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Forex preview: NFP, Powell’s testimony, and BoC and ECB decisionThe key events for the week are concentrated mainly between Wednesday and Friday. In the United States, the focus will be on January jobs data and speeches by Federal Reserve officials. The most important of the bunch is of course Federal Reserve Chair Powell two-day testimony in Congress on monetary policy starting Wednesday. Traders will look for cues regarding the future trajectory of monetary policy, with special attention paid to the Q&A session following Powell's opening remarks. Friday will bring the release of Non-Farm Payroll (NFP) data, with expectations of a 188,000 job increase in February. This would be a significant drop from the 353,000 jobs added in January. JOLTs job openings are anticipated to fall to 8.9 million in January after two consecutive months of increases (Wednesday). In Canada, the Bank of Canada is anticipated to maintain interest rates unchanged for the fifth consecutive time on Thursday. In Europe, the European Central Bank (ECB) is expected to keep rates unchanged on Thursday. ECB members continue to advocate for a patient stance, with the consensus being to wait for Q1 2024 wage data before considering a rate cut in June, aligning with current market expectations. In the United Kingdom, all eyes will be on Finance Minister Jeremy Hunt's pre-election budget on Wednesday, which is expected to include tax cuts, which according to the guardian “... runs the risk of getting an adverse reaction from the markets which would snuff out what is still a lukewarm and tentative economic recovery.”
by BlackBull_Markets
RUMINATION IN TRADING👋 Hello, Forex traders! Let's talk about rumination in trading. What is rumination? Rumination in trading is the process of going over previous trades and market situations in your head. Trying to understand what went wrong and to think of a better way of doing things. In "moderate doses" it is analysis. But when a person thinks about it all the time and in a negative way, analysis turns into mania and "self-beating" for mistakes made. Differences Between Rumination and Analysis ❓ Analysis is an essential part of learning to trade. It involves fixing all actions in a table editor, on paper, or uploading history from the platform. Traders analyze their best and worst moments, identify mistakes, changes in risk level, and successful trades. They also look for ways to optimize their trading system. Rumination, on the other hand, is obsessive thinking with an emphasis on the negative. It involves constant "chewing" of negative moments without searching for a solution. A stock or crypto you bought went down sharply, and all your thoughts are occupied with why it happened and how to fix it. Rumination in trading is the habit of endlessly worrying about and analyzing your trades, mistakes, losses or missed opportunities. It can lead to negative thinking, pessimism, depression, anxiety, impulsiveness and inactivity. Rumination prevents a trader from focusing on the present and the future and following his trading strategy and discipline. Rumination, instead of analyzing, improving and solving a problem, only makes the situation worse. Causes of Rumination in Trading 📋 • Lack of confidence. A trader who is insecure is constantly trying to look for mistakes in his previous trades to justify his failures. • Fear of failure. A trader who is afraid of losing money is constantly running through possible failure scenarios in his head to try to avoid them. • Striving for perfection. A trader who strives for perfection is constantly trying to find ways to improve his or her results, even if they are already quite consistent with expectations. Consequences of Rumination in Trading ⭕️ • Decreased trading efficiency. A trader who is constantly replaying past trades in his head cannot focus on the present and make the right decisions. • Loss of money. Rumination can lead to impulsive trading decisions that can lead to losses. • Mental Distress. Constantly running negative thoughts through your head can lead to stress, anxiety, and even depression. How To Avoid Rumination In Trading ✅ 1. Set limits on the time you spend analyzing past trades. 2. Focus on what you can control. 3. Develop positive thinking and self-esteem. 4. Determine your trading goals, rules, risks, and plans in advance and stick to them. 5. Keep a trading diary where you record your trades, results, mistakes, lessons learned, and emotions. 6. Limit the time spent analyzing charts, news, and forums. 7. Take time away from trading, pursue other interests, hobbies, friends, and family. 8. Find ways to relax and de-stress: meditation, sports, music, reading, etc. 9. Mentally prepare yourself for the worst-case scenario before entering a trade. 10. Every night before you go to bed, think of three good things that happened to you during the day. Example ✍️ You buy EURUSD with the expectation of growth. But there is a downside risk. Prepare yourself mentally for the fact that there are all the prerequisites for the fall of the pair, and you are ready to accept losses. If the price has reached the stop loss, take it with the thought "It is good that it is so, otherwise you could have lost even more" and go to rest. Ask yourself: what is the worst that can happen and how can I deal with it? In conclusion , rumination in trading can be detrimental to a trader's success. By understanding the differences between rumination and analysis, identifying causes, and implementing strategies to avoid rumination, we can improve our mental well-being and trading performance. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
16
