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Long ETH - Adapting to a successful backtested strategyCurrent position is Long at 1640. Stop loss 3.5% The RSI and ATR on multiple timeframes has indicated a trend reversal from short to long. Thus we adapt. No Bias, no emotion. Pure TA and risk management. Is the current position down a few percent? yes... does it matter? No! The entire portfolio is up over 4400% since 2020 (Substatiated by the backtest). We stick to the gameplan, the intermediate market moves are irrelevant. Our risk profile is planned for. We follow the strategy that has consistently had major net profits year on year (Substatianted by the backtest) and we don't get swayed by emotional bias. Adaptation is a fundamental component of implementing a proven and backtested strategy. In financial markets and various other domains, adhering to a well-researched and tested approach is essential for achieving consistent success. The dynamic nature of these environments necessitates the ability to adapt when circumstances change. Therefore, recognizing the importance of adapting to current market realities while still adhering to a proven strategy is paramount for long-term sustainability and success.
BITFINEX:ETHUSD
by TradingAlgorithms
SPX weak move poised for a return to the VPVR Point of ControlIntroduction The recent uptrend in equities has been called a “hated rally” by several financial news organizations (www.afr.com) and lots of people are “sitting on their hands” for this uptrend. That type of behavior seems ripe for people to try and sell the local high and buy lower down. The monthly ADX has remained very low. When the ADX goes from below 20 to the middle zone it is a sign that the volatility and move may proceed in a more sustained manner and when the ADX is above 40 that is a technical sign that there will be a sustained uptrend. A move from above 40 to below 40 is a sign the move is running out of steam. Likewise, the Average True range has been falling during this uptrend. The ATR measures price volatility and this falling volatility combined with a increase in price is broadly bearish. The black arrow on the chart shows that just prior to SPX’s all time high the ATR was falling. The ATR falling again suggest a similar reversal and a new local low. The green arrow also shows some divergence on the ATR. The ATR is good for both regular and hidden divergences so the fact that SPX shows both is a stronger suggestion that this uptrend will reverse. One simple targeting stratify is to assume that price will pull back to the Point of Control at the VPVR. When using the Volume Profile Visible Range it is important to have a defendable starting point and I have set the screen to see the price action since the bottom of the 2008-2009 financial crisis. I find that to be a very defendable place to see the volume by price action. Recall, most volume charts show volume by session wile the VPVR shows volume by price over a specific date range. I have my VPVR defauls set to 68 so I get a close as possible to seeing 1 standard deviation of volume area and I set the number of rows to 147 simply because that gives me 100 rows in the value area. We can see from the main chart that there was a lot of resistance the Point of Control (price where most trading happened) there between 2014 and 2016 and the C19 dump retested that level. In uptrends price has a tendency to be above the value area and correct to it as support and in downtrends price is below the value area/point of control and tends to rally to it and then reverse. In the long run price returning to the Point of Control might set up a head and shoulders but that is a problem for a later time. The quarterly chart below shows that the price target of 2099 puts the price between the 2.0 and 2.618 Fib extension ratios. That is about the max target we could expect from a ABC correction based off a strong understanding of Elliot Wave theory. Elliot Wave Resource forex-indicators.net pg 45 Figure 4-8 Figure 4-9 In a regular flat correction, waves A, B and C are, of course, approximately equal, as shown in Figure 4-10. In an expanded flat correction, wave C is often 1.618 times the length of wave A. Sometimes wave C will terminate beyond the end of wave A by .618 times the length of wave A. Both of these tendencies are illustrated in Figure 4-11. In rare cases, wave C is 2.618 times the length of wave A. Wave B in an expanded flat is sometimes 1.236 or 1.382 times the length of wave A Conclusion I am going to remain on the sidelines of the equities market until I see some bullish divergence on indicators on the weekly or monthly time frames. I have a nagging assumption that as the equities markets top that the broader crypto market will have a last hurrah for 2-3 years and that will begin its drawdown.
