Chart Patterns
Options Blueprint Series: Cost Efficient Skip Strike ButterflyUnderstanding Skip Strike Butterfly
The Skip Strike Butterfly strategy is a unique and cost-effective options trading strategy that builds upon the traditional butterfly spread. This strategy involves buying and selling options at different strike prices to create a position with limited risk and potential for profit. Unlike the traditional butterfly spread, the Skip Strike Butterfly "skips" a strike price, which reduces the overall cost of the trade while maintaining a similar payoff profile.
Benefits:
Cost Efficiency: Lower upfront cost compared to traditional butterfly spreads.
Limited Risk: The maximum risk is limited to the net premium paid for the strategy.
Profit Potential: Potential for significant returns if the underlying asset moves within the expected range.
Understanding the mechanics of the Skip Strike Butterfly strategy can provide traders with a versatile tool for navigating market conditions when trading Corn Futures. This strategy allows traders to participate in market movements with a well-defined risk and reward profile, making it an attractive option for those looking to optimize their trading costs.
Strategy Setup
Setting up the Skip Strike Butterfly strategy for Corn Futures involves selecting the appropriate strike prices and expiration dates. Here, we detail the steps to configure this strategy effectively.
Steps to Set Up the Skip Strike Butterfly:
1. Select the Expiration Date:
Choose an expiration date that aligns with your market outlook and trading plan. Ensure you select an expiration that provides enough time for the expected price movement to occur.
2. Determine the Strike Prices:
Identify the current price of Corn Futures.
Typically, use calls for bullish setups and puts for bearish setups.
Buy one in-the-money (ITM) option.
Sell two at-the-money (OTM) options using a strike located near to where the trade target price is.
Skip one or multiple strikes and buy one further out-of-the-money (OTM) option.
3. Calculate the Cost:
Calculate the net premium paid for the strategy by considering the premiums of each option involved. The net cost is generally lower due to the skipped strike price.
4. Establish the Payoff Structure:
The maximum profit is realized if the price of Corn Futures closes at the middle strike at expiration.
The maximum loss is limited to the net premium paid for the strategy.
Application to Corn Futures
Analyzing the current market conditions for Corn Futures is crucial before implementing the Skip Strike Butterfly strategy. Let's examine the market and set up a trade based on recent data and trends.
Market Analysis:
Current Price: Corn Futures are trading at 456'6 per contract.
Market Trend: The market has shown moderate volatility with a tendency to hover around the 450 level.
Technicals: Recently, buy UnFilled Orders (UFOs) have formed around the 450 level, indicating strong buying interest and potential support at this price. On the other hand, sell UFOs are positioned much higher, around the 490 level, suggesting limited selling pressure in the immediate range and opening the door for a directional move with a potentially strong reward-to-risk ratio.
Setting Up the Trade:
Based on our analysis, we will implement the Skip Strike Butterfly strategy as follows:
Current Price of Corn Futures: 456'6
Expiration Date: 74 days from today.
Strike Prices and Premiums:
Buy 1 ITM Call: Strike Price 450, Premium 27.25
Sell 2 ATM Calls: Strike Price 480, Premium 16 each
Buy 1 OTM Call: Strike Price 540, Premium 6
Net Premium Paid: 27.25 (buy) - 32 (sell) + 6 (buy) = 1.25 points = $62.5 (Point Value is $50/point)
Source: Options chain available at www.tradingview.com
Trade Execution:
Entry Price: The trade is entered at 1.25 points, making it highly cost-efficient.
Target Price: The optimal scenario is for Corn Futures to close at 480 at expiration, where the maximum profit is realized.
Break-Even Points: Calculate the break-even points to ensure clarity on potential losses or gains. For this setup, the break-even points are 451.25 and 508.75.
Risk: In the worst-case scenario, this trade could incur a loss of 31.25 points if Corn Futures surpasses the upper break-even point. Conversely, a minor loss of 1.25 points would occur if Corn Futures falls below the lower break-even point.
Source: Risk profile graph available at www.tradingview.com
Risk Management
Risk management is a critical aspect of any trading strategy, and it is especially important when trading options like the Skip Strike Butterfly. Effective risk management helps protect against unexpected market movements and ensures that losses are minimized while maximizing potential gains.
Importance of Risk Management:
Limit Losses: By setting clear stop-loss levels, traders can limit the amount of capital at risk and prevent large losses.
Preserve Capital: Protecting trading capital is essential for long-term success. Effective risk management allows traders to stay in the game even after a series of losing trades.
Emotional Control: Having a risk management plan helps traders stick to their strategy and avoid emotional decisions driven by market volatility.
Maximize Gains: Proper risk management enables traders to capitalize on profitable opportunities while keeping losses in check.
Techniques for Managing Risk with Skip Strike Butterfly:
1. Stop-Loss Orders:
Set stop-loss orders at predetermined price levels to automatically exit the trade if the market moves against you.
2. Position Sizing:
Only allocate a small percentage of your trading capital to any single trade. This helps to mitigate the impact of any one trade on your overall portfolio.
3. Diversification:
Diversify your trading strategies and instruments to spread risk across different markets and reduce the impact of adverse movements in any one asset.
4. Hedging:
Use other options strategies to hedge your positions. For example, buying protective puts can limit downside risk if the market moves significantly against your position.
5. Regular Monitoring:
Continuously monitor the market and your positions. Be prepared to adjust your strategy or exit the trade if market conditions change.
Conclusion
The Skip Strike Butterfly strategy offers a cost-efficient and flexible approach for trading Corn Futures. By strategically setting up options at different strike prices while skipping an intermediate strike, traders can reduce the cost of the trade while maintaining a similar payoff structure to a traditional butterfly spread. This strategy is particularly useful in markets exhibiting limited price movements, making it ideal for the current conditions in Corn Futures.
Key Takeaways:
Cost Efficiency: The Skip Strike Butterfly reduces the upfront cost of entering a trade, providing a significant advantage over traditional butterfly spreads.
Limited Risk: With a well-defined risk profile, this strategy ensures that losses are capped at the net premium paid.
Profit Potential: Although the maximum profit is achieved if the underlying asset closes at the middle strike price, the strategy still offers substantial profit opportunities within a specific price range.
