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Trade Like A Sniper - Episode 8 - EURUSD - (29th May 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing EURUSD, starting from the Monthly chart. - R2F
Education
by Road_2_Funded
2
Key Levels and what you need to know about themThere are Key Levels on every timeframe. But the ones that are relevant are the ones that agree in between timeframes. There are Swing Key Levels, Intraday Keylevels /agree on H4 + H1) and Scalpers Key Levels (I use those that agree on H1 and M30). Key Levels are zones where the market has not decided yet which direction it will choose, but as a trader you have to be one step ahead and speculate on it. Key Levels of higher time frames are always dominant. So when you scalp make sure you are not landing in between the buyers and sellers fight of swing or intraday traders. How to apply on low risk: - Have a D1 ceiling and floor, have an H1 ceiling and floor. Generally don't sell on floors and don't buy at ceilings. - Look for reversals around those areas (3 peak patterns or longer consolidations rejecting an important zone) - Be careful at Key Levels (that is everything in between the floor and the ceiling) - Generally buy at floors and sell at ceilings when you have: a. indication of reversal b. break of structure indication with candle close (not few pip around the zone, it should clearly break with close) c. momentum pushing like "engulfing patterns", long candles (towards your direction), long wigs (towards the opposite direction), Dojis (indicates end of wave and short term change of direction) How to apply on middle risk: - buy when it breaks the ceiling with volatility specific stop loss of asset - sell when it breaks the floor with volatility specific stop loss of asset Also take a look at my post about specific volatility of assets. Linked below.
OANDA:XAUUSDEducation
by Heaven10
SIMPLE ICT CONCEPTS FOR TRAADING SYNTHETIC INDICES The Inner Circle Trader (ICT) concept for trading Deriv synthetic indices involves using sophisticated market analysis techniques and proprietary trading strategies. It focuses on understanding market mechanics, price action, and order flow to make informed trading decisions. ICT strategies leverage advanced tools and ICT knowledge to predict synthetic market movements, optimizing entry and exit points for higher profitability and risk management.
Education
by FrankFx14
FAIR VALUE GAP OR ORDER BLOCK ENTRYA fair value gap (FVG) and an order block entry are concepts used in technical analysis within financial markets to identify potential trading opportunities. ### Fair Value Gap (FVG) A fair value gap refers to a price range on a chart where there is an imbalance between buyers and sellers, often resulting in a quick movement through this area without much trading activity. This gap can create a zone of interest where price may return to fill the gap, presenting a potential trading opportunity. Traders look for these gaps to predict price movements, expecting that the market will revisit these areas to achieve a fair value. ### Order Block Entry An order block is a consolidation area where significant buying or selling has taken place, often by institutional traders. These blocks are typically identified by a cluster of orders that create a strong support or resistance level. When price returns to this level, it often reacts due to the presence of unfilled orders, providing a strategic entry point for traders. Order blocks are used to predict where the price might reverse or continue its trend, offering a high-probability entry signal based on historical price action. Both concepts are used by traders to make informed decisions based on the past behavior of price and volume, aiming to identify areas where significant trading activity is likely to influence future price movements.
Education
by FrankFx14
Rocket Booster In 3 Steps - Recap VideoInside this video, we look at the recap of the rocket booster strategy that you read about yesterday - So watch it to find out more about the rocket booster strategy and how powerful this strategy can help you - with your trading journey Watch it now and rocket booster this content to learn more, - Disclaimer: Trading is risky please learn risk management strategies, because you will lose money from trading whether you like it or not.
