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Why Risk Management is so important ? (read)Hello traders, I'm making this post in order to help the community, most of you focus to much in technical analysis but let's take back to basics a put things clear. Before continuing reading make sure to give a like this will help the community use proper risk management. Okay let's begin. For every trade that you take, there is a certain scenario playing out. The moment that you clicked, for that moment of time, there were a certain number of market participants buying a certain amount and there were a certain number of market participants selling . Do you believe that the same participants transacting when you clicked for one trade, are the same market participants transacting when you clicked for another trade? Absolutely not; it is an impossibility. Every moment there exists market participants entering and exiting , anything can happen. Now let's talk about simple math : This is simply a conceptual series of 10 trades, taken one after the other from a beginner perspective let's us act as a beginner: if at the beginning you risk more than expected then it will take you a lot of work to recover from that DD%. Make sure to have a proper risk modelling and follow the rules to survive. New traders execute trades with certainties '' this loos good , I will risk more'' . ''I will risk more in this one because I need to recover my previous loss'' . ''I lost the previous one i will risk less'' Here is where the problem occurs: When you modify parameters in your risk modeling it will have a strong impact in the outcome. what happen in you risk 3 % in the 5 first trades and you end up losing ? you will end up in serious problems. What if you risk 2 in the first trades and you end up losing and then you say ok I will risk less because I'm losing to much and that trade end up making a 1 to 6 risk reward ratio.Hope this example was clear. Now Let us say for example that you took 10 trades with proper risk management ? the outcome is totally different. As you can see , we risk the same amount every time and we only need few trades to make decent profits. Proper risk modelling will allow you to have losing trades and still making profit. you can have a poor win rate like in this example and still end up positive. The only difference between the first trader and the second one is that in fact one has a trade by trade approach and the second has a series per trade approach. This might be hard to understand but if you really want to continue in the long you must use a proper risk modelling system. Here is where the solution is : EVERY TRADE IS UNIQUE , ANYTHING CAN HAPPEN. MANAGE YOUR EXPOSURE OR YOU WILL HAVE NOTHING LEFT TO MANAGE. PRO traders understand that in order to have results they must adopt a series per trade approach Please do follow and comment your thoughts. let me know in the comment section what do you think about it .
BITSTAMP:BTCUSDEducation
by AIRFOREXONE_
10
What type of trader are you? Please comment belowHello friends, Today I thought in helping you understand different Forex Trader Types and probably you can identify yourself in which category you fit in so you know how to approach the market each day. There are 6 type of traders as far as I know: 1. News or Fundamental Traders ✅Fundamental traders focuses on Fundamental events that may potentially drive the market in a particular direction, causing spikes in a certain direction. ❇️This type of trading will be best for individual traders who likes to keep up with world events that can cause spikes in the market and seek to take advantage of these spikes that can last for a short period of time ranging from few seconds to 15 minutes. ✅This type of trading can be extremely risky as the market can change direction very fast which can cause a trader loosing his/her entire funds, but with good trading skills and experience this type of trading can be very rewarding and offers fast returns. ✅Fundamental Traders would seek to trade the Non-Farm Payroll data, employment figures, elections, CPI and GDP. 2. Scalpers ✅Scalpers are traders that focuses on holding positions for a short period of time from few seconds to a few minutes. ✅This type of trading requires a trader to sit on computer the whole day or during the time when the market is very volatile to take advantage of the small movements in the market to be able to make profit. ✅A trader may be inclined to take so many trades, making smaller profits each time to be able to make good return at the end of the day. 3. Day Trader ✅Day trader is more less like a scalper, taking short positions during the day and making sure that all positions are closed before the end of the day to stay away from negative news events, market gaps or widening of spread. ✅A day trader should be alert to changes in market direction and manage his positions swiftly and accordingly. 4. Swing Trader ✅Swing traders can hold positions for some couple of days and up to perhaps a couple of weeks. ✅Traders of this type analyses the market and take advantage of changes in trend direction and catch a trend while it is still fresh and ride this trend for a longer period of time before closing positions. ✅They would not be required to sit on computer the whole day. Rather, they would analyse, calculate the cost and take the position and they will only get back to computer after some couple of hours or another day to monitor the movement. ✅This type of trading is good for those that hold other businesses or jobs as they can make time for other activities to be done. 5. Position Traders ✅Positions traders hold trades for longer periods of time ranging from a several weeks to years. ✅For this type of trading patience is required to be able to hold trades for that long and a trader should have a very good knowledge about what moves currencies in a long term. ✅That also means that swap charges will be a lot and as a position trader he should put that into consideration before taking a long term position. 