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How to Trade a High Wave PatternHow to Trade a High Wave Pattern In the dynamic world of trading, the high wave candlestick pattern emerges as a potent instrument, offering valuable insights to traders as they navigate the intricate terrain of financial markets. As we venture into the setup, this exploration will illuminate its fundamental principles, strategies, and tools that empower traders and investors to decode the intricate language of the financial market. What Is a High Wave Candlestick Pattern? The high wave candle pattern is a technical analysis formation traders usually use to identify potential trend reversals in highly fluctuating markets. Still, there might be conditions in which you find this formation during a solid trend, signalling a trend continuation. It is characterised by a candlestick with a small body and long upper and lower wicks, suggesting indecision and rapid price fluctuations. It often materialises at critical support and resistance levels, making it a vital indicator for potential trend reversals. The candle may have any colour. You may also encounter a so-called inverted high wave candlestick pattern. It’s characterised by a small body and long wicks, suggesting price volatility and potential reversals, but this term refers only to a bearish candle. To identify the high wave candlestick pattern, you may look for the following characteristics: It typically consists of a single candlestick. The candlestick's body is relatively small compared to its long upper and lower wicks, which are at least twice as long. The longer the shadows, the stronger the signal the formation provides. It can be green (bullish) or red (bearish). However, a bullish candle at a strong support level provides a more reliable signal of a trend reversal, while a bearish candle at a strong resistance point is more effective for a bearish signal. How to Trade the High Wave Formation When trading the high wave, you may consider the following rules: Entry: To trade a bullish reversal, you may place a buy-stop order above the high of the bar and a sell-stop order below the setup’s low to trade a bearish reversal. Take Profit: There are no precise rules for where to place a profit target trading this pattern. However, you may follow general rules. For a bullish trade, take profit may be set at the nearest strong resistance level, while for a bearish trade, it could be set at the closest solid support level. Stop Loss: You may implement a stop-loss order above/below the setup to limit potential losses if the trade goes against you and the trend continues. Live Market Example A trader finds a high wave setup at a support level on the 1-minute chart of the EUR/USD pair. They place a buy stop above the pattern and take profit at the next resistance level. Their stop loss lies below the candle. You can use the TickTrader platform by FXOpen to examine strategies with the high wave candle. High Wave vs Doji The high wave and the doji are both candlestick formations that indicate market indecision, but they have some differences: High Wave: It has a small body and long upper and lower wicks, suggesting significant price fluctuations. It often forms at support or resistance levels and signals potential trend reversals. Doji: A doji is a candlestick with a small body and long shadows. The major difference between the setups is the size of the body – the doji’s open and close prices are nearly the same, while the high wave’s open and close prices are very different, which makes its body larger. Dojis represent uncertainty and market balance and can occur in various market conditions, including the continuation of a trend or within a sideways trend. What Is a High Wave Spinning Top Pattern? A high wave spinning top candle is a combination of two candlestick patterns: the high wave and the spinning top. It essentially implies a situation of extreme uncertainty and volatility. It signals that the market is experiencing substantial price swings while lacking a clear directional bias. Traders often interpret this setup as a sign that market participants are struggling to determine their next move, and it can foreshadow potential reversals or a shift in market sentiment. Conclusion The high wave is a valuable tool in technical analysis, offering traders insights into potential price reversals and indecision points. When identified correctly and confirmed with other technical indicators, it can provide traders with opportunities to make well-informed decisions. However, like any technical tool, the high wave is not foolproof, and traders should exercise caution and use risk management strategies. It is essential to combine it with other forms of analysis and consider the broader market context before making trading decisions. After developing a solid understanding, you may open an FXOpen account and apply this concept to over 600 assets. 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
3
Deep Dive example, Pattern recognition development. How to train the eyes, to see the markets clearly and trade accordingly. This is a example from my deep dive archive, making these, archiving them and studying them, and deeply understanding them has profound effects on your trading. This post is not about the style you trade. This is about how you study to be able to apply your methods, methodically with little effort in a flow state mentality. I will share what i truly believe can get you there. It is not easy but if truly applied it can change your trading and even more so your life. I am firm believer to conquer the markets (Ie extract $ with a proven strategy consistently) you must become the the best version of yourself both physically and mentally. It is a battle and you must sharp and aware because anything can happen at any time! Develop your methodology and train like most won't. 1) Know your patterns, hand draw them on paper, jot down any rules, triggers, tp's. Try to really envision the pattern. Note the exact price action you would look for at trigger level. Note rules for stop management you would take. (@tntsunrise was a firm believer in hand drawing patterns to start to train your eyes to see them) 2) Draw the patterns on blank chart on @TradingView, I will attach video on how to do this exactly. Practice until all triggers and coordinates can be nailed to the tick, (use fib tools, click and drag feature etc.). Note exact same things, from rules, to trigger, price action, ema theory, volume, rsi etc. Save charts, (print these) This takes a lot of time to develop, think 1000 drawings to nail 1-2 patterns, this could be way higher, some take a lot of time, for me the butterfly was difficult to learn and apply, especially in low time frame. 3) Deep Dives, again this a boot camp for your mind. Set crazy goals= I am going to find 300 of each pattern I trade in 10 hours. I know 6 patterns = 1800 charts. This is daunting at first, Eg suggest walks, breaks, push ups, but really try get dialed in, You will hit a flow state, at some point. Start to see new things, for me this was low tf, 5 minute, 1 minute, them sub 1 minute time frame. This was exactly how I truly started to develop my unique strategy. I suggest you do this alone. I did my first 3 when my GF was away for family trip. I did several during covid. I have thousands of printed copies and several hard drive files. This is life changing, join Stockbee and see the results this has led to. Keep in mind Qullamaggie attributes a lot to Eg's trader development, he trades as big as it gets$$$ 4) Cheat sheet play book. Hard copy, short, to the point, 1-2 examples. As time passes you will not need it. Make it, refine it, look to it often. While learning I kept a note form of this on my phone, ipad. Just immerse your mind in your set ups. One thing EG always said that stuch with me. Trade set ups not stocks or futures., Tntsunrise said much the same. Find clean patterns at important structure levels try to envision the markets in a rally base rally mode and know where to hunt for big money ideas. This is life changing skill set and most rewarding mentally and most of all with profits. 4) Discuss your patterns and share ideas, If you are trading a real system, with proven results this should not be hard. You need to see the patterns you trade, entries, results and when and why the patterns worked or didn't. You need to see this everyday in every timeframe for 3-6 months. This can fast track you in my personal opinion to being able to extract $ from the markets. I will attach additional videos, charts so please come back to this post time to time to see additional thoughts. I will attach 1 set up, I have not decided which and all I ask is for your patience it will be be below.