Education
by lubosi
ORDER BLOCK CONFIRMATION ENTRY PART 2Sure! Here's another description of order block confirmation with a focus on practical application and detailed examples: ### Understanding Order Block Confirmation: Order block confirmation is a technique used by traders to identify and validate significant price levels where large orders from institutional traders have been placed. These levels often act as strong support or resistance zones. Confirming an order block helps traders make informed decisions about entry and exit points in the market. ### Detailed Steps for Order Block Confirmation: 1. **Identify Potential Order Blocks:** - **Bullish Order Block:** Look for a downtrend that ends with a strong bullish reversal, marked by one or more large bullish candlesticks. - **Bearish Order Block:** Look for an uptrend that ends with a strong bearish reversal, identified by one or more large bearish candlesticks. 2. **Analyze Market Structure:** - **Trend Context:** Determine whether the market is in an uptrend, downtrend, or sideways movement. This context helps in predicting the likelihood of the order block holding. - **Key Levels:** Note the order block's alignment with significant support or resistance levels. 3. **Volume Analysis:** - High volume during the formation of the order block is a strong indicator of institutional activity. Look for volume spikes that coincide with the large candlesticks forming the order block. 4. **Price Action Confirmation:** - **Engulfing Patterns:** A bullish engulfing pattern at a potential bullish order block or a bearish engulfing pattern at a potential bearish order block can confirm the level. - **Pin Bars and Rejection Candlesticks:** Candlesticks with long wicks (e.g., pin bars, hammers, shooting stars) at the order block level indicate strong rejection and confirm the presence of significant buying or selling interest. - **Break and Retest:** Confirmation is stronger if the price breaks through the order block level and then retests it as support (for bullish order blocks) or resistance (for bearish order blocks). 5. **Indicator Confirmation:** - **RSI (Relative Strength Index):** If the RSI shows overbought conditions at a bearish order block or oversold conditions at a bullish order block, it provides additional confirmation. - **Moving Averages:** The interaction of price with moving averages (e.g., 50 EMA, 200 EMA) near the order block level can confirm its validity. A bounce off or crossover can be significant. 6. **Confluence of Factors:** - Multiple confirmations such as Fibonacci retracement levels, pivot points, and trend lines aligning with the order block increase its reliability. ### Practical Examples: 1. **Bullish Order Block Confirmation:** - Suppose the price of a stock is in a downtrend and reaches a level where it forms a large bullish candlestick, followed by increased volume. - The RSI indicates oversold conditions. - The price breaks above the identified order block and later retests this level, forming a bullish pin bar. - This confluence of signals confirms the bullish order block, suggesting a potential entry point for a long position. 2. **Bearish Order Block Confirmation:** - Consider a forex pair in an uptrend that hits a resistance level, forming a large bearish candlestick with a volume spike. - The RSI shows overbought conditions. - The price breaks below the identified order block and retests it, forming a bearish engulfing pattern. - This setup confirms the bearish order block, indicating a potential entry point for a short position. ### Trade Execution and Management: 1. **Entry:** Based on the confirmed order block, place a buy order at the bullish order block or a sell order at the bearish order block. 2. **Stop-Loss:** Set stop-loss orders just below the bullish order block or above the bearish order block to manage risk. 3. **Take Profit:** Identify potential take-profit levels based on historical price action, nearby support/resistance levels, or using risk-reward ratios. By following these detailed steps and examples, traders can effectively use order block confirmation to enhance their trading strategies and improve their chances of successful trades.
Education
by FrankFx14
ORDER BLOCK CONFIMATION ENTRYOrder block confirmation is a concept used in technical analysis, particularly in the context of trading financial markets like forex, stocks, and cryptocurrencies. An order block is a significant price level where institutional traders have placed large orders, resulting in a concentration of buying or selling activity. Identifying and confirming these order blocks can help traders understand potential future price movements. ### Key Elements of Order Block Confirmation: 1. **Identification of Order Blocks:** - **Bullish Order Blocks:** These occur when price action suggests strong buying interest. Typically, they are identified after a downtrend when a large bullish candlestick or a series of bullish candlesticks emerge, signaling strong buying pressure. - **Bearish Order Blocks:** These are identified after an uptrend, marked by a large bearish candlestick or a series of bearish candlesticks, indicating strong selling pressure. 2. **Market Structure Analysis:** - **Trend Analysis:** Determine the prevailing trend to contextualize the order block. In an uptrend, look for bullish order blocks; in a downtrend, look for bearish order blocks. - **Support and Resistance Levels:** Order blocks often align with key support and resistance levels. Confirming these levels adds to the validity of the order block. 3. **Volume Analysis:** - High trading volume at the order block can confirm the presence of institutional activity. Spikes in volume during the formation of the order block signal strong interest from large market participants. 4. **Price Action Confirmation:** - **Engulfing Patterns:** A bullish or bearish engulfing pattern near the order block can confirm its validity. - **Rejection Candlesticks:** Pin bars, hammers, or shooting stars at the order block level indicate strong rejection, confirming the order block. - **Break and Retest:** Price breaking through the order block and then retesting it can serve as a confirmation. For a bullish order block, the price should break above and then retest the order block as support. For a bearish order block, the price should break below and then retest it as resistance. 5. **Indicator Confirmation:** - **Relative Strength Index (RSI):** An overbought or oversold RSI at the order block can provide additional confirmation. - **Moving Averages:** Crossovers or bounces off moving averages near the order block can corroborate the signal. 6. **Confluence Factors:** - The more factors aligning with the order block (e.g., Fibonacci levels, pivot points, trend lines), the stronger the confirmation. ### Practical Steps for Traders: 1. **Identify Potential Order Blocks:** - Look for significant price movements and areas where the price has previously shown strong support or resistance. 2. **Wait for Confirmation:** - Use price action, volume spikes, and technical indicators to confirm the validity of the order block. 3. **Plan Your Trade:** - Once confirmed, use the order block as an entry point, setting stop-loss orders below the block for bullish trades or above the block for bearish trades. 4. **Monitor and Manage:** - Keep an eye on market conditions and be prepared to adjust your strategy if the order block is invalidated by new price action. By carefully identifying and confirming order blocks, traders can gain insights into potential areas of strong market activity and make more informed trading decisions.
