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Using the Relative Strength Index (RSI)Using the Relative Strength Index The Relative Strength Index (RSI) is a very popular and often used indicator that can be used effectively in many different ways. My personal favorite two are: 1. As a tool to indicate a reversal. This is the most popular way. 2. As a momentum indicator. This is what it was designed for. Below we will discuss how to read the RSI, and how to set it properly depending on market conditions. What the numbers mean Before we discuss what to do with the information that the RSI gives us, we should learn what the numbers mean. The RSI is a line graph that moves from 0 to 100. When the RSI is 70 or over, we consider our crypto to be overbought (people bidding up the price). Then when the RSI is 30 or below, we consider our crypto to be oversold (people bidding down the price). Overbought means that the crypto might be overvalued. Oversold is the reverse. The crypto might be undervalued. The actual number is calculated using the average gain or loss over a set period of time. The default time period is 14 (minutes, hours, days, based on how the chart you are currently looking at is set). You could also set your period length to a lower number, I use 10 sometimes, so that the RSI is more sensitive to recent moves. This is good to do in markets that are highly volatile (crypto for example). The actual RSI number will increase as there are more and more positive closes within your time period, and will fall as there are more and more negative closes within your time period. As with every trading indicator, the RSI should not be used as the sole reason for a trading decision. It helps paint a picture of the market of the particular crypto you’re looking at. Nor are the default values always to be used. We’ve discussed time changes, but you could also change the upper and lower bands. In a bull market you may want to change the upper band to reflect the general trend of the market (more on that later). Trend Reversal Now, let’s about how to actually use the RSI. The first way to use it is as a way to spot a possible trend reversal. Put simply, the RSI can help us see if we have, in the last few candles, changed from an up-trend to a down-trend, or from a down-trend to an up-trend. When the RSI is below 30 and crosses up, we consider this a bullish move. When the RSI is above 70 and crosses down, we consider this a bearish move. Just to reiterate: A bullish cross up is not an automatic buy, just as a bearish cross down is not an automatic sell. As you can see below. But it is pretty accurate. Nothing in TA is 100%, but the closer you get to 100% the better trader you will be. One other thing to note based on the above picture is that there was no time that the RSI dipped below 30. In a crypto bull market (which we are currently in) it is more common to see cryptos that are overbought as opposed to oversold. You can compensate for this by changing the oversold line to 40. Additionally, as the crypto moves up in price, you can see the RSI making consistent higher lows. Divergence One thing to look for when you are trying to spot trend reversals is what is called a Bullish Divergence. This means that the price of your crypto is in a downtrend and making lower lows. At the same time, the RSI is oversold and is making higher lows. When you spot this, it can be a very powerful indicator that the trend is reversing to the upside. A bearish divergence is the same thing but in reverse. The price of the crypto is getting higher and higher while the RSI is overbought and making lower highs. RSI as a momentum indicator Another way to effectively use the RSI is by using it for its intended use as a momentum indicator. As we talked about before, the RSI rises as we have more and more positive closes in our time window. It rises more (faster) when the price movements are more extreme to the upside. The reverse is true for the downside. So, if we are oversold that means there is momentum to the upside, and if we are overbought that means there is momentum to the downside. Generally, it is better to trade with the momentum than against it. Unless we spot the reversal signals that we discussed above; crossing back down, or crossing up. It is also better to go long in bull-markets and short in bear markets when using the RSI in this way. Let’s take a look at the chart below: In a bull market the 50-60 range of the RSI acts as support and the RSI usually stays above 40. I like to set my upper band to 60 in a bull market so I can trade with the bullish momentum and spot potential reversals in the 50-60 range. As you can see it is necessary to use the RSI differently in different market conditions. Final thoughts As you can see there are different ways of successfully using the RSI. I hope I’ve made at least two of those ways clear in this beginner guide. Please let me know if you have any questions and if you like it, please hit the thumbs up and be sure to follow for more! Thanks for reading!
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Education
by zsamochin
63
Learn to Read Chart (MACD & XRP)✅ The MACD line is the 12-day Exponential Moving Average (EMA) less the 26-day EMA. Closing prices are used for these moving averages. A 9-day EMA of the MACD line is plotted with the indicator to act as a signal line and identify turns. The MACD Histogram (Below the chart) represents the difference between MACD and its 9-day EMA, the signal line. The histogram is positive when the MACD line is above its signal line and negative when the MACD line is below its signal line. ✅ MACD's formula: MACD = 12-Period EMA − 26-Period EMA ✅ MACD is often displayed with a histogram which graphs the distance between the MACD and its signal line. If the MACD is above the signal line, the histogram will be above the MACD’s baseline. If the MACD is below its signal line, the histogram will be below the MACD’s baseline. Traders use the MACD’s histogram to identify when bullish or bearish momentum is high. ✅ The box below the chart has 2 lines which alert traders when a crossover happens: Crossovers are more reliable when they conform to the prevailing trend. If the MACD crosses above its signal line following a brief correction within a longer-term uptrend, it qualifies as bullish confirmation. If the MACD crosses below its signal line following a brief move higher within a longer-term downtrend, traders would consider that a bearish confirmation. ✅ TradingView lets you use the MACD for fast and easy forecasting. You can find it in Indicators & Strategies (f(x)) above your chart.
