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Fundamental Analysis

5 QUESTIONS Before you Take your TradeWith each trade you take… There are these 5 standard questions you’ll need to ask an answer. Jot these down and have them ready… Do I Have a Trade Lined Up? When you go through your watchlist. You need to see any opportunities in the market that align with your trading strategy. These should stick out like a sore thumb. If it’s not, then it’s probably not a high probability trade. It’s important to analyze the market trends and indicators to identify potential trades. This will help you to make informed decisions and avoid taking unnecessary risks. Do I Have a Trading Strategy? Once you have identified a potential trade, it’s important to have a solid trading strategy in place. Your strategy should outline the rules for entering and exiting trades, as well as risk management guidelines. Follow your strategy and avoid making impulsive decisions based on emotions or market rumors. Where Should I Place My Trading Levels? You got the strategy so now you have to set up your trading levels. (Entry, Stop loss, Ghost level, Take profit levels) Are you using Order Blocks, key support and resistance levels, patterns, indicators or trend lines? Whatever you use, keep consistent to determine where to place your trading levels. This will help you to choose your trading levels based on the R:R for each trade. How Much Am I Trading? Trade size is crucial. You need your calculator to work out your risk per trade. This will help you to manage your risk effectively and avoid making emotional decisions. Your risk management plan should outline the maximum amount you are willing to lose on any given trade, as well as the maximum percentage of your trading account you are willing to risk. What Is My Exit Strategy? exit strategy should outline the conditions under which you will exit a trade. So you’ll know where to cut your small losses, ride your winners, lock in profits, or even adjust your take profit levels when the markets move well in your favour. Also, make sure you stick to your exit strategy and avoid making emotional decisions based on market fluctuations. THEN YOU’RE READY TO EXECUTE! Once you have gone through the five questions… It’s time to ask yourself whether you are truly ready to take the trade. Focus your mind, clear the distractions, confirm everything is ready to go… That takes emotional discipline. You got the questions, now go start asking and answering them with your trading…
JSE:J200Education
by Timonrosso
Ninja Talks EP 8: Timing a TradeMan I used to have the worse timing, I cringe just thinking about all the times I entered a trade only to realise moments later I timed it wrong - this goes for long and short term investments - timing a trade wrong makes you feel more useless than a bottle of sand in a desert. But there are ways round it. Not easy, but possible. And it doesn't take a genius to benefit from them. My favourite is the train surfer analogy; Most traders (Bambi's I'm looking at you) think of timing a trade like waiting for a train at a train stop, this couldn't be further from the truth. This is the equivalent of picking a top and bottom. It's where the most volatility happens and where liquidity grabs, stop runs and general tom foolery takes place. The trick is to wait for price to turn and short/long the bounces/pullbacks. This can be likened to a train surfer. The train surfer hides and waits for everyone to get on board, for the direction and departure to be clear and as the train is leaving they simply "hop on". This is how to time a trade! And with each experience you'll get better at it thus giving you more confidence and enthusiasm to try it again. Once the neuro pathway has been created it's easy sailing. The next time you are looking to take a trade, "let it pass" - trust me they'll be plenty of time to "hop on". Hope this helps Ninjas! See you in the next episode. Nick
Education
by NinjaTradingServices
SWING FAILURE PATTERNHello, fellow forex traders! Today we will talk about one of the most powerful Price Action setups, which is little known to the public. The Swing Failure Pattern(SFP)is a false-break of the maximum or the minimum level of the previous swing. The UK trader Tom Dante is mostly responsible for spreading this pattern. The effectiveness of SFP is such that after mastering the skills of identifying of this pattern many traders use it as a full-fledged trading system. ✴️ How and why is this SFP formed? SFP occurs as a result of a failed attempt by market participants to form a new swing high or swing low. The failure is due to the desire of a pool of large traders or investors to take advantage of the accumulation of liquidity of pending breakout orders (Buy Stop, Sell Stop) and loss limit orders (Stop-loss) to enter the position. The placing of a large number and large volume of pending orders in a relatively narrow price range leads to a swing, very similar to the classic trend. Traders are attracted by a "clean" move up or down and place orders virtually in one spot, just above the highs or lows, hoping that the trend will continue. The described example in the growing trend is shown in the picture above. The evident upward movement of the currency pair leads to the desire to enter the market and place the order immediately after the nearest maximum. Stops of the traders who are in a counter-trend position will also be placed there, as it is obvious to them now. ✴️ The SFP pattern: The rules for the formation and entry points SFP is formed on a swing high or a swing low of any timeframe, but the most preferable timeframes for its search are those starting from H1 and above. A false breakout is always preceded by a clear correction, leaving a "clear space" to the right of the previous maximum or minimum. When looking for the SFP pattern, the main condition for its formation must be the evident trend and correction, as well as the breakout of the previous swing level (high or low). If there are several extreme levels, the pattern candlestick should ideally break all previous values, or at least the nearest extreme. The picture below shows the formation of low on the correction of a rising trend. The candlestick of the SFP-pattern should break of the swing low. As in the first case considered, the entry in the pattern is made at the opening price of the next candle, the SFP candle itself can be of any configuration, shape and size, you should only pay attention to the mandatory high/low and the closing of the candle body above/below the extreme. ✴️ Stop Loss and Take Profit levels for the SFP pattern The strategy is best utilized with a dynamic stop loss, the size of which can be determined using the ATR indicator, which measures the current volatility at the period specified by the trader. If the trader is looking for a pattern on the hourly chart, then a stop loss should be set by the size of the daily volatility. Change the period of the ATR indicator to 24. On the daily timeframe you can leave the standard value of 14. Or set it to 20 (the average number of working days in a month). The pattern is not designed for a long-term or medium-term trading, the task of the trader is to catch the pullback. Set a take profit just below the nearest high or above the low, at the nearest level. ✴️ Key Features The pattern can be detected on any time frame, but traders should look for SFPs starting with hourly candles. The liquidity of pending orders and stops, which attracts large players, is the key to the successful working out of the false breakout, which simply may not be present on small timeframes. For the same reason, the visibility of a pullback from the swing-high and swing-low for all traders is important, you should not look for a pattern in the flat market, on the minimums and maximums of which there will not be the necessary number of pending orders. When multiple lows are accumulated in a row (double, triple bottoms or tops), the SFP candlestick should ideally use its tail to break all previous extremes, but the closing price should be lower than the maximum (higher than the minimum). The shape of the candle can be anything, it will often be similar to a pin bar, it's allowed to retest, if it occurs in the next working intervals (timeframes, chosen by the trader). ✴️ Conclusion False breakout often leads to missed profits and an additional stop loss. The SFP pattern demonstrates how you can profit from it with high probability. The figure shows that traders should pay attention to it.
