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Trading Game. How they manipulate with price Imagine You buy a stock or business, that You think was undervalued based on the "circumstances" and that you think has great value. You bought this at 1$, during 2020 November alongside with the oil rally. Nobody knows the price. Everyone has a price target... Imagine my price target was 7$ - based on the previous highs. Chances are everyone will look at it the same way and adjust the price based on some context. Under price momentum, there was buyers and sellers and stock rise to 3$..4$..5$ etc... If everyone use 7$ for guidance - most likely everyone be selling their shares at 5$. If I wanted you to sell higher I would shout 10$. If I wanted you to sell lower I would shout 0.50$. People would adjust their targets and nobody knows exactly how much something is worth. That's what the institutions do with their public price targets. It works like a poker game. The closer price got to 5$ -> more risk you took by buying or holding it. If I had a ton of bitcoins, I would shout $200k price. and sell it when it's strong. etc. Then cause panic - to get cheaper prices. #101

Long

Updated

Let's Talk Liquidity! ⚒️At first, Liquidity may seem like an abstract and confusing concept reserved for only those Finance nerds and geeks to tackle. Turns out it's really not too sophisticated after all and can be though of in terms of Fomo. Fomo if you are not aware already is simply a concept related to chasing the market because of a Fear of missing out. Any action out of fear is typically not the best choice. In trading, this is especially true. Liquidity is what the market needs prior to a big move. Liquidity doesn't necessarily mean that the market needs to pin an extreme low or high from the previous session. Liquidity is also gathered when the market ranges/consolidates for awhile. If you go back and backtest, you will observe that preceding a large move, the market usually consolidates first. Liquidity also dries up during Asian session. You can observe that the volatility is much smaller than London/Ny session as the market moves alot less # of pips. Liquidity dries up prior to news annoucnemnts becuase of uncertainty obviously. This is the very reason why the market moves so much during news is because of lower participation from larger market participants, therefore an increased chance of wild and random price movements. This is explained more in depth in this concept video, Let's talk Liquidity.

Education

10:58

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It Index looks delicately poised. (Educational Post)For last few weeks we have been looking at indices. By the study of a particular index we then try to determine about investing in components of that index or the stocks that from that particular index. In the series we will today have a look at IT Index. IT Index is looking very interestingly poised currently. There is a Doji of indecision formed. As of now the bias of this Doji or shadow of the candle looks a little positive. If the index can give a closing above 37345, there is a chance that there can be an upside upto 37892, 38279 or even 38594. In case the levels of 36711 or 36098 are broken there could be drastic fall in the stocks which form this index as the potential fall can lead index to the levels of 35675, 35094 or 34287. Keeping this information in mind you can look at individual charts of stocks like TCS, Tech Mahindra, Wipro, LTTS, Persistent, Infosys, Coforge, Mphasis, HCL Tech, LTIM. For understanding which companies to invest in amongst the bunch of IT pack leaders you will have to study Technicals and Fundamentals of each of the company individually. Thus through various models you can try to determine tops of current rally or trend. You can reverse the process and try find of the probable bottom in case of downturn. Trend lines / Peaks / Valleys and Fibonacci levels will also give you probable supports and resistances in the path. You can become an expert by studying and drawing and reading charts every day. The more you practice the better accuracy you can achieve. Disclaimer: Investment in stocks and mutual funds is subject to market risks, please consult your investment advisor before taking financial decisions. The data provided above is for the purpose of analysis and is purely educational in nature. The names of the stocks or index levels of spot Nifty mentioned in the article are for the purpose of education and analysis only. Purpose of this article is educational. Please do not consider this as a recommendation of any sorts.

by Happy_Candles_Investment

A Basic Guide to Trading a Balanced Volume Profile Basic Principles of Trading a Balanced Node Rule 1: Unless the price breaks and holds Value High or Value Low we should expect buyers and sellers to maintain the current balance. Rule 2: If we break and re-bid from Period Value High we should treat that level as supportive until it is reclaimed ( buy-side acceptance outside of balance) Rule 3: If we break and push away from Period Value Low we should treat that level as resistance on retest until it is reclaimed (sell-side acceptance outside of balance) Rule 4: If we recover Value Low and it becomes supportive we look for our Period POC and Period Value High as our targets above ( return to balance) Rule 5: If we fail to hold Period Value High and sellers make it resistance on re-offer we look for our Period POC and Period Value Low as targets (return to balance) Balance between Value Low and Value High will remain between buyers & sellers until we see a value shift and acceptance above/below on one of our "edges". Utilizing these rules we can look for opportunities around our Value Edges and have a better understanding how to trade around them.

Education

by TheFinancialCloud

Determining the Daily Bias / EurUsd Example 📋How do we create a Daily bias to organize our trades ideas? After all, we want to implement our trades with confidence so that we can manage them as best we can. A Reasonable daily bias can guide us through the volatility and mayhem of intra-day market behavior. In this video I go through a few hindsight examples and also touch on the current market environment.

Education

09:14

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What Stopped the recovery of Bank Nifty? (Educational Post)How to read a chart and make one is an art which one can master by practicing, understanding the patterns and applying logic in addition to reasoning. Today we will try to master this art with the help of below chart of Bank Nifty. Let us analyze it togther. After reading each paragraph try to look at the chart again for understanding it better. Look at the chart of Bank nifty above. As you can see in the chart Bank Nifty is moving in a parallel channel like a canal since more than 1 year and 3 months or so. After making a high above 48.6K Bank Nifty formed a bottom near 44833 which was a 200 days EMA support, Bank Nifty consolidated and then started surging ahead. Now something happened on Wednesday which hampered the progress. The progress was stopped by the trendline resistance indicated by the blue line. Facing the heat of the resistance Bank Nifty plunged down only to be supported by support zone between 46219 and 46418. This support zone as you can see in the chart consist ot bottoms and tops of few candles ranging from 4th December 2023 to 20th February 2024 and 50 days EMA which is currently at 46219. This can be the future support zone in case Nifty does not recover from this level. Again after taking this support Nifty tried to surge ahead again but was again stopped by the same trend line which cam to effect on Wednesday. Start of this trend line can be seen on the candle of 16th January. This is how Technical analysis works. Can we predict future of Bank Nifty with the help of this chart? Predicting future moves is always risky and is full of assumptions but what we can see here indicates that crossing the resistance zone of 47091 (Trendline resistance) and High of Wednesday 47352 will be a tough task for Bank Nifty. But if Bank Nifty crosses this zone the next levels/ resistances will be near 47670 or 47906. Crossing and closing above 47906 the Nifty can reach the next resistance levels of 48303 or 48595. This is how you can analyse a chart. By applying logic you will gain experience. By applying experience and reasoning you will gain wisdom. Wisdom will help you in chartering your path through the maze of Wealth creation. Charts are nothing but mathematical representation of how investors/speculators behave at particular levels and in particular zones. With the help of charts you can understand paths, patterns and future and past directions of how markets/indices/stocks behave. If you become an expert by watching/drawing 100 charts every day, you can even predict future levels of markets/indices/stocks.

