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Trading NZDUSD | Judas Swing Strategy 28/10/2024 Last week highlighted the importance of a risk management plan for all traders using the Judas swing strategy as a case study. The strategy produced two trades on FX:GBPUSD and one on $EURUSD. Despite facing two losses and securing only one win, proper risk management ensured that the single win offset the losses, allowing us to end the week at breakeven. With these results in hand, we were excited to see what the upcoming week would bring. We got to our trading desk at 8:25EST and started our day by demarcating our trading zones. Once we have demarcated our zones, we wait for the high or low of this zone to be swept, as this will assist us in determining our bias for the trading session. After 35 minutes, the high of the zone was swept, indicating that we should look for potential selling opportunities during this trading session. Next on our checklist is to wait for a Break of Structure (BOS) on the sell side. After an hour, we observed a BOS on the sell side, which resulted in a Fair Value Gap (FVG) being formed in the process We must wait for the price to retrace back into the Fair Value Gap (FVG). A trade can only be initiated once price has entered the FVG, and it is crucial to be patient and wait for the price to close before executing any trades. This waiting period acts as a filter to avoid scenarios where the candle entering the FVG proceeds to hit our stop-loss. The next five-minute candle entered the Fair Value Gap and closed, indicating that we can proceed with executing the trade The position experienced a drawdown shortly after the trade was executed, but this did not concern us as we had only risked 1% of our trading account, targeting a 2% gain. Additionally, we implemented a minimum 10 pip stop loss to allow the trade sufficient space to fluctuate without prematurely stopping us out and then proceeding in our anticipated direction. Upon checking the position later, we found it had shifted in our favor. However, we needed to remain composed since it had not yet reached our ultimate target. Our task was simply to be patient and wait for our targets to be achieved Upon reevaluating the position, we noticed that price had returned to the entry point. At such moments, individuals who have risked more than they can afford may start to panic. That's why we continually stress the importance of only risking what you can afford to lose, as it greatly diminishes the emotional investment in trades. We have encountered situations like this before and will likely face them again. However, what remains within our control is the decision to risk only an amount we are comfortable with losing, which in turn lessens the emotional attachment to the trades. According to our data, we can anticipate being in a position for an average of 11 hours, so the duration of this trade meeting our objective is not a concern we simply need to remain patient for it to occur. After 13 hours and 25 minutes, our patience was rewarded when our Take Profit (TP) was reached, resulting in a 2% gain on the OANDA:NZDUSD trade
Education
by CleoFinance
What Is a Parabolic Arc Pattern, and How Can You Trade It?What Is a Parabolic Arc Pattern, and How Can You Trade It? The parabolic arc pattern is a significant formation in technical analysis, showcasing rapid, exponential price movements that signal significant bullish momentum followed by sharp reversals. This article delves into identifying, trading, and managing the risks associated with parabolic arcs. Understanding the Parabolic Arc Pattern The parabolic arc or parabolic curve is a technical chart pattern that signals a potential reversal. It is characterised by a steep, exponential rise in asset prices, followed by a sharp decline. Characteristics of the Parabolic Arc Pattern - Gradual Start: Initially, prices rise slowly and steadily. - Acceleration Phase: The price movement becomes more rapid, often driven by increasing speculation and market excitement. - Exhaustion Phase: Prices reach a peak where the upward momentum cannot be maintained, leading to a sharp downturn. This pattern can be seen across various markets, including stocks, forex, cryptocurrencies*, and commodities. It often occurs during speculative bubbles when market sentiment becomes overly optimistic. The pattern's unique shape makes it identifiable, but it requires careful analysis to distinguish it from other formations. The parabolic arc chart pattern has been observed in numerous historical market events. Notable examples include the dot-com bubble of the late 1990s and the Bitcoin surge in 2017. However, they can occur across all timeframes. If you find a parabolic curve on a low timeframe, it may look like a long bullish candle, typically closing near the highs, on a higher timeframe. The parabolic arc trading pattern is unique in that, unlike the head and shoulders or double top patterns, which have more symmetrical and predictable formations, the parabolic arc is asymmetrical with a steeper rise and a sudden drop. This distinct shape can offer valuable insights into market psychology and potential future movements. To identify your own parabolic arc chart patterns, head over to FXOpen’s free TickTrader platform to explore a wide range of markets and trading tools. The Psychology Behind the Parabolic Arc Pattern The parabolic arc pattern is heavily influenced by market psychology, primarily driven by two emotional extremes: greed and fear. In the initial stages of the pattern, optimism and speculation dominate, causing prices to rise rapidly. This is often fueled by Fear of Missing Out (FOMO), where traders rush to buy, believing the price will continue to soar indefinitely. As prices climb steeply, the psychological effect intensifies, leading to more aggressive buying. This phase is characterised by euphoria, where rational analysis takes a back seat to the prevailing bullish sentiment. Investors and traders, seeing rapid gains, are convinced the rally is unbreakable, which propels prices even higher. Along the way, some traders will begin to take potential returns while others will enter short positions. This creates pullbacks or ranges within the bullish trend, sometimes called ‘bases,’ that move in a stair-stepping fashion. Generally speaking, there are often three or four bases in a parabolic trend, though there can be fewer or more. The break in the uptrend often prompts a new wave of euphoric buying, leading to another surge higher. However, this fast growth is unsustainable. Eventually, it reaches a tipping point where the exhaustion phase kicks in as early investors start to take potential returns, leading to a shift in sentiment. Fear sets in as prices begin to reverse sharply. The same emotional drivers that fueled the ascent—greed and FOMO—now contribute to panic selling and rapid price declines. In the same way a positive feedback loop drives euphoric buying, this negative feedback loop can cause traders to scramble for the exit door and prompt a sharp reversal almost as steep or steeper as the initial ascent. Identifying the Parabolic Arc Pattern Identifying the parabolic arc pattern in trading involves recognising a distinct, exponentially rising price trajectory. This pattern typically follows a period of sideways accumulation, where prices move horizontally with minimal fluctuation. The transition from this phase to a parabolic rise marks the start of the pattern. Key Characteristics A curved line can be drawn connecting the successive higher lows of the price action. This line's slope increases at an almost exponential rate, visually representing the accelerating price movement. The steepening of this curve is a hallmark of the parabolic arc, indicating increasing buying momentum. Volume Analysis Volume can play a critical role in identifying and confirming the parabolic arc pattern. As prices begin their rapid ascent, trading volume often surges, reflecting heightened market interest and speculative buying. The constant increase in volume is crucial for validating the strength and sustainability of the pattern. A significant rise in volume during the parabolic phase suggests strong participation from traders, further driving prices upward. Technical Indicators The Parabolic SAR indicator is a valuable tool for identifying parabolic arc patterns. This indicator places dots above or below the price, signalling potential reversal points. During a parabolic rise, the Parabolic SAR dots will trail below the price, confirming the uptrend. While short-term corrections in the parabolic ascent will plot dots above the price, there will typically be fewer dots vs those below the price. As the pattern approaches its peak and the price movement starts to decelerate, dots will also begin to appear above the price, indicating a potential correction. However, while there may have been only a few dots above the price during the parabolic movement, there will likely be a greater number of dots above the price as the trend begins to cool, as seen in the chart above. It’s important to note that this can be a visual cue that the parabolic trend is ending, but the lagging nature of the Parabolic SAR indicator means that it comes with a significant delay. It’s best used as confirmation of a parabolic trend or reversal rather than a sole indicator of a parabolic ascent. Trading the Parabolic Curve Chart Pattern The parabolic curve chart pattern is a powerful yet risky formation. As buyers are in complete control, leading to a strong bullish trend, it’s unclear when the trend reverses as traditional momentum indicators like RSI can indicate overbought conditions, often giving false signals. A parabolic curve trading strategy involves two main focal points: buying the uptrend and shorting the reversal. Buying the Uptrend Trading the uptrend of a parabolic arc can be highly rewarding, but it's also fraught with risk. The bullish trend is strong, and buyers dominate the market, making it challenging to determine an optimal entry point. Therefore, traders often use shorter timeframes. Typically, the risk-reward payoff might not be favourable as traders are effectively buying high with the aim of selling higher. According to the theory, it’s best to avoid entering trades when the ascent is near vertical due to the high probability of a sharp reversal. This is a shorter timeframe of the Carvana stock. Early Entry Points Traders often look to get involved in the early stages of the parabolic arc, typically after a breakout from a sideways accumulation phase. During this phase, the price may follow a stair-stepping pattern, making it more probable the uptrend will continue. Waiting for a Pullback Another strategy involves waiting for a pullback in the strong trend. Traders might look for such signals as the price reaching a previous resistance point that now acts as support or the RSI on a lower timeframe showing oversold conditions. Setting a buy stop at the high of the pullback with a stop loss below the low allows traders to participate in the breakout and subsequent legs higher. Taking Profits Taking profits during