TrendlinesNot all trendlines have to be build using higher highs and lower lows. Some work perfectly as a trend direction and parallel channel middle line. The more bounces it has the more important it is for the chart (not stronger, but important). Also pay attention to volume - it should increase at line cross or bounce zones, confirming the line.
Example - look at blue trendline that worked as SR through all the way MCO made up, before BTC cracked it down. Breakdown of trendline started fast dump. In combination with horizontal SR line crossover price movement increase exponentially.
Educational
Approximating A Least Square Moving Average In PineLeast Squares Moving Average, Running Least Squares, Regression Line or even Running Line, this method is among the most popular ones in statistics and technical analysis.
The LSMA is extremely useful, it approximate the price pretty well and can be considered as one of the best low-lagging filters out there. Knowing how this filter is made can be really interesting. May the methods i share below inspire you to create great indicators or start coding in pine :)
A Least Squares Moving Average is defined by Tradingview as :
A line that best fits the prices specified over a user-defined time period. It is calculated using the least squares method. The result of this function is calculated using the formula: linreg = intercept + slope * (length - 1 - offset), where length is the y argument, offset is the z argument, intercept and slope are the values calculated with the least squares method on source series (x argument).
Alright, we wont use the offset parameter for our approximations, so how to calculate a least squares moving average ? If you find the mathematical formula of it you will certainly ask yourself "what are all of those maths" . But its ok, in the Pinescript you can just use the linreg() function, or you could calculate it like that :
slope = correlation(close,n,length) * (stdev(close,length)/stdev(n,length))
intercept = sma(close,length) - slope*sma(n,length)
linreg = slope*n + intercept
Ok, but can we use different estimation methods ? Certainly, the key of the LSMA is only the correlation coefficient after all, all the other parameters can be estimated.
Standard Score Or Rescaling A Line To The Price
Rescaling a line to the price is easy to do, it will give a similar result as the LSMA but it is faster to write, here the code :
A = (n - sma(n,length))/stdev(n,length) * correlation(close,n,length)
B = sma(close,length) + A*stdev(close,length)
Easier no ? We first standardized a line (n) and multiplied it by its correlation with the price, our first parameter A is dimensionless .
Then we rescaled the result to the price by multiplying our parameter with the price standard deviation and summing this result to the price moving average.
here the difference between our method and the classic LSMA of both period 100
If you put both together you wont see any difference. Overshoots can be reduced by modifying the standard deviation size.
Correlation Rescaling
The correlation coefficient is the core of a LSMA, if we rescale it we can approximate a LSMA, here the code :
a = (correlation(close,n,length) + 1)/2
b = sma(close,length) + stdev(close,length)*1.7
c = sma(close,length) - stdev(close,length)*1.7
k = c + a*(b-c)
The correlation coefficient oscillate in a range of 1/-1, we first scale it in a range of 1/0. Then you may have recognized the b and c formulas, they are the one used in bollinger bands,
the standard deviation is multiplied by 1.7 because it was the number who best approximated a LSMA, but it could be any number defined by the user, something interesting is that this method to can fix overshoots in a classic LSMA using lower multiplier. Since our correlation is in a range of 1/0 we can rescale it to the price thanks to the method used in k.
In red our method, in blue the LSMA of both period 100.
Here the standard deviation is not multiplied by a number, this result in less overshoot.
In order to have even more manipulation over the LSMA i will try to estimate the correlation coefficient the best i can :)
So here you go, i hope you will find a use for it.
TRADING PSYCHOLOGY MIND HACK - IMPROVE YOUR PATIENCE / VIDEOHey TV,
In this video I cover an easy to apply mind hack that will help you STOP exiting your trades too early. You know, those trades where you think it's gonna run against you so you bail out only to see it head to your target later on!
As always likes and comments are appreciated. Stay safe out there :)
P.S. Please check out my other educational videos linked below.
Price vs. Percentage ChangeThis here is a quick visual on how the percentage change correlates to price action. For my example I have used a 20% change over the price action of BTC over the past year.
