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Fundamental Analysis

Why it PAYS to be a PATIENT trader - 5 ReasonsPatience isn’t just a virtue. Patience is your portfolio’s best friend. Now you might think that patience is just sitting on your hands and doing nothing. It’s not! It’s about taking the time to prepare, analyse and wait for when the moment arrives. And that’s why you have to keep your eyes peeled and ready to take on the big bad market. So here are 5 reasons why it pays to be a patient trade. 🚦 #1: Stops You From Making Impulsive Decisions Ever caught yourself hitting the ‘buy’ button for the sake of taking a trade? You’re not alone. Impulse is the enemy of reason, and in trading, it’s the fast track to a thinner wallet. Remember, the market will always be there tomorrow, but the same can’t be said for your capital. Impulsive decisions normally yields LOW probability trades. And that’s a reason in itself to STOP doing it. Why take the risk? 🔍 #2: Helps You Spot High Probability Trades The markets speak to those who listen. Patience gives you the superpower to cut through the noise and hone in on high-probability trades. It’s like having a financial crystal probability ball. Instead of predictive qualities, you’re armed with analysis, trends, and a likelihood of how a trade is more likely to play out. Remember, more trades from all types of markets don’t mean more wins. Often, they just mean more fees, more stress and more losses. 🤲 #3: Hold Onto Winners Got a winner in play? Cool… Patience says, “Hold it, let’s ride this wave a bit longer.” It’s the difference between a quick sprint and a marathon. Sure, locking in profits feels good and it looks promising on the portfolio. But in the medium to long run, it’s a traders kryptonite to defeat. Trading patience whispers in your ear, “There’s more to come,” and more often than not, it’s right. 🧠 #4: Takes Away Fixation Obsession is a trader’s Achilles heel. Patience frees you from the chains of market fixation. This will allow you to take a step back, focus on other things and not get hung up on every markets ticks. Stop fixating on your trades once you’re in. You have the strategy in play, you have risk and reward levels setup. Let them be and follow your strategy (regardless of whether it’s a winner or a loser). 🐆 #5: Wait for the Prey In the wild, the most successful predators are those that can wait, watch, and pounce at the perfect moment. A leopard will wait for hours in the tall grass. But when the probability is high and the leopard has done its instinctual calculations – it will pounce and WIN. You’re not chasing every gazelle; you’re waiting for the right one, the one that’s worth the energy. It’s about being proactive, not reactive. You set your terms, your entry, and exit points, and then you wait. The market will move; it always does. And when it moves into your crosshairs, that’s when you strike. So let’s sum up the reasons it pays to be a patient trader. 🚦 #1: Stops You From Making Impulsive Decisions 🔍 #2: Helps You Spot High Probability Trades 🤲 #3: Hold Onto Winners 🧠 #4: Takes Away Fixation 🐆 #5: Wait for the Prey
JSE:J200Education
by Timonrosso
Engage: Type of trading Day { DOUBLE DISTRIBUTION TREND DAY}DOUBLE DISTRIBUTION TREND DAY A double distribution trend day is an extension of a regular trend day. It exhibits two distinct price distribution phases within the trading session, with each phase characterized by a different price range. The first distribution typically follows the morning market open, while the second occurs later in the day. Key features: The market opens with brief consolidation phase After the consolidation, a new trend emerges, usually with higher volatility Followed by another consolidation phase Trading strategies: Use Initial base Breakout trade. The Concept shared from the Book " Secrets of a Pivot Boss: Revealing Proven Methods for Profiting in the Market " by Frank O Ochoa (Author)
NSE:NIFTYEducation
by Tradeplannifty
The Psychology of Trading:Identifying and Overcoming FrustrationFrustration in trading is an emotional state that traders experience as a result of unsuccessful trades, losing money, or being unable to follow their trading plan. It can be caused by a number of factors including unexpected changes in the market, errors in analysis or lack of discipline. Frustration occurs when expected results do not match reality or when a trader fails to achieve his or her goals. Imagine this scenario: you've been eyeing a specific gift for your birthday, available exclusively at a single store. However, when the time finally arrives to make the purchase, you discover that the item is sold out – and there's no alternative option. This sense of disappointment, accompanied by feelings of annoyance and irritation, is a common experience known as frustration. In the context of trading, frustration can manifest in similar ways. Imagine spending hours analyzing market trends, only to watch your carefully crafted trading plan fall apart due to unexpected market fluctuations. Or, picture yourself agonizing over a losing trade, unable to extricate yourself from a losing position despite your best efforts. In both cases, the emotional toll can be significant, leading to feelings of frustration that can compromise your decision-making and ultimately impact your overall performance. 