Education
by DeGRAM
3
Educational: Relative Drawdown vs. Absolute DrawdownUnderstanding the concepts of relative drawdown and absolute drawdown is crucial for effective risk management and evaluating the performance of trading strategies. In this publication, we will delve into the understanding of both relative drawdown and absolute drawdown. 🔷 Relative Drawdown: (Sometimes referred to as equity drawdown) Relative drawdown is like looking at how much your money went down compared to the highest amount of money you had in your piggy bank before it started going down. Relative drawdown measures the decline in equity relative to the previous peak value, expressed as a percentage. It provides a proportional view of the drawdown in comparison to the highest equity point achieved. Traders often utilize relative drawdown to assess the performance of their trading strategies over time. By calculating the relative drawdown, traders can determine the percentage loss from the peak and evaluate the strategy's ability to recover from losses. For example, if a trading account reaches a peak equity of $10,000 and subsequently experiences a drawdown with a low point of $8,000, the relative drawdown would be 20% ($2,000 decline divided by $10,000 peak). A higher relative drawdown indicates a more significant loss relative to the previous peak, potentially highlighting the need for adjustments in risk management or strategy refinement. 🔸Relative drawdown provides traders with insights into the consistency of their strategies and the extent of losses experienced during adverse market conditions. It helps them compare the drawdowns of different strategies or trading systems using a percentage-based metric, enabling a better understanding of risk exposure and the ability to set realistic expectations. 🔷 Absolute Drawdown: (Sometimes referred to as balance drawdown) In contrast to relative drawdown, absolute drawdown quantifies the actual monetary value of the decline in equity from the initial balance to low . Continuing from the previous example, if the lowest equity point during the drawdown was $8,000, the absolute drawdown would be $2,000. Absolute drawdown focuses on the actual amount of money you lost from the starting point to the lowest point. It helps us understand the total decrease in money without comparing it to any percentages or ratios. 🔸By understanding the absolute drawdown, traders can assess the real monetary value lost during a drawdown period, which helps in making informed decisions regarding position sizing, risk allocation, and overall portfolio management. It also assists in evaluating the effectiveness of risk management strategies in terms of limiting losses during drawdowns. NB: It is worth noting that it is important to clarity when discussing balance base drawdown as the balance base drawdown can be calculated based on the starting balance of each day or trading session which in this case will have a drawdown calculated based on a dynamic balance as oppose to the static initial balance. ----------------- Relative and absolute drawdowns play a vital role in assessing the performance and risk exposure of trading strategies. While relative drawdown provides a percentage-based view of the decline in equity from the peak, absolute drawdown quantifies the monetary value of the loss. Traders should consider both types of drawdowns to effectively manage risk, set realistic expectations, and make informed decisions about their trading strategies. Remember, understanding and managing drawdowns are key elements of long-term success in the trading world. It's important to understand that drawdowns are a natural and inevitable part of trading. No trader, no matter how experienced or skilled, is immune to drawdowns. Here's a simplified explanation of why drawdowns occur and why traders should not be discouraged by them: When you play a game, there are times when you might make a mistake or encounter challenges that cause you to lose points. Similarly, in trading, the market can sometimes move in a way that goes against your expectations or trading strategy, causing temporary losses in your trading account. This decline in the value of your account is known as a drawdown. Drawdowns occur due to various factors, such as changes in market conditions, unexpected news events, or even errors in decision-making. Markets are influenced by many participants, and their behavior can be unpredictable at times. Therefore, it's natural to experience periods of drawdown. Traders should not be discouraged by drawdowns for a few important reasons: 🔸Learning Opportunity: Drawdowns provide valuable lessons for traders. They offer insights into potential weaknesses in their trading strategies or areas where they can improve their risk management. By analyzing drawdowns, traders can refine their approach and enhance their trading skills. 🔸Long-Term Perspective: Successful traders understand that trading is a long-term game. Drawdowns are often temporary and can be followed by periods of profitability. By maintaining a long-term perspective, traders can ride out drawdowns, knowing that their overall success is determined by their ability to stay focused, adapt, and stick to their trading plans. 🔸Risk Management: Drawdowns highlight the importance of proper risk management. Traders who implement effective risk management techniques, such as setting stop-loss orders, diversifying their portfolios, and managing position sizes, can limit the impact of drawdowns on their overall trading performance. 🔸Psychological Resilience: Drawdowns test a trader's emotional resilience. Successful traders understand that emotions like fear or frustration can cloud judgment and lead to impulsive decisions. By developing emotional resilience and maintaining a disciplined mindset, traders can navigate drawdowns more effectively and make rational decisions based on their trading plans. 🔸Consistency is Key: Consistency in trading is crucial. Drawdowns are part of the journey to profitability. Traders who remain committed to their strategies, continue learning, and adapt as needed have a higher likelihood of success over the long run.
PEPPERSTONE:ETHUSDEducation
by ChristopherDownie
2
When you’ve taken a trade – Let It Go!One of the key principles of successful trading is… Once you have taken the trade to just let it go and allow it to run its course. The system lined up – tick. The entry orders are all in place – tick. It matches your risk and reward criteria – tick. You know your trade size – tick. Now let it go. You may get the urge to interfere, change the levels and lock in profits early or limit losses even more. You need to resist the urge. Here are some factors to consider… Don’t Interfere… When you’ve taken a trade, it’s important to have a plan in place for how you will manage it. This means you’ve got your entry, stop loss and take profit in place. These actions may seem like a good idea at the time. But they can often lead to bigger losses, smaller profits and even missed opportunities. But then there are times where you need to adjust the course. You might even have a time stop loss. Or a strategic and mechanical criteria for when to adjust your levels. But other than that, you need to have the discipline to stick to it and resist the temptation to interfere with your trades. Don’t Get Excited When It’s in the Money One of the most common mistakes that traders make is getting too excited when they’re in the money. You might feel overconfident and “know-better” about a trade. Or you might have this irrational decision-making idea to quickly move your stops and take profits, which can quickly erase any gains that you’ve made. It’s essential to remain level-headed and stick to your plan, even when your trades are performing well. To avoid getting too excited when you’re in the money, go back to your journal and look at how your trades have played in the past. It’s important to have a clear idea of your risk tolerance and profit targets before you enter a trade. This will stop you from making any quick and unnecessary decisions along the way. Don’t Fear When It’s Going Against You Another common mistake that traders make is letting fear dictate their decisions when a trade is going against them. It’s natural to feel anxious when you’re losing money. But it’s important to remember that losses are a normal part of trading. We all take them and we are all bound to take them more times than we wish to think. To overcome the fear of losses, it’s important to focus on the long-term goals of your trading strategy. One way to do this is to maintain a positive mindset and view losses as “costs of business” and as learning opportunities rather than failures. Stay calm and level headed. Also stop risking so much that it interferes with your psychology. When you feel emotional take a step back or it could lead to even bigger losses. Don’t Watch Every Tick Finally, it’s important to resist the urge to obsessively watch every tick of the market. This can lead to overtrading and emotional decision-making. And you’ll find it will quickly derail your trading strategy. Instead, it’s important to focus on the big picture and have a long-term perspective on your trades. Close your computer once you’ve taken a trade. Or close your trading platform and move onto something else. You’ve done your job now stop watching every tick the market moves. By doing so, you’ll be less likely to make rash decisions based on short-term fluctuations in the market. I hope this helps and if there is one thing to remember out of them all. When you’ve taken a trade, just let it go and let it run its course.
JSE:J200Education
by Timonrosso
1
BASIC MARKET STRUCTUREMany traders use indicators these days in trading the markets and they certainly have their place. But the most effective method of market analysis remains the method of determining market structure. Trading based on the underlying market structure can be quite easy because the principle is very simple. What is market structure? We look for trading opportunities because of the market structure. We constantly search for opportunities to buy when the market is trending upward and sell when it is trending downward; in other words, sell high and buy low. The fundamentals of market structure As much as we all would like to see nice capital curve, especially if one has a trade in that direction, unfortunately that is not how the market works. In the trading world, one would like to see the market always reach its target after opening a trade. But in reality, the market is neutral and it has its own laws and principles. The market functions in another way. As a wave, the market movement has its ebbs and flows. The market moves up and down as it breathes in motion. The basic price movement, which consists of four points: Higher High Higher Low Lower Low Lower High Equal high and lows It is more complicated on a chart than in the illustration above. In between the major swing points, the price makes even smaller swings: a swing within a swing and this usually causes confusion for beginners. You can see it on the live chart below. Price moves in alternating swings between lower lows and lower highs. On the timeframe higher, though, the scene can be different: on the higher timeframe, price goes up, and on the lower timeframe, price can go down. This is the nature of the financial markets. Can we use basic market structure to predict potential trend changes? Of course, there are no tools that can identify trend changes in all cases. It is probable, but unrealistic! Nevertheless, by using the basic principles of market structure shown, it is possible to identify exactly where the strength is. On the side of the sellers or buyers, which can lead to a reversal of the market trend. A market that makes a series of higher highs and higher lows usually attracts buyers who want to join that bullish movement by pushing the price even higher. But when the price fails to make a new high and cannot support the rising move, going lower to form a lower low, it is an indication that a possible down-trend change may be underway. And here on the live chart of the EURUSD: Implementing the market structure in trading? In a bull market, we expect price to roll back to the optimal trading zone in anticipation of the market eventually forming a higher low. Fibonacci levels allow us to identify these zones in the market. In the BTCUSD chart below we can see the association of support and resistance zones with the underlying market structure and Fibonacci points. We have clearly identified three potential buy zones based on the underlying market structure. We must remember that price should move smoothly and should look nice, no choppy moves.
