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RISK MANAGEMENT - WHAT WOULD YOU CHOOSE? 🤑🤑🤑🤑🤑 Hi traders! Introduction - I was reading a few articles around risk management, the psychology off a successful trader & common mistakes traders who fail make. I stumbled across a concept which I thought resonated with me and made me really think about my psychology towards risk management and I thought I would share it with you. I hope this is just as fascinating to you as it was to me, and it has some intrinsic value to you. Why is risk management important in Trading? Trading in general can be regarded as a high-risk activity compared to not trading at all which would be regarded as having virtually no risk to any principal money you may have. For this reason, I would regard risk management to be the most important concept in any type off trading regardless off strategy, instrument & individual ability. Let’s look at the definition of risk management: “Risk management involves identifying, analyzing, accepting and/or mitigating trading decision uncertainty.” – Yahoo Finance To summaries we know trading is risky, therefore risk management is a tool to control that risk & staying in control is the most important thing that you must never forget. This is going to be the reason why the almost 90% of traders fail and why only 10% manage to achieve some sort off “success” from trading and its all to do with risk. Now I know for sure we can all think back to a time where we fell into this trap, but the important thing is learning from that lesson. 90% of traders will lose more on their losing trades than they win on their winning trades and that’s why they are not in the 10% of “successful” traders Understanding decision making from winning & losing Here’s the way it goes: Say I offered you a very simple wager and that wager was based on the flip of a coin. All you must do is predict whether the coin will land on heads or land on tails. The same principal activity off trading in its most basic form. Will price go up or will price go down? A simple 50/50 chance off being right regardless of what strategy you use right. Here comes the interesting part, the part that changes everything. The wager Say I decide to give you two choices, we will label these option A and option B. Now remember we already know what we’re doing is risky, but our aim is to maximize profit and minimize losing and put our money to work. Now thinking logically Option A is the one which maximizes our profit (which is our goal). That doesn’t make Option B wrong however as this option means you are guaranteed to make a profit you just aren’t maximizing what you could make. You will not be surprised that in this scenario then more than likely the most popular option is option B. Guaranteed profit with little to no risk. That’s a thumbs up from a risk management perspective. Here’s where I’ll highlight why 90% off traders fail. Let’s turn this scenario upside down and on its head and instead of talking making profit lets talk about making a loss. Now before I fully explain it lets put it into the concept of trading. Option A – A trade is going against you. Its about to hit your stop loss and you decide that you’re going to move your stop loss into further loss as there is the potential that you can get back to breakeven and you hate losing money. Option B – A trade is going against you again. Its about to hit your stop loss and you decide that you would rather take the guaranteed loss off -£400 rather than take the risk your loss could exceed. In the second scenario we all know that option B would be the most sensible option as it means we are managing our risk and staying in control of the situation. Remember as I said that’s the most important thing, stay in control. However unlike in scenario one where we are likely to choose option B when it comes to making money in scenario 2 when it comes to losing money, we seem to become risk driven and would rather roll the dice on losing more money for the chance to get out without losing anything at all rather than take the guaranteed risk. The scenario shows the reason I think traders lose more than they win and by understanding the simple concept you can give yourself the best possible chance of long-term success. Remember our goal is not to be right in forex, it is to make money. To make money we need to limit our risk and stay in control. The best way to combat this and to remove the emotional influence is to have predetermined targets. Know where you will get out of a trade; win or lose & don’t allow anything or anyone to influence that pre-determined decision. Hope this was insightful for you and thanks for reading! The Fx Chartist
Education
by TheFxChartist_
2
Common Chart Indicators: Part IHey, traders! In this series, we’re going to cover some common chart indicators available for general market. To keep it simple and easy to read, there will be several parts to this educational post. We’re really hope you enjoy it, so let’s get started! Bollinger Bands are a technical indicator created by John Bollinger that is used to determine market volatility and identify "overbought" or "oversold" scenarios. A quick recap would be that there are typically 2 lines in this indicator, that get close together when market is non-directional and if you see them spreading apart that means that there is something volatility building up. There is also a 3rd line representing the middle line which just an SMA (usually a 20). Think of this indicator as a dynamic support and resistance where the price tends to come back to the middle line. Keltner Channels is a volatility indicator created by Chester Keltner, a grain trader, in his 1960 book How To Make Money in Commodities. Linda Raschke later produced an updated version in the 1980s. Linda's Keltner Channel, which is more often used, is quite similar to Bollinger Bands in that it has three lines as well. In a Keltner Channel, however, the central line is an Exponential Moving Average (EMA), while the two outer lines are based on the Average True Range (ATR) rather than standard deviations (SD). The Keltner Channel contracts and expands with volatility, although not as much as the Bollinger Bands, because it is derived from the ATR, which is a volatility indicator. Keltner Channels are used to set trading entry and exit points. What exactly is MACD? Moving Average Convergence Divergence (MACD) is an abbreviation for Moving Average Convergence Divergence. This technical indicator is a technique for identifying moving averages that indicate a new trend, whether bullish or negative. After all, finding a trend is a key priority in trading because that is where the greatest money is produced. A MACD chart normally has three numbers that are used to establish the parameters. The first is the number of periods that the faster-moving average is calculated across. The number of periods utilized in the slower moving average is the second factor. The number of bars utilized to construct the moving average of the difference between the faster and slower moving averages is the third factor.