a parabolic arc can be challenging. Traders could scale out, closing portions of their position at set intervals or risk-reward ratios. Another method is using significant resistance areas or round numbers as targets. Additionally, trailing a stop below the lows that form along the way can help in capturing gains while potentially protecting against a sudden reversal​. Shorting the Reversal Shorting a parabolic arc requires waiting for clear signs that the trend is reversing. This approach can be more effective but also demands precision and patience. Identifying Reversal Signals Key signals for a trend reversal include the price beginning to move near-vertically before closing below the parabolic curve trendline. Other indicators are long bearish wicks, gaps down (mostly in the case of a parabolic stock pattern), and lower lows being created. Monitoring market sentiment can also provide clues; for instance, Alternative.me’s crypto* fear and greed index and CNN's stock fear and greed index can indicate an impending reversal in these assets when they show extreme greed. However, a close outside the curve’s trendline is ultimately seen as the key signal. Once traders suspect a reversal, they typically enter a short position with a market order, setting a stop loss above the recent high. Taking Profits According to theory, profit-taking strategies for short positions include targeting significant support areas that previously acted as resistance. Fibonacci retracement levels, typically the 0.382 to 0.786 levels, are commonly used for setting profit targets. Specifically, parabolic ascents usually precede a sharp reversal, meaning they often correct beyond 0.5 (i.e., a 50% correction), falling between 0.618 and 0.786. Similar to long positions, trailing the stop may help capture more of the downward move. Challenges and Risks Associated with Parabolic Curve Trading Trading parabolic curves comes with significant challenges and risks. The primary risk is the high probability of a sharp reversal, as the pattern's near-vertical ascent is unsustainable. This can lead to substantial losses if traders enter the market late or fail to manage their risk properly. Volatility Parabolic arcs are marked by extreme volatility. Rapid price increases can be followed by equally swift declines, making it difficult for traders to react timely. This volatility can lead to significant slippage, where orders are executed at prices different from those expected, especially if the catalyst is a notable news event. False Signals Indicators like the RSI, Stochastic, and MACD can signal overbought conditions prematurely. In a parabolic trend, these false signals can mislead traders into exiting positions too early or entering short trades too soon​. Psychological Factors The intense fear of missing out (FOMO) can drive irrational buying, inflating the asset price to unsustainable levels. Conversely, panic selling during the reversal can exacerbate losses. Managing emotions and maintaining discipline is crucial but challenging during such volatile phases. Risk Management Effective risk management is essential but difficult to implement in real-time. Setting appropriate stop-loss orders and profit targets can be tricky due to the rapid price movements​. However, it’s important to predetermine an exit strategy and stick to it. The Bottom Line Understanding and trading the parabolic arc can offer substantial opportunities, but this pattern also comes with significant risks. By recognising the pattern early and employing effective strategies, traders can potentially enhance their trading performance. For a reliable trading experience, consider opening an FXOpen account, where you can access advanced tools and resources to navigate the complexities of parabolic arc trading. FAQs What Is a Parabolic Arc Pattern in Trading? A parabolic arc is a chart pattern characterised by a rapid, accelerating price movement that forms a parabolic shape on a chart. This pattern typically indicates strong bullish momentum followed by a sharp reversal. The steep ascent often results from speculative buying, driven by investor enthusiasm or fear of missing out (FOMO)​. How to Trade Parabolic Arcs? Trading parabolic arcs involves two main strategies: buying the uptrend early and shorting the reversal. Traders look for early signs of the pattern forming after a sideways accumulation phase and avoid entering when the ascent is near vertical. Shorting typically occurs when clear reversal signals appear, such as a break below the parabolic trendline or significant bearish indicators. What Is a Parabolic Arc Stock Pattern? A parabolic arc stock pattern is a specific formation observed in stock charts where the stock price rises steeply, forming a parabolic shape. This pattern often results from intense speculative buying and is followed by a dramatic price correction. It's common in high-momentum stocks and reflects significant shifts in market sentiment​. How to Use Parabolic SAR in Forex Trading? The Parabolic SAR (Stop and Reverse) is used in forex trading to identify potential reversals in the market. It places dots above or below the price to signal the direction of the trend. Traders use it to set trailing stop-losses and identify entry or exit points during strong trends. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
NYSE:CVNAEducation
by FXOpen
2
8313-Rasan-Long BullishBuy-67-74.8 SL:- 65 DCB 1st Tgt-93 2Nd Tgt:99 Company posted Good result with Operating profit increase of 98% Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
8Education
by khanrashid80
BTC Dominance explained - Impact on Altcoins and Market CyclesBTC Dominance Explained 📊 – Impact on Altcoins and Market Cycles Understanding Bitcoin dominance is crucial for navigating the crypto market, especially when planning moves with altcoins. Let’s dive into this BTC.D chart to get a clearer view of what BTC dominance signals and how it can shape your portfolio strategy. The BTC Dominance Range and Altcoin Opportunities 🌐 Bitcoin dominance measures BTC’s market share relative to all cryptocurrencies. Currently, we’re moving within an upward channel, nearing a significant resistance at 59%. Historically, levels above 58% have been challenging for altcoins, as a strong BTC dominance means funds flow primarily into Bitcoin rather than altcoins. The higher this percentage, the more “BTC-centric” the market becomes. However, if BTC dominance reverses from this resistance, which the chart suggests as a possibility, it could open the door for altcoins to perform strongly. Key levels where altcoins tend to gain traction are around 54%, 50%, and ideally below 48%. Dropping to or below these levels is often where we see capital shifting into altcoins, allowing them to shine as BTC consolidates. Why BTC Dominance Matters for Ethereum and Other Alts 🚀 As noted in my recent Ethereum analysis, a breakout for ETH could coincide with a decrease in BTC dominance. Ethereum, currently flirting with a big breakout level around $2,800, could see significant upward movement if BTC dominance declines. The fundamentals of ETH are also aligning with this technical picture, setting up a favorable environment for Ethereum to absorb some of Bitcoin’s market share. How to Use BTC Dominance in Your Trading Strategy 📉 When BTC Dominance Rises: High BTC dominance typically signals caution for altcoin investors. When dominance is around 58% or higher, the market is likely to favor BTC over other coins. This is a “BTC season,” where Bitcoin absorbs most of the inflow, leaving altcoins with reduced momentum. When BTC Dominance Declines: If BTC dominance drops below 54% and further towards 50%, it becomes “altcoin season,” a period where alts, especially high-cap projects like Ethereum, tend to outperform. Watch these support zones closely; they often indicate when BTC is overextended and funds may rotate into alts. Channel Boundaries for BTC Dominance: This channel on the 8-hour BTC.D chart shows BTC dominance’s cyclical nature. Every time dominance reaches the channel’s top, altcoins often benefit if BTC reverses. Conversely, approaching the bottom of the channel can signal potential BTC strength, drawing funds away from alts. Current Market Setup: Preparing for an Altcoin Move? We’re at a tipping point, with BTC dominance testing upper resistance. Should we see a reversal, we could enter a favorable phase for alts, particularly Ethereum, which is primed for a breakout. The combination of Ethereum’s strong technical position and the possibility of BTC dominance declining is a powerful signal for the alt market. By understanding and leveraging BTC dominance in your strategy, you can more effectively time your altcoin entries and exits, aligning with macro movements rather than just isolated setups. This cycle-driven approach is essential for maximizing gains across different market phases. One Love, The FXPROFESSOR 💙
CRYPTOCAP:BTC.DEducation
by FX_Professor
5
SWING TUTORIAL - ICICIPRULIIn this tutorial, we analyze the stock NSE:ICICIPRULI (ICICI Prudential Life Insurance Company Limited) identifying a lucrative swing trading opportunity following its all-time high in Sep 2021. The stock declined by nearly 50%, forming a Lower Low Price Action Pattern, but subsequently reversed its trend. At the same time, we can also observe the MACD Level making a contradictory Pattern of Higher Lows. This Higher Low Pattern of the MACD signaled the start of a Bullish Momentum, thereby also signaling a good Buying Opportunity. The trading strategy yielded approximately 88% returns in 71 weeks. Technical analysis concepts used included price action analysis, MACD, momentum reversal, trend analysis and chart patterns. The MACD crossover served as the Entry Point, with the stock rising to its Swing High Levels of 724 and serving as our Exit too. As of wiring this tutorial, we can also notice how the stock is making a breakout and retest of the Swing High levels and trying to continue its momentum further upward trying to make a new All Time High. KEY OBSERVATIONS: 1. Momentum Reversal: The stock's price action shifted from a bearish to a bullish trend, indicating a potential reversal. 2. MACD Indicator: The Moving Average Convergence Divergence (MACD) line showed steady upward momentum, signaling increasing bullish pressure. 3. MACD Crossover: The successful crossover in March 2023 confirmed the bullish trend, creating an entry opportunity. TRADING STRATEGY AND RESULTS: 1. Entry Point: MACD crossover in March 2023. 2. Exit Point: Swing High Levels - 724. 3. Return: Approximately 88%. 4. Trade Duration: 71 weeks. TECHNICAL ANALYSIS CONCEPTS USED: 1. Price Action Analysis 2. MACD (Moving Average Convergence Divergence) 3. Momentum Reversal 4. Trend Analysis 5. Chart Patterns NOTE: This case study demonstrates the effectiveness of combining technical indicators to identify bullish momentum. By recognizing Price Action, MACD movements, and Reversal patterns, traders can pinpoint potential entry and exit points. Would you like to explore more technical analysis concepts or case studies? Share your feedback and suggestions in the comments section below.