Education
by FrankFx14
Order Block ICT (Inner Circle Trader) for Beginners Order block trading is a method championed by the Inner Circle Trader (ICT), a well-known figure in the forex trading community. ICT's approach to order blocks is grounded in understanding market mechanics and the behavior of institutional traders. For beginners, grasping this concept can provide a powerful edge in trading by revealing areas of potential price reversals and continuations. ### What is an Order Block in ICT? An order block, according to ICT, is a price range where significant buy or sell orders from institutional traders have been placed. These blocks represent zones of high interest for major market participants and can serve as indicators of future price movements. Recognizing these zones can help traders anticipate where the market is likely to react. ### Key Characteristics of ICT Order Blocks 1. **Institutional Footprints**: Order blocks indicate the presence of large financial institutions in the market. They reveal where these entities have placed their orders, suggesting potential areas of strong support or resistance. 2. **Price Consolidation and Expansion**: Order blocks are often found in areas where the price has consolidated before a significant move. This consolidation is followed by an expansion, which confirms the presence of large orders. 3. **Market Structure**: Order blocks are integral to understanding market structure. They often align with swing highs and lows, forming critical points in price action analysis. ### Steps to Identify ICT Order Blocks 1. **Identify Swing Points**: Begin by marking significant swing highs and lows on the chart. These are potential areas where order blocks may form. 2. **Spot Consolidation Zones**: Look for areas where the price moves sideways, indicating accumulation of orders by institutional players. 3. **Observe Breakouts**: After consolidation, identify strong bullish or bearish candles that break out of the range, signaling the presence of an order block. 4. **Mark the Order Block**: Draw the order block by marking the high and low of the consolidation area, extending this zone into the future to identify potential trade setups. ### Trading with ICT Order Blocks 1. **Entry Points**: Wait for the price to return to the order block. Look for confirmation signals such as reversal patterns or volume spikes to time your entry. 2. **Stop Loss**: Place your stop loss just outside the order block to minimize risk in case of false breakouts. 3. **Take Profit**: Set your take profit levels based on nearby support or resistance levels, or use a predetermined risk-reward ratio. ### Benefits of ICT Order Block Trading - **Alignment with Institutional Activity**: By focusing on order blocks, traders can align their strategies with the actions of large market participants, potentially increasing the accuracy of their trades. - **Defined Risk Management**: Order blocks provide clear areas for placing stop losses and take profits, enhancing risk management. - **Enhanced Market Insight**: Understanding order blocks helps traders gain deeper insights into market dynamics and price behavior. ### Challenges for Beginners - **Learning Curve**: Identifying and correctly interpreting order blocks requires practice and experience. Beginners may find it challenging to accurately spot and draw these zones. - **Market Variability**: The effectiveness of order blocks can vary with different market conditions. Knowing when and how to apply them is crucial for success. ### Tips for Beginners 1. **Practice on a Demo Account**: Start by practicing on a demo account to build confidence and refine your skills without risking real money. 2. **Use Multiple Timeframes**: Analyze order blocks on higher timeframes for a broader market perspective and on lower timeframes for precise entry and exit points. 3. **Combine with Other Tools**: Enhance your analysis by using order blocks alongside other technical tools like trend lines, moving averages, and indicators to confirm trade setups. Order block trading, as taught by the Inner Circle Trader (ICT), offers a structured approach to understanding and navigating the forex market. By learning to identify and trade order blocks, beginners can improve their ability to anticipate market movements and make more informed trading decisions. With practice and careful analysis, ICT order block trading can become a valuable part of a trader's strategy.
