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XRPBTC Consolidation - Breaking UP or DOWN?? Been observing this ticker for a few days now, notice on how the trendlines are drawn: - From higher high to lower high to lower high - From lower low to higher low to higher low The two trendlines looks like they are converging to a single point. This is a consolidation pattern of price action and price is about to break out from the pattern. On a Daily Time Frame, some of you may be able to identify the "Inside Bars". At this moment, market watchers will be asking this Golden Question - Is it breaking UP or breaking DOWN? One group of traders I know, we call them the breakout traders. They will place their Buy/Sell Stop Orders a certain price outside the two trendlines and anticipate to get in to catch the move, either up or down it doesn't matter to them. There are another group of traders who are directional, they do their analysis and "place their bet" on buying or selling the market according to their market bias. They get the best entry price but at the same time, they are exposing to the risks that are far more worst if the market goes against them. What I prefer is to wait and anticipate where price is heading and identify its turning points. Using methods such as Harmonics Patterns and Supply Demand, I am able to mark out the price area that price is likely going to turn, and it is at these areas that I am interested to take my trades to protect myself as i have a good risk management. Which are the best methods? There is no right or wrong answer, I recommend to choose the right strategy that suits your personality and your lifestyle. Do like, share and follow me for more analysis like this. We believe in sharing and build a conducive environment for all traders.
Education
by TradeEye
Bullish Trade Example: Foot Locker Notice the up arrows around the Blue indicator lines. These indicator lines show good levels to buy The longer the holding period, the bigger the gains (usually). Trade Example: Foot Locker – FL It is very easy to read price action if you have a reference point. These support/resistance lines are there to help you read where the buyers and sellers are likely to make a stand. MasterChartsTrading Price Action Indicators show good price levels to enter or exit at trade. The Blue indicator line serves as a Bullish Trend setter. If your instrument closes above the Blue line, we think about going Long (buying). For commodities and Forex, when your trading instrument closes below the Red line, we think about Shorting (selling). For Stocks, I prefer to use the Yellow line as my Bearish Trend setter (on Daily charts ). Be sure to hit that Follow button! Please find me on social networks via the link on my profile page for more ideas from MasterCharts!
NYSE:FLEducation
by mastercharts
A basic guide on how to operate the descending triangle breakoutA basic guide on how to play the descending triangle breakout. Works Referenced: (Kirkpatrick and Dahlquist, 2010, p. 315) (Bulkowski's Descending Triangles, 2005) Kirkpatrick and Dahlquist state that descending triangles breakout to the downside 64% of the time (2010, p. 315). But "Price Breakout Down: Price fails to gain at least 5% from breakout 16% of the time; the average maximum gain from shorting before any 20% reversal upwards is 16%." So the conclusion we can draw is that the downward triangle breakout even happening 64% of the time, does not bring big profits and has a higher risk for the operation. "Price Breakout Up: Price fails to gain at least 5% from breakout only 7% of the time, the average maximum gain before any 20% decline is 47%." Considering a breaking up, even happening in only 36% of the time, when occurs brings greater profits and a safer trade. In this way, it is preferable to play in descending triangles aiming only to break up! In the chart above you can see the two classic options of entry into breakout, I use that red bar as safety margin for the breakup, that is in case the price exceeds the red bar, I consider the breakup valid, this serves to avoid false breaks. The first entry option is in the breakout, it is a good option that most of the time brings good profits, however it is necessary to leave a bigger stop-loss because of the risk of pullback. In the second option, the Pullback is the perfect entry according to most books, because it is where the trend consolidates making the first ascending bottom and also allows us to use a very short stop-loss which greatly increases the risk x return ratio. And how to set a "perfect" target? Bulkowski (2008) suggests the following breakout price targets for the descending triangle: Descending Triangle Breakout Upward: Breakout Price + ((Highest Price in Triangle - Lowest Price in Triangle) * 84%) If you liked this content, please follow me and leave your like! Thank you for your support, God Bless!