NSE:ICICIPRULIEducation
by thepranam
My Most Used TradingView Hotkeys!Just wanted to highlight a few of my most-used TradingView hotkeys: ALT + H: Horizontal line – Ideal for marking round numbers or mark tight support/resistance areas. For broader S&R zones, I often use the rectangle tool. ALT + V: Vertical line – Rarely use it, it’s handy for highlighting specific dates below the chart. ALT + T: Trendline – Provides quick access to one of the most essential tools for analyzing long-term stock movements. [* ]ALT + I: Invert the chart – Probably the most interesting hotkey! If you find it challenging to take "SELL" setups or tend to prefer "BUY" ideas, flipping the chart can reveal a fresh perspective. If your bias remains unchanged after inverting, it may be a solid setup for you. This can help reduce psychological biases; sometimes, just viewing it from another angle makes all the difference. ALT + S: Take a screenshot – An easy way to share your chart with friends or colleagues. ALT + F: Fibonacci tool – I’m using it less often lately, but it’s still there when needed. ALT + W: Add to watchlist – Quickly adds interesting charts to your watchlist. ALT + A: Set an alert SHIFT + CLICK: Measure tool – Instant access to measure distances or changes on the chart. Hopefully, this helps save you a bit of time hunting for these tools. After all, time is money! Regards, Vaido
NASDAQ:TSLAEducation
by VaidoVeek
MA Trading Strategies for Experienced TradersMA Trading Strategies for Experienced Traders Despite their simplicity, moving average (MA) trading strategies remain popular with experienced traders looking to refine their market analysis. This article delves into various MA types and four advanced MA strategies, including moving average ribbons, envelopes, and channels, providing actionable insights to potentially boost trading performance. Moving Average Indicators: Advanced Types This is a short overview of moving averages (MAs). If you already know this, please scroll down and learn advanced types of MAs and comprehensive trading strategies. Moving averages are fundamental tools used by traders to smooth out price data and identify trends. By averaging the price over a specified period, MAs help traders filter out the noise from random price fluctuations, providing a clearer picture of the underlying market direction. Traders use moving averages in various ways, such as determining trend direction, identifying potential support and resistance levels, and confirming other technical indicators. They can also help in spotting reversals and momentum changes. Below are the most notable moving averages that traders can use to construct a strategy. To see how each works, head over to FXOpen’s free TickTrader trading platform to explore every tool described here and a world of more than 1,200 trading tools. Types of Moving Averages Simple Moving Average (SMA) - Overview: The SMA calculates the average of a selected range of prices, typically closing prices, over a specific period. - Usage: SMA trading is straightforward. The Simple Moving Average helps traders identify the direction of the trend by smoothing out short-term fluctuations. Exponential Moving Average (EMA) - Overview: The EMA gives more weight to recent prices, making it more responsive to new information. - Usage: It reacts more quickly to price changes than the SMA, which can be beneficial in fast-moving markets. Weighted Moving Average (WMA) - Overview: The WMA assigns different weights to data points, with the most recent prices typically given more importance. - Usage: Like the EMA, it reduces lag but in a slightly different manner by linearly increasing the weight of each successive data point. Volume-Weighted Moving Average (VWMA) - Overview: The VWMA takes volume into account, giving more weight to price points with higher trading volumes. - Usage: Useful in identifying price moves that are supported by high trading volumes, which can indicate stronger trends​. Hull Moving Average (HMA) - Overview: The HMA aims to improve smoothness and responsiveness to the latest data. It’s calculated using a combination of WMAs. - Usage: Known for its responsiveness and reduced lag, making it a favourite for trend analysis​. Arnaud Legoux Moving Average (ALMA) - Overview: The ALMA uses a Gaussian distribution to smooth data, reducing lag and improving the reliability of signals. - Usage: It's designed to provide a balance between smoothness and responsiveness. Volume-Weighted Average Price (VWAP) - Overview: The VWAP calculation is based on volume and price. The indicator reflects the average price a security has traded at throughout the day. - Usage: Widely used by institutional traders, VWAP helps determine the true average price of a security over a given period. It is crucial for understanding the market's intraday trend and for executing large orders efficiently without distorting the price. Advanced Moving Average Indicators Moving Average Ribbons - Overview: This involves plotting multiple moving averages of different lengths on the same chart. The Guppy Multiple Moving Average (GMMA) is a popular example, using short-term and long-term MAs to analyse market behaviour. - Usage: The spacing and interaction between these ribbons can indicate the strength and direction of a trend. Converging/tightening ribbons may signal a trend reversal while diverging/widening ribbons indicate a strong trend. Moving Average Envelopes - Overview: Envelopes consist of two bands plotted at a fixed percentage distance above and below a moving average (e.g., 2%). - Usage: They help identify overbought and oversold conditions. Price movement outside the envelopes can indicate potential reversal points or the start of strong trends. Moving Average Channels - Overview: Channels are created by plotting a moving average of the highs and a moving average of the lows over a specified period. - Usage: Traders use these channels to identify breakouts and confirm trends. Breakouts beyond the channel may signal the beginning of a new trend​. Four Advanced Moving Average Trading Strategies Here are four advanced moving average trading strategies. You can test other settings to make the strategies more suitable for your trading approach and the timeframe you trade on. Moving Average Ribbon Strategy The Moving Average Ribbon Strategy leverages the Guppy Multiple Moving Averages (GMMA) alongside the ADX to identify potential breakout points. This strategy works by observing the convergence and divergence of multiple MAs to pinpoint moments of price compression and subsequent breakout, enhanced by confirming the trend strength with the ADX. Indicators Used - Guppy Multiple Moving Averages (GMMA): This indicator uses a series of short-term and long-term moving averages. The short-term MAs are sensitive to recent price changes, while the long-term MAs help identify the overall trend. - Average Directional Index (ADX): This measures the strength of a trend, with values above 20 indicating a strong trend. Entry - Traders typically look for the long-term MAs in the GMMA (red) to converge and tighten, indicating a compressed range. - Then they look for the price to break away from the long-term MAs with a series of closes beyond the short-term MAs - below in the downturn and above in the uptrend. Ideally, these are strong closes with minimal wicks, but a series of candles in the projected direction suffice. -The price should remain beyond both the short-term and long-term MAs. - The ADX should be above 20 and rising, indicating strong trending conditions. It shouldn’t be stalling or declining. Sometimes, the ADX crosses above 20 after the price has moved beyond the long-term/short-term MAs; this is also valid. - Once these criteria are met, traders enter with a market order. Stop Loss - Stop loss is commonly set beyond the long-term MAs. This provides a buffer against minor fluctuations and potentially protects against false breakouts. Take Profit - Profits might be taken at key support or resistance levels. - Alternatively, traders might look for the price to close beyond the short-term MAs in the opposite direction (e.g., a bullish close above the MAs in a short trade). - A trailing stop loss positioned beyond the long-term MAs can also be used to capture sustained trends while potentially protecting gains. Moving Average Envelopes Strategy The Moving Average Envelopes Strategy leverages the EMA envelopes to identify potential reversal points by examining price interactions with the upper and lower bands. When combined with RSI, this stock and forex moving average strategy helps traders pinpoint overbought and oversold conditions, offering a robust method for trading reversals. Indicators Used: - Moving Average Envelopes: Uses an exponential moving average (EMA) set to a length of 20. The envelope percentage is adjusted based on asset volatility: 0.25%-0.5% for forex and 1%-2% for stocks might be good starting points, with a lower percentage creating more frequent opportunities but with greater false signals and vice versa. It forms an upper and lower band alongside a central EMA, similar to Bollinger Bands. - Relative Strength Index (RSI): Set to a standard length of 14, indicating overbought conditions above 70 and oversold conditions below 30. Entry - Traders typically observe when the price crosses the moving average envelope bands, either upper or lower. Ideally, the price wicks through and then closes back inside the boundary, but sustained price action beyond these levels is also considered valid. - The RSI should be above 70 for a potential short entry, indicating overbought conditions, or below 30 for a potential long entry, indicating oversold conditions. - An entry might be made once the RSI crosses back into the normal range (between 70 and 30) and the price closes back inside of the bands. Stop Loss - Stop losses are generally set beyond the most recent swing point to potentially provide a buffer against minor fluctuations. Take Profit Profits might be taken at multiple points: - The centerline EMA, which acts as a mean reversion target. This is the smallest target, which may be insufficient when considering the risk/reward ratio. - The opposite envelope bound, capitalising on the price's full range movement. - Significant support or resistance levels, providing predefined exit points. - When the RSI crosses into the opposite territory (e.g., from overbought to oversold), indicating a potential reversal in the opposite direction. Strategy with Three MAs The strategy with three MAs combines the Hull Moving Averages (HMA) with the Commodity Channel Index (CCI) to identify potential trading opportunities. This strategy leverages the smoothness and responsiveness of the HMA and the momentum indications provided by the CCI to capture effective trade entries and exits. Indicators Used - Hull Moving Averages (HMA): Three HMAs with lengths of 13, 36, and 100. - Commodity Channel Index (CCI): A momentum-based oscillator set to a standard length of 20. The CCI measures the difference between the current price and its average over a given period. Entry - Traders look for the price to be above the 100-period HMA for long positions and below it for short positions. - Simultaneously, the CCI should be above 100 for long entries, indicating strong upward momentum, and below -100 for short entries, indicating strong downward momentum. - Traders then watch for the 13-period HMA to cross above the 36-period HMA for long positions or below it for short positions. It should ideally be the first crossover after the price moves above or below the 100-period HMA. Occasionally, the CCI may move above 100 or below -100 shortly after this crossover occurs rather than before. - Once these criteria are met, they enter with a market order. Stop Loss - Stop losses are typically set just beyond the 36-period HMA. - Alternatively, traders may choose the 100-period EMA or a recent swing point. Take Profit - Profits might be taken once the price crosses back over the 100-period HMA, signalling a potential end to the current trend. - Alternatively, traders may choose to take profits at significant support or resistance levels, providing predefined exit points based on market structure. Moving Average Channel Strategy The Moving Average Channel Strategy utilises the Moving Average Channel along with the Parabolic SAR and ADX to identify potential trading opportunities. This strategy helps traders capture breakouts by confirming trend strength and potential reversals, offering a robust approach to trading trending markets. Indicators Used - Moving Average Channel: Set to a length of 50, this channel uses the moving averages of the highs