Education
by UnknownUnicorn15614419
9
Trading Through Time: From Stocks to CryptocurrenciesOnce upon a time, within the bustling boulevards of Amsterdam amid the 17th century, a progressive thought was born. Dealers assembled in coffeehouses and marketplaces, trading offers of the Dutch East India Company. This was the birth of stock exchanging as we know it nowadays. Word of this modern frame of venture spread like rapidly spreading fire, and before long stock markets started to rise in other European cities. London, Paris, and other budgetary centers built up their possess trades, where people seem purchase and offer offers in different companies. These stock markets given a centralized stage for exchanging, enabling investors to take an interest within the development of businesses and share in their benefits. As time went on, stock trades kept on advance. Within the bustling lanes of Modern York City, the famous Unused York Stock Trade (NYSE) was established in 1792. It rapidly got to be a image of America's financial control and a center for dealers from around the world. Companies looked for to be recorded on the NYSE, because it advertised expanded perceivability and get to to capital. With the coming of the computerized age, the world of stock exchanging experienced a significant change. Conventional open objection frameworks were supplanted by electronic trading stages. Exchanges that once depended on yells and hand signals might presently be executed at lightning speed with the tap of a button. This democratized stock exchanging, permitting people to exchange from the consolation of their homes through online brokerages. In parallel to these advancements, a modern frame of money risen from the profundities of the web. In 2009, an puzzling figure or bunch known as Satoshi Nakamoto presented Bitcoin, the world's to begin with cryptocurrency. Based on progressive blockchain innovation, Bitcoin pointed to make a decentralized advanced money free from the control of central banks. Bitcoin's beginning checked the starting of the cryptocurrency transformation. Its unique properties, counting security, immutability, and namelessness, pulled in tech-savvy people and early adopters. As the esteem of Bitcoin taken off, individuals begun to realize the potential of cryptocurrencies past a simple advanced money. Propelled by Bitcoin's victory, other cryptocurrencies started to grow like wildflowers in a computerized garden. Ethereum, Swell, Litecoin, and endless others entered the scene, each advertising special highlights and utilize cases. The world of cryptocurrency exchanging took off, with specialized trades giving stages for buying, offering, and exchanging these advanced resources. To keep pace with the advancing scene, innovative headways played a imperative part. Calculations and high-frequency exchanging calculations revolutionized the speed and effectiveness of stock exchanging, whereas decentralized trades and shrewd contracts brought robotization and believe to the domain of cryptocurrency exchanging. The development of stock exchanging and cryptocurrencies has not been without its challenges. Advertise instability, administrative concerns, and security dangers have postured deterrents along the way. Be that as it may, the charm of potential benefits and the crave to take an interest within the worldwide economy proceed to drive people and educate to lock in in these markets. Nowadays, stock exchanging and cryptocurrency exchanging have ended up fundamentally parts of the worldwide financial ecosystem. They offer opportunities for speculation, riches creation, and budgetary consideration. As innovation proceeds to progress and modern advancements develop, the world of exchanging stands balanced for assist change, interfacing people, businesses, and economies in ways incredible within the early days of bargaining and stock trades. And in this way, the story of exchanging in stocks and cryptocurrencies proceeds to unfurl, a story of advancement, theory, and the interest of financial thriving in a quickly changing world. Thank you for reading my masterpiece haha, please consider following me or boosting this post for motivation to make more content like this :)
BITSTAMP:BTCUSDEducation
by LuminoAlgo
When to FEEL THRILL when Trading - It may surprise you!First let me tell you. NO you should not feel thrill when you take a profit. NO you should not feel thrill when you are on a winning streak. NO you should not feel thrill after a day, week or month of upside. But I’m not going to be a wet blanket. As a trader, including me, there are times to feel thrill. Trading is a process, it’s a lifestyle, it’s a game, it’s your control of your financial future. So let’s explore the times you should feel thrill. #1: Analyse the markets A major part of trading is assessing the current state of the markets and identifying potential opportunities. This involves creating your strategy, finding the indicators that work best and identifying the different systems (chart patterns, trend lines, Smart Money Concepts) etc… This process is super exciting part on the journey to becoming a trader. #2: Optimise your strategies Creating a strategy is one thing. But optimising and maximising your system is an ongoing thing. It’s crucial to continuously fine-tune your strategies and adapt to the ever-changing market conditions. When you identify areas for improvement and make changes that lead to better performance, the thrill of knowing that you’re on the path to success can be awesome. #3: Search for high probability trades One of the keys to success in trading is finding high probability trades. It’s these trades that will offer a favorable risk-reward ratio and a high chance of success (regardless whether they win or lose). The hunt for these opportunities is always fun and it’s almost like going on a daily treasure hunt. And spotting the highest probability trades, require a deep understanding of the markets and the ability to spot subtle patterns that others might miss. When you uncover a high probability trade and execute it successfully, the feeling of accomplishment is also a great feel. #4: Reading Fundamentals Sure your strategy might not comprise of fundamentals or news. But still learning about the markets, companies, indices and other micro and macro aspects, is interesting. A solid grasp of fundamental analysis is essential for any serious trader. This involves assessing the financial health of companies, industries, and economies to identify why markets move the way they do. When you can successfully combine technical and fundamental analysis to make informed decisions, the thrill of knowing you have an edge in the market is undeniable. #5: Monitor your results and stats As a trading boss… You need to track, analyse and assess your trading performance. You don’t get more power and thrill as a trader, when you have control of your financial markets. When you see your strategies paying off and your account balance growing, the thrill of your hard work and dedication materializing into tangible results is incredibly rewarding. Conversely, it’s also thrilling when you analyse your losses where you can gain valuable learning experiences. And this will help provide insights into areas for improvement and will motivate you to refine your approach. #6: Find new markets to trade Do you think I was looking at AI, VR, Metaverse type companies to trade 10 years ago? Nope! These markets weren’t in fruition with trading as they are today. So as a trader, this is always an exciting and thrilling venture with trading. To explore, adapt and add on new markets into your watch list. When you add and enter these new markets to your strategy, this can expose you to a whole new set of opportunities and challenges. And this will help broaden your horizons and deepen your understanding of the financial markets. So now you know when to embrace thrill as a trader. Use them to fuel and propel you toward achieving your goals. When else do you feel thrill?
JSE:J200Education
by Timonrosso
LOGICAL PLACES TO ENTER THE MARKETFormations in price action trading include candlestick patterns, often known as triggers. They can, with a high degree of likelihood, identify the direction in which the price movement will occur if they have the right location on the chart. The important factor is not simply the patterns' use but also how they interact with the structure levels and trends. The apparently "right spots" are these. They may be misused by many traders. Therefore, where is the best place to enter the markets? Support and Resistance 📊 Determining the trend is an important trading process. The correct step is to classically define higher highs and higher lows compared to lower lows and lower highs. But in practice there is a lot of room to interpret the trend at different timeframes, so it is very helpful and important to have clear principles and rules. It is quite logical, if there is a trend in the market, to be able to trade in its direction or apply reversal signals. If the market is trading in a range, then the trader is best off using a range trading tactic. Once market structure has been identified, traders can look for entry points at these levels. Traders may look for price action signals, such as candlestick patterns, around the support or resistance level to indicate a possible entry point. Additionally, traders can use overbought/oversold conditions by using indicator and divergences. Fibonacci Retracement 📈 Fibonacci levels are often used to confirm a market reversal, and they can be used to identify potential trading opportunities. For example, after a strong trend, if the market pulls back, this is the best place to open a trade. Fibonacci levels are 38.2%, 50.0%, and 61.8% where you should pay attention. If these levels are near psychological levels, or levels of support and resistance, this is a very good place to enter the market. Trendline Breakouts 📉 A trendline reversal and breakout is a chart pattern that occurs when the price of an asset breaks through a trendline connecting the highs and lows of the asset over a period of time. This is usually seen as a sign that the current trend has reversed and the price of the asset will begin moving in the opposite direction. Traders usually watch for a trendline reversal and breakout to enter a position in the opposite direction, long or short. A trendline breakout is a good indicator that the current trend is fading. If a trendline breakout occurs in large candles, it means there is a supply or demand zone above or below, which pushes the price in the opposite direction. Range Breakouts 📃 Markets often break out of ranges or other chart consolidation patterns like triangles or flags. Identifying breakouts and waiting for confirmation can help you enter a trade with a better risk/reward ratio. For example, if you are bullish, waiting for a breakout can help you enter a trade with a lower risk/reward ratio. The purpose of a range breakout is to capitalize on a sudden increase in the volatility of an asset. When the price of an asset moves out of its range, it means that there is strong pressure from buyers or sellers behind the move. Accumulation always leads to distribution and entering a trade when the price moves out of range, the trader can benefit as the price usually makes an impulse move after the breakout.