BITSTAMP:BTCUSDEducation
by Investroy
9
Elliott Wave Example - Impulse Wave 📚 Today i would like to share some basic Elliot Wave analysis along with an example. The Elliott Wave Theory was developed by Ralph Nelson Elliott in the 1920s. Elliott found that financial markets have characteristic movements that repeat in perpetuity. He called these movements *waves," due to the troughs and peaks that present themselves in a cyclical up-and-down fashion. I have put together this example of an Impulsive wave, this pattern is the most common motive wave and the easiest to spot in a market. The impulse wave consist of five sub waves that make net movement in the same direction as the trend of the next-largest degree. Like all motive waves, it consists of five sub-waves—three of them are also motive waves, and two are corrective waves. It has three unbreakable rules to be an impulsive wave - Wave 2 cannot retrace more than the beginning of wave 1 Wave 3 can never be the shortest but does not have to be the longest of waves 1, 2 and 5 Wave 4 cannot overlap the end of wave 1 If one of these rules is violated, the structure is not an impulse wave. Elliott Wave Theory is a broad and intricate topic and can be a little overwhelming when first learning it but despite its complexity you can use these simple elements to begin with to help you understand which way the market is going. We will dive deeper into Elliott Waves in the future but for now train your eyes to spot these impulse waves
Education
by UnknownUnicorn26193975
2
Classic Chart patterns and how to trade it (READ)Hello Traders. Welcome to this Post about How to properly Trade Chart Patterns. In this post first post we will talk about how to find it. Make sure to follow for more content ----- How to Draw it ? You just need to start with current price on the chart . Then look left and down until you find the origin of a very strong drop in price or rally in the price. Understand that behind every drop and strong mouvement someone is behind leaving a footprint. that's what we call the market flow . JUST LIKE THE water from the river it's easier to swing with the direction rather to swing and fight against it. The same occur with chart patterns , You must priorise continuation patterns. When to Know when we have a valid pattern? The perfect combination is : MARKET FLOW + SUPPLY DEMAND RETEST+ PATTERN = HIGH PROBABILITY TRADE. Rules: When you have a very strong bearish monthly structure , supply levels tend to be accurate a stronger. By other side we like to trade the first retest. The more a zone is being tested the less accurate it becomes. When you have a very strong bullish macro structure , demand levels tend to be accurate a stronger. By other side we like to trade the first retest. The more a zone is being tested the less accurate it becomes. In that way , we like to combine supply and demand market flow and chart patterns. → If you want to execute :from my experience you need to combine multiple factors. One of the most important is the fundamental. when you have a strong fundamental trend confirmed or the sentiment, then a pullback into a supply level in a strong downtrend structure is valid and so the continuation pattern can be rewarding . When a chart pattern is not accurate ? ❗The purpose of continuation patterns is to always try to take it following the market sentiment. There is no accuracy when trying to fight against the river . For example trying to take a double bottom in a downtrend is not likely to work , same way happens when we are trying to take a demand retest in a downtrend structure. that's what we call LPT LOW PROBABILITY TRADES I hope this Educational Post was helpful . Make sure to follow and let me know in the comment section if you trade supply and demand ? have a nice day!
