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Smart Money Market Structure Order Block Trading🔸The principles of "smart money" trading focus on understanding the behavior of institutional investors, often referred to as "smart money," to make informed trading decisions. By analyzing market structure, order blocks, supply and demand zones, and market cycles, traders aim to predict price movements and make profitable trades. Here’s a breakdown of these key concepts and how they interact: 1. Market Structure Market structure is the fundamental flow of price movement, typically defined by highs and lows that indicate trends. The market can be seen in three primary states: ▪️Uptrend: Characterized by higher highs (HH) and higher lows (HL). ▪️Downtrend: Defined by lower highs (LH) and lower lows (LL). ▪️Consolidation (Range-bound): Prices oscillate between a support (demand) and resistance (supply) level. ▪️Understanding market structure helps traders identify when a market is trending or ranging, which is essential for timing entries and exits. 2. Order Blocks Order blocks are areas on a price chart where large institutional traders, like banks and hedge funds, execute significant orders. These blocks often indicate strong levels of support or resistance due to the substantial buying or selling activity. ▪️Bullish Order Block: Typically found before a strong upward move. It's the last bearish (down) candle before the price rallies, signaling a demand zone. ▪️Bearish Order Block: Typically found before a strong downward move. It's the last bullish (up) candle before the price drops, indicating a supply zone. ▪️Order blocks provide clues to where "smart money" has entered the market, suggesting areas where price may return for liquidity and where retail traders may find good entry points. 3. Supply and Demand Zones Supply and demand zones are similar to support and resistance levels but with a focus on identifying imbalances. They represent areas where supply (sellers) and demand (buyers) are significantly unbalanced: ▪️Demand Zone: A price range where buyers are strong enough to prevent further price drops. This often corresponds to an area of support. ▪️Supply Zone: A price range where sellers have historically stepped in to prevent further price increases, serving as resistance. ▪️Prices often revert to these zones due to liquidity needs, creating entry points for trend continuations or reversals. 4. Lower Highs (LH) and Higher Lows (HL) These are essential markers in identifying trend changes: ▪️Lower Highs (LH): In a downtrend, the price fails to reach a previous high, indicating seller dominance and potential continuation of the downtrend. ▪️Higher Lows (HL): In an uptrend, the price creates higher lows, suggesting that buyers are gradually gaining strength, signaling a continuation of the uptrend. These structural points help traders understand potential trend reversals or continuations. 5. Accumulation and Distribution Phases These phases are critical to the Wyckoff Market Cycle: ▪️Accumulation: This phase represents a period where "smart money" accumulates positions at low prices. It typically occurs after a downtrend and is characterized by a consolidation or sideways price movement. This phase often signals a future uptrend. ▪️Distribution: This is the phase where institutional players offload positions after a significant price increase. Like accumulation, distribution appears as consolidation, often preceding a downtrend. ▪️Accumulation and distribution are often analyzed using volume patterns and price action to gauge when a trend may begin or end. 6. Market Cycles (The Wyckoff Theory) Market cycles are a sequence of phases that price undergoes over time. According to Wyckoff’s methodology, there are four phases: ▪️Accumulation: Institutions build positions, often at a market bottom. ▪️Markup: After accumulation, the price starts to increase as demand outstrips supply. ▪️Distribution: Institutions sell off their positions, often at the top of the cycle. ▪️Markdown: Price declines as supply overwhelms demand, leading to a downtrend. ▪️Understanding these phases allows traders to anticipate potential turning points, which is critical in smart money trading. Applying These Principles in Trading The smart money trading approach uses these principles collectively: 🔸Identify Market Structure: Determine whether the market is trending or ranging, then identify order blocks, supply and demand zones, and significant highs and lows. 🔸Recognize Key Levels: Watch for accumulation and distribution phases at these levels, helping to anticipate likely future movements. 🔸Confirm with Volume: Use volume analysis to confirm accumulation or distribution activity. 🔸Set Entries and Exits at Smart Money Zones: Utilize identified order blocks and supply/demand zones to enter trades with the trend (markup or markdown) or exit before a reversal. 🔸By combining these elements, traders seek to align with the strategies of institutional investors, capturing trends early and minimizing exposure during less favorable periods.
Education
by ProjectSyndicate
7
Mastering the Anchored Volume Profile: Setup & Tutorial on TVMastering the Anchored Volume Profile: Setup & Tutorial on TradingView 📊 The Anchored Volume Profile is a powerful tool that traders use to visualize volume distribution over a specified price range, providing critical insights into market behavior. Here’s a detailed description of its setup and usage on TradingView: In this video, we will be going in-depth into the following areas: What is the Anchored Volume Profile? The Anchored Volume Profile is a specialized indicator that helps traders understand the distribution of traded volume at different price levels. Unlike traditional volume profiles that analyze data over a fixed time period, the anchored version allows traders to anchor the volume analysis to specific bars, candles, or price points. Why Use the Anchored Volume Profile? Identifying Support and Resistance Levels: You can easily identify key support and resistance levels by analyzing where the most volume has been traded. Spotting Trends and Reversals: High-volume nodes can indicate areas of strong interest, helping to predict potential trend continuations or reversals. Improving Entry and Exit Points: Knowing where the market participants are most active can significantly enhance your decision-making process for entries and exits. How to set up the Anchored Volume Profile on TradingView: Add the Anchored Volume Profile Indicator: Click on the “Indicators” button at the top of the chart. Search for “Anchored Volume Profile” in the search bar. Select it from the list and apply it to your chart. Anchor the Indicator: Click on the anchor icon that appears on the chart. Drag it to the specific bar, candle, or price point where you want to start your volume analysis. Customize Settings: Adjust the settings to suit your trading style. You can modify the range, color, and other parameters to better visualize the data. Using the Anchored Volume Profile: Analyzing Volume Nodes: Identify high and low volume nodes. High volume nodes often act as support or resistance, while low volume nodes might indicate potential breakout areas. Understanding Market Sentiment: See where the majority of trading activity has taken place to gauge market sentiment. Making Informed Decisions: Use the insights from the volume profile to make better-informed trading decisions regarding entries, exits, and stop-loss levels.
