Get started

EURUSD-2

How To Find Trend Trading OpportunitiesTrend trading is a style of trading. It specifies what you are looking for when trading a specific market. Style Trend trading sets you on a path to looking for a clear and defined uptrend and downtrend. Anything outside of that realm is no longer considered trending. A clear uptrend defines price forming a path of repetitive high prices called higher highs (last highest price to buy an asset before price declined) and higher lows(last discounted price to buy an asset before the price increased). While a clear downtrend defines price forming a path of repetitive lower prices called lower highs (last highest to buy an asset before price declines to a new discounted price) and lower lows(last highest(cheapest) price to buy an asset before price increased.) If you desire to be a trend trader you want to see the market creating a clear and defined uptrend or downtrend to call it an opportunity. Ignore the drama The next best thing to do is to avoid assets that are not trending. I prefer to trade the forex market. So, if I see any currency pairs absent of a clear trend, I immediately move on to the next pair. It's better on my mind to wait for my opportunity than to create one out of thin air. The more pairs that are not trending the better. This way, I have a small group of currency pairs to watch and trade. Limit the small mindset I have no idea what trades will win or lose. When I'm in my right frame of mind I don't think about the opportunity not working instantly. Which is why I swing trade. I like to lose my money slowly vs. fast as a day trader. It helps me stay clear of telling myself I'm wrong on a daily basis. I found I focus better on the outcome of the trade when I remind myself the market will tell me that I'm wrong. This way, as every outcome plays out I can handle each winning trade and losing with little emotion as possible. Is this always easy to do? Nope! I'd dare not fool you. But it does make it easier to setup for the next series of trades when I only focus on my "trend trading" opportunities. Quick recap You'll do better to find trend trading opportunities by focusing solely on currency pairs that are trending and ignoring the ones that are not. Its wise to limit your mindset by believing you're wrong choosing to trend trade. Let the market tell you when your setup is wrong vs. you telling yourself you're wrong before the trade plays out. This allows you to focus on the outcome of the trade to being overly emotional. I really hope this helps and that you were able to find a gentle takeaway. If you enjoyed this read, please like the post and comment on what your takeaway was. Happy trading 🧡 Shaquan
Education
by ShaquanLopez
5
👉 THE TRUTH ABOUT DISCRETIONARY TRADING ✅According to statistics, 2/3 of those who try their hand at forex trading or another type of financial product trading ultimately quit up. Scientists have been researching financial industry failure rates for decades and have come to the conclusion that a beginner trader has a 10% probability of success. Only the most dedicated and persistent people in the market are rewarded with longevity. Financial markets can give you the opportunity to receive above-average compensation for your work. To help with achieving this goal, a variety of ideologies and tactics are available. Discretionary trading is one of the most intriguing. What Is Discretionary Trading? Trading that is exclusively done at the discretion of the trader is referred to as discretionary (intuitive) trading. Technical indicators and fundamental analysis are minor considerations in this case. First and foremost, trading decisions are based on the trader's instinct and feel of the market. Simply said, systematic trading is based on rigorous rules and algorithms, whereas intuitive trading is based on making judgements (a trading strategy describes in detail the interpretation of technical indicators and indicates how to open and close positions). Discretionary Trading: Pros And Cons There are a lot of misconceptions regarding discretionary trading, just like there are in every aspect of financial activities. Because of this, the idea and definition of discretionary trading are frequently misunderstood. Some people think it's enjoyable for beginners but unworthy of true specialists' attention. Others hold the secret to their swift success and wealth. Only novice traders or experienced pros with a deep understanding of the market may afford discretionary trading. However, traders who possess sufficient intelligence and common sense will be able to benefit from intuitive trading in the following ways: Financial gain If statistics are to be believed, discretionary traders do the best (in terms of total performance). After all, an intuitive trader employs their intuition and hits the target right away, as opposed to a conventional trader who rigorously follows the plan, follows invariably lagging indicators, or waits for significant news. In light of this, if the first trader typically obtains 20% of the profit from a trade, the second trader may receive 200% or 2000%. Six out of ten of the top 10 most successful stock market traders would be regarded as practitioners of intuitive trading. Personal development According to evolutionary psychology, intuitive trading has a significantly greater impact on a person's personal development. After all, it suggests the most logical application of cognitive abilities. In this instance, the trader learns to avoid piling on layers of pointless data while attempting to extract valuable information. Efficiency. Traders run the danger of missing the ideal opportunity to place an order by obsessively reviewing and double-checking analytical data. In discretionary trading, there is no such issue because the blow is delivered accurately and at the appropriate time. Relevance. Ordinary traders run the risk of being unable to keep up with the volatility of the market when using pre-made methods based on the interpretation of technical and fundamental analysis.The major advantage of the discretionary trading system is that the trader adapts their trading to the current market conditions in real-time mode. Of course, if their intuition is so developed that they can assess the market soberly while maintaining calmness and discipline so that emotions do not mislead them. However, as always, there is a downside. There are negative sides to discretionary trading. The main ones are: Process subjectivity is too great. Unfortunately, the way the brain is wired makes people more likely to believe information that supports their preconceptions. A trader, for instance, will typically notice the information that confirms their goal for the markets to rise first if they are passionate about that outcome. This strategy carries significant risks. the impact of observation and expectation. The unconscious impact of the expectation process on how the outcome is perceived is another uniqueness. Can show up as making hasty, rash decisions or, on the other hand, as spending too much time thinking things out and skipping out on having fun. indulgent in one's prejudices Discretionary traders are frequently the victims of cruel tricks by those who fail to understand their own prejudices. Whether one realizes it or not, cognitive biases (and many others) directly influence one's decisions (consciously or unconsciously). Few people have a truly disciplined mind, which is why discretionary trading is a failure for most. Can A Beginner Reach The Level Of A Good Discretionary Trader? Of course! There are chances. Although it's a fallacy to think that everyone who wants it will make it. And to be frank, not everyone needs it. Many traders really find it easier to act according to classical schemes and be satisfied with the profit that can be squeezed out of them. You have to realize that intuitive traders who place orders regularly are world-class players, pocketing millions and billions of dollars. They have learned to distinguish real intuitive impulses from vague hints and impulses arising chaotically in the brain and therefore have achieved success. How exactly did they achieve this? In this case, we are talking about conscious brain training to develop and improve such qualities as: emotional stability; patience; self-confidence; the ability to feel comfortable in stressful situations. Only by having developed them to the fullest, one can talk about any success in this type of trading. It is important to understand: intuition is not some magical characteristic with which fate blesses a person. It is obtained through practice, defeats, successes, new failures, and overcoming them. There are no easy ways. And if someone is sure of the contrary, it's easier for them to make coffee grounds' divination, since the result will be just in accordance with such beliefs. What Is The Catch? One of the worst things a trader can do is rely on intuition without much experience. Intuitive trading is the ultimate in trading, actually elevating it to an art form. Only those traders who have the necessary personal qualities and many years of successful experience can afford to make decisions based solely on intuition. Ordinary traders who do not have enough knowledge and experience are likely to find themselves in a losing position. The statistics are inexorable - 95% of beginning traders who try to trade intuitively (it seems easier to them than following the movements of candlesticks and meticulously analyzing indicator indicators) tend to lose their deposits on their very first trades. For this reason, beginners should use reliable approaches, based on price analysis. After all, indicators and technical analysis are the tools that give a more or less reliable basis for building truly working trading strategies. Simply put, the "intuition" of a beginner is banal guessing, and with such an approach you will not earn much anyway on stock and currency markets. Summary The key aspect of discretionary trading is the effectiveness of the trader as a person. Decisions are made solely based on inner feelings, often in opposition to the current market sentiment. Taking a discretionary approach to trading is not for every trader. Only those who have mastered the standard methods of analysis flawlessly can step on the shaky ground of guesses and assumptions, and most importantly, can feel the psychology and sentiment of other market participants. After all, it is people who ultimately shape the market, and their actions are far from always logical and rational.