Education
by ShawnMCR
2
💡How To Use Market Leaders to Spot a Potential Bottom❗️Lets take a break from stuffing our bags with money and look quick at an example of spotting the market bottom using what's called a market leader, a very simple technique that can be very effective for both shorter and longer term trades. In general the market right now is very alt focused, we can tell that by looking at how low bitcoin dominance is, and how the alt cap is climbing both with btc and with the general market cap. When we're dealing with an alt focused market there's generally going to be a hot ticket item, little while back it was ETH, now it's DOGE again as it's the media darling and Elon is on SNL soon to decide the fate of every leveraged DOGE trader in one monologue. We call this asset the "Market Leader", because it leads the market. Complex, I know. We can identify these assets by their movements during catalyzing BTC movements, generally corrections down are the easiest to see - which is what we have an example of here. Also fundamental analysis of the news can give us a good idea of what may or may not be a market leader. When we see a correction down, and all of a sudden a coin starts moving contrary to the correction at a level that could very well be the bounce point on our BTC and index charts; we know it's either a Pump and Dump if it's a shitcoin or that coin is probably the market leader for either the short term or potentially longer term. In this case we see our lord DOGE, which now has a stupidly high market cap because people are inherently greedy apes, basically hit it's higher low and start rebounding almost exactly 1-hour before BTC started reacting. The rest of the market of course followed and now we see there's a massive bounce and everyone's getting paid copious amount of money today. Fantastic. OBVIOUSLY this is extremely potent information to have, as knowing when the market has reached it's general bottom means we can either close shorts, open longs, or both if you're one of the energetic variety. So keep an eye out for this behavior on the markets in general - it's not always there but when it is, like ETH last week, it can lead you straight to the bank$$$
Education
by cryptosince1963
1
ONE OF THE MOST USED BEARISH PATTERNS: DESCENDING SCALLOPOne of The Most Used Bearish Patterns: Descending Scallop · The descending scallop is a bearish reversal pattern. · Descending scallops are common topping chart patterns. · This is a downward trending char pattern. · You can support me with your likes. · Also you can share your opinion with me in comments. · Attention: this isn't financial advice we are just trying to help people on their own vision. ·Have a good day!
Education
by CaptainBarbossa
2
Candlestick education - rest off between bull-runsHey guys, as we all know a chart/price doesn't always go up between a rest in between, but how can we understand its correction based on the candlesticks? 📍 right after a bull run we may see a red candle with huge wicks usually we panic after seeing those candles ⚠️ don't worry guys! If a red candle closes at the bottom of half of the previous green candle it's reasonable to worry because it shows less interest of the bulls🐃 📍 however, if the red candle shows us a huge wick at both ends it means that many took the advantage and bought the dip Do you enjoy my tutorial? Ask me if you have any question and/ or problems
NASDAQ:AAPLEducation
by C_EWAVE13
8
Educational: AB=CD pattern w/ BTC exampleOne fairly easy and useful pattern for determining reversals is the AB=CD pattern. The pattern simply looks for two rising or falling legs up or down respectively. Then one simply measures the retracement level from point B followed by the projection from C (luckily tradingview has a tool to assist with this). If these values equal a 0.618 or 0.786 retracement followed by a 1.272 or 1.618 projection respectively, the pattern is likely to indicate a reversal of the current trend. For example, above we can clearly see the pattern almost perfectly matched the required levels of 0.618 and 1.272. However, no pattern is guaranteed, so it is always recommended to seek out confirmation. As we can see in the above example, there is bearish reversal divergence that can be seen on both RSI and MACD (dotted green lines), whereby price is rising while oscillators are falling, indicating an even greater likelihood for a reversal. Upon confirmation of a reversal, one can then target Fibonacci retracement levels as key points of interest as can be seen above. A nice part about this pattern is how simple it is to spot and draw out particularly with tools available on tradingview. Hopefully you are able to use this pattern as another useful tool in your arsenal!