and lows to create two lines, forming a channel around the price. - Parabolic SAR: An indicator that plots dots above or below the price to signal potential reversals. - Average Directional Index (ADX): Measures the strength of a trend, with values above 20 indicating a strong trend. Entry - Traders look for the price to trade through the Moving Average Channel, either breaking from above to below (for a downtrend) or from below to above (for an uptrend), ideally with a series of strong candles. - Simultaneously, the Parabolic SAR should plot dots above the price, indicating a bearish signal, and vice versa. - The ADX should be above 20 and rising, not stalling or declining, confirming a strong and growing trend. - All three signals (price breaking through the channel, Parabolic SAR, and ADX above 20 and rising) should occur relatively close to each other, typically within a few candles. - Once all criteria are met, traders enter. Stop Loss - Stop losses are typically set just beyond the Moving Average Channel or at a nearby swing point. Take Profit - Profits might be taken when the price closes back through the other side of the Moving Average Channel, signalling a potential trend reversal. In this scenario, there is a risk of missing a part of potential profits in the solid trend. - Alternatively, traders might choose to take profits at significant support or resistance levels, providing predefined exit points based on market structure. Best Practices for Using Moving Average Indicators Moving average indicators are essential tools in technical analysis. Here are some best practices to maximise their effectiveness: Choosing the Right Type Selecting the appropriate type of moving average is crucial. For example, an EMA is more responsive to recent price changes, making it suitable for short-term trading, while an SMA may be better for long-term trend analysis. Choosing Suitable Lengths It’s best to use a combination of short-term and long-term moving averages to get a comprehensive view of the market. For instance, combining a 20-day, 50-day, and 200-day moving average can help in identifying both short-term fluctuations and long-term trends. Experimenting There are various moving average types beyond the well-known SMA and EMA, such as the Hull Moving Average (HMA), Volume Weighted Moving Average (VWMA), and more. Experimenting with different types can help you find the best fit for your MA strategy. Combining with Other Analysis You can potentially enhance your moving average strategy by combining it with other forms of analysis and indicators, such as those described in the strategies above. This will allow you to confirm signals and get a more comprehensive market picture. Backtesting and Forward Testing Before deploying any moving average strategy in real-time, traders typically backtest it with historical data to understand its performance under different market conditions. Then, when transitioning from backtesting to live trading, they forward test with a demo account to refine their strategy without risking real money. Beware of False Signals Moving average crossovers in choppy markets can generate false signals. Consider additional filters, such as trend confirmation from the ADX, to avoid whipsaws. Following these best practices can help you effectively incorporate moving averages into your trading strategies, whether you're using a moving average crossover strategy or an EMA trading strategy. The Bottom Line Advanced moving average strategies can offer a route to potentially enhance your trading analysis and performance. As always, it’s best to experiment with different indicators and backtest strategies to find what works best. To start implementing these strategies, consider opening an FXOpen account. Use our robust tools and enjoy low commissions and tight spreads from 0.0 pips. FAQs How to Use Moving Averages? Moving averages smooth out price data, helping to identify trends and potential support/resistance levels. Traders often use moving averages to determine trend direction, confirm breakouts, and identify reversals. Combining short-term and long-term moving averages provides a well-rounded market overview. For instance, a simple SMA strategy might see a trader watch for a crossover between a pair of long and short-term SMAs before entering. What Is the Simple Moving Average? The Simple Moving Average represents an asset’s average price over a specified period. It's a fundamental tool in trading, smoothing out fluctuations to highlight the underlying trend. An SMA trading strategy typically involves comparing SMAs of different lengths to identify crossovers and trend changes. What Does EMA Stand For in Trading? The EMA stands for the Exponential Moving Average. Unlike the SMA, the EMA gives more weight to recent prices, making it more responsive to price changes. This responsiveness makes the EMA popular in strategies that require quick reaction to market movements, such as an EMA crossover strategy. What Moving Average Should Be Used for Day Trading? In moving averages for day trading, shorter periods like the 9 or 21 are often used due to their responsiveness to recent price changes. These shorter EMAs help day traders quickly identify trend direction and potential entry/exit points. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
1
Options Blueprint Series [Basic]: H&S amid Surging Wheat Supply1. Introduction: Bearish Opportunity in Wheat amid Rising Supply With the U.S. Grain Stocks Wheat (USGSW) report showing a notable rise in wheat stock levels, a bearish scenario is unfolding for wheat futures. This increase in supply, which could drive prices downward, aligns with a technical setup showing potential for a bearish breakout. From a technical perspective, Wheat futures exhibit a Complex Head and Shoulders formation, signaling a possible breakdown as prices approach a critical support level. By combining the supply dynamics and technical formation, this article outlines a Bear Put Spread strategy, ideal for capitalizing on this bearish outlook with limited risk. 2. Fundamental Analysis: Rising Wheat Stock Levels The most recent USGSW report has recorded wheat stock levels breaking upward to 1.98 billion bushels, up from the previous level of 1.779 billion bushels. This shift indicates a higher supply of wheat available in the market, which, in the absence of proportional demand, typically should result in price pressure to the downside. Higher wheat stock levels often dampen demand sentiment, as markets anticipate reduced scarcity and increased availability. Such fundamentals offer a conducive backdrop for a bearish approach, supporting the downside breakout anticipated in the technical setup. 3. Technical Analysis: Complex Head and Shoulders Formation The technical landscape for Wheat futures supports the bearish case, with a Complex Head and Shoulders pattern forming on the chart. This pattern is characterized by multiple peaks (heads) flanked by smaller peaks (shoulders), indicating a potential reversal from recent highs. The critical neckline for this formation sits at 585'6. A break below this level would signal the likelihood of further downside movement. The target for this setup aligns with a UFO support zone at 552'4, which serves as an optimal price point to close the trade if the breakout confirms. 4. Trade Setup: Bear Put Spread on Wheat Futures (Ticker: ZWH2025) To capitalize on the bearish setup, a Bear Put Spread is employed. This strategy allows for limited downside risk while still offering attractive profit potential. Here are the specifics: o Contract Details for ZWH2025 (Wheat Futures): Contract Size: 5,000 bushels Tick Size: 1/4 of one cent (0.0025) per bushel (equivalent to $12.50 per tick) Point value of 1 future unit: $50 Point value of 1 option unit: $50 Expiration: December 27, 2024 Margin Requirement: While the exact margin depends on the broker, the requirement typically ranges between $1,500 and $2,000 per futures contract. The margin for a Bear Put Spread in Wheat futures options is limited to the debit paid (15.2 points *$50 = $760). o Options Strategy: Bear Put Spread Buy the 585 put option at 25.84 and Sell the 550 put option at 10.64, both expiring on December 27, 2024. The net debit paid is 25.84 – 10.64 = 15.2 points = $760 This spread provides a capped-risk opportunity for profiting from a downside move in Wheat futures. o Risk Management: While stop loss orders can be used, no stop loss is required given the limited-risk nature of the Bear Put Spread. The maximum potential loss is predefined by the cost of the spread. 5. Options Risk Profile Analysis The Bear Put Spread strategy involves buying a put option at a higher strike price (585) and selling a put option at a lower strike price (550). This configuration: Maximizes potential profit if Wheat futures drop to or below the 550 level by expiration. Caps maximum loss at the initial cost of the spread, regardless of how the underlying Wheat futures move. For this setup, the maximum potential profit is the difference between the strikes (585 - 550) minus the premium paid = 19.80 ($990). The maximum potential loss is the cost of the spread, making it a controlled-risk strategy suited to volatile or downward-trending markets. 6. Trade Execution Plan Entry: Initiate the Bear Put Spread as Wheat futures break below the 585'6 neckline, confirming the downside breakout. Target: Close the trade at 552'4, which aligns with a nearby UFO support zone, marking a logical exit point. 7. Risk Management Considerations Effective risk management is essential in any options strategy, and the Bear Put Spread inherently offers several risk control advantages: Limited Risk: By buying a put and selling a lower-strike put, the Bear Put Spread creates a defined risk position, capping potential losses at the initial premium paid for the spread. No Stop Loss Required: With maximum risk predetermined by the cost of the spread, there's no need for a stop loss, which could otherwise be triggered prematurely in a volatile market. Predefined Entry and Exit: This strategy's effectiveness hinges on precise entry (below the 585'6 neckline) and a clear target at 552'4. By maintaining these predefined parameters, the trade maximizes its alignment with both technical and fundamental setups. This trade setup offers a balanced approach, allowing for downside exposure with risk under control, making it well-suited for periods of volatility or substantial downward moves. 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. Also, some of the calculations and analytics used in this article have been derived using the QuikStrike® tool available on the CME Group website. 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.
Editors' picks
CBOT:ZWH2025Education
by traddictiv
2
The Symmetrical Triangle: Real Success Rates + Breakout.The Symmetrical Triangle: Real Success Rates + Breakout. The symmetrical triangle is an important chart pattern in technical analysis, deserving special attention from professional traders. This formation is characterized by a convergence of prices between two trendlines, one descending and the other ascending, creating a consolidation zone where indecision between buyers and sellers is palpable. Statistical Analysis Empirical data reveals that the success rate of the symmetrical triangle for a trend continuation is approximately 54%. This percentage, although higher than 50%, underlines the importance of a cautious approach and rigorous risk management in using this pattern. Breakout Point The breakout of the symmetrical triangle usually occurs when the price has traveled approximately 75% of the distance to the apex. This point is crucial for traders, as it often represents the moment when volatility increases and a new trend can be established. Risks and False Exits It is essential to note that the symmetrical triangle has a relatively high rate of false exits. Statistics indicate that approximately 13% of cases in a bear market can result in a false exit to the bottom. This phenomenon underlines the need for additional confirmation before entering a position. Strategy of use To effectively exploit the symmetrical triangle, professional traders must: -Identify the formation accurately. -Wait for the breakout near the point of convergence of the trendlines. -Confirm the breakout with other technical indicators or an increase in volume. -Put in place strict risk management to protect against false exits. In conclusion, the symmetrical triangle, although being a valuable tool in the trader's arsenal, requires a methodical approach and a thorough understanding of its characteristics to be used effectively in a trading strategy.
