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if you use technical analysis you owe a lot to these individualsTHE HISTORY AND ORIGIN OF TECHNICAL ANALYSIS I am a firm believer that as investors/traders we need to know the historic and major events that have occurred in this magnificent field of ours that have shaped how it is today. Today i want to shed light of knowledge on the history/origin of technical analysis as this is a widely used concept that is used by majority of traders/investors to analyse/predict future market moves through the evaluation of historic market data especially price, volume and implied volatility and many have made a living and good returns on the financial markets using the various technical analysis tools and concepts but not knowing where it all started. many do believe that technical analysis was initiated by Charles Dow in the 1800s but this is not true as evidence of Technical Analysis dates far back as to the 17th century from basic and underdeveloped methods as compared to the more evolved ones used in Morden-day times. Let's get straight into it: 17th CENTURY -- 1. the Dutch east India Company traders The Dutch East India Company which was formed in the Dutch Republic, Amsterdam in 1602 which is known to be the first publicly traded company, trading mainly in spices, Indigo and cotton, which gave way to the first financial market the Amsterdam Stock Exchange. Here is when the earliest forms of technical analysis came to show when the Dutch traders would graph record/keep track of the various price fluctuations of their stock but in a basic form. 2. José or Joseph Penso de la Vega still in the 17th century a Spanish diamond merchant, philosopher and poet best known also as Joseph de la Vega, born 1650 in Spain also considered one of the earliest financial market expert published a marvellous financial read called "Confusion De Confusiones" which provided detailed awareness of how the Dutch financial market participants operated focusing on their illogical behaviour and price patterns they used further more hinting on technical analysis with his descriptions of technical analysis concepts such as puts, calls and pools which are still relevant in Morden-day technical analysis and how he used these in the Amsterdam Stock Exchange. 18th CENTURY Homma Munehisa Homma Munehisa, born 1724 in Sakata, Japan a Japanese rice merchant trading in Dōjima Rice Exchange developed what i consider the most popular form of technical analysis which proved high standards of acceptance as traders/investors world-wide still use it in modern-day times, he initiated the Japanese Candlestick/ K-Line (primarily known as Sakata Charts), which is a price chart that's represents the open, close, high and low prices of a security for a specific time period which was introduced in his book "THE FOUNTAIN OF GOLD- THE THREE MONKEY RECORD OF MONEY" which also shared insights about chart patterns, markets trends and traders human emotions. LATE 19TH AND EARLY 20TH CENTURY Charles Henry Dow considered father of technical analysis born 1851 Charles Dow is the one that first to induct modern-day technical analysis in the United States Of America, he was an American journalist who co-founded Dow Jones and Company which is a publishing firm along ide Edward Davis Jones and Charles Bergstresser. He also co-founded The Wall Street Journal which its first publication was on July 8, 1889 which became the the most reputed financial publication and first of it's kind which was a series of texts that discussed his observations of the U.S stock market especially the industrial and transportation stocks listed in the U.S stock market this gave way to the Dow Jones Industrial Average and Dow Jones Transportation Average, he also held a strong believe that "the stock market as a whole was a reliable measure of overall business conditions within the economy" he also developed the Dow Jones Theory which states that the market has 3 trend phases which was a significant breakthrough in technical analysis as this theory aids traders/investors in identifying the major, intermediate and minor trends in the market. after his passing many other technical analysis developers came from studying his work/publications which include the likes of William Hamilton who later become the editor of the wall street journal, others notable followers of his work include Robert Rhea, George Shaefer and Richard Russel. another prominent figure in the development of modern-day technical analysis is Ralph Nelson Elliot born 1871 whose financial career started as an accountant, Mr. Elliot was famously known for studying 75 years of historical stock market data and recording his research and findings manually as computerized systems where limited which i believe is very outstanding. his work is based on a theory that market movements are not random and that the markets moves in specific trends and patterns (waves) which are influenced by traders/investors psychology. his wave theory gained traction in March 13, 1935 when he stated that the the market will make a bottom and indeed the following trading day the Dow Jones Industrial Average made it's lowest closing price, which proved his Elliot Wave Theory to be a significant technical anaysis concept. 20th CENTURY Technical Indicators with the aid of computerized systems technical analysis evolved into technical indicators which are computer systems backed by mathematical calculations of price data which apply these calculations to analyse large volumes of market data incorporated by algorithms which overlap on charts to forecast future price movements. hope you have a fun read and learned something new. “In learning you will teach, and in teaching you will learn.” Phil Collins put together by Pako Phutietsile as @currencynerd
COINBASE:BTCUSDEducation
by currencynerd
Dark Pool Buy Zones Explained with Pro Trader Nudge SignalsThis lesson is about how to identify when a hidden quiet accumulation of a stock is underway and how to prepare for the momentum runs that follow. NYSE:DIS is our example for today. Dark Pool activity is explained in detail. Alternative Transaction System (ATS) Venues are called Dark Pools of Liquidity. A Buy Zone is an extended period of hidden accumulation of often millions of shares of stock over several weeks to months. Professional traders use these buy zones to enter on the penny spread and instigate a trigger of HFT gaps to the advantage of the pro trader. Learn how you can profit from this activity for swing trading or position trading.