BITSTAMP:BTCUSDEducation
by crypto_trends
Golden Candle Stick Pattern's - You Have To CheckBULLISH PATTERN'S ----------- Hammer is identical in shape to hanging man but the difference is that while hammer occurs is a down trend , the hanging man pattern occurs in uptrend Inverted Hammer : An Inverte Hammer Is usually observed at the end of downtrend ,this pattern is similar to Shooting Star and differs only in the position where is occurs DragonFly Doji : This is partly a bullish pattern , Open . Close and High Prices of the candle are same . Dragonfly Doji implies That , buyers and sellers were in a tough fight and by the end of the session : buyers were able to push the prices to its open price Bullish Engulfing : A Bullish Engulfing pattern is generally observed at the end of a downtrend , A large green candle engulfs a small red candle showing the strength of bulls , prior bearish trend coverts to bullish trend Piercing Pattern : A Piercing Pattern is similar to bullish engulfing pattern in a way that both of them appear near he end of a downtrend , but the green candle doesn't engulf the red candle completely instead closes half way through it Bullish Harami : in a bullish harami . 1st candle is a bear candle and the 2nd candle is a bull candle . bull candle has a small body compared to bear candle Morning Star : This Pattern Is observed at the end of a downtrend , first candle is a bear candle . second candle is a doji with gapdown opening and he third candle is a strong bull candle with a gap up opening length of bull candle's body is generally largest than the bear candle ----------------- BEARISH PATTERN'S Hanging Man : A hanging Man is a Candlestick pattern with a long wick below the candle's body and a little to no wick above the candle's body the length of the bloody is usually 1 / 3r of the length of the lower wick Shooting Star : Shooting Star is simply an inversion of the hanging man pattern it has a mall body and a long wick above it . with little to n wick below shooting start is usually observed in an uptrend and signifies trend exhaustion Gravestone Doji : This is Partly a bearish pattern open . close and low prices of the candle are same gravestone doji implies that , buyers and sellers were in a tough fight and by the end of the session sellers were able to push the prices to its open price Dark Cloud Cover : A Dark Cloud Cover Pattern is Similar to Bearish Engulfing pattern in a way the both of them appear near the end of an uptrend but the red candle docent engulf the green candle completely instead closes half way through it Bearish Engulfing : A Bearish Engulfing pattern is generally observed at the end of and uptrend , A large Red Candle Engulfs a small green candle showing the strength of bears , prior bullish trend converts to bearish trend Bearish Harami : in a bearish harami . 1st candle is a bull candle and the 2nd candleis a bear candle bear candle has a small body compared to bull candle Evening Star : This Pattern Is Observed at the end of an uptrend first candle is a bull candle , second canle is a Doji with Gap up opening and the third candle is a strong bear candle wit a gap down opening . length of bear candle's body is generally larger than the bull candle
Education
by GoldenEngine
24
The game of probabilities (%)In this article we will explain some fundamental truths about trading that any beginner should know in order to start being successful: 1. You don't need to know what is going to happen next in order to make money. Because any given set of independent variables that define an edge has a random distribution of wins and losses. In other words, based on your performance, you should know that from 100 trades that you take you should have 65 wins and 35 losses for example. The unknown part is the sequence of that distribution. You can have 10 losses in a row or 20 wins in a row. This fundamental truth makes trading a game of probabilities . When you know and believe that, a win or a loss doesn’t have the same meaning as before. 2. An edge is nothing more than an indication of a higher probability of one thing happening over another. To achieve consistency, you must agree that trading isn't about wishing, guessing, or collecting information to decide if the next trade will succeed. The only proof you need is that the variables you're using to describe an edge (your system) are present at any given time. You're adding random variables to your trading regime if you are using "other" facts beyond the parameters of your edge to determine whether or not to take the trade. If you are not sure about your edge you won’t feel confident about it and if you don’t feel confident you will experience fear. 3. There is a random distribution between wins and losses for any set of parameters that define your edge. If you believe that trading is about being right, when you experience a loss, you will blame yourself for that loss when in reality if you respect your system’s parameters you should not take the blame for it. If you blame yourself then on the next opportunity you will be afraid of the outcome. As a result, you'll begin collecting information in support of or against the trade. If your fear of missing out (FOMO) outweighs your fear of losing, you will collect facts for the trade. If your fear of losing (FOL) outweighs your fear of missing out, you will collect knowledge against the trade. You won't be in the best frame of mind to achieve consistent outcomes in this event. 4. Every trade is special and unique. Even if our minds are perceiving some trades as being the same as others that we have in our memory, every moment in the market is unique. If each moment is unique, there's no way to predict for sure what will happen next based on your logical experience. 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.
