PULLBACK TRADINGTrading on a pullback is one of the options for trading in Price Action patterns. Like trading on a breakout, this style implies the use of pending orders. Trading on a pullback is more popular than on a chart breakout. If Price Action signals are used correctly, it can bring more profit with less risks.
🔵 Characteristics of the strategy of trading on a pullback
This strategy, as well as all other trading strategies based on Price Action, is considered universal and multicurrency, suitable for any asset and timeframe. However, it is recommended to trade on liquid currency pairs, such as EURUSD or GBPUSD on hourly or four-hour charts. The daily D1 is also suitable for trading. When trading on a pullback, traders place limit orders (as opposed to a breakout, where stop orders are used).
🔵 The principle of trading on a pullback and the algorithm of placing orders
The basic idea of the strategy is that the price, before it goes in the necessary direction after the formation of the pattern, usually pulls back, and if you catch the moment trend continuation, you can enter the same trade on more favorable conditions, with a smaller stop-loss and larger take-profit.
Trading on a pullback is performed as follows:
1. A Price Action pattern appears on the chart. This can be a pattern of engulfing, a doji candle on a trend reversal, etc.;
2. At the opening of the next candle, a Limit pending order is placed (to buy, if an uptrend is expected, and to sell, if a downtrend is in progress). The order is placed approximately in the middle of the signal candle;
3. Stop Loss is set a few points beyond the extremum of the signal candlestick (below the minimum if trading to buy, above the maximum if trading to sell);
Take Profit is set at trader's discretion. As an alternative, you can multiply the value of a stop-loss by 3 or 4, or set the take profit at the next key level, so that the price is guaranteed to catch it when it reaches this level.
🔵 Example of pullback trading
As an example, we will consider trading on a pullback on the hourly chart of the EURUSD in detail. As an alternative, we will also consider the variant of opening a breakout order in this situation and compare the results.
Events have developed as follows:
1. After a bullish move, a bearish doji candle was formed, signaling at least a correction;
2. At the opening of the next candle a Sell Limit order was placed (in this case the order was opened at the market, since the price at that moment was at the level of the supposed pending order);
3. Stop Loss is set above the maximum of the signal candle, Take Profit - in the area of the nearest support level;
4. The stop loss ratio is approximately 1:2.5, which provides a positive mathematical expectation of the trade;
5. After 6 hours the deal closed in profit.
In this case both trades would be profitable, but profit on breakout of the support level would be almost twice less, and the stop/stop profit ratio would be 1,5:1 not in favor of take profit, which is considered inappropriate from the money management viewpoint.
🔵 Additional details of pullback trading
Despite the fact that, in the example above, trading on a pullback was more profitable than trading on a breakout, it cannot be argued that this style is absolutely better. There are drawbacks to trading on a pullback as well. Unlike trading on a breakout which can be applied to all possible Price Action patterns, limit trading is not possible in every situation. Due to this the number of signals and possible transactions is reduced, and therefore the potential profit will also be less. In spite of the fact that as a rule the take profit at breakthrough trading is less than at limit trading. As we have more trades during the same test period, trading on the breakout can bring more profit.
For example, the screenshot above shows the trend continuation pattern of an inside bar. When trading on the breakout, a pending order is placed above the maximum of the parent bullish candle which opens after several hours and the trend goes upwards, bringing profit to the trader. There are no reasons for the limit trade in this situation.
It is impossible to place a pending order in the middle of the inside bar, and there is no logical reason to place it in the middle of the mother candle.
It happens that the signal not to open a trade on a pullback on the limit order does not work, even when there are all the conditions for it. For example, during the formation of an engulfing pattern on the screen above placing a limit order in the middle of this pattern was quite logical.
However, the signal candle turned out to be too strong, the pullback movement has not reached the pending order placed and the trade was not opened. In the same situation when trading on the breakout the trade would have been opened on the next candle, and in a few hours the trader would have fixed the profit.
🔵 Conclusion
Trading by Price Action on a pullback has both advantages and disadvantages. On the one hand, this style allows you to make more profits with less risk in the same situation, when trading on the pullback shows less attractive dynamics. On the other hand, not all price action patterns are suitable for this style, in addition even suitable signals sometimes do not work, leaving the trader without profit.
The choice of trading style largely depends on the trader's temperament. The pullback method suits the patient and conservative traders who are willing to wait for the signal for days and even weeks. As a result, such waiting will be rewarded with high profits on each of trades. More aggressive traders would be better suited to trading on the breakout which allows them to enter the market more often compensating the small profit and probable losses with the number of profitable trades.
Fundamental Analysis
🧠 Fundamentals of Trading Psyhology 🧠🧠 Fundamentals of Trading Psyhology 🧠
Trading is a complex and challenging activity that requires a combination of technical knowledge, analytical skills, and psychological principles. While technical and analytical skills are essential, understanding the psychological principles that drive human behavior can make a significant difference in trading success. In this blog post, we will explore the most important psychological principles in trading and how they can affect your trading decisions.
1️⃣. Emotions and Trading
One of the most critical psychological principles in trading is understanding how emotions affect your decision-making process. Emotions such as fear, greed, and hope can influence your trading decisions and lead to irrational behavior. Fear can cause traders to panic and sell off their positions prematurely, while greed can cause them to hold on to a position for too long, hoping for more profits. Hope can cause traders to hold on to losing positions in the hopes that they will turn around.
To manage your emotions while trading, it's essential to have a plan and stick to it. Have a set of rules in place that guide your trading decisions and avoid making impulsive decisions based on emotions. Additionally, it's helpful to take breaks and step away from the market when you feel overwhelmed or stressed.
2️⃣. Loss Aversion
Another psychological principle that affects trading decisions is loss aversion. This principle states that people tend to experience the pain of losses more than the pleasure of gains. As a result, traders may hold onto losing positions for too long, hoping to recover their losses, even if it's not rational to do so.
To overcome loss aversion, it's important to set stop-loss orders that limit your losses if a trade goes against you. Additionally, it's helpful to have a risk management plan in place that outlines how much you are willing to risk on each trade.
3️⃣. Confirmation Bias
Confirmation bias is another psychological principle that can affect trading decisions. This principle states that people tend to seek out information that confirms their existing beliefs and ignore information that contradicts them. Traders may look for information that supports their position while ignoring or dismissing information that suggests they should sell.
To overcome confirmation bias, it's important to be open-minded and consider all available information. Take the time to research and analyze both sides of an argument before making a decision. Additionally, it's helpful to have a trading journal that records your decisions and the reasoning behind them, so you can review and analyze your performance objectively.
4️⃣. Overconfidence
Overconfidence is a psychological principle that can lead to risky behavior in trading. This principle states that people tend to overestimate their abilities and underestimate risks, leading them to take more significant risks than they should.
To manage overconfidence, it's important to be realistic about your abilities and limitations. Take the time to learn and practice trading strategies and techniques before risking real money. Additionally, it's helpful to have a mentor or a trading community to provide feedback and support.
5️⃣. FOMO (Fear Of Missing Out)
FOMO is a psychological principle that can lead to impulsive and irrational behavior in trading. This principle states that people tend to feel anxiety or regret when they believe they are missing out on an opportunity. Traders may enter a position because they fear missing out on potential profits, even if it's not a rational decision.
To overcome FOMO, it's essential to have a plan and stick to it. Set clear goals and entry and exit points for each trade, and avoid making impulsive decisions based on emotions. Additionally, it's helpful to remember that there will always be opportunities in the market, and it's better to miss out on one trade than to risk your capital on a bad trade.
6️⃣. Patience
Patience is a critical psychological principle in trading. Successful traders understand that trading is a marathon, not a sprint, and that it takes time to develop and refine trading skills. Patience also applies to individual trades. Traders who rush into trades without doing proper research and analysis often make poor decisions. On the other hand, traders who take the time to wait for the right opportunities and execute trades based on solid analysis and strategy are more likely to succeed.