NYSE:DISEducation
by MarthaStokesCMT-TechniTrader
1
How to convert TradingView Alerts to trades on exchange accountsCreating automated trading solutions can often feel like a daunting task. Traders must not only craft complex algorithms but also ensure smooth execution across various exchanges. The process involves handling trade execution, order management, and performance analysis—each exchange presenting its own integration challenges. What may start as a simple strategy can quickly evolve into a time-consuming, resource-heavy project. But what if you could automate your trades directly from your TradingView alerts with just a few clicks? By leveraging alert-based automation, you can easily transform your TradingView alerts into real trades on your preferred exchange. In this article, we’ll walk through how to set up automated trades based on TradingView alerts. We’ll show you how, in just 5 minutes, you can create alerts, link them to an alert bot, and watch as your orders are seamlessly opened and closed on an exchange. Let’s get started with a step-by-step guide for TradingView indicators! Step 1. Click Alert Messages in your create Skyrexio Alert bot, copy webhook URL, messages to open and close trade Step 2. Go to TradingView charts, select trading pair, choose indicator and apply it to the chart Step 3. Set the chart timeframe and indicator configuration to meet your expectations Step 4. Click Alert, select the indicator as the condition, paste the bot message and webhook URL, click Create Note: if you chose Alert close orders when configuring the bot, set another alert with close message to exit trades With just a few simple steps, you can now turn your TradingView indicators into fully automated trades on popular exchanges like Binance, Bybit, OKX, Crypto.com, Gate.io, and KuCoin. This powerful integration streamlines your trading process, enabling you to act on signals without constant monitoring or manual execution. The ability to seamlessly execute trades ensures that you never miss a profitable opportunity, regardless of market conditions. But that’s just the beginning! In the next section, we’ll show you how to convert TradingView strategies into automated trades using alerts. With strategies, you can further refine your approach and unlock even more potential for automation. If you're interested in learning how to take your automation to the next level, stay tuned! Ready to dive deeper into strategy automation? Let us know in the comments if you want to see more on this topic!
Education
by Skyrexio
This Wyckoff VSA Buy in Gold and Short S&P FuturesIn this video produced by Author of "Trading in the Shadow of the Smart Money", Gavin Holmes, we see clear buying by professionals in the GC futures contract (Indicator is PB in the Wyckoff VSA system for TradingView) and clear selling into the e-Mini S&P Futures contract (Indicator is PS in the Wyckoff VSA system for TradingView). The markets move based on three universal laws, its simple as explained over 100 years ago by Richard D Wyckoff, a famous investor in the early 1900's. The laws are: Supply and Demand Cause and Effect Effort Vs Result The fourth law to success is your belief system, often referred to in new thinking as: The Law of Attraction. Enjoy the video and I hope it helps You succeed. Namaste, Gavin Holmes, Author "Trading in the Shadow of the Smart Money" and "Think-Link-Create".
CME_MINI:ES1!Education
by TradeGuider_VSA
Trading GBPUSD | Judas Swing Strategy 15/10/2024Last week proved challenging for the Judas Swing strategy, with three consecutive losses and no wins, which heightened our anticipation for this week. Will we be able to break this losing streak? We'll soon find out. We typically arrive at our trading desks five minutes before the session starts to delineate our zones and settle into the trading rhythm. After delineating our zones, the next step is to wait for a sweep of a high or low of the trading zone, which will assist us in establishing our bias for the trading session. Forty-five minutes later, price swept the liquidity at the high, indicating that we should look for selling opportunities during this trading session. A few minutes after the high was swept, we observed a Break of Structure (BOS) on the sell side, which was encouraging as we avoid entering trades without analysis, even with a sell bias established for the session. Upon identifying the BOS, the next step is to find a Fair Value Gap (FVG) within the price leg that broke structure. The final step in the entry checklist is to wait for price to pull back into the Fair Value Gap (FVG) and to execute the trade only after the candle that enters the FVG has closed. Shortly after, a candle entered the FVG, indicating that we could execute our trade following the close of the candle. It's crucial to understand that by risking only 1% of our trading account for a potential 2% return, we minimize emotional attachment to the trades since we're only risking what we can afford to lose, and we stand to gain more than we risk. After executing the trade, we experienced a significant drawdown, which is a critical point for those who risk more than they can afford to lose. After a patient wait, the trade has turned around and begun to move in our favor, which is thrilling. However, we must still keep our composure as the objective has not yet been achieved 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 15 hours and 20 minutes, our patience was rewarded when our take profit (TP) target was reached, resulting in a 2% gain on a trade where we risked 1%.
Education
by CleoFinance
How to Identify and Trade Flag Patterns EffectivelyThe flag pattern is one of the most effective trading setups in the crypto market, known for its reliability and high probability of continuation in trending markets. Here’s a detailed overview of what a flag pattern is, how to identify it, and why it works so well in crypto trading. What is a Flag Pattern? A flag pattern appears as a brief consolidation following a strong price movement, resembling a rectangular shape. There are two main types of flag patterns: bull flags and bear flags. Bull Flag: This pattern typically forms after a strong upward price movement (the flagpole), followed by a slight pullback or consolidation (the flag) before the price continues its upward trend. The flag usually slopes downward or moves sideways. Example of Bullish Flag Pattern. Bear Flag: Conversely, a bear flag occurs after a significant downward movement, followed by a consolidation that trends slightly upward, indicating a continuation of the downward trend once the price breaks down through the flag. Example of Bearish Flag Pattern. Identifying Flag Patterns To identify a flag pattern, traders look for: 🏳️ Flagpole: This is the initial sharp price movement. 🏳️ Flag Formation: This should be a consolidation phase that lasts from 2-3 candles up to more than ten, depending on the timeframe. 🏳️ Volume Analysis: Ideally, the volume should be higher during the flagpole and lower during the flag consolidation. An increase in volume upon breakout is a strong confirmation of the continuation. Here is the example chart for identifying the flag pattern: Trading the Flag Pattern To trade a flag pattern effectively, follow these steps: 📈 Entry: For a bull flag, consider entering the trade once the price breaks above the upper boundary of the flag. For a bear flag, enter on a break below the lower boundary. 📈 Stop Loss: Place your stop loss just below the flag (for bull flags) or above the flag (for bear flags). 📈 Profit Target: A common target is to measure the height of the flagpole and project that distance from the breakout point. Example chart showing how to place a trade using the flag pattern: Why It Works in Crypto Markets The flag pattern is particularly effective in the crypto market for several reasons: 📊Volatility: Cryptocurrencies are highly volatile, which can create strong price movements leading to clear flag formations. 📈 Trend Continuation: Flags often appear in trending markets, where there’s a significant amount of bullish or bearish momentum. 🧠 Psychological Factors: Traders recognize these patterns, leading to increased buying or selling pressure at breakout points. Example of Bullish and Bearish Flag Pattern: Bullish Flag: Bearish Flag: Flag patterns are highly effective in crypto trading, offering clear signals for trend continuation. They are especially useful in volatile markets, providing reliable entry and exit points. By identifying strong momentum during the breakout and combining it with volume analysis, traders can use flag patterns to make well-informed, high-probability trades.