We can clearly observe that less money is required to make the same percentage as the price decreases. For example it takes $4000 to move from $20000 to $16000, but only $3200 to move from $16000 to 12800 even though both are a %20 change.
This is always some thing to keep in mind when analyzing a chart, and before investing because it can help you visualize potential price levels and mitigate risk.
Thanks for reading!
If you like this educational piece please hit the LIKE button!
Please leave a comment with your thoughts and feedback!
*This information is not trading advice and is to be used for educational purposes only!
EURUSD / How To Trade?Hi guys, I wanted to share with you the process I normally go through to analyse the markets. I have broken it down to 4 steps
1. Higher Time Frame
2. Identify Trend
3. Identify Structure
4. Lower Time Frame Setups
Hope you have a great week ahead!
Good luck and Trade Green!
Psychological trading hack #0002 (educational)In this screencast I share some of my own personal journey which I suspect may resound with many a struggling trader out there. This post is in keeping with the house rules on text-based analyses, and psychological self-analysis is the biggest most important aspect of trading. It is clearly in the category of 'Beyond Technical Analysis'
I had been thinking for many days where to start with this journey. This morning I hit on it. It is about me! Not about charts and methods. So that's where I start.
I share this for the benefit of all traders and especially new traders. I'm not saying I am right about everybody. I only know about my own journey and I think there may be some 'psychological hacks' in all this, to curtailing much suffering among other traders.
Everybody knows that discipline in trading is required, and that is primarily a psychological issue. Proven methodologies for profitability just do not work for a majority of people. So the big factor is 'the people' and what leads them to make bad decisions in trading. I've been tackling it.
Join me on the journey. This could be (though not necessarily) the most important journey of all.
Technical Analysis 101!!SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY
Technical Analysis 101!!
Interpreting the candlestick
This type of chart is an extension of the bar chart as discussed and is actively utilised by
the investors in China for more than 500 years of time period. It helps in providing the
information regarding open, close, low and high in the dimensional format. It can be seen that
the vertical axis of the chart helps in providing information on the prices of the FOREX whereas
the horizontal axis represents the time period. The white candles are the representation of the
advances of the currency and the black candles, on the other hand, represents the decline in the
value of the FOREX. Moreover, the body denotes the thick portion of the candle, and the vertical
line represents the wick. This chart helps the investor to forecast the future price movement of
the FOREX.
b) Charting systems
In the mind of a few people, charts are the exemplary image of the trader’s speciality. The
experienced eye can make ups and down. Charting is a questionable piece of the fund. Future
research is probably going to reveal things about outlining that would amaze people today. All
things considered, even individuals who eagerly restrict the training are ought to be acquainted
with the essential techniques of charting.
Follow your Trading plan, Remain disciplined and keep learning !!
Please Follow, Like,Comment & Follow
Thank you for your support :)
This information is not a recommendation to buy or sell. It is to be used for educational purposes only!
Key Trading StrategiesSELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY
Key Trading Strategies
There are four key trading strategies, which are Day, Scalper, Swing and Position Trading.
a. Day
The day trading is the method in which the buying and selling of securities are done on the same
day. The professional traders who are commonly known as market makers generally do it.
b. Scalper
It is one of the quickest strategies, which is employed by the active traders. In this, the currency
is purchased at the bid price and sell at the asking price to receive the difference between them.
Scalper holds the FOREX for short period and therefore, they search for the markets where the
liquidity is high.
c. Swing
The swing traders steps in when the trend in the FOREX ends. These traders buy and sell at the
price, which is set by the volatility. The trades, which is done in the swing, is not held for more
than a day. The rules in the swing trade are set by the technical or fundamental analysis. They are
generally known as algorithms. It is necessary for the algorithms to predict the peak or down
price of the trade so that it can identify the direction in which the market moves.
d.Position Trading
Position trading is considered as the strategy, which is referred to the buy and hold of the
currency. It is not considered as the active trading. However, when some advanced trader does it,
it can be referred as the active trading. It determines the current trends in the market by using
various charts which fall between anywhere from daily to monthly. It is a long trade, which can
last for several months also. For determining the trend of the security, the traders look into the
successive upper highs and lower highs for the effective judgement. However, they do not
forecast any price levels.