Risk Management: Implementing robust risk management techniques is essential for success. Utilizing stop-loss orders, managing position sizes, diversifying strategies, and regular market monitoring can help protect trading capital and maximize gains.
When trading options and employing strategies like the Skip Strike Butterfly, it is crucial to stay disciplined and adhere to your trading plan. Always ensure that your risk management measures are in place to navigate market uncertainties effectively.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Trend Reversals and the Sushi Roll Reversal PatternTrend Reversals and the Sushi Roll Reversal Pattern
Understanding trend reversals is essential for optimising trading and managing risks. This article delves into the concept of trend reversals, with a focus on the Sushi Roll reversal pattern—a sophisticated tool that helps traders anticipate significant market shifts—exploring its formation, context, and application.
Understanding Trend Reversals
As you know, a trend reversal indicates a change in the direction of a price movement, transitioning from an upward to a downward trajectory or vice versa. Recognising these reversals is crucial as they can signal opportunities to enter a trade or take profits.
A reversal must be distinguished from minor retracements or "pullbacks," which are short-term movements against a prevailing trend that do not signify a long-term change. Traders analyse reversals through various technical indicators and chart patterns, which provide visual cues and statistical evidence of potential shifts in market momentum.
Several well-known patterns signal trend reversals:
- Head and Shoulders: This pattern appears at the peak of an upward trend and features three peaks, with the middle one being the highest. Its completion, marked by a price fall below the support level—the "neckline"—confirms a trend shift to the downside.
- Double Tops and Bottoms: These patterns occur at the end of a trend and resemble the letter "W" (Double Bottom) or "M" (Double Top). A double top signals a move from an uptrend to a downtrend after failing twice to break through a resistance level, while a double bottom suggests a shift from a downtrend to an uptrend after failing to break a support level twice.
Identifying and confirming these patterns with other analysis tools allows traders to make informed decisions about entering or exiting positions, aligning their strategies with the new trend direction. Thus, understanding and recognising trend reversals is an essential skill in a trader's toolkit.
The Sushi Roll Reversal Pattern: An Overview
The Sushi Roll reversal pattern is a lesser-known but valuable technical analysis tool for spotting potential market reversals. It can effectively be viewed as an expanded version of the engulfing candle setup. Originating from trader Mark Fisher's work, this trend reversal pattern forms over a span of ten trading bars and is utilised to anticipate shifts from an existing trend.
The structure of the Sushi Roll pattern is distinctive from other stock reversal patterns (however, note that it applies to all types of assets, including forex, commodities, and crypto*). It consists of two consecutive five-bar segments. The pattern is identified when the range of the first five candlesticks (high to low) is fully contained within the range of the subsequent five candlesticks. This formation suggests a consolidation and potential volatility increase, signalling traders to prepare for a possible trend reversal. On higher timeframes, this pattern could manifest as just two or three candles, with the latter completely overshadowing the earlier price action, resulting in an engulfing candle pattern.
Criteria for the Sushi Roll Reversal Pattern
- Ten-Bar Formation: The pattern unfolds over ten bars on the chart.
- Range Overlap: The high and low prices of the first five bars must be narrower than those of the next five bars.
- Contextual Positioning: It typically appears at the end of a prevailing trend, either an uptrend or a downtrend.
Analysing the Sushi Roll Reversal Pattern
Traders observe this pattern as a precursor to strategic decisions. When it appears during an uptrend, it might indicate a forthcoming downtrend, and vice versa.
Market Conditions and Reliability
The Sushi Roll pattern can emerge under various market conditions, but it is typically more prevalent and reliable at the peak or trough of significant trends.
The requirement that the highs and lows of the first range must be surpassed indicates an initial attempt to extend the existing trend, which fails as the price reverses and breaks through the opposite end of the range. This action is indicative of a liquidity grab—where market players trigger stop losses or entice latecomers before sharply reversing direction.
Flexibility in Bar Count
While the classic Sushi Roll pattern unfolds over ten bars, the exact number isn't rigid. Variations might occur over eight or twelve bars, with the key being the relative engulfment of one segment by another, not the specific count.
Application in Trading Strategies
The Sushi Roll reversal pattern, while powerful, is optimally used as a component of a broader trading strategy. The key to utilising the Sushi Roll effectively lies in its confirmation through additional indicators or a significant price movement following the pattern. Here’s how traders may enhance its effectiveness:
Seeking Additional Confirmation
Using the Sushi Roll pattern in conjunction with other forms of analysis can significantly improve the reliability of the signals it generates. For instance, in markets like forex, stocks, and commodities, the impact of significant news events can align closely with technical signals.
A news release that shifts market sentiment, such as unexpected corporate news or economic data announcements, can serve as strong confirmation if it aligns with the emergence of a Sushi Roll pattern.
Utilising Momentum Indicators
Incorporating momentum indicators such as the Stochastic Oscillator or Moving Average Convergence Divergence (MACD) can provide supplementary signals. Divergence on these indicators, where price movement and indicator direction do not align, can suggest weakening momentum and potential reversal.
The crossing of the Stochastic back into normal range from overbought or oversold conditions, or a crossover in the MACD line vs its signal line, can also confirm the likelihood of a reversal following a Sushi Roll pattern.
These indicators, alongside 1200+ trading tools, can be found in FXOpen’s free TickTrader platform.
Strategic Placement and Timeframe Alignment
The likelihood of a successful reversal increases if the Sushi Roll pattern forms at a key area of support or resistance. These levels are natural points where reversals are prone to occur.
Additionally, if the pattern aligns with a higher timeframe trend, it provides further validation. For example, the pattern forming at the end of a bearish pullback in an overall bullish market may indicate the resumption of the upward trend.
Entry and Risk Management
Traders typically enter a trade after the Sushi Roll pattern is confirmed, which is marked by the price moving past, and ideally closing beyond, the high or low of the initial range of the pattern. Setting stop losses just beyond the extreme of the second range may help to manage risk.
Given that the pattern aims to capture the onset of reversals, setting profit targets at forthcoming support or resistance levels—where another reversal could occur— may help maximise potential returns while managing exposure.