CME_MINI:NQH2024Education
by Hiddenharmonicstrading
7
Support And Resistance Lines Are Not Real: Prove Me WrongIn this video, I draw random lines on the chart to prove a point. I think we need to ask ourselves the following questions to become better traders: How will I define support and resistance consistently ? How will I use support and resistance in my trading? Do I need support and resistance in my trading? Is support and resistance a reliable measure for markets? Are the lines that I have been drawing for so long actually meaningful?
NYSE:CVSEducation
by JoeRodTrades
2
Setting stop-loss and take-profit levels on TradingViewSetting stop-loss and take-profit levels on TradingView is a straightforward process. Here's how you can do it: **1. Open a TradingView Chart:** - Log in to your TradingView account and open the chart for the instrument you want to trade, such as GBP/USD. **2. Draw a Long or Short Position:** - Click on the "Trading Panel" icon located at the bottom of the chart. - In the trading panel, select either "Long" or "Short" to initiate a buy or sell position, respectively. **3. Set Stop-Loss and Take-Profit Levels:** - After opening a position, you can set stop-loss and take-profit levels directly from the trading panel: - **Stop-Loss:** Click on the "SL" button and enter your desired stop-loss price level. This is the price at which your position will automatically close to limit potential losses. - **Take-Profit:** Click on the "TP" button and enter your desired take-profit price level. This is the price at which your position will automatically close to lock in profits. **4. Adjust Stop-Loss and Take-Profit Levels:** - You can adjust stop-loss and take-profit levels by clicking and dragging the stop-loss and take-profit lines directly on the chart. - Alternatively, you can modify the stop-loss and take-profit levels from the trading panel by clicking on the "Edit" button next to the respective level and entering a new price. **5. Confirm and Execute the Order:** - Once you've set your stop-loss and take-profit levels, review your order details in the trading panel to ensure accuracy. - Click on the "Place Order" button to execute your trade with the specified stop-loss and take-profit levels. **6. Monitor Your Position:** - After executing your trade, monitor your position on the chart. - Your stop-loss and take-profit levels will be displayed as lines on the chart, making it easy to track their progress. **Note:** - Ensure that your stop-loss and take-profit levels are set at logical price points based on your trading strategy, risk tolerance, and market conditions. - Remember that stop-loss and take-profit orders are executed automatically when the specified price levels are reached, even if you're not actively monitoring the market.
Education
by FrankFx14
4
Optimizing and refining trading strategiesOptimizing and refining trading strategies is a continuous process that involves analyzing historical performance, identifying areas for improvement, and making adjustments to enhance profitability and reduce risk. Here's a step-by-step guide on how to optimize and refine your trading strategies: **1. Analyze Historical Performance:** - Review the historical performance of your trading strategy using backtesting tools or software. Evaluate key metrics such as profitability, win rate, drawdowns, and risk-adjusted returns. **2. Identify Strengths and Weaknesses:** - Identify the strengths and weaknesses of your trading strategy based on the analysis of historical performance. Determine what aspects of the strategy are working well and which areas need improvement. **3. Adjust Parameters and Rules:** - Make adjustments to the parameters, rules, and conditions of your trading strategy based on the analysis of historical performance and identified weaknesses. This may include: - Fine-tuning entry and exit criteria. - Modifying stop-loss and take-profit levels. - Optimizing indicator settings. - Adjusting position sizing or risk management techniques. **4. Test Alternative Approaches:** - Explore alternative approaches or variations of your trading strategy to see if they yield better results. This could involve testing different indicators, timeframes, or market conditions to identify optimal settings. **5. Implement Risk Management Measures:** - Incorporate robust risk management measures into your trading strategy to protect capital and minimize losses during adverse market conditions. This may include setting stop-loss orders, implementing position sizing rules, and diversifying your trading portfolio. **6. Use Walk-Forward Analysis:** - Perform walk-forward analysis to validate the effectiveness of your strategy over multiple periods of historical data. This involves dividing the historical data into segments, optimizing the strategy parameters on one segment, and then testing the optimized parameters on subsequent segments to ensure robustness. **7. Consider Market Regimes:** - Analyze how your trading strategy performs under different market regimes (e.g., trending, ranging, volatile) and adjust your approach accordingly. Some strategies may perform better in certain market conditions than others. **8. Keep a Trading Journal:** - Maintain a detailed trading journal to record your trades, observations, and thoughts about the market. Use the journal to track the performance of your refined strategy in real-time and make adjustments as needed. **9. Backtest and Validate Changes:** - Backtest the refined version of your trading strategy using historical data to validate the effectiveness of the changes. Ensure that the strategy performs consistently well across different market conditions and timeframes. **10. Monitor Real-Time Performance:** - Implement the refined strategy in a demo or simulated trading environment to monitor its real-time performance. Evaluate its performance over an extended period before transitioning to live trading. **11. Continuously Iterate and Improve:** - Continuously iterate and improve your trading strategy based on feedback from real-time trading experience and ongoing analysis. Be open to making further adjustments as market conditions evolve. By following these steps and adopting a systematic approach to optimizing and refining your trading strategies, you can enhance their effectiveness, increase profitability, and achieve greater consistency in your trading results over time.
