LTC/USDT Analysis#Analysis LTC/USDT
Everything is visible in the chart.
Depends on BTC price action.
Good luck everyone!
Educationalposts
Simple Explanation of Stop Loss Hunting Stop Loss Hunting, a manipulative tool, that is used by Market Makers and Whales to manipulate market every day and to take away money from Retailers.
This is a basic yet advance topic to discuss. For simplicity sake, Let's break down this discussion in five parts :-
1) What is Stop Loss Hunting ?
2) How does it work ?
3) Why does it work ?
4) Why they do it ?
5) How to avoid It ?
---------------- 1) What is Stop Loss Hunting ? ----------------
Stop Loss Hunting is a process in which "A KEY LEVEL" is broken on either side in order to trap Retailers and to take Stop losses of either bears or bulls and trap them in that Trade.
----------------- 2) How does it work ? -------------------------
It works only when we have a level that is SO OBVIOUS to everyone that majority of RETAILERS put there Stop Loss underneath that level.
Stop Loss Orders are clearly observable in ORDER Book and ESPECIALLY to Market makers.
However, Key Levels in Range Trading become so obvious to Market makers or some Support levels that Whales/ Institutions or Market Makers can clearly observe where most Stop Losses of Majority of Retailers will be.
Thus they can overwhelm that range or level with Demand or Supply to take out Bears or Bulls Respectively.
----------------- 3) Why does it work ? -------------------------
We all are HUMANS and are bounded by our Emotions. We are EMOTIONAL BEINGS at the end of the day and we are not machines.
Inherently, We share an emotional domain and there are two key emotions in that domain :- Fear, Greed.
These emotions are involved and determine out actions most of the times in any Financial Market.
Therefore, These emotions are used as trigger points for Buying and selling and thus, Market Makers manipulate the Market by Controlling the masses by using these as Trigger points.
In Bear Trap , thus, when an obvious support level is broken then Retailers sell and Whales/Institutions buy and Bears are trapped. Then market makers Push the price up and that is how BEAR TRAP Works.
On the other side, In Bull Trap when Resistance level is broken then Break out traders buy at Breakout and then Bears Stop Loss is mostly taken out then Many Bulls are trapped. Therefore, Price takes a dump on failure of a breakout.
----------------- 4) Why they do it ? -------------------------
Answer is pretty simple for this :- To make more Money and Get better ORDER FILLING PRICE for their BIG ORDER Trade.
Whales/ Instituions do get have a BIG ORDER SIZE and Especially when they have INSIDER News or Information before it becomes available to public.
They always seek to get their BIG ORDER SIZE FILLING in Blocks at better Price.
For that reason, they do overwhelm a Support level with Supply to take out Retailers out of that trade and fill their BIG ORDER SIZE in Blocks.
Also, sometimes, when Market Makers see good Opportunity to take out Retailers out of trade they do same as well by Breaking Key Level on Either side.
---------------- 5) How to avoid It ? ----------------------
This can be done in TWO WAYS. By having Either your Stop Loss Wide Enough OR Look out for a key Level is so obvious to everyone and thus Expect Stop Loss Hunting at that level.
What i do sometimes is that when a key Level is broken and it is coming back to support then you can trade from that level where AN OBVIOUS KEY LEVEL is broken and most Retailers are taken out of the trade.
Let us use an example for this :-
You can clearly see how an OBVIOUS level of 30K majority was watching and it was taken out and many Retailers would def had been Liquidated or their SL must had been taken out.
I really hope that my Stop LOSS Hunting Explanation would be good enough and if i made any mistake please do lemme know anout it.
Diagram in the chart is an example only and is not meant to taken for any financial advice.
How to spot and use MACD DivergencesOscillators
Oscillators are any bits of information or data moving back and forth between two points. It is usually used as a signal for a buy or a sell on either side of the range it is moving in. The Relative Strength index which you might hear of is an example of an oscillator, however I will not be going into detail about it as we do not personally do not use it for my trading. When there is a change in momentum, this often signals weakness in a trend. The indicators are designed to signal a possible trend reversal.
The only oscillator we use in our trading is the MACD. Moving Average Convergence Divergence. Feel free to look into other indicators, however, we believe that the MACD has been our favourite to use.
DIVERGENCE
Divergence is simply when we will be looking at the difference in price action against an indicator such as MACD, RSI, Stochastic.
The simplest way to put it, when the price is making higher highs the indicator should also be making higher highs, and lower lows then vice versa. If the price is making higher highs but the indicator is not, then the two are diverting from each other and we have divergence. This is a great sign for a weakening trend and a potential shift in momentum.
The two types include regular and hidden.
Regular divergence
When the price is making lower lows (LL), and the oscillator is making higher lows (HL), then we have what we call regular bullish divergence which usually appears at the end of a downtrend.
If the price makes a higher high (HH) but the oscillator makes a lower high (LH), then we have regular bearish divergence. This usually occurs at the end of an uptrend.
Hidden Divergence
Divergence does not necessarily have to show when the trend will reverse, it can show trend continuation, and since we try to avoid trading against the trend this can be of great help.
When the price makes a higher high, but the oscillator makes a lower low, we have what we call hidden bullish divergence.
When the price goes to make a lower high but the oscillator makes a higher high, this is what we call hidden bearish divergence.
Always remember that in conjunction with these signals, we need other signs in order for us to enter the trade. We cannot solely base our analysis on oscillator divergence, otherwise we can find ourselves on the wrong side of the trade.
Wait for the crossovers of the indicators to be sure, this can happen after the price has begun to move, however it can be an assurance that the divergence observed is correct.
Always remember if the market is moving sideways, there are no clear indications of divergence so do not force it. Always connect the latest in the price action, meaning if the price is bullish and is retracing, you are looking at higher highs. Focus on the highs and lows of the indicators and ignore any small minor movements in between. Wherever lines are drawn on the price, they have to line up with the oscillator and that is where the line will also have to be drawn, everything has to line up.