Education
by AIRFOREXONE_
31
Correlation of Different Markets with Forex: CheatsheetOne of the biggest things you should understand as a trader is prices don’t just go up and down (well, maybe on a really small timeframe they’re more chaotic). They’re usually backed by some actions, data and things happening in other markets. This all creates general economic tendencies. But how do we know what affects dollar/currency pair and how? Well, here is a quick cheat sheet for that case. More importantly with an explanation of why. 😊 USD and Gold (negative) Investors prefer to abandon the dollar in favor of gold during times of economic uncertainty. Gold, unlike other assets, retains its inherent worth. Gold and NZD/USD (positive) New Zealand (number 25) is a major gold producer. Gold and AUD/USD (positive) Australia is the world's third-largest gold producer, exporting around $5 billion worth of gold each year. Gold and USD/CAD (negative) Canada is the world's fifth-largest gold producer. When the price of gold rises, the pair tends to fall (CAD is bought). Gold and USD/CHF (negative) Gold backs up more than a quarter of Switzerland's reserves. As gold prices rise, the pair falls (CHF is bought). Oil and USD/CAD (negative) Canada is one of the world's top five oil producers. It exports 5..5 million barrels of oil per day to the United States. As oil prices rise, the pair falls. Bond Yields and USD (positive) Higher bond returns attract greater investment to a country's economy. This makes its native currency more appealing than the currency of another economy, resulting in lower bond yields. Here it’s more about looking out for bond differences between countries. For instance, if bond difference between UK and United States goes down, this will cause GBPUSD fall as well. Gold and EURUSD (positive) Because gold and the euro are both considered "anti-dollars," if gold prices rise, the EUR/USD may rise as well. USD and Stock Market (depends on the market situation, mostly positive) So, here is a little weird one. Strong stock market is an indicator of a strong economy. So as company gets stronger -> stock price goes up -> attracting more international investors to step in, who have to get local currency in order to buy a local stock -> this cases dump of other currency in favor of the currency we’re intending to buy the stocks with (in our case USD). Seems easy? On the other side, people from the local economy dump their dollar/bond holdings to acquire more stocks weaking the currency itself. That’s why it’s a complicated love story. This correlation is quite different depending on the volumes for both cases. Enjoy, family! But keep in mind that these tendencies change to some extent as the world economy shifts/develops. Make sure to always stay updated and observe on your own.
TVC:DXYEducation
by Investroy
13
Bearish Entry ExampleThis kind of price action happens all the time, you just have to spot it while it's happening so that you can plan your trade and execute. I have put this together to give you an idea of the type of things I look for in the hope that it can help you too. Once price action has made a clear impulse to the upsides and taking out previous structure that's our first sign that the buyers are stepping in. Once we see some corrective price action we can place our fib from the high to low, mark out previous structure and identify the pattern that price is making to build a picture of where price is most likely to reverse giving us the best possible entry.
COINBASE:BTCUSDEducation
by UnknownUnicorn26193975
3
USDT.D Tether Dominance and Bitcoin price correlationHello Traders, If you do not have a watchlist made with all of the market cap dominance data get one made. Feel free to DM me and I will send you my premade list with all of the important market caps and market map dominance charts that I use to understand how money is flowing in and out of the market. Below is the list if you would like to make your own. Lets get into it. The chart on the top is USDT.D Tether market cap dominance. This data shows how much usdt is in the market compared to the rest of the crypto market. One thing you can see clear is the dominance of USDT in the market correlates directly with the price of bitcoin. When USDT dominance goes up the price of bitcoin goes down and vice versa. The few point's highlighted on the chart are the recent highs and lows of the USDT.D and the highs and lows of Bitcoins price action. There are 4 data points on each chart that are highlighted in which 2 of these points coordinate directly with each other. The high of USDT.D on Jul 20th 2021 and the low of Bitcoins price on that date as well as the most recent all time high of bitcoin and the most recent low of USDT.D on Nov 8th 2021. There are two other data sets that do not directly correlate but, are very close, the low of USDT.D on Feb 19th 2021 and the high Bitcoin made on Apr 13th 2021 and the almost low that USDT.D made around that time. The reason for the non correlation of these two data point is due to money flowing into altcoins in the market as you can see if you look up most other coins aside from Bitcoin around these times most likely as a lot of market participants will often switch their BTC to the alt coin of their choice by flipping the BTC pairing of the coin on the exchange of their choice. It is very helpful as I said before to understand these different charts to get a grasp on where you may find the best investment for