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A lesson in Revenge Trading"Cut your losses short, but let your winners ride!" We have heard that quote, one and a million times, it's one of the first things you hear when you start trading, a quote almost as known as "Buy low, sell high" And why is it so important and so widespread?. The reason is pretty simple: You need to make more on your winning trades, to compensate all your losses and still make a profit. Sounds pretty simple right? Your win ratio and Risk to Reward are your most important stats, Well it's easier said than done, and today I learned something about that coupled with revenge trading. But what is revenge trading? It's as simple as looking to make quick profits in a quick and aggressive way, after suffering losses, revenge trading also involves forgetting your own trading rules and risk management. Anyone experienced trader can tell you the same, revenge trading is one of the worst things you can do and one of the fastest ways to losing your ENTIRE ACCOUNT You can wipe out, months and even years, of savings and trading profits in a manner of hours or even minutes. So when you take a loss, you should step away for a while, review what you are doing and get back in the game with a clear head. In this case, I didn't take losses, I actually did make some profits BUT I was angry that I didn't make all the profits from the top to the actual bottom. So I revenge traded, even though I was up quite well in the day. Instead of even following my own earlier analysis (linked below) I decided that the best way to make quick profits, was by trying to time the absolute bottom and get a high leverage long in there. Not only I was increasing the leverage I was also increasing the risk, by trading against the trend and trying to time the exact moment the market reversed. I didn't manage as you can see in the chart. The lesson is pretty simple: Don't ever revenge trade and don't let good trades that weren't perfect enough make you become irrational. I could have pretty good profits today, but I let myself become my own worst enemy. ALWAYS PRACTICE RISK MANAGEMENT, RISK MANAGEMENT IS VITAL TO TRADING
Education
by CryptoEstratega
4
BTC - Harmonic Patterns pt.1 'THREE DRIVES PATTERN' (beginners)You may be wondering why you keep losing money in the markets. Well, we've all been there - more often than we wished for. But we asked for it every single time. So, why is that? After years of repeatedly or constantly losing money, I know very well what I've been doing wrong for so long. I came to the conclusion that I - and most people I observed or know in person - keep losing money because of several factors, one of which I will elaborate in this sheet: The absence of a system Many people, who are new to the world of trading and investing, especially those who have suffered (severe) losses in the past, are drifting around, clueless, and are seeking for a helping hand that is supposed to guide them around in the world of making and losing money. That state of helplessness and the general accessability of the internet and social media is the perfect playground for fraud. Since there has been a wave of fake (marketing) gurus all over the internet for quite a while, that many fell victim to, the term 'system' is now broadly misunderstood and causes fear among those who were scammed by 'THE MAGIC AND ALWAYS WORKING SYSTEM'. Usually 'gurus' on the internet charge money for providing a system or pretending to educate people about how to 'REALLY' make money. So what is a system? Before finally adopting or developing a system, one must know what a system is defined by, and what criteria a system has to meet. So what does a system do? A system is supposed to allow one to evaluate more or less reliable entry points/levels. But what does that mean? It means that you don't want to participate in EVERY major move the markets offer you to be part of. In fact a system will focuse on a very specific kind of moves, and you are only supposed to trade/invest according to the potential entry that the system you use provided. You will most likely miss out on many moves, and you will think about the amounts of money you could have made if you had just been part of that one major move that you can't stop thinking about. That thought-process is self destructive though, and will lead to suffering even more losses because most people force themselves to not miss out on the next move, in order to finally be part of the wave that makes the real money. But what defines a proper system? How do you know it works? Well, there is only one way to find out. One who sticks to a system - or several - would only want to take the entries the system provides for them, regardless of what happens outside of their system's frame. And yes, that means missing out on many, many, and many more major moves. However, atually making money by applying a system leads to 'strategy building', which focuses on, or consists of 'money management' and 'risk management'. That is a whole other topic though, which I am looking forward to explaining in further educational posts, but not in this one. A system