The Bottom Line
The Sushi Roll reversal pattern is an insightful tool for traders aiming to identify significant trend reversals. This pattern, especially when combined with additional indicators and contextual market analysis, can inform strategic entry and exit points, thereby potentially optimising trading outcomes. Traders interested in exploring this and other sophisticated trading strategies may consider opening an FXOpen account to access a world of advanced trading platforms and tools.
FAQs
What Is a Reversal in Stocks?
A reversal in stocks refers to a change in the price direction of a stock. It marks the end of a current trend, either bullish or bearish, and the beginning of a new trend in the opposite direction. This shift is crucial for traders as it indicates potential entry or exit points based on the new trend's direction.
What Is the Trend Reversal Pattern?
The trend reversal pattern in technical analysis signals a potential change in the prevailing market trend. Examples include the Head and Shoulders, Double Tops and Bottoms, and the Sushi Roll reversal pattern. These patterns help traders identify when a trend might be shifting from upward to downward or vice versa.
What Is the Best Reversal Indicator?
The best reversal indicator can vary by trading style, but common choices include the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Stochastic Oscillator. These tools help detect momentum shifts that may precede a price reversal.
What Is Reversal vs Continuation Pattern?
Reversal patterns indicate a potential change in the direction of the prevailing trend, leading to a new trend. In contrast, continuation patterns suggest that the current trend will persist after a brief pause or consolidation, such as triangles, flags, and pennants. Recognising these patterns helps traders anticipate and react to short-term price movements within broader trends.
*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. 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.
Market Overview Part 7!Me Going Over My Mindset And Strategy To Take You In To My World On How I Trade!
Trade Like A Sniper - Episode 27 - GME - (8th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions.
A couple of things to note:
- I cannot see news events.
- I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range.
- I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks
In this session I will be analyzing Gamestop (GME), starting from the 4-Month chart.
If you want to learn more, check out my other videos on TradingView or on YT.
If you are interested in private coaching, feel free to get in touch via one of my socials.
Trade Like A Sniper - Episode 26 - CNYUSD - (8th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions.
A couple of things to note:
- I cannot see news events.
- I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range.
- I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks
In this session I will be analyzing CNYUSD, starting from the 4-Month chart.
If you want to learn more, check out my other videos on TradingView or on YT.
If you are interested in private coaching, feel free to get in touch via one of my socials.
Trade Like A Sniper - Episode 26 - QQQ - (8th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions.
A couple of things to note:
- I cannot see news events.
- I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range.
- I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks
In this session I will be analyzing Investco QQQ Trust (QQQ), starting from the 4-Month chart.
If you want to learn more, check out my other videos on TradingView or on YT.
If you are interested in private coaching, feel free to get in touch via one of my socials.
Mastering the Art of Investing: Common Mistakes & solutionsLet's keep it straight to the point, Shall We?
1. Emotional Investing:
One of the most prevalent mistakes is allowing emotions to drive investment decisions. Fear and greed can lead to impulsive actions, such as panic selling during market downturns or chasing speculative investments during bullish phases.
Solution: Develop a well-thought-out investment plan based on your financial goals, risk tolerance, and time horizon. Stick to this plan, regardless of short-term market fluctuations. Regularly review and adjust your portfolio, but do so based on rational analysis, not emotional reactions.
2. Lack of Diversification:
Concentrating all investments in a single asset or industry exposes investors to significant risks. If that particular investment performs poorly, it can have a devastating impact on the overall portfolio.
Solution: Diversify your portfolio across different asset classes, industries, and geographic regions. This strategy helps reduce risk and improves the potential for more stable returns over the long term.
3. Market Timing:
Attempting to time the market, i.e., buying and selling based on predictions of short-term price movements, is a common mistake. Even seasoned professionals struggle to consistently time the market correctly.
Solution: Adopt a long-term investment approach. Time in the market is generally more important than timing the market. Stay invested and focus on your financial goals rather than trying to predict short-term market movements.
4. Overlooking Fees and Expenses:
High investment fees and expenses can significantly erode returns over time. Many investors underestimate the impact of these costs.
Solution: Be mindful of the fees associated with your investments, including expense ratios, broker commissions, and advisory fees. Consider low-cost index funds or exchange-traded funds (ETFs) as cost-efficient alternatives.
5. Ignoring Asset Allocation:
Some investors focus solely on individual investments without considering how they fit into their overall portfolio. Neglecting proper asset allocation can expose portfolios to unnecessary risk.
Solution: Determine an appropriate asset allocation based on your risk tolerance and investment goals. Rebalance your portfolio periodically to maintain the desired allocation.
6. Chasing Hot Tips and Fads:
Acting on unsolicited stock tips or investing in the latest fads and trends can lead to poor decision-making and losses.
Solution: Rely on thorough research and due diligence before making any investment. Avoid making impulsive decisions based on hearsay or the fear of missing out (FOMO).
7. Lack of Patience and Discipline:
Investing is a long-term endeavor, and expecting quick riches can lead to disappointment and rash decisions.
Solution: Cultivate patience and discipline in your investment approach. Stay committed to your long-term strategy and avoid making knee-jerk reactions to short-term market movements. Also, another good way of increasing discipline is giving us a boost for our efforts :)
In conclusion, successful investing requires a well-structured plan, emotional resilience, and a commitment to disciplined decision-making. By avoiding these common mistakes and implementing the provided solutions, investors can increase their chances of achieving their financial goals and building a more secure financial future. Remember, investing is a journey, and learning from mistakes can ultimately lead to greater financial wisdom and success.
Have Insights or Questions? Let us know in the comments below.👇
While you do that, how about a boost for some motivation🚀
⚠️Disclaimer: We are not registered advisors. The views expressed here are merely personal opinions. Irrespective of the language used, Nothing mentioned here should be considered as advice or recommendation. Please consult with your financial advisors before making any investment decisions. Like everybody else, we too can be wrong at times ✌🏻
Trade Like A Sniper - Episode 25 - BABA - (8th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions.
A couple of things to note:
- I cannot see news events.
- I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range.
- I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks
In this session I will be analyzing Alibaba (BABA), starting from the 6-Month chart.
If you want to learn more, check out my other videos on TradingView or on YT.
If you are interested in private coaching, feel free to get in touch via one of my socials.