SP:SPXShort
by This_Guhy
2
How to Use the Supply and Demand Deluxe Indicator Welcome, fellow traders, to this exciting tutorial where we dive deep into the world of supply and demand analysis using the powerful Supply and Demand Deluxe indicator that I launched this morning. Prepare yourself for an enjoyable learning experience as we unravel the mysteries of supply and demand levels across various timeframes. So, grab your favorite trading beverage, sit back, and let's embark on this adventure together! Section 1: Understanding Supply and Demand Analysis: Before we delve into the specifics of the Supply and Demand Deluxe indicator, let's understand the importance of supply and demand analysis in trading. Supply represents the availability of shares or contracts for sale, while demand represents the number of buyers interested in purchasing those shares or contracts. By analyzing the interaction between supply and demand, traders can identify potential turning points, support and resistance levels, and areas of high buying or selling interest. This knowledge forms the foundation of effective trading strategies, and the Supply and Demand Deluxe indicator is here to assist us in this journey. Section 2: Introducing the Supply and Demand Deluxe Indicator: The Supply and Demand Deluxe indicator is a powerful tool designed specifically for TradingView. Its primary goal is to identify supply and demand levels on various timeframes, including weekly, daily, and hourly. With visual plots and customization options, this indicator empowers traders to make well-informed decisions based on the principles of supply and demand. It caters to traders of all styles and timeframes, from day traders to long-term investors. Section 3: Getting Started: Installing and Adding the Indicator to Your Chart: To begin using the Supply and Demand Deluxe indicator, install it on your TradingView platform. Visit the TradingView website, navigate to the indicators section, and search for "Supply and Demand Deluxe (Stock Justice)." Click on the indicator to access its details and add it to your chart. The indicator will be added and ready to unlock its potential. Section 4: Exploring the Key Components and Functionalities: Let's explore the key components and functionalities of the Supply and Demand Deluxe indicator, which help us identify and interpret supply and demand levels effectively. 4.1 Daily and Weekly Pivots: Daily and weekly pivots provide essential reference points. The indicator allows you to plot the previous week's high and low, yesterday's high and low, and the midpoint of yesterday's range. Visualizing these pivots helps gauge potential areas of interest and determine price behavior. 4.2 Weekly Supply and Demand Levels: Weekly supply and demand levels are critical for understanding the broader market context. With the Supply and Demand Deluxe indicator, you can plot these levels, customize the number of levels displayed, choose line colors and styles, and decide whether to extend the lines. Enabling the "Show Price" option enhances your analysis. 4.3 Daily Supply and Demand Levels: Similar to the weekly levels, daily supply and demand levels provide valuable insights into intraday price dynamics. Customize the number of levels displayed, choose line colors and styles, and determine line extensions. Enabling the "Show Price" option visualizes corresponding prices. 4.4 Hourly Supply and Demand Levels: Intraday traders will appreciate the Hourly Supply and Demand Levels feature. The indicator automatically identifies these levels based on the highest and lowest values of the past 10 bars. Customize the number of levels displayed, choose line colors and styles, and even show prices associated with these levels. 4.5 ATR Expected Moves: The ATR Expected Moves feature calculates expected price moves based on the Average True Range (ATR). Customize the lookback length and multipliers. Extend lines, choose colors and line styles, and display prices. Incorporating ATR Expected Moves helps set realistic profit targets and manage risk effectively. 4.6 Futures Levels: For futures traders, the indicator provides specific levels for the Midnight Open, London Open, Asian Open, and the 8:30am EST level. These levels act as potential reference points, aiding in identifying intraday opportunities and aligning trades with global market dynamics. Section 5: Customizing the Indicator to Fit Your Trading Style: The Supply and Demand Deluxe indicator offers customization options to align with your trading style and preferences. 5.1 Adjusting Input Parameters: Fine-tune the indicator by adjusting parameters such as the number of levels plotted, lookback length, multipliers for ATR calculations, and more. Experiment with different settings to better suit your trading strategy. 5.2 Customizing Visual Elements: Customize line colors, styles, and extension options to enhance aesthetics and readability. Choose colors, line styles, and decide whether to extend lines to the left, right, or both. This level of customization ensures a visually pleasing trading experience. Section 6: Practical Applications and Trading Strategies: In this section, we explore practical applications and trading strategies using the Supply and Demand Deluxe indicator. 