Education
by FrankFx14
A Renko Trading Strategy with Multiple Indicators (update 1)This will serve as an update to the previous discussion specifically to some of the chart settings and the approach. Going into the open on 25-March-2024, I was looking for price to move lower to test the monthly and yearly Camarilla R3. My reasoning was that neither seemed to have been tested yet and that these two together would provide a good level for support. My long term view on crude oil is bullish and I believed this type of action would provide a good entry point. However, this plan did not come through so I stood aside to let the market playout to determine another entry strategy. While watching the market in the charts I had published earlier, I decided to make some adjustments to see if I would have detected the market’s plan sooner providing an entry point. The following are the changes that I’ve made: Changed the timeframe of the Renko chart from 15 minutes to 1 minute. Without paying for a higher subscription in TV, 1 minute is as low of a timeframe as you can go with Renko. This alone changed the dynamics of the chart with a different view on the DMI and Stoch. Changed the slower Stoch from 25,3,3 to 50,3,3 (which is a setting I’ve experimented with in the past. The DMI remained the same as did the levels of importance for the ADX of 35 and 20. Added the BPP (Bull Bear Power) indicator and set it to an interval of 50. I’ve not used this indicator before but was experimenting with some items yesterday and found this. I set the line to a step line and you can see the results here. Added a 2-hour candle chart next to the Renko and will use it in conjunction with the Renko chart to make entry/exit decisions. Removed the manual Linear Regression from the Renko chart and have added them to the 2hr chart. This is a more natural fit and have maintained the default settings. I have added two LR indicators with one at 1 STD and one at 2 STD. Removed the manual drawings of the Camarilla pivots and have added them as indicators to the 2hr chart. Removed the volume profile from the Renko chart and have added it to the 2hr chart with a week timeframe. All markup for volume area, opening range, etc. will be put on the 2hr chart and will be for a weekly view. The Renko chart will remain to work for timings of entry and exits. Considering the 1-minute chart, you can see that there was a buy signal across several of the setups. As noted earlier, the consolidation on the 1 minute/25 tick Renko chart provided a signal that a breakout was coming. The slower Stoch set to 50,3,3 provided some insight into the direction with the break of the %k up over the %d and lastly, the new BBP gave an indication that the down move was a correction and that higher prices could be coming. A long wick and breakout of consolidation would have been a trigger to enter a trade of buying a Call option (see green arrow on Renko). Looking at the 2hr candle chart with the 2 linear regressions (1 and 2 STD respectively), then you can see where the support was formed then then where resistance was hit. The monthly and the weekly R4 provided resistance and now support is at the median of the current LR. Because the break of the weekly R3 was with a force with no test, my plan now is to find an entry long (an August Call) along this line which is also the same proximity of the weekly Pivot and the top of the week’s opening range (where the opening range for the week is defined as the first 5 2hr candles of the week. With a red brick in place on the 1 minute/25 tick chart, a green brick now would be a buying opportunity. I’ve added a consolidation channel across levels of what could be support for any pullback and could see another 25-tick brick in place before the green brick to the upside.
NYMEX:CL1!Education
by mxb1961
Options Blueprint Series: Perfecting the Butterfly SpreadIntroduction to the Butterfly Spread Strategy A Butterfly Spread is an options strategy combining bull and bear spreads (calls or puts), with a fixed risk and capped profit potential. This strategy involves three strike prices, typically employed when little market movement is expected. It's an excellent fit for the highly liquid energy sector, particularly CL WTI Crude Oil Futures Options, where traders seek to capitalize on stability or minor price fluctuations. Understanding CL WTI Crude Oil Futures Options WTI (West Texas Intermediate) Crude Oil Futures are one of the world's most traded energy products. These futures are traded on the NYMEX and are highly regarded for their liquidity and transparency. The introduction of Micro WTI Crude Oil Futures has further democratized access to oil markets, allowing for more granular position management and lower capital requirements. Key Contract Specifications for Crude Oil Futures: Standard Crude Oil Futures (CL) Contract Size: Each contract represents 1,000 barrels of crude oil. Price Quotation: Dollars and cents per barrel. Trading Hours: 24 hours a day, Sunday-Friday, with a 60-minute break each day. Tick Size: $0.01 per barrel, equivalent to a $10.00 move per contract. Product Code: CL Micro Crude Oil Futures (MCL): Contract Size: Each contract represents 100 barrels of crude oil, 1/10th the size of the standard contract. Price Quotation: Dollars and cents per barrel. Trading Hours: Mirrors the standard CL futures for seamless market access. Tick Size: $0.01 per barrel, equivalent to a $1.00 move per contract. Product Code: MCL Options on Crude Oil Futures : Options on WTI Crude Oil Futures offer traders the ability to hedge price risk or speculate on the price movements. These options provide the flexibility of exercising into futures positions upon expiration. Constructing a Butterfly Spread The essence of a Butterfly Spread lies in its construction: It involves buying one in-the-money (ITM) option, selling two at-the-money (ATM) options, and buying one out-of-the-money (OTM) option. For CL WTI Crude Oil Futures