To cultivate patience in trading, it's helpful to have a long-term perspective and focus on consistency rather than immediate profits. Traders should also avoid being overly reactive to short-term market movements and instead stay focused on their overall trading strategy.
7️⃣. Discipline
Discipline is another crucial psychological principle in trading. Successful traders understand the importance of having a disciplined approach to trading, which involves following a set of rules and strategies consistently. Traders who lack discipline often make impulsive decisions based on emotions or market noise, which can lead to poor performance.
To cultivate discipline in trading, it's essential to have a trading plan in place and stick to it. This plan should outline your trading strategy, risk management, and trading rules. Traders should also have a daily routine that includes market analysis and reviewing their trading performance.
8️⃣. Adaptability
Adaptability is another psychological principle that can affect trading success. The market is constantly changing, and traders who can adapt to these changes are more likely to succeed. Traders who are rigid in their approach and unwilling to adapt to changing market conditions often struggle to make consistent profits.
To cultivate adaptability in trading, it's important to stay informed and up-to-date on market news and trends. Traders should also be willing to adjust their trading strategies and techniques based on changing market conditions. Additionally, traders should be open to learning new trading techniques and strategies that may help them adapt to changing market conditions.
In conclusion, understanding the psychological principles that drive human behavior is crucial for success in trading. Emotions such as fear, greed, and hope can influence trading decisions, and traders must learn to manage these emotions to make rational decisions. Additionally, traders must overcome loss aversion, confirmation bias, overconfidence, FOMO, and cultivate patience, discipline, and adaptability to succeed in the market. By understanding and applying these psychological principles, traders can improve their performance and achieve their trading goals.
🚀 If you appreciate my work and effort put into this post, I encourage you to leave a like and follow on my profile 🚀
How To Follow Market News Like a ProAs a member of TradingView, you have access to more than 100 news providers. Our excellent news providers cover every asset class. Learning how to manage market news is an important informational edge that takes time and practice - always know the latest stories about your favorite symbols and be in the know about what traders are talking about.
In this post, we want to share a few tips for managing your news flow. 🗞️🎯
Before we get started, let us remind everyone how we recently enhanced our news by giving our members access to one of the world's preeminent news organizations - Dow Jones Newswire including the Wall Street Journal, Marketwatch, Barron's, Dow Jones Commodity Trader, and more.
Where To Find News On TradingView 📰
To get started with news, first make sure you're logged into your account. Once you're logged in, there are several ways to access news. Let's take a look at each method.
- Symbol pages have dedicated news sections that cover that symbol in great detail. For example, here's every important story about Apple and here's the latest breaking news about Tesla . Go to any symbol page of your choice, click News, and start reading.
- Check out our global news flow page that brings all of our sources to one place. Once you've arrived, filter by the asset class of your choice.
- Our corporate news page brings insider buying & selling, company press releases, and official financial filings all to one page. As an equity trader or investor, this page will keep you updated about key events happening in the corporate world.
How To Find News On The Chart 📈
News can also be accessed directly from the chart. As everyone knows, breaking news can impact markets in a variety of ways. Open the chart and watch price, volume, and news all at once. This is an effective combination of tools that combines the biggest headlines with real trading activity. Here's how to get started:
- Open your watchlist, select a symbol, and then look for the latest news headline as demonstrated in the image below. Click the headline to open a dedicated news feed for that symbol. And just like that you'll have markets news and the chart open at once:
- Another way to add news to your chart is to open the Settings menu, click Events, and then check the box that says "Latest news." This box will display the latest market news directly on the chart you have open. Follow the instructions shown on the image below to get started.
Go Deeper With Specific News For Your Needs 🌐
Depending on your style of trading or desired asset class, there are additional news resources for you to harness. Check out the list below for more pages where market news can be found:
- Bond market news
- Futures market news
- Global market news
Read News From Anywhere With Our App 📱
The official TradingView mobile app for iOS and Android is free to download and market news is available to all members. Once downloaded, you can follow global market news or news about your favorite symbols. The app allows you to sort by top stories, asset class, and the world economy.
If you still don't have our app, get it here!
Thanks for reading!
We hope this post helps you become a market master for following the latest news. Please let us know if you have any questions or comments.
GOLD | Interesting facts about GoldOANDA:XAUUSD
1.Gold is a 'noble' metal, meaning that it does not rust or lose its shine. Other noble metals include ruthenium, rhodium, palladium, silver, osmium, iridium, platinum, mercury, rhenium and copper.
2.Gold is the only yellow metal. All other metals darken or turn a yellowish colour after they have oxidised or reacted with other chemicals.
3.Gold is one of the heaviest and densest of all metals in the Periodic Chart; a cubic foot would weigh more than half a ton.
4.Pure gold will melt at 1064.43° and boils at 2856.1°. Even at normal temperatures gold is extremely soft. One gram of gold can be flattened down to a square meter sheet, which is so thin that light passes through, and because of this it has been used as a protective film on visors in space suits
5.Odourless and tasteless, gold is not toxic - and flakes may be eaten in foods or drinks.
6.Gold is far rarer than diamonds but is only the 58th rarest earth element.
7.It is estimated about 160,000 tons of gold have been mined throughout history.
8.In 2018, China was the world leader in gold mining production. Second was Australia, Russia third, US fourth and Canada fifth.
9.The largest gold nugget is the 'Welcome Stranger' mined in Australia in 1869, weighing in at a colossal 173 pounds (that is nearly 78.5 kilos).
10.The first gold coins were produced in Lydia between 700 - 650 BC. They were made from electrum, which is a naturally occurring alloy of gold.
11.The Swiss Franc was the last remaining country to peg its currency to a value in gold. It became a fiat currency in 1999.
12.The Perth Mint in Western Australia cast the largest ever coin - weighing one tonne and measuring 80 centimetres (31.4 inches) in diameter.
13.New York’s US Federal Reserve Bank is reported to hold 25% of the world's gold reserves.
14.Gold is frequently used as a safe haven asset in times of economic turmoil or geopolitical uncertainty.
15.Gold has historically had a weak correlation to movements in the financial markets and is frequently used as a hedge against inflation.
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.
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.
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.
Market Structure Identification ✅Hello traders!
Today I want to tell you about:
✅ 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
🏆 Top 10 Traders of All Time 🏆🏆 Top 10 Traders of All Time 🏆
The trading world has always been fascinating, especially to those who are interested in the global economy and financial markets. Over the years, there have been some remarkable traders who have left their mark in the industry. These traders have made a name for themselves by taking calculated risks, making smart decisions, and having the ability to read the market like no one else. In this post I will be introducing the top 10 traders of all time and discussing their trading styles, strategies, and achievements.
1. George Soros is one of the most successful traders in history, known for his ability to read the market and make huge profits from his investments. He is the founder of Soros Fund Management and is estimated to have a net worth of over $8 billion. Soros is known for his “reflexivity” theory, which suggests that the market is influenced by the actions of investors, and that these actions can create self-fulfilling prophecies. He made headlines in 1992 when he shorted the British pound and made a profit of over $1 billion in a single day.
2. Paul Tudor Jones is a hedge fund manager and founder of Tudor Investment Corporation. He is known for his macro trading strategies, which involve analyzing global economic trends to make investments. He is a firm believer in the use of technical analysis and has developed his own proprietary trading software. Jones is estimated to have a net worth of over $5 billion.
3. Ray Dalio is the founder of Bridgewater Associates, one of the largest hedge funds in the world. He is known for his “Principles” approach to investing, which involves analyzing the underlying economic forces that drive the market. Dalio is also a strong believer in diversification and risk management, and his fund has a reputation for being one of the most conservative in the industry.