any given time period. My only concern that I have for the future price going up is that both Bitcoin and USDT.D are both at critical points of resistance and support. If we assume that USDT.D going up would cause a Bitcoin price decrease and it bounces off of the area of previous resistance which it has also treated as support we would experience a drop in the market. Very similarly, as you see with the correlation of the previous support line Bitcoin is now under, we may see the price action come up to this area and treat it as resistance and then decrease. All in all we are in a critical point for crypto over the next few weeks and need to see some real buying pressure come in from the bulls if we are going to disregard these important areas of support and resistance on both of these charts. Being as we are in an "if this then that" type scenario right now I suggest keeping a level head and making a plan for what is to come no matter the outcome with the data that you have available to you. There are a lot of shorts open and if the bulls start to win this race we may just get lucky and have a bit of a squeeze seeing a decent rapid increase in price that drives us up past these data points flipping these lines back to a more favorable outlook! As always, have a green week! P.S. Here is my Market Cap watchlist: CRYPTOCAP:XRP,CRYPTOCAP:ETH,CRYPTOCAP:DOGE,CRYPTOCAP:BTC,COINBASE:BTCUSD,CRYPTOCAP:TOTAL,CRYPTOCAP:TOTAL2,CRYPTOCAP:TOTAL3,CRYPTOCAP:OTHERS,CRYPTOCAP:ETH.D,BNC:BLX,CRYPTOCAP:BTC.D,BINANCE:ETHBTC,CRYPTOCAP:TOTALDEFI,CRYPTOCAP:OTHERS.D,CRYPTOCAP:USDT,CRYPTOCAP:USDT.D Savvy
BITFINEX:BTCUSD
by Savvythe1
7
Simple Explanation of Stop Loss Hunting Stop Loss Hunting, a manipulative tool, that is used by Market Makers and Whales to manipulate market every day and to take away money from Retailers. This is a basic yet advance topic to discuss. For simplicity sake, Let's break down this discussion in five parts :- 1) What is Stop Loss Hunting ? 2) How does it work ? 3) Why does it work ? 4) Why they do it ? 5) How to avoid It ? ---------------- 1) What is Stop Loss Hunting ? ---------------- Stop Loss Hunting is a process in which "A KEY LEVEL" is broken on either side in order to trap Retailers and to take Stop losses of either bears or bulls and trap them in that Trade. ----------------- 2) How does it work ? ------------------------- It works only when we have a level that is SO OBVIOUS to everyone that majority of RETAILERS put there Stop Loss underneath that level. Stop Loss Orders are clearly observable in ORDER Book and ESPECIALLY to Market makers. However, Key Levels in Range Trading become so obvious to Market makers or some Support levels that Whales/ Institutions or Market Makers can clearly observe where most Stop Losses of Majority of Retailers will be. Thus they can overwhelm that range or level with Demand or Supply to take out Bears or Bulls Respectively. ----------------- 3) Why does it work ? ------------------------- We all are HUMANS and are bounded by our Emotions. We are EMOTIONAL BEINGS at the end of the day and we are not machines. Inherently, We share an emotional domain and there are two key emotions in that domain :- Fear, Greed. These emotions are involved and determine out actions most of the times in any Financial Market. Therefore, These emotions are used as trigger points for Buying and selling and thus, Market Makers manipulate the Market by Controlling the masses by using these as Trigger points. In Bear Trap , thus, when an obvious support level is broken then Retailers sell and Whales/Institutions buy and Bears are trapped. Then market makers Push the price up and that is how BEAR TRAP Works. On the other side, In Bull Trap when Resistance level is broken then Break out traders buy at Breakout and then Bears Stop Loss is mostly taken out then Many Bulls are trapped. Therefore, Price takes a dump on failure of a breakout. ----------------- 4) Why they do it ? ------------------------- Answer is pretty simple for this :- To make more Money and Get better ORDER FILLING PRICE for their BIG ORDER Trade. Whales/ Instituions do get have a BIG ORDER SIZE and Especially when they have INSIDER News or Information before it becomes available to public. They always seek to get their BIG ORDER SIZE FILLING in Blocks at better Price. For that reason, they do overwhelm a Support level with Supply to take out Retailers out of that trade and fill their BIG ORDER SIZE in Blocks. Also, sometimes, when Market Makers see good Opportunity to take out Retailers out of trade they do same as well by Breaking Key Level on Either side. ---------------- 5) How to avoid It ? ---------------------- This can be done in TWO WAYS. By having Either your Stop Loss Wide Enough OR Look out for a key Level is so obvious to everyone and thus Expect Stop Loss Hunting at that level. What i do sometimes is that when a key Level is broken and it is coming back to support then you can trade from that level where AN OBVIOUS KEY LEVEL is broken and most Retailers are taken out of the trade. Let us use an example for this :- You can clearly see how an OBVIOUS level of 30K majority was watching and it was taken out and many Retailers would def had been Liquidated or their SL must had been taken out. I really hope that my Stop LOSS Hunting Explanation would be good enough and if i made any mistake please do lemme know anout it. Diagram in the chart is an example only and is not meant to taken for any financial advice.