COINBASE:BTCUSDEducation
by HexaTrades
Avoiding the Pump and Dump: A Beginner's GuideAvoiding the Pump and Dump: A Beginner's Guide to Protecting Your Investments In the dynamic world of stock trading, new traders are constantly seeking ways to maximize profits and minimize risks. Unfortunately, one of the most deceptive and harmful schemes that can easily trap beginners is the infamous pump and dump scheme. This fraudulent practice has been around for decades, targeting unsuspecting traders by artificially inflating a stock's price and then swiftly cashing out, leaving the victims with significant losses. For traders on platforms like TradingView, especially those just starting, it’s crucial to understand how to spot these schemes and avoid falling prey to them. This guide will provide you with the knowledge you need to recognize pump and dump schemes by analyzing monthly, weekly, and daily charts, identifying repetitive patterns, and understanding market sentiment. By the end, you'll know exactly what to look for to safeguard your investments. What is a Pump and Dump? A pump and dump scheme occurs when a group of individuals, often coordinated through social media or private channels, artificially inflates the price of a stock. They "pump" up the stock by spreading misleading information or creating hype around the asset, leading to increased buying interest. Once the stock price has risen significantly, the perpetrators "dump" their shares at the elevated price, leaving uninformed buyers holding a stock that will soon plummet in value. The key elements to watch out for are: Unusual price spikes without any corresponding fundamental news. High trading volume during these spikes, suggesting that a group of individuals is actively manipulating the price. Aggressive promotion through emails, forums, or social media channels, often making exaggerated claims about a stock's potential. Understanding Timeframes: Monthly, Weekly, and Daily Charts One of the most effective ways to spot pump and dump schemes is by analyzing various timeframes—monthly, weekly, and daily charts. Each timeframe provides different insights into the stock's behavior, helping you detect irregular patterns and red flags. Monthly Charts: The Big Picture Monthly charts give you a broad overview of a stock's long-term trends. If you notice a stock that has been relatively inactive or stagnant for months, only to suddenly surge without any substantial news or developments, this could be a sign of manipulation . What to look for in monthly charts: Sudden spikes in price after a prolonged period of flat or declining movement. Sharp volume increases during the price rise, especially when the stock has previously shown little to no trading activity. Quick reversals following the price surge, indicating that the pump has occurred, and the dump is on its way. For example, if a stock shows consistent low trading volume and then experiences a sudden burst in both volume and price, this is a classic sign of a pump. Compare these periods with any news releases or market updates. If there’s no justifiable reason for the spike, be cautious . Weekly Charts: Spotting the Mid-Term Trend Weekly charts help you see the mid-term trends and can reveal the progression of a pump and dump scheme. Often, the "pump" phase will be drawn out over several days or weeks as the schemers build momentum and attract more buyers. What to look for in weekly charts: Gradual upward trends followed by a sharp, unsustainable rise in price. Repeated surges in volume that don’t correlate with any fundamental analysis or positive news. Recurrent patterns where a stock has previously been pumped, experienced a sharp decline, and is now showing the same pattern again. Stocks used in pump and dump schemes are often cycled through multiple rounds of pumping, so if you notice that a stock has undergone several similar spikes and drops over the weeks, it’s a strong indicator that the stock is being manipulated. Daily Charts: Catching the Pump Before the Dump Daily charts provide a more granular view of a stock's price movement, and they can help you detect the exact moments when a pump is taking place. Because pump and dump schemes can happen over just a few days, monitoring daily activity is critical. What to look for in daily charts: Intraday price spikes that happen suddenly and without any preceding buildup in momentum. A huge increase in volume followed by rapid price drops within the same or subsequent days. Exaggerated price gaps at market open or close, indicating manipulation during off-hours or lower-volume periods. On a daily chart, if a stock opens significantly higher than the previous day's close without any news or earnings report to back it up, this could be the start of the dump phase. The manipulators are looking to sell their shares to anyone who has bought into the hype, leaving retail traders holding the bag. Repeated Use of the Same Quote: A Telltale Sign of a Pump and Dump Scheme Another red flag is when the same stock or "hot tip" keeps resurfacing in social media, forums, or emails. If you notice that the same quote or recommendation is being promoted repeatedly over time, often using the same language, this is a strong sign of manipulation. The scammers are likely trying to pump the stock multiple times by reusing the same tactics on new, unsuspecting traders. Be cautious of stocks that: Have been heavily promoted in the past. Show a history of sudden spikes followed by rapid declines. Are promoted with vague, overhyped language like "the next big thing" or "guaranteed gains." If the same stock is mentioned multiple times in trading communities, check its historical chart. If the stock has undergone previous pumps, you will likely see sharp rises and falls that align with the promotional periods. How to Avoid Pump and Dump Schemes Now that you know how to spot the signs, here are actionable steps you can take to protect yourself from becoming a victim of a pump and dump scheme: Do Your Research: Always verify the information you receive about a stock. Check if there’s legitimate news, earnings reports, or significant company developments that justify the price movement. Avoid relying solely on social media or forums for your stock tips. Look at Fundamentals: Focus on stocks with solid fundamentals, such as earnings growth, revenue increases, and strong management. Stocks targeted for pump and dump schemes often have weak or non-existent fundamentals. Use Multiple Timeframes: As we've discussed, examining stocks across different timeframes—monthly, weekly, and daily—can help you spot abnormal price behavior early on. Monitor Volume and Price Movements: If you see