4. Bruce Kovner is a retired hedge fund manager and founder of Caxton Associates. He is known for his disciplined approach to trading, which involves a careful analysis of market trends and strict risk management practices. Kovner is estimated to have a net worth of over $5 billion.
5. Jim Simons is the founder of Renaissance Technologies, a hedge fund known for its use of quantitative trading strategies. Simons is a mathematician and has developed proprietary algorithms that analyze market trends and make trades based on statistical models. He is estimated to have a net worth of over $23 billion.
6. Jesse Livermore was a legendary trader who made his fortune in the early 1900s. He is known for his ability to read market trends and make investments based on his instincts. Livermore was a master of short selling and made a fortune by betting against the market during the 1929 crash. His life and career were chronicled in the book “Reminiscences of a Stock Operator.”
7. Steven Cohen is the founder of Point72 Asset Management, a hedge fund that manages over $16 billion in assets. Cohen is known for his aggressive trading style and his ability to take calculated risks. He has a reputation for being one of the most successful traders in the industry and is estimated to have a net worth of over $14 billion.
8. Kenneth Griffin is the founder of Citadel, a hedge fund that manages over $32 billion in assets. He is known for his quantitative trading strategies and his ability to make quick decisions based on market trends. Griffin is estimated to have a net worth of over $20 billion.
9. John Paulson is a hedge fund manager and founder of Paulson & Co. He is known for his successful bets against the subprime mortgage market in 2007, which earned him a profit of over $15 billion. Paulson is a contrarian investor who looks for undervalued assets and investments that are out of favor with the market. He is estimated to have a net worth of over $4 billion.
10. Ed Seykota is a pioneer in the field of trend following trading. He is known for his “Whipsaw Song” strategy, which involves following trends and cutting losses quickly when they change direction. Seykota is also a successful commodities trader and has been featured in the book “Market Wizards” by Jack Schwager.
These 10 traders are some of the most successful and influential figures in the world of finance and investing. They have made their fortunes by having a deep understanding of the markets, taking calculated risks, and developing unique trading strategies. While their approaches to trading vary, they all share a common goal: to maximize profits and minimize risk. Aspiring traders can learn a lot from studying the careers and strategies of these successful traders, but ultimately, it is up to each individual to develop their own trading style and approach to the market.
🚀 If you appreciate my work and effort put into this post, I encourage you to leave a like and follow on my profile 🚀
Mark Minervini's Trading MethodologyIntroduction
Mark Minervini is a successful stock trader, author and 2x US investment champion He was born in New York in 1966 and grew up in a family of traders. Minervini began his career as a stockbroker in the 1980s but soon realized that he could achieve better results by becoming a full-time trader.
Minervini is known for his impressive track record in the markets. He has achieved an average annual return of over 30% for more than five years and was featured in Jack Schwager's book "Stock Market Wizards: Interviews with America's Top Stock Traders." In the book, Minervini shares his trading philosophy and approach to the markets.
Minervini is also the author of the book "Trade Like a Stock Market Wizard," which was published in 2013. The book outlines his trading strategy and provides detailed guidance on how to identify and trade high-growth stocks. It has been praised by traders and investors for its clear and concise explanations and practical advice.
In addition to his trading and writing, Minervini is also a popular speaker and educator. He has given presentations and workshops on trading and investing around the world and has been featured in numerous financial publications and media outlets.
In this article, we will take a closer look at Mark Minervini's trading strategy and explore the key principles that underpin his approach.
Minervini's Trading Philosophy and Approach
Minervini's trading philosophy is centered on the idea that the stock market is an information market, where prices reflect the consensus view of all market participants. His approach is based on identifying and trading high-growth stocks that have strong fundamentals and are likely to outperform the market.
He looks for companies with accelerating sales growth, strong earnings growth, and relative strength. He believes that these companies are likely to continue to perform well and are therefore good candidates for investment.
To identify these stocks, Minervini uses a variety of techniques, including fundamental analysis, technical analysis, and market psychology. He combines these techniques to create a comprehensive trading approach that allows him to identify profitable trades and minimize risk.
The Stock Market Wizards Methodology
Minervini's approach is inspired by the trading methodology of the Stock Market Wizards, a group of successful traders who were featured in Jack Schwager's book "Market Wizards." The Stock Market Wizards approach involves identifying and trading high-growth stocks, using technical analysis to identify trends and opportunities.
Minervini has modified this approach to suit his own needs, adding his own techniques and insights to create a more comprehensive trading approach. He looks for stocks that are showing strong price action and have a high degree of relative strength. He believes that these stocks are likely to continue to perform well and are therefore good candidates for investment.
The Importance of Technical Analysis
Minervini believes that technical analysis is an essential tool for traders looking to identify profitable trades. He uses a variety of technical indicators and chart patterns to analyze the market and identify trends. Some of the key technical indicators that he uses include moving averages, momentum indicators, and breakouts.
Moving averages are used to identify the direction of the trend, while momentum indicators are used to confirm the strength of the trend. Breakouts are used to identify potential entry and exit points, allowing traders to enter a trade when the stock is showing strong price action.
Minervini also pays close attention to chart patterns, such as cup and handle patterns, double bottoms, and head and shoulders patterns. He believes that these patterns can provide valuable insights into market trends and can help traders to make informed decisions.
Risk Management Strategies
Managing risk is an essential part of Minervini's trading strategy. He uses a variety of risk management techniques to minimize losses and maximize returns. Some of the key risk management techniques that he uses include stop losses, position sizing, and diversification.
Stop losses are used to limit losses on individual trades. When a stock reaches a certain price level, the stop loss is triggered, and the trade is automatically closed out. This helps to limit losses and protect the trader's capital.
Position sizing is used to manage the amount of risk that the trader is exposed to. Minervini recommends that traders limit their exposure to any one stock to no more than 2% of their trading capital. This helps to limit losses in the event that a single stock performs poorly.
Diversification is used to spread risk across a portfolio of stocks. By investing in a variety of stocks, traders can reduce their exposure to any one stock or sector and limit the impact of market downturns on their portfolio.
Trading Psychology and Discipline
Trading psychology and discipline are critical elements of Minervini's approach. He believes that maintaining a positive mindset and avoiding emotional trading decisions are essential for success in the markets. He also emphasizes the importance of sticking to a trading plan and avoiding impulsive decisions.
To maintain a positive mindset, Minervini recommends focusing on the process of trading rather than the outcome. Traders should focus on following their strategy and making informed decisions based on their analysis of the market. They should avoid becoming emotionally attached to individual stocks and should not let fear or greed guide their decisions.
Sticking to a trading plan is also essential for success in the markets. Minervini recommends creating a detailed trading plan that outlines the trader's strategy, risk management techniques, and entry and exit points for each trade. Traders should stick to their plan and avoid making impulsive decisions based on short-term market movements.
Case Studies
To illustrate his trading strategy in action, Minervini provides real-world examples of trades that he has made using his approach. One example is his investment in pharmaceutical company Jazz Pharmaceuticals. Minervini identified Jazz as a high-growth stock with strong fundamentals, including accelerating earnings growth and strong relative strength. He entered the trade at a breakout point and used a tight stop loss to manage risk. The trade performed well, and Minervini was able to realize a significant profit.
Another example is Minervini's investment in medical device company Intuitive Surgical. Minervini identified Intuitive Surgical as a high-growth stock with strong fundamentals and strong relative strength. He entered the trade at a breakout point and used a tight stop loss to manage risk. The trade performed well, and Minervini was able to realize a significant profit.
Conclusion
Mark Minervini's trading strategy is a comprehensive approach that combines fundamental analysis, technical analysis, and risk management techniques to identify profitable trades and minimize risk. His approach is based on the idea that the stock market is an information market and that prices reflect the consensus view of all market participants.