Education
by Lingrid
5
Gym Well - Trade Well!When you gym well, it’s like trading well. You gym to tone, to lose weight to build muscle and to build discipline. With trading you trade to build your portfolio, build confidence, create a secured financial future and work on your mindset for life. Both pursuits require consistent effort, perseverance, and a strategic approach. Gym is an important element in my life and so I want to explore the similarities between trading and gymming, and how each can lead to success in their respective domains. You Put in the Work Every Day: Gymming and Trading Like a regular gym routine, successful trading requires dedication and consistency. You can’t expect to see results overnight – you need to put in the work every day. As a trader you must constantly educate yourself on market trends, stay informed about global events, and analyze past performance to make informed decisions. Just as gym-goers must adhere to their workout schedules, traders should establish a daily routine that involves researching and analyzing the market. You Pick Up the Portfolio (Weights) as You Make More Money When you gym, you gradually increase the weights you’re lifting to build strength and endurance. Similarly, as you become more experienced and successful in trading, you can gradually increase your investment portfolio. As your confidence and financial gains grow, you may choose to diversify your portfolio and take on a variety of different assets to spread risk, lower risk, optimise and maximize your returns. Don’t Overtrain – Don’t Overtrade Overtraining at the gym can lead to injury and burnout. And if you over trade in the market, it can result in financial losses and emotional exhaustion. It’s essential to strike a balance between staying active and giving yourself time to rest and recover. In trading, this might mean you: Set your limits on the number of trades you make each day or week Identify the goldilocks zone risk per trade Know when to hault trading or lower risks during a drawdown period. And most importantly. Remember, trading is a marathon, not a sprint. So pace yourself accordingly which is crucial to long-term success. It’s a Forever Process (Takes Time) Both gymming and trading are long-term commitments. You won’t see immediate results in either pursuit. It takes time and dedication to achieve your goals and to identify your trading risk and personality. In the gym, you can expect to see gradual improvements in your strength, endurance, and overall fitness. In trading, you’ll gain experience, knowledge, and a more refined strategy as time goes on. So stay dedicated, and you’ll be well on your way to achieving your goals. Let me know if you gym and if it helps your trading :)
JSE:J200Education
by Timonrosso
2
It's a numbers gameI see this more and more, especially in the crypto space. There are some wild stories out there from turning $8k to a billion through to a Pizza for 10,000 Bitcoin. Here are some home truths. Although most of you won't want to hear this. You see, as a professional trader - there is 1 key factor, almost a scale balancing between too much and just enough. Everyone pushes for more returns, we are only human after all. We have had stories of Wall Street Titans and Vegas big wins, but there is some simple logic to this. You might have entered the market after Covid hit the world and wanted an extra income, might have seen a way to make millions from the money the government sent you? The issue is this is no different that rolling a dice in Vegas but without the fun! You possibly saw some influencer selling you the dream - they fail to tell you, they trade on demo accounts and make their income from affiliate links and social media watch time! When you think of investors like Warren Buffet, you have to understand - he didn't watch an influencer video and say to himself "I want to be like that guy" - investing is often a long term thing and not a get rich quick scheme. Here's a few examples to hit home. This is boring, not worth it - so instead you seek higher returns, that opens up the possibility of falling into scams, listening to the wrong crowd and having dreams. To be honest, it's probably more enjoyable spending a day at the races. With a smaller account, you can grow it a little, add to it on the next pay day and of course compound the investments. As you move up the scale. This is probably where most "semi serious" market goers start. It's often a flurry into the market cash in hand. The assumption often the same; you have done well to amass a lumpy investment, your clearly good at the field you have been in to earn your pot. Why wouldn't you be a good trader? After all, these kid influencers are making millions on their demo accounts. Jump to the next level... Your either a captain of industry, you have had your own business or you have a kind daddy. How you got here is not important, staying here is. When you trade with a medium sized account you start to think a little different. Instead of looking for 900x returns, you start thinking about investments that are a little less risky. This is the scales I mentioned earlier. You are now in the space of a good return might be good enough. Too high of a risk, means you are thinking of safe guarding your cash. Here's where the Professionals play the game differently. Trying to make 1-5% is a lot more sustainable than trying to land a 900x return. You have to remember 90% of traders lose 90% of their accounts in 90 days... This can easily be attributed to things like; Buying signals Following influencers Over trading Trading too small a timeframe Trying to find a silver bullet As a professional - you can seek smaller returns, spend less time in front of the charts and let your money work for you, instead of you doing all the chasing! As the amount of capital rises, so does your desire for risk. You might still have the appetite for returns but not at the cost of risk. As a professional trader, you can afford the luxury of trading a bias and scaling into a trade - you will find fund managers who have what's known as secondary investment capital (in essence to add to winning positions). So although this is not going to be what you want to hear, it's what you need to know. There's always chasing the dream, but why not wake up and make it a reality? Enjoy the weekend all! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Editors' picks
COINBASE:BTCUSDEducation
by Mayfair_Ventures
23
Best Qualities of a Signal Provider❇️ Finding the right signal provider for your trading journey can be a daunting task. With so many signal providers out there, it's hard to know which one to choose. But don’t worry—here, we’ll go over the best qualities of a signal provider so you can make an informed decision. ❇️ The first and the most important quality to look for in a signal provider is track record. A track record is important for signal providers because it gives potential clients an indication of their performance and reliability. A good track record shows that the signal provider is consistently able to generate reliable signals and generate profits for their clients, meaning that the provider has a good trading strategy. It also gives potential clients an idea of the provider's risk management practices and their ability to stay profitable in different market conditions. So before using any signal provider's services, you have to first check their track record. ❇️ The second quality to look for in a signal provider is transparency. A good signal provider should be able to explain how their signals are generated and how they interpret the data. This will allow you to assess whether their signals are suitable for your trading style. For example, if you're looking for signals for day trading, you'll want to make sure that the signal provider is generating their signals based on historical price data for that day. In order to succeed in the market, it is essential to have a comprehensive risk management strategy. See how the signal provider manages risks and takes losses in a responsible and timely manner. ❇️ The third quality to look for in a signal provider is customer service. You want to be sure that the provider is available to answer your questions and provide helpful advice. Make sure to check out the provider's customer support options before signing up. Is their customer service team responsive and helpful? Do they have a history of providing reliable signals? Also, it's important to make sure that the signal provider you choose offers a money back guarantee. This will ensure that you can get a full refund if you're not satisfied with their services. This way, you can feel confident in your decision and know that you'll be able to get in touch with support if you need it. ❇️ Cost of services. When it comes to choosing a signal provider, it's crucial to do your research and compare the cost of the signal to other providers to ensure you're getting the best value for your money. Additionally, some providers may offer discounts or other incentives to encourage the use of their services. It is best to contact the provider directly to get an accurate estimate of the cost of the signal. ❇️ This should include a step-by-step process for how they assess each signal, and how they decide whether to move forward with the investment. Additionally, you should find out whether the provider uses a computer algorithm or a team of experts to analyze the markets. Generally, larger providers will charge more for their services than smaller providers, as they have more resources and infrastructure to support the signal. ❇️ In conclusion, a good track record pretty much sums up any signal provider's trading performance and reliability. It shows you can really make good returns from them by using their services. If a signal provider doesn't have a track record, this is a bad sign and makes it hard to value their trading ability as well as signals. And eventually, it can lead to a loss of money.