6. EA, Algorithmic Trader ✅These type of traders rely more or solely on computer algorithm programs to make buy and sell decisions for them. The EA also known as Expert Advisor may place trades on behalf of the trader and even closing trades when in profit. ✅Although the EA performs most of the work, a trader should also have basic knowledge of trading to be able to gain some measure of success from this type of trading. Why is it important to trade in your local currency? ✅It can save you from a lot of calculations. When you trade in a currency which is not your local currency, your mind processes so much information to convert every number to your local currency. Your mind will be tired at the end of the day and you will begin making unplanned trades. ✅I watched a video on this topic recently and this fellow mentioned the same thing that I always thought, when you trade in a currency which is not your own, you wouldn't respect money. For example, $50 US dollar would look smaller if you are a trader living and using South African Rand. You may want to wait for more to be satisfied as the number 50 may look smaller in the eyes. But if we convert USD50 to South African Rand it would be R725.38 today and for many that would be a 4 days wage. ✅Many traders, especially new ones in the Forex industry, they really do not know what they want and how to go about making things work out consistently for them, they only think if they keep buying and selling eventually they can hit a million dollar and get away from the financial distress and poverty. Probably that is how the Forex Market is perceived, that giant casino that makes people rich and such way of thinking can destroy one's life and everything he acquired for years. The most important thing here is to respect money, knowing that it is very hard to obtain. As we respect it in our homes, hiding it from our siblings or relatives, we should respect it on the MT5 or MT4. Money is like Gold in our days, if you really want to know how important money is, get a spade and go dig for Gold. I wish I could write more, but I feel like I have written more already and some people may find this boring to read. Please hit that like button if you learned something from here. Feel free to comment below what you have learned or the type of trader you are. Many Good wishes for you, Forexintelligence AKA the Sniper:)
FX:NAS100Education
by Forexintelligence_NA
10
Adding to Position in ROBOROBO is the ticker for an ETF that invests in robotics and artificial intelligence. It currently has 84 holdings which makes it a diversified and efficient way to target the robotics and AI industry, which I believe will experience above market growth over the next 20 years. As with any long-term investment regular contributions and ignoring the natural fluctuations of the market are essential in order to see the full potential of your investment be realised. However at times the price of an investment will become attractive enough to considerably increase the size of your regular purchases. ROBO is at such a level and I will be increasing my investment until it can close above $65 on a weekly basis. *Not a Recommendation to Buy or Sell*
AMEX:ROBOLong
by MarkE
Cool Entry Strategy - Bullish Engulfing in Key LevelsYou are here to read about one of my best crypto-tested entry strategies, Bullish Engulfing in Key Levels . It’s a price action strategy and I’m going to explain its details but, even if you are not good at price action stuff, you could use it as well as I can. There are no requirements for dealing with this strategy except using two indicators. The base success rate of this strategy was over 60% for me and by applying some filters and considering some best practices and being experienced in it, I could increase its success rate up to 76%. This strategy is a combination of a Bullish engulfing candlestick pattern, pivot points, and key levels. By key level, I mean a trend line or a horizontal resistance/support line drawn by you or your added indicator. We can assume the base requirement of the strategy meet if a Bullish Engulfing (BE) pattern takes place near a key level or a pivot point. We will use the Trend Key Point indicator to draw horizontal key levels and key points. It marks pivot points with a sign above and below the candles. If the pivot point is important, the indicator will draw a horizontal line as a key level. In this strategy the LL pivots are important to us. All necessary details will be applied to your chart by adding the indicator to it. You can also read more about Trend Key Point guide and best practices here . There is also an indicator for finding and highlighting Bullish Engulfing patterns called Common Candlestick Patterns . By adding the indicator, you will see too many highlighted patterns because there are active by default. Therefore, after adding the indicator to your chart, you need to open its options and uncheck all except the Show Bullish Engulfing one to highlight just Bullish Engulfing patterns. After adding indicators, you need to wait and capture entry points in a suitable state. But there are some tips and best practices we need to jot down to distinguish between good and bad states and increase the success rate of the strategy. I list below: Ignore a BE pattern that does not occur at a key level or is far from key levels. It’s a good sign if the BE pattern occurs on an LL pivot point (a candle that has a star under it) which meets a key level. BE pattern must have an acceptable and strong body. You can ignore weak candles. Ignore the BE pattern formed just below a resistance or potential reversal area. It excites me to see a BE pattern at the lower point of the price but a BE at the end of correction sounds good too. If the BE pattern occurs on the LL pivot seeing a key level and the volume also confirms that by crossing the VMA20 (volume moving average length 20), you can enter definitively. If the entry requirements are met, the closing price of the BE pattern will be my entry point. Do not enter if the green candle of the BE pattern is abnormally big. You can wait for a pullback or you can ignore the pattern. BE pattern in the bottom of a range box could also be a good chance to enter but you have to be careful where the range is. As you read before, this article is about finding the entry point and after clarifying that it's time to find out where you need to put your stop loss and your take profit but, these topics not fit in this article. You can refer to the other available resources covering these topics. Both of the indicators mentioned are developed by myself, so I tried to apply my best practices to them. I hope it was useful for you. Feel free to submit your comment to improve the strategy or the indicators.