TVC:DXYEducation
by financialflagship
24
🎓 EDU 5 of 20: FUNDAMENTALS ARE THE HOLY GRAIL OF TRADINGHello traders! In the previous Educational Post (4 of 20) we learned what FIST (Fundamentals, Intermarket, Sentiment, Technicals) is about and why you need to use this trading framework in your trading. I strongly believe that incorporating a range of analytical disciplines returns better trading results than focusing only on one tool. This is how big players play the market, and this is how you should trade too - if you want to become a consistently profitable trader. Most retail traders put too much emphasis on technical analysis. The majority of traders even trade solely with technical tools. In an earlier post, we have covered why you shouldn't trade only on technicals , so this might be a good time to revisit that lesson and read it if you haven't already. Most retail traders will wait for a signal like a pullback, MA crossover, overbought/oversold RSI conditions, MACD, and follow candlestick patterns and chart patterns to enter into a trade. Guess what? That's an easy way to blow your trading account! If you look at your broker's homepage, you'll see a sentence stating how many retail traders lose money. I have yet to find a retail broker where less than 20-30% of traders are profitable. The rest, 70-80% of clients, lose money on a consistent basis. I bet that, of those who lose money, the majority use technical strategies and/or have poor risk management skills. Institutional traders don't open a trade based on MA crossovers or extreme RSI levels. They follow a range of fundamental signals, analyze correlations between different asset classes, and follow the general market sentiment. Technical analysis accounts for 5% of their work. Technical levels are only used to determine entry and exit points - ONLY after they already know in which direction they want to trade. Fundamental Analysis Unlike technical analysis which is based on the premise that history repeats itself, markets like to trend, and all available news is instantly discounted in the price, the fundamental analysis aims to explore the underlying factors of why a market is going up or down. Technical analysis is all about charts. Technicians are not interested in the reasons behind price movements, which often creates an environment where technicals alone produce fake signals. I bet many of you have seen that: a failed triangle breakout, a failed trendline breakout, or the RSI remaining in oversold conditions as the price continues to trade lower. Fundamental analysis can be grouped into two groups: macro fundamentals, and micro fundamentals. In trading, macro fundamentals refer to the bigger picture fundamentals: interest rates, economic growth, inflation rates, and labor market conditions. Micro fundamentals are more subtle, but can also have a large influence on the price. Those are comments by central bankers, news, market indicators (PMIs, CPIs...), political developments in a country, etc. Central Bank Meetings My students often ask me whether they should follow central bank meetings and press conferences. My answer: If you want to make money trading, then yes! Nothing has such a large impact on prices as central bank meetings and interest rate decisions. And if you do your homework, you can profit from those meetings most of the time. Follow press conferences that are scheduled shortly after the meeting and listen to the Q&A session, and read the entire meeting report once it's out. You'll find it astonishing how much you can learn from those reports - and how easy it can be to make money in the markets. There are eight major central banks in FX: US Federal Reserve (Fed), Bank of Canada (BoC), Bank of England (BoE), European Central Bank (ECB), Bank of Japan (BoJ), Reserve Bank of Australia (RBA), and Reserve Bank of New Zealand (RBNZ). Create a bookmark for each of those central bank websites, and read their reports and articles at least once a week. I like to do it on weekends. You can even have very profitable trades after the Central Bank meeting is over and the market has already reacted to the news. Commercial banks and other sell-side institutions will often drain liquidity in the markets to purchase a currency at discount after a major news report or interest rate decision. If you know how to identify this liquidity drain, you'll be able to catch amazing trades in the future. Thanks for reading and stay tuned for Part 6: What Market Indicators do I Need to Follow?
Education
by MujkanovicFX
The power of the Order Block & Bitcoins Inevitable run up The Power of the Order Block. Please refer to chart for reference. What is a order block? A order block will show a big wick up and down, and close as square box. What does this represent? These little square boxes represent there was a battle happening in the price action for support and or resistance. Why is the order block so powerful? As you can see on the chart I have Highlighted where I have found each order block on the Daily Time frame While providing arrows for when the flip from resistance to support was complete. As you can see on the chart after bit had a crazy run up it need time to cool off, and as it is in such a strong up trend you should simply be looking to buy the dips at the correct levels. By understanding what these candle sticks mean you can get a great understanding of where the market is heading. Once coming down to retest these new order block levels, you can see sometimes an overextension occurs through the support level whilst always maintaining a daily close above. You can use these order blocks to find great entries in a bull market.