NASDAQ:TSLAEducation
by RonnieV29
2
Leap Competition: Top 3% in 5 Days! Here's HowLast competition, I hit the top 2% in the Leap Competition on TradingView. This time, though, something clicked. In just 5 days, I was already back in the top 3%. I didn't change my strategy. Instead I focused on refining how I managed risk. I stopped obsessing over perfect entry points and focused on squeezing as much profit as possible from each trade. That meant shifting to a new management technique. I prioritized a high risk-to-reward ratio, knowing that fewer trades could yield better returns. By using a trailing stop-loss, each trade had room to reach its potential without getting cut off too soon. This approach transformed each trade into a high-upside opportunity, letting winners ride and securing profits along the way. Over the last few days, I made fewer than ten trades. Each one was carefully planned through a top-down approach, looking at the bigger picture on higher timeframes to catch the market’s broader trends. This view kept me aligned with the trend, setting up trades with stronger potential. What really amplified my results, though, was the trailing stop. By locking in profits while riding the market’s momentum, this tool turned profitable trades into standout winners. It let me capture each market move fully without jumping out too soon. Now, let’s get into the top trade that helped me to get into top 3% within less than a week: And here’s the trailing stop-loss indicator I’m using—perfect for trades with room to run: //@version=5 indicator("Swing Low Trailing Stop", overlay=true) // User Inputs initialStopPercentage = input.float(0.5, title="Initial Stop Loss Percentage", minval=0.01, step=0.01) * 0.01 Swing_Period = input.int(10, "Swing Period") i_date = input.time(timestamp("05 Nov 2024 00:00 +0300"), "Start Date") // Variables for tracking stop loss var float stopLossPrice = na var float lastSwingLow = na // Calculate Swing Low swingLow = ta.lowest(low, Swing_Period) // Logic if i_date == time stopLossPrice := low * (1 - initialStopPercentage) lastSwingLow := swingLow // Update Stop Loss if time > i_date newSwingLow = swingLow if (newSwingLow > lastSwingLow ) stopLossPrice := math.max(stopLossPrice, newSwingLow) lastSwingLow := newSwingLow // Plot the stop loss price for visualization plot(time >= i_date ? stopLossPrice : na, title="Trailing Stop Loss", color=color.red, linewidth=2, style=plot.style_linebr) With this refined approach, I can’t wait for next week and the fresh opportunities that lie ahead! Big thanks to the TradingView community for creating opportunities like this competition—it’s a game-changer. Getting to test and refine strategies in a real, competitive environment pushes all o us to get better every day! If you haven’t joined already, make sure to hop into the competition . It’s an incredible way to challenge yourself, sharpen your skills, and see how you stack up against other traders! Keep focusing on becoming 1% better every day if you want to make this happen. Moein
COINBASE:ETHUSDEducation
by Fractalyst
1
Never HODL at the highest point even if the profit is small Hello, traders. If you "Follow", you can always get new information quickly. Please click "Boost" as well. Have a nice day today. ------------------------------------- I used TradingView's INDEX chart to see the overall flow of BTC. ----------------------------------------- Let's take a look at the section that showed a big movement. (1M chart) - 13888.32 - 57789.06 - 71320.68 The three points above are where the BW(100) line was created. The fact that the BW(100) line was created means that a high point section has been formed, so there is a high possibility of a decline. Therefore, based on the previous two experiences and looking at the current movement, we can see how important the 71320.68 point is as a support and resistance point. Therefore, we should sell when it falls below 71320.68 in order not to HODL in the high range. In the big picture, the stop loss point has been confirmed. - (1W chart) From the 1W chart, we can see that the 68376.06 point is an important stop loss point. Therefore, we should decide to sell depending on whether there is support in the 68376.06-71320.68 range. - If the BW(0) line is created after the price falls, then it is a strong buying period. Therefore, we should check whether there is support and see if we can buy. The reason is that after buying at the 37929.90 point, there is a possibility that it will fail to rise above the MS-Signal indicator and continue to decline. Therefore, you should not forget that you need to cut your loss when it falls below 37929.90 after buying. If you have a lot of cash left after distributing your investment weight well, you can buy more when the next BW(0) line is created to lower the average purchase price. However, since it is a 1W chart, such a transaction is not easy, so I think it is better to buy again after cutting your loss. - (1D chart) Since BW(0) and BW(100) lines are often created on the 1D chart, it is recommended to use the BW(0) and BW(100) lines created at the current price position for trading. As mentioned earlier or in the chart, you can see that the BW(100) and BW(0) lines appear after the arrows are created, and there is a decline and rise. Therefore, since the arrows are created near the current price, you can see that the BW(100) line is likely to be created soon. Therefore, if you are trying to make a new purchase now, I think it would be better to lower the investment ratio or not to make a transaction at all. In any case, when the BW(100) line is created, you have to stop the transaction in progress or sell some of it. - It is not much, but I think it can be a good reference for trading. If you look at the StErr Line, HA-High, HA-Low, BW(0), and BW(50) indicators together to make this judgment, I think it will be a great help in your trading strategy. Since these indicators can be used on all time frame charts, I think they can help you get an eye for selecting support and resistance points. If you use too many indicators, you can trade incorrectly. Therefore, you should think about how to use the indicators, which indicators to apply to which trading strategy, and think about how to use them accordingly. I hope that this time, you will trade without HODLing at the high point. - Have a good time. Thank you. --------------------------------------------------