by bhnmzm
2
NEM - XEM 📈Education content - When a coin starts to increase?Hello trading friends, 📈This update is an Education update, where we use the example chart OF NEM - XEM. The known ways and most used ways to see an increasing coins trend are that a coin should show some movement before data, the reason that investors not entering coins is that there is no price action, and price action movement is which makes investors entering. ✅The second way of seeing an increasing trend is that a coin should hit the last trend lines with confirmation and time frame, also if a coin shows unexpected volume what not did shows before, then we should confirm or this confirmation is real or not, in case this volume is real trend volume, then it means a coin has a new interest trend. ( the confirmation of trend can be done with time frame) we did explain before the effect of time frame. Extra reaso n The price action gains new levels, and for this reason, it makes it interesting for a coin to hit new high price actions. 📈The above trends are the basic trends with more others that we did not add and which used manny in trading rooms. but there are also advanced ways, which a small part of traders only use it. and here below we will add some of these advanced ways. ✅One of the ways that advanced users use is to study the trend more deep into the moving trends of a coin when it following BTC and when not - If a coin stays strong into the uptrend also when BTC stays stable and breakdown then is this the first scan to follow the coin more. another advanced way is to follow the whale data of the coin to see or there are new DCA investors that invest at same data trend or any trend into whale data that could make this coin interesting. further, it's important to see the target you expect or this has feasibility and you should depend this on good reasons. there should be more positive reasons for the increasing trend. How many users going into the hype, and when a coin breakdown they end with a red balance account, the reason of this, that in every coin there are always recovery trends short term or long term, and in this way use good risk management, The same study we did use for NEM, and NEM shows an interesting trend to increase coming time see here below the NEM chart trend. Have a great day!
Long
by watchtrend
6
Simple Price Action Strategy – Easy Money! $$$$$Here is one of my favourite setups that is easy to learn and trade. I’ve heard it called many things over the years and know that many successful traders watch for this pattern to play out as it has a high win rate. Whatever you want to call it, it’s worth studying and adding to your playbook. What’s actually happening in this pattern? -A low is formed. Long entries have stops below the low providing a pocket of liquidity. -As price returns to the area these stops are hunted and the liquidity is taken. Early breakout traders will short and become trapped. A base has now been formed. -Price returns to the base and retests it as support. -Price bounces back to swing high. How do we trade it? -The first thing we want to look for is a swing low (1) followed by a swing high (2). We can then mark out a potential range. -Next, we want price to return to the swing low and either trade briefly below the range (a deviation) or just quickly wick below (sweeping the lows), and then price should return to the range. This area is shown as 3. -Bids can now be placed at the range low. The setup is invalidated if price trades lower than 3, so stops should be somewhere under the low at 3. -Targets should be set at the swing high (2). -This also works for shorts – just flip everything upside down. You can see this pattern on all timeframes and it presents a lot of opportunities once you know what to look for. Happy Trading.
Education
by ForgeTrades
2
Beginning to add to position in ERTH at reduced price levels ERTH is an ETF that seeks to track the performance of the MSCI Global Environment Select Index, green energy and technology is not a new play but due to the scale of our reliance on fossil fuels it is a theme that has legs to run. Green technology and energy is also an industry that receives substantial subsidization and investment from governments around the globe which will invariably give companies operating within the industry a massive leg up. In addition to this depending on your views about climate change it may tick some of your feel good boxes as well, knowing that your money is being invested into a "good" industry. Once again for the regular investor with limited time and relying on the evidence that even professional money managers tend to underperform the market on average it makes sense to target the green technology theme using an ETF. ERTH has 142 holdings spread across the globe and well diversified across the different sectors. Prices have fallen over 20% from the high of mid January which technically puts it into a "bear" market, as with any long term investment depressed prices are an opportunity to increase your position and so I will be doing so until prices can break back above $65 on a weekly closing basis. *Not a recommendation to buy or sell, for educational purposes only*
AMEX:ERTHLong
by MarkE