BEducation
by LiuTrader
6
Supports and Resistances : Everything You Need to KnowSupports and resistances are horizontal lines on the edges (borders) of congestion areas. The bottom line is the support: the level where buyers strength overcome sellers, and buys are strong enough to reverse the downtrend. The top line is called the resistance: level where sellers strengh overcome buyers, and sells are strong enough to reverse the uptrend. It is more preferable to create your support and resistance lines along congestion area's borders than extreme price action, since these borders illustrate the point where most traders changed their mind, whereas the extremes are only reflecting a few people panicking. Psychology Traders remember at which price they bought or sold, and this is what create supports and resistances. Support and resistance zones often switch roles: when a support is broken it will become a resistance, and vice versa. This happens because as the market makes a breakout downwards, buyers feel pain and wait for a rally to free themselves without cost, whereas sellers regret and wait for a rally to have a second chance to short. The buyer's pain and seller's regret create the new resistance. A support or resistance is going to be more significant if the preciding price action was steep rather than a slow ascending or descending trend. Volumes Low volumes around a resistance or support area indicates its fragility. Traders aren't feeling quite involved in it. However huge volumes show strength in this level. Trading Rules 1. When you are surfing a trend that is reaching its support or resistance, move your protection stop closer. The trend will reveal its health at this point: it can either go faster and your stop isn't triggered or it can bounce on the Trend line and your stop securises your profits. 2. Supports and Resistances are stronger on a bigger timeframe. Weekly charts are stronger than daily charts. This way, if on the weekly the price is flat and on the daily the price action is hitting a support or resistance then the signal is less important than if price was reaching a support or resistance on the weekly. 3. Resistance and support levels are usefull to setup stoplosses and take-profits orders. If you are buying, the lowest value in a support area can be used as a stop if you place it just underneath. Breakouts A breakout happens when the price breaks out of its trading range, but most of breakouts are fake breakouts. Be careful of fakeouts : it is more often an opportunity to position against them, with a protection stop. "Fakeouts" or "fadeouts" are when the price tries to break a support or resistance but end up returning in its trading range. How to know when a breakout is fake or not? True breakouts are confirmed by high volumes and technical indicators showing new highs or new low. Also we should be able to see the new trend on a higher timeframe. Fake breakouts tend to happen on low volumes and indicators divergences. In order to trade fadeouts, wait for price action to stop making new highs or lows. This is when prices fade. Then, place your stop on the extreme, risk is low, but chances are that price will make a pullback in its congestion zone. You liked this article? Make sure to leave like or a comment :) --------------------------------------------------------------------------------------------------- My Website - Automated Strategies with Backtest and Alert Setup blockchainfiesta.com PineScript Development, Reverse Engineering Comissions open (1 slot)
Education
by cyatophilum
3
Trading BCH with the ZenTrend follower & Gameplan for hardforkThis is how we're trading BCASH with our indicator. Now there is of course news of the hard fork and all that, but this is how we have traded it purely technically based on our indicator. Check the post linked below on how to get access to the trial period and you can try it out for yourself! We have taken the trades based purely on the breakout indicator and the trailing stop that the indicator plots. We start at (1) with a long setup, which does not get triggered. The setup switches short (2) and we get entered in the trade. The market moves and we get stopped out at the red crosses the indicator plots. (4) We made a small 1.4% on that trade, nothing to get to exited about, but no loser either. We get another short setup which remains untriggered (5), followed by an untriggered long setup (6). At (7) we get another short setup which does get triggered. We get stopped out at (8) again with a basically break-even trade of .4% profit. A new short setup immediately follows and we get triggered short at (8). We get stopped out at (9) with a 2.8% profit. (10) Gives us another short setup that does not get triggered, followed by a long setup which triggers a trade at (11). We move our stop op as the indicator tells us to do (12). We then start getting extreme overload signals (the dots above the candles) (13), and move our stop to the bottom of the candles at signs of weakness. The other stop loss is moved up by the indicator too(14). We’re getting more overextension signals so we move our stop to the bottom of the candle at (15). Here we get out of 70% of our position, the remaining 30% has the stop at (14). If the market does move down off these overextension signals we will look for re-entry signals the indicator gives us to get back in! Now looking at the hardfork, we plan to get out just before the hard fork at signs of weakness in price, as we expect coin to collapse after that. You can count on about 99% of all BCH that has been bought in the last few days to be sold as soon as the hard fork is done.. If we are wrong it that case we can always re-enter our positions, in safety. To get access to the indicator and try it out, please go here: Like and subscribe if you enjoy our work! Stay calm, and happy trading! ZenTrader
BEducation
by DariusZen