large, unexplained surges in volume and price, be skeptical. Legitimate price increases are usually accompanied by news or fundamental changes in the company. Avoid Low-Volume Stocks: Pump and dump schemes often target low-volume, illiquid stocks that are easier to manipulate. Stick to stocks with healthy trading volumes and liquidity. Set Stop Losses: Always use stop losses to protect yourself from sudden price drops. Setting a stop loss at a reasonable level can help limit your losses if you accidentally invest in a stock being manipulated. Be Wary of Promotions: If a stock is being aggressively promoted, ask yourself why. More often than not, aggressive promotions are a sign that the stock is part of a pump and dump scheme. Conclusion Pump and dump schemes prey on traders’ fear of missing out ( FOMO ) and the allure of quick profits . However, by using a disciplined approach to trading, analyzing charts across multiple timeframes, and paying close attention to volume and price movements, you can avoid falling victim to these schemes. Remember: If something seems too good to be true, it probably is. Protect your investments by staying informed, doing thorough research, and trusting your analysis. By following these guidelines, you can navigate the markets with confidence and avoid the pitfalls of pump and dump schemes. Happy trading, and stay safe!
Editors' picks
EEducation
by TradeVizion
6
Using Big Data Analytics in Forex TradingUsing Big Data Analytics in Forex Trading Recent years have seen explosive growth in the amount of data in circulation, and the financial industry is no exception. The use of big data analytics in forex trading has become increasingly popular as traders and institutions look to gain a competitive edge through the analysis of vast data sets. The forex market is the largest financial market in the world, with a daily turnover of trillions of US dollars. The market is constantly changing. One might argue that such a tendency to change makes it difficult for traders to make decisions. Therefore, the use of big data in forex analytics acts as an essential advanced tool and serves as a means to overcome decision-making challenges. This FXOpen article explores why big data in trading has the potential to revolutionise the way traders approach the market and looks into how it can provide them with valuable insights. Big Data in Forex Trading Big data refers to the large quantity of diverse information that is generated every day from a variety of sources. Such volumes of information cannot be processed and analysed by users or simple office software. Therefore, there’s a whole set of sophisticated technologies designed for working with it. The set typically includes tools for data collection, storage, preprocessing, cleaning, and analysis. To collect and store large amounts of information, traders use cloud computing and distributed databases. Before analysing it, traders preprocess and clean it to remove any noise or inconsistencies using techniques such as normalisation and outlier detection. In the context of forex trading, big data includes market figures, economic indicators, social media sentiment, news articles, and more. The role of big data in forex is enormous. With the help of analytics, traders can select relevant, promising assets and make informed trading decisions, thereby gaining a competitive advantage. Sources of Big Data in the Forex Market Predictive analytics and big data provide actionable insights about the FX market and the general mood of market participants. Here are some of the sources incorporated into big data models used for forex trading purposes: - Market figures — real-time and historical price, order flow, and trade execution data. - Economic indicators — figures of inflation, GDP, employment, various indices, earnings reports, industrial production figures, and other economic indicators. - Social media sentiment — comments from social media platforms such as Twitter, LinkedIn, and Facebook, which provide insights into public sentiment towards certain countries and their currencies. - News articles — articles from financial news sources such as Bloomberg and Reuters, which inform traders about market trends, governmental policies, and major events. How Big Data Analytics Affect Forex Big data analytics significantly impact forex trading, offering both advantages and challenges. Let’s first explore how big data analytics can help in forex trading. Pros: - Improved forecasting and predictive modelling - Real-time market monitoring and analysis - Enhanced risk management and decision support Analysing big data helps traders uncover future market movements and identify patterns that may not be visible through traditional analysis methods. It can provide traders with real-time insights into current trends and high-impact economic events, which allows them to react quickly to changes. Analytics can also simplify risk identification and management. These benefits make big data analytics a key tool for renowned and successful financial institutions. For example, JPMorgan Chase uses it to analyse millions of transactions daily, detect suspicious patterns, and prevent fraudulent activities and money laundering. Meanwhile, the investment bank Goldman Sachs uses it to identify trends in various markets, improve the company’s trading strategies, and enhance risk management. Despite the inspiring cases and the benefits of using it, big data analytics is not a cure-all and has some downsides. Cons: - Requires significant resources - Possible security issues - Possible overfitting Since big data analysis requires significant computing power and storage, as well as high bandwidth, using this approach is not cheap, and it can be problematic for retail traders and trading start-ups. Besides, big data analytics involves collecting sensitive financial information, which is often targeted by cyberattacks. Unintentional breaches are also possible, so companies employ additional security algorithms. This can increase costs as well. Another issue comes when the data analysis model fits too closely to its training basis. Overfitting makes it unable to perform accurately against unseen information. It is related to the issue of capturing patterns without being overly influenced by irrelevant information. If traders rely on algorithms to analyse data, this drawback could hinder their performance. Risk Management in Big Data-Driven Trading Based on the limitations and possible problems with large-scale analyses, the question of risk management in the use of big data arises. Here are some considerations on what a trader could do to minimise risks. 