Minervini's approach is inspired by the trading methodology of the Stock Market Wizards and incorporates a variety of technical indicators and chart patterns. He also emphasizes the importance of risk management techniques such as stop losses, position sizing, and diversification.
Maintaining a positive mindset and avoiding emotional trading decisions is also essential to Minervini's approach. He recommends sticking to a trading plan and avoiding impulsive decisions based on short-term market movements.
By following these principles, traders can apply Mark Minervini's approach to their own trading strategies and improve their chances of success in the markets.
⚛️Review of the CryptoGPT(GPT) Project!!!⚛️Hello, today, let's review one of the cryptocurrency projects in the field of Artificial Intelligence(AI)🤖 from the fundamental point of view.
The reason for choosing this field is people's high acceptance of artificial intelligence🤖 in the new year; cryptocurrency projects also use this opportunity, but always check any project before investing💎.
Today's project name is ⚛️CryptoGPT(GPT)⚛️ .
As I have said before, I evaluate crypto projects based on various factors.👇
I have already introduced each of these factors with a brief explanation, so today, I will be looking at CryptoGPT(GPT).
🔥Let’s get into it:
🔰🔰🔰🔰🔰🔰
✅ Project Goals : CryptoGPT is introduced as a ZK Layer-2, allowing you to monetize your data with AI. Well, first of all, GPT stands for Generative Pre-Trained Transformer, which is basically how an AI language like ChatGPT gets massive databases pre-trained to enhance its services. So CryptoGPT is no more related to ChatGPT than being a rip-off chasing the hype around ChatGPT. Also, well-known L2s like Arbitrum and Optimism launched their tokens after their Mainnets were up and running when the users required governance control. Whereas CryptoGPT has launched its $GPT token already and states in its roadmap that the Layer-2 Mainnet Beta will launch in Q4 of 2023. So $GPT is currently no more than an ERC-20 token. The clout chasing done by this project has made our experts score the CryptoGPT project goals 2/10.
✅ Founders : There is little information about the founders of CryptoGPT. On their main website, Jamila Jelani is listed as part of the marketing team, whereas on some unofficial websites, she's introduced as the project's founder. CryptoGPT provides an AI language model called Alex, and when I asked Alex about the founders of CryptoGPT, I got the answer: "I'm sorry, but I don't have that information. However, you can visit the CryptoGPT website or do a quick online search to find the founders' names."
The fact that there is no proper information about the project's founders and the website owner is using a service to hide their identity is a huge red flag, so I have scored CryptoGPT's founders 1/10.
✅ Github : The project claims to be an AI-to-earn just like the play-to-earn games that were hyped in the crypto space during the end of 2021. Basically, how this works, according to the CryptoGPT website, is that you can turn your daily activities into data using AI and then sell it as something they call "NFT Capsules". They claim to be the only sustainable "to-earn" crypto project while also being a ZK L2 on Ethereum. But as of now, the only thing that exists is the $GPT token on Ethereum and Binance Smart Chain (BSC). There isn't a GitHub respiratory available for the project, at least none our team could find. Therefore I have scored CryptoGPT's Github 1/10.
✅ Inflation Rate : The $GPT token has a maximum supply of 3,000,000,000 (3 billion) tokens; no information is available on the circulating supply. Since there is no necessity for a project with these goals to have a token in the first place, I have scored the Inflation Rate of CryptoGPT 1/10.
✅ Community : CryptoGPT's Twitter account has 240K followers, its Telegram channel has more than 90K members, and its Discord channel has 20K members. Even though these numbers seem good for a crypto project's community, you should keep in mind that these are newly created accounts. For example, the Twitter account for CryptoGPT was created in February 2023, and gaining 240K followers in a month seems shady. That's why I scored CryptoGPT's community 4/10.
✅ Whitepaper : CryptoGPT doesn't have a Whitepaper yet and only provides a Litepaper for the project. In this Litepaper, the team states their goals and compares daily active users with other L2s on Ethereum, like Optimism and Arbitrum. The question is, how can they compare their users when the CryptoGPT Mainnet does not even exist yet? The thing about crypto projects is that they can claim to be unique and solve many issues in their Whitepaper, but the real thing is what's happening in the backend and coding of the project. Since this project doesn't have a whitepaper, I have scored CryptoGPT's Litepaper 3/10.
✅ Developers : The team only introduces 3 people as developers on their website. Of the three, only one is a backend developer, Emanuel Junior from Brazil. According to his LinkedIn profile, Emmanuel is a computer science graduate from a University in Brazil with more than 5 years of work experience. But just one developer isn't sufficient for a ZK Layer-2 since other L2s have huge teams of skilled devs working to improve their protocols. Since I couldn't find information about other devs working on CryptoGPT, I scored the developers 2/10.
✅ Tokenomics : According to CryptoGPT's Litepaper, the $GPT token distribution is as follows: 20% goes to the Public, 20% is allocated to Liquidity, Staking, and Market Makers, 3% goes towards the project's Marketing, 25% is allocated towards Data Mining Incentives, 16% for the team, 6% for partners and advisors, and 10% is allocated to a Development Reserve. But according to etherscan, the top 10 wallet addresses hold more than 85% of the $GPT token supply, which is extremely shady. That's why I have scored CryptoGPT's tokenomics 3/10.
✅ Venture Capital Investors : CryptoGPT has not done any funding rounds yet and therefore doesn't have any VC investors. The team might have decided to fund the project by selling their $GPT tokens which again is another red flag for investing in the project. This is why I have scored CryptoGPT's VC investors 1/10.
✅ Competitor Comparison : Compared to other ZK rollups on Ethereum, like Starknet and zkSync, CryptoGPT is basically already dead. Since these projects have amazing teams working on improving their projects and overcoming milestones, but a project like CryptoGPT just seems to want to use the hype around AI and ZK technology simultaneously without any actual creativity. Therefore I have scored CryptoGPT compared to its comparison 1/10.
🔔 In conclusion , CryptoGPT obtained a total score of 1.9/10. Does this score mean that the $GPT price will never rally? Definitely not. The $GPT token price can rally, but that doesn't change the project's fundamentals. Investing in CryptoGPT is extremely risky, even compared to other cryptos like Bitcoin and Ethereum. That's why if you want to invest in this project, it's best only to put in an amount you're completely comfortable with losing.
Building Your First Trading Plan | Step By Step Guide
📖What is a trading plan?
A trading plan is a comprehensive decision-making tool for your trading activity. It helps you decide what, when and how much to trade. A trading plan should be your own, personal plan – you could use someone else’s plan as an outline but remember that someone else’s attitude towards risk and available capital could be vastly different to yours.
📚Why do you need a trading plan?
You need a trading plan because it can help you make logical trading decisions and define the parameters of your ideal trade. A good trading plan will help you to avoid making emotional decisions in the heat of the moment.
✳️TRADING PLAN CREATION STEPS:
1️⃣Outline your motivation
Figuring out your motivation for trading and the time you’re willing to commit is an important step in creating your trading plan. Ask yourself why you want to become a trader and then write down what you want to achieve from trading.
2️⃣Decide how much time you can commit to trading
Work out how much time you can commit to your trading activities. Can you trade while you’re at work, or do you have to manage your trades early in the mornings or late at night?
If you want to make a lot of trades a day, you’ll need more time. If you’re going long on assets that will mature over a significant period of time – and plan to use stops, limits and alerts to manage your risk – you may not need many hours a day.
It's also important to spend enough time preparing yourself for trading, which includes education, practising your strategies and analysing the markets.