is supposed to allow you to evaluate ONE specific entry, according to specific conditions that have to be met. In order to allow you to pick up on what I'm trying to say I have prepared a very simple example of a system (also referred to as 'technique'). Since many people wanted to be part of the crypto-spikes that we have recently seen, and bought coins at all time highs, I decided to demonstrate several harmonic techniques on the BTC chart. First of all: Where are we? Where is the example taking place? For having a better idea about the scale and location I added this snapshot of the BTC chart in the daily timeframe: (ALL FOLLOWING SNAPSHOTS WERE TAKEN IN 13H TMF) A system, or technique, may be very simple. The strategy your system will be part of will be more complex. But the system itself may surprisingly be very simplistic. For instance: I have been trading with the use of 'harmonics' for a very long time. I focused on TWO different types of harmonic patterns. 1) AB=CD patterns (ABCD) 2) Three Drives patterns In this case, you could make use of the examples I will provide in a second in two different ways, since they'd have given away a short signal on BTC at the ATH. 1) actually shorting BTC, which isn't a very popular method, since not many brokers offer the ability to short sell crypto currencies, and if they do, it often is very expensive to execute. However, some still do it, and this would've been a perfect entry for a short order. 2) interpreting it as a warning signal to either a) getting out of BTC or to b) not buying more coins. I'll introduce the 'Three Drives pattern' in this post, because it was a very clean, textbook-like pattern in this specific case: So, this is the pattern I have spotted that the BTC ATH (all time high) consists of/portrays. As I have mentioned several times already, a system shall provide an entry. So, only if the requirements are met, you are allowed to make a trade. Since some of you may be unaware of what a three drives pattern is, and how to trade it, i will break it down for you: A three drives pattern is a series of lower lows or higher highs which occur in a very specific relation to each other and usually indicate the market may turn around after completing the pattern. It focuses on analysing the time/price relation between said highs or lows. In detail: It consists of three drives, as the name gives away, which may be a series of three consecutive higher highs, or lower lows: bearish: bullish: each drive is interconnected with a corrective move, the corrective moves will play a very decisive role in determining the entry. bearish: bullish: The numbers (1.27) that the three drives pattern, that Tradingview offers, already includes, measure the price excess of the correction move in relation to the next high. In order for the trade to be executed the price excess must either be 1.27 or 1.618 (1.62 approx.). If you're uncomfortable with the three drives drawing tool you could simply measure it by yourself using a fibonacci retracement featuring the 1.27 and 1.618 extensions and apply it on the corrective moves of the three drives pattern, just like this: The following drive should then bounce off the 1.27 or 1.618 extension. You must apply the Fib rectracement on the second correction wave too. The end of the 3rd drive, which should bounce off the 1.27 or 1.618 extension too would then initiate the trade. You would SIMPLY (according to this system) make a trade. All that you have to do is to find a system that has proven to work out to a certain degree in the past (always do never ending backtesting), implement it in your strategy (risk-, and money management) and strictly take the entries that your system provides for you. A system is supposed to give you the confidence you need to blindly execute it according to its rules and requirements. The only way to gain said confidence is to a significant amount of backtesting over and over again, and literally studying the system. A trade that you are afraid of to take, for whatever reason, can still be interpreted as a strong signal to close your current positions, as in the case of this BTC example. Not many people would dare to simply short BTC on the ATH, but relatively many people would probably start takeing profits or selling their coins if they spotted a short entry - according to whatever system(s) they may use. There is not THE perfect system out there. Find a system you can apply confidently and implement it in your strategy. Now, the remaining question is where to take profits once you're in. The Three Drives pattern offers several take profit levels. There may be other ways to successfully take profits, but this is the way that has proven to be the most profitable one for me: I usually simply attach a FIB retracement to the end of the first correction move and to the end of the 3rd drive , and I take partial profits at each of these marked levels. (0.382; 0.5; 0.618; 1.0; 1.27; 1.618). Back to the REAL example: the entry: the take profits: While there are many ways to apply or trade the Three Drives pattern, and some focuse on the retracements in specific, while I focuse on the extensions of