, you might be more willing to take on more risk. On the other hand, if you want to build your portfolio over the long term, you might be more conservative with your trades. It is also important for traders to identify when they are making an emotionally-based decision. Emotions can cloud our judgment and lead us to make poor decisions. If you find yourself getting emotional about a trade, walk away and come back later with a clear head. Additionally, it is crucial to have the discipline stick to your system or strategy even when it might not seem like the best thing to do in the moment. Making sound decisions requires traders have a clear understanding of their goals, the risks and rewards involved in each decision, and how emotions can impact their ability make rational decisions. By having plan and sticking it, traders increase their chances success in the markets. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
12
Simple ways to improve trading disciplineIn order to be successful in any market, it is essential to have trading discipline. This blog post will discuss what trading discipline is, why it is important, and how to improve it. Having self esteem and a positive outlook are crucial for any trader, as well as being able to stick to your trading plan. There are no shortcuts to success, so traders need to be patient and handle losses in order to achieve their goals. The importance of trading discipline Trading discipline is key to success in any market. This blog will explore what trading discipline is, why it is important, and some tips on how to improve it. What is trading discipline? Trading discipline is the ability to stick to a plan and not let emotions get in the way- one of the most important factors for success in any market. A lack of discipline is often one of the main reasons why traders fail. Why is trading discipline important? Having a trading plan that you can stick to is crucial, and this plan should be based on sound analysis. Once you have a plan, you need to be disciplined enough to follow it; however, this can be difficult as there are often temptations to enter trades that are not in line with your plan. Additionally, it is easy to let emotions get in the way of your decisions- which can lead to bad trades. How do I improve my trading discipline? To be successful, traders need to be patient and handle losses well in order to achieve their goals. Some tips on how to improve your trading discipline include being selective with your trades- only taking trades that meet your criteria, and waiting for the right opportunities rather than taking every trade that comes along. In conclusion, trading discipline is essential for success in any market and there are no shortcuts to success. By following these tips, you can improve your trading discipline and increase your chances of success. Why having self esteem is key to being a successful trader? Self esteem is incredibly important for traders, as it is key to success. Traders with high self esteem are more likely to take responsibility for their own success or failure, believe in their own ability to succeed, take risks, handle losses, and stick to their trading plan. Conversely, traders with low self esteem are more likely to second guess themselves, give up after a loss, take too much risk in an attempt to recoup losses, or abandon their trading plan. Self esteem is not something that can be faked – it’s either there or it isn’t. And it’s not something that can be built overnight. It takes time, effort and patience to develop self esteem. However, it is worth the investment, as traders with high self esteem are more likely to be successful in the long run. There are a few things that traders can do to build their self esteem. Firstly, they need to have realistic expectations. They need to understand that there will be ups and downs in the market and that they will make losses as well as profits. Secondly, they need to develop a positive mindset. This means looking at the positives even in tough times and believing in themselves even when things are tough. Lastly, they need to take small steps and celebrate each victory, no matter how small. Building self esteem takes time and effort but it is worth it for traders who want to be successful in the long term. How your personal life can affect your trading discipline? Your personal life can have a big impact on your trading discipline. For example, if you’re going through a divorce or have a sick family member, you may be more likely to take risks in your trading. That’s why it’s important to be aware of how your personal life can influence your trading. If you have any major life changes, it’s important to reassess your risk tolerance. And make sure that you stick to your rules and discipline. Don’t let emotions get in the way of making rational decisions. It can be helpful to keep a journal of your trades. This