3️⃣Define your goals
Any trading goal shouldn’t just be a simple statement, it should be specific, measurable, attainable, relevant and time-bound (SMART). For example, ‘I want to increase the value of my entire portfolio by 15% in the next 12 months’. This goal is SMART because the figures are specific, you can measure your success, it’s attainable, it’s about trading, and there’s a time-frame attached to it.You should also decide what type of trader you are. Your trading style should be based on your personality, your attitude to risk, as well as the amount of time you’re willing to commit to trading.
4️⃣Choose a risk-reward ratio
Before you start trading, work out how much risk you're prepared to take on – both for individual trades and your trading strategy as a whole. Deciding your risk limit is very important. Market prices are always changing and even the safest financial instruments carry some degree of risk. Some new traders prefer to take on a lower risk to test the waters, while some take on more risk in the hopes of making larger profits – this is completely up to you.
It is possible to lose more times than you win and still be consistently profitable. It's all down to risk vs reward.
5️⃣Decide how much capital you have for trading
Look at how much money you can afford to dedicate to trading. You should never risk more than you can afford to lose. Trading involves plenty of risk, and you could end up losing all your trading capital (or more, if you are a professional trader).
Do the maths before you start and make sure you can afford the maximum potential loss on every trade. If you don't have enough trading capital to start right now, practise trading on a demo account until you do.
6️⃣Start a trading diary
For a trading plan to work it needs to be backed up by a trading diary. You should use your trading diary to document your trades as this can help you find out what’s working and what isn’t.You don’t only have to include the technical details, such as the entry and exit points of the trade, but also the rationale behind your trading decisions and emotions. If you deviate from your plan, write down why you did it and what the outcome was. The more detail in your diary, the better.
❤️Please, support our work with like & comment!❤️
What do you want to learn in the next post?
Financial ratios: digesting them togetherI hope that after studying the series of posts about company financial statements, you stopped being afraid of them. I suggest we build on that success and dive into the fascinating world of financial ratios. What is it?
Let's look at the following example. Let's say you open up a company's balance sheet and see that the amount of debt is $100 million. Do you think this is a lot or a little? To me, it's definitely a big deal. But can we say the company has a huge debt based only on how we feel about it? I don't think so.
However, if you find that a company that generates $10 billion in annual revenue has $100 million in debt (i.e. only 1% of revenue), what would you say then? That's objectively small, isn't it?
It turns out that without correlating one indicator with another, we cannot draw any objective conclusion. This correlation is called the Financial Ratio .
The recipe for a normal financial ratio is simple: we take one or two indicators from the financial statements, add some market data, put it all into a formula that includes a division operation - we obtain the financial ratio.
In TradingView you can find a lot of financial ratios in the section Financials -> Statistics .
However, I only use a few financial ratios which give me an idea about the financial situation of the company and its value:
What can you notice when looking at this table?
- Profit and revenue are frequent components of financial ratios because they are universal units of measurement for other reporting components. Just as length can be measured in feet and weight in pounds, a company's debts can be measured in revenues.
- Some financial ratios are ratios, some are percentages, and some are days.
- There are no financial ratios in the table whose data source is the Cash Flow Statement. The fact is that cash flows are rarely used in financial ratios because they can change drastically from quarter to quarter. This is especially true for financial and investment cash flow. That's why I recommend analyzing cash flows separately.
In my next post, I'll break down each financial ratio from this table in detail and explain why I use them specifically. See you soon!
6 Rules of Successful TradersI’ll tell you this.
The money you desire, is not going to just fall into your lap.
If you want to be a successful trader, you need to write down the ground rules to get your as$$into gear.
I can’t profess for every professional trader, but I can share with you my rules I’ve been following for the last 2 decades.
Feel free to write them down for your trading.
RULE 1: Always have a trading plan
This is a must.
The financial markets are dangerous. Once you enter them, you are playing with the big boys.
If you go in blindly or naked (without risk levels in place), prepare to be caught with your pants down.
You need your game plan in front of you at all times.
There needs to be criteria you’ll follow from when you switch on your computer to when you close it.
RULE 2: Don’t procrastinate
Trading is like waiting for the next train.
Wait too long and you’ll miss your train. You’ll then have to wait an unnecessary extended period of time for the next one.
When your trading plan fires a signal – FIRE.
When your trading plan fires an adjustment move – FIRE.
You are only fooling yourself, if you don’t act when you need to.
RULE 3: Be patient
There are two important factors to patience.
First, never rush into getting into a trade for the thrill, excitement or revenge!
Second, never rush at getting out of a trade if it has not hit one of your trading levels.
Patience is where you will grow your portfolio.
Say that out loud…
Patience is where you will grow your portfolio.
RULE 4: Take the trade
If I made a T-Shirt I think I would have one just saying.
“Just take the trade” Repeat after me!
If all is lined up and ready to go. It doesn’t matter what fundamental factor or news event is going on. It doesn’t matter how you’re feeling or that you have a headache.
Just take the trade when your plan tells you to.
It will take you 30 seconds.
Then close your laptop and go rest.
RULE 5: Keep learning
With technology advancing, financial instruments changing, market dynamics shifting and with the world evolving…
You need to keep learning and updating your knowledge base.
You never know if the new developments, will lead to a higher win and success rate. You never know if your system and trading will be optimised and maximised to a better performance,
The onus is on you to keep up with learning…
RULE 6: Don’t give up
We all have our own time lines with trading. We are all on our own journeys, challenges and struggles.
You only lose when you quit.
So please, I beg you, don’t give up and you will thank me later…
Let’s sum up the 6 rules quickly for you…
1. Always have a trading plan
2. Don’t procrastinate
3. Be patient
4. Take the trade
5. Keep learning
6. Don’t give up
FED Interest Rates and it's mechanism BINANCE:BTCUSDT
In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions' reserve requirements. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets.
The effective federal funds rate (EFFR) is calculated as the effective median interest rate of overnight federal funds transactions during the previous business day. It is published daily by the Federal Reserve Bank of New York.
The federal funds target range is determined by a meeting of the members of the Federal Open Market Committee (FOMC) which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule.
The Federal Reserve uses open market operations to bring the effective rate into the target range. The target range is chosen in part to influence the money supply in the U.S. economy
Financial institutions are obligated by law to hold liquid assets that can be used to cover sustained net cash outflows. Among these assets are the deposits that the institutions maintain, directly or indirectly, with a Federal Reserve Bank. An institution that is below its required liquidity can address this temporarily by borrowing from institutions that have Federal Reserve deposits in excess of the requirement. The interest rate that a borrowing bank pays to a lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the effective federal funds rate.
The Federal Open Market Committee regularly sets a target range for the federal funds rate according to its policy goals and the economic conditions of the United States. It directs the Federal Reserve Banks to influence the rate toward that range with open market operations or adjustments to their own deposit interest rates. Although this is commonly referred to as "setting interest rates," the effect is not immediate and depends on the banks' response to money market conditions. Separately, the Federal Reserve lends directly to institutions through its discount window, at a rate that is usually higher than the federal funds rate.
Future contracts in the federal funds rate trade on the Chicago Board of Trade (CBOT), and the financial press refer to these contracts when estimating the probabilities of upcoming FOMC actions.
When the FOMC wishes to reduce interest rates they will increase the supply of money by buying government securities. When additional supply is added and everything else remains constant, the price of borrowed funds – the federal funds rate – falls. Conversely, when the Committee wishes to increase the federal funds rate, they will instruct the Desk Manager to sell government securities, thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply. When supply is taken away and everything else remains constant, the interest rate will normally rise.
The Federal Reserve has responded to a potential slow-down by lowering the target federal funds rate during recessions and other periods of lower growth. In fact, the Committee's lowering has recently predated recessions, in order to stimulate the economy and cushion the fall. Reducing the federal funds rate makes money cheaper, allowing an influx of credit into the economy through all types of loans.