Options, this could translate into buying an ITM call or put, selling two ATM calls or puts, and buying an OTM call or put, all with the same expiration date. The goal is to profit from the premium decay of the ATM options faster than the ITM and OTM options, especially as the futures price gravitates towards the middle strike price. Using call options would typically generate positive delta making the strategy slightly bullish. Using put options would typically generate negative delta making the strategy slightly bearish. Selection of Strike Prices: Identify suitable ITM, ATM, and OTM strike prices based on current crude oil futures prices and expected market movement. (The below chart example uses Support and Resistance UFO price levels to determine the optimal Strike Selection.) Determine Expiration: Choose an expiration date that balances time decay with your market outlook. Manage Premiums: The premiums paid and received for these options should result in a net debit, establishing your maximum risk. Advantages and Risks Advantages: Defined Risk: The maximum potential loss is known at the trade's outset, limited to the net debit of establishing the spread. Profit Potential: Profits are maximized if the futures price is at the middle strike at expiration. Flexibility: Suitable for various market conditions, especially in a range-bound market. Risks: Limited Profit: The strategy caps the maximum profit, which is achieved under very specific conditions. Commission Costs: Multiple legs mean higher transaction costs, which can erode profits. Complexity: Requires careful planning and monitoring, making it less suitable for novice traders. The construction of a Butterfly Spread in the context of CL WTI Crude Oil Futures Options highlights the strategic depth required to navigate the volatile energy market. Meanwhile, understanding its advantages and inherent risks equips traders with the knowledge to apply this strategy effectively, balancing the potential for profit against the complexity and costs involved. Market Scenarios and Butterfly Spread Performance The performance of a Butterfly Spread in CL WTI Crude Oil Futures Options is highly contingent on market stability and slight fluctuations. Given crude oil's propensity for volatility, identifying periods of consolidation or mild trend is crucial for this strategy's success. Neutral Market Conditions: Ideal for a Butterfly Spread, where prices oscillate within a narrow range around the ATM strike price. Volatility Impact: Sudden spikes or drops in crude oil prices can move the market away from the strategy's profitable zone, reducing its effectiveness. Understanding these scenarios helps in planning entry and exit strategies, aligning them with expected market movements and historical price behavior within the crude oil market. Executing the Strategy Executing a Butterfly Spread involves precise timing and adherence to a pre-defined risk management plan. The entry point is critical, often timed with expected market stagnation or minor fluctuations. Entry Criteria: Initiate the spread when volatility is expected to decrease, or ahead of market events predicted to have a muted impact. Adjustments: If the market moves unfavorably, adjustments can be made, such as rolling out the spread to a further expiration or adjusting strike prices. Exit Strategy: The ideal exit is at expiration, with the futures price at the ATM option's strike. However, taking early profits or cutting losses based on predefined criteria can optimize outcomes. Case Study: Applying Butterfly Spread to Crude Oil Market Let's explore a hypothetical scenario where a trader employs a Butterfly Spread in anticipation of a stable WTI Crude Oil market. The futures are trading at $80.63 per barrel. The trader expects the price to move down slowly due to mixed market signals even though key support and resistance (UFOs) price levels would indicate a potential fall. As seen on the below screenshot, we are using the CME Group Options Calculator in order to generate fair value prices and Greeks for any options on futures contracts. Underlying Asset: WTI Crude Oil Futures or Micro WTI Crude Oil Futures (Symbol: CL1! or MCL1!) Strategy Setup: Buy 1 ITM put option with a strike price of $82.5 (Cost: $3.00 per barrel) Sell 2 ATM put options with a strike price of $78 (Credit: $0.92 per barrel each) Buy 1 OTM put option with a strike price of $73.5 (Cost: $0.24 per barrel) Net Debit: $1.40 per barrel ($3.00 - $0.92 - $0.92 + $0.24) Maximum Profit: Achieved if crude oil prices are at $78 at expiration. Maximum Risk: Limited to the net debit of $1.40 per barrel. Over the following days/weeks, crude oil prices could fluctuate mildly due to competing factors in the market but ultimately close at $78 at the options' expiration. The trader's maximum profit scenario is realized, demonstrating the strategy's effectiveness in a stable market. Risk Management Considerations Executing a Butterfly Spread or any options strategy without a robust risk management plan is perilous. The following considerations are essential for traders: Use of Stop Loss Orders: To mitigate losses in unexpected market moves. Hedging: Employing alternative positions to protect against adverse price movements. Defined Risk Exposure: Always know the maximum potential loss before entering any trade. Market Analysis: Continuous monitoring and analysis of the crude oil market for signs that may necessitate strategy adjustment. Conclusion The Butterfly Spread is a nuanced strategy that, when applied carefully, can offer traders of CL WTI Crude Oil Futures Options a means to capitalize on relatively slow market moves. While the potential for profit is capped, so is the risk, making it an attractive option for those with a precise market outlook. It exemplifies the strategic depth available to options traders, allowing for profit in less volatile market conditions. 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.