IPO Investing: Bad or Very Bad ?IPOs can be enticing opportunities for investors to jump into potentially high-growth companies from their early stages. While IPOs can offer significant returns, a strategy of investing in every IPO that hits the market is not considered prudent.
Let us explore several key reasons why such an approach is unwise for investors.
Lack of Information:
IPOs often lack comprehensive financial history and operating data. As a result, investors have limited insights into the company's performance, growth prospects, and competitive positioning. Investing without adequate information increases the risk of making uninformed decisions and exposes investors to potentially unprofitable ventures.
Limited Track Record:
Since many IPOs are relatively young companies, they often lack a substantial track record in navigating economic downturns or industry-specific challenges. Assessing their long-term sustainability is just impossible.
High Valuations:
IPOs tend to be priced at a premium to attract investor interest. Especially, When innovative companies go public, It becomes difficult to value such companies owing to the absence of any market comparable. The result is higher valuations. An epic example is NSE:PAYTM . Also, If you boost this post, It would help us to reach many like-minded investors like you.
Uncertain Performance:
When valuations are high, so are the expectations. Newly listed companies face challenges in meeting the high expectations set by the market. While some perform exceptionally well, others struggle to deliver. This brings panic.
Diversification Concerns:
Investing in every IPO can create an imbalanced portfolio. The preset proportions may go haywire. Especially, when investors are forced to become long-term investors in a company due to a substantial decline in the stock price post listing.
Conclusion:
While IPOs may offer the allure of early-stage growth and potential windfall gains, investing in every IPO is not a wise strategy for investors. The lack of information, market volatility, high valuations, uncertain performance, and limited track record are among the key concerns. Instead, investors should approach IPOs cautiously, conduct thorough research, and focus on building a diversified portfolio that aligns with their risk tolerance and long-term investment goals.
Have Insights or Questions? Let us know in the comments below.👇
⚠️Disclaimer: We are not registered advisors. The views expressed here are merely personal opinions. Irrespective of the language used, Nothing mentioned here should be considered as advice or recommendation. Please consult with your financial advisors before making any investment decisions. Like everybody else, we too can be wrong at times ✌🏻
BARBEQUE NATION: The Psychology of YOUR tradesEmotions play a significant role in trading and can have a profound impact on decision-making and overall trading performance. Here are some common emotions that traders experience and how they can influence trading behavior:
1. Fear:
Fear is a powerful emotion that often arises when traders face unexpected market movements or potential losses. It can lead to impulsive decisions, such as closing a position prematurely or avoiding new trades altogether. Fear can prevent traders from sticking to their trading plans and strategies, ultimately hindering their ability to make rational choices.
2. Greed:
Greed is the desire for excessive profits and can lead traders to take unnecessary risks. It often emerges during bullish market trends when traders become overly confident and start making impulsive trades. Greed can cloud judgment and cause traders to hold onto positions longer than they should, leading to significant losses when the market reverses.
3. Hope:
While hope can provide optimism, it becomes problematic when it's not based on logical analysis. Traders may hold onto losing positions hoping for a turnaround, ignoring warning signs that indicate the trade is unlikely to recover. Balancing hope with realistic assessments of market conditions is crucial to avoid capital erosion.
4. Regret:
Regret can arise from missed opportunities or poor decisions. Traders may feel remorse for not entering a trade that subsequently turns profitable, or they may regret entering a trade that results in losses. Regret can lead to impulsive actions, such as chasing trades or deviating from the trading plan to make up for perceived missed opportunities.
5. FOMO (Fear of Missing Out):
FOMO can lead traders to make rushed decisions in an attempt to catch up with perceived profitable opportunities. This can result in impulsive trading and following the crowd without proper analysis. FOMO-driven actions often disregard risk management and trading strategies, leading to poor outcomes.
6. Ego:
Ego can arise from both winning and losing trades. A trader with a big ego may become overconfident after a string of successful trades, leading to complacency and neglect of risk management. Conversely, a trader who experiences losses may let their ego drive them into revenge trading, seeking to prove themselves and recover losses without a sound strategy.
Successful traders learn to manage these emotions through discipline, self-awareness, and a well-defined trading plan. They understand that emotions can cloud judgment and lead to impulsive decisions, so they prioritize rational analysis and risk management to achieve consistent and profitable trading outcomes.
Should we also post on the set of practices we personally follow to build disciplined psychology?
It takes a lot of time and effort to compile such posts. If it was worth your time, Would you give us a boost?
Have Requests, Questions, or Suggestions? DM us or comment below.👇
⚠️Disclaimer: We are not registered advisors. The views expressed here are merely personal opinions. Irrespective of the language used, Nothing mentioned here should be considered as advice or recommendation. Please consult with your financial advisors before making any investment decisions. Like everybody else, we too can be wrong at times ✌🏻
UPl | Wyckoff Events & Phases Explained Wyckoff developed a price action market theory which is still a leading principle in today's trading practice.
The Wyckoff method states that the price cycle of a traded instrument consists of 4 stages – Accumulation, Markup, Distribution, and MarkDown.
👉TEXTBOOK EXAMPLE Accumulation Schematic: Wyckoff Events and Phases👈
Price Action Analysis
And this is the accumulation stage -
1) PS— Preliminary Support, where substantial buying begins to provide pronounced support after a continued down-move.
- Volume increases and price spread widens, signaling that the down-move may be approaching its end.
2) SC—Selling Climax, the point at which widening spread and selling pressure usually in high point and heavy or panicky selling by the public is being absorbed by larger professional interests at or near a bottom.
- Often price will close well off the low in an SC, reflecting the buying by these large interests.
3) AR—Automatic Rally, which occurs because intense selling pressure has greatly decline.
- A wave of buying easily pushes prices up.
- The high of this rally will help define the upper boundary of an accumulation.
4) ST—Secondary Test, in which price revisits the area of the SC to test the supply/demand.
- If a bottom is to be confirmed, volume and price spread should be decline as the market approaches support in the area of the SC.
- It is common to have multiple STs after an SC.
5) SOS—Sign Of Strength, a price advance on increasing spread and relatively higher volume.
6) LPS—Last Point Of Support, the low point of a reaction or pullback after an SOS.