SWAP ZONES IN FOREX MARKET👋 Hello, Forex traders! In a market situation, swap zones in trading are formed as a result of a change in market direction. When the trend changes, the price often returns to the previous support or resistance line. This is due to the fact that participants often use the lines as reference points for trading decisions. Swap zones can be used by traders to identify optimal entry-exit points for trades. For example, a trader can open a long position when the price is approaching support or a short position when the price is heading towards resistance. What is a Swap Zone? 🧐 Swap zone in trading is a price level that was previously a support and then became a resistance, or vice versa. It represents a part of the chart where the price pauses or rolls back. It is formed as a result of a change in the trend direction. Swap zone is easy to use to identify reversal points. For example, if a price is in a rising market and is pulling back to support, it is a signal that the trend may resume. In order to increase the accuracy of swap zone, it is important to use it in combination with other tools of technical analysis. Swap zone is suitable for deciding whether to open a position. For example, if a price is in a sideways movement and approaches swap zone resistance, it is a signal that the price may break through the level and start a new trend. We can open a long position if the price breaks the resistance, or a short position if the support level is broken. The assistant is useful in various trading systems, including price action and volume analysis systems. In price action strategies, it is suitable for determining potential support and resistance, and in volume analysis it is suitable for determining trend strength. Here Are A Few Strategies To Give You An Example ✍️ Level Breakout. It consists in entering the trade after the price breaks through the swap zone. This is a signal that the trend will continue, you can open a long or short position. Rebound from the level. Entry into the trade after the price bounces off the level. For example, if the price is in a falling market and bounces off the resistance swap zone, this is a reversal signal and you can open a short position. Double Test Level. Opening a position after the price tests the swap zone twice and you can open a short or long position. Pullback after a level breakout. Entry after the price rolls back after a breakdown of the level. It can be a sign that the trend is slowing down. When using the tool, it is important to consider the market direction, trend strength and trading volume. Advantages And Disadvantages Of Swap Zone 📈📉 Before using a pattern, it is important to consider its strengths and weaknesses. Pros: • An effective tool for identifying support and resistance, as well as moments of opening and closing a position; • use together with other tools of technical analysis to improve trading accuracy; • easy to use and understand; • possibility of earning with different tools and in many strategies. Cons: • They are not completely reliable and the market can go in a different direction; • It can be influenced by other factors: news, fundamental data or changes in the mood of market participants; • They do not always provide effectiveness. In summary, swap zones are perhaps the simplest and most effective tool in a trader's arsenal. Levels are the most reliable piece of information you could possibly get about an asset and its price. No amount of analysis will ever tell you more truth than levels can. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
1
HARMONIC PATTERN BUTTERFLY ✴️ Harmonic patterns are prevalent in consolidation markets. These patterns can be used as additional confirmation to enter a trade. Today let's study the Butterfly Pattern. The Butterfly Pattern in trading is a 5-point trend reversal pattern, which consists of two corrections that form the shape of a butterfly. The pattern can be formed on any timeframe, but most often occurs on daily and hourly charts. It has high accuracy, but like any other indicator, it does not guarantee profit. To increase the probability of success, it is necessary to use the pattern in combination with other indicators and methods of market analysis. ✴️ WHAT IS A BUTTERFLY PATTERN? Butterfly pattern in trading is a reversal trend pattern, which is formed from two corrections with the formation of a corresponding shape. It is used to determine a possible market reversal. The formation was first described by Harold Gartley in his book New Wave Theory (1932). He is an American trader and analyst who developed several harmonic patterns, including the Butterfly, Delta and Harmonic Triangle. The Butterfly pattern in trading can appear on any timeframe, but is often caught on daily and hourly charts. For the formation of the pattern, it is necessary that the following point conditions are met: X - the start of an bullish or bearish movement; A - the end of a bullish or bearish movement and it's a start of correction; B - maximum decrease or increase of the price during the market change; 61.8 - 0.786 retracement. C - end of correction (retest of the A point area) and start of a new movement; as long as it does not exceed the A point. D - 127% - 161.8% fibo extension of the XA distance. Gartley's butterfly in trading can have two directions. To determine the Butterfly pattern, you need to find all five points of the formation. X and C are the beginning and the end of the basic movement, and A and B are the top and the lowest point of the correction. Point D is at 127% of the XA distance. If all five elements are present and meet the specified conditions, we can talk about a probable trend reversal. At the same time, it is desirable to use an indicator that would confirm the entry. The butterfly shape does not always have to be perfect. Sometimes the AB correction can be steeper than the BC. The formation conditions are not