Perfect Entry Strategy - Bullish Engulfing in Key LevelsHello everyone, you are here to read about one of my best crypto-tested entry strategies, Bullish Engulfing in Key Levels . It’s a price action strategy and I’m going to explain its details but, even if you are not good at price action stuff, you could use it as well as I can. There are no requirements for dealing with this strategy except using two indicators. The base success rate of this strategy was over 60% for me and by applying some filters and considering some best practices and being experienced in it, I could increase its success rate up to 76%. This strategy is a combination of a Bullish engulfing candlestick pattern, pivot points, and key levels. By key level, I mean a trend line or a horizontal resistance/support line drawn by you or your added indicator. We can assume the base requirement of the strategy meet if a Bullish Engulfing (BE) pattern takes place near a key level or a pivot point. We will use the Trend Key Point indicator to draw horizontal key levels and key points. It marks pivot points with a sign above and below the candles. If the pivot point is important, the indicator will draw a horizontal line as a key level. In this strategy the LL pivots are important to us. All necessary details will be applied to your chart by adding the indicator to it. You can also read more about Trend Key Point guide and best practices here . There is also an indicator for finding and highlighting Bullish Engulfing patterns called Common Candlestick Patterns . By adding the indicator, you will see too many highlighted patterns because there are active by default. Therefore, after adding the indicator to your chart, you need to open its options and uncheck all except the Show Bullish Engulfing one to highlight just Bullish Engulfing patterns. After adding indicators, you need to wait and capture entry points in a suitable state. But there are some tips and best practices we need to jot down to distinguish between good and bad states and increase the success rate of the strategy. I list below: Ignore a BE pattern that does not occur at a key level or is far from key levels. It’s a good sign if the BE pattern occurs on an LL pivot point (a candle that has a star under it) which meets a key level. BE pattern must have an acceptable and strong body. You can ignore weak candles. Ignore the BE pattern formed just below a resistance or potential reversal area. It excites me to see a BE pattern at the lower point of the price but a BE at the end of correction sounds good too. If the BE pattern occurs on the LL pivot seeing a key level and the volume also confirms that by crossing the VMA20 (volume moving average length 20), you can enter definitively. If the entry requirements are met, the closing price of the BE pattern will be my entry point. Do not enter if the green candle of the BE pattern is abnormally big. You can wait for a pullback or you can ignore the pattern. BE pattern in the bottom of a range box could also be a good chance to enter but you have to be careful where the range is. As you read before, this article is about finding the entry point and after clarifying that it's time to find out where you need to put your stop loss and your take profit but, these topics not fit in this article. You can refer to the other available resources covering these topics. Both of the indicators mentioned are developed by myself, so I tried to apply my best practices to them. I hope it was useful for you. Feel free to submit your comment to improve the strategy or the indicators.
by bhnmzm
2
BTC Update - How many times can I be wrong before I am right?Please see the BTC chart. I have my notes on the chart. -I was wrong about the perfect inverted head and shoulders. After it broke upwards, I tried to see if it could be slanted. -I was wrong again... The second inverted head and shoulders pattern did not play out either (although it could with a slight note on the neckline. -I think I will be wrong again (so maybe I will be right this time) on the BTC pullback before a new ATH. It still does not matter which way BTC moves. If we go down, we will complete a bearish pattern which will complete a bullish pattern, if we go up we will invalidate a bearish pattern and move to complete a bullish pattern.
Long
by Jfcaldwell
IOTXUSDT - How to find a good project?I had a question from one of you about this coin, and decided to show my method of madness on how to find low/micro cap coins to invest in. Sources of basic information: www.livecoinwatch.com coinmarketcap.com Answer the questions using the above sources: Who are the founders? (and are they trustworthy with my money) Stalk them! You are about to give them money. What is the purpose of the project? I personally like protocols (ETH, SOL, AVAX), DEX (Uniswap), and unique utility (Think DOT and LINK) Is anyone currently working on the project? when is the next update? Website? You can learn a lot about what is going on with how well the website is built and upcoming milestones. Technical analysis: First, I would like to note, that I don't normally just ape into anything even if I think the project is good. I like to watch the price for a period of time to get a grasp of what is a good value buy. Second, I would look at the chart and understand how much has it moved in the last 30-60-90 days and set a short/long term buy spot. For example here: now looks like a good buy spot and then sell around the $1.8 to $2 mark and wait for the correction. Due to my first rule, I would wait until after the correction. My Chart Summary: The chart has a bullish and bearish pattern formed on top of each other. It looks like the bullish Cup and Handle will play out first with a breakout to about $2. Followed by the bearish pattern playing out with a correction down to potentially $1. This whole chart does resemble a Elliot impulse wave with the rising wedge as wave one, first part of the cup as wave 2, second part of the cup as wave 3, handle part 1 as wave 4, and second part of the handle will be wave 5. The final correction to the second rising wedge will form the A-B-C correction post Elliot impulse wave. Finally: Technical analysis is nothing more of a possible solution to the current snapshot in time shown on the chart. Many things can develop over the coming weeks and months as we end this bull run. this chart could look totally different in a month with a look back at this post being totally wrong. With that said, nothing about this post is financial advice and I am not a financial advisor.
by Jfcaldwell
4