INDEX:BTCUSDEducation
by readCrypto
2
This is all you need to get started: a paper trading account!Starting your trading journey wisely means utilizing a Paper Trading account, also known as a demo account. This account simulates the real trading experience by mirroring market movements and conditions, but operates without the risk of losing real money. It offers traders access to comprehensive market data just like a live account, enabling practice with real-world price fluctuations—if Gold (XAU/USD) experiences a 5% rise or fall, the same scenario reflects in the demo account. This provides an excellent opportunity to understand market dynamics without financial exposure. A Beginner's Best Friend: The Demo Account For novice traders, a demo account is an essential entry point into the financial markets. It allows individuals to familiarize themselves with various trading aspects and strategies. Many traders base their transition to live trading on the insights and performance gleaned from their demo accounts. The convenience of setting one up is straightforward—simply use the Paper Trading option on TradingView to practice with a simulated account. Click on the Trading Panel of your chart, and you'll find the Paper Trading option on TradingView. Advanced Applications for Experienced Traders However, the utility of demo accounts isn’t confined to just beginners; seasoned traders also derive significant benefits. Experimenting with New Strategies Experienced traders frequently utilize demo accounts to try out and assess new trading strategies. This method serves as a safe way to test different approaches without putting their capital at risk. Evaluating Automated Tools Developers of trading bots and algorithms rely on demo accounts for comprehensive testing of their tools. These automated systems undergo rigorous backtesting in a zero-risk environment, ensuring they are ready for live trading scenarios. Training and Development Demo accounts serve as effective training platforms for both individual traders and those employed within financial institutions. Whether it’s a retail trader or a professional in a hedge fund, these accounts offer vital learning experiences that hone skills effectively. Skill Development and Confidence Building The benefits of demo accounts extend to enhancing both technical and soft skills. Fundamental competencies such as market analysis, strategy formation, and data interpretation can be improved in a low-stakes setting. Meanwhile, soft skills like patience, resilience, and adaptability receive a boost, ultimately shaping a well-rounded trader. Moreover, the journey can build confidence. Since trading can be intricate and losing money can shake one's self-assurance, a demo account provides a haven for refining trading strategies without risking actual funds. This psychological support can significantly influence success in the live markets, where self-confidence is often linked to profitability. How Long Should You Practice? The duration one should spend in a demo account varies, influenced by personal factors. For those transitioning to full-time trading, a minimum of three months is advisable. Though this may seem lengthy, it is a small price to pay for a comprehensive understanding of market dynamics and a variety of trading conditions. The Advantages of Practicing Day Trading in a Demo Account 1- Accelerated Learning Utilizing non-market hours for practice enables traders to quickly accumulate experience, far exceeding what can be gained during regular market sessions. 2- Preparedness for Quick Decisions Day trading requires rapid decision-making skills. Regular practice in a demo account equips traders to respond swiftly to market fluctuations. 3- Intuitive Market Recognition Frequent practice encourages an instinctual grasp of market conditions, vital for timely and effective trading actions. 4- Confidence in Trading Decisions Confidence plays a critical role in a day trader's success. Thorough practice in a risk-free environment allows traders to build confidence before they step into live trading. 5- Adaptability to Market Variability Day traders often experience victories and losses. Practicing within a controlled environment fosters a clear mindset to tackle each trade, essential for adapting to shifting market scenarios. 6- Setting Realistic Income Expectations Repeated practice enables traders to set achievable income expectations, cultivating a sensible outlook prior to committing to full-time trading. 7- Enhancing Chart Analysis Skills A demo account encourages traders to develop chart reading abilities without becoming overly reliant on them, promoting a balanced analytical approach. 8- Personal Trading Style Development The complexities of day trading call for personalized strategies. Regular practice in a demo account allows traders to foster their unique trading styles and embrace accountability for their decisions. 