can help you track your progress and reflect on your successes and failures. By doing this, you can identify any patterns in your trading that may be influenced by your personal life. Making small tweaks to your trading strategy can also help you stay disciplined. For example, if you find that you tend to take more risks when you’re stressed, try setting stricter limits on how much risk you’re willing to take. Or if you find that you tend to impulsively buy or sell when the market is volatile, consider using stop-loss orders. The bottom line is that being aware of how your personal life can affect your trading is crucial to success. There are no shortcuts to success—traders need to be patient and handle losses as well as wins. But by sticking to your rules and being disciplined, you increase your chances of success in the long run. There are no shortcuts to success There are no shortcuts to success. You need to put in the work, be willing to sacrifice, and be persistent and consistent. Luck is also a factor in success. You need to be willing to put in the work if you want to be successful. This means being disciplined and sticking to your trading plan. It also means being patient and not giving up when things get tough. You need to be willing to sacrifice your time and energy if you want to be successful. This means making trading a priority and not letting other commitments get in the way. Luck is also a factor in success. While there are things that you can do to increase your chances of success, there is no guarantee that you will be successful. The markets are unpredictable and anything can happen. The bottom line is that there are no shortcuts to success. If you want to be successful, you need to put in the work and be willing to sacrifice. You also needto be persistent and consistent. Luck is also a factor, but there are things that you can do to increase your chances of success. Writing down your rules and being strict with yourself Many traders are not successful because they do not have well-defined rules, which are important because they help to keep you disciplined and focused. Without rules, it is easy to get sidetracked or to make impulsive decisions. Having a set of rules that you strictly adhere to can help you to avoid these pitfalls. It is also important to be flexible and adaptable in your application of the rules. The market is constantly changing and evolving, so your rules need to be able to change with it. Reviewing your rules on a regular basis will ensure that they are still relevant and effective. There are no shortcuts to success in trading; you need to be disciplined, put in the work, and be willing to sacrifice. Luck is also a factor but there are things you can do to increase your chances of success--writing down your rules and being strict with yourself is one of them. Being patient and handling losses Successful trading requires patience and the ability to handle losses. It is important to be patient when looking for the right opportunity to enter a trade. You also need to accept that losses are part of the process and not let them get to you emotionally. Finally, you must have realistic expectations about the market and understand that there are no guarantees you will make money.
OANDA:XAUUSDEducation
by Lingrid
8
WHAT DOES “TRADE WHAT YOU SEE” MEAN?🔵 As a forex trader, you've probably heard about how important it is to keep your emotions under control and follow reason and objective rather than acting on impulses fueled by greed, hope, or fear. But knowing not to trade emotionally is one thing; understanding HOW NOT to trade emotionally and putting that information into practice is quite another. Because of the prehistoric "fight or flight" reflexes that have guided our existence as a species for thousands of years, the human brain is designed to operate against us in the market. The majority of traders, regrettably, are unable to perform to their full capacity on the market due to the same causes. The more rational and objective frontal lobe of the brain, which is the newest section of the human brain and allows us to plan, reason, and make sense of complicated ideas, must thus be used to design a strategy if you want to become a consistently profitable trader. We may ensure that we act on reason and objectivity rather than emotion by learning to trade in what we see rather than what we think. The following information will help you to better understand why it is important to trade what you see rather than simply what you think as well as how to make sure you do so. 