BINANCE:BTCUSDEducation
by Le-Loup-de-Zurich
2
What Is a Falling Knife in Trading? What Is a Falling Knife in Trading? It’s often repeated that traders should ‘never catch a falling knife.’ This phrase highlights the risks of buying into a rapidly declining asset. Understanding what a falling knife is, its causes, and strategies for trading it may help traders navigate these sharp declines more effectively. This article delves into the intricacies of falling knives and offers insights on how to approach them with caution. Understanding the Falling Knife Pattern A falling knife consists of candlesticks that depict a significant rapid drop in an asset’s price, including stocks, commodities, forex pairs, indices, cryptocurrencies*, and more. This situation is often driven by negative news, poor earnings reports, or broader market sell-offs. Identifying a falling knife involves recognising several key characteristics. Firstly, the decline is steep and sudden, typically marked by large red candlesticks on a price chart. The volume often increases as the price falls, indicating panic selling. Technical indicators such as the Relative Strength Index (RSI) might show oversold conditions, suggesting the asset is undervalued in the short term. Common tools used to identify falling knives include: - Moving Averages: When short-term moving averages cross below long-term moving averages, it signals bearish market sentiment. - Bollinger Bands: Prices breaking below the lower band can indicate a falling knife. - Volume Analysis: Spikes in trading volume often accompany these sharp declines, confirming the intensity of the sell-off. In terms of candlesticks, a falling knife typically produces several bearish candles with long bodies and small wicks. They may appear as a large engulfing candle on a higher timeframe. Recognising these patterns is crucial for traders. Misinterpreting a falling knife can lead to significant losses, as attempting to catch a falling knife—buying during the steep decline—without proper analysis can be risky. Instead, many traders wait for signs of stabilisation or reversal before considering an entry point. Causes of Falling Knives A falling knife generally occurs due to several specific catalysts, each capable of triggering a rapid and substantial decline in an asset's price. Understanding these causes, including technical factors, is essential for traders aiming to navigate such volatile situations effectively. Economic Events and News Releases One primary cause of falling knives is significant economic news. For instance, announcements of interest rate hikes by central banks can lead to widespread stock market sell-offs. Similarly, unexpected changes in economic indicators like unemployment rates, inflation, or GDP growth can trigger sharp declines. Traders react swiftly to such news, often leading to panic selling and steep price drops. Earnings Reports and Company-Specific Issues A falling knife stock pattern can be triggered by poor earnings reports or disappointing financial results from a company. When a company misses earnings expectations or issues negative guidance, investors may lose confidence, resulting in a rapidly falling stock. Additionally, company-specific problems such as legal issues, management scandals, or product recalls can lead to rapid price declines as investors reassess the company's prospects. Broader Market Conditions and Trends Broader market trends and conditions play a significant role in causing a falling knife in stocks and other assets. During periods of market volatility or bear markets, negative sentiment can spread quickly, leading to sharp declines in asset prices. For example, during the financial crisis of 2008, widespread fear and uncertainty led to massive sell-offs across various sectors. Similarly, market corrections or crashes can create environments where falling knife patterns are more likely to occur. Geopolitical Events Geopolitical events such as wars, political instability, or trade tensions can cause abrupt market reactions. For instance, escalating trade disputes between major economies can lead to uncertainty and fear, causing investors and traders to exit positions rapidly. Technical Factors Technical analysis also plays a crucial role in falling knife patterns. Key technical factors include: - Breaking Support Levels: When an asset's price falls below critical support levels, it can trigger further selling as traders perceive a lack of price stability. - Overbought/Oversold Conditions: Oscillators like the Relative Strength Index (RSI) showing overbought conditions can precede a falling knife as prices correct sharply. At the same time, the RSI may enter the oversold area during the falling knife pattern. - Bearish Chart Patterns: Patterns such as head and shoulders, double tops, or descending triangles can signal potential sharp declines, leading to falling knife scenarios. Risks Associated with Falling Knife Trading falling knives carries significant risks, primarily due to the rapid nature of the price declines. Understanding these risks is crucial for traders aiming to navigate such volatile situations. Potential for Significant Losses The most apparent risk is the potential for substantial financial losses. When an asset's price plummets, catching the falling knife can result in buying at prices that continue to drop, leading to immediate and severe losses. False Bottoms and Dead Cat Bounces Traders may mistakenly interpret temporary price stabilisations or minor recoveries as the end of the decline, only to face further drops. These false bottoms and dead cat bounces can trap traders in losing positions. Increased Volatility Falling knives are often accompanied by heightened market volatility, making it challenging to analyse short-term price movements. This volatility can result in rapid and unexpected changes in asset prices, complicating risk management. Psychological Challenges The psychological impact of trading falling knives should not be underestimated. The stress and emotional strain of dealing with sharp losses can lead to irrational decision-making, such as holding onto losing positions for too long or making impulsive trades. Technical Analysis Limitations While technical indicators can help identify potential entry points, they are not foolproof. The rapid and severe nature of falling knives can render technical analysis less reliable, as price movements may not follow traditional patterns. Liquidity Issues During sharp declines, liquidity can dry up, leading to wider spreads and slippage. This makes it harder to execute trades at desired prices, potentially exacerbating losses. Examples of Falling Knife Events Now, let’s take a look at a couple of falling knife examples. To start identifying your own falling knives, head over to FXOpen’s free TickTrader platform to explore real-time charts across different asset classes. Onset of the Coronavirus Pandemic and the Nasdaq 100 In early 2020, the onset of the coronavirus pandemic triggered a dramatic fall in global financial markets. The Nasdaq 100, heavily weighted with speculative tech stocks, experienced a sharp decline as investors reacted to the uncertainty and potential economic impact of the pandemic. From mid-February to late March 2020, the Nasdaq 100 dropped by over 30%. This steep decline represented a classic falling knife pattern, characterised by rapid sell-offs and increased market volatility over the course of several weeks. Traders who attempted to buy into the market too early faced significant losses as the market continued to fall before eventually stabilising and recovering later in the year. EUR/USD After Strong US Inflation Data On April 10, 2024, the release of March US inflation data led to a falling knife event in the EUR/USD currency pair. Traders had been closely monitoring the Consumer Price Index (CPI) report, anticipating that a lower-than-forecast reading would prompt the Federal Reserve to lower interest rates later in the year. The forecast was set at 3.4%, with a lower or at-forecast figure expected to weaken the dollar. Instead, the headline CPI YoY reading came in exactly at 3.5%, defying expectations. This unexpected data triggered a rally in the dollar and a sharp sell-off in EUR/USD. The pair plummeted rapidly, and the decline persisted until the end of the trading week, illustrating how sudden economic data releases can lead to sharp and sustained price drops. Strategies for Trading Falling Knives Understanding the catalyst behind a falling knife is crucial for determining whether it’s likely to rebound soon or persist as a trend. Events that cause fundamental repricing, such as poor earnings data, significant or unexpected news/economic releases, or unique risk events like currency intervention or financial crises, often lead to prolonged falling knives. In contrast, temporary sharp corrections might be due to overreactions to already priced-in news or transient market fears. Recognising these catalysts helps traders decide whether to take a position or wait for volatility to subside. Additionally, the timeframe of the falling knife provides valuable context. A falling knife on a 5-minute chart could indicate a sharp intraday decline, potentially recovering before the trading day ends. Conversely, on a 4-hour or daily chart, a sharp decline may suggest a continued downtrend over several days or weeks. Traders can use this information to look for short opportunities on lower timeframes or prepare for longer-term moves. Common Strategies Traders Use The insights gained from analysing market conditions can help traders to decide whether to short the falling knife or stay out of the market and wait for a bottom. Shorting the Falling Knife Traders looking to short a falling knife should exercise caution. Increased volatility during sharp declines can make it difficult to set appropriate stop-loss levels without a sub-par risk/reward ratio. The best entry can potentially be found during a pullback. As some traders think the price is bottoming out, their stop losses being triggered as the price continues to decline can fuel another leg lower. Traders can look for breakouts from bearish chart patterns like rising wedges, bear flags, or bear pennants. Alternatively, waiting for the bullish structure of the pullback (higher highs and higher lows) to break down into a lower low and lower high can indicate the next leg lower is underway. This approach offers traders confirmation that the knife is continuing to fall and an appropriate place to set a stop loss above the pullback’s high. Buying After a Falling Knife For those looking to catch the bottom, confirmation is essential. Using a pair of moving averages, such as 20-period and 50-period EMAs, can help. When the 20-period EMA crosses above the 50-period EMA, and the price closes above both, it suggests the downtrend might be over. However, momentum indicators like RSI and MACD can falsely signal market turns during steep declines, but they may have some value on higher timeframes. Generally speaking, one of the potentially effective strategies for catching a falling knife is to wait for the price to break above the previous lower high of the downtrend. This would demonstrate that the market has been able to break above a point at which it previously found resistance, allowing traders to potentially switch their bias to bullish and seek entry points. The Role of Patience and Discipline in Trading Falling Knives Patience and discipline are paramount when trading falling knives. Impulsive trades driven by the fear of missing out can lead to significant losses. Traders are required to wait for clear signs of trend reversal or continuation before entering a trade. This involves adhering to predefined strategies and not deviating due to emotional reactions to volatile market movements. Likewise, maintaining discipline in setting and following stop-loss levels, adhering to risk management principles, and avoiding premature entries can potentially enhance trading effectiveness. The Bottom Line Navigating falling knives requires careful analysis and disciplined trading strategies. By understanding the causes and employing effective techniques, traders can potentially better manage these volatile situations. To explore these strategies further and enhance your trading skills, consider opening an FXOpen account. With the right tools and knowledge, you can approach falling knives with greater confidence and precision. FAQ What Is a Falling Knife in Trading? A falling knife in trading refers to a rapid and significant decline in an asset's price, often triggered by negative news, poor earnings reports, or broader market sell-offs. This sharp drop can be volatile and difficult to analyse, making it challenging for traders to time their entries and exits. Should You Ever Try to Catch a Falling Knife? Catching a falling knife is highly risky. Therefore, the theory states it’s not recommended for most traders. The rapid decline in price can continue further than anticipated, leading to significant losses. To minimise risk, traders wait for signs of stabilisation or reversal before considering an entry. How to Catch a Falling Knife? Catching a falling knife involves identifying potential reversal points through technical analysis. Traders often wait for confirmation, such as a break above previous resistance levels or a moving average crossover. Patience and strict risk management, including setting tight stop-loss orders, are essential when attempting this strategy. What Is a Falling Knife in Crypto*? In the crypto* market, a falling knife refers to a sudden and steep decline in the price of a cryptocurrency*. This can be triggered by regulatory news, security breaches, or market sentiment shifts. Due to cryptocurrencies*' high volatility, falling knives can be particularly severe and difficult to analyse. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rule. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Editors' picks
Education
by FXOpen
7
Panic or Common Sense?This is not a recommendation but rather a possibility based on the following: 1. We may see an upward opening gap at start of the market later. 2. There are circumspect views that there is collusion between Iran, Israel and the USA pertaining to the recent escalation. Non of Iran's Oil or Nuclear installations were targeted. 3. US Election race is neck to neck with Trump has a perceived lead in swing states. 4. Rising bond yields and DXY also bullish 5. Possible formation of Bear Flag Chart pattern, which looks highly logical because of severe overbought conditions. Please remember this coming week has a plethora of news culminating with the NFP news! I will be looking to sell at the upper Fib level and with buy stop above the ATH. Please leave your comments if you have any ideas! Happy and safe trading!