COINBASE:BTCUSDEducation
by StunnerStock
128
How to spot and use MACD DivergencesOscillators Oscillators are any bits of information or data moving back and forth between two points. It is usually used as a signal for a buy or a sell on either side of the range it is moving in. The Relative Strength index which you might hear of is an example of an oscillator, however I will not be going into detail about it as we do not personally do not use it for my trading. When there is a change in momentum, this often signals weakness in a trend. The indicators are designed to signal a possible trend reversal. The only oscillator we use in our trading is the MACD. Moving Average Convergence Divergence. Feel free to look into other indicators, however, we believe that the MACD has been our favourite to use. DIVERGENCE Divergence is simply when we will be looking at the difference in price action against an indicator such as MACD, RSI, Stochastic. The simplest way to put it, when the price is making higher highs the indicator should also be making higher highs, and lower lows then vice versa. If the price is making higher highs but the indicator is not, then the two are diverting from each other and we have divergence. This is a great sign for a weakening trend and a potential shift in momentum. The two types include regular and hidden. Regular divergence When the price is making lower lows (LL), and the oscillator is making higher lows (HL), then we have what we call regular bullish divergence which usually appears at the end of a downtrend. If the price makes a higher high (HH) but the oscillator makes a lower high (LH), then we have regular bearish divergence. This usually occurs at the end of an uptrend. Hidden Divergence Divergence does not necessarily have to show when the trend will reverse, it can show trend continuation, and since we try to avoid trading against the trend this can be of great help. When the price makes a higher high, but the oscillator makes a lower low, we have what we call hidden bullish divergence.   When the price goes to make a lower high but the oscillator makes a higher high, this is what we call hidden bearish divergence. Always remember that in conjunction with these signals, we need other signs in order for us to enter the trade. We cannot solely base our analysis on oscillator divergence, otherwise we can find ourselves on the wrong side of the trade. Wait for the crossovers of the indicators to be sure, this can happen after the price has begun to move, however it can be an assurance that the divergence observed is correct. Always remember if the market is moving sideways, there are no clear indications of divergence so do not force it. Always connect the latest in the price action, meaning if the price is bullish and is retracing, you are looking at higher highs. Focus on the highs and lows of the indicators and ignore any small minor movements in between. Wherever lines are drawn on the price, they have to line up with the oscillator and that is where the line will also have to be drawn, everything has to line up.
BITSTAMP:BTCUSDEducation
by opes_trading_group
4
BITCOIN round number and stop loss hunting 📚📖Today we are going through the brief technical explanation about the round numbers and stop loss hunting round numbers: the round number end in a zero, and have a tendency to attract orders and most of the time attracts many traders and they choose these points for entering and closing the position Point: For open position on round number the proper point for entering to trade is near the round number and not exactly on round number For example: For opening long position(buying) , your entry point should be above the round number and For opening short position(selling) your entry point should be below the round number. Pay attention to the BITCOIN price near the round number 40000 : If you want to open long position it's better to put your entry point above this round number but important point is that if this round number touches usually we have stop loss hunting and it is better to put your stop loss in proper place below the round numbers. Stop loss hunting: It is a strategy that makes market participants out of their position by driving the price to the area that many traders choose to set a stop loss there. For example: here on round number of 40000 we can expect that stop hunting happens and if someone wants to open long position on BITCOIN it is better to put stop loss below the round number with considering 3 percent penetration and if the price breaks this area the support becomes invalid. 🐳MAD WHALE🐋 This is not financial advice, always do your own research. please, fell free to ask your question, write it in comments below and I will answer. 🐋
BITSTAMP:BTCUSDEducation
by MadWhale
13
HTR/USDT ongoing Final capitulationFollowing my yesterday post The first "kiss test" was made however and regardless of the fact that fear is in control there was no panic and the crypto market does feel stable as long as the bitcoin holds 40k support line. Having said that, and as far as I see things an uptrend will not start unless the stupid money will be shaked out. Waiting on a drop to 32k-36k and then if you ask me only God will save the bears 🐻 🐻‍❄ 🙏 This is an informative post which includes my personal opinion as well and not a financial advise what so ever. Make sure to do your own research and analysis before making any investment.
Long
by moshikomemi
The Problem with Breakeven TradesThe issue with breakeven trading is that when enough people are joining the market at the same place, be it a demand area or an order block. Many traders like to secure their positions immediately. This, however, creates liquidity. Whenever a large group of people move stop losses to the same area, expect that area to be a target for the banks. In this example, we can see buy orders being activated at an order block, a sudden push to make buyers secure their position, followed by a stop hunt of risk-free trades before continuing to the upside. Do you ever get caught in situations like this?