NYMEX:CL1!Education
by traddictiv
A Comprehensive Guide to Fibonacci Retracements (Updated)Hello traders, in this post, we will be going over one of the most commonly used tools in all asset classes - the "Fibonacci Retracement" (or Fib for short). For a better viewing experience, please view this on your desktop/PC, as the mobile and tablet versions of the charts are harder to read. Although I have briefly touched on how to use the Fibonacci Retracement tool in my previous Elliott Waves series, we are now going to go over it in depth, and talk about how this tool can help you find entries and exits within an existing trend with or without the use of the Elliott Wave Theory, which also helps identify whether you are in a bullish or bearish trend. The Fibonacci Retracement tool, although widely used by many traders, is almost always not correctly used by new traders. Most traders will often connect the wrong points, indicating the wrong Fibonacci retracement levels. Here, I will be explaining the proper way to use the Fibonacci Retracement tool in a very simple translated friendly guide in one post. ------- What Is the Fibonacci Retracement? Fibonacci Retracements (Fib(s) for short), are a set of 'ratios', defined by mathematically important Fibonacci sequence. This allows traders to identify key levels of support and resistances for price action. Unlike other indicators, Fibonacci retracements are FIXED, making them very easy to interpret. When combined with additional indicators, Fibs can be used to identify potential entry and exit points with high probability to trade on trending movements. Fibonacci retracements are used to indicate levels of support and resistance for a stock’s price. Although they are similar to moving averages in this respect, Fibonacci retracements are set by the extent of the previous bullish or bearish run and do not change each day in the current trend as moving averages do. Therefore, it can be significantly easier to identify and anticipate support and resistance levels from Fibonacci sequences. How Is the Fibonacci Retracement Calculated? (You don't need to calculate it yourself - It's already done for you!) Fibonacci retracements are based on what is known as the 'Fibonacci sequence', where each number in the sequence can be added to the previous number to produce the following number within the sequence. Now, you might be confused here, but don't! - I am just explaining the concept on how it's calculated. You do not need to personally calculate the actual sequence of the Fibonacci Retracement, as everything is already pre-determined and calculated within the tool itself on TradingView. To put it simply, dividing any number in the sequence by the following number yields 1.6180 – known as the "Golden Ratio" – while dividing any number by its predecessor yields 0.6180. Dividing any number in the sequence by two positions in advance yields 0.382, while dividing any number by a number three positions in advance yields 0.236. These ratios originated from the Fibonacci sequence are found throughout nature, mathematics, and architecture - such as flowers, buildings, and so forth. Yes, if you search for Fibonacci sequence examples, you can find these within daily uses, not only in trading. ------ Retracement levels for an asset are drawn based on the prior bearish or bullish movement. Don't forget this - you need to know whether you are in a bullish or bearish trend. Is the stock or coin going up? or down? To plot the retracements, draw a trendline from the low to the high (also known as the swing low to the swing high), or vice versa, high to low, within a continuous price movement trend – Fibonacci retracement levels should be placed at 61.80%, 38.20%, and 23.60% of the height of the line for you by the tool itself. Again, these numbers are already calculated for you within the tool itself. In a bullish trend, the retracement lines start from the top of the movement (i.e. the 23.60% line is closest to the top of the movement), whereas in a bearish movement the retracements are calculated from the bottom of the movement (i.e. the 23.60% line is closest to the bottom of the movement). ------ How to Trade Using the Fibonacci Retracement Once you have drawn a set of Fibonacci retracements on a chart of your liking, it is possible to anticipate potential reversal points where support or resistance will be encountered. If the retracements are based on a bullish trend, the retracements should indicate potential support levels where a downtrend will reverse bullishly. So to put it simply, the pre-determined Fibonacci levels, should in theory and practicality, act as support if in a bullish trend, and resistance in a bearish trend. There will always be some form of price reaction at each Fibonacci level just based on Market Psychology. If the retracements are based on a bearish movement, the retracements should indicate potential resistance levels where a rebound will be reversed bearishly, which is vice-versa for the bullish movement trend. The most common reversals based on Fibonacci retracement levels occur at the 38.20%, 50%, and 61.80% levels (50% comes not from the Fibonacci sequence, but from the theory that on average, stocks retrace half of their prior movements - so this is considered a 'psychological level'). Although retracements do occur at the 23.60% line, these are less frequent and require close attention since they occur relatively quickly after the start of a reversal. In general, retracement lines can be considered stronger support and resistance levels when they coincide with the overall trend, meaning, that if you know that you are in an established bullish or bearish trend, you will most certainly get some form of reaction at the most common reversal levels within the Fibonacci level, which is shown in the image below. Whenever applying Fibonacci retracements, keep in mind that retracement lines represent only potential support and resistance levels, they are NOT 100% set in stone – they represent price levels at which to be alert, rather than hard buy and sell signals; however, they have HIGH PROBABILITY. It is important to use additional indicators, in particular MACD, to identify when support or resistance is actually being encountered and a reversal is likely. The more that additional indicators are pointing towards a reversal, the more likely one is to occur. Also note that failed reversals, especially at the 38.20% and 50% retracement levels, are common.