ANAB - "ANAB-tomy" Of A Winning Long Trade?Sorry for the stuffy nose! Nonetheless, here I talk about qualities of a trade that help determine it as a winner. This is just a short version of what to look for, just to give some of the things to consider in the process. As a general statement, there are 2 things that make up a stock: technical factors (price behavior) & fundamental factors (financial statement info). Fundamentals are important for longterm investments where company growth & strength are important, since over time, more people will get interested and buy the stock in the future for further price appreciation (5-10+ years for a solid investment). Simple fundamentals just looks at company profits and how much cash the company has access to, but for a detailed fundamental analysis, the company will need to be known and understood on a very high level as if the investor is one of he founders of the company. Before the investment is made, you must know almost everything about how goods/services reach the consumer/customer. For a trader, correct technical analysis is most important (everyone can do technical analysis, but it takes time to do it in a more realistic fashion without dreaming too much or trying too hard to predict a specific future price action). The more factors that favor your objective to buy the stock, whether as a trade or investment, the more likely you will win from the trade. Here is the list from the video: 1. Technical favor -Price accumulation: price usually builds up slowly before exploding upward in an uptrend, with only few/small price corrections in the trend (it is hard to see this early but it is typically only obvious late AFTER the trend has started) -Volatility contraction-expansion: I talk about this all the time I'll skip it; it is very important to always look for though -Price eagerness to increase: when price keeps trying to push upward to newer levels, this tells that at least there are also other people who see the stock going higher and are willing to put their money on the line for it -Supportive base: the price action should show you that the price has no interest in testing lower levels, which means there are no aggressive sellers, investors or other traders are not selling off and there is a positive sentiment toward the stock -Industry/Sector performance: this was not included in the video, but it usually gives you a great technical context especially when you are diversifying or trying to pick a home run stock (it's still very difficult to pick one though) 2. Fundamental favor (if considering longterm investing) -EPS growth past 3-5yrs (should mirror revenue/net income): this tells you the company's plan to grow/expand and make profit in the process is working, and hence the company is still appealing to old and newer investors -Free cash flow: I didn't explain this well in the video, but I meant to say that a good cash flow means the company has cash on hand aside from other assets to be able to pay off any debt or sudden expenses today if the need arises (this is a very simplified version just to give you an idea) Let's see what ANAB can do! Looking forward to comments or PM discussions.
NASDAQ:ANABEducation
by themdtrader
Learn how MACD and Trendlines are Connected.Hey, I am back, this time with something, kinda unusual, and I dont know If you like this kind of stuff, but here is some education for you to make a better trading decision in your future! Okay, so I would like to teach you a bit about MACD and how is this indicator connected to trendlines. In this chart you can see three flags , each flag can be bullish or bearish. But how do you know if a flag will be bullish or bearish? Pretty simple and pretty hard in same way. If a price breaks uptrend ascending ressistance it means breakout ! And if the price breaks ascending support level it means a breakdown . This type of trading is called breakout trading. But what makes flag, a flag? In simple. Flag is a continuation pattern, they usually represent only brief pauses in a dynamic stock also they are typically seen right after a big, quick move , thats why we see so much flags in the Bitcoin charts, its a very quick and dynamic moving stock compared to others stocks, not cryptocurrencies. Channel/flag, is formed by a ascending support level and ascending ressistance level. Inside this channel you can spot tests on both support and ressistance level. So lets now just go trough the chart chronologically and see how the MACD reacts to trendlines. At first double top you can see the test of ressitance uptrend flag/channel. This test was negative, you can spot that by histogram finding his top and starting to decline, same thing on "Point A". As histogram is starting to decline ,Bitcoin is about to test a certain level, this time it is a ascending support level, you can spot it at first macd uptrend test where the histogram turned around and started to see buying volume increasing, this same is valid for each succesful uptrend test. After some tests of each ascending ressistance or support, when the price leaves this channel, its a prediction for a sharp move in a way, which was broken, for example broken ascending ressistance level would mean breakout. After the first flag has broken out, steep uptrend were build , and succesful test of this steeper uptrend meant another wave of buyers p ushing price even higher, found ressistance at 6800, failed at testing second steep uptrend and found new channel. In a second flag , Bitcoin is on selling wave , so for macd to give us buy signa l, Bitcoin would need to break ascending ressistance and that would give macd buy signal, its opposite as buying wave, while on buying wave you see rise in histogram which meant succesful test, here means the fall ( or rise from negative bottom if you will ) of histogram, Bitcoin finding support. A fter Bitcoin has failed in the second flag breaking/testing the ressitance twice as macd suggest and also the ascending ressistance which wasnt overhelmed, the flag has seen a breakdown . After breakdown Bitcoin found support and formed another uptrend , found new ascending ressitance and formed another flag, on this last flag, you can beautifuly see how is macd testing , each test represent an ascending support test on the chart, after 4 succesful test in a row, the flag has broken out and saw a breakout! In short MACD shows test of trendlines, ressistance, support. When is MACD doing waves , or in another words blue riding on orange line, it means succesful test of uptrend , support and price of stock may continue to rise. When Flag gets broken , heavy price action is ahead. When uptrend is broken , usually downtrend is formed until stock finds support and from there form another uptrend. The highest positive histogram tick represent finding ressistance , falling volume, headed to test support levels. The lowest( or the longest if you will) negative histogram tick represent finding support and price headed to test ressistance for possible macd turnaround, on chart you can see two unsuccesful, which led to breakdown. Hope you liked this Education about MACD and Trendlines connection and also some education about flags/channels. Hope I havent missed anything important , if yes point it in comments. I f I have learned you anything that you are able to benefit from and be a bit better trader , let me know by smashing that agree button, each like is very appreciated as I am doing this for FREE and it took me a LOT of time, Thanks a Lot!