1. Traders use risk controls and backtesting to check whether trading strategies are effective and not overly risky. 2. To ensure that the figures are accurate, consistent, up-to-date, and reliable, traders may implement quality control measures such as data validation and verification. 3. Leveraging different sources of big data allows traders to drive their risk management strategies with more confidence as they get a holistic picture of the currency market. Big Data Analytics Strategies in Forex The most popular big data forex trading strategy involves using traditional technical and fundamental analysis, which is enhanced by additional insights and information obtained through big data analytics. Then comes trading based on sentiment analysis and social media monitoring. As mentioned, social media is necessary to understand how the trading community feels about the currency and whether they think it is a good decision to trade it. Lastly, big data analytics improves algorithmic trading, which involves using computer programs to execute trades automatically based on predefined rules. Big data analysis may be helpful in determining these rules. Final Thoughts The use of big data in forex trading and analysing vast amounts of information helps traders gain valuable insights into market trends and make more informed decisions. However, there are also challenges and limitations associated with big data analytics, including overfitting and cybersecurity threats. If you want to trade in the forex market with attractive conditions, you can open an FXOpen account. To create and test trading strategies, you can use the TickTrader trading platform. Alongside trading tools and various assets, there are advanced charts with accurate price history. 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
5
Master Breakout Trading: The Strategy Every Trader Needs to KnowIn the world of trading, a "breakout" refers to a price movement that occurs when an asset moves beyond a predefined support or resistance level. These pivotal moments often signal a significant shift in market dynamics and can lead to substantial price changes. Breakouts are crucial for traders as they can mark the beginning of a new trend. A breakout above a resistance level may suggest the start of an uptrend, while a breakout below support could indicate a downtrend. Learning to identify and trade breakouts effectively can unlock profitable opportunities and help traders capitalize on shifting market conditions. What Are Breakouts in Trading? Breakouts occur when the price of an asset surpasses a well-established support or resistance level, suggesting a potential shift in market direction. A bullish breakout happens when the price breaks above resistance, signaling upward momentum. Conversely, a bearish breakout occurs when the price drops below support, often indicating the continuation of a downtrend. Breakouts are significant because they often lead to increased trading activity and volatility, offering traders opportunities to enter or exit positions at pivotal moments. These breakouts are often accompanied by increased trading volume, which helps confirm the validity of the price move and suggests that a new trend is forming. How Breakouts Occur and Their Importance Breakouts occur when price action surpasses critical price levels—either support or resistance—that have acted as barriers in the past. These levels are often identified through technical analysis and represent key turning points where buyers or sellers have historically entered the market in large numbers. --Support Levels: A price point where an asset tends to stop falling and may reverse upward. A bearish breakout occurs when the price drops below this level, signaling a continuation of the downtrend. --Resistance Levels: A price point where an asset typically stops rising and may reverse downward. A bullish breakout occurs when the price surpasses this level, suggesting the potential for further upward movement. Breakouts are important because they can indicate the start of a new market trend. When price breaks through a support or resistance level, it signals that the market sentiment has shifted, and traders can take advantage of this movement to capture profits. For successful breakout trading, it's essential to confirm these breakouts using volume and other technical indicators to avoid being caught in a false breakout, where price briefly breaks a level but reverses direction shortly after. Examples of Breakout Scenarios Breakouts can present profitable trading opportunities in both bullish and bearish markets. Here are two examples: --Bullish Breakout Example Take a look at the following EUR/USD chart, where the price breaks above the 1.0200 level after previously rebounding off resistance. Traders would interpret this as a bullish breakout and may look to enter long positions, expecting the pair to sustain its upward momentum. This breakout provides a buying opportunity as market sentiment turns positive and shifts to the upside. --Bearish Breakout Example Take a look at the following EUR/USD chart, where the price breaks below the 1.03500 level after previously rebounding off support. Traders would view this as a bearish breakout and may consider entering short positions, anticipating the pair to maintain its downward momentum. This breakout offers a selling opportunity as market sentiment shifts to the downside. In both examples, breakouts offer traders clear entry points based on the movement beyond established levels, allowing them to profit from the new trend. 👆 Read Also this deep article where we cover everything you need to know about Support-and-Resistance in trading. The Concept of Breakout Trading Breakout trading is based on the premise that once price moves beyond significant support or resistance levels, it is likely to continue in that direction for some time. This approach involves recognizing these levels, waiting for the breakout to occur, and entering a trade in the direction of the breakout. Key elements of breakout trading include: --Identifying Key Levels: Use technical analysis to locate critical support and resistance levels where price has previously struggled to break through. --Confirming the Breakout: Ensure the breakout is accompanied by strong volume to confirm its validity. --Risk Management: Employ Stop Loss orders to protect against false breakouts, where the price briefly breaks the level but then reverses. --Maximizing Profits: Traders aim to capture as much of the price movement as possible, staying in the trade as long as the breakout trend remains intact. To identify potential breakouts, traders often use indicators like trendlines, moving averages, and volume analysis. Chart