the correction moves only. I don't pay much attention to the retracement level of the correction moves because there simply isn't a reliable retracement level. Some fall back to 0.382 while others retrace as far as 0.618 or 0.786. The issue with trading and investing is, that one's ANALYSIS is one thing, but actually initiating a trade, spotting the chance of making money in time and not hesitating to take action is a whole other thing. The only way to act with confidence when the time has come and to actually making the trade is to apply a system that has PROVEN to work. If you don't have a system you won't have the guts to take the chance for a good trade because you burned your hands in the past. Focuse on the entry. Not on where prices may go in the future. If you got your entry right, you can take profits wherever you want to. An analysis doesn't make money. The trade does. The market may do whatever, no one knows what tomorrow will bring, so focuse on the only thing you can influence: The entry and the risk that comes with it. And take profits. Especially in these times. Whatever it is that you do, may it be automated or manual trading, the only way to prove a system is working, is to backtest it. Over and over again, on hundreds or thousands of examples. Thank you for taking the time to reading this rather complex and long article. Cheers ;)
COINBASE:BTCUSDEducation
by AlphaTradingGermany
2
Fighting the need to be right in the marketsIn most industrial countries the educational system was created not to truly teach students, but to generate good workers for factories and other companies. Yes, we want these highly trained individuals to be able to think critically and generate new ideas. However, we want them to be excellent employees who follow the boss's instructions. So, how do we do that? We do it through our educational process where children learn that the teacher is always right. Children attend school for 12 to 16 years, and it is often reinforced that the instructor is always correct. For example, as a student, you are required to take tests. You learned that if you get fewer than 70% of the questions correct, you are a failure. "Why didn't you receive 100?" your father asks when you show it to him. So, your father expected you to be correct as well. As a result, we have a strong desire to be correct. If you don't get it correctly at least 70% of the time, you're labeled a failure. However, you want to be correct 100% of the time so that your father does not criticize you. As a result, you begin to criticize yourself first in order to solve the problem before your dad does. Let's take that and apply it to the stock market, futures market, or any other investment you could make. You want to be correct, and that to you means making money. Let's assume you buy a stock for $100 and know how to establish a stop loss: if it drops below $95 per share, you'll sell. Let's assume the price falls to $95 per share. You really want to be right, so you'd be wrong if you got out, or at least feel like you were. Your mind races with ideas such as, "It's simply a temporary setback." "Analysts expect a significant boost in earnings this quarter; I'm reluctant to sell at this time." "What if a few traders are manipulating the downturn?" So you hang onto the stock and watch it fall even further. It drops to $90. Now you have a 2R loss. If it was hard to take a 1R loss, it’s even harder to take a 2R loss. And all the same, arguments apply. Thus, you hold onto your stock. Now the stock drops to $85 and you have a 3R loss. You know you really should get out, but now your portfolio is down $4k and you can really write off $3k in losses, so you’d better keep this stock. You know it will turn around. Now you know why a psychologist and an economist won the Nobel Prize in economics for basically showing that it was very hard for people to take losses. People according to those Nobel prize winners become much more “tolerant of risk” when they are behind. The Nobel winners also showed that people tend to tolerate little risk when they are ahead, making it difficult to let profits run. People tolerate risk more when they are behind (i.e won’t cut their losses) and tolerate risk less when they are ahead (i.e they won’t let their profits run). So what can you do about your need to be right? Instead of focusing on being right, focus on not making any mistakes, whereas a mistake occurs when you don’t follow your rules. Your rules should be the golden rules of trading (previous article material). If you consider breaking these rules as being wrong (i.e., making a mistake), you’ll find that suddenly you can make money in the stock market or any other investment field. In short, you must think in terms of probabilities and statistics. As a result, you can pay attention to just following your system, and making as few mistakes as possible, because when you do that, you “know” what your results will be in the long run (knowing the expectancy of your system). Trade with care. If you like our content, please feel free to support our page with a like, comment & subscribe for future educational ideas and trading setups.