Education
by FOREXN1
30
🔻 How To Swing Trade In A Bear Market 🔻Forex traders that decide to trade in a bear market are looking for a strategy or a way to make a profit when markets are falling. But, is it possible to swing trade in a bear market? It is. The most used strategy in bear market trading is the swing strategy. Traders that want to swing trade must first understand the swing trade meaning. Swing trade is a trading path that comes with challenges. While many traders prefer to stay profitable in a continuing bull market, many traders will choose to earn their profit by swing trading in the following bear market. Swing trading is challenging but can also be profitable in short-term intervals. A trader must know how to use the given signals from the market before starting to swing trade in a bear market. How To Do Swing Trading Traders often wonder how to swing trade forex, and the first thing to know is the swing trade definition first: Swing trading is a type of trading style that focuses on profiting from changing trends in price action in short-term intervals. Swing trading is a trading strategy that involves holding a position long or short for more than one session. It can be from one day up, but not longer than several weeks. Traders that use this strategy look to technical and fundamental analysis. They try to explore trading opportunities and analyze price trends and patterns. Considering the volatile conditions in the forex market, a swing trader tries to catch a potential price movement and make a small profit out of it. Generally, swing trading is a good strategy for beginners because they can trade with much less capital than the other trading strategies. Is It Possible To Swing Trade In A Bear Market? A bear market in forex means that prices fall 20% or more from recent highs, which gives the traders a negative outlook and hopelessness. A bear market is always caused by a group of developments or events such as monetary conditions, monetary policy, shifts in yield curves, and many others. The forex market is very volatile and changes very fast. It creates many opportunities to catch the momentum of price action and make a profit out of it. Swing trading is one of the trading options in a bear market. Implementing a swing trading strategy for the bear market is one way for a forex trader to trade successfully. To swing trade profitably in a bear market, traders need to have a strategy likely to survive the changing market conditions. Swing trading in a bear market does work but usually can give the trader a tough time. Traders need to do a market analysis, research all historical data, and create a safe trading plan before going live. What Is Swing Trading And Its Advantages? Swing trading is a short-term trading strategy where you hold your trades for one day up to a few weeks at most. Swing traders use technical analysis, to make a trading plan, and a strategy for an entry and exit from the market. Swing trading can be divided into discretionary swing trading and systematic swing trading. From experience, traders have found systematic swing trading more efficient, as it has shown better results. Advantages Of Swing Trading Traders know their results quickly, from one day up to one month. They give time to work on the swing strategy and make changes on the next entry. The trader has a clear boundary because there is a specific area to observe, knowing exactly when the trade isn't working. Traders can easily limit the damage of a losing position. By entering and leaving the market in short periods, traders can identify a lot of opportunities. It allows the trader to spread the risk and minimize losses. It is important to mention that swing trading is a very good trading strategy for forex beginners and traders that are short on time. Swing Trade Strategy For A Bear Market Swing trading can make a trader's way much easier if they use one of the trading indicators and stick to it. The most are moving averages, Relative Strength Index (RSI), Stochastic Oscillator, and Volume. A trader has many options to create a swing trading strategy for bear market conditions. Traders also use mean reversion as the most common strategy type. In mean reversion, traders assume that the market will make some extreme moves to either side, and those moves are later corrected through a reversion to the mean. It means that the market tends to swing around its average. This strategy type, a mean reversion, is used to identify if the market is overbought or oversold. It is expected to give traders an entry signal. A different swing trade strategy is trend following, which is the opposite of the mean reversion type. This strategy suggests following the trend of direction, which is harder to succeed with than the mean reversion type. The breakout strategy is another type of swing strategy that traders use. This strategy is similar to the trend following, and it works with a breakout level. When the currency pair breaks a level and continues above that level, it is a signal that the market is solid enough and will likely continue in the direction of the breakout. This strategy is functioning the same way as the trend-following strategy. Traders do not always buy on a breakout of a certain level. Often, traders try to include other conditions that are important in deciding whether to buy or sell. Can Swing Traders Make Money In A Bear Market? Not many traders choose to trade in a bear market because it signals pessimism, and it is hard to know how long it will last. In a bear market, the primary trend is to the downside, and different rules apply. Knowing the bear market trading rules can position traders to benefit from them. That gives light on the pessimism of a bear market. There are many opportunities to make money for traders that know how to use the given signals. Taking a bear short swing trade, also called short-selling, will help you to gain profit using a swing strategy during a bear market. Traders need to do pre-market research, then work up to potential trades before they make an entry position.
Education
by FOREXN1
17
TURTLE TRADING - STRATEGY EXPLAINED ✅Currently, the forex market offers numerous different tools to improve trading. Experts in financial markets develop both simple trading strategies, which will be convenient for novice traders, and complex systems, combining several strategies. Besides, experienced participants in the market develop their own strategies for their trading. They base their systems on the elements of technical analysis, trend lines as well as support and resistance indicators. At the same time, the quality and efficiency of a trading strategy are not measured by its complexity and the presence of a large number of elements. One such example is the Turtle trading strategy developed by trader Richard Dennis in the 1980s. As an experiment, Dennis decided to form a trading strategy that would help beginner traders to become professionals. That being said, financial markets are full of risks and no strategy guarantees a market participant a 100% achievement of profit. The only commitment that can lead a trader to success is to follow the rules of money management. In addition, traders must accurately use their trading strategy. The market shows that even in the same market positions and quotes of trading assets, traders act differently and the result of the trade is often different. That is, it depends on the actions and decisions of a market participant whether a trading strategy will work to achieve profit or not. One unsuccessful trade can make a trader slacken, and someone, after making a loss, is sure to win and get a good profit. Richard Denis's Legendary Experiment Richard Denis once argued with his friend William Eckhardt. The latter assured him that trading is a talent. To be a successful trader a person must have certain qualities: an analytical mind and intuition. Denis proved that to be a successful trader it is enough to follow the strategy rules. As a result, an experiment was conducted. Denis recruited a group of 23 volunteers who came to him by advertisement. There were 21 men and two women who had never dealt with trading. Among the volunteers were ordinary people. The training lasted 14 days. After that, the generous teacher allocated his students a million dollars of initial capital each and sent them on a consolidated exchange voyage. The further experiment lasted for 5 years. After it was over, it turned out that 23 million dollars invested brought a total income of 175 million, i.e. the initial capital was increased 7.5 times. Some became successful traders and made a lot of money. Others went bust. Who was right? Most likely both. To be successful, it is necessary not only to have a good strategy but also to have certain qualities. Subsequently, one of the first students of Richard Denis, Curtis Faith, wrote a book about this method, "The Turtle Way. From Amateurs to Legendary Traders", which became a bestseller. The Essence Of The Turtle Trading It involves a time interval of 20 and 55 days. The trend is monitored at a given time interval. The entry is carried out at the moment of breakout. If the price exceeds the limits, it is the entry signal. The exit signal is a price break out in the opposite trend direction of the same time interval. This strategy allows for insignificant losses, but as a result, the trader still makes a profit. Turtle strategy requires careful monitoring of the trend because with the time interval of 55 days for a year can be placed from 3 to 5 positions. Things are a bit easier with the 20-day interval, but it also has its own peculiarities. Denis has developed the following rule: at the breakout of the price on 10-day intervals the previous entrance is considered. It may not have been performed, but the analysis is mandatory. If that entry has brought profit, the current breakout is ignored. This rule is not valid when working with the 55th extremum. Particular attention is paid to the volatility of the trade at the moment. If volatility is low, placing a trade is not recommended because a multimillion-turtle entry could change the situation on the market. Of course, there is risk in every trade. According to Richard Denis, the risk should not exceed 1% of the deposit. In the process, if there was a steady trend, orders could be added. The risk on additional orders should not exceed a quarter of a percent of the deposit. The deposit should withstand losses and wait for a steady trend, which would invariably bring profit. To control the deposit the notion of the unit - the minimum transaction amount was introduced. Indicators And Tools For Turtle Trading The work according to this trading strategy can be done on a clean chart, but it is somewhat inconvenient. You will have to count candles and rebuild levels on your own daily. Indicators solve this problem and do not distort the essence of the Turtle strategy. Among the indicators, we will need the Donchian channel, the standard ATR, and The Classic Turtle Trader, which will be described below. The last tool is used to exit the market. Market Entry And Stop