6.1 Identifying Key Supply and Demand Levels: The indicator helps identify key supply and demand levels across different timeframes. Analyzing these levels in conjunction with other technical analysis tools can identify high-probability trade setups. 6.2 Using Pivots for Reference Points: Pivots, both daily and weekly, serve as crucial reference points. Consider price reactions around these pivots and consider them in conjunction with supply and demand levels to gain valuable insights into market dynamics. 6.3 Incorporating ATR Expected Moves in Risk Management: Use the ATR Expected Moves feature for risk management. Set realistic profit targets and define appropriate stop-loss levels based on expected price moves. This statistical framework helps adjust position sizing and manage risk effectively. Section 7: Tips and Tricks for Maximizing the Indicator's Potential: To enhance your trading experience with the Supply and Demand Deluxe indicator, consider these tips and tricks: 7.1 Leveraging Different Timeframes: Analyze supply and demand dynamics across different timeframes. Use higher timeframes for overall market context and lower timeframes for precise entries and exits. Combining multiple timeframes improves analysis accuracy. 7.2 Combining Multiple Timeframes: Combine the Supply and Demand Deluxe indicator with other technical analysis tools such as moving averages, oscillators, or chart patterns. This synergy provides confirmation signals and increases the probability of successful trades. Section 8: Conclusion: Congratulations on completing this comprehensive tutorial on the Supply and Demand Deluxe indicator! We've covered the fundamental concepts, explored features and functionalities, and discussed practical applications and trading strategies. Experiment with different settings, customize visual elements, and integrate the indicator into your trading plan. As you gain experience, you'll be well-equipped to make informed trading decisions. Keep exploring, stay disciplined, and may the markets bring you success!
CME_MINI:ES1!Education
by StockJustice
Stop Losses: A Trader's Best DefenseIn a perfect world, every trade would go our way, but alas this is usually not the case. A stop loss is a risk management tool used by traders and investors to minimize their losses when trading. It is a predetermined price level at which a trader's position will automatically exit the market, causing the loss to be realized. Stop losses are crucial to any trading strategy, as they help traders limit their losses and stay disciplined. In this blog, we will look at what stop losses are, why they are important, how to set realistic stop losses, and five different examples of stop losses with a description of how to set the stop loss. What are Stop Losses? A stop loss is an order to sell a security when it reaches a particular price. It is a predetermined price level at which a trader's position will automatically exit the market, causing the loss to be realized. This means that if the price of the security falls to the stop loss level, the trader's position is automatically closed, and any losses incurred are limited to that level. Stop losses are essential because they help traders limit their losses and stay disciplined. Why are Stop Losses Important? Stop losses are important because they help traders limit their losses and stay disciplined. In trading, it is easy to become emotional and let your losses run. Stop losses help traders avoid this situation by automatically exiting the market when the price reaches a predetermined level. This ensures that losses are limited, and traders can move on to the next trade without being emotionally affected by the previous loss. Setting Realistic Stop Losses Setting realistic stop losses is crucial to any trading strategy. A trader needs to consider the volatility of the security, the trading style, and the risk-reward ratio when setting stop losses. The stop loss should be set at a level where the loss is acceptable but not too close to the current price level, as this may result in the stop loss being triggered prematurely. A stop loss should also not be set too far away from the current price level, as this may result in the trader losing more than they are willing to risk. Stop Loss Examples Below we will list five examples of setting effective stop losses. For consistency, we are going to use the same long stop loss example, but these same examples can be set for stop losses for short positions as well. Percentage-Based Stop Loss: A percentage-based stop loss is a stop loss that is set at a specific percentage below the purchase price. For example, if a trader wants to place a long at $0.088602 and sets a 0.5% stop loss, the stop loss would be triggered at $0.88160. For a short stop loss at 0.5%, you would add the value instead and have a 0.89035 stop loss. To set a percentage-based stop loss, the trader needs to determine the percentage they are willing to risk