Education
by FrankFx14
An idea for you tradesHello Everyone I want to say something that might be your strategy or you may criticize me about that but I am sure whoever disagrees with me about it is struggling to get profit in his account. Note: Always and always trade in a chart that is in a weekly trend. I man it does not matter what timeframe you are trading and with what method, it is incredibly vital that chose a trend (Bullish for long positions and Bearish for short positions) and never and ever try to trap yourself in a chart that is ranging in WEKLY TIMEFRAME. There are many reasons for that and I have paid a lot of money to learn it. The first reason is a lot of support/resistance level existing in this area that try to hit your Stops. Second reason is that we should follow the wales in every market and big whales do not waste their time and money for trading in this long term consolidations. Oil is a good example for now and I just want to say, these symbols are not ours and we should chose more profitable ones. This is the most reason that all charts do not move together and liquidity shifts between them. Thanks
TVC:UKOILEducation
by AMA_FX
3
Exploring Ilian Yotov's Quarter Point Theory: Refine Your Entry The quarters theory challenges the notion that financial markets are chaotic and that market prices are random by demonstrating constant orderly movement of price from one Quarter point to the next. In this publication, I will delve into the fundamentals of Yotov's Quarter Point Theory, its significance, and how it can be applied effectively in forex trading. What is Quarter Point Theory by Ilian Yotov? Ilian Yotov's Quarter Point Theory is a technical analysis strategy used in forex trading to identify potential entry and exit points. The theory is based on the observation that currency prices tend to gravitate towards specific levels known as "quarter points," which are key psychological and technical levels in the market. Key Concepts of Quarter Point Theory • Quarter Points: These are price levels that divide a currency pair's price range into four equal parts. For example, if a currency pair is trading between 1.2000 and 1.3000, the quarter points would be 1.2250, 1.2500, and 1.2750. • Psychological Levels: Quarter points often act as psychological barriers where traders tend to place buy or sell orders, causing price reactions at these levels. • Support and Resistance: Quarter points can act as support and resistance levels, where prices may consolidate, reverse, or experience significant movement. Identifying Quarter Points To apply Quarter Point Theory, traders need to identify the high and low of a currency pair's price range. These values are then divided into quarters to determine the quarter points. The quarters theory focuses on the 1000 pip range between major whole numbers in currency exchange. Each 1000 pip range can be divided into 4 equal parts called Large Quarters Each Large quarter has exactly 250 pips (1000/4 =250). A Large Quarter Point (LQP) is a price that marks the beginning and the end of each Large Quarter (250 pips range). Large Quarter Points that coincide with Major whole numbers are called Major Large Quarter Points (MLQP). MLQP signals the end of a 1000 PIP range and the beginning of a new 1000 pip range. A Major Small Quarter point is simple the number that coincides with a whole number, for example, 1.30, 1.31, 1.32, 1.33, 1.34…. Each of these numbers mark the beginning of a 100 pip range. Here is an illustration of this: Using Quarter Points in Forex When you study price around this theory, you may notice that price has a tendency to print the high of the day or low of the day around quarter point levels. Here is a example of this over a 5 day period on EURUSD: With this new-found knowledge, you could integrate this into your strategy. Once you have a directional bias for the day and you have an AOI for entry, you simply need to identify the quarter point within that range and anticipate a reaction at that level. For a deeper dive into this theory, I highly recommend reading the original work by Ilian Yotov's. If you would like a free pdf copy, drop me a message or leave a comment, I'd be happy to share this with you. Happy Trading
Education
by Pips4Breakfastx
Options Blueprint Series: Backspreads as a Portfolio Hedge1. Introduction Backspreads are a versatile options strategy as they allow traders to benefit from significant moves in the underlying asset, particularly when there is an expectation of increased volatility. 2. Understanding Backspreads A backspread is an advanced options strategy involving the sale of a small number of options and the purchase of a larger number of out-of-the-money options. This setup creates a position that benefits from large price movements in the underlying asset. 3. Generic Uses of Backspreads Backspreads offer traders a flexible tool to capitalize on significant price movements and shifts in market volatility. Here are some common uses: Market Sentiment Alignment: Bullish Sentiment (Call Backspreads): Traders use call backspreads when they expect a significant upward move. This strategy involves selling a smaller number of lower-strike call options and buying a larger number of higher-strike call options. Bearish Sentiment (Put Backspreads): Conversely, put backspreads are used when traders anticipate a significant downward move. This involves selling a smaller number of higher-strike put options and buying a larger number of lower-strike put options. Volatility Trading: Backspreads are particularly useful in trading volatility. They create positions with positive Vega, meaning they benefit from increases in implied volatility. This makes backspreads an excellent choice during times of market uncertainty or expected volatility spikes. 4. Hedging an Equity Portfolio using with S&P 500 Futures Put Backspreads Put backspreads offer an effective way to hedge a long equity portfolio against sharp downward moves. By setting up a put backspread, traders can create a position that not only provides downside protection but also benefits from increased market volatility. Setting Up a Put Backspread for Hedging: Sell 1 OTM Put: The initial step involves selling one out-of-the-money (OTM) put option. This option will generate a premium, which can be used to offset the cost of the puts that will be purchased. Buy 2 Lower OTM Puts: Next, purchase two lower OTM put options. These options will provide the necessary downside protection. Depending on the strike selected, the cost of these puts will be fully or partially covered by the premium received from selling the higher-strike put. Constructing a Positive Vega Position: The structure of the put backspread results in a position with positive Vega. This characteristic is particularly valuable as volatility typically rises during periods of sharp declines. Risk Profile: Below is the risk profile of a put backspread used for hedging purposes as described in section #6 below. 