by Happy_Candles_Investment

Beware of Crypto scams- Rug Pulls With the crypto market on a strong run since October of last year and with many dreamers hoping for 100x or even 1000x returns, we must be extremely cautious of scammers. In this article, I will explain one of the most common types of scams: Rug Pulls. The term "rug pull" in the cryptocurrency industry refers to the moment when the founding team abruptly abandons the project and sells or removes all liquidity. The term originates from the phrase "pulling the rug out from under someone," meaning the unexpected withdrawal of support. In 2021 alone, during the previous bull market, rug pulls were responsible for losses of approximately $2.8 billion, a figure close to historical highs and an 81% increase compared to 2020, according to a report by Chainalysis. The cryptocurrency market is susceptible to such scams due to the lack of regulations from central authorities. Unlike traditional companies subject to strict government control, the decentralized nature of the crypto space allows for complete control by private entities. This makes it vulnerable to exploitation by these entities. Types of rug pulls: Liquidity Theft: Liquidity theft is the most common type of rug pull. It involves a developer listing an altcoin on a decentralized exchange (DEX) where it can be traded with a top currency like Ethereum (ETH). To enable trading, the developer must create a liquidity pool. The team generates hype around the new project and attracts investors. As more investors join the project, the coin's price rises, attracting others who believe the project is a viable opportunity. As the coin increases in value, the developer withdraws all ETH from the liquidity pool at some point, leaving investors in the pool with no way to exchange their now-worthless tokens. Technical Manipulation: Some developers intentionally design tokens with the aim of deceiving investors. Therefore, they will include specific lines of code to limit the ability of retail investors to sell, thereby controlling both demand and supply. Of course, they are the only ones capable of selling, and when the price has appreciated sufficiently, they will sell all the tokens they hold. Dumping: This means that developers or promoters who hold a large percentage of the total coins sell off their entire holdings. As new entities invest in the new cryptocurrency, they exchange their valuable cryptocurrencies such as BTC or ETH for the new cryptocurrency. As a result, when the price increases significantly, developers sell off all their tokens, causing the price of the cryptocurrency to plummet. How to Protect Your Investments from Potential Rug Pulls? Lack of a Website: Not all projects start with a website, but many that intend to exist for a long time do. If the developers of the token you want to invest in don't have a personalized domain for their project, this is a clear warning to stay away. There are also fraudulent projects that have websites claiming to be under construction or launching soon. Check the White Paper: This is an excellent way to learn about the plans of the project you want to invest in. Check for the existence of such a document, as well as any discrepancies between the white paper and the website. ALSO, VERIFY IF THE TEAM IS AVAILABLE TO PROVIDE INFORMATION ON PLATFORMS SUCH AS REDDIT OR TELEGRAM. If a developer cannot answer basic questions about their project, this raises major red flags. Anonymous Developers: While the identity of Satoshi Nakamoto, the developer of Bitcoin, is not known for certain, the fact that a project you want to invest in has anonymous developers should raise concerns. If the developers of a cryptocurrency or DeFi project choose not to associate their names with it and remain in the shadows, they may have reasons for doing so, and it's best to avoid such a project. Low Liquidity: Low liquidity of a cryptocurrency means that it is difficult to convert it into fiat currency; therefore, the lower the liquidity, the easier it is for developers to manipulate the price. The best way to check the liquidity of a cryptocurrency is to analyze its trading volume over the past 24 hours. A general rule used by experienced investors is that the trading volume should be more than 10% of the coin's market capitalization. Locked Liquidity: To provide trust and enhance the public perception of their legitimacy, developers of serious projects will relinquish control over the liquidity pool by locking it in the blockchain often with a trusted third party. This process is called locked liquidity and prevents developers from trading with tokens from the pool, thereby making it impossible for them to steal or dramatically reduce liquidity. If liquidity is not locked, then nothing prevents developers from withdrawing their funds. Low Total Locked Value (TLV): TLV is another reliable measure to verify the legitimacy of a project. This term refers to the total amount invested in a particular project. Serious projects have a TLV of hundreds of millions or even billions of dollars, while newly emerging projects with only tens or hundreds of thousands of dollars in TLV should definitely be avoided. Token Distribution: Checking the token distribution of a project on Etherscan or Binance Smart Chain explorer will show who holds the largest amount of tokens and how they are distributed. If a single wallet or two hold more than 5% of the total available, there is a risk that the price may be manipulated. The Project lacks an Audit Report: The most notable projects will have independent audit reports in the fields of security and financial transparency, guaranteeing their authenticity. A project without an audit report is not necessarily fraudulent, but it means that you should research the project in detail before investing in it. Losing investments through a rug pull is a common phenomenon; therefore, before investing in a project, it is wise to analyze the project, developers, liquidity, and also the developers' activity on social media platforms. Additionally, you can opt to use online tools that can detect a potential rug pull. One of these tools is Token Sniffer. This site lists all the latest hacks and scam coins. Rug Doctor is another useful tool for detecting rug pulls. The site analyzes the code of crypto projects, attempting to identify the most common rug pull strategies. Stay safe and good luck! Mihai Iacob

Education

Mastering the 70/30 RSI Trading Strategy - Plus Divergences!Mastering the 70/30 RSI Trading Strategy: A Comprehensive Guide The 70/30 RSI technique stands out as a popular and effective method for making informed decisions in the financial markets. Leveraging the Relative Strength Index (RSI) indicator, this strategy empowers traders to navigate the complexities of buying and selling various financial instruments, from stocks to currencies. In this article, we delve into the intricacies of the 70/30 RSI trading strategy, exploring its fundamentals and practical application in forex trading. Understanding the 70/30 RSI Trading Strategy: Developed by renowned technical analyst J. Welles Wilder, the RSI indicator serves as a powerful tool for evaluating market strength and identifying overbought and oversold conditions. With a range from 0 to 100, the RSI provides traders with crucial insights into market dynamics, enabling them to make timely trading decisions. At the heart of the 70/30 RSI strategy lies the establishment of two key threshold levels on the RSI indicator: 70 for overbought conditions and 30 for oversold conditions. These thresholds serve as crucial markers for generating buy or sell signals, offering traders valuable guidance in navigating market trends. ⭐️ Adding and Setting Up the RSI Indicator on Your Chart: The RSI (Relative Strength Index) Indicator is a freely available tool accessible within your TradingView Platform, irrespective of your subscription plan. Whether you're using a Free membership or one of the Premium plans, you can easily find and add this indicator to your charts. Below, I'll guide you through the process of adding and customizing the RSI indicator on your platform with the help of the following images. To begin adding the RSI indicator to your chart:👇 You can also customize the colors to your preference, just like I did by selecting your favorite ones.👇 Now, let's delve into what the RSI indicator is and how to interpret it. Interpreting RSI Signals: In essence, an RSI reading of 30 or lower signals an oversold market, suggesting that the prevailing downtrend may be ripe for reversal, presenting an opportunity to buy. Conversely, a reading of 70 or higher indicates overbought conditions, implying that the ongoing uptrend may be nearing exhaustion, presenting an opportunity to sell. The Relative Strength Index (RSI) Explained: As a momentum indicator, the RSI measures the speed and magnitude of recent price changes, providing traders with insights into whether a security is overvalued or undervalued. Displayed as an oscillator on a scale of zero to 100, the RSI not only identifies overbought and oversold conditions but also highlights potential trend reversals or corrective pullbacks in a security's price. Practical Application of the RSI Strategy: Traders employing the 70/30 RSI strategy must exercise caution, as sudden and sharp price movements can lead to false signals. While RSI readings of 70 or above indicate overbought conditions and readings of 30 or less indicate oversold conditions, traders must consider additional factors and use other technical indicators to validate signals and avoid premature trades. Let's examine a few examples. Example No. 1: EUR/USD Daily Timeframe On the EUR/USD daily timeframe, we observed an overbought condition indicated by the RSI rising above the 70 level. This signaled a potential reversal in price direction. Subsequently, the price indeed reversed, confirming the overbought scenario. It's crucial to emphasize that while scenarios above the 70 RSI level or below the 30 RSI level suggest potential reversals in price, it's essential to complement your analysis with additional filters. These may include consideration of the economic environment, effective risk management strategies, and identification of triggers or patterns before initiating a trade. Below, I'll illustrate a potential trigger that aligns with the RSI 70/30 strategy: the crossover of the RSI line with the RSI-based moving average (MA). Example No. 2: In this example, the RSI strategy proved effective as we observed the price falling below the 30 level, indicating potential oversold conditions and a forthcoming reversal from the market's potential bottom. Additionally, in the image below, you'll notice the introduction of white lines, known as "divergences." I'll provide a clearer explanation of divergences in the next example. Example No. 3: In this example, denoted as circle N.3, we encounter another instance of the RSI reaching the 70 level, indicating an overbought condition. Once again, the strategy proves effective, but this time, we notice a shallower reversal compared to the previous two examples. Following this reversal, the price experiences growth, presenting a new opportunity for traders with a subsequent higher high. However, unlike before, this high does not breach the 70 RSI level, resulting in a deeper reversal. This scenario exemplifies a "divergence." But what exactly is divergence trading? Divergence trading revolves around the concept of higher highs and lower lows. When the price achieves higher highs, you would expect the oscillator (in this case, the RSI) to also record higher highs. Conversely, if the price makes lower lows, you anticipate the oscillator to follow suit, registering lower lows as well. When they fail to synchronize, with the price and the oscillator moving in opposite directions, divergence occurs, hence the term "divergence trading." I'm confident that the previous three examples were well explained to help you understand the 70/30 RSI strategy, along with the MA moving average trigger and the relative divergence strategy. Please share your thoughts in the comment section below. Key Considerations and Limitations: While the 70/30 RSI strategy offers valuable insights into market dynamics, traders must remain mindful of its limitations. True reversal signals can be rare and challenging to identify, necessitating a comprehensive approach that incorporates other technical indicators and aligns with the long-term trend. In Conclusion: The 70/30 RSI trading strategy represents a powerful framework for navigating the complexities of the financial markets. By leveraging the insights provided by the RSI indicator, traders can make well-informed decisions, identify lucrative trading opportunities, and optimize their trading strategies for success in various market conditions.