Loss Three Donchian channels with periods of 10, 20, and 55 are set in the chart. There are 2 types of entries: Breakout of the 20-day Donchian Channel. There are no special filters to identify the breakout, it is enough to exceed the High or Low by at least one point. If the first signal of this type has already been closed with a profit and a second one is formed, it is not considered; Breakout of the 55-day Donchian channel. A slower variant of work. If the filter on the previous rule is triggered and the entry point on the 20-day Donchian Channel is not taken, you can enter by the slower indicator. When working with a slower Donchian Channel, there is no such filter as in the previous case. The Turtle strategy in the stock market did not involve physical Stop Losses, they were rather virtual. Traders worked with too much volume; if they placed stops, other speculators would have seen them and adjusted their work. Instead, a level was calculated at which the position was manually closed at a loss. For forex, it could be taken as 2 x ATR with a period of 20. Since the work is done on daily charts, the stop value will be higher in pips. Manual loss fixing was not a problem for the Turtles. Volatility was relatively low at the time. It is not advisable to trade forex without stops, there is a risk of getting caught in an impulse movement, and without SL the loss may be too big. Turtles agreed that the win rate will not be in their favor. The strategy is based on breakouts of levels and is trend-following, but not every breakout turns into a trend. The point is that a profit on one trade that has worked in the positive direction will make up 2-3 losing trades and bring the total result in the positive direction. Market Exit In this strategy, some of the profits will inevitably be missed. No trend-following strategy allows you to take all of the trend movement at 100%, the Turtle system - is no exception to this rule. It is necessary to make sure that the trend is over, because of this the profit is somewhat reduced. The basic rules do not provide a fixed Take Profit. The trade is either closed by a Stop Loss or manually. At the beginning of each trade, the Stop Loss is placed 2N below the entry price in case of a long position or 2N above the entry price in case of a short position. This helped to reduce losses if the price did not change favorably after entry. If new positions are added (on every 1/2N favorable move), the last Stop Loss was also moved by 1/2N. This usually meant that the Stop Loss would always be 2N away from the most recent entry (although it could vary slightly depending on the slippage). There is another Stop Loss method called Whipsaw. With this method, the Stop Loss is placed 1/2N away from the entry point. If the price did not reach the Stop Loss, then System 1 and System 2 exit methods were used. If there is a breakout of the 20-day channel, the position is closed if the chart crosses the 10-day Donchian channel in the opposite direction. If the market entry was upon the breakout of the 55-day High/Low, the position is closed if the chart crosses the 20-day channel in the opposite direction. It is psychologically difficult to hold a profitable position and watch profits decline, but it is a must. If one fixes a profit before these rules are met, there is a great chance of not making a profit. Short-Term And Long-Term Turtle Trading When short-term trading, an interval of 20 days is considered. A maximum and minimum are determined. If the price breaks out the maximum by at least 1 point, it is a signal for buying. If the price breaks out the minimum over the same period, it is a signal to sell. If the previous trade in this system is profitable (it does not matter if it is executed or not), then it is not recommended to place an order. If the trend reverses on the 10-day extrema in the opposite direction from the position opening, it is a closing signal. The long-term system involves the use of daily candlesticks for a period of 55 days. The principle is the same: when the price breaks out the maximum - is bought, and when it breaks out the minimum - is sold. But it is recommended to place an order only with one unit (minimum amount). Then if the trend is steady the orders can be added, but no more than one unit each time. The signal for closing is considered to be a trend moving in the opposite direction to the opening at the 20-day extremums. What Are The Best Assets For Turtle Trading? The Turtles traded in large liquid markets. They had to do this because of the size of the positions they entered. They basically traded in all of these liquid markets except meat and grain. Grains were banned because Dennis himself reached the maximum amount in his trading account. The trader was limited to the number of options or futures he could have, which meant that there were no Turtles left to trade under his name. Here's an example of what the Turtles used to trade: 10- and 30-year U.S. Treasury bonds and 90-day U.S. Treasury bills; Commodities such as coffee, cocoa, sugar, cotton, crude oil, heating oil, and unleaded gas; Currencies such as the Swiss franc, British pound, Japanese yen, and Canadian dollar; Precious metals such as gold, silver, and copper. They also traded futures on indices such as the S&P 500. One interesting thing to note is that if a trader decided not to trade a commodity in the market, he had to give up that market entirely. So, if one of the Turtles didn't want to trade crude oil, they had to stay away from everything else in that market, such as heating oil or unleaded gas. How To Apply The Turtle Strategy To Forex Market Let's consider the work of the Turtle method on forex. Let's take a short-term period of 20 days. Let's select the pair with high volatility. If you remember, this indicator has not played the last role in the application of the method. With low volatility, the Turtles could "make the market" and the strategy would be powerless. The indicator ATR (Average True Range) is used to determine volatility. Using the Donchian Channels, we identify the trends for 10 and 20 days. The last candle is selected on the chart. Count backward from it 20 candles. The maximum and minimum are identified on these 20 candles. Horizontal lines are drawn through these points. If the price goes beyond one of the lines, it is a signal. The price breaks out the maximum - the currency should be bought The price breaks out the minimum - we should sell. The order is placed on an amount, which does not exceed 10% of the deposit. During the process, it is possible to make "additions". It is made only if there is a profit of 0.5% of the deposit. It may look like this. We have a deposit of $1000. Let us assume that the price has broken out the upper border for 3 points and a trade was opened for $100. The trend has steadily gone upwards. "Addition" can be made only when the profit from the invested $100 reaches at least $5. At that point, another $100 is added. The next addition can be made when the profit of $15, that is when the first trade will bring 10% profit, and the second 5%. The stop order is set at the minimum of the last three days. Count back three candles from the time of your entry, and find the minimum - this will be the stop order. If among the last three candles, a specific minimum is not traceable, then find the point corresponding to 1% of the deposit, and the stop order is set on it. For example, 1% of a deposit of $1000 is equal to $10. We analyze the price of one pip, i.e. one pip of currency movement. We divide $10 by the price of a pip. We obtain the number of pips that should be subtracted in the opposite direction from the trend direction since the trade was opened. We set the Stop Loss there. It is the same for the main trade, as well as for the ones we add. Exit from the market occurs when the price will fall to a 10-day minimum. For a short position, the exit point is the price of the 10-day high. For a long-term 55-day trade, 20-day candles are considered for determining the stop order and exit point. Conclusion In the Turtle experiment, the strategy itself is secondary. What is more important is that the real example proves that no talent is needed in trading. It is a profession, and everyone can master it. It is impossible to get the results demonstrated by the Turtles in casual trading. As for the strategy itself, even the basic rules still work. The best result is achieved in equities trading, on forex, it is necessary to optimize, and probably revise the rules to look for entry points in the H4 time frame. Long-term trends are formed less often here, so work in D1 shows no best result. In general, the Turtle strategy is considered quite profitable. But it is necessary to be mentally prepared for expectation and the correct arrangement of trading positions. Adhere to the conditions of entry into the market and exit from trading positions, and then you will achieve a positive result.
Education
by FOREXN1
18
What is a Spread in Forex?Hello hello! In this post, we'll take a look at the basic principles behind the spread in forex market and why it is important. In the foreign exchange market, the spread is the difference between the bid price and the ask price for a particular currency pair. The bid price is the highest price that a market maker is willing to pay for a currency, while the ask price is the lowest price at which a market maker is willing to sell the same currency. The spread, therefore, represents the cost of trading a particular currency pair. When trading in the forex market, traders usually buy a currency at the ask price and then sell it at a higher bid price, hoping to make a profit. The spread is the difference between the two prices and it represents the trader's cost of trading that currency pair. The spread is usually expressed in pips, which is the smallest unit of price change in the forex market. For example, if the bid price for EUR/USD is 1.0735 and the ask price is 1.0740, the spread would be 5 pips. The size of the spread can vary depending on the currency pair being traded and the market conditions. Some currency pairs, such as the major pairs like EUR/USD, USD/JPY, and GBP/USD, tend to have relatively tight spreads, while others, such as the exotic pairs, can have wider spreads. Also, the spread can vary depending on the trading conditions, for instance, during high volatility period, such as economic news release, the spread tend to widen. In forex trading, traders should always be aware of the spread as it represents a cost of trading and it affects the trader's potential profits and losses. Spreads are usually factored into a trader's profit and loss calculations and it is important to consider the spread before opening a trade. Some brokers also offer variable spreads and fixed spreads, it is important to be aware of the difference between the two. Many online forex brokers now offer variable spreads, which means that the spread will change depending on the market conditions, but some brokers also offer fixed spreads, which means that the spread will remain the same regardless of market conditions.