COINBASE:BTCUSDEducation
by Moonseekers
Most common mistakes in tradingHello my friends today i want to talk with you about most common mistakes in trading from my experience (any market but specially in crypto) And after reading this i hope you will avoid them 1- Not Patient Enough : I think this is one of top major reasons for failure in cryptomarket Most newbies in this Field are thinking they will be rich in few days thats completely wrong ...Any old trader here will tell you how the patience will paid off 2- More Than You Can Afford To Lose : only risk what you can afford to lose ... more than that will lead to alot of mistakes and you may close your position after any small drop before reaching stoploss point and thats wrong my friends 3- Not Using Stoploss : Stoploss is important but i recommend manual stoploss by candles closing not automatic one to avoid manipulation in market.. if you dont know difference between manual and automatic read my previous idea about it 4- Over Trading : Alot of trades every day wont make more money ...instead, it will make you more stressful and staring at charts all day resulting in more mistakes 👉Fewer in numbers and higher in quality trades per week or even month are enough sometimes best thing you can do is not trading at all when market is uncertain 5- Emotional Trading : Both fear and greed play big role in the market movement When you see most of people are greedy you should start taking profits partially ..and also try to avoid selling during panic sells 6- Revenge Trading : Like using all wallet to buy one coin (all in) or doing high leverage postion to recover losses fast usually end in liqudation or big lose and leaving market completely This market need you to be flexible 7- Ignoring Your First Plan alot of very good plans and managements from start but you continusoly change it by listening to other random people opinions trust in your self and trust in chart no problem from taking advices from more experience people but you should trust in yourself first by have your own view and own plan How many mistakes you find yourself doing it ...choose the number from above and tell us in comments
Education
by Babenski
43
FIB your way to SUCCESS! In his historic 13th century novel Liber Abaci (Book of the Abacus), Leonardo Fibonacci brought a special sequence of numbers known as the Fibonacci series to Western civilization. Before we look into how Fibonacci numbers and ratios are used in the financial markets to predict future support and resistance levels, let's have a look at where they came from and how they were created. A simple mathematical expression that describes a Fibonacci series is given as follows: F(n+1)=Fn+ F(n-1) where Fn represents the current number, F(n-1)the previous number, and F(n+1) the next number in the Fibonacci series. Any integer in the Fibonacci series is the sum of its two previous whole numbers, regardless of how it is represented mathematically. Starting with F(n-1) = 0 as the previous number and Fn = 1 as the current number in the sequence, we can get F(n+1), the next number in the Fibonacci series, by repeating or iterating the process for each new Fn: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, ... The ratio of the current Fibonacci number to its immediate previous number, that is, the ratio (F(n+1)/Fn) or (Fn/F(n-1)), is a special and somewhat mysterious characteristic of the Fibonacci sequence. When we move farther out into the Fibonacci sequence, this ratio reaches 1.618 (to three decimal places). In truth, it turns out that it doesn't matter which two numbers were chosen to start the series in the first place. It will still hit 1.618 as we proceed along with the list! This unique ratio is referred to as the Golden Ratio, or "Phi" . We already know that Phi = 1.618 (to three decimal places). Here are some other important ratios related to Phi: a. (1/Phi) = 0.382 b. Phi x Phi = 2.618 c. (2/Phi)-1 =0.236 d. √ (1/Phi) = 0.786 e. √ Phi = 1.272 The items in this list of Phi‐related ratios are regarded as significant ratios in technical analysis and are used widely by technical traders and analysts. Fibonacci Retracements, Extensions, and Projections Fibonacci numbers and ratios are often used to time future market reversals, or as time forecasts, as we can see in the following pages. Before going any further, it's a good idea to define the terms retracement, extension and projections in broad terms. Price Retracements A market drop or reversal from a significant high, or a rebound from a significant trough, is referred to as a retracement . The amount of retracement is normally expressed as a percentage of the observed price range, and is calculated by comparing the peak to a previous significant trough or a trough to a previous significant peak. In other words, we have both downside and upside retracements. Popular Fibonacci percentage retracements include: a. 23.6 percent b. 38.2 percent c. 61.8 percent d. 78.6 percent Price Extensions A downside extension is any downside retracement that is greater than 100 percent, that is, the downside retracement extends below the previous significant trough, that is, beyond the observed price range. In similar fashion, an upside extension is any upside retracement that is greater than 100 percent, that is, the upside retracement extends above the previous significant peak that is beyond the observed price range. Popular Fibonacci price percentage extension levels include: a. 127.2 percent b. 161.8 percent c. 261.8 percent d. 361.8 percent e. 423.6 percent f. 461.8 percent Price Projection An upside price projection is a projection of an observed price range from a higher significant trough. A 100 percent price projection is simply a one to one (1:1) projection of the observed price range from some new higher significant trough. Similarly, Fibonacci downside price projections use the phi‐related percentages for forecasting potential support in a downtrend. The main Fibonacci percentages associated with projections are: a. 61.8 percent b. 161.8 percent c. 261.8 percent d. 361.8 percent e. 423.6 percent f. 461.8 percent 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.