COINBASE:BTCUSDEducation
by XForceGlobal
37
A Renko Trading Strategy with Multiple IndicatorsThis study will walk through several concepts in analyzing crude oil. The primary chart type will be a Renko chart with the block size (ticks) set to 25 (0.25 in TV) and with a timeframe set to 15 minutes. The significance of timeframe is that in TV, it will take this amount of time for the price to maintain a full block change (25 cents) in order for it to be ‘printed’. In times of high volatility, a 15-minute window can allow for more than one block to print at the same time. While this may be a disadvantage in trading CL futures either day or swing trading, it helps filter out noise in the type of trading I do. The basic strategy I’m wanting to establish using this setup is the buying of options, either puts or calls, that are as near to the market as possible and to limit risk to a % of the value of the purchase price of the option. So, for example, if I pay $2,500.00 USD for a CLQ24 85 Call, I will limit my loss to 10% of that price should the market go against what I had expected. The chart setups and scenarios in this study will be based on Renko charts along with various indicators that will be discussed (for the most part individually). A view of 2024 based on the Renko setup. I will start with this basic view that has the Renko chart configured as outlined above with two linear regression drawings manually drawn on it. There is an indicator for LR which will follow each block change and change accordingly based on the lookback configuration. With the drawing tool, you can start and end the LR based on your strategy. In mine, I want to base the LR on price from a major low to a major high and then adjust based on if a new high or low is obtained. In this chart, I picked the low as that of late December (the first long black arrow). As an exercise, you can hit the new highs from this point to see how the LR adjusted and how future price flowed within it. There are two LR drawings on this chart; one with an upper and lower deviation set to 2/-2 and the second with a upper and lower deviation set to 1/-1 (these are the ones with dots for a boundary). In this specific chart, I’ve started with the latest high to be that on 01-March and with the LRs both extended to the right, you can see the price movement against these LR into the future. As price broke through the top of the LR recently, a new high was put in on 24-March and the adjustment of the LR will be shown next. With this new high confirmed, the LRs are both move to end at this high while keeping the original starting point the same. In this view, price pulled back to the top of the LR 1std and close here. With the LR extended, you can see where the mean is and a potential price target if just considering the LR itself. An expanded view of above: Next, I’ll introduce the DEMA and simple MA on the chart. There are two DEMAs added to the chart with one set to a period of 12 and one set to a period of 20. The significance of the two is that when the 12 (black on this chart) is above the 20 (red on this chart), then the trend is bullish and when the opposite, the trend is bearish. I use these two more for confirmation than for timing. If you study these, you’ll see that they lag for the most part but there are key times that they will provide insight to the direction of a market during times of consolidation. The next two indicators that I’ll introduce are the Stochastic and Directional Movement Index (DMI with the ADX). The experience of using these indicators on a Renko chart is like that on a candle chart except that the period is not for time but the number of bars that have been printed or committed. There are two Stochs used (5,3,3 and 25,3,3). The intent of the 5,3,3 is to provide a fast-moving change in momentum while the 25,3,3 is designed to provide insight to the momentum of the longer trend. Insight as to timing the entry and exit of trades may be possible with an in-depth understanding of the crossover of the 25,3,3 between the %k and the %d. The DMI can be used like it is against a candle chart but with settings at 5,5. This provides a faster moving indicator and, with some study, can determine the importance of the interactions between the 3 lines. There is one key aspect of this indicator with the Renko that works similar to the candle and that is of identifying pending consolidation of the market. In a traditional setup of the DMI on a candle chart, the settings are 14,14 and the line of 20 in the indicator is traditionally the line of strength. Meaning that when the ADX falling at or below the 20 line, then the trends are weak and the market is entering consolidation. During this time, the guidance from various sources is to look for patterns on the market and signs of a breakout. For the Renko charts, the are to watch for trend strength and consolidation is between the 35 and 20 area based on the analysis I’ve done. On the following chart, I’ve highlighted some of these areas of consolidation. Additionally, there is a notion of a high-swap of the +/-Dis which is when price has started moving strongly in one direction and then pivots to change direction and build into a strong trend from this. While in hindsight these look compelling, they can be difficult to trade in real-time, it’s difficult to differentiate between a high-swap and a future degradation of the trend that leads to consolidation. I think that the more reliable setup is finding the longer points of consolidation and prepare to trade in the breakout direction. As you can see on the close Friday, price has moved off of a new recent high and could now be trending down into a period of consolidation (if one were to use just the combination of the DMI and ADX). If you’ve not read “Secrets of a Pivot Boss” by Franklin O. Ochoa, I would encourage you to do so as it has many extremely valuable and innovative ideas in trading off volume, value, and pivots. The following discussions will be based on concepts from this book. The first covered will be that of volume area. I will not dig into the specifics of this but to just show one of the many indicators available in TradingView for these concepts. The volume indicators will work with Renko charts and the specific one I’m using allows me to set the increment of volume based on rows or ticks. I’ve chosen ticks and set the number to 5. With a 25 tick Renko chart, this will allow for a granularity of 5 rows per block for displaying the volume profile. In the chart below, I’ve highlighted a concept outlined in the book of the volume area that is extended out to the next trading day and is what forms the basis for 2-day volume area analysis. There are 6 scenarios that go with this analysis and the pink channels on the chart are intended to enable this view. The volume profile I’ve picked in the indicator is for the week so the analysis I do is for the week and not daily. One of the key setups from the book is an ‘inside day’ which you can see at the black arrow. An inside day is a day to watch for breakout (in this case it would be an inside week) and, after support was found, the price went higher. The last set of indicators that I’ll cover is the Camarilla Pivots. These too are covered in depth in the book referenced above as well as a wealth of details on the web. These pivots do not work on Renko charts so I will create a candle chart with an 8hr setting and then set up the monthly and yearly pivots on it. From this chart, I’ll copy key lines over to the Renko chart. This first chart is a view of the 25 tick, 15 minute chart going back to the beginning of 2024. I’ve labeled some of the key lines on this chart for both the year 2024 and the month of March. This is zoomed into the month of March. I believe a key concept that makes these pivots on the Renko with the timeframe powerful is the ability to see the tests that happen around the various pivots for both support and resistance. There is an entire trading strategy that is outlined in the book referenced above. The current price action seems to imply that price should come back to either the March R3 or the 2024 R3 (which is also the top of the value area for 2023). If price action does come back to these lines, careful attention should be paid to how support plays out and if a buying or selling opportunity arises from it. Next, I’ll provide a view with all of the reviewed items in one view. I’m standing aside on trading this for now until the current price action plays out and a cleaning view of potential trade comes into focus. Some observations considering what’s been discussed individually in this study: The DEMA is currently swapped to the bearish trend. The -DI is over the +DI which is a bearish trend. However, The ADX has been dropping to the 35 line but has not dropped in the 35 to 20 range to indicate a consolidation phase. The Stoch has not completely bottomed out long term and could see more downward movement. While price is at the top of the 1std of the LR, it could drop further. A drop and hold of the 2024 R3, March R3, top of the 2023 volume area, and the median of the current LR (all would be within proximity of each other) could be a strong buy setup. A break below these lines with an ensuing test from the bottom could be a strong sell setup. The relationship of the past two weeks’ volume area is bullish.