Education
by m_maia14
📈 What Are the 10 Fatal Mistakes Traders Make 📉Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. It is important to know that no matter how experienced you are, mistakes will be part of the trading process. That’s why you should be prepared to expect them and if possible not make them. Easier said than done you would say and you will be completely right. That is why I have compiled a list of trading mistakes that you should be trying to avoid. Real-life trading will show you how “easy” that could be. 1) Trading without having a predefined trading plan The first fatal trading mistake that traders make is trading with no plan. Having a written predefined trading plan will help you for two reasons. Trading depends on several aspects, which include the situation in the markets around the world, the status of overseas markets, the status of index futures such as Nasdaq 100 exchange-traded funds. Considering index futures is a wise option for evaluating the overall market conditions. Make a to-do list and build a habit of researching the market before calling your shots. This will not only keep you from taking unnecessary risks, but it will also minimize your chances of losing money. 2) Over-leveraging Over-leveraging is the second mistake of “what are the 10 fatal mistakes traders make”. Over-leveraging is a two-edged sword. In a winning streak, it could be your best friend, but when the trend changes, it becomes the greatest enemy. Recent talks about banning leverage higher than 1:50 for experienced and 1:25 for new traders in the UK have been a result of a lot of traders losing their money too fast. Whether it will happen next year or not is a matter of time for us to see. This is good news for most inexperienced traders because it will somehow limit their exposure. It will allow them to follow their money management rules easier. For greedier and more impatient traders, this is terrible news. Fortunately, this might lead to a better result in their performance in the long term, as well. Over-leveraging is a dangerous way to believe you can make more money quicker. A lot of traders are misled into this way of thinking and end up losing all their money in a short period of time. Some brokers are offering insane amounts of leverage (like 1:2000) that can lead to nothing more than oblivion. Therefore, one needs to be extremely careful when selecting those levels and the brokers that represent them. That’s why diversification among different brokers is probably the best strategy. 3) Staying glued to the screen a) Set entry rules Computer systems are more effective for the purpose of trading because they don’t have feelings about the things that go into the trading environment and they are neither emotionally attached to the factors that are in one way or the other related to trading. Moreover, computers are capable of doing more at a time as compared to mechanical traders. This is one of the several reasons that more than 50% of all trades that occur on the New York Stock Exchange are computer-program generated. A typical entry rule could be put in a sentence like this: “If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here.” Computers are more rational when it comes to taking quick decisions following a set of rules. No matter how experienced traders are, sometimes they tend to be hesitating in taking a decision no matter what their rules state. b) Set exit rules Normally, traders put 90% of their efforts into looking for buy signals, but they never pay attention to when to exit. At times, it is difficult to close a losing trade, but it is definitely wiser to take a small loss and continue looking for a new opportunity. Professional traders lose a lot of trades each day, but they manage their money and limit their losses, which leads to a profitable trading statement for them. Prior to entering a trade, you should be aware of your exits. There are at least two for every trade. First, where is your stop loss if the trade goes against you? This level must be written down. Mental stops don’t count. The second level is your profit target. Once you reach there, sell a portion of your trade and you can move your stop loss on the rest of your position to break even if you wish. As discussed above, never risk more than a set percentage of your portfolio on any trade. 4) Trying to get even or being too impatient What are the 10 fatal mistakes traders make? Rule number 4 is patience. Patience in FOREX trading eventually pays off as it allows you to sit back a bit and wait for the right trading setup. Most traders are too eager to jump in and trade whenever any opportunity arises. This is probably due to our human nature and the eagerness to make a “quick buck”. But if there is one thing that ensures a high probability of winning, it is having the patience to grasp all the necessary information before you trade. This apparently will take time as there are many factors involved in it, such as the forming of trends, trend corrections, highs, and lows. Impatience to look at these matters could result in loss of money. It could be helpful sometimes to take a break and allow oneself to have the time to look at the bigger picture, instead of focusing too much on one aspect. Remember that a single transaction might resonate in a series of future losses if executed at the wrong moment. It takes time and patience to wait for the market correction before you commit to a trade. BUT IT TAKES TIME…Some traders fail to realize that being successful will take time. They often fall prey to their own impatience in the hope of earning fast money. It could be a rough environment, and charts might be hard to read, so it is wise at times to step back in order to avoid costly mistakes. Don’t rush things out, or try to enter a trade at all costs by just following your gut. The market could be quite tricky and often does send out the wrong signals. Wait patiently for the best opportunities to align themselves and then act mercilessly. 5) Ignoring the trend “The trend is my friend“- another cliche sentence, which has helped me stay on the right side of the market for as long as I am a trader. If you think about trading the way I do, it could be a boring business, but at least one that makes money. I am not really interested in quick returns. I am not interested in penny stocks. I am not interested in the most popular trades that everyone is talking about. I like to do my own analysis. The more boring a trade looks, the better for me the trade is. Always consider the trend before placing the trade! 6) Having a bullish/bearish bias Folk wisdom says that if you throw a frog in boiling water, it will promptly jump out of it. But if you put the frog in lukewarm water and then slowly heat the water, by the time the frog realizes that the water has become boiling, it will already be too late. Studies of decision-making have proven that people are more likely to accept ethical lapses when they occur in several small steps than when they occur in one large leap. This statement also explains nicely the unfortunate process of unprofitable trading. Once you are in a losing position, you don’t realize if it slowly accumulates into a big loss. You have your own bias and it might lead you into obscurity. That is why one of the most important elements of successful trading is objectivity. It is also one of the hardest elements of mastering the field of trading. Inattentional blindness is definitely not helpful to human psychology and when it comes to trading, it could be detrimental. 7) Little preparation or lack of strategy Make sure that you close any unnecessary programs on your computer and reboot your computer before the day begins, this refreshes the cache and resident memory (RAM). Several trading systems allow you to set up the environment according to your needs, set it up in a way that allows for minimal distractions and helps you keep an eye on each in and out, alongside. Keep in mind that a flaw in the trading system can be costly. Make sure you have valid proof that your trading strategy does return positive results on a consistent basis. Do not rush into trading before that. 8) Being too emotional Trading the markets is like stepping into a battlefield- you need to be emotionally and psychologically prepared before entering the field, otherwise, you are stepping into a war zone without a sword in your hand. Make sure you have checked three things before you start trading: 1)you are calm, 2)you had a good night’s sleep, and 3) you are up for a challenge. Having a positive attitude towards trading is extremely crucial. If you are angry, preoccupied, or hung over then you are at a bigger risk of losing. Make sure you are completely relaxed before you step into the market, even if you have to take yoga classes, it is totally worth it. 9) Lacking money management skills Rule number 9 of the “What are the 10 fatal mistakes traders make” list is money management. Risking between 1% to 2% of your portfolio on a single trade is the best way to go. Even if you lose while betting on that amount you will be capable enough to trade some other day and make up for your losses. The amount of risk a trader can take is the amount he thinks he will be able to get back the next day. It is a wise option to start with a smaller amount and slowly and gradually increase the percentage. You can come back to point number 2 “Over-leveraging” and read it again. Having the right money management skills is probably one of the most important traits of a profitable trader. And of course- it is one of the most common mistakes among the losing traders. 10) Lack of record keeping Keeping records is key to being successful at trading. If you win a trade, you should note down the efforts and the reasons that pulled you towards the trade. If you lose a trade, you should keep a record of why that happened in order to avoid making the same mistakes in the future. Note down details such as targets, the exit, and entry of each trade, the time, support and resistance levels, daily opening range, market open and close for the day, and record comments about why you made the trade and lessons learned. You should save your trading records so that you can go back and analyze the profit or loss for a particular system, draw-downs (which are amounts lost per trade using a trading system), average time per trade (in order to calculate trade efficiency), and other important factors. Remember, this is a serious business and you are the accountant. CONCLUSION: What are the 10 fatal mistakes traders make?? Successful paper trading does not ensure that you will have success when you start trading real money and emotions come into play. Successful paper trading does give the trader confidence that the system they are going to use actually works. Deciding on a system is less important than gaining enough skills so that you are able to make trades without second-guessing or doubting the decision. There is no way to guarantee that a trade will return profits. This is the actual beauty of trading and being consistent is based on a trader’s skill set and his/her eagerness to improve. Keep in mind winning without losing does not exist in the world of trading. Professional traders know that the odds are in their favor before entering a trade. It is a continuous process of making more profits and cutting down losses which might not ensure a win every time, but it wins the war. Traders or investors who don’t believe in this adage are more viable to making losses. Traders who win consistently treat trading as a business. While it’s not a guarantee that you will make money, having a plan is crucial if you want to become consistently successful and survive in the trading battle.
Education
by FOREXN1
11
Focus on market structures and avoid trapsHello traders - Here you can see how risky it is to trade without sufficient knowledge, because you can encounter a trap at every step, which will end up costing you a lot. - There are a lot of traps for traders left by big boys in the markets to take your money. That's why it's important to be careful, and don't swim with fish but swim with sharks if you don't want to be eaten. Example: - Specifically in this example, we clearly see that the price is in an uptrend, we see an excellent bullish structure, but the other traders in this situation were manipulated and chose the wrong side of the market. - Other traders focused on the retail head and shoulders pattern, and thats the retail flag, but we actually waited for the price to fill Imbalance and liquidity and then continued with the bullish trend. - We see an excellent reaction from the demand zone, the price reached it in the des PA, and after the reaction, we have an excellent reversal setup. - The price has filled the Imbalance, collected all the liquidity and since our entry continues with the bullish structure. Eventually the other traders fell into the trap, and the price hit their SL. I hope you learned an important lesson from this post, if you liked it leave a like and write a comment if you have any questions.