Education

Setups, Planning and RISK: How to MANAGE your RISK vs REWARD 📉Hi Traders, Investors and Speculators of Charts📈 For today's post, we're diving into the concept " Risk-Reward Ratio " We'll take a look at practical examples and including other relevant scenarios of managing your risk. What is considered a good risk to reward ratio and where can you see it ? This applies to all markets, and during these volatile times it is an excellent idea to take a good look at your strategy and refine your risk management. Let's jump right in ! You've all noticed the really helpful tool " long setup " or " short setup " on the left-hand column. This clearly identifies the area of profit (in green), the area for a stop-loss (in red) and your entry (the borderline). It also shows the percentage of your increases or decreases at the top and bottom. It looks like this : 💭Something to remember; It is entirely up to you where you decided to take profit and where you decide to put your stop loss. The IDEAL anticipated targets are given, but the price may not necessarily reach these points. You have that entire zone to choose from and you can even have two or three take profits points in a position. Now, what is the Risk Reward Ratio expressed in the center as a number.number ? The risk to reward ration is exactly as the word says : The amount you risk for the amount you could potentially gain. NOTE that your risk is indefinite , but your gains are not guaranteed . The risk/reward ratio measures the difference between the entry point to a stop-loss and a sell or take-profit point. Comparing these two provides the ratio of profit to loss, or reward to risk. For example, if you're a gambler and you've played roulette, you know that the only way to win 10 chips is to risk 5 chips. Your risk here is expressed as 5:10 or 5.10 .You can spread these 5 chips out any way you like, but the goal of the risk is for a reward that is bigger than your initial investment. However, you could also lose your 5 and this will mean that you need to risk double as much in your next play to make up for your loss. Trading is no different, (except there is method to the madness other than sheer luck...) Most market strategists and speculators agree that the ideal risk/reward ratio for their investments should not be less than 1:3 , or three units of expected return for every one unit of additional risk. Take a look at this example: Here, you're risking the same amount that you could potentially gain. The Risk Reward ratio is 1, assuming you follow the exact prices for entry, TP and SL. Can you see why this is not an ideal setup? If your risk/reward ratio is 1, it means you might as well not participate in the trade since your reward is the same as your risk. This is not an ideal trade setup. An ideal trade setup is a scenario where you can AT LEAST win 3x as much as what you are risking. For example: Note that here, my ratio is now the ideal 2.59 (rounded off to 2.6 and then simplified it becomes 1:3). If you're wondering how I got to 1:3, I just divided 2.6 by 2, giving me 1 and 3. Another way to express this visually: In the first chart example I have a really large increase for the long position and you can't easily simplify 7.21 so; here's a visual to break down what that looks like: If you are setting up your own trade, you can decide at what point you feel comfortable to set your stop loss. For example, you may feel that if the price drops by more than 10%, that's where you'll exit and try another trade. Or, you could decide that you'll take the odds and set your stop loss so that it only triggers if the price drops by 15%. The latter will naturally mean you are trading at higher risk because your risk of losing is much more. Seasoned analysts agree that you shouldn't have a value smaller than 5% for your stop loss, because this type of price action occurs often during a day. For crypto, I would say 10% because we all know that crypto markets are much more volatile than stock markets and even more so than commodity markets like Gold and Silver, which are the most stable. Remember that your Risk/Reward ratio forms an important part of your trading strategy , which is only one of the steps in your risk management program. Dollar cost averaging is another helpfull way to further manage your risk. There are many more things to consider when thinking about risk management, but we'll dive into those in another post. A little bit more in-depth explanation on Dollar-Cost-Averaging here: And Finally, the last tool I'll give away today is an absolute MUST for all traders . Here's how to successfully set-up your own portfolio ratios: If you found this content helpful, please remember to hit like and subscribe and never miss a moment in the markets. _______________________ 📢Follow us here on TradingView for daily updates📢 👍Hit like & Follow 👍 CryptoCheck

Education

by CryptoCheck-

Common Mistakes Traders Make When Placing Stop Loss Orders Let’s discuss the four major mistakes traders often make when implementing stop losses. 😔 We consistently emphasize the importance of proper risk management, as using stop losses incorrectly can result in more losses than gains. And surely, that's not what you desire, right? 💰 Setting Stops Too Narrowly The initial and frequent error is setting stops too tightly. 🤦‍♂️ By placing extremely close stops on trades, there's insufficient "breathing space" for price fluctuations before it moves in your desired direction. Always consider the pair’s volatility and the likelihood of it lingering around your entry point before continuing its trend. 😌 Allow your trades ample room to fluctuate and factor in volatility! 📈 Reliance on Position Size Rather Than Technical Analysis Using position size as the primary determinant for stops, such as "X" or " NYSE:X amount," instead of relying on technical analysis, is ill-advised. 🚫 Position sizing shouldn't dictate stop placement; it's unrelated to market behavior. Since we're trading the market based on technical analysis, it's logical to set stops based on market dynamics. 📊 After all, you've chosen your entry and targets through technical analysis; similarly, determine your stop. This isn't to dismiss position size entirely. 🤔 Rather, decide on stop placement before calculating position size. Setting Stops Too Distantly Some traders err by placing stops excessively far, hoping that market movements will eventually align with their expectations. 😞 But what's the purpose of setting stops then? Why persist with a losing trade when reallocating those funds could lead to a more profitable opportunity? 💡 Setting stops too far increases the distance your trade needs to move favorably to justify the risk. As a rule of thumb, stops should be closer to entry points than profit targets. 🎯 Naturally, aiming for less risk and greater reward is preferable. With a favorable risk-to-reward ratio, like 2:1, profitability is more attainable, provided you're accurate in your trades at least half the time. 📈💰 Placing Stops Directly on Support or Resistance Levels Setting stops either too tight or too distant is counterproductive. So, where should stops be placed? Certainly not directly on support or resistance levels. Why not? 🤔 Despite advocating for technical analysis in determining stops, placing stops precisely on support or resistance levels isn't advisable. It's prudent to consider nearby support and resistance levels when setting stops. 📉 For long positions, identify a nearby support level beneath your entry and place your stop accordingly. Conversely, for short positions, identify the subsequent resistance level above your entry and position your stop nearby. Why avoid placing stops directly on support or resistance levels? Because there's still a possibility of price reversals upon reaching these levels. By positioning your stop slightly beyond these levels, you can confirm whether the support or resistance has been breached, allowing you to acknowledge any misjudgments in your trade idea. 🔄 In conclusion, mastering the art of setting stop losses is crucial for successful trading. By avoiding these common mistakes and adhering to sound risk management principles, traders can enhance their profitability and minimize losses. Remember to give your trades adequate breathing room, base stop placements on technical analysis rather than position size alone, avoid setting stops too far or too close, and refrain from placing stops directly on support or resistance levels. With diligence and discipline, traders can navigate the markets more effectively and increase their chances of achieving consistent success. 🚀 In the fast-paced world of trading, making informed decisions is paramount. By understanding the nuances of stop loss placement and steering clear of these pitfalls, traders can position themselves for long-term success in the financial markets. So, take heed of these insights, refine your trading strategies, and approach the markets with confidence and precision. Happy trading! 😊📈🎉 Your Kateryna💙💛

Education

Very Interesting looking chart of Bank Nifty (Educational Study)Bank Nifty took a sold beating after massive fall in HDFC Bank share price. 200 EMA (Father Line) came to support and it tried to make a come back since 24th of January. After consistent progress for the next few days, today Bank Nifty tried to make a come back and gave a breakout by trying to go above 50 EMA (Mother Line) but it was unsuccessful and could not close below the same. Now you must have read my earlier posts and articles which mention that 50 EMA and 200 EMA which are like Mother and Father. That's why we at Happy Candles call them Mother and Father line are the best supports at the same time they are the biggest resistances if the price is below them. Here is the classic example of the same. 200 EMA gave much needed support to Bank Nifty and after consolidation there was proper progress on chart for the same. Today 50 EMA proved as a major resistance and did not allow Bank Nifty for a close above it. A close above it would have meant that Bank Nifty has made a come back and one can go long in the same but this did not frutify. A closing below mid-channel line and 50 EMA means that Bank Nifty needs further consolidation and will have to attempt a come back again next week. If it is able to do so and give a closing above 46254 first and thereafter the resistance of 46898 which was near today's high Bank Nifty can make a come back. If that is not the case Bank Nifty will still face difficulty in going ahead and growing ahead. The main constituents Banknifty are HDFC Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank, SBIN, PNB, Bank of Baroda, IDFC First Bank, Bandhan Bank, AU Bank and Federal Bank. All of these banks can be impacted in a small or a big way by the movement of Banknifty. Looking at the chart of Banknifty, individual charts, Fundamentals and Results of all these banks an investor can make his or her investment decisions. Disclaimer: Investment in stocks and mutual funds is subject to market risks, please consult your investment advisor before taking financial decisions. The data provided above is for the purpose of analysis and is purely educational in nature. The names of the stocks given in the above article and chart of the company is only for analysis. Purpose of this article is educational. Please do not consider this as a recommendation of any sorts.

by Happy_Candles_Investment

How to identify high quality Supply and Demand zones Supply and demand zones are powerful tools to find high probability trades. If they are used in the correct context they offer a high win rate and a very controled risk. These are some of the characteristics that high quality zones have: •When a good zone is being created in real time you will watch that price pushes down/up with aggressive price action and follow through after the basing candle. Heavy volume on the development and candle closing at its highs are also good indicators. •A high quality supply/demand zone is the one that creates new lows/highs. That means that it was able to push below/above the prior low/high. •In short time frames, shorter than 1 hour, you would probably find good supply and demand zones to have a continuation of the trend. For example, if a Future is in an uptrend pay attention to the demands that are created in that trend and then when price pulls back to it look at the price action in the zone. Have in mind that in uptrends, demand zones are reliable and supply zones have a much lower probability of working. The opposite scenario happens in downtrends were supply zones are higher probability and demand zones should be avoided. •In higher time frames, a very strong supply or demand zone could be an area for a change of structure (from an uptrend to a downtrend for example). •A good indicator of a reliable supply/demand zone is when price pulls back to it and the candle has a strong rejection as it touches the zone, meaning an upper/lower wick is created below/above the zone. volume is developing with no follow through (orders hitting strong ask/bid in the tape) and the candle does not close inside the zone. •Speed heading into the zone is also relevant, a high speed drop heading in to a demand zone is a good area to trap late sellers. •If for example FX:EURUSD has a demand zone and TVC:DXY has a supply zone or a resistance level and both are having retracements from their trend, that could be a good opportunity to go long and also if price action gives an extra confirmation. This means that confluence is key for a high probability trade when using supply and demand zones. • Use the concept of relative strength/weakness when using confluence with other charts. Example: A 2 hour demand zone in Brent Futures $NYMEX:BZ1!. Notice how the red candle that reaches the zone is a strong one with higher volume and is not able to close inside the zone, It prints a lower wick and closes above it giving the demand zone a good price action confirmation.