7) BU/LPS- Backing up to an LPS means a pullback to support that was formerly resistant, on diminished spread and volume.
All the phases of accumulation stage-
Phase A:
Phase A marks the stopping of the prior downtrend.
-- Up to this point, supply has been dominant.
-- The approaching cutback of supply is evidenced in preliminary support (PS) and a selling climax (SC).
-- A successful secondary test (ST) in the area of the SC will show less selling than previously and a narrowing of spread and decreased volume, generally stopping at or above the same price level as the SC.
-- If the ST goes lower than that of the SC, one can anticipate either new lows or prolonged consolidation.
-- Horizontal lines may be drawn to help focus attention on market behavior, as seen in the two Accumulation Schematics above.
Phase B:
-- Phase B serves the function of “building a cause” for a new uptrend
-- In Phase B, institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup.
--There are usually multiple STs during Phase B'
-- Institutional buying and selling impart the characteristic up-and-down price action of the trading range.
--Early on in Phase B, the price swings tend to be wide and accompanied by high volume.
Phase C:
-- It is in Phase C that the stock price goes through a final test of the remaining supply.
-- this marks the beginning of a new uptrend, trapping the late sellers (bears).
-- It indicates that the stock is likely to be ready to move up, so this is a good time to initiate at least a partial long position.
-- The appearance of an SOS shortly after a spring or shakeout validates the analysis.
Phase D:
--During Phase D, the price will move at least to the top
--LPSs in this phase are generally excellent places to initiate or add to profitable long positions.
Phase E:
--large operators can occur at any point in Phase E.
--These are sometimes called “stepping stones” on the way to even higher price targets.
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Trade Like A Sniper - Episode 21 - INTC - (7th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions.
A couple of things to note:
- I cannot see news events.
- I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range.
- I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks
In this session I will be analyzing Intel (INTC), starting from the 6-Month chart.
ICT's Market Maker Model - An Easy to Understand GuideIn this video I try to explain ICT's Market Maker Model as simply as I can.
This model basically depicts how smart money efficiently facilitates their positions in the marketplace. It is important to understand some concepts beforehand, such as liquidity, AMD/PO3, market efficiency, crowd mentality, and the fractal nature of price.
I hope you find the video insightful and that it helps you utilize Market Maker Models in your trading.
- R2F
Brilliant Basics - Part 3: Harnessing the Power of Moving AveragWelcome to the third instalment of our Brilliant Basics series, where we help you achieve consistency and discipline in foundational concepts that create a platform for long-term success.
Today, we’re harnessing the power of moving averages. We will explore how to use them effectively and consistently to enhance your trading.
Moving Averages: Momentum Versus Mean Reversion
Moving averages are a beautifully simple and robust indicator that can be used to gauge a market’s level of momentum and its level of mean reversion.
Momentum: Simply by looking at where the price is in relation to a moving average, and the slope of the moving average can tell you a lot about a market’s momentum. Is the price above or below the moving average? How far away from the moving average is the price? Is the slope of the moving average rising or falling? These simple observations can be used to construct robust and objective rule sets for defining trade entries and trade exits.
Example: In the below example of the S&P 500’s daily candle chart, we can see that the 9-period exponential moving average (EMA) is sloping higher and moving away from the 21 EMA – signalling a market with strong momentum. However, the price is now quite far from both moving averages – indicating that the market could be vulnerable to profit-taking.
Past performance is not a reliable indicator of future results
Mean Reversion: When a market is trending, it cycles from periods of momentum to mean reversion. Moving averages provide a dynamic benchmark for how far the price has pulled back from trend highs.
Example: Sticking with the same market as used in our momentum example, we can see that the market has cycled from its momentum phase to its mean reversion phase – pulling back towards the 21 EMA
Past performance is not a reliable indicator of future results
Selecting the Right Moving Averages for Your Trading Style
Different trading styles require different moving average settings to effectively capture market movements. Here’s how you can choose the right settings for your approach:
Position Trading: Daily Simple Moving Averages (SMA’s)
For position traders who hold trades for weeks or months, the 200 SMA and 50 SMA are essential tools. These moving averages provide a broad view of the market's direction and help identify long-term trends.
Past performance is not a reliable indicator of future results
Swing Trading: Daily Exponential Moving Averages (EMA’s)
Swing traders, who typically hold trades for 2-5 days, benefit from the more responsive nature of EMAs. The 21 EMA and 9 EMA are popular choices, allowing traders to capture shorter-term price movements and react quickly to market changes.
Past performance is not a reliable indicator of future results
Day Trading: 5-Minute EMA’s and VWAP
Day traders need even more sensitivity to price movements. Using 5-minute EMAs along with the Volume Weighted Average Price (VWAP) provides an excellent framework for intraday trading. The VWAP, in particular, helps day traders identify the average price over a trading session, factoring in volume, which is crucial for short-term decision-making.
Past performance is not a reliable indicator of future results
3 Steps to Harness the Power of Moving Averages
1. Be Consistent: Use the same moving average settings consistently across your analyses. Consistency ensures that you build a reliable and repeatable process for making trading decisions.
2. Target Pullback Zones: Moving averages act as dynamic support and resistance levels. Target these zones for potential entry points in the direction of the trend. For example, in an uptrend, look for buying opportunities when the price pulls back to the moving average.
3. Combine with Price Patterns: Enhance the effectiveness of moving averages by combining them with price patterns. Patterns such as flags, pennants, and double bottoms can provide additional confirmation for trade entries and exits.
Example: In this swing trading example, notice how EUR/USD pulls back to the upward sloping moving averages. When price does this, the confluence of the moving average and a simple price pattern can provide a strong signal for entering a long trade.
Past performance is not a reliable indicator of future results
Summary
Moving averages are an indispensable tool in a trader’s arsenal, offering insights into both momentum and mean reversion. By selecting the right moving averages for your trading style and consistently applying them, you can significantly enhance your analysis.
In our penultimate instalment, Part 4, we will delve into Multi-Timeframe Analysis , helping you understand how to align strategies across different timeframes for more robust trading decisions. Stay tuned!
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.84% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
SWING TUTORIAL - EMAMILTDThe stock had found a Resistance zone @ 602 during Aug 2021 and had started a Lower Low Pattern ever since.