What is the pricing in factor?Pricing In
Human behaviour, specifically greed and impatience are some of the main reasons the markets move the way they do. The term pricing in is the definition and illustration of human impatience. Due to the fear of missing out, impatience, and greed, humans natural instinct after hearing a rumour without any solid information to back it is the buy into it.
Brexit has been causing a lot of this recently with rumours of a possible Brexit solution which causes investors to “price in” based on the rumours.
Interest rate cuts are another example where they begin to get priced in based on the rumours.
Buy the rumour, sell the news. A sentence commonly seen in the trading world. Let's imagine we have interest rate data expected to be released at 2%. The current rate is 3%. This data is seen as negative as the interest rate is dropping so many people can begin to factor that information in days prior to the release of the news. This is demonstrated by a drop in the price of the currency much earlier than the actual release. Once the data is released, it comes out at 2%, and you may notice the price does not move much. This is due to the fact that the price has dropped and been factored in prior. However, let's imagine the data released at 1.5% which is worse than expected, you can expect the value to decrease majorly. On the other hand if the data was released at 2.5%, even though the interest rate still fell from 3 to 2.5%, it is still expected to see an increase in value of the currency due to the data being greater than the expected result. In other words, when data release is unexpected, you should expect great volatility in the markets.
In the markets, it is important to always watch for the unexpected at all times. Data may be predicted to be very positive or very negative and once released it can be the total opposite. Don't get caught up in trading news as it is not suggested, however learn how to use the fundamentals to your advantage and imply them into your technical analysis.
Basics of Trading PsychologyPsychology is perhaps the single most important aspect of trading. Without the proper psychology, you are almost guaranteed to fail.
First things first, you have to understand that trading is just as much of a profession as any other, and just like top performing athletes, trading reflects your performance, you are responsible for your results.
In life your beliefs shape your reality, and you have to believe without a doubt that you could become a trader. Only once you completely trust yourself, you will be able to go ahead and become a trader. Every aspect of trading is psychological including everything we have spoken about pretty much. And since you trade your beliefs, that makes the biggest impact on the results you will receive. People make decisions based on fear or greed, it is that simple. And since the market is designed to take advantage of individuals psychological weakness, if you do not have control over yours then you will be a part of the 90% who lost that day.
Since all trading is psychological, it is most important to always be working on yourself as a person, because that will greatly impact your mindset and attitude while trading. You cannot finish fighting with a friend, partner, or spouse, and sit on your computer expecting to make great analytical decisions while there is anger and indecisions going on in your head. Trading has to be treated just as much of a business as any other.
A lot of people think that trading mistakes and trading losses are the same thing. However, a trading loss is simply a trade that hit your stop loss and did not go your way. Until the day you learn to accept that losses are just as much a part of trading as winners, you will not become successful. A trading mistake on the other hand is you simply not following your own rules. You have to understand the importance of being disciplined and how it is possibly the single most important aspect of lasting in the markets. Never break your own rules just to be right, because as said earlier, you need to learn that losses are completely normal and expected.
By following your rules, you will focus less on being right and have less emotional attachment to trades. If emotions are attached to every single trade then what can happen is that you could have a great week and make a certain amount of money that week. Now by attaching an emotion to that trade, you are programming your mind to believe that the following week even if half that amount was made, it is not good enough as you do not have the same intensity of positive emotions. In trading you have to be emotionless towards both wins and losses and strictly follow your rules.
According to Dr Van K. Tharp, there are 12 tasks of trading which include:
1. Self-analysis to determine if you are in a state of mind to trade
2. Mental rehearsal to avoid mistakes
3. Daily focus to lead you towards your goal
4. Developing your own style of a low risk idea
5. Stalking the charts starting from high to low time frames
6. Action requiring commitment and not thought
7. Monitoring the trade to keep the risk low
8. Aborting if the trade is not going well
9. Taking profits when the reason for the trade has ended
10. A daily review to monitor and prevent future mistakes
11. Being grateful for what went well
12. A periodic review to make sure everything is still working well
One of the biggest parts of a good trading psychology is believing in yourself. This can sound very straight forward until you deposit real money and place a trade. You will see parts of yourself being tested that you didn't know existed. You might find yourself checking the trade every few minutes or even seconds, you might look at your drawdown and doubt everything that you have done, you might lose a trade and think that you will never analyse another right. Let me give you some common examples, you analyse a trade and all the confluence is there, you then monitor your trade and after several hours you find yourself in drawdown leading you to close the trade, hours later you see that the price went to exactly where you had your take profit. Another might be after losing a trade you see a great opportunity, but your previous loss makes you doubt everything about the trade, only to see it reaching where you had in mind also. Of all the things learnt, if your psychology is not your main focus of work, you will not be able to succeed as a trader, not because you do not have the right knowledge and analysis to trade, but because you are your own enemy.
Over trading is another reason why many people do not last long in the markets. Over trading is extremely negative as placing too many trades and adding on to your losses, you are not managing your risk correctly and only exposing your account and capital to more risk. The psychology going from demo to a real account is great also and individuals need to be careful as emotions will come into play.
If there is one thing that cannot be stressed enough, it is that the aim of trading is to gain pips and not money. Chasing money, especially fast money, is gambling and you will never have control as long as you remain with that attitude.
How to use EMA's as a beginnerIf you are getting started in trading, identifying a trend may not be the easiest thing to do. So here we can see a little example of how using EMA's such as the 20 and the 50 can help.
By placing your EMA's on the chart, you can use them on any TF, however just like every other indicator, the higher the TF the more value it holds.
EMA's can help us identify trends and we can spot what is known as dynamic support and resistance, where just like traditional support and resistance, the moving averages can now act as areas where the price can bounce or reject from as its trending. The further our EMAS move apart, the stronger the momentum is getting for that trend.
When the EMAS are moving very closely together it can help us to identify a ranging or sideways market that is not trending. A crossover can help us to identify the beginning of a trend that is about to start.