What are the ways to profit from choosing an exchange wisely?Previously, we wrote about the free bonuses that exchanges provide us and how they ensure the speed of transactions and minimal slippage . In this idea we will talk about the interface of exchanges, the terminal and what are the main types of orders that should be on any terminal nowadays.
An interface of a cryptocurrency exchange should be user-friendly. We won’t use any product or service which repels us by its “packaging” on first impression. So let's check the most common mistakes and so called red-flags that exchanges make in their interface:
Cluttered Interface. This can make it difficult for us as users to navigate the exchange and find the information we need
Poor Navigation. If we can't easily find what we're looking for, we're likely to become frustrated and leave the exchange. It's important for exchanges to have clear and intuitive navigation
Lack of Mobile Optimization. You have already known all the importance of mobile-optimized interface. (Mobile devices were responsible for 43% of all cryptocurrency transactions in 2022)
Confusing Terminology. Cryptocurrency can be complex, especially for newbies. It's important to use clear and simple language to help everyone understand the exchange
Slow Load Times. Finally, slow load times can be a major issue for cryptocurrency exchanges. If we have to wait too long for pages to load, we are going to live very soon
In a current market with many “players” it's hard to get a user with only a quality design and interface and here we come to another important point for traders - types of orders and options for it . It is important to have many different types because it allows us to execute trades in a way that best suits trading strategy and risk tolerance. Here is the list of the most popular and in the meantime significant ones:
1. Market order: buy or sell a given instrument at the market price. The price for these types of orders is defined as the best price available on the market at the point of time the order is being placed. Since the price changes constantly, the total price and fees are provided as estimates rather than exact values.
2. Limit order: execute a trade at a specified price or better (limit price). A Limit order to buy would be at the limit price or lower, and a Limit order to sell would be at the limit price or higher.
Subtypes of limit orders:
Good-Till-Cancelled - lasts until the order is completed or canceled.
Day - automatically expires if not executed on the day the order was placed.
Good-Till-Date/Time - automatically expires at the specified date and time.
Fill-Or-Kill - must be executed immediately in its entirety; otherwise the entire order will be canceled
Immediate-Or-Cancel - must be executed immediately. Any part of an IOC order that cannot be filled immediately will be canceled.
3. Scaled orders: you can set multiple orders at once. This lets you implement the most sophisticated trading strategies with ease. For example, if you'd like to consistently sell portions of some currency in case its price is increasing. Usually, you would have to create a whole lot of sell orders manually, specifying the desired amount, and the price each time. With Scaled orders, you can noticeably speed up this process.
Now a little bit about options:
A Stop-loss option on your orders helps with minimising risks attached to trading. This option is available for Market and Limit orders with a preselected Stop option, which ensures that your order will be placed as soon as the price reaches a certain value, called the Trigger price.
A Take-profit option on your orders helps with consolidating your gains from trading. This condition is available for Market and Limit orders with a preselected 'Stop' condition — a condition that ensures that your order will be placed as soon as the price reaches a certain value, called the Trigger price.
A Post only option ensures that your limit order will be added to the order book and not match with a pre-existing order. If your order would cause a match with a pre-existing order, your post-only limit order will be canceled. The 'Post' only option guarantees that you will pay the maker fee and not the taker fee unless matched with a hidden order.
A Reduce only option enables you to create buy and sell orders meant to reduce an existing position without opening an opposite long or short position worth more than the current value of your leveraged assets. This essentially means that you will not be able to execute more than the size of your position, allowing you to trade without risking over-exposure of your assets.
In conclusion, it’s crucial for you to choose exchanges that have a user-friendly interface and a variety of order types. It can help execute trades more efficiently and with greater precision, leading to a better overall trading experience.
Thanks for reading! Write in a comment what other important points you pay attention to when choosing an exchange
You don't know how to manage your portfolioI had a talk with my mentor earlier today, and we talked about how we each calculate the signal for our allocation towards ETH compared to BTC.
It got me thinking that a lot of people actually aren't aware of why they allocate capital to different assets in the same class!
Case in an upwards trend
When the trend is up and you want to maximize your returns in crypto, with the least amount of risk... What do you do?
Well, you know that alts are higher beta (they move more than BTC), but you don't know when BTC will alts...
In the case for my conservative portfolio I only hold ETH and BTC, but how do I allocate between them?
What I first and foremost do is look at the dominance chart for BTC:
Here we see the dominance of BTC going down a lot, this is while the market is up (between 18th of jan 2021 and 19th of may 2021)
The TPI informed us about the entire trend for the dominance chart. What you do in this scenario is now determine how much ETH you hold relative to BTC in this period (in your conservative portfolio)
Open the ETH/BTC chart (I use binance personally)
In this period we see ETH outperforming BTC a lot!
When the TPI is bullish for the ETH/BTC pair, it means that ETH is likely to outperform BTC, how did that prediction go?
As BTC dominance falls, and we see strength in ETH compared to BTC, we have a higher allocation towards ETH.
But Omar, how do I quantize the amount of ETH compared to BTC?
No one asked, but I will answer still:
The TPI gives values between -1 and 1, I normalize these values between 0-1 for the ETH/BTC pair, where 0 is 0% allocation and 1 is 100% allocation towards ETH:
Equation for normalization:
minValue = 0
maxValue = 1
(TPI - minValue) / (maxValue - minValue) => (TPI - 0) / (1- 0)
Since the TPI had been bearish with a TPI value at -1 for ETH/BTC since the 13th of march, 100% of my conservative portfolio is in BTC!
Case in a downwards trend
The method is the same, but reversed!
When we look to maximize our returns on a short we want to short the asset that is underperforming!
ETH was underperforming BTC by a large portion during the LUNA drama:
This means most of the conservative portfolio was short ETH, rather than BTC
Quite simple, but very effective!
In conclusion
I want you to ask your self, why am I allocating x% of my capital towards this asset (long or short), and is my allocation optimal?
If you can't answer these two questions, then you probably need to look at your system
Numbers don't lie, this method works!
The TPI is truly the holy grail for a swing trader who wants to use statistics and data to maximize their returns and minimize their risk!
Kind regards
Omar
I've linked an idea below from a dear friend of mine (much bigger than on this platform) who has marked out crutial levels for the altcoin market based on what the FED will do, give it a watch!
Behind the scenes of exchanges. Speed of orders and slippageHello guys. Today we are sharing with you an idea about the impact of order speed and slippage. Why is it important and what exchanges could do to provide us with the best solutions?
First of all, fast order execution is essential for those of you who are looking to take advantage of market opportunities in real-time. If orders are executed too slowly you may miss out on profitable trades or be forced to accept less favorable prices. Unpredictable slippage can lead to unexpected losses, which can be particularly damaging in volatile markets.
On the other hand, high-speed trading can also increase the risk of market manipulation and other forms of unethical behavior. Traders who are able to execute orders more quickly than others may be able to manipulate prices in their favor, leading to unfair advantages and potentially harming other market participants.
What do exchanges do to ensure the best speed and lowest slippage?
1. Orders speed:
Exchanges make use of a combination of advanced technology and strategic partnerships to offer fast order execution. They are using high-performance servers and optimized software to process orders quickly
Some exchanges use machine learning algorithms to predict market trends and react to market movements more quickly. By analyzing large amounts of trade data, these algorithms can identify patterns and make predictions about future market conditions. This allows exchanges to offer faster and more accurate trading services to their users
2. Slippage
As we all know, slippage refers to the difference between the expected price of a trade and the actual price at which the trade is executed. To minimize slippage on orders, exchanges can use different strategies:
Employ advanced order matching algorithms that can quickly and accurately match buyers and sellers based on their preferences and available liquidity. These algorithms can help to reduce the likelihood of trades being executed at unfavorable prices, which can help to minimize slippage
Exchanges provide users with access to a deep liquidity pool. This can be achieved by partnering with market makers and other liquidity providers, who can help to ensure that there is always a reliable supply of buyers and sellers for each currency pair.