TVC:GOLDEducation
by financialflagship
30
5 Tips for Newbie Trader💯1. Two dangerous extremes On the way to making a stable income in the financial markets, newbie traders face two extremes: a) First - you can learn a lot and for a long time, but you still can't go to real trading. b) The second is to start without knowledge. Both paths lead to failure. By the way, it is the traders who have lost funds from ignorance of the principles of trading, and mainly create a negative image of the financial markets. You can't make money without knowledge! And to separate the process of gaining knowledge from practice too. Therefore, a beginner in the financial markets must both learn and practice. 2. Best instruments to trade for a newbie trader Now forex brokers provide a wide range of financial instruments within one trading platform: currency pairs, CFD contracts on stocks, futures , cryptocurrencies, commodities ( oil , gold , silver , etc.). It's easy for a beginner to get lost in this variety. In order to facilitate the choice, study separately the features of the different types of markets. 3. Trading psychology: the third pillar of successful trading An important factor to pay attention to when reading books for beginner traders is the ability to manage your own emotions. Trading is an amazing area. All your habits, behavior patterns, strengths and weaknesses of character are immediately reflected in the trading account and bring results in monetary terms. So you either earn or lose. Newbie trader, faced with a storm of emotions in the process of trading, should know: he is not alone. Most traders experience the same feelings, and those who have been making money in this area for a long time have learned to turn them to their advantage. And we are ready to share tips. 4.What a beginner trader needs to know about money management You already know that trading in financial markets is a high risk area. However, this risk is completely manageable, and if you know how to do it, you will be able to earn consistently. In addition to a profitable trading strategy, a trader needs an understandable money management system and competent risk management. The safety of your account depends on them. Here are the ingredients for a good money management system: a) Stop loss. It must be set correctly, according to the requirements of the market and your trading strategy. It will allow you to reduce your risk if your prediction turns out to be wrong or out of date. b) The ratio of risk and reward in each trading position. Usually trading strategies provide for it at a level of 1: 3 and higher. The minimum allowed ratio is 1: 2, only then the deal makes sense. c)The volume of the trade entry. Along with a stop loss, it determines how much or a percentage of your trading account you risk on each trade. d) Risk per position. Based on the mathematical expectation of a trading strategy, it is necessary to decide what percentage will be the maximum risk in each transaction. The smaller it is, the safer your trade. 5. Trading and life: how to organize your work So, you have decided to start making money through trading. Motivating pictures with a trader who sits under a palm tree with a cocktail in his hands and spends an hour a day to check how profit is dripping into his account - this is clearly not about the start of a career. At the very beginning (and eventually too) you need to have an organized working day for trading. 1) Set aside time on weekdays that you will devote to trading. 2) Do not combine it with other activities: dinner, watching TV series, spending an evening with your family, etc. Trading requires extreme concentration. 3) If you are a beginner, take the study plan presented in this article, allocate the stages in time and systematically, without scattering, move along it to your first profit. 4) Before you start trading, do a market analysis every day. ___________________________________________________ P.S. Can you add more, wolves?🔥
HITBTC:CRDTUSDEducation
by Berzerk_invest
9
All candlestick patterns for Trading : Bearish reversal patternsHello everyone 😃 In this article we present Most useful bearish reversal patterns of candlesticks and How to trade with them. ( Sorry for my irregular chart 🤦‍♂️ I'm not good in drawing 😁 ) 📊 What is Candlestick charts ? Candlestick charts are a type of financial chart for tracking the movement of securities. They have their origins in the centuries-old Japanese rice trade and have made their way into modern day price charting. Some investors find them more visually appealing than the standard bar charts and the price actions easier to interpret. Candlesticks are so named because the rectangular shape and lines on either end resemble a candle with wicks. Each candlestick usually represents one day’s worth of price data about a stock. Over time, the candlesticks group into recognizable patterns that investors can use to make buying and selling decisions. 