🔲 Stop trying to "outsmart" the market Trying to guess what the market will do next, with no real basis or trading setup, is like gambling on a slot machine or a roulette wheel. Yet every day, novice traders, as well as unsuccessful experienced traders, make exactly this emotional trading mistake. Instead of looking at the price chart and checking it against their forex trading plan to see if any price action setups are present, many traders simply "manifest" some idea of what price "should" be doing. When you are not trading on obvious and visible price events or according to a pre-designed trading strategy, you are simply acting on emotions and feelings rather than objective analysis of price movement. Many traders trade emotionally after a losing trade or after a winning trade because they succumb to the feelings of revenge that a losing trade causes, or the greed that a winning trade often causes. It is in these moments that traders stop trading based on what they see on the chart and start trading based on what they "think" or feel, and it is these moments that separate consistently profitable traders from unsuccessful amateurs. 🔲 Don't marry a trade It is important to understand that just because you "think" that something will happen in the market, it does not mean that it will. Similarly, even if you find a very obvious and "perfect" at first glance setup, you must always remember that the Forex market is a dynamic and constantly changing arena where anything can happen at any moment, so do not bet on the farm just because you think you have spotted the "right thing", because that does not happen in Forex, or in any market in general. Instead of allowing yourself to get emotionally attached to any trade or any idea of what the market might do, you need to learn to trade emotionally detached from your trades. Allow price action to light your way through the noise and confusion of the market, while remembering that you must constantly manage your risk even when trading setups look "perfect." Always make sure you are trading according to the concepts of your forex trading strategy and not just on a "whim", if you are trading on price action, then follow the tracks left by price, instead of going astray and succumbing to what you think the market "should" do or "might" do. 🔲 Learn to control yourself One obvious but often overlooked fact about Forex trading is that the market simply does not care whether you win or lose money, it is unaware of your existence and has no emotional reactions to you. However, most traders react emotionally to their trades and to the market, thereby allowing an inanimate being to control their behavior instead of controlling it itself. You won't be able to consistently make money in the market until you learn to control your emotions and reactions to the market. Once you learn to trade only what you see on the price chart and not what you think, you will be on your way to becoming a consistently profitable trader, because trading what you see and not only what you think means that you control yourself, not the market. The key is to consistently trade only what you see, not what you think or feel. This will help you avoid succumbing to the emotions of revenge or greed after a losing or winning trade. Traders who consistently trade only what they see on the price chart and not what they think "might happen," along with effective risk management, are the traders who make money in forex. When you learn how to trade with a high probability of price events while controlling your emotions and risk, you will find yourself in an even better position to make money in the forex market. 🔲 Ask questions before opening a trade Advice on how to ensure that you only trade what you can see, not what you can think. To truly make sure you only trade what you see and not what you think is quite another from simply understanding why you should. Here are some practical suggestions you may use to make sure you only trade what you can see and avoid giving in to emotion. Take the time to consider the following questions before entering into any trade: "Am I doing according to my plan?" "Where is my setup and does it meet the requirement?" "Is the market controlling me?" and "Am I acting logically or emotionally?" "Is it only my imagination, or do you have a bad attitude?". It's a good idea to ask yourself all of these questions before starting any trade. You'll be forced to think through your choices more carefully and decide whether your trade is reasonable or simply motivated by emotion. If you are trading a particular trading strategy, such as price action, make sure that every trade you make is consistent with the concepts you learned in the trading course or study material. Ask yourself any or all of the above questions before every trade you make, until trading only what you see becomes second nature. Eventually, you will develop a sophisticated discretionary trading perspective that allows you to look at the price chart almost instantly and identify price setups. Trading only obvious price action trading setups that are already formed and are not just "possible" setups provides us with a kind of "control and balance" to make sure we are not trading on emotion.