patterns, such as triangles or flags, can also signal a potential breakout. When combined with volume analysis, these tools help confirm that a breakout is likely to lead to a sustained price movement. Popular Breakout Trading Strategies: --Trendline Breakout Strategy One of the most popular strategies involves using trendlines. A trendline is drawn by connecting two or more price points, creating a visual representation of market direction. When the price breaks through the trendline, it signals a potential reversal or continuation of the trend. Step 1: Draw trendlines by connecting significant highs and lows. Step 2: Monitor price as it approaches the trendline. Step 3: Enter a trade when the price closes beyond the trendline, with confirmation from increased volume. Step 4: Place a Stop Loss order just below/above the breakout level to manage risk. Support and Resistance Breakout Strategy: This strategy involves identifying key support and resistance levels on a chart. Once these levels are breached, traders enter the market based on the direction of the breakout. Step 1: Identify key support and resistance levels from historical price data. Step 2: Wait for the price to approach these levels. Step 3: Enter a position after the price breaks through, with confirmation from volume. Step 4: Use Stop Loss orders to protect against false breakouts. Volume-Based Breakout Strategy: Volume is a critical component of successful breakout trading. A significant increase in volume during a breakout indicates strong market interest, making it more likely that the breakout will continue. Step 1: Monitor volume as the price approaches key levels. Step 2: Confirm the breakout with a volume spike. How to Implement a Breakout Trading Strategy To implement a breakout trading strategy effectively: --Set Up Your Platform: Ensure your trading platform is equipped with real-time charts like Tradingview, technical indicators, and alerts to identify breakouts as they happen. Customizing your charts with trendlines, support/resistance levels, and volume indicators will help in visualizing breakout points. --Use Risk Management: Proper risk management is key to avoiding large losses. Place Stop Loss orders just below (for bullish breakouts) or above (for bearish breakouts) the breakout level to limit potential losses from false breakouts. 👆 Read Also this article where we cover everything you need to know about Risk Management in trading, from essential strategies to practical tips for safeguarding your capital. Common Mistakes in Breakout Trading Breakout traders often fall into a few common traps: --Overtrading: Jumping into too many trades or reacting to every price movement can lead to losses. It's crucial to wait for confirmed breakouts before entering trades. Falling for False Breakouts: A false breakout occurs when price temporarily moves beyond a key level but then reverses. Confirming the breakout with volume or other indicators can help avoid this mistake. -Ignoring Risk Management: Failing to set proper Stop Losses can lead to significant losses if the market moves against you. Always manage risk by placing Stop Loss orders at appropriate levels. Tips for Successful Breakout Trading --Combine Indicators: Use multiple technical indicators, such as moving averages, volume analysis, and trendlines, to confirm breakouts. This increases the reliability of breakout signals. --Maintain Discipline: Stick to your trading plan and avoid making emotional decisions. Impatience can lead to entering or exiting trades prematurely, undermining your strategy. --Refine Your Strategy: Continuously review and refine your trading strategies based on market conditions. Markets evolve, and regular analysis helps ensure your breakout strategies remain effective. 👆 Lastly, read this article where we cover everything you need to know about the Trader's Checklist for Successful Trading, providing key steps and insights to help you stay on track and maximize your trading success. In Conclusion.. Breakout trading offers a powerful way to capitalize on significant price movements in the market. By mastering strategies like trendline, support/resistance, and volume-based breakouts, traders can position themselves to profit from new trends. Effective risk management and discipline are crucial for long-term success. With continuous learning and strategy refinement, breakout trading can become a highly rewarding approach to navigating financial markets.
Education
by FOREXN1
3
Beware of Symmetrical Triangles. And yes, they occur oftenWhy Beware? Ambiguous Direction: Symmetrical triangles don't inherently indicate whether the breakout will be upward or downward. Without additional confirmation from volume or other technical indicators, predicting the direction can be challenging. Market Noise: In volatile markets, price movements within the triangle can be erratic, making it difficult to identify clear breakout signals amidst the noise. False Breakouts: Not every symmetrical triangle leads to a significant price movement. Sometimes, the breakout fails, resulting in a false signal that can trap traders in losing positions.
Editors' picks
Education
by Blayno_MTOPS
2
SWING TUTORIAL - PODDARMENTIn this tutorial, we analyzes the reversal of NSE:PODDARMENT 's 50% decline, identifying key technical indicators that signaled a buying opportunity. We'll explore how to recognize bullish momentum and optimal entry points using chart analysis. NSE:PODDARMENT reached its all-time high before experiencing a significant downturn. However, the stock began forming support levels at 250 in June 2023 and repeatedly retested this level until June 2024. Key Observations: 1. Support Levels: The stock consistently found support at ₹250, indicating a potential reversal. 2. MACD Indicator: The Moving Average Convergence Divergence (MACD) line showed steady upward momentum, signaling increasing bullish pressure. 3. Consolidation: Price action demonstrated a consolidation phase, forming a strong support zone. 4. MACD Crossover: The successful crossover in June 2024 confirmed the bullish trend, creating an entry opportunity. Trading Strategy and Results: Based on this analysis, our entry point was established at the MACD crossover. The stock subsequently rose to its swing high levels, yielding approximately 67% returns. Note: This case study demonstrates the effectiveness of combining technical indicators to identify bullish momentum. By recognizing support levels, MACD movements, and consolidation patterns, traders can pinpoint potential entry points. Would you like to explore more technical analysis concepts or case studies? Share your feedback and suggestions in the comments section below.