5. Market Scenarios Understanding how a put backspread behaves under different market scenarios is crucial for effective trade management and risk mitigation. Here, we explore the potential outcomes: Market Moving Up or Staying the Same: Flat P&L If the market moves up or remains around the current level, the put backspread will likely expire worthless. Market Moving Down Sharply: Increased Profitability If the market experiences a sharp decline, the put backspread would potentially become profitable. Impact of Increased Volatility: Enhanced Gains A rise in implied volatility benefits the put backspread as higher volatility increases the value of the bought puts more than the sold put, adding to the overall profitability of the strategy. Maximum Risk and Trade Management: Maximum Risk: Limited to the difference between the strike prices minus the net credit received (or plus the net debit paid). Trade Management: It is essential to actively manage the position. 6. Trade Example To illustrate the application of a put backspread as a hedge, let's consider a detailed trade example using S&P 500 Futures Options. Trade Rationale: Current Market Condition: The S&P 500 Futures have just created a new all-time high, indicating that the market is at a crucial juncture. From this point, the market could either continue its upward trajectory or experience a severe change of direction. Implied Volatility (VIX): The VIX, which measures the implied volatility of options, is currently very low at 11.99. This low volatility environment makes it an ideal time to enter a backspread, as any future increase in volatility will significantly benefit the position. Trade Setup: Underlying Asset: S&P 500 Futures Current Price: 5447 Strategy: Put Backspread Expiration Date: December 2024 Specifics: Sell 1 OTM Put: Sell 1 4600 put option Buy 2 Lower OTM Puts: Buy 2 4100 put options Entry Price: Sell 1 4600 Put: Receive $2,160 premium per contract (43.2 points) Buy 2 4100 Puts: Pay $1,068.5 premium each; total $2,137 for two contracts (21.37 points x 2) Net Cost: The net cost of the backspread is the premium paid for the bought puts minus the premium received from the sold put. Net Cost: $2,137 (paid) - $2,160 (received) = $23 net credit As seen below, we are using the CME Group Options Calculator in order to generate fair value prices and Greeks for any options on futures contracts. Maximum Risk: 500 – 0.46 = 499.54 points (distance between strike prices minus the net credit received). 7. Importance of Risk Management Risk management is a fundamental aspect of successful trading and investing. It involves identifying, analyzing, and mitigating potential risks to protect capital and maximize returns. When implementing a put backspread as a portfolio hedge, understanding and applying robust risk management practices is crucial. Using Stop Loss Orders and Hedging Techniques: Stop Loss Orders: Placing stop loss orders helps limit potential losses by automatically closing a position when the market reaches a certain price level. This ensures that losses do not exceed a predetermined amount, providing a safety net against adverse market movements. Hedging Techniques: Utilizing hedging strategies, such as combining put backspreads with other options or futures contracts, can provide additional layers of protection. This approach can help manage risk more effectively by diversifying exposure and reducing the impact of unfavorable market conditions. Importance of Avoiding Undefined Risk Exposure: Defined Risk Strategies: Employing strategies with clearly defined risk parameters, such as put backspreads, ensures that potential losses are limited and known in advance. This contrasts with strategies that expose traders to unlimited risk, which can lead to catastrophic losses. Position Sizing: Properly sizing positions based on risk tolerance and account size is essential. This involves calculating the maximum potential loss and ensuring it aligns with the trader's risk management plan. Precise Entries and Exits: Entry Points: Entering trades at optimal levels, based on technical analysis, support and resistance and UFO levels, and market conditions, enhances the probability of success. In the case of put backspreads, entering when volatility is low and market conditions are favorable increases the potential for profitability. Exit Points: Setting clear exit points, including profit targets and stop loss levels, helps manage risk and lock in gains. Regularly reviewing and adjusting these levels based on market developments ensures that positions remain aligned with the trader's overall strategy. Continuous Monitoring and Adjustment: Regular Review: Continuously monitoring market conditions, position performance, and risk parameters is essential for effective risk management. This involves staying informed about economic events, market trends, and changes in volatility. Adjustments: Making timely adjustments to positions, such as rolling options, adjusting stop loss levels, or hedging with additional instruments, helps manage risk dynamically and adapt to changing market conditions. By incorporating these risk management practices, traders can effectively use put backspreads to hedge their portfolios and protect against significant market downturns. 8. Conclusion In summary, put backspreads offer a powerful tool for hedging long equity portfolios, especially in low volatility environments and/or when markets are at all-time highs. By understanding the mechanics of put backspreads, their application in various market scenarios, and the importance of active risk management, traders can enhance their ability to protect their investments and capitalize on market opportunities. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME_MINI:ES1!Education
by traddictiv