Education
by DeGRAM
10
ELEMENTS OF A TRADING JOURNALA trading journal is an important tool for any trader. It allows you to track your progress and learn from your mistakes. In this blog post, we will discuss the different elements that should be included in a trading journal. These elements include the date and time, the traded instrument, the entry and exit price levels, the position size, and the trade results. Date and Time The date and time when a trade is made is important for a number of reasons. Firstly, it allows you to track your progress as a trader. You can look back at your journal and see how your trades have changed over time. This information can be invaluable in helping you to improve your trading strategy. Secondly, the date and time can be used to help you learn from your mistakes. If you notice that you tend to make losing trades at a certain time of day, or on certain days of the week, you can adjust your strategy accordingly. Finally, the time zone in which the trade is made is important to consider if you are trading in multiple time zones. If you are not aware of the time zone differences, you could end up making trades at the wrong time and missing out on profitable opportunities. Traded Instrument Different types of instruments can be traded on the market, each with their own set of benefits and risks. It is important for traders to understand the instrument they are trading before making any trades. The most common type of instrument traded are stocks. A stock is a share in the ownership of a public company. When you buy a stock, you become a partial owner of the company. The value of stocks can go up or down, depending on a number of factors such as the company's performance, the overall health of the economy, and political factors. Another type of instrument that can be traded are options. An option is a contract that gives the holder the right to buy or sell an underlying asset at a specific price within a certain time period. Options are often used by investors as a way to hedge against losses in the stock market. ETFs, or exchange-traded funds, are another type of instrument that can be traded. ETFs are similar to mutual funds in that they offer diversification and professional management, but they trade like stocks on an exchange. ETFs can be made up of stocks, bonds, commodities, or other assets. Futures contracts are another type of instrument that can be traded. A futures contract is an agreement to buy or sell an underlying asset at a specific price at a specific time in the future. Futures contracts are often used by investors to speculate on the future price movements of an asset. Entry Exit Price Levels Entry and exit price levels are important to track in a trading journal for a number of reasons. Firstly, they allow you to see how well you timed your trades. Secondly, they can help you identify support and resistance levels in the market. Finally, they can be used to help you improve your trading strategy. When it comes to identifying entry and exit price levels, there are a few things that you need to keep in mind. Firstly, you need to make sure that you are using a reliable source of data. secondly, you need to take into account the time frame that you are looking at. And finally, you need to make sure that you are using the correct indicators. There are a few different ways that you can use entry and exit price levels to your advantage. One way is to use them to confirm your trades. Another way is to use them to set stop-loss and take-profit orders. And finally, you can use them to exited positions early if the market turns against you. In conclusion, entry and exit price levels are important elements of a trading journal. They can be used to track your progress as a trader, identify support and resistance levels, and improve your trading strategy. Position Size Position size is an important element of a trading journal. It can be used to track your progress as a trader, identify support and resistance levels, and improve your trading strategy. When identifying position size, it is important to use a reliable source of data, take into account the time frame, and use the correct indicators. Position size can be used to confirm trades, set stop-loss and take-profit orders, and exit positions early. There are a few different methods that can be used to calculate position size. The first method is to use a fixed percentage of your account balance. For example, you could risk 2% of your account balance on each trade. The second method is to use a fixed dollar amount. For example, you could risk $100 on each trade. The third method is to use a fixed number of shares or contracts. For example, you could risk 10 shares or contracts on each trade. The risk and reward potential of different position sizes should also be considered when making trades. A larger position size will have a higher potential profit, but it will also have a higher potential loss. A smaller position size will have a lower potential profit, but it will also have a lower potential loss. There is no right or wrong answer when it comes to position size. It all depends on your individual trading strategy and risk tolerance. Some traders may be willing to risk more money in order to make a larger profit, while others may only be willing to risk a small amount in order to limit their losses. Ultimately, it is up to each individual trader to decide what position size they are comfortable with. Trade Results When it comes to trading, the results of each trade are important. This is because they can show you how much money was made or lost, the percentage return on the trade, and what could have been done better. By looking at the results of your trades, you can learn lessons that will help you improve your trading strategy. One of the most important things to look at when evaluating the results of a trade is the percentage return. This is because it can show you how profitable the trade was. If you are only looking at the dollar amount made or lost, you may not be getting an accurate picture. For example, a trade that made $100 but had a 100% return is more profitable than a trade that made $200 but only had a 50% return. It is also important to look at what could have been done better in each trade. This includes things like entry and exit points, position size, and risk management. By looking at what went wrong in each trade, you can learn from your mistakes and make adjustments to your trading strategy. Finally, it is also important to take into account the lessons learned from each trade. These lessons can be used to improve your trading strategy and make more profitable trades in the future.