Eventually finding its Support Zone @ 360 during Mar 2023 after 1 Year and 7 Months.
At this point notice that the Lower Low Pattern in the Price Action, however MACD slightly started showing a Higher Low formation. Hence the Convergence Divergence indicating a good move upward and also the 1st confirmation upward.
Finally in July the stock showed its 2nd confirmation once it successfully exited the Lower Low Pattern Trendline with a massive huge green candle.
Thus giving us our 1st Entry point at this stage which took the stock as close to the previous Resistance zone @ 602 and a safe exit as High as 31% for the Trade as well.
Another cool thing to note here is the Stock also retested the same breakout zone and the MACD as well was making a new Crossover, thus indicating another fresh Entry into the stock.
This trade had eventually broken the 4 Year Resistance zone @ 602 with a large volume and taking the stock as High as 67% in returns as of today.
What do you think about this Tutorial? Give your comments in the Comments Section below:
UNI wave reversal case studyCase study for UNI/USDT chart.
see how the MTF Wave down started at the correction. up to the entry there were no fakedowns. The first Fakedown have a clear long entry similar to the ideal MTF Wave illustrated on the right...
The Mechanics Of Trading - Part XII - 6-4-24 FlagsPart XII
I started this video because a friend asked me for help determining trends on multi-interval (time frames) and asked how I look at trading across multiple intervals. Asking how to best setup/use price trends to capture the best trade setups.
Essentially, it comes down to three key components...
A. Initial reversal/impulse waves should be traded lightly (if at all). They are the "potential price reversal setups" that are usually the most dangerous for traders (and often fairly short in length).
B. Looking for the second wave to form provides traders with the opportunity to catch the bigger Wave-3. This wave forms after the impulse (Wave-1) and a corrective wave (Wave-2), which must stay below any previous ultimate high or above any previous ultimate low.
C. Wave-3, and Wave-5 if applicable, are where traders can flex their muscles related to trade size using the techniques I present to try to capture the MEAT (Sweet Spot) of any trend.
Remember, after Wave-3, you must prepare for the potential end of a trend setup where volatility is likely to increase and risks become a bit more elevated.
I go over multiple techniques in this video.
Fibonacci techniques and Fibonacci Price Theory
Anchor Bars (breakaway bars)
Using Fibonacci Retracements to identify key support/resistance levels for trending
Stochastics
RSI
Wave formations (ZigZag)
and Others
This video is designed as an instructional video to help you incorporate usable techniques into your own trading style.
Hope you enjoy.
The Mechanics Of Trading - Part XI - SPY Flagging ExamplePart XI
I started this video because a friend asked me for help determining trends on multi-interval (time frames) and asked how I look at trading across multiple intervals. Asking how to best setup/use price trends to capture the best trade setups.
Essentially, it comes down to three key components...
A. Initial reversal/impulse waves should be traded lightly (if at all). They are the "potential price reversal setups" that are usually the most dangerous for traders (and often fairly short in length).
B. Looking for the second wave to form provides traders with the opportunity to catch the bigger Wave-3. This wave forms after the impulse (Wave-1) and a corrective wave (Wave-2), which must stay below any previous ultimate high or above any previous ultimate low.
C. Wave-3, and Wave-5 if applicable, are where traders can flex their muscles related to trade size using the techniques I present to try to capture the MEAT (Sweet Spot) of any trend.
Remember, after Wave-3, you must prepare for the potential end of a trend setup where volatility is likely to increase and risks become a bit more elevated.
I go over multiple techniques in this video.
Fibonacci techniques and Fibonacci Price Theory
Anchor Bars (breakaway bars)
Using Fibonacci Retracements to identify key support/resistance levels for trending
Stochastics
RSI
Wave formations (ZigZag)
and Others
This video is designed as an instructional video to help you incorporate usable techniques into your own trading style.
Hope you enjoy.
A textbook reversal signal..And if you do not know what I mean then see the linked idea below ‘the study’. Now the market cap is way to small for my interest but it might appeal to someone or indeed someone who is interested in the long game.
The reversal pattern is one we see play out time and time again in all markets. Most recently on a crypto called CFX (see example below). The psychology between buyers and sellers is very specific and is told in great detail on this particular pattern. The last 6-day candle to print on this chart informed you of the great weakness amongst sellers. This crucial.. for the moment demand returns there practically no resistance until new buyers sell into the market.
Is it possible price action falls further? Sure.
It is probable? No
Ww
Type: trade
Risk: 1%
Timeframe: now
Return: At least 500%
The study
Example
The Mechanics Of Trading - Part X - EOD 2 Min ES RecapPart X - End Of Day 2 Min ES Recap
I started this video because a friend asked me for help determining trends on multi-interval (time frames) and asked how I look at trading across multiple intervals. Asking how to best setup/use price trends to capture the best trade setups.
Essentially, it comes down to three key components...
A. Initial reversal/impulse waves should be traded lightly (if at all). They are the "potential price reversal setups" that are usually the most dangerous for traders (and often fairly short in length).
B. Looking for the second wave to form provides traders with the opportunity to catch the bigger Wave-3. This wave forms after the impulse (Wave-1) and a corrective wave (Wave-2), which must stay below any previous ultimate high or above any previous ultimate low.
C. Wave-3, and Wave-5 if applicable, are where traders can flex their muscles related to trade size using the techniques I present to try to capture the MEAT (Sweet Spot) of any trend.
Remember, after Wave-3, you must prepare for the potential end of a trend setup where volatility is likely to increase and risks become a bit more elevated.
I go over multiple techniques in this video.
Fibonacci techniques and Fibonacci Price Theory
Anchor Bars (breakaway bars)
Using Fibonacci Retracements to identify key support/resistance levels for trending
Stochastics
RSI
Wave formations (ZigZag)
and Others
This video is designed as an instructional video to help you incorporate usable techniques into your own trading style.
Hope you enjoy.
Foreign exchange trading skills worth collecting (Part 2)
Continuing from the previous article;
25. Observe the magnitude of market changes: When the market falls (rises) with the same small amount every day, it may be a signal of a rebound (fall).