always perfectly met. Often the XA distance can be slightly more or less than 127%. Stop-loss can be placed not only below point D. The Butterfly pattern is considered a powerful tool that helps traders improve results. But it is important to use it in combination with other market analysis techniques to increase the probability of success. ✴️ HOW TO TRADE A BULLISH BUTTERFLY This is a 5-wave trend reversal pattern that represents two corrections that form a butterfly shape. Features of the design by points: X - start of a rising movement; A - end of growth and correction; B - fall of the price during the correction; C - the end of the process and the start of a new movement; D - 127% - distance of the XA. Entry into the trade is made at the level of point D, and stop-loss is set below point D. The target price is within A-D distance. ✴️ HOW TO TRADE THE BEARISH BUTTERFLY Exit is made after reaching the target price or when trend reversal signals appear. This is a 5-wave market reversal pattern that represents two corrections in the shape of a butterfly. To create it, the following requirements must be met: X - start of a falling movement; A - end of growth and correction; B - increase of the price during the correction; C - the end of the process and the start of a new movement; D - 127% - XA distance. The entry in the bearish butterfly is made at the level of point D, and stop-loss is set above point D. The target price for the pattern is within the Fibonacci levels 38.2% and 61.8% of the A-D distance. Exit is performed after reaching the target price or when there are signals of trend reversal. In both cases discussed above, it is important to combine the pattern with other methods of market analysis, such support and resistance levels, to increase success. You should not enter a trade if the pattern does not meet all conditions. Set a stop loss at a level that will limit losses in case of a failed trade. Also, you can move stop loss to break even once the price hits 38.2% Fibonacci level. ✴️ CONCLUSION The experience of using the Butterfly Pattern has shown that it is quite accurate when trading in a sideways movement or opening trades with a trend. It can be used on any timeframe, but it is more effective in combination with other methods of market analysis. At the same time, the pattern does not always correspond to the conditions and can give false signals. For this reason, it is recommended to check it with the help of indicators. Harmonic patterns should follow the basics of technical analysis. In the first place, of course, is the market structure.
Education
by DeGRAM
2
USDJPY pull back go on long still on the table Hello fellow traders , my regular and new friends! Welcome and thanks for dropping by my post. Long on pullbacks should be still the theme,jpy is weak. Long on other jpy crosses can take a look at well. Do check out my stream video for the week to have more explanation in place. Do Like and Boost if you have learnt something and enjoyed the content, thank you! -- Get the right tools and an experienced Guide, you WILL navigate your way out of this "Dangerous Jungle"! -- ********************************************************************* Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. *********************************************************************
Long
by Shadowing_The_Big_Boys
CADJPY: Waiting For Confirmation 🇨🇦🇯🇵 CADJPY is trading in a bullish trend. After setting a new higher high higher close on a 4H time frame, the pair started to consolidate within a horizontal trading range. I am waiting for a bullish breakout of the resistance of the range. 4H candle close above 111.76 will indicate the strength of the buyers. A bullish continuation will be confirmed then. Next resistance will be 112.0 ❤️Please, support my work with like, thank you!❤️
Long
by VasilyTrader
1
VWAP INDICATOR EXPLAINED👋Hello traders! In this post, I would like to introduce you to the VWAP indicator, which is used by major market participants in their trading. Moving averages are one of the most popular basic tools of technical analysis. More than 10 variations are known: EMA, LWMA, etc. All of them, in one way or another, use the same principle of data averaging; the difference is in the coefficients applied to each period. The VWAP indicator is also an analog of the MA indicator, which differs in the fact that the values of periods are weighted by trading volumes. This makes it possible to see a more real picture in contrast to what MA indicators show. Advantages And Disadvantages Of The Vwap Indicator 📊 In a nutshell, let us recall the principle of calculating a simple moving average (and the rules of their application): the arithmetic mean. If there are three last candles with closing prices (you can choose another price): "5", "3", and "8", then the simple moving average will be equal to (5+2+8)/3 = 5. Now let's imagine that we get to the market. The seller offers 100 apples at the price of 5 euros and 1 pear at the price of 50 euros. If we follow the MA formula, the average price would be (5+50)/2 = 27.5. And this price would be regardless of how many pieces of apples or pears there are. But, agree, this somehow does not accurately reflect the real average price. It would be more correct to also take into account the quantity of goods sold. And then the formula would look like this: (5*100 + 1*50)/101 = 5.44 euros. That is, in this case, one single pear will not dramatically affect the average price. What is VWAP? 