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The continuous feedback loop of a successful traderDo you know what’s more important than winning in trading? It is knowing exactly why you actually won . Why? So that you can do it constantly. Needless to say, it is equally important to know why you lost when you lost. The successful trader is constantly winning money, no matter the conditions. The economy may be in recession … or not … Algorithmic trading may be accounted for most of the trading volume . The volatility may be over the edge or down to ridiculous levels due to the summer holidays. So what … these are all part of the job . You need to make money because this is your job and if you complain and blame external factors for your poor results then think about choosing another profession. Many would ask how is that possible … to constantly make money in ever-changing markets? Among the other 999 little things, your overall strategy is built upon there is one directly linked to your consistency. That is the continuous feedback and adjustment loop of your trading approach . This is where your post-trade analysis takes place and where you should find out WHY you won or lost. For a discretionary trader, this feedback loop is not an easy thing to put in place, but it’s crucially important to have it. Because, the more useful you want the feedback, the more accurate the analysis should be. The difficulty of building the whole feedback mechanism is finding a fine balance between the depth of the trading details you take into consideration and the time and effort needed for analyzing them. From personal experience, I can tell you that you may fail to have a useful mechanism if you are too superficial. You might as well get lost in “analysis paralysis” as well as if you go too deep. That level of needed compromise is somehow personal. You know you’ve reached it when it can answer the following questions: 1. Is your selection technique giving you enough opportunities per your time frame? 2. Are your entries able to give you the price moves you want? 3. Are your exit techniques able to cut your losers short and let the winners run? If the answer is “No” to any of these questions then you need to ask the next question “Why?” and dissect the effectiveness of that particular technique. Be ready to do the required adjustments if necessary. There is a point in a trader’s career when being able to answer these questions alone will be more useful than an advice from the mentor. From that point on you can be on your own. Best regards! Mihai Iacob
BITSTAMP:BTCUSDEducation
by Mihai_Iacob
27
How to Trade the Cup and HandleHello trader, hope you are having a profitable month. so, There are several ways to approach trading the cup and handle, but the most basic is to look for entering a long position. Place a stop buy order slightly above the upper trend line of the handle. Order execution should only occur if the price breaks the pattern’s resistance. Traders may experience excess slippage and enter a false breakout using an aggressive entry. Alternatively, wait for the price to close above the upper trend line of the handle, subsequently place a limit order slightly below the pattern’s breakout level, attempting to get an execution if the price retraces. There is a risk of missing the trade if the price continues to advance and does not pull back. A profit target is determined by measuring the distance between the bottom of the cup and the pattern’s breakout level and extending that distance upward from the breakout. For example, if the distance between the bottom of the cup and handle breakout level is 20 points, a profit target is placed 20 points above the pattern's handle. Stop-loss orders may be placed either below the handle or below the cup depending on the trader’s risk tolerance and market volatility. Limitations of the Cup and Handle Pattern Like all technical indicators, the cup and handle should be used in concert with other signals and indicators before making a trading decision. Specifically, with the cup and handle, certain limitations have been identified by practitioners. The first is that it can take some time for the pattern to fully form, which can lead to late decisions. While one month to one year is the typical timeframe for a cup and handle to form, it can also happen quite quickly or take several years to establish itself, making it ambiguous in some cases. Another issue has to do with the depth of the cup part of the formation. Sometimes a shallower cup can be a signal, while other times a deep cup can produce a false signal. Sometimes the cup forms without the characteristic handle.