Brilliant Basics - Part 1: Trendlines"Champions are brilliant at the basics." - John Robert Wooden, legendary basketball coach. In trading, just like in sports, mastering the fundamentals forms the foundations for exceptional performance. Welcome to the first part of our educational series, Brilliant Basics . In this series, we'll explore how mastering the fundamentals lays the groundwork for achieving high-level performance in trading. Today, we focus on trendlines, a crucial tool for any trader aiming to understand market momentum. Simple Elegance Trendlines are so simple in their design that their importance can often be dismissed. A child could map the swings of a market and tell you whether the line was upward or downward sloping. Yet, this simplicity is precisely what gives trendlines their potency. Past performance is not a reliable indicator of future results The elegance of trendlines lies in their ability to distil market movements into an easily interpretable format. This simplicity does not mean they lack depth; rather, it means they are accessible to all traders, regardless of experience level. Here’s why their simplicity is so important: Clarity in Chaos: Markets can be noisy and unpredictable, but trendlines help to bring order to this chaos. If drawn correctly, they provide a clear visual representation of the market’s overall direction and volatility. Universal Application: Trendlines can be applied to any market, on any timeframe. Whether you are trading stocks, commodities, or forex, trendlines work the same way, making them a universal tool in a trader's toolkit. Consistent Feedback: Trendlines offer immediate visual feedback on price action. If a trendline is respected by the market, it reinforces your analysis. If it is broken, it signals a potential change in momentum or trend. How to Draw Trendlines Correctly Drawing trendlines might seem straightforward, but there are specific guidelines to ensure they are both accurate and useful: 1. Identify Swings: Begin by identifying the swing highs and swing lows on your chart. For an uptrend line, connect at least two higher lows. For a downtrend line, connect at least two lower highs. Ensure these points are significant swings and not minor fluctuations. Past performance is not a reliable indicator of future results 2. Avoid Cutting Prices: A trendline should not intersect any price action between the points it connects. Drawing a trendline that cuts through price bars undermines its validity and the potential insights it can offer. The line should clearly touch the chosen swing points without cutting through the price action in between. Draw multiple high quality trendlines rather than a ‘line of best fit’. Past performance is not a reliable indicator of future results 3. Consistency: Maintain a consistent approach when drawing trendlines. Use the same criteria for identifying swing points and avoid forcing a trendline to fit the data. This consistency helps in making objective and reliable trading decisions. Trendline Fans and Their Insights A single trendline can offer valuable insights, but using multiple trendlines—forming a trendline fan—can provide a deeper understanding of market momentum and potential changes in trend. Rising Momentum: In an uptrend, if the subsequent trendlines are steeper, it indicates increasing momentum. Each steeper line shows that buyers are stepping in more aggressively. However, should trendlines increase in steepness exponentially this leaves the trend vulnerable to exhaustion. Past performance is not a reliable indicator of future results Ebbing Momentum: Conversely, if the subsequent trendlines in an uptrend are less steep, it indicates decreasing momentum. This situation suggests that while prices are still rising, the strength of the upward movement is waning. Past performance is not a reliable indicator of future results Practical Applications Understanding the simplicity of trendlines enhances their practical application in trading. Here’s how you can leverage their elegance: Momentum Assessment: As we’ve seen with the trendline fans, the steepness of a trendline or progressive steepness of a trendline fan can give a valuable real-time insight into market momentum. Support and Resistance: Trendlines act as dynamic support and resistance levels. In an uptrend, the trendline or trendline fan serves as a support levels where price may bounce back up upon testing. In a downtrend, the trendline acts as resistance, where price might reverse downward upon touching. Past performance is not a reliable indicator of future results Entry Signals: Trendline breaks can serve as entry signals, especially when used on multiple timeframes. A break above a downtrend line on a lower timeframe, in-line with a bigger picture uptrend could create an attractive buying opportunity. The inverse is true with a break below an ascending trendline on a lower timeframe. Past performance is not a reliable indicator of future results Exit Signals: Trendline breaks can serve as exit signals. A break below an uptrend line or multiple uptrend lines in a trendline fan might indicate a potential reversal and an exit point. Past performance is not a reliable indicator of future results Summary: The simple elegance of trendlines makes them an indispensable tool in technical analysis. Their straightforward nature belies the depth of information they can provide, making them accessible yet useful. By mastering the basics of drawing and interpreting trendlines, traders can gain a clearer understanding of market trends and make more informed trading decisions. As we continue our Brilliant Basics series, stay tuned for Part 2, where we will explore support and resistance levels. Understanding this fundamental concept will further enhance your ability to identify potential reversal zones. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.84% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Editors' picks
CAPITALCOM:GOLDEducation
by Capitalcom
5
How To Grow A Forex or Crypto Acc Scalping A 5m Time FrameIn this video, we delve into a high-probability scalping strategy, building upon the concepts introduced in our previous videos on developing a trading plan and risk management. This third installment in the series focuses on refining entry points for high-probability trades. We explore a basic trend continuation strategy on the 4-hour time frame, then zoom in on the 5-minute time frame to identify specific price action that provides a precise entry point. Our approach involves identifying when price action begins to trade sideways, forming a range on the 5m time frame, and waiting for signs of volatility, where price takes out stop losses above or below the range. Once this occurs, the trend typically sets up on the lower time frame, allowing us to enter our trade on the 5-minute chart. We always place stops above or below the previous high, targeting the previous price swing. Please note that this video is for educational purposes only and should not be construed as financial advice.