Education
by UnknownUnicorn15614419
9
WORLD'S TRADING TITANS: The Top 10 Traders Who Ruled the Market.This article is about the world of iconic traders. They've left a profound mark on the world of trading, inspiring countless traders with their strategies and insights. Jesse Livermore Jesse Livermore, often referred to as the "Great Bear of Wall Street," was a self-taught trader who started his journey at the age of 14 and became one of the most influential traders of his time. He made (and lost) several fortunes betting against the market during the 1907 Panic and the 1929 Crash. Livermore's trading strategy was heavily based on price movements and market psychology, rather than intrinsic value of companies. He was known for his supreme discipline, focusing on timing, price patterns and his well-known adage: “The big money is not in the individual fluctuations but in sizing up the entire market and its trend.” One of Livermore's core principles was the importance of letting the market, rather than emotions, dictate when to buy and sell. He believed in following the big market trend, also known as trend following. His rules around cutting losses quickly, letting profits run, and adding to winning positions are still religiously followed by many traders. Lastly, Livermore emphasized the importance of patience in trading. He famously said, "It was never my thinking that made the big money for me. It always was my sitting...Men who can both be right and sit tight are uncommon." This highlights the importance of waiting for the right opportunities and not overtrading, a lesson that remains relevant for traders today. Livermore's life serves as both an inspiration and a cautionary tale for traders, reminding us of the potential rewards and risks that come with trading. George Soros George Soros is a legendary trader known as "The Man Who Broke the Bank of England." In 1992, he bet against the British Pound, believing that it was overvalued relative to other currencies, notably the Deutsche Mark. His bet paid off, earning his fund an estimated $1 billion in a single day. Soros' trading style falls under a global macro strategy, which involves making large bets on economic trends in various asset classes like currencies, bonds, and commodities across the globe. His ability to detect significant changes in economic conditions and market sentiment, combined with an aggressive risk tolerance, contributed to his extraordinary profits. Central to Soros' approach is the concept of reflexivity, a theory he developed. Reflexivity posits that market perceptions can shape the underlying economic fundamentals, which in turn influence market perceptions, creating a feedback loop. According to Soros, markets are not always in equilibrium or accurately reflecting fundamentals, and these discrepancies can create lucrative trading opportunities. Soros has been a prominent figure not just in trading, but also in philanthropy and politics. His trading career serves as a testament to the potential of a global macro strategy and the importance of understanding both market sentiment and macroeconomic fundamentals when making trading decisions. Despite his success, Soros' strategy involves a high level of risk and requires deep knowledge of global economics, and thus may not be suitable for all traders. Paul Tudor Jones Paul Tudor Jones is one of the most successful traders in the world, known for his ability to navigate and profit from volatile markets. He gained fame after predicting and profiting handsomely from the 1987 stock market crash, a feat which earned him a legendary status in the trading world. Jones' trading style is predominantly macro, meaning he makes bets based on economic trends and events around the world. He trades in a variety of markets, including equities, commodities, currencies, and bonds, and is known for his versatility and adaptability. An avid user of technical analysis, Jones employs chart patterns, price movements and other analytical tools to identify trading opportunities. He combines this with a deep understanding of market fundamentals to create a comprehensive trading strategy. One of Jones' most well-known tenets is his focus on risk management. He is often quoted saying, "If you have a losing position that is making you uncomfortable, the solution is simple: Get out." This reflects his belief that protecting capital and managing losses is more important than chasing profits, a strategy that has served him well throughout his career. Jones is also known for his philanthropic efforts. He founded the Robin Hood Foundation, a charity that combats poverty in New York City. His story reminds traders of the importance of risk management, adaptability, and giving back to the community. Richard Dennis Richard Dennis, a commodities trader from Chicago, is a trading legend who rose to fame in the 1970s and 80s. Starting with a small loan, he quickly amassed a fortune, earning him the moniker "Prince of the Pit." But Dennis is perhaps best known for his role in a unique trading experiment that sought to answer an age-old question: Are traders born or made? Dennis' personal strategy centered on trend following - buying when prices increase and selling when they decrease, essentially riding the market's momentum. He believed that price, and how it changes over time, is the most crucial piece of information for a trader. To settle the debate on whether trading could be taught, Dennis and his partner William Eckhardt conducted the "Turtle Traders" experiment in the 1980s. They selected a group of individuals with no trading experience, trained them for two weeks using a simple set of rules based on trend following, and then provided them with money to trade. The experiment's results were astounding. Over the next four years, the Turtles earned an average annual compound rate of return of over 80%. This proved Dennis' theory that anyone could learn to trade, given the right system and discipline to follow it. Dennis' story is a powerful reminder that successful trading is not just about inherent talent but also about discipline, a well-defined strategy, and the ability to follow that strategy consistently. Stanley Druckenmiller Stanley Druckenmiller is a highly respected figure in the world of trading, known for his impressive track record and his role in some of the most legendary trades in history. As a fund manager for George Soros, Druckenmiller was instrumental in the trade that "broke the Bank of England," earning a profit of $1 billion. Druckenmiller's approach to trading is top-down, which means he first considers macroeconomic factors and themes, and then identifies the best investments within that context. He is not averse to placing large, concentrated bets when his confidence in a trade is high. This approach requires a deep understanding of economics, keen intuition, and a high tolerance for risk. Risk management is an essential aspect of Druckenmiller's strategy. He is known to go all in when he's confident in a trade, but he is also quick to exit a position when he realizes he's made a mistake. As he often says, "The first thing I heard when I got in the business...is bulls make money, bears make money, and pigs get slaughtered. I'm here to tell you I was a pig." Druckenmiller has an impressive ability to make bold and accurate market predictions. For instance, he successfully predicted and profited from the dot-com bubble's burst in 2000, and later, the financial crisis of 2008. While his aggressive style and remarkable intuition might not be replicable by every trader, Druckenmiller's story underscores the importance of understanding macroeconomic themes, being confident in your convictions, and the crucial role of risk management in trading. Ray Dalio Ray Dalio, the founder of Bridgewater Associates, one of the world's largest and most successful hedge funds, has left an indelible mark on the world of finance with his innovative approach to investing and risk management. Dalio pioneered the risk parity strategy, which aims to balance the allocation of risk, rather than the allocation of capital, in a portfolio. His "All Weather" portfolio, designed to perform well across various economic environments, is a prime example of this strategy. It is diversified across different asset classes such as stocks, long-term and intermediate-term bonds, and commodities, designed to balance risks of inflation, deflation, and economic growth. Dalio believes that economic events and market behavior are cyclical, a concept he outlines in his book "Principles." Understanding these cycles, according to Dalio, is key to making successful investment decisions. He combines these economic principles with a fundamental and quantitative analysis to make his investment decisions. Dalio also champions the idea of radical transparency in the workplace, arguing that open and honest communication leads to better decision-making and helps avoid persistent problems. He applies this philosophy to his own investment process, using a systematic, rules-based approach to decision-making that reduces the role of emotions and subjective judgment. Dalio's approach underscores the importance of diversification, understanding macroeconomic principles, and systematic, rules-based decision-making in investing. While Dalio's strategies might require a high level of understanding and are not suitable for all investors, his principles and methodology offer valuable lessons for investors of all levels. Ed Seykota Ed Seykota is a trading legend and pioneer of systematic trading who used computerized systems to follow price trends long before such practices were commonplace. Notably, he turned $5,000 into $15 million over 12 years, proving the potential of trend-following strategies. Seykota's trading methodology is deeply rooted in the principles of trend following. He believes in going with the flow of the market, buying when prices are increasing, and selling when prices are decreasing. Seykota’s approach was to identify long-term trends and then take positions in those directions, riding them for as long as they remained intact. Seykota is also known for his emphasis on psychology and personal discipline in trading. He often stresses the importance of understanding one's emotional responses to gain and loss, and managing those feelings effectively to make rational trading decisions. Seykota famously said, "Win or lose, everybody gets what they want out of the market." Moreover, Seykota is a strong advocate of risk management. He believes that managing risk is a key element of long-term success in trading. He often talks about setting stop-loss levels and adjusting them according to market movements to protect his portfolio from significant losses. Seykota's story offers key lessons in the power of trend-following strategies, the importance of psychological discipline, and the crucial role of risk management in trading. Despite the sophistication of his methods, the core principles behind Seykota's success can provide valuable guidance for traders of all levels. Linda Bradford Raschke Linda Bradford Raschke, a prominent figure in the trading world, is known for her technical and fundamental analysis