Education

Banknifty chart at Mid-Channel Support (Educational Post)The daily chart of Banknifty is looking nicely poised for a recovery if Mid-channel support line is held effectively. Mid Channel support right now is at 45700. Exactly where Bank Nifty closed today when I am writing this. If the mid channel support is broken we can see a further fall of Bank Nifty to 45469 or 44886 levels. In case the mid channel support works well the resistance on the upper side will be at 46544 (Mother line based on my Mother, Father and Small child story), 47271, 47906 and finally 48959. Below par result of HDFC Bank was the main reason for the fall of Banknifty. The merger of two giants HDFC and HDFC Bank is putting pressure on the profit margins of the bank and top line growth is muted due to the same. It seems from the result of HDFC Bank that, consolidation of 2 mighty forces will take some time to rebuild the top line. It is a popular opinion that in the next 1 to 4 quarters the merger will stabilize and HDFC Bank should emerge from this saga as a mega force but we will have to see when it actually happens. HDFC Bank still remains a long term investment idea and Portfolio stock for many investors. However Banknifty took a terrible beating for the same reason. Results from other banks if good, can turn the pessimistic ambiance around Banknifty to that of recovery and consolidation. Mid channel line is there to support the same. 200 days EMA or the Father Line (those who know my Mother, Father and small Child story know it) can prove to be vital support for the falling comet. 200 days EMA is currently at 44539. We will have to see how it goes from here. The main constituents Banknifty are HDFC Bank, Axis Bank, ICICI Bank, Kotak Mahindra Bank, SBIN, PNB, Bank of Baroda, IDFC First Bank, Bandhan Bank, AU Bank and Federal Bank. All of these banks can be impacted in a small or a big way by the movement of Banknifty. Looking at the chart of Banknifty, individual charts, Fundamentals and Results of all these banks an investor can make his or her investment decisions. Disclaimer: Investment in stocks and mutual funds is subject to market risks, please consult your investment advisor before taking financial decisions. The data provided above is for the purpose of analysis and is purely educational in nature. The names of the stocks given in the above article and chart of the company or index is only for analysis. Purpose of this article is educational. Please do not consider this as a recommendation of any sorts.

by Happy_Candles_Investment

Gold buy As Gold has made a double bottom and is now going to have a rally upwards so we will have to watch for a price action like a Morbozu doji or Engulfing pattern to identify the buy side trade as far as the condition is concerned we will be taking a buy side trade

Long

How to Analyse Forex Market Trends and Make Informed Trading Dec The Forex market (FX), or foreign exchange market, represents a vast and dynamic space in which currencies are traded daily. Serving as the largest financial market in the world—trading in the Forex market reached US$7.5 trillion per day in April 2022, according to the Bank for International Settlements (BLS)—the Forex market delivers clear and actionable trends for seasoned traders and investors, though for the uninitiated these trends can appear confusing and unpredictable. Consequently, possessing accurate knowledge and analysis tools to analyse market trends and make informed trading decisions is key. FX Market Movers Everything begins with the central banks and their guidance in the FX space. Well-known central banks include the US Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BoE); major central banks play a crucial role in shaping market sentiment. Monetary policy—altering the money supply—can significantly influence exchange rates and help establish long-term trends; when a central bank refers to monetary policy, it tends to be in the direction of increasing/decreasing the overnight target rate, which can make it more expensive (or less expensive depending on the rate move) for commercial banks to borrow reserves from one another in the overnight market. For the US, the target range for the Fed funds rate is set eight times a year, reflecting the FOMC's (the Federal Open Market Committee is the policy-making arm for the Fed) assessment of the economic conditions and their desired monetary policy stance. Ultimately, commercial banks decide whether to borrow at the Fed funds rate based on their own needs and the prevailing market conditions. If banks have sufficient reserves at the central bank, they may not need to borrow, even if the Fed funds rate is low. The Fed conducts open market operations (OMOs) to influence the supply of reserves in the banking system. By buying or selling Treasury securities, the Fed can increase or decrease the amount of reserves banks have, thereby affecting the availability of funds for lending. Recognising central bank projections and their guidance helps highlight possible trend reversals or can help indicate a resumption in current trends. For example, a central bank echoing a hawkish vibe (expected to raise rates) could see increased demand for its currency, and vice versa for a dovish setting. Economic data such as inflation (CPI and PPI, for example), growth (Gross Domestic Product ) and unemployment are pivotal to understand and often move FX markets in the short term; this is what the central bank policymakers follow to help decide monetary policy. Central banks determine the longer-term trend, while economic indicators influence shorter-term price movement (this action can either be in line with the longer-term trend or against the trend ). Out-of-consensus economic data tend to move markets most, particularly those that reach/exceed the upper and lower range estimate limits. Geopolitics, of course, is another noteworthy market mover and one that can be difficult to trade. Wars, political unrest and pandemics create uncertainty for traders: geopolitical risk. When all three are aligned, that is, central bank guidance/expectations, economic indicators, and the geopolitical situation, this is where solid trending markets can occur. How to Make Informed Trading Decisions? How one elects to assess the trending structure in the Forex market will be unique to each trader. Some choose to focus their efforts solely on technical analysis; others prefer the comfort of merging both technical analysis and fundamental analysis (macroeconomics – as above) to create trading ideas. Many professional traders use macroeconomic market analysis to help answer the question of what to trade: what market is likely to see a trend reversal over the next few months or a trend continuation? Technical analysis is used to help answer the question of when to trade, representing the study of historical price action, technical indicators and volume. As a basic (hypothetical) example, assume that the Fed is closely monitoring inflationary pressures, which, according to the latest data, hit 5.0% in the twelve months to December 2025. With markets and economists indicating inflation could continue to rise in 2026, the Fed is widely expected to keep raising the Fed funds target range. Fast forward to January’s inflation number, which was expected to rise by 5.2% but instead surpassed median estimates and rose by 5.8%. A release such as this, knowing that the Fed is watching for further inflationary pressures, increases the chances of the Fed raising the Fed funds target range at its next meeting. By extension, this will affect rate-pricing forecasts and could bolster the US dollar (USD) following the inflation release, adding to the (hypothetical) current uptrend that has been in play since the beginning of 2025, when inflation began to rise. So, in this particular example, the macro backdrop could have been an opportunity to join an uptrend or add to an existing long (buy) position. The trigger to indicate when to enter long, however, may have been from something as basic as a technical resistance breach, thus providing a trigger point to enter the market. Therefore, not only would this trade have been backed by having a macro rationale, but also technical evidence. Another example is the current situation as we head into 2024. The markets are gradually switching from a central bank tightening theme that was seen in 2023 to a central bank easing theme. This means that any negative data for the US economy could see the dollar sold off, and this is where traders would then shift to their technical strategy to seek a bearish setup.