Follow your Trading plan, Remain disciplined and keep learning !!
Please Follow, Like,Comment & Follow
Thank you for your support :)
This information is not a recommendation to buy or sell. It is to be used for educational purposes only!
Elements of a Successful Trading Plan 106SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY
Elements of a Successful Trading Plan 106
The last Element that i will explain is Trading edge.
6. Trading Edge
The season, in which the currency will exchange, it is beneficial to hold the exchanging edge
down to maybe a couple setups when beginning. The more systems one plans to ace, the more
troublesome it will progress toward becoming reliably profitable in the market. The following
are the points of interest of exchanging edge:
• Early Range Breakouts
• High Volume
• Tight Spreads
• Combination preceding the breakout
Follow your Trading plan, remained disciplined and keep learning !!
Please Follow, Like,Comment & Follow
Thank you for your support :)
This information is not a recommendation to buy or sell. It is to be used for educational purposes only!
6 Things That Separate The Pro From The Amateur Trader!! Ben SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY
6 Elements of a Successful Trading Plan
1. Test
The test is considered as the start-up element of the successful trading plan. It refers to the
successfulness or failure of any currency involved. In most organisations, time is the primary
driver for assessing execution. The assessment period is constructed with respect to the quantity
of exchanges put and not by the measure of time passed. You should distinguish the correct
number of exchanges for the assessment, however, this number should be sufficiently high that
an individual has a nice example set, yet sufficiently low where it keeps you from going on a
damaging exchanging.
More elements will follow... Like, share, Comment and follow us to keep updated on our professional trading ideas and education :)
Follow your trading plan, remain disciplined and keep learning :)
HOW TO TRADE WITH THE TREND + IDENTIFY TREND REVERSALS / VIDEO This is a 9 minute video that covers how to ensure you are trading on the right side of the trend.
Lots of good stuff on this topic, unfortunately it's impossible to cover everything in the 10 minute limit provided by TradingView for videos, so if you have any questions please feel free to get in touch.
Financial Market Introduction 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY
Financial Market Introduction 101
a) Market participants
Market Participants include those parties that are involved in the operations of investment
companies. Their control in the market is necessary and they should be well aware of the
changes in the market.
1. Brokers and dealers handle trade activities between the buyers and sellers of currencies by
charging a fee. They are the crucial part of the FOREX market, which acts as a medium
between buyers and sellers.
2. Investment advisers are individuals who provide investment advice to investors by
issuing reports regarding the analysis of investment securities.
3. The investor is one of the main participants of the financial market as funds are allocated
to them as a capital to gain financial returns in future.
4. A central bank is one of the monetary authority and it regulates the state's currency,
interest rates and money supply. Performance of the commercial banking system is also
overviewed by the Central bank of respective countries.
b) The Trading Market
Trading market is a place where trading of currency and securities are done. The market includes
brokers and investment experts who provide active services as traders on the basis of their
education and knowledge regarding the market. They take investment decisions on the basis of
different trading methodologies and data from past years to determine the most profitable
investment.
c) The Best Time to Trade
Best time during the year
Previous yearly records show that October and September are considered as the best months to
invest in the FOREX. The main reason is due to the price bumps, which usually arises during the
month of November and December, due to the seasonal changes.
Best time during the Month
The best time of the month to invest in the FOREX is during the first five and last five days of
the month. The fact was illustrated in research conducted by Professor Ogden’s, which
determines different types of investment return that are paid in the last first few days of the
month. This "regularity of payments" can enable the investors to generate profit on their
investments.
1. Municipal bonds interest payments are made up to 90%
2. 70% of corporate bonds principal payments
3. Preferred stock dividends are paid up to 65%
4. 45% of all common stock dividends.
d) Market Cycles
Market cycles are considered as the key to determining the maximum returns. The market cycle
can be divided into 4 phases:
Accumulation Phase
• The accumulation phase arises after the market decline and experienced traders start to buy
after figuring that the worst position of the market is ended.