of the futures and equities markets. With a trading career spanning over three decades, Raschke's success underscores the importance of consistency, discipline, and a thorough understanding of market dynamics. Raschke's approach to trading is methodical and rule-based. She uses a mix of chart patterns, indicators, and market cycles to guide her trading decisions. One of her best-known strategies is the "Holy Grail" setup, which combines a moving average with the ADX indicator to identify potential breakouts in the market. In addition to technical analysis, Raschke pays close attention to market fundamentals. She believes that while patterns and indicators can signal trading opportunities, understanding the underlying factors driving market movements is crucial to making informed decisions. Raschke also emphasizes the importance of discipline and risk management. She believes that sticking to a well-defined trading plan, and not letting emotions influence trading decisions, are key to successful trading. As she often says, "Discipline is the ability to sit and wait." Raschke's experience reminds us that successful trading requires a mix of technical knowledge, a deep understanding of market dynamics, and a strong sense of discipline. Whether you're a novice trader or a seasoned veteran, Raschke's approach offers valuable insights. Michael Steinhardt Michael Steinhardt, the founder of Steinhardt, Fine, Berkowitz & Co., is one of Wall Street's most successful hedge fund managers, known for producing remarkable annual returns over a 30-year career. His aggressive, contrarian approach to trading has left a lasting impact on the industry. Steinhardt's approach is characterized by a philosophy he calls "variant perception." He believes in making investments that are contrary to prevailing market views, often taking high-risk positions that other investors shy away from. His ability to spot opportunities where others see none, backed by deep analysis, has been a crucial part of his success. Steinhardt's investment decisions are informed by a comprehensive understanding of macroeconomic factors, as well as a thorough analysis of individual companies and sectors. He holds both long and short positions in a variety of asset classes, demonstrating a remarkable ability to navigate a wide range of market conditions. Risk management is also central to Steinhardt's approach. He is known for taking large positions in his high-conviction ideas, but he also keeps a keen eye on the potential downside and is swift to cut losses when a trade doesn't go as planned. Steinhardt's story underscores the importance of deep research, conviction, and risk management in trading. It also highlights the potential of contrarian investing strategies for those willing to buck the trend and take on higher levels of risk. Remember, however, that such strategies require deep market understanding and are not suitable for all traders. Jim Simons Jim Simons, the founder of Renaissance Technologies, is a unique figure in the world of trading. With a background in mathematics and a deep understanding of code-breaking from his time as a code breaker during the Vietnam War, Simons has pioneered the use of quantitative trading strategies, achieving extraordinary success. Simons' approach to trading is fundamentally different from many of his peers. Instead of relying on traditional methods of analysis or macroeconomic insights, Simons employs complex mathematical models to uncover patterns in price data that are invisible to the human eye. His fund, the Medallion Fund, is famous for its consistent high-performance, with an average annual return of 35% after fees since 1988. Quantitative trading, or "quant trading," relies on powerful computers to process massive amounts of data and execute trades. This approach requires deep knowledge of mathematics, statistics, and computer science, and it stands as a testament to the potential of using technology in trading. At the heart of Simons' strategy is the belief that markets have more in common with the chaotic, unpredictable world of natural phenomena than they do with the logical, rational models of traditional economics. This realization led him to apply mathematical concepts to financial markets, with remarkable success. Jim Simons’ approach, while highly complex and require significant expertise, shows us the power of mathematics and technology in understanding and capitalizing on financial markets. His story also highlights the potential for innovative, unconventional thinking in trading. That wraps up our highlight of the top 10 traders who've revolutionized the trading world with their strategies, innovation, and sheer tenacity. But trading is ever-evolving and there are countless talented individuals out there. Who do you think should be on this list and why? Share your thoughts, let's spark a conversation. Stay tuned for more educational content and subscribe to our page if you enjoy our educational materials.
CBOE:VIXEducation
by financialflagship
HOW TO USE FIBONACCI EXTENSIONFibonacci is a technical tool, essentially an automatic tool for building support and resistance levels. They need to be supplemented by: Standard support and resistance lines Trend lines Japanese candlesticks and additional indicators Then they will be a good assistant in your trading. This is how a trading strategy is created, based on the combined instruments and the study of their features in different market conditions. The three most important Fibonacci retracement levels are: 0.382 (38.2%) 0.5 (50.0%) 0.618 (61.8%) All other levels, say 0.236 or 0.764 are secondary. And these are important expansion levels: 1.272 (127.2%) 1.414 (141.4%) 1.618 (161.8%) It's not difficult to use Fibonacci. Swings (upper and lower), as the maximum and minimum price values, are taken. From them, a fibo is drawn, and its lines are used as hints for support and resistance levels. It is up to you to decide whether to use Fibonacci in your trading. As we know from self-fulfilling prophecy, the more traders use a certain tool, the more important it become to the markets. Also, Fibonacci is a very popular tool, which often pops up on the charts of professional currency traders as well. So, it's a prophecy that comes true quite often. Now let's expand our Fibonacci tool by examining the uptrend. We see that the 1.272 and 1.414 levels work as resistance, and after a couple of unsuccessful breakout attempts, as we can see many pinbars, the price might just go down and make another pullback. Now let's do the same thing with the downtrend. Let's pull the fibo extension tool. And here's what's happened: Price ran into support, then broke through it. It was the level that was held up before the price went down. Price action made a new low. Fibo extension level 1.414 lines up with psychological level 1.59000. From these examples we can see that Fibonacci extension level is logical and often (though not always) form temporary support and resistance levels. Remember, there is no guaranteed way to tell when a Fibonacci level will work as resistance or support. However, by applying all of the technical analysis techniques you've learned so far, you'll significantly increase your ability to identify these situations. Therefore, you should consider Fibonacci expansion and retracement levels as an auxiliary tool that may be useful in some cases. But don't expect the price to bounce off right away. Fibonacci levels are your area of interest. If any candlestick combinations are formed near these levels, if oscillators or other instruments show anything curious, it is time to be alert.
Editors' picks
Education
by DeGRAM
26
STOP Impulse Trading at once – 5 Actions to takeOne of the most dangerous traits a trader can adopt is… Impulse Trading. This is where they take trades mainly on emotions and gut rather than sound financial analysis. This means, more risk, more irrational choices and that can lead to steering away from what works. Your proven trading strategy! And the end result, you’ll lose in the long term and end up with less confidence for your future endeavours as a trader. So let’s come up with certain ways for you to STOP the impulse trading. ACTION #1: Give it an hour When you feel the urge to make a trade based on emotions, it can be helpful to step back and take a break. One great way is to wait for an hour before you make any decisions. Go get something to eat, grab a beer, go walk your crocodile or go do something other than trading. Close your computer if you feel you’re about to impulse trade. This break can help you regain a sense of perspective and avoid making impulsive decisions that you may later regret. ACTION #2: Remember your long term goal I always say… Financial trading is a long-term game. You need to have a clear and specific long-term goal in mind that guides your decisions. When you feel the urge to make an impulsive trade, take a moment remember your trading record, journal and what works. Also, remember it’s not about the one trade but the hundreds of trades later… Ask yourself whether this trade aligns with your overall strategy or whether it’s just a momentary impulse. This can help you stay focused and disciplined in your trading. ACTION #3: Revisit your journal Your journal is pretty much your game-plan. It foretells of the most probable outcome when you follow it. And it should include a record of all your trades, your thoughts and feelings at the time of the trade, and the results of the trade. When you feel the urge to make an impulsive trade, take some time to revisit your journal. Look at your past trades and the results they produced. My favourite… Go look at your drawdowns. Go look at your biggest drawdowns. Then go see how you came out of the drawdowns and your portfolio headed to NEW all time highs. There is no better feeling than that. Do this and I doubt you’ll want to take any impulse trades again. ACTION #4: Read more trading psychology Mind is everything with trading. It’s a great way to develop your discipline and avoid impulse trading. Either go read trading books, articles, watch YouTubes or just save this article. I can almost guarantee… If you read this article, when you feel like taking an impulse trade – You will stop that primitive way of thinking. You’ll stop that inner conscience from trying to ruin your trading performance. ACTION #5: Avoid Overtrading If you find you take MANY trades at a time… You’ll be more inclined of taking impulse trades, because you feel you need to take more. Try and have a cap when it comes to the number of trades you hold. I used to never hold more than 5 trades. But over time, with adopting into new markets and evolved markets – that number gone up. Now I make sure I never have more than 12 trades opened at any one time. Remember to give yourself time to reflect, keep your long-term goals in mind, revisit your journal, and read more about trading psychology. Let’s bring back the 5 actions to avoid taking any impulse trades. ACTION #1: Give it an hour ACTION #2: Remember your long term goal ACTION #3: Revisit your journal ACTION #4: Read more trading psychology ACTION #5: Avoid Overtrading Let me know if this was useful in the comments.