Long
by nicotj
How can we profit after BoJ's intervention?Yesterday, after more than 10 years, the Bank of Japan intervened in the market. UsdJpy pair was very volatile and has a 550 pips daily range from top to bottom. However, thinking of previous interventions, yesterday's volatility represented around 2.5% if we take into consideration the daily close when in the past we had 5% moves... But, what do we know from previous interventions? First of all, they never worked, in fact from the past 11 interventions, BoJ was able to maintain "the move" in only one case, and that time wasn't a BoJ intervention, but a joint intervention in the markets alongside other central banks. Second, and most importantly, we can profit from this. So, how can we do this: 1. As I said, we know that BoJ intervention doesn't work and the pair resumes its previous trend. In UsdJpy we have a clear up trend and in such a case we should look for buying opportunities. Using only support and resistance we can see that under 140 we have a very good level of support. So under 140, we should look for buying opportunities. Considering the resistance provided by the intervention, we can set a take profit in that zone. Considering a hypothetical trade, if we buy at 139.50 with a take profit at 145.50, we have a potential 500 pips profit. As a stop loss, we can use a large and comfortable stop loss of 250 pips, which still gives us a 1:2 risk to rewards ratio, or, be more aggressive and use 138 as a stop loss and, in this case, we have more than 1:3 R: R. 2. Using the ceiling given by BoJ yesterday, which is 146. So, also a hypothetical trade: sell around that zone, set a stop loss of 150-200 pips and as for target, we choose the 140 support. In this case, we count on 2 things: first, we are backed by BoJ which "said" very clearly yesterday that is not comfortable with UsdJpy above 145, second, a lot of people will sell or close their buy positions there, using the same reasoning, putting pressure on the pair. P.S: Keep in mind that levels provided in this article are for the sake of example, not specific points where to buy or sell. Regards and best of luck! Mihai Iacob
Education
by Mihai_Iacob
11
Successful traders think like chess playersEvery day I get many questions from traders and more than half of them are: "What will X asset do today, will it rise or fall" or "Do you think X asset will reach Y price?" With very few exceptions, I say "I don't know". Surely my interlocutor will think that I don't want to tell him/her or that I'm an idiot. In fact, the correct answer is another: "I don't care" And now, dear reader, you will think not that I am an idiot, but a complete one. But bear with me a little more and let me explain using a real trading example on EurUsd Let's say we consider taking a trade on this pair so, we ask ourselves what do we know about it? 1. Fundamentally the USD is favored 2. The trend is down for more than a year. So, we want to trade in the direction of the trend and sell this pair Looking closely at the chart we see that EurUsd is contained in a downwards channel and recently found support in the 0.99 zone. Last week, the pair corrected and reached a high at 1.0150 and reversed exactly from the channel's resistance, leaving a nice and strong bearish engulfing on our daily chart. Going further with our judgment, where do we want to sell this pair? Now, considering my approach, I see a good place to sell in the 1.0030-1.0050 zone. So we set a sell limit order in that zone (Remember, professional traders use pending orders) We also consider at this moment the point where our bearish outlook is negated. We get 1.0150 for our stop loss. Now, using again my personal trade, let's say we set the selling order at 1.0030, with a stop loss at 1.0150 we have a potential loss of 120 pips. We know that every pip move on EurUsd represents 1usd for 0.01 volume, so 12usd potential loss on 0.01 trade for our trade. Now, let's consider volumes. What potential loss are we "comfortable" with? For the sake of example let's say 120 USD, so a 0.1 volume. Now let’s see where we can take profit. 0.97 zone is the falling channel's support, so there. Looking at such a trade we have 120 pips or 120 USD potential loss with 330 pips or 330 potential profit. This gives us a close to 1:3 risk-reward ratio, a very good one. And now, maintaining the analogy from the title is the market’s “move” turn And the market can do only 2 things at this point: fill our pending order or not. Considering that I don't hold pending orders after NY's close, if the market doesn't reach my level by then, I will remove the order, and tomorrow I will start over again by analyzing the market. The second is to trigger our limit order as is also the case for my trade, and we are in a running trade now. Now, with a trade running is again the market's move. So, what are the possible scenarios? 1. The market rises and hits our SL. Although an undesirable scenario, we knew from the start that it’s a possibility and like every trade, this also carries a risk. We considered it and assumed it from the start and didn't trade more than we could afford to lose in a trade. So, we take it like a stoic and move on to the next trade and market analysis 2. The lovely scenario in which EurUsd breaks 0.99 support and falls to our target. So, our reasoning was correct and we now have a trade that brought 330usd in our pocket, but more importantly we traded disciplined with a good R: R 3. The market falls below 0.99 but reverses. Now we can also consider some action - Move SL in BE and let the trade run - Close half to get some money off the table and move SL into BE - Close all trade In conclusion: As you can see, you don't need to be Gary Kasparov to be a good trader, the market's "moves” being in fact just a few. All you need to do is to be aware of these moves and have a plan for each of them. This way you will not end up wondering every minute "where will EurUsd go, it will rise, it will fall", you will not trade emotionally or recklessly. As Benjamin Franklin once said: "Those who failed to plan, plan to fail", but it is not your case, because, as a good trader you always trade with a plan and know from the beginning all that the market can do. Best regards! Mihai Iacob