Editors' picks
Education
by tradingwithanthony
10
How To Scalp or Day Trade XAUUSD. Scalping Strategy 15m. In this video, we explore a high-probability scalping and/or day trading strategy for XAUUSD (Gold), building upon concepts introduced in our previous videos about trading plan development and risk management. This installment focuses on refining entry points for high-probability trades. Initially, we analyze a basic trend continuation strategy on the 4-hour time frame. Subsequently, we zoom in on the 15-minute time frame to pinpoint specific price action that offers precise entry opportunities. Our approach involves identifying sideways price action, forming a range, and patiently waiting for signs of volatility. Once liquidity is hit above or below the range, the trend often establishes itself on the lower time frame, allowing us to execute trades on the 15-minute chart. As always, please note that this video serves an educational purpose and should not be considered financial advice.” 🚀📊
FOREXCOM:XAUUSDEducation
by tradingwithanthony
How to Confirm an Elliott Wave Count.Hello fellow traders, today I would like to show you how to apply a Kennedy Channeling technique (by Jeffrey Kennedy) to identify and confirm Elliott waves with more confidence. 1. Base Channel:- Wave 3 identification When wave 2 is complete, connect the origin of wave 1 and the end of wave 2. Draw a parallel line along the top of wave 1. As long as price action stays within this channel, you can consider price action corrective, probably wave C of a Zigzag. In a bullish trend, prices ought to break above the upper boundary line of this channel for wave 3 count to be acceptable. 2. Acceleration Channel:-Wave 4 identification. Connect the extreme of wave 1 and the top of wave 3. Draw a parallel line starting at the bottom of wave 2. Only after prices break through the lower boundary line of the acceleration channel, could you be convinced that wave 3 is over and wave 4 is unfolding. 3. Final Channel:- Wave 5 identification Connect the end of waves 2 and 4. Draw a parallel line along the top of wave 3 to project wave 5 target. It is quite common for wave 5 to terminate upon reaching the upper trendline of the final channel. That's all for today. Trade wisely!