Education

Trading BTC : Dunning Kruger Effect 🐸Hi Traders, Investors and Speculators 📈📉 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. Daytime job - Math Teacher. 👩🏫 Have you ever wondered what it takes to be a good and profitable trader? Have you wondered how long it will take before you would have mastered the art f trading? Myself and Dunning Kruger will let you in on a little secret - the journey of pretty much every person that has ever started trading is explained in the chart above. The Dunning-Kruger effect, in psychology, is a cognitive bias whereby people with limited knowledge (in a given intellectual or social domain) greatly overestimate their own knowledge or competence in that domain relative to objective criteria or to the performance of their peers or of people in general. This happens in trading all the time. In fact, we probably all started there if we're being honest . So - What causes the Dunning-Kruger effect? Confidence is so highly prized that many people would rather pretend to be smart or skilled than risk looking inadequate and losing face. Even smart people can be affected by the Dunning-Kruger effect because having intelligence isn’t the same thing as learning and developing a specific skill. Many individuals mistakenly believe that their experience and skills in one particular area are transferable to another. Many people would describe themselves as above average in intelligence, humor, and a variety of skills. They can’t accurately judge their own competence, because they lack metacognition, or the ability to step back and examine oneself objectively. In fact, those who are the least skilled are also the most likely to overestimate their abilities. This also relates to their ability to judge how well they are doing their work, hobbies, etc. The Dunning-Kruger effect results in what’s known as a double curse : Not only do people perform poorly, but they are not self-aware enough to judge themselves accurately—and are thus unlikely to learn and grow. So how can we prevent ourselves from falling into this trap? Here's a few things to keep in mind: To avoid falling prey to the Dunning-Kruger effect, you should honestly and routinely question your knowledge base and the conclusions you draw, rather than blindly accepting them. As David Dunning proposes, people can be their own devil’s advocates, by challenging themselves to probe how they might possibly be wrong. Individuals could also escape the trap by seeking others whose expertise can help cover their own blind spots, such as turning to a colleague or friend for advice or constructive criticism. Continuing to study a specific subject will also bring one’s capacity into a clearer focus. 💭Practice these habits to ultimately escape the double curse: - Continuous learning. This will keep your mindset open to new possibilities, whilst increasing your knowledge over time. - Pay attention to who's talking about what. Is the accountant talking about bodybuilding? - Don't be overconfident. This is self explanatory. I hope you enjoyed this post today! Please give us a thumbs up 👌 _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck

Education

by CryptoCheck-

Updated

DAY TRADING WHILE HOLDING A 9-5 JOB DAY TRADING WHILE HOLDING A 9-5 JOB Embarking on the exciting journey of day trading while managing the demands of a full-time job is indeed a challenging yet achievable endeavor. Thanks to the rise of user-friendly mobile applications offered by trading platforms, individuals now have the power to execute trades seamlessly from various locations. This creates an opportunity for those with traditional 9-5 jobs to actively participate in the dynamic world of day trading. Let's explore the practical aspects of day trading while maintaining a 9-5 job, discovering strategies and considerations that can enhance your ability to strike a harmonious balance between your professional life and the enticing financial markets. Day Trading With A 9-5 Job: Engaging in day trading while juggling a full-time job is not only feasible but also a thrilling adventure. The availability of robust mobile applications has made it possible to trade conveniently from different locations, allowing individuals with office hours to participate in the excitement of day trading. Several factors contribute to the viability of day trading alongside a regular job. Firstly, the accessibility of markets on a 24/7 basis provides flexibility. The forex market operates continuously from Monday to Friday, enabling individuals with office hours to trade after work. Additionally, cryptocurrencies trade around the clock, and some platforms have introduced extended stock trading hours from Monday to Friday. Strategies like swing trading and position trading offer alternatives for individuals unable to actively day trade. These approaches involve setting predetermined Stop Loss and Take Profit levels, allowing traders to initiate trades and await favorable outcomes over longer periods. For stock traders, focusing on pre-market and extended-hours trading is a viable strategy. The pre-market session, beginning at 4 AM ET, extends until the regular session commences at 9 AM, and extended-hours trading continues beyond the regular session. Why You Should Not Day Trade At Work: While day trading with a full-time job is plausible, certain pitfalls make it less than ideal. Successful day trading demands substantial time, concentration, and dedication, aspects often hindered by professional commitments. The need for consistent market analysis, risk evaluation, and timely trade execution can be challenging to fulfill amidst the demands of a 9-5 job. Engaging in day trading during working hours may also impact productivity and mental well-being. Maintaining a high level of workplace productivity and a positive demeanor is crucial for professionals, and day trading disruptions, especially in the face of losses, can adversely affect these aspects. Mental fatigue, stress, and depression are significant concerns for day traders. The demanding nature of the activity, coupled with potential losses, can contribute to a negative impact on one's mental health. This, in turn, may lead to reduced workplace productivity and strained personal relationships. Furthermore, the comprehensive research required for effective day trading, including technical and fundamental analysis, and sentimental and price action analysis, may be challenging to undertake alongside a demanding job. Professions such as healthcare, finance, and real estate may leave little room for the in-depth analysis needed for successful day trading. Best Strategies For Day Trading With A 9-5 Job Successfully managing day trading alongside a 9-5 job requires a strategic approach to ensure optimal results without compromising professional responsibilities. Here are some effective strategies for individuals seeking to seamlessly integrate day trading into their daily work routine: After-Hours Trading: Leverage the extended trading hours available in the evenings after the regular workday. Focus on markets like cryptocurrencies, which operate 24/7, or utilize platforms offering extended stock trading hours. Swing Trading: Embrace the swing trading strategy that allows traders to capture short to medium-term price movements. This approach requires less frequent monitoring, making it suitable for those with limited time during the workday. Algorithmic Trading: Explore algorithmic trading using automated systems or expert advisors. While demanding thorough testing, these systems can execute trades on your behalf, freeing you from constant market monitoring. Pre-Market and Extended Hours Focus: Concentrate on pre-market and extended-hours trading, especially if dealing with stocks. This allows you to engage in market activities before and after regular working hours. Strategic Breaks: Schedule breaks during the workday for brief market check-ins. Use this time to assess market conditions, manage existing trades, and stay informed about potential opportunities. Set Clear Trading Goals: Establish realistic trading goals that align with your work schedule. Define specific time frames for market analysis, trade execution, and review to maintain a disciplined and organized approach. Utilize Limit Orders: Reduce the need for constant monitoring by implementing limit orders. Set predetermined entry and exit points, allowing trades to execute automatically when market conditions align with your strategy. By incorporating these strategies, individuals can strike a balance between day trading and a 9-5 job, optimizing opportunities while minimizing the impact on professional responsibilities. In conclusion.. In the intricate dance between day trading and the demands of a 9-5 job, finding equilibrium is an art. Technological strides have offered a bridge, enabling individuals to traverse the realms of financial markets while anchored in full-time employment. Yet, the fragility of this balance necessitates a nuanced understanding of its implications. The potential trade-offs — be it in productivity, mental well-being, or the relentless demand for in-depth research — underscore the gravity of this endeavor. As we navigate the dual responsibilities of day trading and professional life, thoughtful consideration and strategic planning emerge as our guiding lights. In this dynamic landscape, success lies not just in seizing market opportunities but in orchestrating a harmonious symphony between financial aspirations and the structured cadence of a 9-5 routine. I hope this article will give you some nice thoughts before opening your charts while you are working. Happy trading!