and place the stop loss order at that level. ATR-Based Stop Loss: An ATR-based stop loss is a stop loss that is set based on the average true range of the security. The average true range is a measure of volatility and is calculated by taking the average of the high and low prices for a particular period. To set an ATR-based stop loss, the trader needs to determine the number of ATRs they are willing to risk and place the stop loss order at that level. For a long stop loss, you would subtract the ATR times its multiplier from the current price. For a short-stop loss, you would add the ATR times its multiplier to the current price. The unique upside to this stop-loss style is the ATR accounts for market volatility which can aid your risk management and help set more appropriate stop losses. Using Moving Averages or Super Trend: Moving averages and super trend are technical indicators that can be used to set stop losses. Moving averages are calculated by taking the average price over a specific period, while the super trend is a trend-following indicator that uses the average true range to calculate the stop loss level. To set a stop loss using moving averages or super trend, the trader needs to identify the period and place the stop loss order at the appropriate level. The Moving Average or Supertrend can then act as a moving stop loss as it trails the price. 1. Moving Average: 2. SuperTrend: Donchian Channels: Donchian channels are a technical indicator that can be used to set stop losses. Donchian channels are created by taking the highest high and lowest low over a specific period and plotting them on a chart. To set a stop loss using Donchian channels, the trader needs to identify the period and place the stop loss order at the appropriate level. In the example below we use a more standard 20-period Donchian level to identify areas of lowest low interest that would be a good place for a stop loss. If we were setting a short order we would look to recent highest highs as potential stop-loss areas Conclusion Stop losses are crucial to any trading strategy, as they help traders limit their losses and stay disciplined. When setting stop losses, traders need to consider the volatility of the security, the trading style, and the risk-reward ratio. Stop losses can be set using many different techniques, including percentage-based, ATR-based, using moving averages or super trend, and Donchian channels. By setting realistic stop losses, traders can minimize their losses and stay disciplined, which is essential for long-term success in trading.
Editors' picks
MEducation
by LeafAlgo
40
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
Introducing the Volatility Adjusted ADX (VADX)In this video, Stock Justice introduces you to the Volatility Adjusted ADX (VADX), a powerful tool that combines trend strength and market volatility. Learn how to customize your settings for optimal analysis and how this indicator, with its proprietary mathematical formulation, offers a nuanced perspective on market dynamics. Discover the benefits of normalized data and how to read and interpret the VADX line in conjunction with other indicators. All of this, delivered in Stock Justice's engaging style, will empower your technical analysis toolkit. Be ready to trade safe, trade smart!
NASDAQ:TSLAEducation
by StockJustice
Top 10 Technical Indicators for Successful TradingTop 10 technical indicators for successful trading Introduction: Technical indicators are essential tools for traders to analyze market trends, identify potential trading opportunities, and manage risk. These indicators are mathematical calculations based on past price and volume data that can help traders make informed decisions about buying or selling assets. In this article, we'll discuss the top technical indicators that traders can use to enhance their trading strategies. Moving Average: A moving average is a widely used technical indicator that helps traders identify market trends. A moving average is calculated by averaging the price of an asset over a specific period, such as 10 days or 50 days. This indicator smooths out the price data and makes it easier for traders to identify the direction of the trend. When the price is above the moving average, it's considered a bullish trend, and when the price is below the moving average, it's considered a bearish trend. Relative Strength Index (RSI): The Relative Strength Index (RSI) is a momentum oscillator that measures the strength of a price trend. The RSI is calculated by comparing the average gains and losses over a specific period, typically 14 days. The RSI value ranges from 0 to 100, with values above 70 indicating an overbought market, and values below 30 indicating an oversold market. Traders can use the RSI to identify potential trend reversals and overbought or oversold conditions in the market. Bollinger Bands: Bollinger Bands are another widely used technical indicator that helps traders identify potential trend reversals and price volatility. Bollinger Bands consist of three lines: a moving average in the center, and two outer bands that represent the standard deviation of the price data. When the price is within the bands, it's considered normal market volatility. However, when the price reaches the outer bands, it's considered an overbought or oversold condition, and a potential reversal may be imminent. MACD (Moving Average Convergence Divergence): The Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that helps traders identify changes in momentum and trend reversals. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A signal line, which is a 9-day EMA of the MACD, is also plotted on the chart. Traders can use the MACD to identify potential buy and sell signals, as well as divergences between the MACD and the price of the asset. Fibonacci Retracements: Fibonacci Retracements are a popular technical indicator that helps traders identify potential support and resistance levels. Fibonacci Retracements are based on the idea that prices tend to retrace a predictable portion of a move, after which they may continue in the original direction. Traders can use Fibonacci retracements to identify potential entry and exit points, as well as stop-loss levels. Stochastic Oscillator: The Stochastic Oscillator is another momentum oscillator that helps traders identify overbought and oversold conditions in the market. The Stochastic Oscillator is calculated by comparing the closing price of an asset to its price range over a specific period. The Stochastic Oscillator value ranges from 0 to 100, with values above 80 indicating an overbought market, and values below 20 indicating an oversold market. Traders can use the Stochastic Oscillator to identify potential trend reversals and overbought or oversold conditions in the market. Average True Range (ATR): Average True Range (ATR) is a technical indicator that measures the volatility of a stock or currency. Developed by J. Welles Wilder Jr., ATR calculates the average range of price movements over a specific period, taking into account gaps in price movements. ATR is typically calculated over a period of 14 days, but traders can adjust this period to fit their specific trading strategy. To calculate ATR, traders first calculate the true range (TR), which is the greatest of the following: Current high minus the current low Absolute value of the current high minus the previous close Absolute value of the current low minus the previous close Once the true range is calculated, traders can calculate the ATR by taking an average of the true range over a specific period. ATR can be used to measure volatility in the market, helping traders to identify potential trading opportunities. When ATR is high, it indicates that there is a lot of volatility in the market, which can present opportunities for traders to profit. Conversely, when ATR is low, it indicates that the market is relatively stable, and traders may want to avoid entering trades at that time. Ichimoku Cloud: The Ichimoku Cloud, also known as Ichimoku Kinko Hyo, is a technical indicator that provides a comprehensive view of potential support and resistance levels, trend direction, and momentum. The indicator was developed by Japanese journalist Goichi Hosoda in the late 1930s and has gained popularity among traders in recent years. The Ichimoku Cloud consists of five lines, each providing a different view of the market: Tenkan-Sen: This line represents the average of the highest high and the lowest low over the past nine periods. Kijun-Sen: This line represents the average of the highest high and the lowest low over the past 26 periods. Chikou Span: This line represents the current closing price shifted back 26 periods. Senkou Span A: This line represents the average of the Tenkan-Sen and Kijun-Sen, shifted forward 26 periods. Senkou Span B: This line represents the average of the highest high and the lowest low over the past 52 periods, shifted forward 26 periods. The area between Senkou Span A and Senkou Span B is referred to as the "cloud" and is used to identify potential support and resistance levels. When the price is above the cloud, it indicates a bullish trend, and when the price is below the cloud, it indicates a bearish trend. Traders can also use the Tenkan-Sen and Kijun-Sen lines to identify potential entry and exit points, with a bullish crossover of the Tenkan-Sen above the Kijun-Sen indicating a potential buying opportunity, and a bearish crossover of the Tenkan-Sen below the Kijun-Sen indicating a potential selling opportunity. Conclusion: In conclusion, technical indicators are valuable tools for traders in the financial markets. The Average True Range (ATR) can be used to measure volatility in the market, while the Ichimoku Cloud provides a comprehensive view of potential support and resistance levels, trend direction, and momentum. By using these indicators in combination with other technical analysis tools and market knowledge, traders can make informed trading decisions and improve their chances of success. It's important for traders to experiment with different indicators and find the ones that work best for their trading strategy.
BITSTAMP:BTCUSDEducation
by JS_TechTrading