9- Effective Risk Management Practicing with margin in a demo account allows traders to experiment with leverage while treating each trade seriously. Also Read: and now... "Best Practices for Using Demo Accounts" To ensure you maximize the benefits of a demo account, adopt the following strategies: Serious Approach Although no real money is at stake, treating the demo account with seriousness enhances realism and deepens the learning experience. Realistic Capital Allocation Even though demo accounts may offer unlimited capital, traders should simulate an amount similar to their intended live trading capital for a more accurate experience. Maintain Consistent Leverage Using the same leverage plan that you would apply during live trading ensures that your demo experience aligns closely with potential future outcomes. Gradual Transition to Live Trading Transitioning from a demo account to live trading should be done thoughtfully. Test your strategies extensively in the demo environment, simulating real trading amounts, to reduce the likelihood of mistakes once you start live trading. In conclusion... In summary, a demo account is a vital resource for both novice and experienced traders navigating the complexities of financial markets. For beginners, it provides a risk-free avenue to grasp market dynamics and develop essential trading techniques. For seasoned professionals, demo accounts are indispensable for strategy testing, evaluating automated tools, and enhancing both technical and psychological skills. While the ideal duration in a demo account varies from trader to trader, committing to three months is recommended for anyone serious about entering full-time trading. Day traders particularly stand to gain by practicing within a demo setting, allowing them to accelerate skill acquisition, prepare for snap decisions, and foster a robust sense of confidence. The structured environment of a demo account promotes the crafting of personalized trading strategies, the establishment of effective risk management practices, and the ability to adapt to real-world market conditions. Lastly I would like to add this previous lecture to this post, I'm sure will be useful for you... The Psychology Of Trading How To Manage Your Emotions and.. The Benefits of Keeping a Trading Journal for Your Psychology ✅ Please share your thoughts about this article in the comments section below and HIT LIKE if you appreciate my post. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Education
by FOREXN1
1
How to PREDICT MARKETS! Tops and BottomsIn this video, I go over the following in great detail: Predicting Markets with Williams %R, RSI, and MACD Predicting market movements can be challenging, but combining the Williams %R, Relative Strength Index (RSI), and Moving Average Convergence/Divergence (MACD) indicators can provide powerful insights for traders. Williams %R measures the current closing price relative to the high-low range over a specific period, helping identify overbought or oversold conditions. RSI gauges the speed and change of price movements, also indicating overbought or oversold levels. MACD analyzes the relationship between two moving averages of a security's price, identifying potential buy or sell signals. By using these three indicators together, traders can: Confirm Trends: When all three indicators align, it strengthens the signal for a potential trend continuation or reversal. Identify Entry and Exit Points: Overbought or oversold signals from these indicators can help pinpoint optimal entry and exit points. Reduce False Signals: Combining multiple indicators can help filter out false signals, increasing the reliability of predictions.
AMEX:SPYEducation
by RonnieV29
Trend Direction and Trading Indicator TutorialThe Tenoris Trend Indicator determines support and resistance using a proprietary method that I've not seen in other indicators. Over the last 10 days a potential gain of 15% on Bitcoin is shown on the chart. The key is knowing which Red and Green arrows are most likely to indicate the reversal of the price trend from short to long or long to short (red to green or green to red arrows and boxes). The arrows are used for trade entries and exits and the boxes in relationship to the price of a closed candle are used to predict price direction. The time frame of the chart is critical for maximizing the accuracy of the indicator. In general a 7D candle on crypto and a 30 day candle on stocks and a quarterly candle on indexes like the S&P provides the most accurate trend direction. On Bitcoin a 4H candle chart can be successfully used to determine entires for short term trades lasting a few days. In extensive back testing and live trading a gain of 10% a month or more is consistently possible. The key to using the indicator is knowing which arrows are the most indicative of a trend change. When a green candle closes above the red boxes it's likely that price is going to go from trending down to up. When a red candle closes below a green box it's likely that price will trend down. Compared to moving averages, and other directional trend indicators the Tenoris Trend Indicator is superior in detecting trend changes much earlier than other methods of technical analysis commonly used.
BITSTAMP:BTCUSDEducation
by TrendGuruX
A capture of inflation, dilution and stimulus /2024As we see by the chart, we had a series of events mostly around mega-stimulus for Covid and a massive dilution of currency as triggering events. Inflation rose and is now back down close to the desirable 2% inflation. We don't want prices to go back to where they were, that is deflation and is not healthy for an economy. We want prices to stay near the same year after year with modest inflation. When inflation rises too fast, we increase interest rates to slow down spending, to reduce inflation. The best we can do is work on wage growth to accommodate the inflation from our past years while maintaining modest inflation. At 2.4% inflation currently, there really is pretty much nothing to fix anymore, we just need to keep it around where it is, a little lower really and work on modest wage growth. Looking at this data, it really looks like the vast majority of the culpability of that inflation we had came from 2020, one of the single worst years financially as a country with inflation starting to rise immediately in 2021, and exacerbated some in 2021. Looking at this chart, there is a tangible possibility that we see >10% inflation by 2027 Here is the M2 money supply chart:
ECONOMICS:USIRYYEducation
by EncryptShawn
CBOE long @ 197.04 - it may be the perfect stock for meCBOE is short term oversold. That is enough reason for me to buy it. But there's more. This might be the absolute perfect stock to use my "first profitable close" exit strategy on. Both exit strategies work well. My original one produced a 42-3* win rate over the last 2 years (backtesting) with all 3 “losers” being the last 3 trades that haven’t become profitable yet, while the first profitable close strategy was 43-2*. This is a stock that rarely stays oversold long, and bounces back quickly in most cases. In an albeit short 2 year backtest, the highest number of lots I'd have held at once was 4 and the average was 1.4, meaning almost always, they were being sold the next day. In fact, the average holding period for the 45 trades taken in that time would have been 1.55 days and 69% of the trades closed in 1 day, using the first profitable close. Remarkably, the longest I'd have had to hold a lot before it became profitable in the entire 2 year backtest period was 5 days and that only happened twice. Now as I mentioned in my NYSE:VZ idea yesterday, there is usually a tradeoff with this exit strategy. Lower average profits and slightly lower profits per day held in exchange for quicker cycling of capital. But I mentioned that isn’t always the case, and CBOE is a perfect example of that. The big reason is the HUGE difference in trade length. ORIG exit strategy tied up capital 9x as long, on average, as FPC (first profitable close) did. Avg. hold period ORIG = 14.1 days (longest hold - 106 trading days) Avg. hold FPC = 1.6 days (longest hold - 5 days) Overall gain per lot traded favored ORIG over FPC, +2.8% vs. 1.2%...BUT...gain per lot per day held (quantifies the tradeoff between hold length and profit) was HUGELY in favor of FPC here due to the dramatically shorter hold period. FPC = +.78%/lot/day held ORIG = +.20%/lot/day held Both of those numbers are very good, but the FPC one is off the charts. A +.78%/day held return is a 197% annualized return. That’s moonshot microcap returns, not stodgy, safe, dividend paying options exchange company returns. Now realistically you're not actually going to have a 197% return because you don't get these trades every day. But it's a measure of how fast your money is making you money. Usually ORIG marginally beats FPC in this situation, but the speed at which CBOE can return capital profitably makes the FPC exit a much better play with this one. I haven't done an all-time backtest on this, but you can bet I'm going to this weekend. I suspect the difference between the two won't be as dramatic over the long haul, but it's worth noting that there were no long, grueling downtrends in CBOE over the last 2 years, and FPC outperforms ORIG during those. I'll post the results of that as an update to this idea either over the weekend or on Monday, depending on how busy my weekend gets. By the way, I bought a double lot because it was oversold yesterday too and I missed it. The last time it was oversold 2 days in a row was May '23. I will add to the position whenever it is oversold and I will sell any lot at the close of the first day it becomes profitable. So try to resist following me on this trade, since this isn't financial advice. It's edutainment. You should DYOR before investing or trading any of your own hard earned money. Have a good weekend everyone! Stay profitable, San Diego. -Ron Burgundy
AMEX:CBOEEducation
by redwingcoach
Election Year Cycle & Stock Market Returns - VisualisedIn this chart, we're analysing the open value of the week the US election took place and comparing it to the open of the following election, showing the gain (or loss) in value between each election cycle. Historically we can see prices in the Dow Jones Industrials Index tend to appreciate the week the election is held. Only twice has the return between the cycles produced a negative return. Buying stocks on election day, 8 out of 10 times has yielded a profitable return between the election cycles. 80% of the time in the past 40 years returning a profit, has so far been a good strategy to take. The typical cycle starts with the election results, an immediate positive movement and continued growth before finishing positive. The Outliers 2000-2004 was the only year which ended negative without prices going higher than the election day. 2004-2008 increased 41.84% before ending negative. 2008-2012 began the cycle falling 30.62% before finishing positive. The names of presidents who won their respective elections is to visualise who had the presidential term during that specific cycle.
TVC:DJIEducation
by Mt.BFX
Bearish continuation setups taken on Silver and WTI today explaiIn this video, I walk you through my entire thought process during today's trading session. You'll learn how I selected the pairs and executed three key trades: * Silver Breakdown Retracement Continuation Short, R4,5 * WTI Breakdown Continuation Short, R3 I'll also provide a detailed explanation of the BD Continuation setup, helping you understand how to apply this strategy in your own trading. Breakdown Continuation is one of my personal A+ playbook setups. Don't miss out on these valuable insights and tips!