Education
by Mihai_Iacob
17
GBPJPY UPDATE GJ is looking beautiful here for potential short opportunities, price is extremely over extended since removing all stops above the massive daily wedge formation, now i am expecting a corrective move we have a strong psychological level in confluence with 4H supply at 167.500. On the LTF price is consolidating in a bullish flag formation, but given the current over extension and level price is at i believe this flag is an induction pattern. I would like to see short stops removed above the Asian session high and buyers induced into the market from the flag breakout. If price follows my projection i will be looking for short confirmations at the 4H zone of confluence ✅
Short
by ITSCRYPTO1
1
EURGBP- 120 MINS TIMEFRAMEThe Structure looks good to us, waiting for this instrument to correct and then give us these opportunities as shown on this instrument (Price Chart). Note: its my view only and its for educational purpose only. only who has got knowledge about this strategy, will understand what to be done on this setup. its purely based on my technical analysis only (strategies). we don't focus on the short term moves, we look for only for Bullish or Bearish Impulsive moves on the setups after a good price action is formed as per the strategy. we never get into corrective moves. because it will test our patience and also it will be a bullish or a bearish trap. and try trade the big moves. we do not get into bullish or bearish traps. we anticipate and get into only big bullish or bearish moves (Impulsive Moves). Just ride the Bullish or Bearish Impulsive Move. Learn & Know the Complete Market Cycle. buy low and sell high concept. buy at cheaper price and sell at expensive price. Keep it simple, keep it Unique. please keep your comments useful & respectful. Thanks for your support.... Tradelikemee Academy
Short
by Tradelikemee
Is TA working? A 2k pips drop case studyThere is a great debate about whether technical analysis works or not, and my personal opinion is that most of the time, YES. In this educational post, I will use EurUsd as an example and we will see how, using basic technical analysis knowledge, we could have been on the good side of the market for more than 2k pips. So let's get started... We can see from the image above that after a nice rise started in the first part of 2020, EurUsd reached a strong level of resistance at the beginning of 2021(remember, support and resistance are more likely zones than fixed price points) and dropped to the next zone of support. A new leg up followed this drop from the beginning of April 2021 and we have EurUsd again at resistance at the end of May 2021. From this level of resistance EurUsd dropped again and in mid-August is again at support. As it was normal, we have a rebound from this level of support, but the pair was unable to reach the previous resistance and stopped its rise in the previous level of resistance, just above 1.19. Important note: Although the zone above 1.22 acted twice as resistance we can't yet call for a double top!!! We need the break under the neckline for the pattern to be complete. Finally, on September 2021, we have the break under the neckline and the double top pattern is now complete. As we've learned, we need to have confirmation for the break and this comes at the end of October. Now we can take into consideration the measured target for the pattern of 500 pips and this is reached in just a month after the test, at the end of November. Let's go further and we can see that after the target of the double top was reached, EurUsd entered a range trading period between and old support which is now resistance, and the target of the pattern which is now support. Also, we have 2 great selling opportunities for EurUsd this year using the level of resistance in January and February. Again, going further, in March we have a break of the support of this consolidation, and considering a 300 pips range, we can use it as a target which is reached IN JUST 4 TRADING DAYS!!! Also, if you go back in 2020 you will see that 1.08 acted as support from February till May. Again we have a reversal and the rise stopped in the old support, now resistance at 1.12 zone. Another great selling point To fast forward and get to "our days" we can see that after the retest of 1.12 we have a sequence of two similar outcomes with resistance at 1.08 and 1.03. That being said, in my opinion, there are 3 things that you should take from this post: 1. Trust the process 2. Trade higher TFs and look at the overall picture 3. Trade in the direction of the trend Best of luck! Mihai Iacob
Education
by Mihai_Iacob
34
Preparing for going LONG on EURAUD!As you see, EURAUD is in a retest in 15 minutes TF, so we want to enter Long but after seeing some powerful confirmations such as breacking the level of 1.46454 and the price should make a retest that dont breack the 38.20% of fibonaccin retracement, and after some little confirmations to spot the entry trigger, we can enter LONG on EURAUD to around 1.48036. Dont worry, once i will see all of this confirmation, i'll share with you the entry trigger to enter the position, so Follow me to stay in touch and tell me what do you think about making a youtube channel where i'll post videos analazing the full charts so you can understande well.
by bluetrade007