26. The dense area is likely to form a support belt or pressure belt: The dense area can be regarded as an obstacle to slow down the market price fluctuations. Once the trading range is broken, the price will make progress. Generally speaking, the longer the trading range lasts, the greater the price movement after the breakout.
27. Significant price rises and falls are often accompanied by key reversals: When the price hits a new high on high trading volume, then falls and closes lower than the previous day, it is usually a reversal phenomenon in the uptrend. The reversal in the downtrend is that the price first goes down, then rebounds strongly on the same day, and finally closes at a higher closing price than the previous day.
28. Pay attention to the head and shoulders pattern: When a head and shoulders pattern is formed on the price chart, it is usually a signal of a big rise. The appearance of the head and shoulders will not be clear until the second shoulder rebounds or pulls back to the level.
29. Pay attention to the highest point of "M" and the lowest point of "W": When the market trend forms a large M on the price chart, it suggests that you can sell. When it forms a W, it suggests that the price will rise.
30. Buy and sell at three highs and three lows: When the market climbs to a peak for the second or third time, it is a bearish signal; otherwise, it is a bullish signal.
31. Observe changes in trading volume: When trading volume rises with price, it is a buy signal. When trading volume increases and prices fall, it is a sell signal, but when trading volume decreases, no matter how the price moves, it is a wait-and-see or expecting a reversal signal.
32. The amount of open contracts can also provide intelligence: If open contracts increase when prices rise, it is a buy signal, especially when trading volume increases at the same time. Conversely, if open contracts increase when prices fall and trading volume is large, it provides sell information.
33. Pay attention to the fact that things will turn around when they reach their extremes, and good times will come after bad times: when a rising trend is very strong, pay attention to the implicit downward trend and pay attention to negative factors at any time; when a falling trend is very weak, pay attention to the implicit recovery information, pay more attention to positive news, and beware of market reversals.
34. Carefully judge the news effect: first, judge the authenticity of the news; second, understand the timeliness of the news; third, analyze the importance of the news; and finally, study the indicative nature of the news.
35. Retire before the delivery period: Commodity prices will have relatively large fluctuations in the delivery month. Commodity trading novices should move to other commodities before this to avoid this additional risk. The potential profits during the delivery period should be sought by experienced spot market traders.
36. Buy and sell when the market breaks through the opening price: This is a good hint of price trends, especially after a major news report. A breakthrough in the opening price may indicate the trend of trading that day or in the next few days. If the market breaks through the upper limit of the opening price, buy; if the breakthrough point is at the lower limit of the opening price, sell.
37. Buy and sell at the previous day's closing price breakthrough point: Many successful traders use this rule to decide when to establish new contracts or increase contracts. It means buying only when the transaction price is higher than the previous day's closing price; or selling when the transaction price is lower than the previous day's closing price.
38. Buy and sell at the previous week's high and low price breakthrough points: This rule is similar to the daily rule mentioned above, but his high and low prices are predicted based on the high point of the week. When the market breaks through the highest point of the week, it is a buy signal; when the market breaks through the lowest point of the week, it is a sell signal.
39. Buy and sell at the previous month's high and low price breakthrough points: The longer you observe, the more market momentum your decision will be based on. Therefore, the price breakthrough point of each month is a stronger hint of price trend, which is more important for futures commodity traders or hedge traders to make or break.
40. Establish pyramid trading: When you add contracts, do not add more contracts than the first one. This is a dangerous trading technique because as long as the market reverses slightly, all your profits will be wiped out. In the inverted pyramid trading, the average cost is close to the market price, which will hurt you.
41. Be careful with stop loss orders: The use of stop loss orders is a simple self-discipline; it can help you stop losses automatically. An important factor is: when you place an order, you must also set a stop loss point at the same time. If you don’t do this, you will lose more money and increase your losses in vain.
42. The retracement in a bull market is not the same as the bear market: conversely, the rebound in the bear market is not a bull market. Most investors like to short in a bull market and believe that it will definitely retrace, and vice versa. Change the rhythm and learn to buy in the retracement in the bull market and short in the rebound of the bear market. You will get more profits.
43. Buy and sell when the price is out of the track: Some successful traders use this rule most often. They buy and sell when prices are out of the norm or beyond general expectations. If ordinary buyers and sellers believe that market prices are rising, but in fact they are not, it is usually a good sell signal, especially after important information is released. Successful traders will wait for the general public to lean to one side, and then choose the time to buy and sell in the opposite direction.
44. The market will always fluctuate in a narrow range after violent fluctuations: when the market stabilizes after a sharp rise or a heavy fall, you must observe when the actual buying or selling begins to increase steadily, so that you can understand whether the market is ready to start, and take the opportunity to get on the train and wait to earn a wave of market.
45. When the bulls are rampant, the rise will slow down: if the market is filled with strong bullish arrogance, the price will not rise easily. Why is this so? When everyone is bullish and enters the market to do more, who can buy again and push the market up? Therefore, the price can only continue to rise after the people who originally did more can't stand the price softening and exit the market.
46. Buy and sell at the breakout points of rising and falling wedges: Any trend has its own process of brewing, generation, and development. When recorded on a chart, it will take on a certain shape. Once a certain pattern is formed, it usually has a considerable enlightenment effect on the future market development. Although it is not absolute, it has a high probability and has its reference value.
47. Don't buy and sell multiple commodities at the same time: If you try to pay attention to the pulse of many markets, that is, if you want to grasp the news of several markets at the same time, you will hurt yourself. Few people can succeed in both the stock index and the grain market at the same time because they are affected by irrelevant factors.
48. Don't add to the losing commodities: No matter how confident you are, don't add contracts to the commodities that have already lost money. If you do that, it shows that you can no longer keep up with the market, but some traders disagree with this rule and prefer to believe in a price averaging technology.
49. In a bear market, put aside the statistical reports: In a bear market, you must be able to ignore all the statistical figures and focus on the market trend. You must understand that the figures to be published reflect the past, not the future. The figures to be published in the future are the results of the present and the near future.
50. The market can only give you so much, so don't hold unrealistic expectations: Some operators always hope to make every penny in the market; trying to squeeze the last drop of profit in the market, the time and energy spent are not worth it; a fish is divided into three parts: the head, the body, and the tail, and the largest part is the body; the operator only needs to find a way to eat the fish meat, and leave the head and tail for others to eat.