Always remember, these indicators should be used as confluences, and not to be relied on solely.
Supply and Demand zones and how to use themAs we can see above i have demonstrated how supply and demand zones can be used to help you analyse a chart.
Firstly we need to identify an absolute high and and absolute low on the TF we are using. The higher the TF the more valid the zones become. When the absolute highs and lows are identified, they are what we know as the major supply and demand and we will expect the greatest reactions to happen around them.
As the chart also shows, price will create sets of highs and lows in between the majors and they are what will become the MINOR supplies and demands. These zones can be looked at as reaction points, however once the price breaks through them they become invalid.
This is just a very brief way of looking at zones in order to help you analyse a chart.
DREAMS QUEST Wedge Breakout 1043% potential (Mobile Version)Hello traders,
DISSECTING A FALLING WEDGE TRADE
THE STRUCTURE
Todays technical analysis is on DREAMS QUEST. This coin seems to be consolidating in a falling wedge pattern which I have seen many times play out very well for the Kucoin bangers that get listed. What you want to look for on a falling wedge pattern is 3 touches on both the bottom support trend and 3 touches on the top resistance trend. This will be the formation of the bullish consolidation falling wedge pattern as saw in the chart.
The key indicators of a bullish falling wedge parttern are a wide mouth at the beginning of the pattern and bullish price heading up to the top of the pattern. Then an ABC corrective wave during a bearish down trend that consolidates tightly at the end of the pattern. A lot of times you will be able to use a fib tool from the bottom of the recent to the top of the beginning of the wedge and see that the bottom of the wedge generally bounces off of the 50% Fibonacci level indicating the price action may have exhausted the bearish market participants.
THE STOP LOSS
There is nothing more important in trading than risk management and protecting your capital. No matter how good of a pattern you see or how promising a trade set up is, the market could always have some bearish news that completely destroys your position. Thus, if you’re going to trade, USE A STOP LOSS!! Ok, for this particular pattern, placing your stop loss is pretty simple, I have a general rule of thumb to place my stop loss 3% below the last swing low of the falling wedge prior to the breakout. Which this will be placed after your entry which we will go over next but, I have listed it in this tutorial first as it is more important than your entry! Your initial stop loss is at .06295¢
THE ENTRY
Your entry will be upon the breakout of the top of the wedge located in area #1 or upon retest of the breakout areas in box #2 shown on the chart. Upon breakout of the top of the falling wedge pattern, in the box labeled #1 this being your initial breakout area, you’re going to want to see a CLEAR bullish candle on the daily come above the trend line and be in the #1 buy box before entry to confirm that breakout. The entry for this trade is between .08718¢ and .09880¢
KEY NOTE and always a rule of thumb here is patience, your entry will come. Make sure you have a clear closed candle outside of the pattern before you think about opening a trade as there are very often false breakouts and it’s better to have a slightly less favorable entry than to have an entry that will end up getting you stopped out before the trade even starts.
Last but not least, another KEY NOTE to look for when placing your entry is to make sure you watch for a spike or increase in volume upon breakout. This is a solid indication that the selling pressure has been exhausted and the market participants are turning bullish, adding more quality to your trade. ALWAYS LOOK FOR THIS INDICATOR FOR OPTIMAL TRADE RESULTS.
THE ALLOCATION
I generally enter with 25%-50% of my allocation I have set aside for this trade at this point. When you’re actively trading it is important to keep your allocation low as when you have a large amount of your capital in a specific trade the hardest parts about trading start affecting you and coming into play. That is the psychology of the trade. The more money you have in any given trade will draw bigger fear and bigger ego if you have a loss or a win. Both are equally bad in trading and will cause you to lose money. So when I say I allocate 25%-50% of the funds I have for this specific trade you have to keep in mind that you should not be using more than 3% of your total account in any particular trade this, my 25%-50% is actually .75%-1.5% of my total account. This makes it easier to just let the trade ride and to follow my plan regardless if I am correct or wrong about my trade, it’s is a calculated loss with a small amount of capital allowing me to have a higher chance of having a smaller drawdown on my overall capital if the market gets bearish on me while I’m in a few longs. So, getting to the other half of my allocation. Generally a consolidation like this will have a very bullish breakout that will pop a hot few candles out of the pattern and generally head to the .618-.5 fib measured from the top to the bottom of the full falling wedge pattern. At this point I take a small amount of profit. About 50% of my current position. This will leave me with .375%- .75% of my capital still in the trade and a small amount of profit that I made from the initial breakout on the side. Now here comes the most important attribute you need to be a good trader, PATIENCE !!! After my small win, I am looking to enter back into this trade at the official retest of the breakout of the pattern. This generally comes shortly after the first target is hit. Again, patience is imperative to your success as a trader. Wait it out until you have a clear candle back at the entry point before you add your second half of your position.
PATIENCE IS KEY BUT, ALARMS HELP!
Have I mentioned that patience is an important attribute you must have to be a successful trader? Not enough? Ok, we’ll it is! I do know that all of our time is very precious and dear so, I have a small remedy to help with allocations your time so you’re not just starting at your charts… USE ALARMS!! TradingView had everything that you need to be successful, it is your responsibility to learn it so you can earn it! I generally first set an alarm at the entry point of my trade set up that I have identified as well as where I’d expect the stop loss to be. #1, so I can be reminded that the trade has either entered my first entry zone, or to let me know that the trade I have identified may not be what I thought it was and to re assess the situation or find a new trade. Again, patience! So, after my entry alarm goes off and I start my initial position, I then set my stop loss and assure my alarm is set a few pips above my stop loss so I can be alerted before it hits as well as well as an alarm at my first target and one more at my entry point. This way I can be alerted that my first take profit was hit and if the price action comes back down to retest I have an alarm there as well to place my second position along with my profit from the first target TP allocated to the whole trade. At this time I double check that my stop loss is a market stop for my total position and that I have an alarm set up for it that sends a text to my phone just in case!
After this I gage my take profit targets and place alarms on all of them as well.