• At this time period, currency price valuations are pretty enough that they can play an
essential role in profit generation. However, in this stage, prices are flattered and every seller
in the market knows that the buyer will get a healthy discount.
Mark-up Phase
• A Mark-up stage the market stability moves forward towards the higher market moves.
During this time media stories usually determine that the worst period of trading is over,
however, increase in unemployment can arise during this period.
• At the maturity of this phase, investors use bandwagon because of their fear regarding the
decrease in market prices. A bandwagon is a group including technicians who analyses the
market prices to recognise the changes in market direction and sentiment.
The Distribution Phase
• Within this time period, sellers dominate the market. The bullish market sentiments can
turn the market cycle towards the mixed sentiment. Prices in this phase stay locked,
which can last for some weeks and months.
• Even the timing models do not flash any signals to buy the currency. This phase can be
affected due to the bad economic news or adverse geopolitical event.
Mark-Down Phase
• This stage can be most painful for the investors, those who still hold their previous
FOREX reserve can get huge losses, as they would have to sell them even at the lower
prices at which they have bought the currency.
• However, this phase determines the buying signals to the early innovators, which can
enable them to generate returns in future once the prices got higher. This stage also
demonstrates that it is not the good period to sell the FOREX.
e) Days of the Week
1. Throughout the whole week, Monday is considered as most the best day to buy FOREX,
as the prices usually show a decline. A study conducted on "A Survey of the Monday
Effect Literature" reveals that decline in the prices can be the reason of bad news that was
released during the weekend.
2. Conversely, if Monday is considered as the best day to buy FOREX, Friday is determined
as the most feasible day to sell it. As it is better to sell the reserve before the weekend due
to changes of price decreases which can affect the profitability of investment, in case of
selling it at lower prices on Monday.
3. Heading towards Tuesday trading can flourish a little. The reason behind this fact is that
opinions are formed by the traders and they have started taking their positions in the
market. Therefore, this can make a good day for trading in the market.
4. Wednesday shows the same kind of trend in trading followed by Tuesday or usually
depicts bigger price moves and is considered as the second-best day of the week for
trading.
5. Thursday, it quickens. Thursday is considered as the days when huge profits can be made
by the investors. Investing in the right currency can enable the investor to generate huge
profits.
f) Hours of the Day
Trading in the morning time is not a good idea as market prices and volumes can change
roughly. It is assumed by experts that these are considered as volatile hours and several new
releases can affect the investment outcomes adversely.
However, trading in the middle of the day can be favourable for the investor, as prices mainly
remain stable during this time period. Several time frame analysis is utilised by the investor to
select the most appropriate time for trading.
g) Swing Approach
Swing-Traders analyses the swing chart within the day so that they can take advantage of
favourable price changes in the marketplace, and this affords them the benefit of not having to
watch markets continuously while they are trading. Once they find an opportunity in terms of
increase in FOREX prices, they place the currency on sale and then constantly keep a check on
the progress of the pricing.
The approach has different optimal time frames, which include:
• Daily, and Weekly Charts
• 4 Hour, and 1 Hour charts......
Please let me know if you would like to know more
Happy trading :)
"In investing, what is comfortable is rarely profitable" Robert Arnott
21 lessons learned (educational)This is what I have discovered over the last 4 years. It is not advice for anybody. If you identify with some of it, fine. If not, leave it alone. Share your own lessons learned.
1. If I'm on the right side of the trend, it is my friend - else it is my foe.
2. Stalk and plan ahead 90% of the time but trade 10%.
3. Do not chase.
4. Appreciate the power of chart patterns, especially head and shoulders pattern.
7. Markets often disrespect Fibonacci.
8. The RSI is useful at times and dangerous at other times.
9. Always have a sensible stop-loss based on the ATR or an indicator based on the ATR.
10. Study different instruments across all time frames - they have very different 'personalities'.
11. Manage emotions. My true enemies lie within me: fear, greed, revenge and hope.
12. Avoid the news - except for geopolitical or macroeconomic events.
13. Avoid hot tips, signals, courses and following people who set themselves up as gurus.
14. Prediction is nonsense.
15. Confirmations are myths - instead assess probabilities based on the overall behaviour of the market or instrument.
16. Learn from mistakes - even if repeated.
17. Discover and avoid internal psychological biases.
18. Get enough sleep.
19. Get it wrong up to 70% of the time, but limit how wrong - I accept that I'm a loser most of the time.
20. Break the rules a minority of the time.
21. Adapt to changes in the markets.
Good Trade Setup will always a key to be successful traderBased on my Experience i wish to give some information on trading and how we can be a good trader.