Education
by AlkalineFX
5
Quality vs QuantityThis has been an ongoing battle between generations of traders and we’re here to provide some insight and let you choose between what type of a trader you would like to be. When it comes to trading, there appears to be a lot of misunderstanding on both sides about the Quality versus Quantity Debate. Because this is such a crucial topic for a trader, we've been meaning to write about it for a while, so now is the moment to dispel some of the misconceptions, misinformation, and misunderstanding. Let’s go ahead with some common arguments: 1) It is less stressful and more accurate to trade greater time periods. 2) Anything less than a one-hour chart is merely noise. 3) Trading smaller time periods leads to excessive trading and analysis. Statement #1 is 90% true. Usually, it’s easier to observe big economical trends on larger timeframes. You’re pretty much becoming an investor at that point. However, with more risk we usually tend to have more reward. IF executed properly, more trades on a smaller timeframe should yield more pips? Not exactly! The market reality is different. Overall, it’s a good rule of thumb to stay open-minded and capitalize on market moving both directions, but it’s also easy to get caught in this battle. Our advice for newbies here, try to aim for less trades for the same overall reward. Statement #2 is also kind of true. Except sometimes, it’s a useful noise. One-hour charts and lower are extremely useful for proper entries. On larger timeframes 20-25 pips don’t matter, but over time they add up. Think of it as a casino. They only have 3-4% edge over players, but if you spin the roulette 10.000 times, this difference will be useful. Pay attention to our entries and rank your past trade on a scale of 1-10. Statement #3 is 50% true. DON’T analyze charts on M15, with all the honesty and not to offend anybody, you have to be a psycho or a genius to see a pattern through all those extreme outliers. If you have that 20/20 vision, good for you, but keep in mind that structures on M15 are completely unreliable, so in the long run, failure is inevitable. On the chart itself you can see the visual difference between the “Trader A” and “Trade B”. Which one would you like to be yourself?
BITSTAMP:BTCUSDEducation
by Investroy
15
Left Brain Versus Right Brain 🧠 (Find out which one is you) 📚Left Brain Versus Right Brain-Thinking vs Feeling Hello all. I put this educational content to help you realize how these two very important psychological concepts play part in almost every traders life. I wanted to bring to you this unusual educational content which I personally learned from a book called, “Trading from Your Gut” by Curtis Faith. This knowledge came to serve me a long way and I hope it helps you too. First let me briefly highlight the differences between Right and Left hemispheres. Right Brain hemisphere : (It is definitely time to buy now): It is a cliché and you probably know it, “listen to your gut”. Right brain traders use gut instinct as the basis for powerful and rapid decision making. Unfortunately, too much reliance on an untrained gut can be disastrous for the inexperienced trader. This is because the right brain is quick and intuits instead of reasoning. Thus, it can be a powerful tool in the hands of an experienced trader who not only relies on intuition, but also reasoning and logic. Left Brain hemisphere : (I will only buy if): Left brain traders know exactly why they enter certain trades, following specific set of criteria that must be met before initiating a trade. Instead of relying merely on intuition and feelings, left brain traders analyze, use linear thinking, categorize, theorize, and only then put on certain trades. It is only after when left brain trader will trust his/her gut to execute the trade. So which is better ? (Integration of both hemispheres): Using intuition to decide when to make trades is not a bad thing when used in combination with logical reasoning using analysis, data and tools. In other words, to become a better trader, one should incorporate both left and right hemispheres and have a balance between brain’s two primary types. It is not about “thinking versus feeling” per se, but rather combining thinking and feeling to be able to intuitively make better trading decisions. No intuition is good without knowledge and without receiving training. Thus, you should never solely rely on trading from your gut. Bonus for you : •If you are a short-term trader or a scalper, you are likely using your right brain due to not enough time to perform analysis. •if you are a long-term trader or a swing trader, then you are using your right brain given plenty of time for analysis. •Remember, left brain analyzes, and the right brain notices. Use your whole brain to trade this year. Thanks for reading, and I hope you can use this for your advantage in this new era of volatility. Enjoy, and happy 2022 everyone.