SETTING YOUR TAKE PROFIT TARGETS
This is what we are here for, the profit right? So it’s important that you have take profit targets (TP TARGETS) on your chart as you need to plan the points you’d like to exit your trade. The first target I find is the total and final take profit of the pattern, which can be determined by measuring the distance between point A and point B which can be found at the beginning of the mouth of the falling wedge as shown in the diagram above on the top of the chart. Once you have the distance measured between points A and B you can then ad this measurement on top of the first area of the breakout candle on the bottom of the falling wedge pattern as soon as the price action shows you where it is breaking out. KEY NOTE is to always make sure you’re being conservative and by this I mean, when placing the distance from A to B on C to D, it is important that you don’t try and get it perfectly to the full measure meant on C To D. What I do is shave off a few % from the total measurement so I can allow for margin of error with my target. Minimum of 3%. Now that I have my final target set up at .99704¢ I then take a Fibonacci tool and run it from the top of the pattern to the bottom of the pattern and place TP targets at both the .5 Fib and the .618 Fib lines. I find that this is the easiest way to get quick targets on a falling wedge pattern that the price action generally will react to while heading to the final target. The .5 Fib is at .34509¢ TP target #2 and the .618 Fib TP target #1 is at .23311¢.
Congrats, you’re almost done with your trading plan! Now to the best part!
GETTING PAID!!
Everyone’s favorite part about trading! Ok, now that you have entered the quality trade, have your risk management set up and are ready to get into some profits here we can set a plan for taking some of those beautiful profits. Now being that we have 3 target areas here I generally have 3 separate take profit %’s that I set up along the way by lieu of limit sell orders for the first two TP targets. My take profit target allocation strategy is generally the 33.3% take profit strategy at every target. So for the first two targets, I will set limit sell orders for 33.3% and a 33.4% of my allocation adding up to 66.7% after the first two targets are hit. This way I am already in profit just in case something goes wrong along the way. KEY NOTE it is always smart to take profit, as if you don’t you’re just an investor without a plan and you’re never profitable until you take profit, so congrats, at this point you’re a profitable trader! Yaaayy!! Ok, so for the final take profit I set a market order as a lot of times when the final take profit comes about the price action can quickly get up to this area and we don’t want to be stuck looking for someone to take the coins off of our hands, we want to get them sold and go celebrate our win by looking for our next trade so we can compound these gains amirite??
So awesome, we have a W on the board so we’re done right? No, there’s another tip you should know in trading to assure profits and apply better risk management strategies. What is this you ask?
KEEPING AS MUCH PROFIT AS YOU CAN
How do we do this? Simple, after your first two take profits hit, which you will be reminded on your cell phone via text messge because you, ya sly devil, you set up alarms on your TP targets and now are going to head over to your exchange and move your stop loss up aren’t ya? Of course you are! Where are you moving it to? Why not make that right at your entry point so not only are we assuring we don’t lose any money on this trade at all, but, we are in fact in profit from 3 separate TP targets that we cashed in on!! NOOOOYCE!! So now that we are deciding on what color Lambo we want, we can assure we still have some bank roll by tossing that stop loss up from .06295¢ to the entry of the trade at .10416¢
Ok, you have it all set up, I wish you the best and make sure you’re doing your own research as I am not a financial advisor nor is this financial advice. Before we end, here is some key note reviews and the signal targets for the original trade below.
KEY NOTE AND TAKEAWAYS
#1: Patience is key to any successful trader success.
#2: Allocation should always be a fraction of your total account
#3: Be sure to identify the structure based on the rules above.
#4: Wait for a CLEAR breakout by looking for a daily candle close above the resistance trend line on the top of the falling wedge
#5:The retest happens after the breakout
#6: Not the 6th most important but, ALWAYS USE A STOP LOSS!!
#7: ALARMS make life easy!
#8: You have to take profit to be profitable! SO TAKE SOME OFTEN!
Entry: Between .08718¢ and .09880¢
Stop loss: .06295¢
TP1: .23311¢
TP2: .34509¢
Final TP3: .99704¢
P.S. it’s always important to know the fundamentals on a coin, so with that said, below are some stats, coin info and a link to the coins website so you can further research it during your DD.
FUNDAMENTALS
Dreams Quest Coin Price & Market Data
Dreams Quest price today is $0.090157396598 with a 24-hour trading volume of $8,589,048. DREAMS price is up 31.4% in the last 24 hours. It has a circulating supply of 0 DREAMS coins and a total supply of 186 Million. If you are looking to buy or sell Dreams Quest, KuCoin is currently the most active exchange.
Dreams Quest is building the first-ever metaverse-based economy, a self-sustaining DreamsVerse where people will be able to participate in the decentralised play-to-earn RPG game using dynamic NFTs. Unknown factors will affect character attributes in-game, and post-game outcomes will dynamically change the NFT card attributes and write them on the blockchain (the ethereal scribes) to show game history for each card.
Website: dreams.quest
XRP and the Legendary Jesse LivermoreToday we are going to discuss the Livermore Cylinder an accumulation patter first identified by Jesse Livermore a Legend in the trading industry as he for the most part is the reason we are all here today doing TA. You will get a little history, a little TA knowledge, a nice chart to help with your DD and some education on the fundamentals of this accumulation pattern.
Jesse Lauriston Livermore ( July 26, 1877 – November 28, 1940 ) was a US based stock trader who was a pioneer in the early days of massive market manipulation, little rules and wild west every operator for themselves days. From my readings of Jesse and Richard Wyckoff (my two favorite historical traders) it was crazy times back then and order needed to be created to help the average trader like you and myself have an edge on the game. Thus these two traders pioneered many techniques that we still use today.