Education

Mastering Support and Resistance: Part 1 Hello Traders, and welcome to a new year of endless learning opportunities! Today, we will kick off 2024 by exploring the concept of support and resistance, how to identify these levels and common misconceptions about them. Support and resistance levels play a crucial role in technical analysis and can greatly impact your trading strategy. Understanding these levels and knowing how to effectively use them can make all the difference in your trading success. We will be doing a deeper dive in a subsequent article later this week where we will cover more advanced techniques and the psychology behind support and resistance. In the meantime, are you ready to dive in? Understanding Support and Resistance Levels in Trading Support and resistance levels are key aspects of technical analysis that traders incorporate into several different trading decisions. Support refers to a price level where buying pressure is expected to be strong enough to prevent the price from falling further. On the other hand, resistance is a price level where selling pressure is expected to be strong enough to prevent the price from rising higher. These levels are based on the idea that markets often go through similar patterns and respond to certain prices. The Importance of Support and Resistance in Technical Analysis Support and resistance levels are crucial in technical analysis for several reasons. Firstly, they provide traders with valuable information about market sentiment. When the price approaches a support level, it indicates that buyers are likely to step in and try to push the price up. Conversely, when the price approaches a resistance level, it suggests that sellers are likely to enter the market to push the price down. Understanding market sentiment can help traders avoid potential losses. Secondly, support and resistance levels act as a reference point for setting profit targets and stop-loss levels. By analyzing historical price movements, traders can identify key support and resistance levels that are likely to be tested in the future. These levels can be used to determine when to take profits or cut losses, providing a clear framework for risk management. Lastly, support and resistance levels can act as confirmation tools for trading signals. For example, if a trader receives a buy signal from a set of technical indicators and the price is approaching or bouncing off of a strong support level, it adds credibility to the signal. Similarly, if a sell signal is generated and the price is approaching or moving away from a major resistance level, it strengthens the validity of the signal. By combining support and resistance levels with other technical indicators, traders can increase the accuracy of their trading signals. Identifying Support and Resistance Levels on Price Charts Identifying support and resistance levels on price charts is a fundamental skill for any trader. Several methods can be used to identify these levels, depending on the trader's preference and trading style. Here are a few common techniques: Swing Highs and Lows: Horizontal support and resistance levels can be identified by analyzing price charts. A support level is typically formed by connecting multiple swing lows, where the price has previously bounced back up. Conversely, a resistance level is formed by connecting multiple swing highs, where the price has previously reversed its upward trajectory. By identifying these levels, traders can anticipate potential reversals or breakouts and adjust their trading strategy accordingly. It is important to note that support and resistance levels are not exact price points, but rather zones where buying or selling pressure is expected to be strong. Traders should use a combination of these techniques and exercise discretion to identify the most relevant support and resistance levels on their price charts. Moving Averages: Moving averages are commonly used to identify trends in price charts, but they can also act as dynamic support and resistance levels. For example, a 200-day moving average is often considered a strong support or resistance level. When the price approaches this moving average, it is likely to either bounce off or breakthrough, depending on the prevailing trend. Fibonacci Levels: Fibonacci levels are based on mathematical sequences. These levels are used to identify potential support and resistance levels based on the percentage retracement of a previous price move. Traders often look for confluence between Fibonacci levels and other technical indicators to increase the reliability of their analysis. Several different tools on TradingView can be used to identify these levels such as a Fibonacci retracement or Fibonacci Channel. How to Effectively Use Support and Resistance in Your Trading Strategy Once you have identified support and resistance levels on your price charts, it is important to know how to effectively use them in your trading strategy. Here are some key considerations: Combine with other indicators: Support and resistance levels should not be used in isolation but should be combined with other technical analysis techniques. Relying solely on support and resistance levels can result in false signals, as price can break through or reverse at unexpected times. Consider using trend lines, candlestick patterns, or oscillators to confirm your support and resistance levels and increase the accuracy of your trading signals. Price Action: Observing price action around support and resistance levels can provide valuable insights into market sentiment. Look for signs of price rejection, such as long wicks or multiple failed attempts to break through a level. Price patterns may also form around support or resistance levels. These signs can indicate potential reversals or breakouts. Risk Management: Support and resistance levels can be used to determine stop-loss levels and profit targets. When entering a trade, set your stop-loss just below a support level for long positions or just above a resistance level for short positions. Similarly, set your profit target at the next significant support or resistance level to ensure a favorable risk-reward ratio. Multiple Timeframes: Analyzing support and resistance levels across multiple timeframes can provide a broader perspective on market dynamics. A level that appears strong on a daily chart may be insignificant on a weekly or monthly chart. Consider higher timeframe levels for long-term trades and lower timeframe levels for short-term trades. Common Misconceptions About Support and Resistance There are several common misconceptions about support and resistance levels that traders should be aware of. Understanding these misconceptions can help you avoid common pitfalls and make better trading decisions. Here are three common misconceptions: Support and Resistance Levels Are Fixed: One of the most common misconceptions is that support and resistance levels are fixed and remain unchanged over time. In reality, these levels are dynamic and can shift as market conditions change. Traders should regularly reevaluate and adjust their support and resistance levels based on new price information. Support Turns into Resistance and Vice Versa: Another misconception is that support levels always turn into resistance levels when broken, and vice versa. While this can sometimes be the case, it is not always true. Market dynamics can change, and a support level that has been broken may become irrelevant in the future. Traders should not blindly assume that a broken support level will act as a strong resistance level. Support and Resistance Levels Are Foolproof: Many traders mistakenly believe that support and resistance levels are infallible and always result in predictable price movements. While these levels can provide valuable guidance, they are not guaranteed to hold or reverse the price. Traders should always use support and resistance levels in conjunction with other technical analysis tools and exercise proper risk management. By understanding these misconceptions, traders can avoid relying solely on support and resistance levels and develop a more comprehensive trading strategy. We implore you to be thorough in practice and understanding of S&R as there is a great degree of subjectivity to them. The more you understand about these levels the greater accuracy you can obtain. Tips for Mastering Support and Resistance Mastering support and resistance requires practice and experience. Here are some tips to help you improve your skills in identifying and utilizing these levels: Backtesting: Backtesting is a valuable tool for evaluating the effectiveness of support and resistance levels in historical price data. By analyzing past price movements, you can assess how well your identified levels have held or reversed the price. This can provide valuable insights into the reliability of your levels and help you refine your approach. Focus on Key Levels: Not all support and resistance levels are equally significant. Focus on key levels that have been tested multiple times and have resulted in strong price reactions. These levels are more likely to hold or reverse the price and can provide more reliable trading opportunities. Practice Patience: Support and resistance levels often require patience to be effective. Wait for clear confirmation before entering a trade, and avoid chasing price or making impulsive decisions based on a single level. Patience and discipline are key to successful trading. By incorporating these tips into your trading routine, you can enhance your mastery of support and resistance levels and improve your trading performance. What Does it All Add Up To? In conclusion, understanding and mastering support and resistance levels is crucial for successful trading. These levels provide valuable information about market sentiment, act as reference points for setting profit targets and stop-loss levels, and can confirm trading signals. By identifying support and resistance levels on price charts using techniques like swing highs and lows, moving averages, and Fibonacci levels, traders can make better judgments in deciding what actions to take. However, it is important to use support and resistance levels in conjunction with other indicators and consider price action for confirmation. Overall, integrating support and resistance levels into a trading strategy can help break through barriers and achieve trading success.

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Taking the Guesswork Out of Take Profit: A Fibonacci Approach In the world of trading, one of the most influential factors that can either make or break a trader is the mind. How often have we found ourselves saying, "I should have done this" or "I would have done that" after a trade has unfolded? Yet, when we were in the heat of the moment, those seemingly obvious solutions never crossed our minds. To overcome this common pitfall and make more calculated decisions when it comes to setting take profit levels, we can turn to the Fibonacci tool. Utilizing Fibonacci retracement levels can help traders establish mechanical and consistent take profit points. This is especially crucial for mechanical traders who rely on predetermined parameters for their trading strategies. Let's delve into how you can use Fibonacci step by step to set your take profit levels, taking into consideration a buying scenario (though the process remains the same for selling, but in reverse). **Step 1: Add -0.272 and -0.618 Levels to Your Fibonacci Tool** Begin by adding the -0.272 and -0.618 Fibonacci retracement levels to your Fibonacci tool. These negative levels will be instrumental in creating mechanical take profit points. **Step 2: Place Your Fibonacci Tool from Low to High** Next, take your Fibonacci tool and place it from the low point to the high point of the relative price movement you're analyzing. This essentially helps you identify potential retracement levels within the price action. **Step 3: Identify Negative Levels** As you apply the Fibonacci tool, you'll notice the negative levels (-0.272 and -0.618) on your chart. These levels will suggest specific price points that you can consider for setting your take profit. Interestingly, you'll often find that prices tend to react near these negative Fibonacci levels because they represent strong psychological levels in the market. By following these steps, you can establish a mechanical and objective approach to determine your take profit levels. This approach not only reduces the influence of emotions in your trading decisions but also provides you with a systematic way to lock in profits. Remember that while the example here focuses on buying, the process remains the same for selling, with the Fibonacci levels adjusted accordingly. Incorporating Fibonacci retracement levels into your trading strategy can be a game-changer, helping you trade with greater discipline and consistency. The key is to trust the numbers and your predetermined plan, allowing you to make more informed trading decisions and ultimately enhance your overall trading performance.

Education

How Artificial Intelligence is Revolutionizing the Market Artificial Intelligence (AI) has permeated almost every aspect of our lives, from virtual assistants to self-driving cars. In recent years, AI has also made significant inroads into the world of finance, particularly in trading. This article explores the transformative impact of AI in trading, shedding light on how it's revolutionizing the market, shaping trading strategies, and offering new opportunities to investors. AI in trading is not a futuristic concept but a present-day reality. Sophisticated algorithms and machine learning models are being employed by traders and financial institutions to gain a competitive edge, make data-driven decisions, and navigate the complex landscape of global financial markets. In this article, we'll delve into the key ways AI is reshaping the trading landscape. One of the primary contributions of AI in trading is the development of highly advanced trading strategies. These strategies leverage AI's ability to analyze vast amounts of data, identify patterns, and make predictions based on historical data and real-time market information. The Role of AI in Trading Strategies: 1. Algorithmic Trading: AI-powered algorithms are designed to execute trades automatically based on pre-defined criteria. These algorithms can process information at speeds impossible for human traders, enabling them to capitalize on fleeting market opportunities. AI algorithms can incorporate technical indicators, news sentiment analysis, and market data to make split-second trading decisions. 2. Sentiment Analysis: AI-driven sentiment analysis tools scour news articles, social media, and other sources to gauge market sentiment. This helps traders understand how public perception may impact asset prices. For example, if a particular stock is trending negatively on social media due to a scandal, AI algorithms can detect this and make informed trading decisions. 3. Risk Management: AI can enhance risk management by providing real-time risk assessment. It can continuously monitor a portfolio's exposure to various assets, assess potential risks, and suggest adjustments to maintain an acceptable risk level. This helps traders avoid catastrophic losses. The future of AI in trading looks promising, with several trends and developments on the horizon: 1. Reinforcement Learning: AI models, particularly reinforcement learning, are expected to play a more significant role in trading. These models can adapt and learn from their actions, making them capable of evolving strategies in response to changing market conditions. 2. Explainable AI: As AI becomes more prevalent in trading, the need for transparency and interpretability is paramount. Explainable AI aims to provide insights into how AI models arrive at their decisions, helping traders understand and trust AI-driven strategies. 3. Retail Investor Access: AI-powered trading tools that were once exclusive to institutional investors are becoming more accessible to retail investors. This democratization of AI-driven trading may empower individual investors to make more informed decisions. 4. Regulatory Challenges: As AI becomes more integrated into financial markets, regulatory bodies will need to address new challenges related to algorithmic trading, market manipulation, and data privacy. Striking the right balance between innovation and oversight will be crucial. In conclusion , AI is revolutionizing the trading landscape by offering powerful tools for analyzing data, developing trading strategies, and managing risks. While AI has already made a significant impact, its influence is expected to grow in the coming years. Investors and traders who adapt to these changes and embrace AI technology are likely to gain a competitive advantage in the evolving world of finance. However, it's essential to remain mindful of ethical and regulatory considerations as AI continues to transform the trading landscape.