Most of the time relying on one indicator lead to a loss result . In a technical analysis we should use minimum three indicator to take a right call.We do not actually require a high Fi indicators.A Basic yet worthy indicator is sufficient to be a successful trader.As a strategy we have to be strict that only when all three indicators are giving good signal we should enter the trader. In case even one indicator fails and not providing green signal to trade then at any cost we should avoid those trades.
Using RSI,MACD,Stoch,PSAR,ADX or combination of any three indicators and framing the trading rule will help us to win the trade most of the time.
Here in this post ,i tried my best to explain in the snapshot representation format which will be helpful to traders.Please treat this post as only a educational post.Make your own trading setup ,try the information alone provided here that might help you forever for a successful trader.
As i above mentioned ,Very very basic yet powerful indicators and its behaviors used in this chart to instruct our trading community for a better trading.Once again ,take this as a lesson copy for reference and posted here only for sharing the knowledge that will be helpful to you all.
Make a trading plan and plan the trade with your own strategy.Happy Trading.
AUDJPY - a different wayIn this screencast I show a different way of tackling the markets. This is about trend-following which is a pretty difficult methodology - but it is the most powerful and potentially rewarding.
I show how I made a decision to short.
I am not promoting my own methodology. I encourage all new and seasoned traders to explore different methodologies to find what works best for them.
I briefly mention EBTA but I'm anxious about providing a reference. EBTA is not a service or a broker. It is the result of scientific analysis undertaken around 2007, of some 6400 rules used by traders. The outcomes probably explain why roughly 80% of all trading accounts lose money consistently. Those who wish to discuss can message me (I'm selling nothing).
BTCUSD Models of continuation. Triangles.BASIC MODELS OF THE CONTINUATION OF THE TREND’S MOVE
Graphic configurations which will be studies in this chapter are called the models of the trends continuation. These models usually mean that the period of the price stagnation indicated on the graph is just a pause in the main trend development and that the direction of the trend will be the same after they end.
The second criterion between the fracture and continuation models is the duration of their formation. The construction of the first ones, which display serious changes on the price dynamics, require more time. The second ones are shorter. It is better to call them short-term and intermediate.
Note how often we use the word “usually”.
This is due to the fact that the interpretation of graphic models is subject, rather, to general patterns than to rigid rules. There are always exceptions in it. Even the elementary classification of price models is sometimes difficult.
There are always exceptions in it. Even the elementary classification of price models is sometimes difficult. Typically, triangles are models of continuation of the trend, but at times they show a fracture of the trend. Although triangles are usually considered intermediate models, they sometimes appear on long-term graphs reflecting the development of the main trend. A variation of the triangle - an inverted triangle - usually means a fracture of the main upward trend. At times, even the "head and shoulders" - the most famous basic model of a fracture - may indicate a phase of consolidation
TRIANGLES
We will begin a discussion of patterns of continuation of the trend with consideration of triangles. There are three types of triangles - symmetrical, ascending and descending (sometimes called the fourth kind, known as the "expanding triangle" or "broadening formation," but it will be considered below). All triangles differ in shape and have different prognostic functions.
SYMMETRICAL TRIANGLE
A symmetrical triangle or "spiral" is, usually, a continuation of the trend. It marks a pause in the already existing trend, after which the latter resumes.
An example of a bullish symmetrical triangle. Note the two converging lines. The model ends when the closing price is fixed on the market outside of any of the two trend lines. The vertical line on the left is the base of the model, and the point on the right where the two lines meet is the vertex.