And last but not least, exchanges offer users the ability to place limit orders, which allow them to specify the maximum price they are willing to pay for a particular currency. This can help to minimize slippage by ensuring that trades are only executed when the desired price is available.
So what was the main purpose of this idea? To reflect the importance of transaction speed and slippage on exchanges, because the outcome of transactions and their convenience for us as users directly depends on it. If you want to make a profit in this market, you should understand exactly what exchanges are doing to give you the best options. With this knowledge you are able to choose exchanges to trade with more wisely.
Thank you for reading, don’t forget to check the links below. Check the speed of transactions and slippage on our terminal, as we are constantly working on it! We are ready to drop you some bonuses for testing our platform and sharing your feedback! Contact us here on TradingView or any other way that is convenient for you
GOLD : What Should Be Ideal Risk Reward Ratio OANDA:XAUUSD
A good risk/reward ratio could be seen as greater than 1:3,
where you would risk 1/4 of the overall potential profit.
For trading to prove profitable in the long term, a trader should not typically risk their capital for a lower risk/reward ratio,
as this will mean that half or more of their investment could be lost.
The risk/reward ratio marks the prospective reward an investor can earn for every dollar they risk on an investment. Many investors use risk/reward ratios to compare the expected returns of an investment with the amount of risk they must undertake to earn these returns. A lower risk/return ratio is often preferable as it signals less risk for an equivalent potential gain.
Consider the following example: an investment with a risk-reward ratio of 1:7 suggests that an investor is willing to risk $1, for the prospect of earning $7. Alternatively, a risk/reward ratio of 1:3 signals that an investor should expect to invest $1, for the prospect of earning $3 on their investment.
Traders often use this approach to plan which trades to take, and the ratio is calculated by dividing the amount a trader stands to lose if the price of an asset moves in an unexpected direction (the risk) by the amount of profit the trader expects to have made when the position is closed (the reward).
KEY TAKEAWAYS
The risk/reward ratio is used by traders and investors to manage their capital and risk of loss.
The ratio helps assess the expected return and risk of a given trade.
In general, the greater the risk, the greater the expected return demanded.
An appropriate risk reward ratio tends to be anything greater than 1:3.
GOLD : Whales Impact In trading MarketOANDA:XAUUSD
A whale is any individual or company who has enough money and power
To directly influence the price of a cryptocurrency or stock, usually in a negative way. Think of a whale and their large mass.
Whales use artistically created buy walls and sell walls to manipulate traders by changing current market sentiment.
Traders should be aware of large buy walls and sell walls that appear quickly. They could be part of a whale's manipulation strategy.
How do you spot a whale trade?
There are four primary ways to track whale activities,
which include monitoring known whale addresses, order books, sudden changes in market capitalization and trades on crypto exchanges.
Whales are held responsible for sudden price fluctuations in the crypto and traditional markets every so often.
WHAT ARE THE FIBONACCI LEVELS? 🔵 We are not going to focus on the Golden Ratio and the Fibonacci sequence in nature or around us. You can read about it in various books or on the Internet if you are interested. We will find out how these numbers can help in forex trading. Now, let's talk about Fibonacci retracement levels. Now let's get straight to the point.
Fibonacci retracement levels look like this:
0.236, 0.382, 0.500, 0.618, 0.764
The Fibonacci extension levels are as follows:
0, 0.382, 0.618, 1.000, 1.382, 1.618
And these are the extension levels used in forex to set orders like "take profit". In other words, according to them, the price often reaches these levels, which should be taken into account in the analysis. Let us agree that Fibonacci levels are an instrument for trend analysis and are not suitable for consolidation. The point is that when the trend is upward, Similarly, for a down trend and support. We find the lower swing levels, then the upper swing levels, and draw a grid between them.
🔵 Fibonacci in a downward trend
Let's act in the same way and draw the grid between the two candlestick patterns-swings, but downwards. The chart of EUR/USD, 4-hour timeframe. The assumption is that as the price rebounds upwards, it will hit one of the Fibonacci resistance levels, since the general trend is very strong downwards.
Let's see what happened next.
The pullback really came and the market slowed down below 0.382, an early hint of exhaustion of the bulls' forces. Finally, at 0.500 the bulls ran out of steam and the level worked as a resistance. And these two levels, 0.382 and 0.500, interact with each other. Their main purpose is as temporary support and resistance.
We all know about the resistance and support, so do not expect the price to bounce from these levels. No. These are, first of all, the zones of trader's interest. Therefore, the price at these levels likes to consolidate into micro-channels before it moves on.
As you well know, price can break both support and resistance. That means it will similarly break through Fibonacci levels. So, these levels are a guideline, but not an absolute guarantee of pullbacks and reversals. Sometimes levels are broken through, sometimes instead of 0.500 a bounce occurs from 0.618 and lots of other examples. Sometimes the price doesn't care about these levels. The price, as such, moves between levels, and some levels are more significant for it at a certain moment in time, and some are less significant for it.
So, in using Fibonacci levels, you will benefit from all the tools in your arsenal that we already know about. The tools we use to filter inputs from support and resistance levels, whether it's Fibonacci or conventional. Say, oscillators with their divergences, price action patterns and more. In fact, let's combine Fibonacci levels with support and resistance.
🔵 Fibonacci retracement with support and resistance levels
We have already learned that Fibonacci retracement levels are quite subjective. Like everything in technical analysis, we shouldn't just use them. In this case, we need a level enhancer. This is when ordinary support or resistance is well combined with Fibonacci retracement levels.
An uptrend, so many green candles. it's all very nice, but where to enter? Especially since the price clearly went with low volatility. We use the Fibo and let's add a mirror level, where resistance has become support. It can be seen very well. Notice how it combines with the 0.5 level.
Now we have to wait for the price to interact with this level. As you can see, the price really respected that level, it worked as support and did not let the price go further up. As you understand, support and resistance are, first of all, the zones of interest. The area that triggers the maximum reaction of the price. Not the least of the reasons is that everyone uses these levels. And, consequently, the more institutional traders apply Fibonacci levels, the more these levels influence price behavior. There is a direct correlation. This is why simple support and resistance levels also work.
Of course, there's no guarantee that these levels will bounce the price, but we don't need guarantees, because we don't know that they don't exist in trading, do we? We know very well. But here is the zone where the price should be watched closely Fibonacci levels are quite suitable for that.
🔵 Fibonacci levels and trendlines
Another way to apply Fibonacci levels is with another basic technical analysis tool. And what tool comes after support and resistance? That's right trendlines. Many traders use Fibonacci retracement levels exactly in an uptrend or downtrend, so combining them with trendlines makes confluence. Let's take a look at the next chart.
We should take a trade, if such a situation arises, let's say, when the price touches the trendline. However, let's add Fibonacci retracement levels and see what happens. And we will get a more accurate entry zone. Let's use two swing values and watch what happens. We are especially interested in the levels of 0.500 and 0.618.
Here we have it, the level 0.618 (61.8%) worked out as support, and it is right on the trendline. It's time to enter to further increase the trend. Two simple tools sometimes give equally simple results. Similarly, you can use the Fibonacci levels with horizontal support and resistance. In this case, Fibonacci will act as another way to filter entries at support and resistance levels.
✅ Conclusion
Keep in mind that Fibonacci levels should not be used alone, you will lose everything. They should be combined with other elements of technical analysis, such as indicators, trend lines, Price Action patterns, etc. They are auxiliary tools and you should always remember about it.