COINBASE:BTCUSDEducation
by EdgarTigranyan
91
ELLIOTT WAVES and REAL CHART RUNE ANALYSISElliott Wave Theory Interpretation The Elliott Wave Theory is interpreted as follows: Five waves move in the direction of the main trend, followed by three waves in a correction (totaling a 5-3 move). This 5-3 move then becomes two subdivisions of the next higher wave move. The underlying 5-3 pattern remains constant, though the time span of each wave may vary. Let's have a look at the following chart made up of eight waves (five net up and three net down) labeled 1, 2, 3, 4, 5, A, B, and C. Waves 1, 2, 3, 4 and 5 form an impulse, and waves A, B and C form a correction. The five-wave impulse, in turn, forms wave 1 at the next-largest degree, and the three-wave correction forms wave 2 at the next-largest degree. The corrective wave normally has three distinct price movements – two in the direction of the main correction (A and C) and one against it (B). Waves 2 and 4 in the above picture are corrections. These waves typically have the following structure: Wave Degrees Elliott identified nine degrees of waves, which he labeled as follows, from largest to smallest: [ *]Grand Super Cycle Super Cycle Cycle Primary Intermediate Minor Minute Minuette Sub-Minuette
Education
by NiccoFx
The ins and outs of trading psychologyThe ins and outs of trading psychology For something that I believe makes up the bulk of trading itself, I believe it is also the most overlooked. Trading psychology is what I am talking about, and it is definitely the most important aspect of trading that every trader needs to develop and master in order to become successful. In the most basic ways to put it, trading psychology is the term that defines all the feelings and emotions experienced day to day by traders. It is not something that can easily be controlled, however with time and experience it is definitely something that is needed to master in order to move forward in your trading journey. The two emotions that drive the markets are fear and greed. Based on these two emotions, you can find all the negative effects of trading psychology. Based on the emotion of fear, the following can occur: • Fear of missing out (FOMO), leading to bad entries • Exiting a trade too early • Exiting a trade in a drawdown only to see it go in their original direction • Adding to a losing position in hope of recovering the drawdown • Constantly checking your trade • Finding yourself glued to the charts Based on the emotion of greed, the following can occur: • Moving your original TP in order to gain more profits • Adding large positions after seeing gains in a position • Over trading and overleveraging to chase big returns • Risking big on a single trade Another important thing that needs to be understood is the difference between mistakes and losses. A lot of people think that trading mistakes and trading losses are the same thing. However, a trading loss is simply a trade that hit your stop loss and did not go your way. Until the day you learn to accept that losses are just as much a part of trading as winners, you will not become successful. A trading mistake on the other hand is you simply not following your own rules. You have to understand the importance of being disciplined and how it is possibly the single most important aspect of lasting in the markets. Never break your own rules just to be right, because as said earlier, you need to learn that losses are completely normal and expected. Emotions are a normal part of everyday life, however it cannot be stressed enough how important it is to leave them completely out of your trading. Many others believe that negative emotions should be shut off, however positive emotions are great to have, however I think otherwise. Emotions should not be attached in any way to trades, whether positive or negative. If emotions are attached to every single trade then what can happen is that you could have a great week and make a certain amount of money that week. Now by attaching an emotion to that trade, you are programming your mind to believe that the following week even if half that amount was made, it is not good enough as you do not have the same intensity of positive emotions. In trading you have to be emotionless towards both wins and losses and strictly follow your rules. Constantly working on your psychology and mindset is key to developing and succeeding as a trader. Something as simple as developing a daily morning routine, keeping a journal, meditation, exercise, and visiting a mindset coach, are great tools to constantly develop and keep your psychology and mindset at its best. Meditation alone has helped me to develop as a successful trader by improving my focus and attention, reducing stress, reduced panic, improved my information processing, increased mental strength and emotional intelligence, and increase in my focus. If there is one thing that cannot be stressed enough, it is that the aim of forex is to gain pips and not money. Chasing money, especially fast money, is gambling and you will never have control as long as you remain with that attitude.
BITFINEX:XRPUSDEducation
by opes_trading_group
What is the pricing in factor?Pricing In Human behaviour, specifically greed and impatience are some of the main reasons the markets move the way they do. The term pricing in is the definition and illustration of human impatience. Due to the fear of missing out, impatience, and greed, humans natural instinct after hearing a rumour without any solid information to back it is the buy into it. Brexit has been causing a lot of this recently with rumours of a possible Brexit solution which causes investors to “price in” based on the rumours. Interest rate cuts are another example where they begin to get priced in based on the rumours. Buy the rumour, sell the news. A sentence commonly seen in the trading world. Let's imagine we have interest rate data expected to be released at 2%. The current rate is 3%. This data is seen as negative as the interest rate is dropping so many people can begin to factor that information in days prior to the release of the news. This is demonstrated by a drop in the price of the currency much earlier than the actual release. Once the data is released, it comes out at 2%, and you may notice the price does not move much. This is due to the fact that the price has dropped and been factored in prior. However, let's imagine the data released at 1.5% which is worse than expected, you can expect the value to decrease majorly. On the other hand if the data was released at 2.5%, even though the interest rate still fell from 3 to 2.5%, it is still expected to see an increase in value of the currency due to the data being greater than the expected result. In other words, when data release is unexpected, you should expect great volatility in the markets. In the markets, it is important to always watch for the unexpected at all times. Data may be predicted to be very positive or very negative and once released it can be the total opposite. Don't get caught up in trading news as it is not suggested, however learn how to use the fundamentals to your advantage and imply them into your technical analysis.