The minimum requirement for each triangle is the presence of four control points. To hold the trend line, as we remember, two points are always needed. Thus, in order to draw two converging trend lines, each of them must pass through at least two points.
The completion of the triangle model takes some time, which is determined by the point of convergence of the two lines that is the top of the model. Usually, the price breakout should be in the direction of the previous trend, at a distance of half to 3/4 of the width of the triangle horizontally.
The ASCENDING AND DISCENDING TRIANGLE
Ascending and descending triangles are a kind of symmetric but have different prognostic functions. The figure below shows an example of an ascending triangle. Note that the top line of the trend is horizontal, and the bottom line is up. This model means that buyers are more active than sellers. Such a model is considered to be a bullish one and usually ends with a price breakout beyond the upper line.
This model is completed when the closing price goes beyond the upper trend line significantly. A breakthrough must be accompanied by a sharp increase in volume. The upper resistance line turns into a support level with subsequent price drops.
The minimum price benchmark is determined by measuring the height of the triangle (AB) and projecting this distance up from the breakout point C.
The descending triangle model is a mirror reflection of the ascending triangle and is often considered a bearish model. Have a look at the downward upper line and horizontal bottom line on the picture below. This configuration which indicates that the more active the sellers are than the buyers usually ends with the future price drop.
Completion of the model usually occurs with the closing price going beyond the lower trend line crucially and is accompanied by an increase in volume. Sometimes this is followed by a price return which meets resistance on the lower trend line. The measurement procedure for this model is exactly the same as for the ascending triangle. You should measure the height at the bottom on the left side of the model, and then project the distance down from the breakout point.
Morning Star Candlestick Pattern EducationMorning star candlestick patterns can be strong reversal signs, but need to be traded safely as they are not always reliable, try to only use them at areas that are likely to be a “bottom” of a trend.
They consist of the first candle being bearish and large bodied, the second candle being a doji, usually tiny with a two distinct wicks and the 3rd candle being bullish, large bodied and surpassing 50% of the value of the first candle.
A shooting star is the oppiosite of a Morning Star.
I will be posting excerpts from a new in depth crypto trading guide every week on my discord:
www.invite.gg
WHY YOU SHOULD STOP FOCUSING ON PIPSMost beginner traders aswell as even some that have been around for a while always get tricked into
the psyche that a profitable trader is one who caps the most pips in a month.
This is only not true but substantially misleading especially to new traders as they hardly think
in the negative direction when thinking pips, all focus is always on the PIPS they can "potentially" pick up.
Can't blame them much however , the whole eduction is focusd on PIPS. its all we dream of starting off.
RISK-to-REWARD on the other hand literally pays attention to both sides of the trade and as simple as it may sound,
focusing on R:R rather than on pips gives you a great deal of psychological balance we all need as traders before
rushing into trades
DXY EDUCATIONKey support @89.29 with the break off the bottom of the flag can have a high possibility of the reversal to the bull markets.
If you re looking for more confirmation wait for the break of the resistance level.
Key resistance is @90.98 witch is where back in September of 2017 the low was at.
***THIS IS AN EDUCATIONAL POST***
Real Price vs Heikin Ashi PriceHi!
This is just a quick study for my own curiosity.
It maps out the real world closing price vs the Heikin Ashi closing price. I think I'll make the indicator a mainstay of my trading charts, as it's useful to see. It also makes manual backtesting more viable.
Some interesting observations:
Long-term average difference between real world closing and HA closing ranges from 1 - 4 pips.
There are intermittent spikes of up to 10 - 12 pips. These happen fairly infrequently (depending on the time frame being viewed).
On average, HA prices are closer than I thought to real world prices. I would have expected an average greater than 1 - 4 pips.
Spikes in difference often signify important points. Primarily they seem to signify new or continued trend activity in the relevant direction, but sometimes they can indicate tops or bottoms. Could be interesting to try and build a strategy around it.
I'm not sure if I'll publish the Real Price indicator (it's literally just a few lines of code), but let me know if you want a copy of it.
Cheers,
DreamsDefined