Editors' picks
JSE:J200Education
by Timonrosso
7
EDUCATION: Hedging vs Stoploss Some rookie traders frequently trade without a stop loss because they think they can avoid being stopped out by market swings or rollover. However, if the market moves against them, this technique could result in severe losses. In this article, we'll cover why trading without a stop loss is a bad idea and how stop losses can be used efficiently or, as an alternative, how to employ hedging techniques. What is a stop loss? A stop loss is an order that you place on your trading platform to automatically close your position at a certain price level if the market goes against you. For example, if you buy EUR/USD at 1.2000 and set a stop loss at 1.1950, you are limiting your potential loss to 50 pips if the price drops below that level. A stop loss can help you control your emotions and prevent you from holding on to losing trades for too long, hoping that the market will turn around. There are several reasons why trading without a stop loss is a bad idea, such as: 🔹 You expose yourself to unlimited risk. Without a stop loss, you have no exit plan and you are relying on your gut feeling or luck to close your trade at the right time. However, the market can be unpredictable and volatile, and sometimes it can move hundreds or thousands of pips in a matter of minutes or hours. If you don't have a stop loss, you can lose more than your initial investment and even end up with a negative balance in your account. 🔹 You increase your stress level. Trading without a stop loss means that you have to constantly monitor your positions and worry about every pip movement. This can be very stressful and exhausting, especially if you have multiple trades open at the same time. You may also experience fear, greed, anxiety, anger, frustration, and other negative emotions that can cloud your judgment and affect your trading performance. 🔹 You reduce your profitability. Trading without a stop loss can also reduce your profitability in the long run. By not cutting your losses short, you are letting them eat into your profits and reduce your win rate. You may also miss out on better trading opportunities because you are too focused on your losing trades or afraid to open new ones. Additionally, you may incur higher trading costs due to wider spreads, commissions, swaps, and slippage. How to use stop losses effectively? Effectively utilizing stop losses will help you increase your trading profits and stay away from the risks of trading without one. The following advice will help you use stop losses effectively: 🔹 Determine your stop loss level using technical analysis. You can use a variety of technical tools and indicators, including as support and resistance levels, trend lines, Fibonacci retracements, moving averages, volatility indicators, etc., to pinpoint areas where the market is expected to reverse or rebound. Depending on whether you are going long or short, you should set your stop loss just below or just above these levels. 🔹 Use risk management rules to determine your position size. You should always calculate how much money you are willing to risk on each trade and adjust your position size accordingly. A common rule of thumb is to risk no more than 1% or 2% of your account balance per trade. This way, you can limit your losses and preserve your capital for future trades. 🔹Use trailing stops to lock in profits. A trailing stop is a type of stop loss that moves along with the price as it goes in your favor. For example, if you buy EUR/USD at 1.2000 and set a trailing stop of 20 pips, your stop loss will move up by 20 pips every time the price moves up by 20 pips or more. This way, you can protect your profits and let your winners run. NB: In related ideas I have attached my publication on trailing stop loss and support and resistance for those who would like to know more on those topics If a trade is having a hard time using stop losses what they can do as an alternative is hedge there position. Similar to how stock traders will use stock options to hedge their risk in the markets. What is hedging ? Hedging is a trading strategy that involves opening a position opposite to an existing one, in order to reduce the risk of loss from unfavorable price movements. For example, if you are long on EUR/USD, you can hedge by opening a short position on the same currency pair. This way, if the price goes down, you can offset some or all of the losses from your long position with the profits from your short position. Why this and not a stop loss ? The reasons someone would do this is because a stop loss can be triggered by temporary price fluctuations that do not reflect the true market direction. This can result in premature exits and missed opportunities. Moreover, stop loss can expose you to slippage and gaps, which are situations where the market price jumps over your stop loss level and executes your order at a worse price than expected causing you to loss more that you anticipated. hedging your position protects you from those situations. By hedging, you can keep both positions open until you are confident about the market direction and close the losing one when the price starts trending in your direction again. Things to note: Though you have positions opened in both directions and in theory you should not lose any additional funds once you've initiated the hedge it is worth noting that you can still have fees both positive and negative from swap fees at rollover depending on the direction and the asset you are trading. I will be doing a post soon on heading as a stop loss as a standalone topic and also swaps and rollover.
Editors' picks
Education
by ChristopherDownie
36
What is OrderBlock ⁉️‼️ Order Blocks are candles where Market Makers (Banks) have placed their positions, generally, the market returns to those candles and they are never violated. There're 2 types of Order Blocks: 1. The Bullish Order Block is the last bearish candle before the bullish movement, that Break The Market Structure Higher. Represents a high possibility of holding the price, when the price returns to it. 2. The Bearish Order Block is the last bullish candle before the bearish movement, that Break The Market Structure Lower. Represents a high possibility of holding the price, when the price returns to it. CHARACTERISTICS OF TRADABLE ORDER BLOCKS 1. OB SHOULD BE AT/NEAR SUPPORT/RESISTANCE 2. OB SHOULD BE AT/NEAR FLIP ZONE (Good for reversal entries) 3. OB MUST BREAK THE MARKET STRUCTURE 4. IMBALANCE AFTER CREATION OF OB MUST BE 2 TIMES THE OB + RISK REWARD MUST BE 3 TIMES THE OB 5. THE OB MUST TAKE OUT AN OPPOSING OB 6. BERISH OB MUST BE ABOVE SSR AND BULLISH OB MUST BE BELOW THE SSL 7. BULLISH OB ABOVE EQH. 8. BEARISH OB BELOW EQL.
Education
by Snick3rSD
3
What is Confluence❓✅ Confluence refers to any circumstance where you see multiple trade signals lining up on your charts and telling you to take a trade. Usually these are technical indicators, though sometimes they may be price patterns. It all depends on what you use to plan your trades. A lot of traders fill their charts with dozens of indicators for this reason. They want to find confluence — but oftentimes the result is conflicting signals. This can cause a lapse of confidence and a great deal of confusion. Some traders add more and more signals the less confident they get, and continue to make the problem worse for themselves. ✅ Confluence is very important to increase the chances of winning trades, a trader needs to have at least two factors of confluence to open a trade. When the confluence exists, the trader becomes more confident on his negotiations. ✅ The Factors Of Confluence Are: Higher Time Frame Analysis; Trade during London Open; Trade during New York Open; Refine Higher Time Frame key levels in Lower Time Frame entries; Combine setups; Trade during High Impact News Events. ✅ Refine HTF key levels in LTF entries or setups for confirmation that the HTF analysis will hold the price. HTF Key Levels Are: HTF Order Blocks; HTF Liquidity Pools; HTF Market Structure.
OANDA:XAUUSDEducation
by Snick3rSD
3
CHOCH vs BOS ‼️WHAT IS BOS ? BOS - break of strucuture. I will use market structure bullish or bearish to understand if the institutions are buying or selling a financial asset. To spot a bullish / bearish market structure we should see a higher highs and higher lows and viceversa, to spot the continuation of the bullish market structure we should see bullish price action above the last old high in the structure this is the BOS. BOS for me is a confirmation that price will go higher after the retracement and we are still in a bullish move WHAT IS CHOCH? CHOCH - change of character. Also known as reversal, when the price fails to make a new higher high or lower low, then the price broke the structure and continue in other direction.