The three most worthwhile potential coins to invest in in 2023Today, I will reveal what I think is the best cryptocurrency portfolio in 2023.I think this portfolio will be the best altcoin in 2023.
1.Arweave (AR)
Arweave is a Blockchain-based decentralized platform that provides a permanent and tamper-proof data storage solution.It was launched in 2017 by a group of developers led by Sam Williams.The platform aims to solve the problem of data persistence by providing a cost-effective permanent data storage solution that is accessible to everyone.
A key feature of Arweave is that it uses a new consensus mechanism called proof of access (PoA).This mechanism is designed to be more energy-efficient than traditional proof-of-work (PoW) or proof-of-stake (PoS) mechanisms, and also allows faster transaction times.The working principle of PoA is to require nodes to prove that they have stored a certain amount of data on the Arweave network in order to participate in the consensus process.
Arweave also has a unique economic model designed to motivate data storage on the network.The platform uses a local cryptocurrency called AR to pay for storage.AR is also used to reward nodes that participate in the consensus process, which helps ensure the security and reliability of the network.As of March 2023, AR has a market capitalization of more than 1.5 billion US dollars.
A significant use case of Arweave is the creation of a decentralized social media platform.Since the data stored on Arweave is permanent and immutable, it provides a feasible alternative to traditional centralized social media platforms that are vulnerable to censorship and data leakage.
In short, Arweave is a blockchain-based platform that provides a cost-effective permanent data storage solution.Its unique consensus mechanism and economic model have helped it gain attention in the blockchain community, and have the potential to revolutionize the way we store and access data in the future.
2.Chainlink (LINK)
Chainlink (LINK) is a decentralized oracle network designed to connect smart contracts to real-world data so that they can interact with the outside world in a safe and reliable way.Launched in 2017, Chainlink has quickly become one of the most popular blockchain projects, with a market capitalization of more than US10 billion as of March 2023.
The idea behind Chainlink is to solve the trust problem in smart contracts.A smart contract is a self-executing program that runs on the blockchain and is designed to be executed automatically when certain conditions are met.However, these conditions are usually based on data outside the blockchain, such as stock prices or weather data.In order to ensure the accuracy and immutability of this data, smart contracts need to rely on oracles.
The oracle is a third-party service that can provide the data required for the execution of smart contracts.However, these oracles can be centralized, which means they are vulnerable to manipulation or attack.Chainlink tries to solve this problem by creating a decentralized oracle network that can provide reliable and secure data for smart contracts.
Chainlink works by connecting smart contracts to multiple nodes in its network.These nodes are operated by independent operators, who are motivated to provide accurate data by earning LINK tokens (the native cryptocurrency of the Chainlink network).When a smart contract needs data, it sends requests to multiple nodes in the network.The node then provides its own data, which is aggregated and verified by the Chainlink protocol to ensure accuracy and consistency.
One of the key features of Chainlink is its ability to provide data from off-chain sources (such as APIs and Web services).This means that smart contracts can be connected to a wide range of data sources, including traditional financial markets, weather services, and social media platforms.
Chainlink is also very popular in the field of decentralized finance (DeFi), it is used to provide reliable and secure price information for various DeFi protocols.This price information is essential to determine the value of various assets and execute transactions in the DeFi ecosystem.
In addition to technical features, Chainlink also has a strong and active community of developers and supporters.The project is led by Sergey Nazarov and Steve Ellis, who have a long history in the field of blockchain and smart contracts.Chainlink has also established partnerships with many large companies, including Google, Oracle, and SWIFT, which has helped increase its visibility and adoption.
In general, Chainlink is a promising project that aims to solve an important problem in the blockchain field.Its decentralized oracle network has the potential to revolutionize the way smart contracts interact with the outside world, and its growing ecosystem of developers and supporters shows that it will continue to be a major player in the blockchain industry in the coming years.
3.Uniswap(UNI)
Uniswap is one of the most popular decentralized exchanges in the cryptocurrency market.Uniswap is a decentralized exchange (DEX) built on the Ethereum blockchain, allowing users to trade Ethereum-based tokens without the need for intermediaries or central institutions.It was created by Hayden Adams in November 2018 and has since become one of the most widely used DEX in the cryptocurrency space.
The core of Uniswap is the use of an automatic market maker (AMM) system, which means it relies on a set of algorithms to determine the price of a given asset.This is in stark contrast to traditional centralized exchanges, which usually use order books to match buyers and sellers and determine asset prices.
The Uniswap agreement has two main components: the liquidity pool and the Uniswap token (UNI).The liquidity pool is a place where users can deposit their tokens to provide liquidity to the exchange. In return, they can get a portion of the transaction fees generated by the platform.On the other hand, Uniswap tokens are used for governance and allow holders to vote on important decisions related to the agreement.
As of March 2023, Uniswap has been rated as one of the top decentralized exchanges, and the market capitalization of UNI tokens exceeds US 10 billion, making it one of the top 25 cryptocurrencies by market capitalization.
One of the main advantages of using Uniswap is its decentralized nature, which means that it will not be subject to the same risks as centralized exchanges, such as hacking or government intervention.In addition, since Uniswap is built on the Ethereum blockchain, it benefits from the security and reliability of the Ethereum network.
Having said that, there are also some risks in using Uniswap.For example, the value of tokens held in the liquidity pool may fluctuate significantly depending on market conditions, which may cause liquidity providers to suffer losses.In addition, since Uniswap is a decentralized platform, there is no central authority to supervise the platform, which means that users need to be careful to avoid fraud.
Overall, Uniswap is a powerful and popular decentralized exchange that provides a series of benefits for cryptocurrency traders and investors.However, as with any investment in the cryptocurrency space, it is important to conduct your own research and carefully consider the risks before investing.
In order to facilitate everyone to continue to follow up on my analysis and sharing, you can like and follow me; in addition, I will share the daily real-time strategy in the channel. If you can't follow up in real time, you may make operational errors.You can use the following methods to enter my channel for free to follow the latest news and follow up on market trends in real time.
How to use news and data reports to make transactions profitableFrom central bank interest rate resolutions, non-farm payrolls, PMI indexes, inflation rates and other data reports, to geopolitical developments, and even natural disasters, these are major news that foreign exchange investors cannot ignore.Because the trend of the currency is always guided by these major economic events and news developments, it is accompanied by trading opportunities.
Of course, not all news is worth trading, so we must be familiar with how economic events will affect currency market trends.For major transaction news and data reports, we can follow the following three steps:
1. Select news events that will cause price fluctuations
Foreign exchange traders tend to pay attention to certain key economic data that have an impact on interest rate speculation. These economic data include: central bank decisions and speeches, gross domestic product (GDP) data, employment data, inflation rate and trade balance.
2. Choose the right currency pair
Generally speaking, we will choose currency pairs with high liquidity. There are mainly the following 8 pairs: EUR/USD, USD/¥, AUD/USD, GBP/¥, EUR/CHF, and CHF/¥.The sufficient liquidity of currency pairs is conducive to us to use lower transaction costs to win huge profits through greater volatility.
3. Pay attention to the news release time and forecast results
We have to trade based on data expectations, that is, the actual announced results are compared with the predicted values.For example, if the non-farm payrolls report is better than expected, the dollar will generally rise, and EUR/USD may fall.
In addition, before the data is released, we need to check the price movement of the short-term chart (5, 10, 15-minute chart), and use the closing price to decide whether to trade the current data report.After the price trend is confirmed, open a position and set a take profit and stop loss.
In order to facilitate everyone to continue to follow up on my analysis and sharing, you can like and follow me; in addition, I will share the daily real-time strategy in the channel. If you can't follow up in real time, you may make operational errors.You can use the following methods to enter my channel for free to follow the latest news and follow up on market trends in real time.