Education
by hybridtradingfx
2
HEAD AND SHOULDERS PATTERN - TRADING GUIDE Head and Shoulders pattern This lesson will cover the following What is a “Head and Shoulders” formation? How can it be confirmed? How can it be traded? The Head and Shoulders pattern forms after an uptrend, and if confirmed, marks a trend reversal. The opposite pattern, the Inverse Head and Shoulders, therefore forms after a downtrend and marks the end of the downward price movement. As you can guess by its name, the Head and Shoulders pattern consists of three peaks – a left shoulder, a head, and a right shoulder. The head should be the highest and the two shoulders should be at least relatively of equal height. As the price corrects from each peak, the lows retreat to form the so-called neckline, which is later used for confirming the pattern. Here is what an H&S pattern looks like. Other key elements of this pattern and its trade process are the breakouts, protective stops, profit target, and volume, which is used as an additional tool to confirm the trend reversal. So here is how you identify the Head and Shoulders pattern and how its individual components are characterized. Formation and confirmation In order to have a trend reversal pattern, you definitely need a trending market. Let's talk about the first model of H&S, the Inverse or Reversal will have the same methodology but exactly in the opposite way. While prices are trending up, our future patterns left shoulder forms as a peak, which marks the high of the current trend. For the shoulder to be formed, the price then needs to correct down, retreating to a low, which is usually above or at the trend line, thus, keeping the uptrend still in force. This low marks the first point used to determine where the neckline stands. Afterward, a new higher peak begins to form, stemming from the left shoulder low, which is our pattern head. As the market makes a higher high (the head), it then corrects back and usually, this is the point where the upward trend is penetrated, thus signaling a shift in momentum and a possible Head and Shoulders pattern. The second low that is touched after the retreat from the heads peak is the other point used to build the neckline, which is basically a line drawn through the two lows. The subsequent rebound from the second low forms the third peak – the right shoulder. It should be lower than the head and overall match the height of the left shoulder (keep in mind that exact matches rarely occur). It is also preferable that the two shoulders have required relatively the same amount of time to form as this would make the pattern stronger. In order for the Head and Shoulders pattern to be confirmed, the retreat from the third peak (the right shoulder) should penetrate the neckline and a candle should close below it. The neckline itself should be horizontal in the perfect case scenario, but that rarely happens. Instead, most often it is sloping up or down and that is of significance as well – a downward-sloping neckline is more bearish than an upward-sloping one. Volume As mentioned above, volume plays a key role as a confirmation tool and can be measured via indicators or by just analyzing its levels. Presumably, volume during the left shoulder advance should be higher than during the subsequent one, because as the head hits a higher high on the base of declining volume, this serves as an early signal for a possible reverse. This, however, does not happen every time. The next step of confirmation comes when volume increases during the decline from the head's peak and the last nail in the coffin are when volume gains further during the right shoulder's decline. Trading the pattern, stops and profit targets We said earlier that the Head and Shoulders pattern is deemed confirmed if the right shoulder's decline penetrates through the neckline and a candle closes below it. As soon as that happens and you are reassured that it is not a false breakout, you can enter into a short position. However, as you already know, no trading decisions should be made on the go, i.e. you need to have predetermined where your protective stop is going to stand and what your profit target is. Protective stop There are two common places where you can place your stop loss. The first one, which is more conservative, is right above the peak of the head, while a more standard position is right beyond the right shoulder. You can see those visualized in the following screenshot. The second option makes more sense because if the breakout through the neckline actually fails and the price rebounds back with such momentum that it rises beyond the right shoulder, then the whole pattern is flawed and you definitely do not need to wait for it to exceed the head as well. Besides, such a loose stop significantly increases the risk and reduces the risk/reward ratio, thus, reducing this pattern's trading appeal. Profit target The most common and often advised profit target is the distance (number of pips) between the head's peak and the neckline. Having estimated that distance, you then need to subtract it from the neckline, just like in the screenshot below. And how does that translate in terms of risk/reward ratio? If the breakout confirmation (the close beyond the neckline) appears very close to the neckline itself, and we enter into a short position there, we generally have a 1:1 risk-to-reward proportion, if we use a conservative protective stop. Why? Since our profit target is the distance between the heads peak and the neckline, if we decide to use the conservative option for a protective stop, then we will have the same distance as a loss limit, thus, reducing our risk-to-reward ratio to 1:1. This is why, in order to improve that ratio, most experienced traders place their protective stops more often above the right shoulders peak, given that they use the head-to-neckline profit target. However, keep in mind that this price distance should serve as a rough target, because things are usually not that straightforward and other factors such as previous support levels, crossing mid-term and long-term moving averages, etc. must be taken into consideration as well. Two ways to trade the Head and Shoulders Pattern There are generally two ways to trade this pattern, depending on how it plays out. The first one we've already mentioned. As soon as a candle closes below the neckline as a sign of confirmation, you enter into a short position with the respective profit target and protective stop described above. Now for the second way to trade the H&S formation. In this case, we have a pullback after the neckline penetration, which, once support, now acts as a resistance level. This time we need to go short once the price pulls back and tests the neckline as resistance. As soon as it rebounds from the neckline, we enter into a short position, using the same principle for placing the protective stop and aiming for the same profit as in the first scenario. Here is what this would look like.
Education
by FOREXN1
1
Relative Strength IndexThe Relative Strength Index is one of the most widely used tools in traders handset. The RSI is an oscillating indicator which shows when an asset might be overbought or oversold by comparing the magnitude of the assets recent gains to its recent losses. A common misconception is that the RSI draws a comparison between one security and another, but what it actually does is to measure the assets strength relative to its own price history, not that of the market. The Relative Strength Index is useful for generating signals to time entry and exit points by determining when a trend might be coming to an end or a new trend may be forming. It weighs the prices upward versus downward momentum over a certain period of time, most often 14 periods, thus showing if the asset has moved unsustainably high or low. The RSI is visualized with a single line and is bound in a range between 1 and 100, with the level of 50 being considered as a key point distinguishing an uptrend from a downtrend. You can see how the RSI is plotted on a chart on the following screenshot. J. Welles Wilder, the inventor of the Relative Strength Index, has determined also two other fundamental points of interest. He considered that an RSI above 70 indicates that the asset is overbought, while an RSI below 30 suggests an oversold situation. These levels however are not strictly set and can be manually switched, according to each traders unique trading system. Trading platforms allow you to choose any other value as overbought/oversold boundary apart from the conventional levels. How is RSI calculated? The formula is as follows: RSI = 100 – Where the RS (Relative Strength) is the division between the upward movement and the downward movement, which means that: RS = UPS / DOWNS UPS = (Sum of gains over N periods) / N DOWNS = (Sum of losses over N periods) / N As for the period used for tracking back data, Wilders original calculations included a 14-day period, which continues to be used most often even today. It however can also be a subject to change, according to each traders unique preferences. After the estimation of the first period (in our case the default 14 days), further calculations must be made in order to determine the RSI after a new closing price has occurred. This includes one of two possible averaging methods – Wilders initial and still most commonly used exponential averaging method, or a simple averaging method. We will stick to the most popular approach and use exponential smoothing. The UPS and DOWNS for a 14-day period will then look like this: UPSday n = / 14 DOWNSday n = / 14 What does the RSI tell us? here are several signals that the Relative Strength Indexs movement generates. As we said earlier, this indicator is used to determine what kind of trend we have and when it might come to an end. If the RSI moves above 50, it indicates that more market players are buying the asset than selling, thus pushing the price up. When movement crosses below 50, it suggests the opposite – more traders are selling rather than buying and the price decreases. You can see an example of an uptrend below where the RSI remains above 50 for almost the duration of the move. However, do keep in mind to use the RSI as a trend-confirmation tool, rather than just determining the trend direction all by itself. If your analysis is showing that a new trend is forming, you should check the RSI to receive additional confidence in the current market movement – if RSI is rising above 50, then you have a confirmation at hand. Logically, a downtrend has the opposite properties. Overbought and oversold levels Although trend confirmation is an important feature, the most closely watched moment is when the RSI reaches the overbought and oversold levels. They show whether a price movement has been overdone or it is sustainable, thus, indicating if a price reversal is likely or if the market should at least turn sideways and see some correction. The overbought condition suggests a high probability that there are insufficient buyers on the market to push the asset further up, thus leading to a stall in price movement. The reverse, oversold, level indicates that there are not enough sellers left on the market to further push prices lower. This means that when the RSI hits the overbought area (in our case 70 and above), it is very likely that price movement will decelerate and, maybe, reverse downward. Such a situation is pictured on the screenshot below. You can see two rebounds from the overbought level with the first move being extraordinary strong and bound to end with a price reversal, or a correction at least. . Having noted that prices tend to rebound from overbought/oversold levels, we can therefore reach the conclusion that they tend to act as support/resistance zones. This means that we can use those levels to generate entry and exit points for our trading session. As soon as the price hits one of the two extremes, we can use the Relative Strength Index to confirm a probable price reversal and enter an opposite position, hoping that prices will reverse in our favor. We can then set the opposite extreme level as a profit target.