OANDA:XAUUSDEducation
by ccpudaism
Prop Trading - All you need to know !!A proprietary trading firm, often abbreviated as "prop firm," is a financial institution that trades stocks, currencies, options, or other financial instruments with its own capital rather than on behalf of clients. Proprietary trading firms offer several advantages for traders who join their ranks: 1. Access to Capital: One of the most significant advantages of working with a prop firm is access to substantial capital. Prop firms typically provide traders with significant buying power, allowing them to take larger positions in the market than they could with their own funds. This access to capital enables traders to potentially earn higher profits and diversify their trading strategies. 2. Professional Support and Guidance: Many prop firms offer traders access to experienced mentors, coaches, and support staff who can provide guidance, feedback, and assistance. This professional support can be invaluable for traders looking to improve their skills, refine their trading strategies, and navigate volatile market conditions. 3. Risk Management Tools: Prop firms typically have sophisticated risk management systems and tools in place to help traders monitor and manage their exposure to market risks. These systems may include real-time risk analytics, position monitoring, and risk controls that help traders mitigate potential losses and preserve capital. 4. Profit Sharing: Some prop firms operate on a profit-sharing model, where traders receive a share of the profits generated from their trading activities. This arrangement aligns the interests of traders with those of the firm, incentivizing traders to perform well and contribute to the overall success of the firm. Overall, prop firms provide traders with access to capital, technology, support, and learning resources that can help them succeed in the competitive world of trading. By leveraging these advantages, traders can enhance their trading performance, grow their portfolios, and achieve their financial goals.
OANDA:XAUUSDEducation
by Snick3rSD
CHOCH vs BOS !!WHAT IS BOS ? BOS - break of strucuture. I will use market structure bullish or bearish to understand if the institutions are buying or selling a financial asset. To spot a bullish / bearish market structure we should see a higher highs and higher lows and viceversa, to spot the continuation of the bullish market structure we should see bullish price action above the last old high in the structure this is the BOS. BOS for me is a confirmation that price will go higher after the retracement and we are still in a bullish move WHAT IS CHOCH? CHOCH - change of character. Also known as reversal, when the price fails to make a new higher high or lower low, then the price broke the structure and continue in other direction.
OANDA:XAUUSDEducation
by Snick3rSD
What is Confluence ?✅ Confluence refers to any circumstance where you see multiple trade signals lining up on your charts and telling you to take a trade. Usually these are technical indicators, though sometimes they may be price patterns. It all depends on what you use to plan your trades. A lot of traders fill their charts with dozens of indicators for this reason. They want to find confluence — but oftentimes the result is conflicting signals. This can cause a lapse of confidence and a great deal of confusion. Some traders add more and more signals the less confident they get, and continue to make the problem worse for themselves. ✅ Confluence is very important to increase the chances of winning trades, a trader needs to have at least two factors of confluence to open a trade. When the confluence exists, the trader becomes more confident on his negotiations. ✅ The Factors Of Confluence Are: Higher Time Frame Analysis; Trade during London Open; Trade during New York Open; Refine Higher Time Frame key levels in Lower Time Frame entries; Combine setups; Trade during High Impact News Events. ✅ Refine HTF key levels in LTF entries or setups for confirmation that the HTF analysis will hold the price. HTF Key Levels Are: HTF Order Blocks; HTF Liquidity Pools; HTF Market Structure.
OANDA:XAUUSDEducation
by Snick3rSD
Market Structure Identification !!Hello traders! I want to share with you some educational content. ✅ MARKET STRUCTURE . Today we will talk about market structure in the financial markets, market structure is basically the understading where the institutional traders/investors are positioned are they short or long on certain financial asset, it is very important to be positioned your trading opportunities with the trend as the saying says trend is your friend follow the trend when you are taking trades that are alligned with the strucutre you have a better probability of them closing in profit. ✅ Types of Market Structure Bearish Market Structure - institutions are positioned LONG, look only to enter long/buy trades, we are spotingt the bullish market strucutre if price is making higher highs (hh) and higher lows (hl) Bullish Market Structure - institutions are positioned SHORT, look only to enter short/sell trades, we are spoting the bearish market strucutre when price is making lower highs (lh) and lower lows (ll) Range Market Structure - the volumes on short/long trades are equall instiutions dont have a clear direction we are spoting this strucutre if we see price making equal highs and equal lows and is accumulating . I hope I was clear enough so you can understand this very important trading concept, remember its not in the number its in the quality of the trades and to have a better quality try to allign every trading idea with the actual structure
OANDA:XAUUSDEducation
by Snick3rSD
How to avoid being emotional in trading?Avoiding emotional trading is a key skill in successful investing and trading, as it helps minimize impulsive decisions that can lead to losses. Here are some strategies and insights to help maintain a disciplined approach to trading and avoid being swayed by emotions like fear, greed, or overconfidence: 🔸 Create and Stick to a Trading Plan ▪️Set Clear Goals: Define your profit goals, risk tolerance, and entry/exit points in advance. ▪️Follow Predefined Rules: A trading plan provides structure, guiding you to make logical decisions rather than impulsive ones. ▪️Limit Exposure: Decide on position sizes beforehand to avoid overcommitting and feeling compelled to make irrational moves if markets turn volatile. 🔸 Use Stop-Loss and Take-Profit Orders ▪️Automate Exit Points: Setting up stop-loss and take-profit orders allows you to exit trades at predefined points, limiting the need to make quick, emotion-driven decisions during market fluctuations. ▪️Reduce Monitoring: Knowing your trades will automatically exit at specific points reduces the need for constant checking, which can often lead to stress and emotional reactivity. 🔸 Practice Patience and Avoid Overtrading ▪️Avoid Excessive Monitoring: Watching the market closely can lead to impulsive reactions to small fluctuations. Stick to reviewing your trades periodically rather than minute-by-minute. ▪️Limit Trade Frequency: Overtrading, driven by the need to “make back” losses or maximize gains, often leads to poorly thought-out decisions. Trade only when your trading plan calls for it. 🔸 Develop a Balanced Mindset ▪️Stay Neutral to Wins and Losses: Emotional attachment to individual trades can make it harder to accept losses and lead to revenge trading, where you try to make up losses through risky moves. ▪️Accept Losses as Part of the Process: Even the best traders face losses. Accepting this and moving on helps maintain perspective and discipline, which are essential for long-term success. 🔸 Utilize Data and Analysis Over Intuition ▪️Focus on Objective Indicators: Base decisions on data, such as price charts, moving averages, and technical indicators, rather than “gut feelings.” ▪️Avoid Confirmation Bias: Seeking only information that supports your existing beliefs can lead to one-sided and often poor decisions. Stay open to all relevant information. 🔸 Take Breaks and Manage Stress ▪️Step Away After a Major Loss or Win: Strong emotional responses often follow big losses or gains. Taking a break gives you time to reset your mindset before your next trade. ▪️Practice Relaxation Techniques: Techniques like deep breathing, meditation, or even short exercises can reduce stress and improve focus, reducing emotional reactions. 🔸 Build Self-Awareness ▪️Reflect on Your Emotions: Keeping a trading journal can help you understand emotional triggers and patterns in your decision-making. ▪️Work with a Trading Coach or Join a Community: Having accountability, whether through a mentor or a trading group, can help you stay grounded and receive objective feedback on your trading behavior. 🔸 Set Realistic Expectations ▪️Don’t Chase Unrealistic Returns: Expecting massive returns can lead to risky, emotion-fueled decisions. Focus on sustainable, gradual growth. ▪️Acknowledge Market Unpredictability: Markets are often unpredictable, and not every trade will go as planned. Accepting this helps lower emotional stakes with each trade. 🔸 Consider Using Algorithmic or Automated Trading ▪️Remove Emotion from Execution: Algorithmic trading allows traders to set parameters and let algorithms execute trades, effectively reducing emotional interference. ▪️Define Rules for Entry and Exit: Predefined rules, when followed strictly by algorithms, allow for a structured and emotion-free approach to trading. Adopting these practices helps build discipline, patience, and resilience, which are essential for minimizing the negative impact of emotional trading on your overall financial success.