OANDA:XAUUSDEducation
by Lingrid
5
4 important trade tips on price actionWhen it comes to trading, there are a few key things you need to keep in mind in order to be successful. In this blog post, we'll cover four important trade tips that focus on price action. By keeping these tips in mind, you'll be better equipped to make profitable trade decisions going forward. №1: Identifying the current market structure The first step to take when trying to identify the current market structure is to examine the overall market trend. This will give you a good idea of whether the market is trending up, down, or sideways. You can use a variety of tools to help you with this, such as trend lines, moving averages, and price action. Once you have a good idea of the overall market trend, you can then start to look for areas of value. These areas could be support or resistance levels, depending on the market trend. For example, if the market is trending downward, you would look for areas where the price has bounced off of support in the past. If the market is trending upward, you would look for areas where the price has bounced off of resistance in the past. It's also important to watch out for price volatility when trying to identify the current market structure. This will help you understand if the market is on the move or consolidating. Price volatility can be caused by a number of factors, such as news events, economic data releases, and even just changes in investor sentiment. Finally, pay attention to chart patterns and breakout levels. These can be important clues for future market direction. Some common chart patterns include head and shoulders, triangles, and double tops/bottoms. №2: Identifying major areas of value In order to identify major areas of value, traders should: 1) First take a look at the overall market trend to get an idea of whether the market is moving up, down, or sideways. 2) Identify potential support and resistance levels. 3) Watch out for price volatility to better understand if the market is on the move or consolidating. 4) Monitor chart patterns and breakout levels, as they can provide important clues for future market direction. №3: Watching for price volatility Price volatility can be defined as sudden changes in prices. These changes can be either up or down, and they often happen very quickly. Price volatility is a normal part of the market, and it happens for a variety of reasons. Some of the most common causes of price volatility include news events, economic data releases, and central bank decisions. One of the most important things that traders need to do is to watch for price volatility. By monitoring price movements, traders can take advantage of market swings to make profits. There are a few different ways to do this. One way is to use technical indicators, such as Bollinger Bands or the Average True Range indicator. Another way is to simply pay attention to price action and look for signs of a potential breakout. When it comes to identifying when the market is volatile, there are a few different things that traders can look for. First, they can look at the overall level of market activity. If there is a lot of activity, it is likely that prices will start to move around more. Second, traders can look at the size of the candlesticks on a price chart. If they are getting bigger or smaller, it could be an indication that prices are starting to move more aggressively. Finally, traders can also listen to news reports and economic data releases for clues about potential market moves. There are a few different techniques that traders can use to monitor price volatility. One way is to set up alerts on their trading platform so that they are notified whenever there is a sudden change in prices. Another way is to check in on the markets regularly throughout the day so that they can spot any potential changes as they happen. №4: Chart patterns and breakout levels One of the most important things for traders to know is how to identify chart patterns and breakout levels. This knowledge can help them take advantage of market swings to make profits. There are many different types of chart patterns that traders can use to their advantage. Some of the most common include head and shoulders, double tops and bottoms, triangles, and flag and pennant patterns. Each of these patterns can give traders clues about future market direction. Head and shoulders patterns, for example, often form at the end of an uptrend and can signal that the market is about to reverse course. Double top and bottom patterns can also be used to predict market reversals. Triangles typically form during periods of consolidation and can be used to trade both breakout and continuation setups. Flag and pennant patterns often form during periods of consolidation and can also be used to trade breakout setups. When it comes to trading breakouts, it is important for traders to wait for multiple confirmations before taking a trade. This means that they should look for other signs that the market is about to move in the direction they are anticipating before entering a trade. Some things traders can look for include a sharp increase in volume, a break above or below key resistance or support levels, or a strong move in price away from the pattern itself. By knowing how to identify chart patterns and breakout levels, traders can take advantage of market swings to make profits. These techniques are some of the most important tools in a trader's toolbox and can help them become more successful in the markets. Conclusion The conclusion of the article should cover the four important trade tips on price action. These tips are designed to help traders make better decisions and maximize their profits. By following these tips, traders will be able to better navigate the market and make more informed decisions that can lead to successful trades. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
11