Education
by FOREXN1
27
WHAT IS A PIP AND HOW TO MEASURE IT?WHAT IS A PIP? The pips is the unit with which we measure the price movement of a pair. Example: If the USD/MXN pair is used. If the dollar is worth 20.7 and rises to 20.8, it is said to rise to 1 cent but in FOREX it is not measured with cents, it is measured with pips. The price of the USD/MXN chart has 3 extra decimal places 20.8 000 those 3 extra decimal places are what the pips are measured with: the pip is the fourth number after the point . If the price changes from 20.8100 to 20.80101 the price moves 1 pips, if the price moves from 20.80100 to 20.80110 the price moves 10 pips and if the price moves from 20.80100 to 20.80300 the price moves 200 pips. Pips are calculated differently depending on the pair, pairs with Japanese YEN and pairs WITHOUT Japanese YEN PAIRS WITH YEN
Education
by Ed_Ale
2
Develop your trading psychology There are 2 types of edges in trading, a trading strategy edge and a trading psychology edge. You need to have both to succeed. This post will focus on how to develop your mental edge, which is the more important of the 2 types. The process of developing a trading psychology edge is simple, but usually not easy. Start trading Identify your advantages and weaknesses Find solutions to your weaknesses Review your results Repeat steps 3 and 4 until you reach your goals In this post, I'll give you strategies to uncover your trading genius and overcome your biggest roadblocks. Keep reading to learn the details of each step. 1. Start Trading This step might seem obvious to some people, but it won't be to others, so I'm going to talk about it. In order to develop a mental edge in trading, you have to engage the markets on a regular basis. Even if you only demo trade, taking trades will start to expose your psychological strengths and weaknesses, within the context of trading. Here are some things that you might discover after you begin trading. You're afraid to take trades It's easier for you to follow a rules based trading strategy You have a tendency to revenge trade You're good at riding trends You take good notes You don't like backtesting You get easily discouraged after a series of losses That's just a short list of what could come up for you. But you'll only discover these things when you go through the process of taking trades and experiencing the emotional ups and downs that come with wins and losses. Once you've taken some trades, now it's time to take an inventory of your strengths and weaknesses. 2. Identify Your Advantages and Weaknesses How many times have you experienced an event with a group of people and they noticed things about the event that you missed? This is because they were aware of those things and you weren't. You also probably noticed things that they didn't. That shows that we will only notice things that we place our awareness on. So start a trading journal and write down what you're good at and what you aren't so great at, while you're trading. This is the first step to full awareness. The things you do well will give you clues as to what you should probably focus on in trading. For example, if you find it easy to follow a trend on the daily chart, then you should probably work on trading some sort of trend following, swing trading strategy. If you lose a lot of money when you day trade, then that's probably something you should avoid. Maybe you live in a timezone that makes it difficult to trade the New York Forex session. Then you could work on a strategy that trades the Asian session or the London open instead. Like with any other skill, there will be things that are optional, and there will be things that you have to change. In the case of day trading versus swing trading, you don't have to day trade. You can trade on other time frames, so being bad at day trading is not a problem. But let's say that you have a tendency to over trade and revenge trade. That's a problem that has to be fixed if you want to become a successful trader. So find ways to amplify your strengths. That's pretty easy. 3. Find Solutions to Your Weaknesses The great news is that there are a ton of solutions out there to help you overcome anything you're working on. You simply have to do the work to seek out these solutions and implement them. I cannot list all of the strategies available because there are so many of them. But I'll get you started with the 2 general categories. I believe that there are only 2 parts to the human mind, the conscious and subconscious. Yeah, you probably knew that already. However, I feel that many therapists and coaches don't understand how to apply this concept effectively. Many are trained in a particular type of treatment. Most only follow the doctrine of that modality and think that everything can be solved through that lens. Obviously, the more aware ones understand the limitations of their craft. But there are many who do not. Not entirely their fault. They don't know what they don't know. There are a lot of things that I don't know either. But I do know that it's up you to you to use your intellect to figure out what will work best for you. That said, let's take a look at a real example of why the conscious/subconscious theory is so important. I have a friend who used to smoke. If you know a smoker, or you were a smoker, you know that it can be one of the toughest habits to break. But guess how he quit? He was on a smoke break at work one day… He looked the the cigarette, and thought “This is dumb.” So he quit cold turkey, on the spot. That's it. How was that possible? I don't think that anyone knows for sure, probably not even him. But here's my theory… There's always a reason why we do things. Our actions fulfill a need or desire in our mind. Sometimes the cause of a desire sits in our conscious mind. But many times it sits in the subconscious mind. I believe that the cause of his smoking habit was in his conscious mind. So he could use a conscious thought to change the behavior. That's why it was so easy. Now if the source was in his subconscious, even though he knew that smoking was a waste of time and money, it would have been much harder to quit. So when you look for methods to help you change your behaviors, start with the conscious methods first because those will give you the easiest wins. But if you cannot change with those methods, then it's time to go deeper and dive into your subconscious. It's not always possible to figure out if a behavior is caused by a subconscious or conscious source. It can also be difficult to figure out which part of your mind a treatment will work on. That's OK. Do your best and you'll get a good feel for it after trying a few different things. What about your weaknesses? That will probably take a little more effort. Here's how to get started with overcoming them. Conscious Mind Methods Methods for changing thoughts in your conscious mind usually involve mental visualization exercises, repeating affirmations or visual cues. Neuro linguistic programming (NLP) Mind Movies Visualization Vision boards Mantras Talk therapy Subconscious Mind Methods Changing your subconscious mind is a new concept to many people and it's probably new to you too. The reason why this works may not be obvious at first. You're basically digging down into your subconscious and bringing the causes of your negative behavior to the surface. When you do this, it's much easier to resolve the issue so the symptoms never come up again. This can be very powerful stuff and you really have to experience it believe it. Subliminal recordings Hypnosis with a therapist Cloud Sound Therapy The Emotion Code Clairvision Again, this is just a short list of what's out there. But it will give you a great starting point. 4. Review Your Results Now it's time to see how you've done. Sit down on a Sunday morning with a coffee (or your favorite drink) and review your trading journal again. Did the methods you used work? If yes, then great, you're done! You can stop reading right now. However, it's more likely that you still have things that aren't completely resolved. That's just how it works. Unfortunately, modern mass marketing has given us the impression that there's always a pill or hack that we can use to instantly achieve any outcome that we want. In reality, that's rarely the case. It's like mining. Miners almost never hit gold on the first try. They usually have to do a lot of homework and drill several holes before they find a workable mine. So put down your discouragement and dig your heels in for the long haul. Your transformation could be fast, but it's more likely that it will be a process. That's how your great grandparents did it, along with every generation before them. The idea of instant results is a new and often unrealistic ideal. 5. Repeat Steps 3 and 4 Until You Reach Your Goals Instead of getting discouraged, do this: Congratulate yourself for taking action. Celebrate what did work. It's very likely that you made some progress, no matter how small. Look for the next thing to try. Assuming you gave the first thing an honest try, it just might not have been a good fit for you. I've had many cases where this has happened in my life. For example, back in the day, I used to listen to a lot of Tony Robbins recordings. He's great, I have nothing against Tony. However, I put too much faith in the idea that he had all the answers. I figured that since he had so many high-profile clients, he must have a solution that could help me. So I would listen to his tracks over and over, and implement the strategies…over and over. …and they did help a little. But they didn't create the big shifts that I was looking for. Instead of continuing to do something that didn't work, I should have reassessed my results after a few weeks, then tried something else. I just didn't know any better back then, and I'm OK with that. It literally took me years to figure out that I needed to branch out and try other things. I want you to learn from my experience. If you didn't get the results that you expected, then don't get down on yourself. Remember that one of the the most powerful tools that you can have in your trading toolbox is self-forgiveness. It will take as long as it takes for you to become successful at trading. So get back up on your horse and keep going. Of course, there can be the tendency to have “shiny object syndrome,” where you keep hopping to the next new thing. So you have to be honest and ask yourself if you've given the method an honest try, before moving on. Only you can answer that question.