📍 Bearish reversal candlestick patterns : Bearish reversal candlestick patterns can form with one or more candlesticks; most require bearish confirmation. The actual reversal indicates that selling pressure overwhelmed buying pressure for one or more days, but it remains unclear whether or not sustained selling or lack of buyers will continue to push prices lower. Without confirmation, many of these patterns would be considered neutral and merely indicate a potential resistance level at best. Bearish confirmation means further downside follow through, such as a gap down, long black candlestick or high volume decline. Because candlestick patterns are short-term and usually effective for 1-2 weeks, bearish confirmation should come within 1-3 days. To be considered a bearish reversal , there should be an existing uptrend to reverse. It does not have to be a major uptrend, but should be up for the short term or at least over the last few days. A dark cloud cover after a sharp decline or near new lows is unlikely to be a valid bearish reversal pattern. Bearish reversal patterns within a downtrend would simply confirm existing selling pressure and could be considered continuation patterns. There are many methods available to determine the trend. An uptrend can be established using moving averages, peak/trough analysis or trend lines. A security could be deemed in an uptrend based on one or more of the following : - The security is trading above its 20-day exponential moving average (EMA). - Each reaction peak and trough is higher than the previous. - The security is trading above a trend line. 🈺 Now let's talk about patterns that we provided on chart.. ! - Hanging man : The hanging man is characterized by a small "body" on top of a long lower shadow. The shadow underneath should be at least twice the length of the body. 📚 The hanging man represents a potential reversal in an uptrend. While selling an asset solely based on a hanging man pattern is a risky proposition, many believe it's a key piece of evidence that market sentiment is beginning to turn. The strength in the uptrend is no longer there. - Gravestone DOJI : A gravestone DOJI is a bearish reversal candlestick pattern that is formed when the open, low, and closing prices are all near each other with a long upper shadow. 📚 A gravestone DOJI is a bearish pattern that suggests a reversal followed by a downtrend in the price action. 📌 A gravestone pattern can be used as a sign to take profits on a bullish position or enter a bearish trade. - Bearish kicker : This pattern is characterized by a sharp reversal in price over the span of two candlesticks. 📚 Traders use kicker patterns to determine which group of market participants is in control of the direction. 📌 The pattern points to a strong change in investors' attitudes towards a security that typically follows the release of valuable information about a company, industry, or economy. - Shooting stars : A shooting star is a bearish candlestick with a long upper shadow, little or no lower shadow, and a small real body near the low of the day. 📚 A shooting star occurs after an advance and indicates the price could start falling. The formation is bearish because the price tried to rise significantly during the day, but then the sellers took over and pushed the price back down toward the open. - Bearish spinning top : A spinning top is a candlestick pattern that has a short real body that's vertically centered between long upper and lower shadows. 📚 The real body should be small, showing little difference between the open and close prices. 📌 Since buyers and sellers both pushed the price, but couldn't maintain it, the pattern shows indecision and that more sideways movement could follow. - Bearish engulfing : A bearish engulfing pattern is a technical chart pattern that signals lower prices to come. The pattern consists of an up (white or green) candlestick followed by a large down (black or red) candlestick that eclipses or "engulfs" the smaller up candle. 📚 A bearish engulfing pattern can occur anywhere, but it is more significant if it occurs after a price advance. This could be an uptrend or a pullback to the upside with a larger downtrend. 🔴 The pattern can be important because it shows sellers have overtaken the buyers and are pushing the price more aggressively down (down candle) than the buyers were able to push it up (up candle). - Bearish harami : A bearish harami is a two bar Japanese candlestick pattern that suggests prices may soon reverse to the downside. The pattern consists of a long white candle followed by a small black candle. The opening and closing prices of the second candle must be contained within the body of the first candle. An uptrend precedes the formation of a bearish harami. 📚 A bearish harami is a candlestick chart indicator for reversal in a bull price movement. 📌 Traders can use technical indicators, such as the relative strength index (RSI) and the stochastic oscillator with a bearish harami to increase the chance of a successful trade. - Dark cloud cover : Both candles should be relatively large, showing strong participation by traders and investors. When the pattern occurs with small candles it is typically less significant. 📚 Dark Cloud Cover is a candlestick pattern that shows a shift in momentum to the downside following a price rise. The pattern is composed of a bearish candle that opens above but then closes below the midpoint of the prior bullish candle. 📌 Traders typically see if the candle following the bearish candle also shows declining prices. A further price decline following the bearish candle is called confirmation. - Evening star : An evening star is a stock-price chart pattern used by technical analysts to detect when a trend is about to reverse. It is a bearish candlestick pattern consisting of three candles: a large white candlestick, a small-bodied candle, and a red candle. 📚 Evening star patterns are associated with the top of a price uptrend, signifying that the uptrend is nearing its end. - Evening DOJI star : The Evening DOJI Star is a bearish reversal pattern, being very similar to the Evening Star. The only difference is that the Evening Doji Star needs to have a doji candle (except the Four-Price Doji) on the second line. The DOJI candle (second line) should not be preceded by or followed by a price gap. 