Education

by financialflagship

Forex: The Impact of (Geo)Political Factors.In the vast expanse of the currency market, where fortunes are made and lost in the blink of an eye, understanding the multifaceted risks is crucial. Beyond the charts and technical indicators lies a force often underestimated — geopolitical risk. In this exploration, we unravel the intricacies of geopolitical risks and delve into the political factors that cast a profound shadow over the forex market. I. Decoding Geopolitics: To comprehend the significance of geopolitical risk, one must first grasp the term "geopolitical." It involves the intricate study of how geography, political systems, and international relations intersect to mold global politics. Geopolitics explores the strategic importance of geographic spaces, resource distribution, and the influence of political power on a global scale. In essence, it is the lens through which we examine the interplay between geography and political dynamics to fathom how nations behave on the world stage. II. The Unseen Forces: Geopolitical Risks in Forex Geopolitical risks are potent influencers in the currency market, steering exchange rates and market sentiment. Several factors contribute to this influence: Political Instability and Unrest: Civil unrest and regime changes breed uncertainty, impacting investor confidence and currency values. Trade Tensions: Disputes between major economies create market uncertainty, affecting trade flows and currency values. Military Conflicts: Armed conflicts or geopolitical tensions can prompt currency depreciation as investors perceive heightened risk. Terrorism: Acts of terrorism introduce fear, potentially leading to currency depreciation in affected countries. Economic Sanctions: Imposing sanctions disrupts trade and financial transactions, influencing a country's currency value. Political Leadership and Policy Changes: Shifts in political leadership or policy direction induce currency volatility by impacting investor confidence. Natural Disasters: While not strictly geopolitical, natural disasters can disrupt economies and influence currency values. Global Health Crises: Pandemics impact global trade and currencies through measures like lockdowns and travel restrictions. Brexit-Like Events: Instances where countries contemplate leaving unions create uncertainty with repercussions for currency markets. III. The Forex Symphony: How Geopolitical Risks Conduct the Orchestra Geopolitical risks impact the forex market through a complex interplay of economic and political factors. Heightened geopolitical risk injects uncertainty, prompting investors to seek safe-haven assets. Currencies such as the US dollar, Japanese yen, and Swiss franc often benefit as investors flock to stability during times of crisis. Political dynamics play a pivotal role in shaping the forex market: Government Stability and Policies: Political stability and policy implementation influence investor confidence and currency values. Economic Policies and Reforms: Political decisions on economic policies impact a country's economic outlook and currency values. Political Events and Elections: Elections inject uncertainty, affecting market sentiment as traders anticipate political changes. Trade Policies and Agreements: Political decisions on trade policies influence currency values, introducing volatility to the forex market. Central Bank Actions: Central banks' decisions, influenced by politics, impact currency values as traders monitor monetary policy shifts. Government Debt and Budget Deficits: Political decisions on fiscal policies influence a country's debt levels and fiscal health, impacting the currency. Corruption and Governance Issues: High levels of corruption erode investor confidence, influencing currency values. Social and Political Stability: Broader stability in social and political realms influences the forex market and investor perceptions. Public Perception and Confidence: Political factors shape public confidence, impacting economic activities and currency values. In the sea of the forex market, geopolitical risks and political factors are the unseen currents shaping its course. Traders and investors must master the art of navigating these turbulent waters, understanding that beyond charts and algorithms, the geopolitical landscape and political dynamics are the true captains of the ship. In this ever-evolving arena, adaptability, foresight, and a keen understanding of geopolitics are the compasses guiding traders to success in the unpredictable world of currency trading. The geopolitical events stand as formidable forces capable of reshaping exchange rates and creating market volatility. From Brexit to trade wars and geopolitical tensions, understanding the historical impact of these events on currency markets is crucial for traders seeking to navigate the tumultuous seas of forex. This article explores notable geopolitical events that have left an indelible mark on exchange rates and provides strategic insights on mitigating the associated risks. Geopolitical Events and Their Impact: Brexit (2016): The UK's decision to exit the EU led to a sharp decline in the British pound, reflecting uncertainty about the economic consequences of the separation. GBP/USD sharp drop in 2016 US-China Trade War (2018-2019): Trade tensions between the US and China influenced exchange rates, with the Chinese yuan being particularly sensitive to developments in the trade dispute. European Debt Crisis (2010-2012): The sovereign debt crisis in the Eurozone led to fluctuations in the euro as concerns about the stability of the currency and the future of the EU affected exchange rates. EUR/USD fluctuations throughout 2010-2012 Russian Annexation of Crimea (2014): Geopolitical tensions and sanctions imposed by Western countries led to a significant depreciation of the Russian ruble. Arab Spring (2010-2012): Political uprisings across Arab countries caused volatility in currencies like the Egyptian pound and the Tunisian dinar. North Korean Nuclear Tests (2017): Geopolitical tensions resulting from North Korea's nuclear tests impacted currencies in the Asia-Pacific region, including the Japanese yen and the South Korean won. 9/11 Attacks (2001): The terrorist attacks had far-reaching consequences on global financial markets, influencing the US dollar over the longer term. Dollar Index after 9/11 US Invasion of Iraq (2003): Geopolitical events surrounding the invasion led to increased uncertainty and affected currencies in the Middle East, notably the Iraqi dinar. Mitigating Geopolitical Risks: Strategies for Forex Traders Stay Informed: Regularly follow reputable news sources to stay informed about political events, economic indicators, and policy decisions that could impact the forex market. Diversify Your Portfolio: Avoid overconcentration in a single currency or region. Diversification spreads risk and minimizes the impact of adverse geopolitical events on specific positions. Use Risk Management Tools: Implement tools such as Stop Loss and Take Profit orders to limit potential losses and secure gains. Setting appropriate risk-reward ratios enhances effective trade management. Monitor Economic Indicators: Keep an eye on economic indicators affected by geopolitical events. Understanding the economic fundamentals of traded currencies helps anticipate market reactions. Understand Correlations: Be aware of correlations between currencies and other assets, helping gauge potential spillover effects from other markets during times of geopolitical uncertainty. Utilize Safe-Haven Currencies: Allocate a portion of your portfolio to safe-haven currencies, such as the US dollar, Japanese yen, or Swiss franc, during heightened geopolitical uncertainty. Stay Flexible: Be prepared to adapt your trading strategy based on changing geopolitical conditions. Flexibility is key to adjusting your approach in response to evolving circumstances. Regularly Review and Reassess: Periodically review and reassess your trading strategy in light of changing geopolitical conditions. Markets can shift, and adjusting your strategy is crucial to remain relevant. Conclusion: In the dynamic world of forex trading, geopolitical risks are inherent, and their impact on exchange rates is undeniable. Traders armed with historical insights and proactive risk management strategies can navigate these uncertainties with confidence. While eliminating all risks is impossible, staying informed, diversifying portfolios, and employing risk management tools empower traders to weather the storms and emerge resilient in the face of geopolitical challenges. Embracing these approaches not only limits potential losses but also positions traders to seize opportunities in the ever-changing forex landscape.