OANDA:XAGUSDEducation
by TC888
Algorithmic vs. Quantitative Trading: Which Path Should You TakeI’ve always wondered why anyone would stick to traditional trading methods when algorithms and mathematical models could do all the heavy lifting. I started questioning everything: • Why do so many mentors still swear by discretionary trading when algorithms could handle all the heavy lifting? • Do they really have solid proof of their “own” success, or is it just talk? • Or are they keeping things complex and discretionary on purpose, to confuse people and keep them as members longer? • Why deal with the stress of emotions and decisions when an algorithm can take care of it all? • Imagine how much further ahead you could be if you stopped wasting time on manual trades and instead focused on market research and developing your own models. When I first got into trading, I thought Algorithmic Trading and Quantitative Trading were basically the same thing. But as I dug deeper, I realized they’re two completely different worlds. Algorithmic Trading: It’s simple – you set the rules and the algorithm executes the trades. No more sitting in front of the screen “controlling your emotions” and trying to manage every little detail. Instead, you let the algorithm handle it, based on the rules you’ve set. It frees up your time to focus on other things rather than staring at price charts all day. But here’s the thing – it’s not perfect. You’ll still need to test the rules to make sure the data and results you’re getting aren’t overfitted or just random. Quantitative Trading: A whole different level. It’s not just about executing trades; it’s about understanding the data and math behind market movements. You analyze historical price, economic, and political data, using math and machine learning to predict the future. But it can be complex – techniques like Deep Learning can turn it into a serious challenge. The upside? This is the most reliable way to trade, and it’s exactly what over 80% of hedge funds do. They rely on quant models to minimize risk and to outperform the market. So, which path should you choose? Quantitative Trading can feel overwhelming at first, I recommend starting with the basics. Begin with Pine Script coding in TradingView—start building a foundation with simple strategies and indicators. As you grow more confident, start coding your own ideas into rules and refining your approach to eventually automated your trading strategy. TradingView is a great tool for this, and I’d highly suggest grabbing the Premium plan. This will give you access to more data and features to make your learning journey smoother. Dive into the Pine Script documentation , and begin bringing your ideas to life. I promise, the more you focus on this, the better and more independent you’ll become in trading. Every day, aim to get just 1% better. To Your success, Moein
COINBASE:ETHUSDEducation
by Fractalyst
1
EDUCATION: The “Fake” Engulfing Candle: A SNEAKY TRAPAs traders, we’re often taught to look for classic price action patterns, and one of the most well-known is the Engulfing Candle. It's that strong reversal pattern where the body of the second candle completely engulfs the body of the first, signaling potential trend reversals or continuations. But what happens when that engulfing candle shows up in the "wrong" place? That’s what I like to call a "Fake" Engulfing Candle. A "Fake" Engulfing Candle is one that paints on the chart but in a location that doesn’t align with the market context or trend. For example, if you’re in a strong, established trend, an engulfing candle that appears in the middle of the trend (without any supporting structure or context) could be a false signal. This kind of engulfing candle might look great on the chart, but it's not telling you the full story—it’s a signal with poor timing. Understanding the Importance of Location The location of an engulfing candle is key. A "real" engulfing candle typically forms after a clear trend exhaustion or at a key support or resistance level. These are areas where price is likely to reverse, and that’s where an engulfing pattern becomes meaningful. However, when the engulfing candle appears in random locations—without any clear structure around it—it’s often just noise in the market. Fake signals, like this, can lead traders to make impulsive decisions, chasing trades that aren’t supported by solid market structure or context. Think of it like walking into a room full of noise—you may hear words, but they’re not telling you anything meaningful. How to Spot a Fake Engulfing Candle Context is King: Look for the engulfing candle to form after a trend exhaustion or near a key support or resistance level. If it pops up in the middle of a strong trend with no visible reason for reversal, chances are it’s a fake. Volume Confirmation: Is the engulfing candle supported by volume? A strong engulfing candle should have an increase in volume, confirming the strength of the move. If volume is absent or weak, the signal may be unreliable. Previous Market Structure: The best signals often come from patterns that align with previous market structure, such as previous highs or lows. If the engulfing candle doesn’t respect any major levels or swing points, it might not be worth trading. Practical Takeaway: Don't Fall for the Fake The takeaway here is simple: don’t let the appearance of a "perfect" engulfing candle fool you. Just because it looks good on the chart doesn’t mean it’s the right signal for the current market conditions. Always pay attention to the context around the pattern and confirm it with volume and other technical indicators. Remember, location matters when it comes to identifying valid trade setups. Have you ever been caught by a "Fake" Engulfing Candle? What’s your process for distinguishing real signals from fake ones? Drop your thoughts in the comments—I'd love to hear how you handle these tricky setups!
Editors' picks
Education
by TLTurnerTV
4
SWING TUTORIAL - ABSLAMCIn this tutorial, we analyze the stock NSE:ABSLAMC (Aditya Birla Sun Life AMC Limited) identifying a lucrative swing trading opportunity following its all-time high in Oct 2021. The stock declined by nearly 57%, forming a Lower Low Price Action Pattern, but subsequently reversed its trend. At the same time, we can also observe the MACD Level making a contradictory Pattern of Higher Lows. This Higher Low Pattern of the MACD signaled the start of a Bullish Momentum, thereby also signaling a good Buying Opportunity. The trading strategy yielded approximately 114% returns in 63 weeks. Technical analysis concepts used included price action analysis, MACD, momentum reversal, trend analysis and chart patterns. The MACD crossover served as the Entry Point, with the stock rising to its Swing High Levels of 720 and serving as our Exit too. As of wiring this tutorial, we can also notice how the stock is making a breakout and retest of the Swing High levels and trying to continue its momentum further upward trying to make a new All Time High. KEY OBSERVATIONS: 1. Momentum Reversal: The stock's price action shifted from a bearish to a bullish trend, indicating a potential reversal. 2. MACD Indicator: The Moving Average Convergence Divergence (MACD) line showed steady upward momentum, signaling increasing bullish pressure. 3. MACD Crossover: The successful crossover in May 2023 confirmed the bullish trend, creating an entry opportunity. TRADING STRATEGY AND RESULTS: 1. Entry Point: MACD crossover in May 2023. 2. Exit Point: Swing High Levels - 720. 3. Return: Approximately 114%. 4. Trade Duration: 63 weeks. TECHNICAL ANALYSIS CONCEPTS USED: 1. Price Action Analysis 2. MACD (Moving Average Convergence Divergence) 3. Momentum Reversal 4. Trend Analysis 5. Chart Patterns NOTE: This case study demonstrates the effectiveness of combining technical indicators to identify bullish momentum. By recognizing Price Action, MACD movements, and Reversal patterns, traders can pinpoint potential entry and exit points. Would you like to explore more technical analysis concepts or case studies? Share your feedback and suggestions in the comments section below.