BINANCE:BTCUSDEducation
by financialflagship
30
Understanding draw down recovery 😬😥Morning traders. Middle of the trading week all ready! I thought I'd take this opportunity to discuss a topic we all fear and we all find ourselves in at some point in our trading journey. That topic being draw down and your account in a loss of starting capital. The table I have drawn on the chart shows the amount of gain required to get an account back to break even depending on how big the draw down is on your capital. Scary stuff when viewed in a simple table format like and hits home just how big of task over turning losses could be. No trading system or strategy has zero losses or draw down and all strategies endure losing runs. To avoid excessive losses there is two crucial elements. Sounds obvious but cut losing trades quickly is the first element, second element is factoring probability into the trading strategy. Probability helps control risk management which in turns keep losses to a minimum, probability is obtained by carrying out back testing on your strategy. You can't plan for probability in your risk management if you have no data for your strategy. The example I am using for this Idea is on AUDCHF H1 timeframe and thanks to our built in strategy tester I can see if I traded this pair in the manner the strategy is set over the last 292 trades at 1% risk I am 22% down on my account. It would not take in the region of a 25% account gain to be back to near break even on my account!!! You don't need a built in strategy tester to gain this information you can also manually back test a strategy in order to avoid losses and to know if you are entering markets with a proven edge. A trading edge means your strategy creates bigger wins than losses. Which in turn means you avoid the situation shown in the table. To avoid hefty draw down don't enter the markets blind with an unproven strategy. Ensure you have back tested strategies with probability factored in to those strategies that way what is shown in the table wont apply to you then 👍 ------------------------------------------ Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. The stats for this pair are shown below too. Thank you. Darren
Education
by pow_removetheguesswork
[Trade Review] How I traded $HD, $U, $SPCE, $ROKU In this video I will reviewing trades I took on June 22 ,2021 which were $HD, $U, $SPCE, $ROKU these trades were taken from todays livestream were i explained my plan showed you guys my TA and updated my TA as we went on plus answered questions! Traded these tickers using my knowledge of technical Analysis , sharing my levels: Support & Resistance , my trendlines , Fibs, Waves, Price Action, Channels , Emma's, and prior experienced , while providing both bullish & bearish scenarios for you to be able to understand my analysis and wait for confirmation as always!
NASDAQ:COINEducation
by Raulf-m
🎓 EDU 6 of 20: What Market Indicators do I Need to Follow?Hi traders, it's time for a new part of our educational series. This series aims to equip new traders with all the necessary tools to trade the forex market. Most of these tools are also used by large market participants in their daily analysis, and for making trading decisions. Getting started with trading isn't easy, mostly because the internet lacks quality when it comes to trading education. Yes, there are some great posts out there, but how are you supposed to know where to find them, and how to distinguish bad trading practices from good ones? This is why I created this educational series, to equip you with the main tools used by institutional investors and banks in trading. Alright, let's move on with the sixth part: What Market Indicators do I Need to Follow? Capital chases yield. Investors will move their capital to markets that offer better yields, be it in the USA, Europe, or Asia. Central banks play a huge role in determining yields when they hike domestic interest rates to fight inflationary pressures (making the domestic currency relatively more attractive), lower yields to support economic activity (making the domestic currency relatively less attractive), or keeping rates unchanged. To recap how this works, visit my previous post (EDU 5 of 20). Central banks follow market indicators to determine what is the correct monetary policy for current economic conditions. Just like traders, central banks follow CPIs, PPIs, industrial output, PMIs, and labor market numbers, to name a few. And if central banks follow them, you should too. 1. CPIs - Since most central banks have a specific inflation target they want to reach, Consumer Price Indices (CPIs) are one of the most followed market indicators. CPIs measure the change in the prices of goods and services at the retail level over a specific period of time (usually one year), and compares that change to a base period (in the US, the base period is 1982-1984, where the value of the CPI is set to 100.) However, markets are mostly focused on the annual rate of change in the CPI. 2. PPIs - While the CPI measures the change in prices at the retail level, PPIs do the same at the manufacturing level. For example, the PPI would catch changes in the prices of manufacturing input, such as raw materials or labor. Since most of the price changes are spilled over to the retail level, traders often follow PPIs to get early clues on where the CPI could be heading. 