One of those techniques is the Livermore Cylinder accumulation pattern which basses a large wave breakout of "Stock A" on wave 8 after a long accumulation period. As you can see on the chart I have laid out for you, the accumulation matches perfectly aside from the black swan event that came about when the SEC filled suit against Ripple Labs for selling an unregistered stock on December 22 2020. This trading pattern is defined by a cylinder shaped accumulation and further confirmed by the volume relating to the accumulation of the asset. To depict the volume of the accumulation I choose to use the Weis Wave Volume indicator by @LazyBear as it best illustrates the accumulation and distribution visually with the waves better then the traditional volume indicator for this specific pattern.
As you can see in the sketch note on "Example A" on the chart titled "Livermore's Speculative Chart" you will see the diagram drawn by Jesse Livermore depicting the accumulation of each move and the volume behind these moves. In wave 1 you will notice a small volume spike showing that buying pressure is starting to increase as well as at the top of wave 2. Wave 3 shows a sell off as the volume decreases but the accumulation continues into wave 4 which is a high accumulation volume and increase in price action. Wave 5 presents the black swan event of the SEC lawsuit against Ripple Labs causing a sell off which matches the volume indication on wave 5 but, the price action slightly pops out of the Livermore cylinder which is ok as it leveled back out after the cooling off period from the lawsuit. Still though presenting an increase in selling volume as the price then started to increase into wave 6. After wave 6 we experienced the sell of that has us to the current price of today and completing wave 7. Per the rules to this accumulation wave 8 will present a large increase in buying volume as well as a swift increase to price action raising the asset up quickly and most likely creating a large blow off top before heading onto to waves 9,10,11,12,13,14 and 15 which would complete this accumulation patter and bring it back down to most likely be the end of this current bull run.
I will update along the way.
I hope you folks have a very GREEN year ahead in 2022. Tell me something that you learned from your trading endeavors in 2021, lessons, mistakes you learned from or some education that you would like to share with the community in the comments below!
Savvy
First become a good trader then focus on the chartsFor day traders, traders who focus on technical analysis it is very important to first master the mental aspect of trading before they move to actual charting. This blog post and video will help you understand the path you need to take if you are a new or struggling trader.
The biggest challenge we see in new traders is that the new traders want to learn as quickly as possible to earn, they rush into trading live and that "rush" doesn't actually allow them to actually learn how to trade, successful trading comes in two parts, the first is mental skills and the second is a complete trading system, without having both of these traders fail.
I'll quote Richard Dennis, a legendary trader, to explain the importance of mindset,
I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline.
Discipline and consistency are mental skills, nothing to do with the system everything to do with the mindset. Meaning that you could have at your disposal the best trading system in the world, but if you don't follow it (with consistency and discipline) you are doomed to failure. - Since you simply won't follow the system.
Most of the great traders that I know or follow, who trade based on charts like us, were great traders first, now once they became great traders (mentally) then, after they because great traders they learned how to read charts and built or learnt trading systems.
Trading is the hardest easy job in the world, easy because you choose everything, from exposure, to when and where you work and all the way to how much you make or lose. You are in control and always will be, but you're only in control when you manage your mindset throughout the day with discipline and consistency.
The main reason we are sharing this is because we have gotten a lot of new members in our community and followers on tradingview, and we just want to help everyone new to us to master their emotions first and then focus on the profits!
Now, while I mention profits above I want to explain the correlation profits have to deeds, I firmly believe in cause and effect, and I believe it works in this way:
poor or average causes = poor or average results (losses, failure, stress)
Good causes = good results
Great or extraordinary causes = great or extraordinary results
Like I mention above, you get to choose everything you do in trading, this is the main difference between actual trading and gambling.
Who are you going to be today? A gambler or a trader? - The choice is always yours!
WHAT WE RECOMMEND TO NEW OR STRUGGLING TRADERS:
Our first recommendation is that you fully focus on yourself, find and accept your weaknesses or limitations.
Weaknesses are overtrading, no patience or discipline. Find them and create plans to remove them, if you're not challenging yourself you cannot be a good or great trader.
Limitations are not having much time, not having capital, not having knowledge, all of which you can work on if you're serious about trading success.
Next is the system, you must find or create a complete trading system... that is the easy part, all you need is a system that governs every aspect of your trading and we have one, not to make this promotional, but you can get our day trade for a living course here and replicate our system.
Now charts are important, very important so you must learn how to read charts, that will only come from practice, lots of practice! Think about it like this, if all the great businessmen/women, sports people and everyone in between practice (read, train etc) don't you think as a trader you need to do the same?
In a nutshell, first develop your mental trading skills, then you can use charts to supplement your trading skills. Just know this, without trading skills your charting knowledge will not be valuable. - You need them both!
8 tips to keep you sharp over the weekend!Tomorrow is Christmas eve, the general markets will be closed, of course crypto will still be rocking and rolling, but the CFD markets will be shut. In day trading it is very easy to get rusty, a few days will do the trick, so with a 3 day weekend approaching we wanted to use this time to help you stay on track so you remain "hot" for the last trading week of 2021!
For those of you who will be celebrating Christmas, you will be busy Friday and Saturday, but we're sure you can find a cheeky hour on Sunday to work on yourself, since the weekend is the perfect time to grind, and do things such as reviewing your trades, seeing which assets moved the most and why (so you can take advantage of these situations in the future).
Today's blog topic will be guidance on what you could work on this weekend to keep yourself hot and not get rusty!
"DO OR DO NOT, THERE IS NO TRY." - YODA
1. THINK HOW CAN YOU IMPROVE YOUR PATIENCE – Having patience as a day trader will help in many ways, one of them being better entries, since entries are directly connected to our PnL it is then a vital skill to acquire, think what you could do to become a more patient trader and create a plan for the new week and apply it on your first opportunity!
2. REVIEW THE MAIN MOVERS THIS WEEK/MONTH – Every successful person, whatever industry it may-be practices a lot, the best way we trades get to practice is to review the charts and see what you could have done to profit in the new week by learning what you missed the week before
3. REVIEW YOUR RULES (PROCESS / ENTRY / EXIT / WATCHLIST) – Always helpful to read over and reevaluate your trading rules, it is a very underrate process, and because the majority of traders do not review their rules and processes they generally do not know what they are nor do they apply them!