OANDA:XAUUSDEducation
by Snick3rSD
6
Market Structure Identification ✅Hello traders! Today we have NFP day, so I will not trade, but I want to share with you some educational content. ✅ MARKET STRUCTURE . Today we will talk about market structure in the financial markets, market structure is basically the understading where the institutional traders/investors are positioned are they short or long on certain financial asset, it is very important to be positioned your trading opportunities with the trend as the saying says trend is your friend follow the trend when you are taking trades that are alligned with the strucutre you have a better probability of them closing in profit. ✅ Types of Market Structure Bearish Market Structure - institutions are positioned LONG, look only to enter long/buy trades, we are spotingt the bullish market strucutre if price is making higher highs (hh) and higher lows (hl) Bullish Market Structure - institutions are positioned SHORT, look only to enter short/sell trades, we are spoting the bearish market strucutre when price is making lower highs (lh) and lower lows (ll) Range Market Structure - the volumes on short/long trades are equall instiutions dont have a clear direction we are spoting this strucutre if we see price making equal highs and equal lows and is accumulating . I hope I was clear enough so you can understand this very important trading concept, remember its not in the number its in the quality of the trades and to have a better quality try to allign every trading idea with the actual strucutre
OANDA:XAUUSDEducation
by Snick3rSD
3
WHAT IS THE WYCKOFF METHOD?The Wyckoff Method is a trading strategy developed by Richard D. Wyckoff. It is based on the principles of supply and demand and is used to analyze price movements in financial markets. The Wyckoff method involves identifying support and resistance levels, analyzing volume and volatility, and studying the relative strength of different markets and uses these patterns to identify trading opportunities. The strategy is used by traders to identify trends and determine entry and exit points. The four cycles defined by Wyckoff's model of market behavior are: Accumulation Impulse leg is an upward trending movement Distribution Downward movement Three Wyckoff Principle 📜 The supply and demand law, the cause-and-effect link, and the connection between effort and results are the three rules that make up the Wyckoff trading strategy. The principle of supply and demand. If there is an increase in demand over supply, it leads to an increase in the value of a financial instrument. Prices rise because the quantity of an asset is limited and investors are willing to pay more when there is a shortage of the asset. If the demand for the asset falls relative to the supply, the asset loses in value. When supply and demand are in balance, the price is roughly in the same place, which causes the volatility in the market to decrease to a minimum. According to Wyckoff, accumulation time correlates with an uptrend, while distribution, in contrast, leads to a downtrend in what is called a supply and demand imbalance. When an asset spends a lot of time in the accumulation or distribution zone, there are often strong impulsive moves to break through the zone. A bullish trend will continue upward if a higher price is accompanied by high volume. However, if prices are rising and volumes are high, the trend will shift downward. According to Wyckoff's method, the market should be viewed from the point of view of the main participants, or market makers. Accumulation 📊 Market makers accumulate assets. Accumulation is when investors buy a lot of a certain asset over time. This makes their holdings bigger, which can lead to higher returns. Some investors believe a certain asset is undervalued and will go up in value. Also, some investors want to diversify their portfolio by adding a new asset. Impulse move 📈 Market makers eventually start to trade more assets, which causes the price to rise. Investors are becoming greater in number and demand goes up. The volume rises and a trend quickly ascends to new highs. It is typically characterized by a sharp, sustained move in price. This type of movement is often seen during a bull or bear market, when investors are trying to capitalize on the sudden change in price. Distribution 📉 Market makers distribute assets they have purchased by offering profitable positions to participants who just recently joined the market. Indicators of the cycle include sideways price movement and rising volumes. The demand is absorbed up until the point of exhaustion. A lot of securities or other financial instruments are sold in a short time. This is usually done by institutional investors, like mutual funds, hedge funds, and pension funds, to raise cash or to reduce their securities holdings. Sell-off 📉 Supply exceeds demand. The market maker reduces the price to a certain level. As soon as the decline is completed, the market enters the next accumulation cycle. On the gold chart, we can see each of Wyckoff's cycles: accumulation, momentum, distribution and depreciation. The phases of accumulation and distribution may differ. Conclusion 💡 The Wyckoff technique gives detailed principles and strategies, to assist traders in making reasoned decisions. His work explains the market's logic and psychology, which determine how decisions about buying and selling are made. Numerous oscillators are integrated with cluster analysis in the method.
Editors' picks
Education
by Lingrid
17
FINANCIAL MARKETSOnce upon a time, in the bustling streets of 17th-century Amsterdam, an extraordinary concept was born that would transform the world of finance forever: the stock market. It was a time of exploration, trade, and economic growth, and the Dutch Republic stood at the forefront of this new era. In the early 1600s, the Dutch East India Company (Vereenigde Oostindische Compagnie or VOC) was established, becoming the first multinational corporation in history. The VOC aimed to capitalize on the lucrative spice trade with the East Indies and sought to raise vast amounts of capital to finance its expeditions. To achieve this, the VOC devised a revolutionary plan. Instead of relying solely on wealthy merchants or monarchs to fund their ventures, they decided to offer shares of the company to the general public. These shares represented fractional ownership in the company and entitled the holders to a share of the profits. The VOC's decision to issue shares to the public was groundbreaking. It allowed individuals from various walks of life to invest in the company and reap the benefits of its success. Investors eagerly snapped up these shares, leading to the birth of a secondary market where these shares could be bought and sold. To facilitate the buying and selling of shares, the world's first formal stock exchange was established in Amsterdam in 1602. Known as the Amsterdam Stock Exchange, it provided a central location where traders could gather and exchange shares of the VOC and other companies. This marked the beginning of organized trading and the birth of the financial markets as we know them today. The stock exchange quickly gained popularity, attracting investors from all corners of Europe. Merchants, nobles, and even small-time traders flocked to the exchange, seeking opportunities to profit from the flourishing trade and expanding global economy. The stock market became a symbol of economic prosperity and a catalyst for further growth. As the stock market flourished, it began to evolve and adapt. New financial instruments emerged, such as options and futures contracts, allowing investors to speculate on the future value of various assets. Investment banks and brokerage firms sprouted up, providing services to investors and further fueling the growth of the financial sector. Over time, stock exchanges spread across the world, with London, New York, and other major cities establishing their own marketplaces. The stock market became a vital component of modern economies, providing a mechanism for companies to raise capital and investors to allocate their resources. However, with its growth and increasing complexity, the stock market has also faced its fair share of challenges. Market crashes, economic recessions, and regulatory issues have tested its resilience. Yet, despite these setbacks, the stock market has persisted, adapting to new technologies and market dynamics. Today, the stock market remains a central pillar of the global financial system. Billions of dollars are traded daily, connecting investors, businesses, and governments across the world. It continues to be a place of opportunity, risk, and innovation, shaping the economic landscape and reflecting the aspirations and fluctuations of societies. The story of the stock market is one of human ingenuity, ambition, and the pursuit of wealth. From its humble beginnings in the 17th century to its current status as a global financial powerhouse, it stands as a testament to the power of markets and the enduring human desire for growth and prosperity. WHAT IS THE TERM "HEDGING"? in the financial realm, the concept of hedging, or mitigating risks, has been practiced for centuries. While it's challenging to pinpoint the exact birth of the first hedge, we can explore the origins of hedging and how it evolved over time. Hedging can be traced back to the earliest forms of agricultural societies. Farmers, who were at the mercy of unpredictable weather conditions and crop yields, sought ways to protect themselves from potential losses. They adopted strategies such as diversifying their crops, storing surplus produce, and entering into agreements with other farmers to share risks. The development of organized markets further facilitated the practice of hedging. In ancient civilizations like Mesopotamia and Egypt, farmers and traders engaged in forward contracts, which allowed them to lock in prices for future transactions. These contracts acted as a hedge against price fluctuations, ensuring a certain level of certainty in an uncertain market. As trade and commerce expanded, so did the need for hedging beyond the agricultural sector. In ancient Greece, merchants and shipowners faced risks associated with maritime trade, including storms, piracy, and shipwrecks. To mitigate these risks, they would spread their investments across multiple voyages, diversifying their cargo and destinations. This approach served as an early form of hedging against potential losses. The formalization of financial markets in medieval Europe laid the foundation for more sophisticated hedging strategies. Merchants engaging in long-distance trade began to use bills of exchange, which were essentially early forms of negotiable instruments. These bills allowed merchants to hedge against currency and credit risks by transferring their debt obligations to a third party at a discount, reducing their exposure to potential losses. In the 17th century, options and futures contracts emerged as key hedging instruments. These contracts provided traders with the right to buy or sell assets at a predetermined price within a specific timeframe. Options and futures allowed market participants to hedge against price fluctuations and protect their investments by locking in prices in advance. One notable example of early hedging can be found in the tulip mania that swept through 17th-century Holland. During this period, the price of tulip bulbs skyrocketed to absurd levels, driven by speculative fervor. Sensing the growing bubble, some traders began selling short tulip bulb contracts, effectively betting that the prices would decline. This early form of short selling acted as a hedge against potential losses if the bubble burst, enabling traders to profit from falling prices. The development of modern financial markets and the growth of complex financial instruments in the 20th century further expanded hedging strategies. Innovations such as options, futures, swaps, and derivatives allowed market participants to hedge against a wide range of risks, including interest rates, exchange rates, and commodity prices. It's important to note that hedging, while an essential risk management tool, can also be used for speculative purposes. Traders and investors often engage in hedging strategies to take advantage of market inefficiencies and price differentials. In conclusion, while the birth of the first hedge cannot be attributed to a specific event or individual, the practice of hedging has evolved over time as a response to the inherent risks of various economic activities. From ancient agricultural societies to modern financial markets, the concept of hedging has become an integral part of managing risks and ensuring stability in an ever-changing economic landscape.
OANDA:XPTUSDEducation
by ElectiFX
3