📍 THE IMPACT OF FRUSTRATION IN TRADING: ➡️ Emotional Responses to Trading Challenges. Traders may experience a range of emotional responses to trading challenges, including irritation, anger, anxiety, and depression. Frustration can be particularly debilitating, as it can lead to feelings of dissatisfaction with oneself due to perceived missed opportunities or imperfect decisions. ➡️ Self-Doubt and Loss of Confidence. Frustration can also erode a trader's confidence in their abilities. A series of losing trades can lead to self-doubt, causing a trader to question their skills and judgment. This can have a negative impact on subsequent trades, ultimately resulting in significant losses. ➡️ Impulsive Decision-Making. Frustration can also prompt traders to re-evaluate their earlier decisions and seek changes to their strategies without sufficient analysis. This impulsive decision-making can lead to further mistakes and exacerbate the situation. ➡️ Loss of Motivation. As frustration builds, traders may experience a loss of motivation. The desire to achieve a goal or make progress in the market can fade, leaving them feeling disconnected from their trading activities. Without motivation, traders are less likely to make informed decisions or take calculated risks, which can hinder their long-term success. Frustration in trading can have far-reaching consequences, extending beyond the trading arena to impact one's overall well-being. Prolonged frustration can lead to nervous system disorders, insomnia, depression, and even unhealthy habits. However, in the early stages, frustration can be leveraged as a motivating force. Its benefits include: ⚡️ Increased Motivation and Perseverance: Frustration can propel an individual to redouble their efforts and push harder to achieve their goals. Those who are initially unsuccessful may be more likely to give up, but those who persist despite setbacks can emerge stronger and more resilient. ⚡️ Creative Problem-Solving: Frustration can stimulate innovative thinking and inspire out-of-the-box solutions. When standard approaches fail, individuals may need to think creatively to overcome challenges, leading to novel and effective problem-solving strategies. 📍 MANAGING FRUSTRATION: A STEP-BY-STEP APPROACH To effectively manage frustration, it's essential to first acknowledge and accept your emotions. Recognize when you're feeling frustrated and avoid denying the issue. Instead, focus on finding solutions. 🔹 Identify the Root Cause. To address the frustration, identify the specific trigger or event that led to it. This could be a particular action, situation, or decision. Once you understand the cause, you can develop a plan to address it. 🔹 Develop a Plan of Action. Create a plan that outlines potential solutions to the problem causing your frustration. This will help you feel more in control and empowered to take action. 🔹 Seek a Fresh Perspective. Talking to someone about your frustration can provide a valuable fresh perspective. They may help you see the situation from a different angle, and you may realize that the problem is not as severe as you thought. 🔹 Set Realistic Goals. When setting goals, aim for something achievable. Setting unrealistic expectations can lead to disappointment and further frustration. Instead, strive for a middle ground that is challenging yet attainable. 🔹 Work on Your Self-Esteem. Maintaining a healthy self-esteem is crucial for confidence and setting realistic goals. Avoid underestimating or overestimating your abilities, and focus on building a balanced sense of self-worth. 🔹 Emotional Management. Lastly, learn to manage your emotions by quickly shifting your focus away from negativity. Try to find something positive in the situation or practice mindfulness techniques to maintain a calm and centered state. 📍 CONCLUSION In the realm of trading psychology, several emotions and thought patterns are common pitfalls that can hinder performance. Frustration, Fear of Missing Out, and rumination are all closely related to mistakes and failures, which can snowball into negative consequences if left unchecked. However, it is crucial to recognize that these psychological states can be transformed from liabilities into assets. By acknowledging our mistakes, incorporating them into our learning process, and approaching challenges with creativity and resourcefulness, we can turn any psychological obstacle into an opportunity for growth. By doing so, we can break free from the cycle of negative thinking and cultivate a mindset that is resilient, adaptable, and ultimately successful. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣
Education
by Lingrid
11
Technical Analysis vs. Fundamental Analysis: Why Not Both?Hey there, fellow traders and market mavens! Ever found yourself staring confused at the screen and not making sense of things that happen in trading? So you decided to wander off deep into technical analysis shutting out its other half — fundamental analysis? Or vice versa — you digested every economic report that big media outlets churned out and yet failed to factor in some support and resistance levels? Fear not, for we've got the lowdown on why you don't have to pick sides and go with either the Fibonacci sequence or the latest jobs data . In fact, we're here to tell you why embracing both might just be your secret to trading success. So, grab your charts and financial reports and let's dive into the world where candlesticks meet earnings reports! Technical Analysis: The Lost Art of Tape Reading Technical analysis is like the cool, intuitive friend who always seems to know what's going to happen next. It's all about reading the market's mood through price charts, patterns and indicators. Here's why tech analysis should be in your skill set: Trend Spotting : Ever wished you could predict the next big trend? With moving averages, trend lines and momentum indicators like the MACD, you can ride the waves like a pro surfer and let the