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Decoding the NFP Report: Trading Strategies.In the dynamic world of forex trading, strategies that cater to the ever-changing market conditions are invaluable. While fundamental analysis is widely embraced in stock trading, its effectiveness in the forex market is often questioned. Unlike the stock market, where financial statements can significantly impact individual stocks, the forex market is influenced by a myriad of factors, including central bank policies and political leadership. In this article, we explore the limitations of fundamental analysis in the forex market and delve into an intriguing momentum trading strategy centered around a key macroeconomic indicator—the Non-Farm Payrolls (NFP). This strategy harnesses the unpredictable yet powerful market reactions triggered by the release of NFP data, offering traders a unique opportunity to capitalize on momentum. Fundamental Analysis in Forex: Fundamental analysis, a staple in stock trading, faces challenges in the forex market due to its limited impact on currency exchange rates. Forex stability relies not only on economic indicators but also on the nuanced decisions of central banks and political leadership. Despite these challenges, successful forex trading doesn't necessitate rigid adherence to a specific scenario. Traders can leverage price momentum and increased liquidity to execute effective impulse trading strategies. Non-Farm Payrolls Trading Strategy: The Non-Farm Payrolls (NFP) trading strategy capitalizes on the release of crucial U.S. economic data—the Non-Farm Payrolls report. This multicurrency strategy is applicable to all currency pairs involving the U.S. dollar, allowing traders to explore numerous assets simultaneously. The primary objective of this strategy is to capture price momentum, making it adaptable to various time frames. Non-Farm Payrolls: Predictable Unpredictability: The NFP report, published every first Friday of the month, serves as a linchpin for speculative traders. It provides insights into the strength and growth of the U.S. economy, consequently influencing the value of the U.S. dollar. The report focuses on the non-agricultural sector, which contributes significantly to the nation's GDP. The sheer importance of the NFP report lies in its ability to reflect the health of the U.S. economy. The release of this data sparks maximum market volatility, with prices witnessing rapid fluctuations, often ranging from 100-200 points in a short period. However, interpreting the aftermath of the news poses a unique challenge due to the simultaneous release of unemployment statistics, which can sometimes contradict each other. Despite the inherent unpredictability, the NFP trading strategy capitalizes on the strong price spikes triggered by the news release. While predicting post-news price behavior may be challenging, the strategy offers a systematic approach to navigate and profit from the volatile market conditions that follow the NFP announcement. Rules of Non-Farm Payrolls (NFP) Trading Strategy: Stay Informed with an Economic Calendar: Use a reliable economic calendar to stay informed about upcoming NFP releases. The economic calendar will help you track the scheduled date and time of the NFP report. Check for News Release Postponements: Understand that postponements of data releases are common in economic calendars. Monitor the calendar regularly to stay updated on any changes to the scheduled release time of the NFP report. Utilize a Trusted Economic Calendar: Choose a reputable economic calendar platform to ensure accurate and timely information. The provided link www.tradingview.com can be a valuable resource for tracking economic events. Prepare for High Volatility: Recognize that the release of the NFP report triggers significant market volatility. Prepare for rapid price movements and be cautious about entering trades during the initial moments following the release. Focus on the Non-Agricultural Sector Employment Data: Prioritize the non-agricultural sector employment data within the NFP report. This indicator is crucial for gauging the strength of the U.S. economy and can have a substantial impact on currency pairs involving the U.S. dollar. Monitor Unemployment Statistics: Simultaneously track unemployment statistics released alongside the NFP report. While the primary focus is on non-agricultural employment, an understanding of unemployment trends can provide additional context for market reactions. Be Cautious of Contradictory Data: Acknowledge that data within the NFP report, especially non-agricultural employment and unemployment figures, may occasionally present contradictory signals. Exercise caution during such instances, as market predictability diminishes. Wait for Initial Volatility to Subside: Post NFP release, wait for the initial surge in volatility to subside before considering trade entries. Initial reactions can be impulsive, and waiting allows for a more informed decision-making process. Consider Multiple Currency Pairs: Since the NFP report influences the U.S. dollar, the strategy can be applied to various currency pairs involving the dollar. Explore multiple pairs simultaneously to identify the most favorable trading opportunities. Implement Risk Management: Prioritize risk management strategies to protect your trading capital. Set stop-loss orders and determine the appropriate position size based on your risk tolerance and account size. Practice on Demo Accounts: Before implementing the NFP trading strategy in live markets, practice on demo accounts to familiarize yourself with the dynamics of the strategy and refine your execution. Continuous Learning and Adaptation: Stay informed about changes in market conditions and continuously adapt your strategy. The forex market evolves, and traders need to adjust their approaches based on ongoing developments. By adhering to these rules, traders can enhance their effectiveness when employing the Non-Farm Payrolls trading strategy and navigate the unique challenges posed by this high-impact economic event. Traders often seek strategies to capitalize on this volatility, and one popular approach is the Pending Orders strategy. In this article, we'll explore the intricacies of the Pending Orders strategy , shedding light on its advanced nature and its application by both novice and experienced traders. 1 ) Pending Orders Strategy: Set Buy Stop and Sell Stop Orders: Minutes before the NFP publication, set two pending orders: Buy Stop and Sell Stop. These orders are strategically placed 25-30 points away from the current price to avoid simultaneous triggering due to heightened volatility. Manage Triggered Orders: When the price reacts to the news release, triggering one of the pending orders, promptly delete the other as a non-operational scenario. This prevents both orders from activating simultaneously. As observed in this image, during the latest NFP event on Friday, December 8, 2023, the price exhibited a robust bearish impulse immediately after the report release at 5:30 pm. This triggered our sell stop pending order, shifting our trade into a profitable position. Following the bearish movement, the strategy aims to close the buy stop position (the opposite direction). At this juncture, traders should take proactive measures to manage the open position. Stop Loss Considerations: Place a Stop Loss in the opposite order or opt not to set it at all, provided the second pending order remains intact to limit potential losses. This ensures that the remaining order acts as a safeguard against adverse market movements. Trailing Stop for Profit Maximization: Implement a Trailing Stop to secure profits. Continuously adjust the Trailing Stop as the price advances, allowing you to capitalize on the maximum price momentum. This dynamic approach helps lock in gains while navigating the evolving market conditions. As depicted in the image, the price, after experiencing a bearish movement, rebounds upward. What could be the reason behind this? The Non-Farm Payroll (NFP) report assesses the percentage of the total workforce that is unemployed and actively seeking employment in the previous month. For this specific event, the forecasted unemployment rate was 3.9%. However, the actual percentage revealed in the report was 3.7%, indicating a lower number of individuals unemployed and actively seeking employment in the preceding month. This positive deviation from the forecast serves as a favorable signal for the USD, prompting an upward movement in its value following the event. In currency markets, an 'actual' percentage lower than the 'forecast' is generally considered beneficial for the respective currency. By the way, Short-term trades had the opportunity to secure a few pips in gains after the activation of the Sell Stop order. Strategy N.2 Meanwhile, in this other image, I have marked a vertical line at the recent NFP event. Additionally, I've incorporated a 20-period Simple Moving Average (SMA) to illustrate the short-term trend. After the release of this significant economic news, you can observe an increase in volatility. This could serve as a component of a monthly strategy where the release of such news acts as a trigger. This second scenario or strategy, especially for beginners, is considered much safer. By analyzing the NFP report results, understanding economic dynamics, and gaining insights into the potential continuation of the trend or a possible pause for a reversal, traders can make informed decisions. In conclusion, it's essential to backtest the presented strategies and conduct a forward backtest in a demo account. Your thorough understanding and application of these strategies are crucial. Thank you for taking the time to read my article.

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4 Triangle Types You Need to Know Triangle chart patterns offer valuable insights into market dynamics, symbolizing a clash between buyers and sellers within a contracting price range. These patterns are often classified as continuation or neutral patterns, suggesting that the price is likely to persist in its existing trend after the pattern concludes. 1. Symmetrical Triangle: A symmetrical triangle manifests when the slope of the price's highs and lows converges, creating a triangular structure. This pattern signifies a period of consolidation, with lower highs and higher lows indicating equilibrium between buyers and sellers. As the slopes converge, a breakout becomes imminent, though the breakout direction remains uncertain. To capitalize on a symmetrical triangle , consider placing entry orders above the slope of the lower highs and below the slope of the higher lows, prepared to ride the price in the direction of the breakout. 2. Ascending Triangle: An ascending triangle features a resistance level and a slope of higher lows. Buyers gradually push the price up, testing the resistance level. This pattern often signals an upward breakout as buyers gain strength and attempt to breach the resistance. To trade an ascending triangle , set entry orders above the resistance line and below the slope of the higher lows, anticipating a potential upward breakout. However, remain open to movement in either direction, as the resistance level may prove formidable. 3. Descending Triangle: In contrast to the ascending triangle , a descending triangle comprises lower highs forming the upper line, with a robust support level acting as the lower line. Sellers gain ground against buyers, and in most cases, the support line eventually breaks, leading to a continued downward move. To trade a descending triangle , set entry orders above the upper line (lower highs) and below the support line, prepared for a potential breakout. Note that sometimes, the support line may hold, resulting in a robust upward move. 4. Broadening Triangle: Now, let's delve into the captivating Broadening Triangle , also known as a Megaphone Pattern. This pattern stands out due to its expanding price range, creating a distinctive visual pattern on the chart. The Megaphone Pattern comprises a series of higher highs and lower lows, causing the price range to widen over time. This pattern reflects increasing volatility and uncertainty in the market, with both buyers and sellers actively participating. Trading Triangles demands meticulous analysis and risk management due to their nature and potential for unpredictable price moves. To approach Triangle patterns effectively: 1️⃣ Pay attention to the pattern's boundaries: Identify the upper trendline connecting the highs and the lower trendline connecting the lows. These trendlines define the range of price movement within the pattern. 2️⃣ Watch for breakouts and reversals: Triangles often precede significant price movements. Look for breakouts above the upper trendline or breakdowns below the lower trendline as potential trading opportunities. 3️⃣ Confirm with additional indicators: Combine your analysis with other technical indicators or tools to validate your trading decisions. Consider using indicators like moving averages, oscillators, or volume analysis to confirm the pattern's potential direction. Remember, trading Triangles necessitates careful analysis and risk management. Consider the overall market context, fundamental factors, and other technical signals to make informed trading decisions. While chart patterns provide valuable insights, they cannot guarantee future price movements. Always conduct thorough research, stay updated with market news, and adapt your strategy as market conditions evolve. Wishing you successful trading journeys guided by these patterns! 🚀📈✨ 💬 We would love to hear your thoughts and feedback on the article! Please leave your comments and questions below the article. Your input is valuable to us!

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