📚 The pattern, as every other candlestick pattern, should be confirmed on the next candles by breaking out of the support zone or a trendline. If the occurrence is confirmed, then its third line may act as a resistance area. It also happens, however, that the pattern is merely a short pause prior further price increases. - Bearish abandoned baby : A bearish abandoned baby is a specialized candlestick pattern consisting of three candles, one with rising prices, a second with holding prices, and a third with falling prices. Technical analysts expect that this pattern signals at least a short-term reversal in a currently upward trending price. 📚 This is a rare pattern that has a fairly strong track record for forecasting a short-term downward trend. The key item of the pattern is the middle day, which should have a gap in front of it and following it, and which should close the session with price unchanged. - Three black crows : The black crow pattern consists of three consecutive long-bodied candlesticks that have opened within the real body of the previous candle and closed lower than the previous candle. 📚 Three black crows is a bearish candlestick pattern used to predict the reversal of a current uptrend. Traders use it alongside other technical indicators such as the relative strength index (RSI). - Tweezer top : A tweezers topping pattern occurs when the highs of two candlesticks occur at almost exactly the same level following an advance. 📚 Tweezers are more meaningful as part of other trends, especially pullbacks. - Three inside down : The three inside down pattern is a bearish reversal pattern composed of a large up candle, a smaller down candle contained within the prior candle, and then another down candle that closes below the close of the second candle. 📚 The down version of the pattern is bearish. It shows the price move higher is ending and the price is starting to move lower. Here are the characteristics of the pattern. - Three outside down : The three outside down describe a pair of three-candle reversal patterns that appear on candlestick charts. The pattern requires three candles to form in a specific sequence, showing that the current trend has lost momentum and might signal a reversal of an existing trend. 📚 The first candle marks the beginning of the end for the prevailing trend as the second candle engulfs the first candle. The third candle marks an acceleration of the reversal. - Advance block : Advance block is the name given to a candlestick trading pattern. The pattern is a three-candle bearish setup that is considered to be a reversal pattern—a suggestion that price action is about to change from what had been an upward trend to a downward trend in relatively short time frames. 📚 An advance block is a three-period candlestick pattern considered to forecast a reversal. The pattern's success at predicting reversal is barely above random. - Bearish stick sandwich : One candlestick pattern is the stick sandwich because it resembles a sandwich when plotted on a price chart - they will have the middle candlestick oppositely colored vs. the candlesticks on either side of it, both of which will have a larger trading range than the middle candlestick. 📚 These patterns may indicate either bullish or bearish trends, and so should be used in conjunction with other methods or signals - Matching high : The first line of the pattern appears as a long line whereas the second one can be either long or short. Both candle lines need to close at the same level. Additionally, the opening of the second candle need to be higher than the opening of the previous candle. 📚 The Matching High is built of two MARUBOZO candles having white bodies. In other words, it can be a White MARUBOZO or a Closing White MARUBOZO. - Bearish breakaway : The bearish breakaway is a formation of five candlesticks where the first is always bullish and the last is always bearish. The middle candlesticks will be rising and can be either bearish or bullish, but will usually be bullish. 📚 A bearish breakaway is a chart formation that can appear in a rising market when the price starts to pull or break away gradually to the downside. - Bearish Tri-Star : Tri-Star patterns form when three consecutive DOJI candlesticks appear at the end of a prolonged trend. 📚 A Tri-Star pattern near a significant support or resistance level increases the probability of a successful trade. - MARUBOZO : The black MARUBOZO is simply a long black (down, or red on the charts below) candle, with little to no upper or lower shadows. The pattern shows that sellers controlled the trading day from open to close, and is therefore a bearish pattern. 📚 How to avoid false MARUBOZO signals and setting stop-loss : If bearish, take a short when price falls below; Place a stop above candlestick. 🔴 NOTES : - There are many bearish reversal patterns that we only present most useful patterns for trading ! - Most of them have 2 definition and direction ( Bearish and Bullish ) and we only present bearish reversal patterns ! - For better result in your trading, You need to confirm patterns through trend lines , momentum, oscillators, or volume indicators. ⏰ Best timeframes to work with candlestick patterns : Traders usually use Monthly, Weekly, Daily, 4-Hour, Hourly, 15-Minute and even 1-Minute timeframes. Ideally, traders pick the main timeframe they are interested in and then choose a longer and a shorter timeframe to complement the main one . The longer timeframes typically contain fewer and more reliable signals. The shorter timeframes usually contain more signals with less accuracy. There are several types of traders, and they have different trading styles. 📍 We will provide more contents for candlestick patterns in next weeks ! So stay tuned and support us with your LIKES, COMMENTS and FOLLOWINGS... Have a great moments. @Helical_Trades
NSENG:ACADEMYEducation
by Helical_Trades
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