market carry your trades into a sea of profits. Timing is Everything : Candlestick patterns and support/resistance levels are your besties when it comes to perfect timing. The more you study them, the more you elevate your chances of entering and exiting trades with ninja-like precision. Market Sentiment : Tools like the Relative Strength Index (RSI) and Bollinger Bands give you the scoop on whether the market's feeling overbought, oversold or just right. Learn these if you want to increase the probability of correctly gauging the market’s mood. But hold up, before you get lost in the charts, let's not forget about the fundamentals. Fundamental Analysis: Making Sense of Things If technical analysis is your go-to for instant market vibes, fundamental analysis is the place to figure out why things happened in the first place. Here’s why fundamentals are a big deal and can help you to a) learn what moves markets and b) become fluent in marketspeak and own every trading conversation: Long-Term Vision : While technical analysis can sometimes feel like guesswork, fundamental analysis is spitting facts. Earnings reports, P/E ratios and economic indicators help you see the bigger picture and educate you into a better, more knowledgeable trader. Value Hunting : Ever heard of value investing legends like Warren Buffett? They thrive on finding undervalued gems through rigorous fundamental analysis. And, some say, this approach to investing is not reserved for companies only. It works for crypto, too. Economic Health Check : Understanding GDP growth, interest rates and inflation can feel like having a crystal ball for market trends. And, one big plus is that you’ll become a lot more interesting when you explain things like monetary policy or forward-looking guidance to your uncle at the Thanksgiving table. The Power Couple: Combining Technical and Fundamental Analysis Now, here’s the kicker: Why choose one when you can have both? Imagine the synergy when you combine the swift foresightedness of technical analysis with the solid foundation of fundamental analysis. Here’s how to make this dynamic duo work for you: Double-Check Your Entries and Exits : Use technical analysis for pinpointing your entry and exit points but back it up with fundamental analysis to build a convincing narrative of the asset’s long-term potential. Confirm the Trend : Spot a promising trend with technical indicators? Validate it with strong fundamentals to make sure it’s not just a flash in the pan. Risk Management : Technical analysis can help set your stop-loss levels, while fundamental analysis keeps you informed about any potential game-changers in the market. Diversification : Fundamental analysis might show you the hottest sectors right now, while technical analysis can help you call tops and bottoms if an indicator you trust is showing oversold or overbought levels. Wrapping Up So, there you have it, folks! Technical analysis and fundamental analysis don’t have to be opposite camps. Think of them as your dynamic duo, Batman and Robin, peanut butter and jelly — better together. By blending the best of both worlds, you’ll increase your chances of success in trading and do yourself a favor — you’ll get to know a lot and become more interesting! Ready to take your trading game to the next level? Start combining technical and fundamental analysis and watch as your trading strategies transform into a market-crushing masterpiece. Happy trading and may your profits be ever in your favor!
Editors' picks
SP:SPXEducation
by TradingView
14
Compound Interest - A Trader's Secret WeaponIn this video I give you a perspective that traders often neglect - Compound Interest. Compounding is probably the most important part in terms of becoming a trader that survives in the long run. Social media is filled with traders nowadays, and some of them are pretty good at trading. However, shortsightedness gets to them as they forget about the one thing that ensures longevity in this game. It is way easier dig yourself into drawdown than it is increase your wealth, it is just math. The technique that greatly rewards the disciplined and patient trader is COMPOUNDING. As Albert Einstein said according to some sources although not verified is that "Compound interest is the 8th wonder of the world". - R2F
Education
by Road_2_Funded
Why Are Bonds Still Crashing?Why are US, UK, and EU bonds still crashing since March 2020? In this video, we are going to study the relationship between bonds, yields, and interest rates, which many of us find confusing. How can we understand them, and why are bond prices leading the yield, followed by interest rates this season? 10 Year Yield Futures Ticker: 10Y Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Editors' picks
TVC:US30YEducation
by konhow
9
Liquidity is KEY to the MarketsIn this video I go through more about liquidity and why it is important. The markets move because of liquidity. Without liquidity, there is no trading. The larger the trader, the larger the liquidity required. Understanding the concept of liquidity and the fractal nature of price, trading becomes very interesting. A whole new world opens up to you and you no longer have to keep guessing where price is going. You no longer have to keep chasing candles. I hope you find this video insightful. - R2F
OANDA:XAUUSDEducation
by Road_2_Funded
1