3. PMIs - The Purchasing Managers Index is a major leading indicator that catches trends in the overall economic activity. It's based on a survey of purchasing managers in 19 industries, who are asked to assess the current conditions on five major survey areas: new orders, inventory levels, production, supplier deliveries, and employment. Currencies often react with great volatility to PMI releases, making it an important market report to follow. 4. Labor Market Conditions - When talking about labor market conditions, we are actually referring to all the indicators which cover the labor market, including unemployment rates, unemployment claims, non-farm payrolls, average hourly wages, employment change, etc. Many central banks closely follow labor market numbers, as their mandate can also be to target full employment (in addition to an inflation target.) Labor market numbers can also provide some leading insights into the future economy, as the creation of many new jobs usually leads to higher economic output and GDP growth. Besides the mentioned reports, there are many more reports that can have a significant impact on the forex market. Some of them include retail sales and core retail sales, consumer confidence indices, GDP growth rates, etc. Check them out if you want to get a deeper understanding of the major market reports. What's important to mention is that markets are focused on the actual number vs the forecasted number. For example, if non-farm payrolls come in at 500k but expectations were set at 350k, this will usually lead to a strong positive reaction in the US dollar. Also, the reaction is stronger is the surprise comes in the direction of the central bank policy (for the example above, if the Fed is hawkish and the NFP comes in stronger, the reaction in the US dollar will be stronger than in the case of a dovish Fed and strong NFP.) If you find my educational series useful, please consider hitting the "LIKE" button to share the word. Thanks!
Education
by MujkanovicFX
BLK Short (Educational macro)Drew this a while ago, never reached my target. Using this as a proxy for financials because quite frankly I am lazy. Would not touch any financials until this hits low 800s. Tightening yield spreads are awful for banks, because banks lend money on the long end of the yield curve and borrow on the short end of the curve. The Fed was smart about the reverse repo rates and mentioning rate hikes, as it forced the long end of the yield curve to flatten since people sell off short term treasuries. The dot plot showed overnight federal funds rates rising to 60 bps. That is much higher than the current 21 bps of the 2-year bill. From Investopedia, one reason the yield curve may flatten is market participants may be expecting inflation to decrease or the Federal Reserve to raise the federal funds rate in the near term. It is kind of funny, the banks drove their own parabolic rise by crowding the bond trade and pushing the inflation narrative. Now Daddy Fed is wringing their arms and forcing them down the yield curve, causing their own downfall. The rotation from value / financials to growth / tech remains strong in my opinion, as the inflation trade was way overdone. 10Y went from < 100 bps to 170 bps in the span of 3 months. That is a metric crap ton of bond selling. Seriously, the US bond market is an ocean of liquidity. People are correcting themselves now. ARKK has a nice uptrend and was green on quad witching. DO NOT all in growth tech til after Tuesday, as JPOW is speaking, and people get scared any time he clears his throat. Take a lozenge my friend.
NYSE:BLKShort
by MightAssTouch
Pay attention in the Ethereum movement compared with ChainlinkIn the recent analysis, we see that Ethereum forming a simetric triangle, but broke down, but now, pay attention how the strong support work and this key support line work too. I see that this it's a same movement what Ethereum may to form. Historical Data: 1. Chainlink up in the past from $20 to $35 approximately.' 2. Then, Chainlink down to $24 approximately in the past 3. Chainlink up a little until $29 approximately and during this period formed a simetric triangle. 4. Then, Chainlink break down this chartist pattern and drop to the exactly key support at $24.70 USD. If you see, we form 2 thing, a key support line and a strong support at $24.70 USD. And we see that in 3 ocassion, Chainlink form a strong support, but in tha 4 occasion, Chainlink made validation that form a bullish setup and up and break up the resistance of $35 USD and continue down that we know. Guys, in my summary, that it's an exactly same movement what Ethereum may to do. And that historical data and analyze in your own opinion, you can to get a better analyzis. For that, I create it like a tutorial to review and compare this movement with Ethereum when Chainlink made in the past. That it's so exaclty and same movement that Chainlink do and now, Ethereum may to repeat this movement. I share the Ethereum last analysis for you to review and check out it.