Education
by Sahran_Mohammed
What Is the Best Divergence Trading Strategy? 👑 What Is Divergence? Divergence is a trading phenomenon that offers reliable and high-quality information regarding trading signals. It refers to when an asset’s price moves in the opposite direction to the momentum indicators or oscillators. Commonly used indicators include the relative strength index (RSI), stochastic oscillator, Awesome Oscillator (AO), and moving average convergence divergence (MACD). Divergence is one of the many concepts that experienced traders use to the time when to enter or exit the market. To say a divergence occurs is to say that the price and momentum are out of sync. This signals that the market is preparing for a trend reversal or pullback, but it does not necessarily guarantee trend directions. There are mainly two types of divergence: 1) Regular divergence is where the price signal creates higher highs or lower lows while the indicator makes lower highs or higher lows respectively. 2) Hidden divergence, which is the opposite of regular divergence, is where the indicator makes higher highs or lower lows while the price action creates lower highs or higher lows respectively. Regular Divergence vs. Hidden Divergence What Is Regular Divergence? Regular divergence can be divided into two types: regular bearish divergence and regular bullish divergence. What is Regular Bearish Divergence? Regular bearish divergence occurs when the price action makes successively higher highs while the indicator makes consecutively lower highs. This suggests that the asset’s price is preparing for a reversal into a downtrend. The indicator signal means that the momentum is changing. Even though the price action has made higher highs, the uptrend may be weak. In this scenario, traders should get ready to go short, i.e., to sell the asset and repurchase it later at a lower price. What is Regular Bullish Divergence? Regular bullish divergence happens when the price action forms progressively lower lows while the indicator creates higher lows. This implies that the prices will move in an upward trend soon. The indicator action implies that the price needs to catch up with the indicator signal and that the downtrend is weak. In this scenario, traders should get ready to go long, i.e., to buy the asset. How to Trade Regular Divergence? Divergence only tells traders that the momentum of a price movement is weakening. This does not necessarily lead to a strong reversal, and the price movement may just be entering a sideways trend (horizontal price movement within a stable range). To create a more reliable divergence trading strategy, skilled traders combine indicators with various tools. Regular bullish divergence and regular bearish divergence have different entry rules. In any case, once a trader has spotted a divergence, they should consider how to enter or exit the market and place their Stop Loss or Take Profit orders. What’s a hidden divergence? Divergences not only signal a potential trend reversal but can also be used as a possible sign for a trend continuation (price continues to move in its current direction). Hidden bullish divergence happens when the price is making a higher low (HL), but the oscillator is showing a lower low (LL). Hidden Bearish Divergence occurs when price makes a lower high (LH), but the oscillator is making a higher high (HH). Keep in mind that regular divergences are possible signals for trend reversals while hidden divergences signal trend continuation. Regular divergences = signal possible trend reversal Hidden divergences = signal possible trend continuation Conclusion Trading divergence can be very profitable if traders can reliably identify divergence by making use of the trading tools in their arsenal. However, like all trading strategies, using divergence indicators involves a certain degree of risk. [
Education
by FOREXN1
24
The Last Kiss trade. Eurusd The first step of the last-kiss trade is to identify the consolidation zone. One way to visualize a consolidation zone is to draw a box on the chart. This box will contain the choppy movements of the directionless market. This box should encompass the market movement during the choppy, drifting-market phase. It should be obvious that the market is stuck between both of the zones. Typically, there will be several touches on either side of the zones. The last-kiss trade is based on the retouch principle. The market will often come back to a significant zone once the market has expanded beyond the zone, and the last-kiss trade is designed to take advantage of this typical market behavior. The reason for waiting for the market to come back to the consolidation box is to confirm that the market will, indeed, respect the boundaries that were formed by the consolidation box. In this way, the trader will jump on the trade only when the market comes back to kiss a consolidation box. Once the market returns to the edge of the consolidation box, it must print a strong candle in the direction of the breakout. Therefore, if the breakout is a bullish breakout (up), then the retouch candlestick must be a strong bullish candlestick. A buy stop is placed above the high of this bullish candlestick.
Education
by EMkioko
FOREXN1:SWING TRADING - MADE IT EASY - A GREAT STYLE OF TRADINGSwing trading is a style of trading that attempts to capture short- to medium-term gains in a stock (or any financial instrument) over a period of a few days to several weeks. Swing traders primarily use technical analysis to look for trading opportunities. Swing traders may utilize fundamental analysis in addition to analyzing price trends and patterns. Some general Rules before going in the Deep of the Strategy : - Swing trading involves taking trades that last a couple of days up to several months in order to profit from an anticipated price move. - Swing trading exposes a trader to overnight and weekend risk, where the price could gap and open the following session at a substantially different price. - Swing traders can take profits utilizing an established risk/reward ratio based on a stop loss and profit target, or they can take profits or losses based on a technical indicator or price action movements. Rules of entry : Swing trading means " Surfing the trend " Using the Swing points as an entry inside a trend. The Swing point is basically retracements inside an already-started trend. Let's see the picture below. I personally call the Swing point or retracements " V " points. Let's look together. . As you can see the retracement inside a trend looks like a " V " point. In a Bearish scenario, the " V " is upside down meanwhile inside a Bullish trend the " V " is on the correct side. Let's note, the " V " points can look also like " W " or generally is correct to call them a " Pullback " Area. In this example, EUR/USD we can see how the price used the " V " shape as Pullback to continue the downtrend. In the picture below I add the Moving averages, the 200 and the 50. This easy and simple technical indicator can help you to determine the direction of the trend. If the price is below 200, generally it means the price is in a Downtrend, and Vice-versa when the price is above, generally it means is in an Uptrend. The 50 Moving average can help you to understand if the price it's started to grow, and when the moving average crosses the 200, generally it means that the price is started a bullish impulse. You can use any kind of indicator to determine the direction of the main trend, the moving average is one of the most used in this style of trading. As you can see, the moving average, like the 50 in this case, in EUR/USD has been used from the price as a Pullback trigger to continue the downtrend. I explain better... The price inside a Pullback Area or " V " point, in a downtrend, below the 200 Moving average, has used the 50 Moving average as a dynamic resistance and rejected the price in the direction of the main trend. Swing trading as explained use technical analysis to look for trading opportunities. Look how conventional support and resistance can work in this, another clue to add to our idea of entry. Additionally, in our plan of action, we can add some technical indicators, look how the Stochastic indicator can give a clear overbought reversion signal. Not least, the use of the Fibonacci retracement can give the Swing trader a clear metric of entry and exit point with relative stop loss and take profit area. In This last example, we can add together all the previous clues given by the Technical indicators, the use of support and resistances, and adding also Fibonacci retracements as targets for Stop loss and take profits. Remember, Swing traders may utilize fundamental analysis in addition to analyzing price trends. Advantages and Disadvantages of Swing Trading Many swing traders assess trades on a risk/reward basis. By analyzing the chart of an asset they determine where they will enter, where they will place a stop loss, and then anticipate where they can get out with a profit. If they are risking $1 per share on a setup that could reasonably produce a $3 gain, that is a favorable risk/reward ratio. On the other hand, risking $1 only to make $0.75 isn't quite as favorable. Swing traders primarily use technical analysis, due to the short-term nature of the trades. That said, fundamental analysis can be used to enhance the analysis. For example, if a swing trader sees a bullish setup in a Forex pair, they may want to verify that the fundamentals of the asset look favorable or are improving also. Swing traders will often look for opportunities on the daily charts and may watch 1-hour or 15-minute charts to find a precise entry, stop loss, and take-profit levels. Pros It requires less time to trade than day trading. It maximizes short-term profit potential by capturing the bulk of market swings. Traders can rely exclusively on technical analysis, simplifying the trading process. Cons Trade positions are subject to overnight and weekend market risk. Abrupt market reversals can result in substantial losses. Swing traders often miss longer-term trends in favor of short-term market moves. Hope this guide can be useful for everybody.