4. VISUALIZE SUCCESS AND CHALLENGES – Visualize yourself making good/great trades. see yourself going through different scenarios and achieving the profits you seek. From seeing the perfect setup to executing the trade to exiting the trade, every aspect of trading, see it and feel it. Then also review the challenges you face as a trader, I'm sure you can think of dozens of them!
5. THINK HOW CAN YOU MAKE ONE A+ TRADE AT A TIME - Work on your entry process and criteria, know what the BEST TRADES look like, write it up! So when they show up you can execute with a larger size and maybe bank a much bigger profit than normally.
6. TALK TO EXPERIENCED TRADERS – It is very helpful to get ideas and see what these traders are doing, there is always something for you to learn, even when you become a millionaire trader, you'll still have so much to learn!
7. HOW CAN YOU IMPROVE THE RETETION OF PROFITS – If you are up on the day, set a tighter stop loss to keep your profits, that could always be a solid idea right? There are many ways to retain profits, such as lowering your size after a strong winning streak in a day... but its also your job to think about how you could do this better!
8. WORK ON YOUR PREPARATION – Preparation is Key for success! If you fail to prepare, you prepare to fail! We prepare for a solid hour before we start to trade, there is value in this... so this weekend create your "preparation process" and put it to work!
Ok we are done! Thanks for reading, but before we let you go we have a small request! If you come up with any good ideas that work for you, or have them already, please share them with us we'd love to learn from you too!
Merry Christmas and all the best!
Bitcoin dominance BTC.DBitcoin dominance is moving inside a massive descending triangle! It's only a matter of time before we break below the 40% area! That's when #Alts will start to explode! #Bitcoin loves to repeat history and it's exactly what's going to happen!
Why Traders Suffer From Analysis Paralysis In TradingAnalysis-Paralysis In Trading This is an article I’ve been avoiding. Maybe it’s cos’ I’m guilty of it.
You know, A bunch of knowledge makes—jack cross the rubicon.
It’s December 1, 1990. ugh… what a glorious day! I mean—I’m grateful I survived. Are you? (rhetorically—cos’ I talk to myself a lot). Anyway, I finally get to attend “School of Candles” in Pretoria.
South Africa is a great country but, only because they have one of the best—Trading schools in the world. Hashtag “respectfully” .
I mean—Finally! Heh… I’m here. The Oakland… miserable red-collar guy is here. Can you believe it? Considering all the blown accounts and failed trades—I finally left the country to… South Africa.
Pfft… Don’t mind my excitement—at least—I’m not sitting on my a*s reading this article because I have a problem. You are!
i’m pretty sure you haven’t travelled out yet and it’s cos’ you keep losing. You’re a loser! At least… someone had to tell you.
Don’t worry that makes two of us. Yeah—you and uh… you!
Ugh… duh… I know you are not here for my—school of candles story. You’re here cos—you are stuck!
Am I right?
Anyway, I’ll help I promise. But, you have to promise me that I won’t be wasting my time. Do you promise? Okay—Great.
So…
Analysis Paralysis In Trading (What Does That Even Mean?)
Look at them… so peaceful. Quick question—Have you ever really stopped to watch kids play? The laughter, glee, ambience, passion—so peaceful; so serene!
These guys literally have nothing to worry about. Don’t you miss that?
When last did you laugh? No… like actually laugh. These days—we have to watch a funny illiterate online to… crack up. How miserable can one’s life be?
So sad; so depressing and why’s that?
I don’t know about you—but, I miss those days. Nothing to worry about.
You’re probably wondering, “What’s he on about?”… I just had to remind you of what your life (hopefully you’re still breathing)… is supposed to feel like. Before… I tell you how it actually feels like. That’s why you’re here right.
Shucks. Analysis paralysis—wonder who comes up with these names. In a lame man’s term, it’s basically being paralyzed (not literally) from over-thinking. over-researching and over-analyzing…
Why do we do these things; why do we even do anything. Imagine the thought of—mentally paralyzing yourself… Do you love yourself at all? Of course not—Humans (you reading this now) think of the possible worst for—every situation.
Imagine… You go out and a complete stranger gives you money, from nowhere; out of the blue. What’s the first thing that comes to your mind? Be honest, Don’t lie.
That’s what I thought.
Anyway, Being completely mind-paralyzed is bad. I mean … have you seen—how they have to literally drive paralyzed people everywhere… They become furnitures (not trying to be insensitive); they really can’t do anything… on their own.
You’ll end up—A furniture trader!
Analysis Paralysis In Trading (How Can You Tell?)
In school (school of candles), I attended every class. Wyckoff 101, Fibonacci 203 (borrowed course), Way of the candles, Price-action 105, Order blocks and Market structures 103, Supply and Demand, Indicators not manipulators… Weird ones! I took all.
Trust me —I was a diligent student. But, I had no direction.
I practically learned everything and anything. I mean—I wanted to be a great trader (don’t we all).
The next class (Final year) required… Mastery. I realized that—sticking to one thing was a problem. Oh! No, I can’t choose. I literally attended all classes—just to find out what was best for me—even after taking these classes… in my first year.
Hello Jane, I know this is kind of awkward… But, what’s your major?
Uh… Order blocks.
Imagine! I couldn’t even come up with something. What the H-E-L-L do you want Jamal? You’re just going round in circles.
I couldn’t choose. Wanted to take action but, how could I? No one gave me the memo. I don’t even know what making decisions feels like. “Making Decisions” suddenly sounds like the strangest word in—the dictionary.
So, tell me have you been in this position. All you keep doing is learning—anything; everything. But, no actions!
Two ways you can tell:
Can’t seem to make a decision.
Always looking for a better solution—without actions!
For analysis paralysis in trading It’s not something you can cheat. As a trader, You can’t go over or under it—Dealing with it is… the only solution.