COINBASE:LINKUSD
by harisonhbn9718
2
Trade review How i Traded $SQ, $ABNB, $ROKU, $NVDA, & $SNAP!In this video I will reviewing trades i took 6/18/2021 which were $SQ, $NVDA, $ABNB , $ROKU showing you guys my favorite pattern "Flags" to make some insane returns! Traded these tickers using my knowledge of technical Analysis , sharing my levels: Support & Resistance , my trendlines , Fibs, Waves, Price Action, Channels , Emas, and prior experienced , while providing both bullish & bearish scenarios for you to be able to understand my analysis and wait for confirmation as always!
NASDAQ:ABNB
by Raulf-m
BTC/USD: The Weekly Bull Retest. Is 45k next?. The general thesis of this multi-timeframe analysis is that BTC broke out of weekly range namely resistance at $ 38k with previous week's close, and now intraday timeframes might gift us risk defined setups for entry at $37,400 towards daily and weekly target at resistance ($45,000) (+19.75%). As seen above, the daily chart suggests that BTC was unable to maintain itself above $39k closing back below it and afterwards retesting it to the downside. This might be a daily and intraday bearish sign, but not after considering that on a larger scale, price is actually just retesting to continue upwards, which may catch many traders dismissing the weekly facts on the wrong side, leading to a more aggressive breakout when short traders are forced to close their intraday and daily shorts. Finally, the possibility that $ 37,400 acts as the perfect support and entry point that converges with Fibonacci and with the trend of the previous triangle is explored, never forgetting that the cherry on the cake is actually market structure, which now continues to make higher highs and higher lows in 4H and 1D. Not financial advice. Trade at your own risk. 🚀LIKE AND SHARE IF YOU FIND IT USEFULL🚀
Long
by JRuiz000
2
Be like Jake *educational material* *This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management* My team has decided to use a recent failed trade as an example of the importance of stop losses. Here @SimplyShowMeTheMoney you may have noticed that we place stop losses and stop profit losses on the majority of our trades. If we ever post a trade without a stop loss please understand that we're waiting for further information and that we have long-term confidence in the trade and are not worried about the short-term price action in-between. To demonstrate the importance of stop losses we must first introduce you to a successful retail trader by the name of Jake. Our friend Jake has been trading for the past 5 years. Jakes trading strategy is simple: he finds a company that he likes, and he invests his money into it. Jake hits roughly 6 out of 10 of the trades that he places. Jakes 60 percent winning average may sound 'okay' at first but lets say Jake is consistent about managing his take profits and stop-losses. Jake may be losing 40 percent of his trades, but he is able to mitigate most of the risks due to his insane stop-loss precision. But if you've been in the market long enough and have ever used stop-losses then you can probably recall a time where your trade broke through your stop-loss and then the worst thing possible happens...it shoots off to the moon without you while you watch in disbelief with your jaw dropped down to the floor. Jake knows this feeling very well. So to lower this risk, Jake locates key price areas on the chart where the stock may be at its weakest and places his stop losses. Doing this helps prevents scenarios like the one above from occuring. Jake cares about the roof over his head and keeping food in his belly. He cares about the amount of sleep he gets every night. Jake wants to be able to enjoy quality time with his girlfriend without feeling anxious about a trade that was supposed to buy her a ring, but is now worth as little as a ring-pop. That's why Jake uses stop-losses. Be like Jake. If you would like to see more, please please like and follow us @SimplyShowMeTheMoney
TEducation
by SimplyShowMeTheMoney
[Trade Review]How I traded $CRM, $TLRY,$U, + psychology TALK In this video I will reviewing trades I took 6/16/2021 which were $CRM,$TLRY $SQ that were posted in a pervious video about the set up on my New Series *Set Ups For the Week Traded these tickers using my knowledge of technical Analysis , sharing my levels: Support & Resistance , my trendlines , Fibs, Waves, Price Action, Channels , Emas, and prior experienced , while providing both bullish & bearish scenarios for you to be able to understand my analysis and wait for confirmation as always! In the second part of this video I rant about trading phycology and use yesterdays loss as an example I hope yall enjoy!
PEducation
by Raulf-m
2