Education
by Aquanet_Market_Forecast
▶️▶️▶️ What is Wyckoff method? ◀️◀️◀️▶️▶️▶️ What is Wyckoff method? ◀️◀️◀️ This trading method was developed by Richard Wyckoff in the early 1930s. It consists with series of principles and strategies originally designed for traders and investors. Wyckoff devoted much of his life experience for studying market behavior, and his work still influences much of modern technical analysis (TA). Currently, the Wyckoff method is applied to all types of financial markets, although initially it was focused only on stocks. Richard has conducted a large amount of research that has led to the creation of several theories and methods of trading. This article provides an overview of his work and includes three fundamental laws. ✔️ Three Laws of Wyckoff ✔️ 1️⃣ Law of supply and demand The first law states, that the value of assets start rising when demand exceeds supply, and accordingly falls in the opposite direction. That's one of the most basic principles in the financial markets, that Wyckoff doesn't rule out in his writings. We can represent the first law as three simple equations: 📍 Demand > Supply = price Max; 📍 Demand < supply = price falls; 📍 Demand = supply = no significant price change (low volatility). In other words, Wyckoff's first law suggests, that an excess of demand over supply causes prices to rise because there are more buyers than sellers. But in a situation where there are more sales than buyers, and supply exceeds demand, it indicates a further drop in value. 2️⃣ Law of Cause and Effect The second law states, that the differences between supply and demand are not a coincidence. Instead, they reflect preparatory actions resulting from certain events. In Wyckoff's terminology, an accumulation period (cause) eventually leads to an uptrend (effect). In turn, the distribution period (cause) provokes the development of a downtrend (consequence). 3️⃣ The law of connection between efforts and results Wyckoff's third law states, that changes in price are the result of a collective effort that's reflected in trading volume. In the case when the growth in the value of an asset corresponds to a high trading volume, there is a high probability that the trend will continue its movement. But if the volumes are too small at a high price, the growth is likely to stop and the trend may change its direction. ❗️❗️❗️ For example, let's imagine that the Bitcoin market starts consolidating with very high volume after a long bearish trend. High trading volumes indicate great effort, but sideways movement (low volatility) suggests little result. If a large amount of bitcoin changes hands and the price does not fall significantly, this may indicate that the downtrend may be ending and there will be a reversal soon. You can find more my educational posts by hashtag #rocketbombeducational (You can click it under the pic of this post) Thanks for your attention I'll be glad to see your feedback Sincerely yours Kateryna💙💛
Editors' picks
BITSTAMP:BTCUSDEducation
by RocketBomb
42
Trade identification: Using bitcoin as an exampleHello, Trade identification is the process through which you are able to identify setups that can be actioned on in the markets. For this example, I shall be using the BTCUSD chart to chant my path as I look for tradeable setups. 1: Structure drawing Identifying the structure of trades is very key since it creates a sense of knowing where the market is at from a greater point of view. The structure on a 2 weeks chart shows that the crypto is at the top of the chart. This shows that it might not be a good time to buy since it is advisable to buy at the bottom and sell at the top. However, we can always look for smaller trades using lower timeframes and get better setups. 2: Move to lower time frames & identify patterns. Patterns are very key in helping you identify tradeable assets. For my asset I moved to the 6h timeframe to zone in and identify tradeable opportunities. This helped me identify the Expanding triangle setup on a bigger scale. This is a sideways move that will help me trade on the asset for the short term. In the expanding triangle I was able to identify other smaller correction patterns that guide me on how the market is moving. 3: Entry identification After you have determined where you are at in the eco cycle, very key is now to identify the next causes of action. You must never trade at the top (buying overpriced assets). Very important is to always note that there will always be more opportunities in the future and never to chase trades that have already gone. The ideal situation is to look for corrections as entry points and buy/sell with them. Next now will be to look for areas where you can enter on an even lower timeframe. The chart shows that a correction is happening on a lower timeframe (1hour). Now have an alert at the bottom of the correction also coupled with indicators. Thats the entry point of the trade. 4: Target setting The exit target shall be set using the 6 hour chart and will be at the top. A stop loss will be just behind the trendline as shown below. This is very key for risk management. Now wait for the price to come close to your entry points and good luck. We shall follow this trade to end.
Editors' picks
COINBASE:BTCUSDEducation
by thesharkke
28
Advanced Trading Strategies Using Multiple IndicatorsTechnical Analysis Report: Advanced Trading Strategies Using Multiple Indicators Introduction: In this educational video, a comprehensive approach to technical analysis is presented, focusing on the identification of trend reversals and entry points in the market. The strategy incorporates a diverse set of indicators and concepts to enhance trading precision and decision-making. Key Components: 1. Indicators Utilized: - Fibonacci Retracement (Fibonacci) - Average True Range (ATR) - Cumulative Volume Delta - Smart Money Concepts - Relative Strength Index (RSI) - Trailing Stop Loss ATR - Ichimoku Kinko Hyo (Ichimoku) 2. Objective: The primary goal of the strategy is to pinpoint the transition from a downtrend to an uptrend, facilitating well-timed trading decisions. By combining various technical tools, traders aim to increase the probability of successful trades. 3. Trading Philosophy: - The emphasis on Ichimoku Kinko Hyo as a foundational element underscores the strategy's commitment to deriving signals from this powerful indicator. - The reference to being an "Ichimokian" reflects a dedication to mastering Ichimoku strategies and principles in trading practices. Conclusion: By integrating a spectrum of indicators such as Fibonacci, ATR, volume analysis, RSI, and Ichimoku, traders following this methodology can gain a more holistic view of market dynamics. The utilization of these tools in conjunction with each other enhances the ability to identify optimal entry and exit points, laying a strong foundation for informed and strategic trading decisions. This video encapsulates the essence of the educational content, offering insights into the advanced technical analysis approach advocated by the "ICHIMOKUontheNILE" community.
EGX:PHDCEducation
by ICHIMOKUontheNILE