NSE:ABSLAMCEducation
by thepranam
Becoming a Respected Vendor on TradingViewBecoming a Respected Vendor on TradingView: What it Means and How to Excel. If you're reading this, you’re probably on TradingView.com, a thriving hub for technical traders, market enthusiasts, and creators of tools that support trading success. TradingView is home to two main groups: those who offer paid indicators and those who share ideas and tools for free, contributing to the community’s growth. With so many options available, the question arises: Should people pay for technical indicators? And what distinguishes a quality vendor from one who’s just following trends? Here’s a guide on what makes a vendor worth your attention—and how they can establish legitimacy and trustworthiness in a sometimes oversaturated market. 🞛 Why Pay for Technical Indicators? Investing in a paid indicator can sometimes be invaluable, as these tools often go beyond what’s available for free, providing deeper insights or unique approaches. Generally, a vendor will decide to sell a product if they believe it has some sort of edge. However, paying for an indicator requires careful evaluation: understanding the tool’s unique value and assessing the vendor’s commitment to creating quality products. When considering whether an indicator is worth your money, the focus should be on its utility, originality, and the support structure behind it. 🞛 Key Qualities of a Good Vendor Originality and Innovation At the heart of any high-quality technical indicator is robust mathematical groundwork. While visuals are helpful, they come secondary to solid foundational math and advanced techniques, like Digital Signal Processing (DSP). A vendor with a genuine passion for indicator creation will have refined, creative tools, rather than simply repackaging or rebranding existing ideas. Look for originality and a clear differentiation in the product. Vendors who aim to elevate the field contribute to the TradingView library, sharing open-source content that adds genuine value. This process can of course be assisted via the Editor Picks award where the TradingView team will select excellent creations awards. Community Engagement This means responding to questions, implementing meaningful suggestions, and generally showing a vested interest in user success. The largest vendors may not be able to respond to every comment, but they should have systems in place to track and log feedback consistently. Comprehensive Educational Support A quality vendor ensures you understand how to get the most out of their tools, whether through documentation, recorded courses, or live classes. This support is particularly important for complex products, where a little guidance can go a long way in helping users fully utilize the tool’s capabilities. Humility and Honesty Some of the best tools come from lesser-known creators who prioritize their craft over marketing. Scouting out promising indicators on the trending page can reveal gems created by individuals who may lack big budgets but offer real, innovative value. Also, beware of grandiose claims—vendors who truly believe in their work allow the product to speak for itself. Ego is dangerous especially in a field like technical analysis where nothing is assured or guaranteed. Any vendors asserting themselves as leaders or the best could be disingenuous as generally speaking every product will have a unique quality set. How to Assess a Vendor’s Legitimacy With so many options on TradingView, it can be challenging to determine which vendors are truly worth your time. Here are some ways to evaluate them: Research Their History and Contributions Have they released any open-source scripts or tutorials? Vendors who contribute freely to the community often demonstrate a higher level of expertise and integrity. Review Customer Feedback and Engagement Look through comments, reviews, and responses to see how well the vendor interacts with customers. Vendors who consistently receive positive feedback and follow up on user input are often more reliable. Test Their Free Indicators First Trying these tools before making a financial commitment can give you a sense of their quality, ease of use, and how well they align with your trading goals. 🞛Premium or Free indicators? While both free and paid indicators rely on mathematical foundations, paid indicators may incorporate more advanced or refined techniques. For instance, they might leverage proprietary algorithms, signal processing methods, or unique data combinations that aren’t as accessible in free indicators. This doesn't mean they will automatically yield higher profits, but these advanced techniques can provide unique insights that a trader may not find in simpler tools. Rather than promising financial gains, these indicators aim to enhance a trader’s analytical capability. Paid indicators often come with dedicated customer support, documentation, and even a community of users who actively share insights and strategies. This support can be extremely valuable for traders at any experience level, as it allows them to troubleshoot issues, learn from others, and get guidance on how to maximize the tool's potential. 🞛 Final Thoughts The TradingView ecosystem is a dynamic environment, filled with talented individuals who push the boundaries of technical analysis. By seeking out vendors who prioritize originality, community engagement, and user support, traders can make informed choices about which indicators add real value to their toolkit. Remember, a responsible vendor doesn’t just sell a product—they cultivate an experience, one that ultimately supports you in becoming a more confident, successful trader. When choosing a vendor, look for those who stand behind their product, foster transparency, and create tools that are rooted in genuine innovation. By doing so, you’ll contribute to a marketplace that encourages quality, integrity, and growth for traders everywhere. Thank you for reading! - Alex Friend / ChartPrime
Education
by ChartPrime