NSE:PODDARMENTEducation
by thepranam
XAUUSD GOLD: Understanding Trend Shifts for Precision Entries👀👉 In this video, we explore the inner workings of market trends and, more importantly, how smart money manipulates price action to sweep liquidity, allowing them to place their orders and sustain the trend. We also showcase a powerful, free indicator from TradingView’s extensive toolset. Here's what we cover: 📊 Understanding Trends: How trends truly operate in the market.
 💰 Smart Money Tactics: How institutional traders manipulate price action to sweep liquidity and execute large orders.
 🔑 Key Levels: Identifying crucial accumulation and distribution zones to approach potential trade setups effectively.
 🛠 TradingView Indicators: Learn how to access tools that help spot when price is overextended.
 🔎 Market Structure: Discover how to locate resting liquidity and anticipate price reactions, understanding the role of liquidity in market movement.
 📈 Trade Setups: Using a practical approach, we examine price interactions with liquidity, blending Wyckoff theory and ICT concepts for sharper trade decisions. Disclaimer: This video is for educational purposes only and is not financial advice. Trading involves significant risks. Be sure to conduct your own research before making any decisions. Trade responsibly.
Editors' picks
FX:XAUUSDEducation
by tradingwithanthony
9
Options Blueprint Series [Intermediate]: Vega-Neutral Gold Play1. Introduction Gold is currently in an uptrend, presenting a potentially favorable environment for bullish traders. However, with implied volatility (IV) sitting around its mean, there’s uncertainty about whether IV will rise or fall in the near future. In such a scenario, traders may want to neutralize their vega exposure to avoid being negatively affected by changes in volatility. This article focuses on setting up a Call Ratio Spread, a bullish option strategy that provides positive delta while allowing for further adjustments that could keep vega neutral. This allows traders to capitalize on Gold’s potential uptrend while minimizing risk from changes in implied volatility. 2. Current Market Context The Gold futures market shows strong levels of support, which reinforces the bullish outlook. On the continuous Gold futures chart above GC1!, we observe key support levels at 2646.2 and 2627.2-2572.5. These levels could act as price floors, helping the uptrend continue if tested. Similarly, when examining the contract-specific below chart for GCQ2025, we identify supports at 2725.4 and 2729.5-2705.5. These levels provide solid ground for bullish trades on this specific contract, giving traders additional confidence in entering long positions. With implied volatility near its average (see the chart below), the market’s future volatility direction is unclear. Traders using options may choose adapt to this environment, ensuring that changes in volatility do not work against them. 3. Options Strategy: Call Ratio Spread To take advantage of Gold’s uptrend while neutralizing the risk from changes in volatility, we could employ a Call Ratio Spread. This strategy offers a bullish stance while maintaining vega neutrality, protecting the trader from swings in implied volatility. Setup: Buy 1x 2600 Call at 256.15 Sell 2x 3500 Calls at 23.32 Expiration: July 28, 2025 This configuration generates positive delta, meaning the strategy will benefit from upward price movement. At the same time, by selling two calls at a higher strike, we offset the vega exposure, ensuring that changes in volatility won’t dramatically affect the position. The strike prices and expiration selected help create a risk profile that works well in a bullish market. The maximum gain potential occurs if Gold continues to rise but stays below the higher 3500 strike, while the vega neutrality minimizes any volatility risks as the trade begins. Notice the breakeven point for this strategy is 2809.5, meaning the trade becomes profitable if Gold exceeds this level by expiration. 4. Why Use Micros? Traders looking for a more flexible approach can consider using Micro Gold Futures (symbol: MGC) instead of standard Gold futures contracts. Micro Gold Futures offer smaller contract sizes, which translate into lower margin requirements and a more precise way to control risk. This makes them an attractive alternative for traders with smaller accounts or those looking to scale into positions gradually. Additionally, Micro Gold Futures allow traders to fine-tune their exposure to Gold without the larger capital commitment required by standard contracts. For those implementing strategies like the Call Ratio Spread, Micros provide a cost-effective way to execute similar trades with a lower financial commitment. Contract Specs and Margin Requirements Gold Futures (symbol: GC) represent 100 troy ounces of gold, and their margin requirements can vary depending on market volatility and the broker. Typically, the initial margin requirement for a standard Gold futures contract is around $10,000 to $12,000, but this can fluctuate. For traders seeking more flexibility, Micro Gold Futures (symbol: MGC) offer a smaller contract size, representing 10 troy ounces of gold. The margin requirement for Micro Gold Futures is significantly lower, usually in the range of $1,000 to $1,200, making it a more accessible option for those with smaller accounts or those looking to fine-tune their exposure. 5. Risk Management As with any options trade, managing risk is essential. In the case of a Call Ratio Spread, the primary risk comes from the naked short calls at the 3500 strike price. If Gold rallies aggressively beyond 3500, the trader faces unlimited risk due to the uncovered nature of the short positions. To mitigate this risk, traders should consider using stop-loss orders or adjusting the trade if Gold's price approaches the 3500 level too quickly. Another way to eliminate the unlimited risk component to the upside would be to convert the Call Ratio Spread into a Call Butterfly by buying an additional call above the 3500 strike price, effectively capping the risk. This adjustment still allows for positive delta exposure while limiting potential losses if Gold moves sharply higher. Additionally, monitoring implied volatility is key. While the position starts with neutral vega exposure, this will change as the underlying asset price moves and time passes, especially as expiration approaches. The vega exposure can increase or decrease depending on these factors. If maintaining the vega-neutral characteristic is a priority, further adjustments—such as rolling options or modifying strike prices—could be made to keep the position aligned with the trader’s volatility outlook. 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.