UEducation
by opes_trading_group
Basics of Trading PsychologyPsychology is perhaps the single most important aspect of trading. Without the proper psychology, you are almost guaranteed to fail. First things first, you have to understand that trading is just as much of a profession as any other, and just like top performing athletes, trading reflects your performance, you are responsible for your results. In life your beliefs shape your reality, and you have to believe without a doubt that you could become a trader. Only once you completely trust yourself, you will be able to go ahead and become a trader. Every aspect of trading is psychological including everything we have spoken about pretty much. And since you trade your beliefs, that makes the biggest impact on the results you will receive. People make decisions based on fear or greed, it is that simple. And since the market is designed to take advantage of individuals psychological weakness, if you do not have control over yours then you will be a part of the 90% who lost that day. Since all trading is psychological, it is most important to always be working on yourself as a person, because that will greatly impact your mindset and attitude while trading. You cannot finish fighting with a friend, partner, or spouse, and sit on your computer expecting to make great analytical decisions while there is anger and indecisions going on in your head. Trading has to be treated just as much of a business as any other. A lot of people think that trading mistakes and trading losses are the same thing. However, a trading loss is simply a trade that hit your stop loss and did not go your way. Until the day you learn to accept that losses are just as much a part of trading as winners, you will not become successful. A trading mistake on the other hand is you simply not following your own rules. You have to understand the importance of being disciplined and how it is possibly the single most important aspect of lasting in the markets. Never break your own rules just to be right, because as said earlier, you need to learn that losses are completely normal and expected. By following your rules, you will focus less on being right and have less emotional attachment to trades. If emotions are attached to every single trade then what can happen is that you could have a great week and make a certain amount of money that week. Now by attaching an emotion to that trade, you are programming your mind to believe that the following week even if half that amount was made, it is not good enough as you do not have the same intensity of positive emotions. In trading you have to be emotionless towards both wins and losses and strictly follow your rules. According to Dr Van K. Tharp, there are 12 tasks of trading which include: 1. Self-analysis to determine if you are in a state of mind to trade 2. Mental rehearsal to avoid mistakes 3. Daily focus to lead you towards your goal 4. Developing your own style of a low risk idea 5. Stalking the charts starting from high to low time frames 6. Action requiring commitment and not thought 7. Monitoring the trade to keep the risk low 8. Aborting if the trade is not going well 9. Taking profits when the reason for the trade has ended 10. A daily review to monitor and prevent future mistakes 11. Being grateful for what went well 12. A periodic review to make sure everything is still working well   One of the biggest parts of a good trading psychology is believing in yourself. This can sound very straight forward until you deposit real money and place a trade. You will see parts of yourself being tested that you didn't know existed. You might find yourself checking the trade every few minutes or even seconds, you might look at your drawdown and doubt everything that you have done, you might lose a trade and think that you will never analyse another right. Let me give you some common examples, you analyse a trade and all the confluence is there, you then monitor your trade and after several hours you find yourself in drawdown leading you to close the trade, hours later you see that the price went to exactly where you had your take profit. Another might be after losing a trade you see a great opportunity, but your previous loss makes you doubt everything about the trade, only to see it reaching where you had in mind also. Of all the things learnt, if your psychology is not your main focus of work, you will not be able to succeed as a trader, not because you do not have the right knowledge and analysis to trade, but because you are your own enemy. Over trading is another reason why many people do not last long in the markets. Over trading is extremely negative as placing too many trades and adding on to your losses, you are not managing your risk correctly and only exposing your account and capital to more risk. The psychology going from demo to a real account is great also and individuals need to be careful as emotions will come into play. If there is one thing that cannot be stressed enough, it is that the aim of trading is to gain pips and not money. Chasing money, especially fast money, is gambling and you will never have control as long as you remain with that attitude.
BITSTAMP:BTCUSDEducation
by opes_trading_group