You keep delaying actions—whilst over-analyzing every situation. For this trader—you keep imaging downsides… Always the negatives; never positives. Imagine taking a trade—but, you’ve already imagined—300 scenarios of your plan going badly.
Pfft… heh—who does that? Uh! you. You’re literally mentally paralyzed. What other options do you have than over-thinking everything.
Are You Asking The Right Questions?
Ta-ta… I envy them so much. Anyway, You learn to be in the comfort zone because…
Why stress your brain till it’s paralyzed. Your brain is literally “yours truly”—It would always try to keep your safe. It will protect you, which is good. But, you become safe and unsuccessful.
In trading, which do you prefer?
Actually making a decision irrespective of the outcome or… staying out and avoiding everything.
I mean if we’re being honest—the second option looks safe and comfortable. Will you choose that though? Remember you want to be rich; you want financial freedom.
Even if you go through hell—do it without hesitations.
Yup—That quote is a reference to the previous sentence. Eh… your lack of decision making will only make you—miss out on a million market opportunities. So, are you asking the right questions?
When you literally ask yourself the right questions… It gives room for a clearer thought process and faster decision-making.
Honestly though—Let’s blame google.
An increase in options; an increase in choice. The fear of making the wrong choice arises. Then you become mentally paralyzed.
Most traders today are stuck.
I remember meeting a guy (Joe)—In one of my trading communities—in school. This guy found it hard to make a decision. Heh… So he buys and sells at the same time.
Analysis paralysis in trading can make you a fan of gambling. But, there’s a solution…
You can start by answering the right questions. What are the right questions?
Is it worth the risk?
Will it matter in 5 minutes?
What was my first choice?
Can you answer these questions? Make it a habit to answer these questions before—you take a trade. Not just trading—anything at all… Train that brain of yours.
Is It Worth The Risk?
You know some-times the best way to eliminate choices is to—know the risk attached to each choice. Imagine having a $50 account (your only money) and trying to take a trade. You’ll probably over-think every thing because—you just can’t lose that money. I mean… Heh—that’s all you have right?
So, the first question should be… “If I take this trade, is it worth the risk”. Note that… you might lose—but, the keyword here is “risk”. How much are you willing to let go of?… That should be the first thought.
Try this exercise and you have to be truthful—always!… If I was given $50 and I was told to give someone $5 (out of your $50)… Would I be okay with that?
If you will, then you can decide to risk 10% of that account—knowing that you won’t feel bad if you lose.
Ergo, You’ve just made a decision—because you eliminated your options.
I mean losing 10% of $50 is better than losing all.
Now what next? you need to eliminate all trades that will make you lose more than 10%. See, No mulling— just progress.
Note that… Not all trades are negatives. But, we should always consider the risk.
Will It Matter In 5 Minutes?
Now you know the risk you’re willing to take, the next question is—Will it matter in 5 minutes?
Ever heard of the “5 by 5 rule”?
Well, the 5 by 5 rule states that—if you come across an issue take a moment to think—whether or not it will matter in 5 years. If it won’t, don’t spend more than 5 minutes stressing out about it.
Forget the “5 years”—My own 5 by 5 rules is… don’t waste 5 seconds pondering over it, if it won’t matter in 5 minutes. Mine works right?
I mean… 5 years is a pretty long period you know. By the way, the market waits for no man. The fact of the matter is, there are some problems that do not need your full attention.
Why stress over some money you’re okay losing. If after 5 seconds you’re cool with it then—go ahead!
Do me a favor. Let’s practice… Um—can you remember what you just did 5 seconds ago? If you can, it matters; If you can’t, “It’s irrelevant and doesn’t matter. There, fixed right!
What Was My First Choice?
The human mind is like a sick computer virus.
It’s basically, randomly, just processing relevant and irrelevant informations and thoughts. You tend to have all these choices, thoughts and feelings all mixed up—especially during pressure. I was listening to Roger Khoury the other day and he said, “When driving a car in a—calm state—you’re basically just following the rules of the road right? But, what happens when you’re late for a meeting—You find yourself breaking all these rules.”
Similarly… same applies to the market. You don’t have time; you’re supposed to make a decision—If not, the market leaves you.
Then if you’re like me that attended all classes in—Pretoria, you probably don’t have a particular strategy. Different options; different opinions. What happens?
You become paralyzed!
All this can be avoided if you remember your first choice. Many traders fail to understand that our gut feelings, our instincts—matter.
Where do instincts come from?
In as much as the brain behaves sick sometimes—It also stores useful informations… knowingly or unknowingly. These useful informations are usually processed when needed.
Do you ever know something and wonder—how you know that thing?
It’s cos’ you probably already came across that stuff but, you ignored it. Cos’—It didn’t matter. But, look who wasn’t ignorant “your brain” yeah, remember… “Yours truly” loves you.
Those first choices… are thought of for a reason. So, make them your last resort—always!
Havoc Of Analysis Paralysis In Trading
Hey guys, my name is Jamal and I’m a victim of Analysis Paralysis in trading … “Hey Jamal”…
Sounds familiar. Yeah, group home.
My encounter with Analysis Paralysis in trading wasn’t a great one. There were consequences. Each with its own baggage.
After I narrowly graduated from the School of Candles, Pretoria. I mean I’ve learnt everything—I was ready for the market.
On Tuesday, May 3, 1994, I deposited $50,000 to my trading account. As a graduate of School of Candles—what was the next thing? To get into the real world of trading .
A nasty encounter in the market occurred. I found a GJ (gbp/jpy) trade, the daily had a bearish head and shoulder, the—4 hour, a double bottom. On my chart, I had Bollinger bands, Moving averages, Relative strength index… Name it.
Yeah —I was that confused. Didn’t know if to—buy or sell. Oh! No, a clash of interest.
My indicators… some gave me buy signals; others sell signals. Oh my God! What now? What’s the direction—Now I’m exhausted, tired, I can’t think straight!
The market decides to buy… Yeah, I guess I’ll go long now.