Education
by FOREXN1
33
FOREX 101 - 4 TYPES OF LOT SIZES.What is a lot? A ‘lot’ is a measure of a transaction amount. It’s the minimum number of units of the base currency that you can buy or sell. This gives traders more control over the exposure per trade. There are four main types of Lot Sizes. Lot size #1: Standard lot = 100,000 units of base currency Risk per pip =$10 per pip Lot size #2: Mini-lot = 10,000 units of base currency Risk per pip = $1 per pip Lot size #3: Micro-lot = 1,000 units of base currency Risk per pip = $0.10 per pip Lot size #4: Nano-lot = 100 units of base currency Risk per pip = $0.01 per pip Did you find this helpful? Let me know in the comments so I can do more Forex 101 tips. Ask any trading questions too :) Trade well, live free. Timon MATI Trader
Education
by Timonrosso
2
InvestMate|December the worst month for bulls on the US dollar🐻December statistically the weakest month for the US Dollar, a statistic since 2000 against the EUR/USD. Relative to statistics, December is the month in which EUR/USD gains the most. The average EUR/USD increase for the month is over 1.58%. This year there is a really good chance that the rule could be confirmed. December statistically the weakest month for the US Dollar, a statistic since 2000 against the EUR/USD. Relative to statistics, December is the month in which EUR/USD gains the most. The average EUR/USD increase for the month is over 1.5% This year there is a really good chance that the rule could be confirmed Historically, the increases have been: 2000: +8% 2001: -0.37% 2002: +5.59% 2003: +5.04% 2004: +1.91% 2005: +0.44% 2006: -0.3% 2007: -0.3% 2008: +9.75% 2009: -4.48% 2010: +3.15% 2011: -3.62% 2012: +1.54% 2013: +1.43% 2014: -2.93% 2015: +2.84% 2016: -0.66% 2017: +0.85% 2018: +0.84% 2019: +1.8% 2020: +2.45% 2021: +0.4% 2022: ? Average: +1.589% 🚀If you appreciate my work and effort put into this post then I encourage you to leave a like and give a follow on my profile.🚀
Education
by InvestMate
1
Endless Debate Among Investors & Traders: Which One is Better?Have you ever seen the debate on any social media platforms between traders and investors? On each side, Investors or Traders Claimed their techniques were far superior to the other because of the capability of earning more profit and a High Win Rate. Endless Debate Between Investors and Traders never stops to this day. They are blinded by their false sense of superiority. They failed to recognize the similarity between them. Both were waiting for the ideal price level before buying stocks to get a capital gain or dividend (Money) with a bit different approach. The Investors determine the ideal price level to buy the stock by analyzing the Intrinsic value of the company and then buying the company below its Intrinsic Value (buying a Cheap Company and Selling it at its fair price). On the other hand, Traders will analyze the historical price movement and look for repeating patterns that may indicate a potential upside movement before buying the stock at the determined price level. We have some similarities in method and purpose. If both sides could prove themselves profitable in the long run, why are we wasting our time to win the debate? It would be best if we use your time wisely to improve your strategy than debating on Social Media Platforms. Improving your strategy can make you more money! *Disclaimer On: The Article is for Educational Purposes Only.
Education
by financialfreedomgoals101
4
New York Open Killzone Explained | Real Trading Concepts8:30 in the morning NY Time is what your eyes 👁️👁️ should be on. This time of day unleashes huge volatility in the market that you can take advantage of if you know how to benefit from it. Price at this time likes to entrap a lot of retailers to revers against them and take stoplosses.. Every day at this time..A Lot of news, a lot of volatility, and clear direction and price movements.. Don't Forget to LIKE ♥️ and make sure to FOLLOW if you want useful ideas straight to your email👌 Let me know your opinions in comments 😉
Education
by MST_Trader
3
CYPHER Harmonic Pattern - Made Easy For Everyone !The Cypher harmonic pattern is a technical analysis indicator used by traders to identify valuable support and resistance levels based on the Fibonacci sequence of numbers and detect trend reversals. Here, in this article, we explain how the Cypher harmonic pattern works, identify it, and trade it. What is the Cypher Harmonic Candlestick Pattern? The Cypher harmonic pattern is a technical analysis formation indicating a price-action reversal. The pattern was discovered by D. Oglesbee and is known as a relatively advanced pattern formation. In structure, the Cypher pattern is similar to the butterfly harmonic pattern; however, the Cypher is not a very common chart pattern due to its unique Fibonacci ratios. The Cypher pattern, which can be either bullish or bearish, has five points (X, A, B, C, and D) and four legs (XA, AB, BC, and CD). Like any other harmonic pattern, the theory behind the Cypher chart pattern is that there is a strong correlation between Fibonacci ratios and price movements. Eventually, the market is expected to reverse from point D after the four market swing wave movements How to Identify and Use the Cypher Harmonic Pattern in Forex Trading? Much like any other harmonic chart pattern, several conditions must occur so you can identify the Cypher pattern: B point retracement of the primary XA leg ranges between 38.2% to 61.8% Fibonacci levels C point is an extension leg with a Fibonacci ratio that should be between 127.2% to 141.4% of the primary XA leg D point should break the 78.6 retracement level of XC Let’s see what the Cypher harmonic pattern looks like on a trading chart. Cypher Pattern – Set a Stop Loss A reasonable stop-loss level when trading the Cypher pattern is simple and does not necessarily require the combination of Fibonacci retracement. All you need to do is to place the stop loss somewhere below the D level because if this level breaks, the entire Cypher pattern is invalidated. So, the stop would be placed at the next support or resistance level, which is the X-point Cypher Pattern – Set a Take Profit Target The simple Cypher pattern trading method is using its points as profit targets, meaning the A and C levels. How accurate is the Cypher harmonic chart pattern? The Cypher harmonic pattern has been historically proven to be a fairly reliable and accurate chart pattern. According to various studies, the pattern has an accuracy rate of around 70%.
Education
by FOREXN1
31
REVERSAL AND CONTINUATION PATTERNS ⚡️Chart patterns are visual representations of price action. Chart patterns can show trading ranges, swings, trends, and reversals in price action. The signal for buying and selling a chart pattern is usually a trend line breakout in one direction showing support or resistance is overcome at a key level. Stop losses are usually set on retracement back inside the previous range and profit targets are usually set based on the magnitude of the previous move leading into the pattern. Many people think of chart patterns as bullish or bearish but there are really three main types of chart pattern groups: reversal chart patterns, continuation chart patterns, and bilateral chart patterns. Understanding the differences is important for traders to understand the path of least resistance on a specific chart based on the primary sentiment of the buyers and sellers price action. Well in this article we will discuss the Reversal chart patterns and the Continuation chart patterns. Reversal chart patterns Reversal patterns happen when a chart has a strong break from its current trend and its momentum reverses course. These patterns show that a trend is coming to an end and the price action is moving in a new direction away from the previous range or direction. These patterns go from bullish to bearish or bearish to bullish. They can take longer to develop than other types of chart patterns. Now I'll show you how the 3 Bullish and Bearish patterns shown in the picture in this Education post. Double TOP and BOTTOM: Well for this first pair of patterns, I have already made a very nice and detailed explanation here in Tradingview, follow the link :) Click Below in the picture. Head & Shoulder and Reversal H&S A head and shoulders pattern used in technical analysis is a specific chart formation that predicts a bullish-to-bearish trend reversal. The pattern appears as a baseline with three peaks, where the outside two are close in height, and the middle is the highest. The head and shoulders pattern forms when a stock's price rises to a peak and then declines back to the base of the prior up-move. Then, the price rises above the previous peak to form the "head" and then declines back to the original base. Finally, the stock price peaks again at about the level of the first peak of the formation before falling back down. The head and shoulders pattern is considered one of the most reliable trend reversal patterns. It is one of several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end and vice versa. and Viceversa the reversal will look like this Reversal Rising Wedge and Falling Wedge A wedge pattern can signal either bullish or bearish price reversals. In either case, this pattern holds three common characteristics: first, the converging trend lines; second, a pattern of declining volume as the price progresses through the pattern; third, a breakout from one of the trend lines. The two forms of the wedge pattern are a rising wedge (which signals a bearish reversal) and a falling wedge (which signals a bullish reversal). Rising Wedge This usually occurs when a security’s price has been rising over time, but it can also occur in the midst of a downward trend as well. Falling Wedge Continuation chart patterns Continuation patterns signal that the current trend is still in place and it’s about to resume going in the same direction after a trading range has formed. These types of patterns usually form consolidations in price action to let buyers and sellers work through supply and demand before moving higher or lower like the previous trend leading into the range. These are the most popular classic bearish and bullish chart patterns. Continuation Falling Wedge The falling wedge pattern is a continuation pattern formed when the price bounces between two downward-sloping, converging trendlines. It will follow the impulse trend, so a Bullish trend will continue in the uptrend and Vice-versa for il downtrend. And Vice versa the Rising Wedge The Bullish and the Bearish Rectangle A rectangle is a pattern that occurs on price charts. A rectangle is formed when the price reaches the same horizontal support and resistance levels multiple times. The price is confined to moving between the two horizontal levels, creating a rectangle. Bullish Rectangle Bearish Rectangle: Bullish and Bearish Pennant In technical analysis, a pennant is a type of continuation pattern formed when there is a large movement in a security, known as the flagpole, followed by a consolidation period with converging trend lines "the pennant" followed by a breakout movement in the same direction as the initial large movement, which represents the second half of the flagpole. Some examples: Hope this post will help you to understand the difference between some examples of the most common reversal and continuation patterns.
Education
by FOREXN1
22