NYMEX:CL1!Education
by mxb1961
💰The #1 Commodity Market Watch📉🎢-- What you will hear in this video: -- 1-Learning how to trade commodities 2-Trend analysis 3-Support levels 4-Resistance levels 5-Market psychology -- And more... Watch this video to learn more -- **Disclaimer:** The information provided above or below is for educational and informational purposes only. -- It does not constitute financial advice, and trading always involves -- a risk of substantial losses, regardless of the margin levels -- used. Before engaging in any trading activities, it is crucial to -- conduct thorough research, consider your financial situation, -- and, if necessary, consult with a qualified financial advisor. Past -- performance is not indicative of future results, and market -- conditions can change rapidly. Trading decisions should be made -- based on careful analysis and consideration of individual -- circumstances. The user is solely responsible for any decisions made -- and should be aware of the inherent risks associated with trading in -- financial markets.
ICEUS:CC1!Education
by lubosi
2
3 Tips to Improve Your TimingTiming is everything in trading. The ability to enter and exit positions at the right moment can significantly impact your profitability. Here are three simple tips to help you enhance your timing and make better trading decisions: 1. Lower Your Execution Timeframe Lowering your trading timeframe can provide more precise insights into short-term market dynamics. Example: Combining Breakouts Maybe your trading strategy is buying breakouts from flag patterns on the daily candle chart that align with long-term uptrends. The best breakout trades occur simultaneously across multiple timeframes and achieve high levels of participation. Lowering your execution time frame to the 1hr candle chart can potentially help you to achieve a more precise entry. Flag Breakout Daily Candle Chart: Amazon (AMZN) Past performance is not a reliable indicator of future results Flag Breakout Hourly Candle Chart: Amazon (AMZN) Past performance is not a reliable indicator of future results Example: Timing Pullbacks Maybe your trading strategy is buying pullbacks on the hourly candle chart. A pullback on a higher timeframe is a downtrend on a lower timeframe. Traders can add precision to timing their pullbacks by looking for trend reversal patterns on lower timeframes that align with the higher timeframe trend. In the below example, a trader who buys pullbacks to the 20 – 50 period moving averages on the hourly candle chart could use trend reversal patterns on the 5min candle chart to precisely time their entry. Timing Pullbacks Hourly Candle Chart: GBP/USD Past performance is not a reliable indicator of future results 5min Candle Chart Adds Precision: GBP/USD Past performance is not a reliable indicator of future results 2. Use Pre-Alerts If you’ve been trading for a while, chances are you’re already utilising the valuable tool that is price alerts – ensuring you will be notified when a price hits a certain level. However, if you’re a momentum trader and setting price alerts at breakout levels, you may want to rethink where you’re placing your price alerts. The best breakouts are powerful, high-volume events where price is moving quickly. Placing an alert at the breakout level can make trading the breakout rushed and stressful – making for suboptimal timing. Pre-alerts are price alerts set at levels that prior to the breakout occurring. When used properly they have the potential to bring a number of benefits: Depth and Detail: Pre-alerts help you observe the breakout in real time. This can provide more detail about the breakouts conviction than if you’re only monitoring the market post breakout. Reduced Stress: A pre-alert ensures you are prepared and focused on execution prior to the breakout. This will reduce stress levels which should ultimately help you to make better decisions. Faster Execution: If you’re ready and at your desk prior to the breakout occurring, you stand a better chance of achieving a better entry price. 3. Combine Technical and Fundamental Catalysts Integrating technical analysis with fundamental catalysts can enhance your timing and decision-making process. Here are some practical strategies for combining catalysts effectively: Stay Informed: Stay updated on relevant market news, economic data releases, and corporate earnings announcements that may impact the markets you trade. Utilise financial news websites, economic calendars, and real-time news feeds to stay informed about upcoming events and their potential implications on market dynamics. Validate Technical Signals: Confirm technical setups with supporting fundamental factors. For example, if you identify a bullish chart pattern, look for positive news or fundamental developments that align with the pattern's bullish bias. Be Selective: Prioritise quality over quantity when selecting news events to incorporate into your trading analysis. By focusing on impactful catalysts, you can streamline your analysis process and allocate your resources more effectively to capitalise on the most promising trading opportunities. For more information on the power of combining technical and fundamental catalysts, check out our two-part Trade The News series (link at the bottom of the page). 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. 84.01% 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.