I hope it helps you. The rest will be updated in new articles. If you need it, you can check it on the homepage after following it.
Foreign exchange trading skills worth collecting (Part 1)
Charlie Munger once said that if you are allowed to punch a maximum of 20 holes in a piece of paper, each time you punch means you lose a trading opportunity, and after 20 times, your opportunities will be used up. At this time, will you cherish every opportunity?
The same is true in foreign exchange trading. For each transaction, you must treat your account balance as the last bullet. This requires us to constantly reflect and sum up our experience so that every transaction can gain something, whether it is money or experience, we must accumulate something.
The following are 72 trading tricks that I have carefully compiled for you. I hope it will help you on your trading journey! The content is too long, divided into 3 articles,introduction. Please pay attention to it.
72 foreign exchange trading tricks
1. Only use the money you can afford to lose: If you use your family's funds to engage in trading, you will not be able to calmly use your mental freedom to make sound buying and selling decisions.
2. Know yourself: You must have a calm and objective temperament, the ability to control emotions, and will not suffer from insomnia when holding a trading contract. Successful commodity traders seem to have always been able to remain calm during the transaction.
3. Do not invest more than 1/3 of the funds: The best way is to keep your trading funds three times the margin required to hold the contract. In order to follow this rule, it is okay to reduce the number of contracts when necessary. This rule can help you avoid using all the trading funds to decide on buying and selling. Sometimes you will be forced to close the position early, but you will avoid big losses.
4. Do not base trading judgment on hope: Do not hope too much for immediate progress, otherwise you will buy and sell based on hope. Successful people can be unaffected by emotions in buying and selling. When a novice hopes that the market will turn in his favor, he often violates the basic rules of buying and selling.
5. Take proper rest: Buying and selling every day will dull your judgment. Taking a break will give you a more detached view of the market; it will also help you look at yourself and the next goal from another state of mind, so that you have a better perspective to observe many market factors.
6. Do not close profitable contracts easily, and keep profits continuous: Selling profitable contracts may be one of the reasons for the failure of commodity investment. The slogan "As long as there is money to be made, there will be no bankruptcy" will not apply to commodity investment. Successful traders say that you can't close a position just for the sake of profit; you must have a reason to close a profitable contract.
7. Learn to love losses: If you can accept losses calmly and without hurting your vitality, then you are on the road to success in commodity investment. Before you become a good trader, you must get rid of your fear of loss.
8. Avoid entering and exiting at market prices: Successful traders believe that buying and selling at market prices is a manifestation of lack of self-discipline. Unless you use market prices to close a position, you should aim to avoid market orders as much as possible.
9. Buy and sell the most active contract months in the market: This makes trading easier.
10. Enter the market when there is a good chance of winning: You should look for opportunities with a small possibility of loss and a large possibility of profit. For example, when the price of a commodity is close to its most recent historical low, then the possibility of it rebounding upward may be greater than the possibility of it falling.
11. Pick up unexpected wealth: Sometimes you buy and sell a commodity and get a greater profit than expected in a short period of time. Rather than waiting a few days to see why profits come so quickly, it is better to take them and run!
12. Learn to short sell: Most new investors tend to buy up, that is, buy in markets that they think will rise, but because the market often falls faster than it rises, you can quickly make profits by selling at high prices and buying at low prices. Therefore, the counter-trend operation method is worth learning.
13. After making a decision, act decisively and quickly: The market is not kind to those who procrastinate. So one of the methods used by successful traders is to act quickly. This does not mean that you have to be impulsive, but when your judgment tells you that you should close your position, do it immediately without hesitation.
14. Choose a conservative, professional and conscientious salesperson: A good salesperson must be able to pour cold water on you in time to prevent you from overdoing it in this market; at the same time, he must also have professional knowledge to provide you with exceptions that may occur at any time in the market.
15. Successful operations are like slowly climbing up a slope, while failed operations are like rolling down a slope: the stories of getting rich in one day that are widely circulated in the market are just stories. Without a solid foundation, even if you get one day's wealth, you can't keep it. Therefore, successful operators must try to create a framework, cultivate good operating habits, and slowly establish a successful operating model.
16. Never violate good rules: What is a good rule? As long as you think it is a good rule that can help you make a profit or reduce losses in operation, it is a good rule, and you should not violate it. When you find that you have violated a rule, leave the market as soon as possible, otherwise you should at least reduce the volume of operations.
17. Putting it in your pocket is real: a wave of market conditions cannot rise continuously without rest, and you must learn to put the profits in your pocket to avoid the profits on the books turning into losses.
18. Try to use the market for hedging: when the overall economy weakens, market risks increase. In order to reduce risks and increase profits, hedge and sell hedging in the market in order to form a price insurance function.
19. Buy when there is a rumor that the price is going to rise, and sell when it really rises: If there is a rumor in the market that the price is going to rise, then you should buy based on this news, but when this news comes true, it is time to sell. For one sell, there may be multiple sell news, because the market tends to build news into the market price.
20. The bull market will be crushed by itself: This is an old trading rule in the trading market. It says that when the price of a bull market soars, it may be crushed to the limit by its own weight. So, when you are in a bull market, you should be particularly bearish on news.
21. Detect price trends: The price chart is one of the basic tools of successful traders. You can use it to see the main trend of prices. A common mistake made by commodity investors is to buy when the market is basically trending down, or sell when it is rising.
22. Pay attention to the breakout points in the trend chart: This is the only method used by some successful traders. They draw a curve chart of the trading price for several consecutive days. If the price trend breaks through the previous trend and remains for more than two or three days in a row, it is usually a good buy or sell prompt.
23. Pay attention to the 50% retracement point in the main trend: You may often hear that the market is running in a technical rebound. This means that after a big rise (or fall), the market will have a 50% reverse movement.
24. When choosing buying and selling points, use the half-cut rule: This means finding the range of commodity buying and selling, and then cutting the range in half, buying in the lower half, or selling in the upper half. This rule is particularly useful when the market follows the chart track.
I hope it helps you. The rest will be updated in new articles. If you need it, you can check it on the homepage after following it.