Education
by ProjectSyndicate
25
AI Algo Trading Intro/OverviewAI ALGO TRADING INTRO/OVERVIEW 🔹AI algorithmic trading, often referred to as AI algo trading, is a sophisticated approach to financial trading that uses artificial intelligence (AI) algorithms to make trading decisions. It combines finance, statistics, and computer science to analyze vast amounts of data and execute trades in real-time, often at speeds impossible for human traders. Here's a closer look at how it works, its benefits, and the key components: 1. How AI Algo Trading Works AI algo trading employs machine learning, deep learning, and other advanced data analysis techniques to create models that can predict stock prices or detect trading patterns. These AI models are designed to identify patterns or anomalies in historical and real-time data, which helps them make predictions about price movements. The algorithms can process huge datasets from multiple sources, including stock prices, news, sentiment data from social media, and even macroeconomic indicators. Typical steps involved in AI algo trading include: 🔹Data Collection: Gathering historical price data, technical indicators, financial reports, and alternative data (e.g., news, social media sentiment). Model Training: Training machine learning models on historical data to predict asset price movements or specific trading signals. 🔹Backtesting: Testing the model on historical data to see how it would have performed in the past, adjusting for any biases or errors. 🔹Execution: Implementing the model in live markets to execute trades automatically when certain conditions are met. 2. Key Components of AI Algo Trading Several key components work together in AI-driven trading systems, including: 🔹Data Management: Collecting, cleaning, and storing large volumes of financial and alternative data. 🔹Feature Engineering: Selecting or creating specific data features that improve the model's accuracy, such as moving averages, volatility measures, or sentiment scores. 🔹Machine Learning Models: Models like neural networks, decision trees, or support vector machines (SVMs) are common in AI trading. More advanced models use deep learning and reinforcement learning. 🔹Risk Management: Ensuring trades meet certain risk parameters to prevent excessive losses. Many AI algorithms have built-in risk management measures, like stop-loss limits or position size restrictions. 🔹Execution Algorithms: After generating trade signals, execution algorithms place trades in the market. These can include smart order routing and algorithms for optimizing trade timing. 3. Advantages of AI Algo Trading 🔹Speed and Efficiency: AI algorithms can execute trades within milliseconds, reacting instantly to market movements. 🔹Data-Driven Decisions: AI algo trading relies on empirical data rather than emotions, leading to potentially more consistent decision-making. 🔹Pattern Recognition: Advanced AI models can identify complex patterns in large datasets, uncovering trading opportunities that may be invisible to human traders. 🔹24/7 Operation: AI systems can monitor markets continuously, which is especially valuable in global markets that operate around the clock. 🔹Customization: AI-driven strategies can be tailored to specific asset classes, trading goals, and risk tolerances. 4. Popular AI Techniques in Trading AI algo trading employs several popular techniques: 🔹Supervised Learning: This includes models like regression, classification, and neural networks, often used to predict price changes or determine trading signals. 🔹Unsupervised Learning: Clustering and anomaly detection models help identify unusual trading patterns or group similar assets. 🔹Reinforcement Learning: This is where AI learns to optimize strategies through trial and error, which can be particularly useful for adaptive, evolving trading strategies. 🔹Sentiment Analysis: AI can analyze text data (e.g., news articles, tweets) to gauge market sentiment, adding a qualitative dimension to trading models. 5. Risks and Challenges While AI algo trading offers numerous advantages, it also comes with certain risks: 🔹Model Overfitting: Overfitting to historical data can result in poor performance in live markets if the model is too specific to past conditions. Market Volatility: AI algorithms may struggle to adapt to sudden market changes, like unexpected geopolitical events or economic crises. 🔹Technical Failures: Infrastructure and connectivity issues can disrupt AI trading systems, leading to missed opportunities or unwanted positions. 🔹Regulatory Concerns: Regulatory bodies often scrutinize algorithmic trading for issues like market manipulation, requiring firms to ensure their algorithms are compliant. 6. Future of AI Algo Trading 🔹The future of AI algo trading looks promising, with ongoing advancements in AI and access to even more diverse data sources. Innovations in quantum computing, natural language processing (NLP) for deeper sentiment analysis, and reinforcement learning for adaptive strategies are likely to further enhance AI-driven trading. 🔹As AI trading models continue to evolve, they may also become more accessible to individual investors and retail traders, allowing a broader range of market participants to benefit from data-driven trading strategies. However, regulatory agencies may also implement stricter controls to manage the risks associated with autonomous AI trading.
Education
by ProjectSyndicate
15
Understanding The Basics Of AI/Inference Engine ConstructionRecently, there has been a lot of discussion related to my SPY Cycle Patterns and how they work. In short, without disclosing proprietary code/quants, I built an inference engine based on Fibonacci, GANN, and Tesla theories. Part of this inference engine is to identify the highest probable outcome related to the patterns. This is not rocket-science. This is the same process your brain does when determining when and what to trade. The only difference is I'm doing a bunch of proprietary calculations/quants related to data and price theory in the background, then the inference engine determines the best, most likely outcome. Take a few minutes to watch this video and try to understand the difference between static and dynamic modeling. Again, my objective is to help as many traders as possible. My Plan Your Trade videos are my opinions based on my skills, knowledge, and proprietary modeling systems/tools. None of my tools are 100% accurate all the time - nothing is. But, I do believe the quality of information and instructional information I provide is invaluable to most traders. Get some. #trading #research #investing #tradingalgos #tradingsignals #cycles #fibonacci #elliotwave #modelingsystems #stocks #bitcoin #btcusd #cryptos #spy #es #nq #gold
NASDAQ:QQQEducation
by BradMatheny
2
BIG POST! | How To Beat SP500? S&P 500 Performance: +35% since 2022. My Selected Portfolio Performance: +62%, with an 82% hit rate. Top Performing Stocks: NVDA (+735%), ANET (+343%), META (+209%), and more. Technical Analysis Tools Used: Price action, trendlines, Fibonacci levels, round numbers, and more. It’s been nearly three years since I posted my analysis of S&P 500 stocks on February 23, 2022. Back then, I reviewed all 500 stocks, applied some quick technical analysis, and identified 75 stocks that stood out for me. Importantly, I relied solely on technical analysis to make my picks. Fast forward to today, and the results speak for themselves. Most of these selections have significantly outperformed the broader market, proving the power and importance of technical analysis. While many investors rely solely on fundamentals, technical analysis brings a dynamic edge that’s often underestimated. By focusing on price action and market behavior, technical analysis allows us to spot opportunities that others might miss, especially it gives a massive psychological edge while the markets are making corrections. The market doesn't care what you know, the market cares what you do! Here’s what I used for my analysis: It's kind of pure price action - previous yearly highs, trendlines, a 50% retracement from the top, round numbers, Fibonacci levels, equal waves, and channel projections. For breakout trades, determined strong and waited for confirmation before pulling the trigger. The Results While the S&P 500 has gained around 35% over this period , my selected stocks from the same list have made +62%! Out of the 75 stocks I picked, 67 have hit my target zones and 54 are currently in the green. That’s an 82% hit rate, and for me, that’s a good number! Now, for those who favor fundamental analysis, don’t get me wrong, it has its place. But remember, fundamentals tell you what to buy, while technicals tell you when to buy - to be a perfect investor, you need them both. You could hold a fundamentally strong stock for years, waiting for it to catch up to its "true value," while a technical analyst might ride multiple trends and capture far superior returns during that same time. Also, the opposite can happen – you may see a great technical setup, but if the fundamental factors are against it, you could end up with your money stuck in a bad trade. To put these ideas in perspective, starting with a simulated portfolio of $76,000, where each stock had an equal investment of around $1,000–$1,100, the portfolio is now worth around $124,000. The results are based on buying at marked zones and holding until today. I calculated entries from the middle of the target zone, as it’s a more realistic and optimal approach compared to aiming for perfect lows (which, frankly, feels a bit scammy) to get much(!) higher returns. This method reflects real-world trading. Before we dive in, here are the current Top 5 stocks from My Picks: NVDA: +735% ANET: +343% TT: +227% META: +209% LEN: +164% These numbers demonstrate the effectiveness of a solid technical strategy. Many say it's tough to beat the market with individual stock picks, but these results show it’s not just possible, it’s absolutely achievable with the right tools and approach. Now, let's dive into the charts! 1. Apple (AAPL) - a load-it-up type of setup has worked out nicely. Used previously worked resistance levels. If the stocks performing well and the market cap is big enough then these levels can help you to get on board. Current profit 65% Before: After: --------------------------- 2. Adobe (ADBE) - came down sharply, but the price reached the optimal area and reversed. Current profi 38%. Before: After: --------------------------- 3. Advanced Micro Devices (AMD) - round number, strong resistance level becomes support and the climb can continue. Current profit 101% Before: After: --------------------------- 4. Amazon (AMZN) - came down from high prices to the marked levels and those who were patient enough got rewarded nicely. Current profit 66% Before: After: --------------------------- 5. Arista Networks (ANET) - retest of the round nr. worked perfectly, as a momentum price level, after the strong breakout. Current profit 343% Before: After: --------------------------- 6. Aptiv PLC (APTV): Came down quite sharply and it will take some time to start growing from here, if at all. The setup was quite solid but probably fundamentals got weaker after the all-time high. Current loss -24% Before: After: --------------------------- 7. American Express (AXP) - firstly the round nr. 200 worked as a strong resistance level. Another example is to avoid buying if the stock price approaches bigger round numbers the first time. Came to a previous resistance level and rejection from there… Current profit 104% Before: After: --------------------------- 8. Bio-Rad Laboratories (BIO) - in general I like the price action, kind of smoothly to the optimal zone. It might take some time to start growing from here but also fundamentals need to look over. Current loss 6% Before: After: --------------------------- 9. BlackRock (BLK) - kind of flawless. All criteria are in place and worked perfectly. Current profit 81% Before: After: --------------------------- 10. Ball Corporation (BALL) - a perfect example of why you should wait for a breakout to get a confirmed move. No trade. Before: After: --------------------------- 11) Berkshire Hathaway (BRK.B) - Buy the dip. Again, as Apple, a big and well-known company - all you need to do is to determine the round numbers, and small previous resistances that act as support levels, and you should be good. Current avg. profit from two purchases 64% Before: After: --------------------------- 12) Cardinal Health (CAH) - the retest isn't as deep as wanted but still a confirmed breakout and rally afterward. Still, the bias was correct! Before: After:https://www.tradingview.com/x/83OmlWuv/ --------------------------- 13) Ceridian HCM Holding (DAY) - found support from the shown area but not much momentum. Current profit 20% Before: After: --------------------------- 14) Charter Communications (CHTR) - technically speaking it is a quite good price action but kind of slow momentum from the shown area. Probably came too sharply and did not have enough previous yearly highs to support the fall. Current loss -10% Before: After: --------------------------- 15) Comcast Corp. (CMCSA) - got liquidity from new lows, pumped up quickly, and is currently fairly solid. Current profit 10% Before: After: --------------------------- 16) Cummins (CMI) - got rejected from 2028 and 2019 clear highs, fairly hot stock, and off it goes. Current profit 80% Before: After: --------------------------- 17) Salesforce.com (CRM) - perfect. 