NASDAQ:AMZNEducation
by Capitalcom
How I got funded six figures with 1 trade!!Trading is tough when you're juggling a 9-5 job and trying to make it full time. With my strategy you can take a trade and wait a week and make 6% with only monitoring every few hours or so. What we have here is a clear uptrend, with a high volume order block which is isolated to one period of time meaning a whole lot of orders were created. We had a strong push down before big push up and I always believe we you will have a strong push down before a push up or a strong push up before a big push down. Follow for more
Education
by Theintuitontrader
BITCOIN Chart without inflation BTCUSD divided by the average of USDCNY, USDPKR, USDINR, USDNGN, and EURUSD, multiplied by 148.68. The number 148.68 is just a placeholder; don't worry about it. In this chart, I'm looking at the five biggest crypto countries: China, India, Pakistan, Nigeria, and Europe. These countries do a lot of cryptocurrency trading, so averaging their currencies gives us a clearer view. Right now, the chart shows that the price is staying about the same. The chart might be confusing because the value of the dollar is going down. We're at a really important point in the price movement. If we break past this point, the price will probably go up a lot. so watch out for this chart :) this is for educational purpose, it shows what else we can do with tradingview chart :)
BITSTAMP:BTCUSDEducation
by Bitsleader
1
📍Part #2, Elliott Waves: "Motive Waves - Impulse".👩🏻‍💻 Welcome to the 2nd lecture on Elliott Waves. So, Elliott Wave Theory suggests that price behavior follows a wave structure, with three waves being impulse waves and 2 being corrective waves. It can be said that these 5 waves look like the image above. ➡️For example, let's take an upward impulse, where the impulse refers to all these five waves. We observe the first wave of growth, then the second wave is corrective to the first, meaning the second wave is specifically a correction for the first wave. Next, the third wave is a growth wave, the fourth is corrective for the third, and the fifth wave concludes the impulse. Following the completion of the impulse or the five-wave sequence, a correction occurs in the form of A, B, C. ➡️This entire structure is fractal, meaning that if our upward impulse has three waves, and they are also impulse waves, such as the first, third, and fifth, and as impulse waves, as we already know, consist of five waves, then each impulse within this larger five-wave sequence has the same structure of five waves. Furthermore, in the correction A, B, C, waves A and C also have a five-wave structure, but more on that in the next lessons. ➡️If you ask about the timeframes to work with waves, I would say that the 1-hour timeframe is the threshold below which it is not recommended to consider the structure! Next, I will describe the basic rules and regulations concerning impulses in the form of pictures, which are convenient to save and use as a hint when analyzing charts. ➡️Now let's consider some rules that are mandatory for all impulse movements. Rules An impulse always subdivides into five waves. Strong guidelines 📍Wave A almost always will alternate with wave B. Alternation can be expressed in two ways: 1) In the type of correction: sharp/sideways or vice versa 2) In the presence of extension: in waves 2 and 4 of the impulse, two sideways patterns are possible, but only one of them will have an extreme beyond the peak of the previous wave. 📍Wave 4, as a rule, significantly violates the channel formed by the subwaves of wave 3. 📍As a strong norm, no part of wave 4 should enter the price territory of wave 1 or 2. 📍As a strong norm, the peak of wave 4 should not extend beyond the doubled channel constructed from the peaks of waves 1, 2, and 3, while the midline of the channel will serve as the minimum achievable target. 📍Second waves of impulses tend to go beyond the previous fourth wave. When using this norm, the previous fourth wave serves as the minimum target. 📍Sometimes wave 5 does not move beyond the end of wave 3 (in which case it is called a truncation). 📍Often, waves 1 and 5 of the impulse form impulses, but more often they alternate in the type of motive waves: if wave 1 is an impulse, expect wave 5 in the form of a diagonal, and vice versa. Less commonly, waves 1 and 5 form diagonals, but in this case, alternation will be expressed in the form of a pattern: contracting/expanding. So there are also many other lesser indications, but they are too numerous and less frequent. Therefore, I recommend that we focus on the main ones for the time being. 📣This concludes the lecture on impulse waves. Save the images and practice. Next week I'll start talking about the Leading and Ending diagonals. 🔔 Links to other lessons in related ideas. 🔔
Education
by Hellena_Trade
11
Backtesting strategies using TradingView's replay featureBacktesting trading strategies using TradingView's replay feature is a valuable tool to evaluate the effectiveness of your strategy in different market conditions and timeframes. Here's a step-by-step guide on how to backtest strategies using TradingView's replay feature: **1. Define Your Strategy:** - Clearly define the rules and parameters of your trading strategy, including entry and exit conditions, stop-loss and take-profit levels, and any other relevant criteria. **2. Access the Replay Feature:** - Open the chart for the GBP/USD pair on TradingView. - Click on the "Replay" button located at the bottom of the chart. This will activate the replay feature, allowing you to scroll back and forth through historical price data. **3. Set the Timeframe and Date Range:** - Choose the timeframe (e.g., 1-hour, 4-hour, daily) that matches the trading frequency of your strategy. - Select the specific date range you want to backtest your strategy on. You can adjust the date range using the timeline at the bottom of the chart. **4. Apply Indicators and Drawing Tools:** - Apply any indicators, drawing tools, or overlays that are part of your trading strategy to the chart. - Ensure that the parameters of your indicators are set according to your strategy's rules. **5. Start the Replay:** - Begin the replay by clicking on the play button in the replay control panel. - You can adjust the playback speed using the speed slider to simulate different market conditions and trading environments. **6. Execute Trades:** - As the replay progresses, identify potential trade setups according to your strategy's rules. - Manually execute trades (open, close, or modify positions) based on your predefined entry and exit conditions. **7. Record Results and Observations:** - Keep track of the performance of each trade, including entry and exit prices, profit or loss, and any deviations from your strategy's rules. - Take note of any observations or insights gained during the backtesting process, such as areas of strength or weakness in your strategy. **8. Analyze Results and Refine Strategy:** - Analyze the overall performance of your strategy, including profitability, win rate, maximum drawdown, and risk-adjusted returns. - Identify areas for improvement or optimization based on the results of your backtesting. - Consider making adjustments to your strategy's parameters, entry/exit rules, or risk management techniques to enhance its effectiveness. **9. Repeat and Iterate:** - Repeat the backtesting process on different timeframes, market conditions, and historical periods to validate the robustness of your strategy. - Continuously iterate and refine your strategy based on feedback from backtesting results and real-time trading experience. By utilizing TradingView's replay feature for backtesting, you can gain valuable insights into the performance of your trading strategy and make informed decisions about its suitability for live trading.
Education
by FrankFx14