COMEX:GC1!Education
by traddictiv
Mastering Pitchforks: A Powerful Tool For TradersGood morning Traders So I had a question from one of my followers: can you explain pitchforks in more detail: Pitchforks are a fantastic tool for traders at any experience level, offering a visual way to map out potential support and resistance levels based on market movements. With three key anchor points, a Pitchfork reveals trend channels by highlighting the market's natural ebb and flow. The central line acts like a magnet for price, while the upper and lower lines provide a framework for spotting where the market might reverse or break out. For a more advanced strategy, try overlapping Pitchforks across different timeframes or swings. When these Pitchforks intersect at certain levels, they create a powerful correlation. This suggests that the market is paying attention to these areas, and they often become key turning points. These confluence zones act like traffic signals, giving you clues about where the market could change direction or gain momentum. By understanding and leveraging these correlations, you can build stronger, more confident trade setups. Whether you're looking to confirm a reversal or catch a breakout, Pitchforks can help guide your decisions and boost your accuracy in identifying those critical market levels. I hope this can add more tools to your trading style and maybe you will love pitchforks as much as I do if you like this video or want more videos: comment below and a good ole boost to help those in our trading community benefit Happy Trading MB Trader
Education
by Mindbloome-Trading
Actual Success Rates of Ascending and Descending TrianglesActual Success Rates of Ascending and Descending Triangles Here is an analysis of the actual success rates of ascending and descending triangles in trading, based on the information provided: Success Rates Ascending and descending triangles generally have fairly high success rates as continuation patterns: -The ascending triangle has a success rate of approximately 72.77%. -The descending triangle has a slightly higher success rate of 72.93%. These numbers come from a study that tested over 200,000 price patterns over a 10-year period. Factors Influencing Success Several factors can influence the success rate of these patterns: -The trader's ability to execute the strategy correctly -Market conditions at the time the triangle formed -Market liquidity -Overall market sentiment Important Points to Consider -Triangles are considered reliable continuation patterns, especially in trending markets. -The ascending triangle in an uptrend is statistically more reliable than the descending triangle. -To validate the pattern, the price must touch at least twice each of the upper and lower lines. -An increase in volume during the breakout is an important confirmation sign. Strategies to improve the chances of success -Wait for the triangle to fully form before entering a position1. -Confirm the breakout with a close above/below the resistance/support level. -Use additional technical indicators to confirm the signal. -Pay attention to the volume, which should increase during the breakout. Conclusion Although ascending and descending triangles have relatively high success rates, it is important to use them in conjunction with other technical analysis tools and to take into account the overall market context to maximize the chances of success.
COINBASE:BTCUSDEducation
by Le-Loup-de-Zurich
Top Down Analysis 101: Getting started📖 Forex Top-Down Technical Analysis 🔸Top-down technical analysis is a method used by traders to examine the Forex market starting from higher time frames and gradually zooming into smaller ones. 🔸This approach helps traders get a comprehensive view of the market, starting from the broader trend on long-term charts and then analyzing intermediate and short-term charts to find precise entry and exit points. 📩 Here’s a step-by-step breakdown of how top-down analysis works in Forex trading: 1. Start with Higher Time Frames 🔸Begin by analyzing the market on the higher time frames to understand the dominant trend. Typically, traders start from the Monthly (M), Weekly (W), or Daily (D) charts. 🔸Monthly Time Frame: The monthly chart provides a bird’s-eye view of long-term trends and key levels of support/resistance. You can observe the major direction of the market, whether it is trending up, down, or moving sideways. This is where traders establish the broader market context. 🔸Weekly Time Frame: Moving down to the weekly chart helps to refine the broader trend you’ve identified on the monthly chart. It reveals more intermediate levels of support and resistance, trend lines, and key price action patterns that can influence the market over a few weeks. 🔸Daily Time Frame: The daily chart helps traders zoom in further to find relevant market structures, patterns, and price movements. It also helps you evaluate the short-term trend while keeping the long-term trend in mind. 📩At this stage, traders may look for things like: 🔸Trend Direction: Is the market in an uptrend, downtrend, or range-bound (consolidation)? 🔸Support and Resistance Levels: Key horizontal levels where price has previously reacted. 🔸Price Action Patterns: Candlestick patterns (e.g., engulfing patterns, pin bars) that indicate potential reversals or continuations. 2. Analyze Intermediate Time Frames 🔸After understanding the overall trend on the higher time frames, move to intermediate time frames like the 4-Hour (H4) or 1-Hour (H1) charts. These time frames give you a clearer picture of more recent price action and finer details for your analysis. 🔸Identify the Current Market Structure: Look for things like the formation of higher highs and higher lows (indicating an uptrend) or lower highs and lower lows (indicating a downtrend). 🔸Find Consolidation Areas or Breakouts: These time frames are useful for spotting breakouts or consolidations that may indicate the start of a new move. 🔸Refine Support/Resistance Zones: Draw closer support/resistance levels that are relevant to the current price action. 🔸This step helps you align your understanding of the intermediate trend with the higher time frame trend. 🎁Please hit the like button and 🎁Leave a comment to support our team! RISK DISCLAIMER: Trading Futures , Forex, CFDs and Stocks involves a risk of loss. Please consider carefully if such trading is appropriate for you. Past performance is not indicative of future results.
Education
by ProjectSyndicate
15