The sound your phone makes when you just placed a trade. Greedy old Jamal, used 2 standards for US30 on a $50,000 account. I was more than confident.
The market does it thing. What! no… no… n0—Why is there a sell taking place now? No!
The Havoc
That’s it… That was so easy I lost it all.
Everything! “What was the point of school then?” I thought. Useless! You’re so useless Jamal. You can’t get anything right.
I couldn’t make a decision… My brain said, “Pause”. I was paralyzed and I failed. Three things happened to me:
My trading performance reduced
Creativity was gone. Couldn’t decide on a strategy and all patterns became useless.
Lost my willpower. I couldn’t make a decision—too many options.
Thank you for listening! “Thanks for sharing Jamal”.
How To Overcome—Final Words
Don’t ask me what I went to a group home to do. Analysis paralysis in trading affects you mentally—It builds into a habit and you become the hesitant trader.
Do you remember him? That guy who couldn’t make decisions, that insecure coward. Yeah—that was who I became.
June 23, 1994, I was in bed. Thinking, crying, staring—”What went wrong?”, I thought. How come… I mean i’ve gone to one of the best schools, learnt everything there is to learn, and graduated with a 2:1. So, what exactly is the problem.
I discover that—I was.
“Jamal you are the problem”—I discovered 6 things. These 6 things I’m going to tell you are very important. I’m telling you because—I love you.
You shouldn’t follow my past; you shouldn’t make my mistakes. My mom’s teaching helped. Remember when she gave me the trading elements and principles…
Steps To Overcoming This Nuisance.
This is the truth; this is my truth. After a month I discovered that:
You need to trust you. No one else opinion matters in the business of trading. It’s your business—You should mind it.
Limit the amount of research (information you consume) you do. It’s called “learn and earn” for a reason—Not “Learn and continue learning”.
Talk to someone. If you think you’re stagnant, you need to pour out all those information—on someone. Teach them!
Perfection isn’t the key. Progress is!
Know your end goal always.
Notice every thoughts and emotions. If possible, write them down.
If you follow this manual, you should never have reason to be stuck or mentally paralyzed. Remember sharing is caring!
Tell someone about this article. Most traders have no idea what analysis paralysis in trading is.
Beating the rake - Know your trading feesLet’s talk about trading fees. This is an area that most people who trade don’t put enough thought into, but it can make a huge difference to your bottom line. This is especially the case when dealing with percentage based commissions in combination with leverage.
Many people, especially those who mainly trade crypto, will be using services that charge percentage based commissions, with fees that can be as high as 0.5% ! But even if you’re trading at one of the more trader-friendly exchanges you’re likely to be paying in the region of 0.1% taker fees for spot trading and 0.04 - 0.06 % taker fees on futures.
That sounds pretty cheap, right? 0.06% fee on a trade sounds almost negligible, which is why most casual traders don’t pay too much attention to it. Firstly though, you need to remember that this is the fee for both buying and selling, so for a round trip (buy and sell, assuming taker fee of 0.06% for each) you’re paying 0.12%
Suddenly that starts to look a bit more significant, especially for short term intraday traders and scalpers.
Let’s take a quick example. Let’s say you’re an intraday trader paying 0.06% taker fees on futures, and your typical Risk/Reward is aiming for a 1% gain and a 0.5% loss for an R of 2.
The breakeven rate with an R of 2 is a 33.33% win rate, which is why many traders aim to trade this way. If they can achieve a win rate in the region of 50% they can be highly successful.
But then we take your trading fees into account.
That 1% average win becomes 0.88 % after your 0.12% round trip of taker fees.
And your 0.5% average loss becomes 0.62 % after your round trip to fee-town.
So now with an average win of 0.88% and average loss of 0.62% your R is down to 1.42!
That means your breakeven win rate has changed from 33.33% to 41.33%!
What if you’re aiming to catch even smaller percentage moves?
If you were aiming for 0.5% average wins and 0.25% average losses for Risk/Reward of 2, but without considering fees, you might be in for a nasty surprise.
Your average win would now be 0.38% and your average loss would be 0.37% after accounting for 0.12% round trip fees on all trades.
The 2 R you were aiming for to require a 33.33% win rate actually becomes 1.02 R, requiring a 49.33% win rate to break even!
And as a last example, let’s say you take a different approach. Perhaps you’re the type of trader aiming to take equal sized wins and losses but aiming for a 60 - 70% win rate to make your money.
At 1% average win and loss (1 R), your wins become 0.88% and your losses become 1.12% after fees. Instead of a 50% break even rate you now require a 56% win rate just to break even!
And if you aim for 0.5% average win and loss (1 R) your average wins become 0.38% and your losses become 0.62% after fees, requiring a 62% win rate to break even!
Can you overcome those odds?
The key takeaway here is that factoring trading fees into your trading plan is absolutely vital to understanding your risk/reward.
The smaller the trading fees are as a percentage of your average trade, the less impactful the fees will be on your bottom line.
To keep your trading fees small as a percentage of your average wins and losses, the simplest way is obviously to trade for larger average wins and losses, taking a swing trading approach with smaller position sizing.
Alternatively, most exchanges/brokers will offer cheaper trading fees for “makers” using limit orders, as opposed to “takers” using market prices. This discount for maker fees will usually slash your fees by 50% - 80%. Many will also offer additional discounts for using a specific token for paying fees (e.g. BNB or KCS) or various discounts for VIP levels/tiers. Do not underestimate the value of these discounts, they can have a very substantial impact on your bottom line, especially if you are a short term intraday trader or scalper. Just a 50% saving on fees could be enough to turn a short term trader from a breakeven trader to a winning one.
EDUCATIONAL CHART WITH LIVE MARKET Here is the example for head and shoulder pattern in gold , So learn from this chart , just watch the market movement in gold , it will work perfectly . Read fully and comment your opinion down , thank you
GOLD EDUCATIONAL IDEASHI GUYS , i always trade with elliott wave , not with patterns , so would like to share an flag pattern here , soon you will know the results thank you