50% drop, strong horizontal area, and mid-round nr did the work. Current profit 83% Before: After: --------------------------- 18) Cisco Systems (CSCO) - worked and slow grind upwards can continue. Current profit 30% Before: After: --------------------------- 19) Caesars Entertainment (CZR) - not in good shape imo. It has taken too much time and the majority of that is sideways movement. Again, came too sharply to the optimal entry area. Current loss -16% Before: After: --------------------------- 20) Devon Energy (DVN) - inside the area and actually active atm. Still, now I’m seeing a bit deeper correction than shown. Before: After: --------------------------- 21) Electric Arts (EA) - 6 years of failed attempts to get a monthly close above $150 have ended here. It got it and we are ready to ride with it to the higher levels. Current profit: kind of BE Before: After: --------------------------- 22) eBay (EBAY) - it took some time but again, worked nicely. Before: After: --------------------------- 23) Enphase Energy (ENPH) - got a breakout, got a retest, and did a ~76% rally after that! If you still hold it, as I do statistics, then… Current loss -59% Before: After: --------------------------- 24) Expeditors International of Washington (EXPD) - kind of worked but didn't reach. No trade. Before: After: --------------------------- 25) Meta Platforms (META) - the bottom rejection from the round number $100 is like a goddamn textbook :D At that time 160 and 200 were also a good area to enter. Here are several examples of the sharp falls/drops/declines - watch out for that, everything should come fairly smoothly. Still, it ended up nicely and we have a massive winner here... Current profit 209% Before: After: --------------------------- 26) FedEx (FDX) - I love the outcome of this. Very solid price action and multiple criteria worked as they should. Perfect. Current profit 60% Before: After: --------------------------- 27) First Republic Bank (FRC) - firstly got a solid 30 to 35% gain from the shown area but...we cannot fight with the fundamentals. Current loss 99% Before: After: --------------------------- 28) General Motors (GM) - finally found some liquidity between strong areas and we are moving up. Current profit 47% Before: After: --------------------------- 29) Alphabet (GOOG) - load it up 3.0, a good and strong company, and use every previous historical resistance level to jump in. Current avg. profit after three different price level purchases 63% Before: After: --------------------------- 30) Genuine Parts (GPC) - coming and it looks solid. Before: After: --------------------------- 31) Goldman Sachs (GS) - really close one. Current profit 86% Before: After: --------------------------- 32) Hormel Foods (HRL) - quite bad performance here. Two trades, two losses. The current loss combined these two together is 35% Before: After: --------------------------- 33) Intel (INTC) - at first perfect area from where it found liquidity, peaked at 65%. Still, I make statistics if you still holding it then… Current loss -21% Before: After: --------------------------- 34) Ingersoll Rand (IR) - beautiful! Current profit 144% Before: After: --------------------------- 35) Intuitive Surgical (ISRG) - the trendline, 50% drop, strong horizontal area. Ready, set, go! Current profit 157% Before: After: --------------------------- 36) Johnson Controls International (JCI) - second rest of the area and then it started to move finally.. Current profit 55% Before: After: --------------------------- 37) Johnson & Johnson (JNJ) - Buy the dip and we had only one dip :) Current profit 13% Before: After: --------------------------- 38) CarMax (KMX) - the area is strong but not enough momentum in it so I take it as a weakness. Current profit kind of BE Before: After: --------------------------- 39) Kroger Company (KR) - without that peak it is like walking on my lines Current profit 15% Before: After: --------------------------- 40) Lennar Corp. (LEN) - strong resistance level becomes strong support. Beautiful! Current profit 164% Before: After: --------------------------- 41) LKQ Corp. (LKQ) - just reached and it should be solid. Probably takes some time, not the strongest setup but still valid I would say. Before: After: --------------------------- 42) Southwest Airlines (LUV) - no breakout = no trade! Don’t cheat! Your money can be stuck forever but in the meantime, other stocks are flying as you also see in this post. If there is a solid resistance, wait for the breakout and possibly retest afterward! Currently only lower lows and lower highs. Before: After: --------------------------- 43) Las Vegas Sands (LVS) - channel inside a channel projection ;) TA its own goodness! Current profit 70% Before: After: --------------------------- 44) Microchip Technology Incorporated (MCHP) - worked! Current profit 37% Before: After: --------------------------- 45) Altria Group (MO) - got a bit deeper retest, liquidity from lower areas, and probably a second try.. Currently kind of BE Before: After: --------------------------- 46) Moderna (MRNA) - "seasonal stocks", again too sharp and we are at a loss… Current loss -37% Before: After: --------------------------- 47) Morgan Stanley (MS) - the first stop has worked, and got some nice movements. Current profit 62% Before: After: --------------------------- 48) Microsoft (MSFT) - Load it up 4.0, buy the dip has worked again with well-known stock. Three purchases and avg. return from these are amazing 70% Before: After: --------------------------- 49) Match Group (MTCH) - it happens.. Current loss -53% Before: After: --------------------------- 50) Netflix (NFLX) - almost the same as Meta. Came quite sharply but the recovery has been also quick. Another proof is that technical analysis should give you a psychological advantage to buy these big stocks on deep corrections. Current profit 153% Before: After: --------------------------- 51) NRG Energy (NRG) - Perfect weekly close, perfect retest… Current profit 90% Before: After: --------------------------- 52) NVIDIA (NVDA) lol - let this speak for itself! Current profit 735% Before: After: --------------------------- 53) NXP Semiconductors (NXPI) - usually the sweet spot stays in the middle of the box, and also as I look over these ideas quite a few have started to climb from the first half of the box. Touched the previous highs. Current profit 74% Before: After: --------------------------- 54) Pfizer (PFE) - actually quite ugly, TA is not the strongest. Probably results-oriented but yeah.. Current loss -25% Before: After: --------------------------- 55) PerkinElmer - “after” is EUR chart but you get the point. Current profit 25% Before: After: --------------------------- 56) Pentair (PNR) - worked correctly, 50% drop combined with the horizontal area, easily recognizable, and the results speak for themselves. Current profit 124% Before: After: --------------------------- 57) Public Storage (PSA) - again, previous yearly highs and the trendline did the job. Current profit 36% Before: After: --------------------------- 58) PayPal (PYPL) - the area just lowers the speed of dropping, but slowly has started to recover. Current loss -14% Before: After: --------------------------- 59) Qorvo (QRVO) - slow, no momentum. Current profit 10% Before: After: --------------------------- 60) Rockwell Automation (ROK) - previous yearly high again, plus some confluence factors. Current profit 32% Before: After: --------------------------- 61) Rollins (ROL) - after posting it didn’t come to retest the shown area. Being late for a couple of weeks. Worked but cannot count it in, the only thing I can count is that my bias was correct ;) Before: After: --------------------------- 62) Snap-On Incorporated (SNA) - same story! Before: After: --------------------------- 63) Seagate Technology (STX) - firstly it came there! Look how far it was, the technical levels are like magnets, the price needs to find some liquidity for further growth and these areas can offer it. I like this a lot, almost all the criteria are in place there. Current profit 73% Before: After: --------------------------- 64) Skyworks Solutions (SWKS) - one of the textbook examples of how trendline, 50% drop, round nr. and strong horizontal price zone should match. Still a bit slow and it will decrease the changes a bit. Kind of BE Before: After: --------------------------- 65) TE Connectivity (TEL) - came down, and got a rejection. “Simple” as that. Current profit 37% Before: After: --------------------------- 66) Thermo Fisher Scientific (TMO) - mister Ranging Market. Current profit 19% Before: After: --------------------------- 67) Trimble (TRMB) - finally has started to move a bit. Got liquidity from previous highs again and.. Current profit 45% Before: After: --------------------------- 68) Tesla (TSLA) - made a split. Have been successfully recommended many times after that here and there but two years ago we traded in these price levels and.. Current profit 19% Before: After: --------------------------- 69) Train Technologies (TT) - dipped the box and off it goes! Epic! Current profit 227% Before: After: --------------------------- 70) Take-Two Interactive Software (TTWO) - I like this analysis a lot. Worked as a clockwork. Current profit 60% Before: After: --------------------------- 71) United Rentals (URI) - WHYY you didn’t reach there :D Cannot count it. Before: After: --------------------------- 72) Waters Corp. (WAT) - came to the box as it should be slow and steady. As the plane came to the runway. Current profit 41% Before: After: --------------------------- 73) Exxon Mobil Corp. (XOM) - another escaped winner. Didn’t come down to retest my retest area so, missed it. Before: After: --------------------------- 74) Xylem (XYL) - perfect trendline, good previous highs, 50% drop from the peak and.. Current profit 76% Before: After: --------------------------- 75) Autodesk (ADSK) - took a bit of time to start climbing but everything looks perfect. Nice trendline, 50% drop from ATH, previous yearly highs - quite clean! Current profit 66% Before: After: The strategies above show how useful price action, key levels, and psychology can be for investing. By spotting breakouts, and pullbacks, or focusing on round numbers and past highs, technical analysis helps give traders an edge in understanding the market. Regards, Vaido
NASDAQ:NVDAEducation
by VaidoVeek
"Trading Confluences Explained: Daily Highs, Engulfing Patterns,I break down the key confluences used by professional traders to make high-probability trades. Learn how to leverage Daily Highs/Lows, spot Pin Bars, recognize Engulfing Patterns, and understand Break of Structure to enhance your trading strategy. I'll also dive into Demand Zones, Fibonacci Retracements, and Trendline Analysis to show how these powerful tools can align for stronger trade entries. Plus, I cover an essential aspect of the market – Stop Loss Hunts – and how to avoid being caught by them, while setting up your stop losses intelligently.
Education
by AfaqKhan111