BITFINEX:BTCUSDEducation
by TiborVrbovsky
5
How to detemine Targets for Pennant BreakoutsThe target for a pennant breakout should be determined by the height of the pennant In this example the height was 165 pips. The price reached broke out and reached 161 pips. Of course, it's not always perfect but it's close enough. A similar example can be seen in last weeks pennant break out on EURUSD. However, on the EURUSD example, when price broke out it did a retest and then continued to the target. Retest do occur, so be weary of moving your stop too early and then missing the main move Thanks for reading.
Education
by jannatul96
USDCAD idea update - why you must get your entry rightHere's another example of the larger time frame providing plenty of chances on the lower time frame. A healthy breakout is one with buildup against the level under attack. If we keep probing/failing....and STILL attacking the level from closer and closer, you know where the pressure is. I'm sure you already use variable size to consistently risk the same % of your account per trade. i.e. keeping risk the same whether you're accounting for 10, 20, or 30 ticks/pips. I'd suggest adding another filter - standardizing the SIZE of your stops. By that I mean if you're taking trades with stops between 10-30 ticks/pips, that's fine. But what if another move suggests a stop of 100 pips/ticks? Can you expect the same R out of the move? Are you actually just chasing price? This filter will get you to be more disciplined about your entries, keeping them tight and decisive. This move was already extended. But the level was attractive enough I expected a healthy push at least to the levels I marked out. This is very different to trying to get in with a young, strong trend. You've got to recognize what you're trying to get out of the move and how the market is likely to react at SPECIFIC points.
Education
by structuredtrader
Why an early fail can actually HELP a breakoutThis is a great example for traders of all timeframes to study. I don't really have time for people basing trades on wide zones - that's fine for analysis, but for a TRADE, you've got to see the fight at a specific level. When you draw these correctly, you can get a really great picture of evolving sentiment and balance of power shifts. Most traders treat breakouts way too lazily. You don't just enter at a new High/Low. You NEED buildup. Any naked attack from distance is likely to fail. But what if it only pauses, instead of crashing? Do you redraw the level? Do you avoid the trade completely? What works for me: Talk out the developing scenario. A fail failed? Ooh, interesting. Maybe there's more power on the original side than expected. Once the breakout's happened, how is the other side thinking? I was biased long, getting everything I wanted to see....but what would the Bears want to see? Probably a close back under the grey/yellow boxes, right? But wait, now that we created another temporary level during the failed probe, there's another level price needs to break through before even attempting the yellow level and then grey boxes! --> this makes for a likely bounce point, and creates several chances for late entries. Best of all, it means a breakout entry at the original level will be protected by that bounce and your trade stays green.
CBOT_MINI:YM1!Education
by structuredtrader
level attack without buildup, the recipe for a trapWhen you have your eyes consistently at the same important levels (preferably horizontal ones), you'll quickly see the difference between a buildup that creates a powerful breakout vs a breakout fail / trap. Naked run ups like this can be scary to get in front of, and it's not a straightforward entry, especially if you're executing on the H1. But this is why you should be building libraries of similar setups. If price knifes through that level and shoots straight up, its likely because of some really spectacular news catalyst. But in NORMAL market conditions, this is a great trap patter to study. I think I recently shared a chart showing consistent buildup ahead of a level on the NQ. Several turns, wedging, etc BEFORE the level's probed. That's power, like a coiling snake. But no coiling here. Think about the psych of the traders involved here. The Bulls who bought down low are happy and probably looking for an excuse to cover. Smart longs are covering at least part of their position here (sell orders). Some late FOMO Bulls are looking to get in and will try and buy on a probe past highs. Big money isn't doing this. Bears are entering and keep pushing price back under the level (check out the 15m). With each bar, more Bears are selling. IF price pokes back up above highs, that's usually where Bears will tap out and the BO will be safe. This actually momentarily happens on the 15m, but it ends up turning into a second Bull trap. From the same perspective, once we've got that wedge, a push below the wedge spells the end of the Bulls. When it happens, there's no fail of a fail....Bulls pull out, and price crushes back into the big range.
Education
by structuredtrader