Understanding Trading Leverage and Margin.When you first dive into trading, you’ll often hear about leverage and margin . These two concepts are powerful tools that can amplify your profits, but they also come with significant risks. The image you've provided lays out the essentials of leverage and margin: Leverage allows traders to control larger positions, Margin acts as a security deposit, Profit Amplification boosts potential gains, and Risk Amplification warns of increased losses. In this article, we’ll break down these terms and explore how leverage and margin work, their advantages and risks, and what to consider before using them in your trading strategy. What is Leverage in Trading? Leverage is essentially a loan provided by your broker that allows you to open larger trading positions than your actual account balance would otherwise allow. It’s a tool that can multiply the value of your capital, giving you the potential to make more money from market movements without needing to invest large sums of your own money. Think of leverage as “financial assistance.” With leverage, even a small amount of capital can control a larger position in the market. This can lead to amplified profits if the trade goes your way. However, it’s a double-edged sword; leverage can also lead to amplified losses if the trade moves against you. Example of Trading with Leverage Suppose you have €100 in your trading account and your broker offers a leverage of 1:5. This means you can control a position worth €500 with your €100 investment. If the market moves in your favor, your profits will be calculated based on the €500 position, not just the €100 you originally invested. However, if the market moves against you, your losses will also be based on the larger amount. What is Margin in Trading? Margin is the amount of money you must set aside as collateral to open a leveraged trade. When you use leverage, the broker requires a deposit to cover potential losses—this is called margin. Margin essentially acts as a security deposit, ensuring that you can cover losses if the trade doesn’t go as planned. Margin is usually expressed as a percentage of the total trade size. For example, if a broker requires a 5% margin to open a position, and you want to open a €1,000 trade, you would need to deposit €50 as margin. How Does Margin Work? Margin works together with leverage. The margin required depends on the leverage ratio offered by the broker. For instance, with a 1:10 leverage, you’d only need a 10% margin to open a position, while a 1:20 leverage would require a 5% margin. If the market moves against your position significantly, your margin level can drop. If it falls too low, the broker may issue a **margin call**, requesting additional funds to maintain the trade. If you don’t add funds, the broker might close your position to prevent further losses, which could lead to a loss of the initial margin amount. How Does Leveraged Trading Work? Leveraged trading involves borrowing capital from the broker to increase the size of your trades. This allows you to open larger positions and potentially gain higher profits from favorable market movements. Here’s a simplified process of how it works: 1. Deposit Margin: You set aside a portion of your own funds (margin) as a security deposit. 2. Leverage Ratio Applied: The broker provides you with additional capital based on the leverage ratio, increasing your trading power. 3. Open Larger Positions: You can now open larger trades than you could with just your capital. 4. Profit or Loss Magnified: Any profit or loss from the trade is amplified, as it’s based on the larger position rather than just your initial capital. While leverage doesn’t change the direction of your trades, it affects how much you gain or lose on each trade. That’s why it’s essential to understand both the potential for profit amplification and the risk amplification that leverage brings. The Benefits and Risks of Using Leverage Benefits of Leverage - Profit Amplification: With leverage, you can control larger trades, which means any favorable movement in the market can lead to greater profits. - Capital Efficiency: Leverage allows you to gain exposure to the markets without needing to invest a large amount of your own money upfront. - Flexibility in Trading: Leveraged trading gives traders more flexibility to diversify their positions and take advantage of multiple opportunities in the market. Risks of Leverage - Risk Amplification: Just as leverage can amplify profits, it also amplifies losses. If a trade moves against you, your losses can be substantial, even exceeding your initial investment. - Margin Calls: If the market moves significantly against your leveraged position, you may face a margin call, requiring you to add more funds to your account to keep the position open. - Rapid Account Depletion: High leverage means that small market moves can have a big impact on your account. Without careful management, you could deplete your account balance quickly. Important Considerations for Leveraged Trading 1. Understand the Leverage Ratio: Different brokers offer various leverage ratios, such as 1:5, 1:10, or even 1:100. Choose a leverage ratio that aligns with your risk tolerance. Higher leverage ratios mean higher potential profits but also higher potential losses. 2. Know Your Margin Requirements: Always be aware of the margin requirements for your trades. Brokers may close your positions if your margin level drops too low, so it’s essential to monitor your margin balance regularly. 3. Risk Management is Key: Use risk management strategies like stop-loss orders to limit potential losses on each trade. Don’t risk more than a small percentage of your account balance on any single trade. 4. Avoid Overleveraging: One of the biggest mistakes new traders make is using too much leverage. Start with a lower leverage ratio until you’re more comfortable with the risks involved in leveraged trading. 5. Only Use Leverage if You Understand It: Leveraged trading is suitable primarily for experienced investors who understand the market and the risks involved. If you’re new to trading, practice with a demo account to learn how leverage works before applying it in a live account. Final Considerations Leverage and margin are powerful tools in trading that can amplify profits, but they come with considerable risk. Using leverage wisely and understanding margin requirements are essential to avoid unnecessary losses and protect your account. While the prospect of profit amplification is attractive, traders should always remember that leveraged trading is a double-edged sword—it can lead to significant gains, but it can also result in rapid account depletion if not managed carefully. To summarize: - Leverage allows you to control larger trades with a small investment, multiplying both potential profits and potential losses. - Margin is the deposit required to open a leveraged trade and acts as a security against potential losses. - Use leverage responsibly and only after understanding the risks involved. Leverage can be a valuable tool in trading if used wisely, so make sure to educate yourself, practice with a demo account, and always approach leveraged trading with caution.
FX:XAUUSDEducation
by pow_removetheguesswork