🤔 The Volume Weighted Average Price (VWAP) indicator is a technical analysis tool, in which the price of each period is weighted by trading volumes of the same period. If on a 5-minute chart one candlestick during 5 minutes trading volumes conditionally amounted to $1 million, and on the second candlestick to $10 thousand, the influence of the second candlestick on the indicator value will be minimized. Features Of The Vwap Indicator 📝 • VWAP is a trend indicator that works on the same principle as moving average indicators. • VWAP shows the level of liquidity. The higher the volumes of this or that period, the greater the liquidity in this area. Accordingly, a decrease in the indicator value indicates a decrease in liquidity, either because there is a flat period or traders temporarily minimize open trades. • VWAP has a minimum of settings and is a confirming indicator for trend strategies. The VWAP indicator could be a great tool for technical analysis, if not for one question: where to get data on volumes? At an individual broker, it is tick data, which is far from the real market volumes, which distorts the final result so much that it is easier to use classic moving average data. Since each broker has different volume data with almost the same quotes, VWAP will draw different lines on different platforms. From a professional point of view, it is unacceptable. But on the other hand, if you use VWAP as a confirming signal, you can "adjust" to its chart, finding regularities. The indicator signals are interpreted separately for long-term and short-term trends. In preliminary analysis, the long-term trend is evaluated first: if VWAP is below the price line for a long time (it is best seen on a line chart), the trend is upward or downward. On the lower timeframe, the logic is somewhat different. If the current price is below the VWAP, it means that the asset can now be bought at a more favorable price than the average market price. However, there is no guarantee that the price will not continue to go down, so the strategy should be based on the main trend indicator, where VWAP will be an additional tool. If the VWAP indicator crosses the price several times, the market is flat. Conclusion ✅ It is possible to build a successful trading system based on the VWAP indicator. VWAP is not the Holy Grail, but it can be used to build a strategy with a positive mathematical expectation, which is the ultimate goal of forex trading. The VWAP indicator is interesting for those who work with large volumes of trades on the stock market with direct access to the U.S. exchanges, from where VWAP will pull the initial data. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
7
RAILWAY TRACKS CHART PATTERN Railway Tracks Pattern is a secondary formation (unlike pinbars and inside bars) of Price Action, but no less frequent on the chart of price movement of a certain underlying asset. It occurs mainly during the correction of the main trend movement. That is, it is necessary to catch the pattern on a pullback from the main trend. ✴️ THERE ARE TWO TYPES OF PATTERN • Bullish pattern is formed in a downward movement and indicates a change from a bearish trend to a bullish trend; • Bearish pattern is formed in an upward movement and indicates a change from a bullish trend to a bearish trend. ✴️ THE SHAPE OF THE RAILWAY TRACKS PATTERN The pattern consists of only two candles (bars). The following conditions are necessary for the pattern formation. Each candlestick should be facing different directions. That is, there must be bearish and bullish candles. The bodies of the candles should be long and make up at least 70% of the entire length of the candle. By the way, if you switch to higher timeframe of the chart when the Railway Tracks Pattern is formed, you can find a pinbar, which is also a reversal pattern in the Price Action trading system. For example, on the 15-minute chart of the GOLD a bearish Railway Tracks Pattern was formed, which led to a trend reversal: And if you look at the 30-minute chart, you can see a pinbar: These are the nuances of the pattern that can play into the hands of a trader, especially beginners. ✴️ WHAT THE RAILWAY TRACKS PATTERN INDICATES If we look at the pattern itself, we can realize that the market has changed its mood sharply. At the same time, as a rule, this abrupt change of mood is short-term. The pattern indicates a reversal of the current trend, but that does not mean that it will be long-term. Most often, after the pattern in question, the price moves in the direction opposite to the previous trend, for a short distance, a relatively small range. After a sharp change of mood in the market, as a rule, a flat move follows. In the resulting sideways trend, you can usually recognize the next pattern of trend continuation or reversal. ✴️ HOW TO TRADE RAILWAY TRACKS PATTERN In order to apply Railway Tracks Pattern in trading, you need to consider only a high-quality pattern. In addition, the signal from the pattern should be confirmed by any of the following technical analysis tools: • support and resistance levels • Fibonacci levels • trend lines or trend channel • divergence In addition, the pattern is considered to be of higher quality the longer the bodies of its candlesticks are. It is most profitable to trade it at the end of the correction of the main trend. That is, trading will be conducted in the direction of the main trend. The formation of the pattern is a signal in itself. If there is a confirming factor, it is necessary to enter the trade. For the Forex market, the target price is the nearest potential support or resistance level. The order should be pending in the direction of the potential movement. Stop Loss should be at the level of the opposite extremum the highest point in a bearish setup and the lowest point in a bullish setup. ✴️ BOTTOM LINE The Railway Tracks Pattern is a reversal formation in indicator-free trading. It serves as a confirming factor about the trend reversal rather than a full-fledged trading signal. Therefore, the pattern must be confirmed by other tools of technical analysis of the chart.
Education
by DeGRAM
1