Nasdaq's Stellar Returns, Potential Risks AheadThe Nasdaq-100 has been a stellar performer since its debut in 1985, rising 22,900% (with dividends reinvested) for a 14.8% compounded annual total rate of return. By comparison, the S&P 500 returned 7,200% over the same period with dividends reinvested, an 11.5% compounded return (Figure 1). Figure 1: Since the inception of the Nasdaq-100 index in 1985, it has outperformed the S&P Source: Bloomberg Professional (XNDX and SPXT) However, the Nasdaq’s outperformance can partly be attributed to higher risk levels. It has been consistently more volatile than the S&P 500 (Figure 2) and has been subject to much greater drawdowns. On March 28, 2000, Nasdaq began a drawdown that reached -81.76% on August 5, 2002 (Figure 3). The total return index didn’t hit a new high-water mark until February 12, 2015. It also had a sharper drawdown during the 2022 bear market. Figure 2: The Nasdaq-100 has nearly always been more volatile than the S&P 500 Source: Bloomberg Professional (XNDX and SPXT), CME Economic Research Calculations Figure 3: From 2000 to 2002, the Nasdaq-100 fell by nearly 82% and didn’t recover until 2015. Source: Bloomberg Professional (XNDX and SPXT), CME Economic Research Calculations A large part of the reason for the Nasdaq’s greater overall return, higher volatility and its heightened susceptibility to deep and long drawdowns is its dependence on one sector: information technology. Since at least the 1990s, Nasdaq has been nearly synonymous with the tech sector. While nearly every sector has at least some presence in the Nasdaq, since its launch in 1999 it has always had a near-perfect correlation with the S&P 500 Information Technology Index (the basis for the S&P E-Mini Technology Select Sector futures launched in 2011). That correlation has never fallen below +0.9 and has sometimes been as high as +0.98. In the past 12 months the correlation has been +0.95 (Figure 4). Figure 4: The Nasdaq-100 has always had extremely high correlations with the tech sector Source: Bloomberg Professional (NDX, S5INFT, S5UTIL, S5ENRS, S5FINL, S5HLTH, S5CONS, S5COND, S5MATR, S5INDU, S5TELS) The preponderance of technology stocks in the Nasdaq is largely a function of history. Nasdaq was founded in 1971 as the world’s first electronic stock market and it began to attract technology companies, in part, because it had more flexible listing requirements regarding revenue and profitability than other venues. Over time the technology ecosystem settled largely on this market and came to dominate the Nasdaq-100 Index. Those who need to minimize tracking risks with respect to the S&P 500 Information Technology Index can do so with the Select Sector futures. However, those who wish to increase or decrease exposure to the technology sector more generally, and for whom tracking risks is a less of a concern can easily increase or reduce their exposure with the Nasdaq-100 futures. Also launched in June 1999 were E-mini Nasdaq-100 futures, which are now turning 25 years old. The contracts caught on quickly, and today trade at more than 668K contracts or $60 billion in notional value each day. E-mini Nasdaq-100 futures offer capital-efficient exposure to the Nasdaq-100 index, and allow investors to trade and track one NQ futures contract versus 100 stocks to achieve nearly identical exposure. These futures also help mitigate risk against the top-heavy nature of the Nasdaq-100 index, where the so-called Magnificent Seven companies—Microsoft, Apple, Nvidia, Amazon.com, Meta Platforms, Google-parent Alphabet and Tesla—have dominated recently. Broad exposure to this index acts as a hedge if the Magnificent Seven stocks decline. The Nasdaq has also correlated highly in recent years with consumer discretionary stocks as well as telecoms. By contrast, it has typically low correlations with traditional high-dividend sectors such as consumer staples, energy and utilities which tend to be listed on other exchanges. The exception to this rule is during down markets, when stocks tend to become more highly correlated. The Nasdaq also has very different interest rate sensitivities than its peers. For starters, high short-term interest rates seem to benefit the Nasdaq-100 companies as many of them have large reserves of cash that are earning high rates of return by sitting in T-Bills and other short-term maturities. This is a sharp contrast to the Russell 2000 index, which has suffered as Federal Reserve (Fed) rate hikes have increased the cost of financing for smaller and mid-sized firms, which borrow from banks rather than bond holders and don’t usually have substantial cash reserves. By contrast, the Nasdaq has shown a very negative sensitivity to higher long-term bond yields. Many of the technology stocks in the Nasdaq-100 are trading at high earnings multiples. Some have market capitalization exceeding $1 trillion. Higher long-term bond yields are a potential threat because much the value of these corporations is what equity analysts might refer to as their “value in perpetuity,” meaning beyond any reasonable forecast horizon. Typically, such earnings are discounted using long-term bond yields and the higher those yields go, the lower the net present value of those future earnings. Additionally, higher long-term bond yields can also induce investors to switch out of highly volatile and expensive equity portfolios into the relatively less volatile, fixed- income securities. The Nasdaq’s high sensitivity to long-term bond yields may explain why the index sold off so sharply in 2022 alongside a steep fall in the price of long-dated U.S. Treasuries, whose yields were rising in anticipation of Fed tightening and due to concerns about the persistence of inflation. By contrast, the Nasdaq has done well since October 2022 despite the Fed continuing to raise short-term rates through July 2023 and subsequently keeping those rates high. On the one hand, many of the cash-rich Nasdaq companies are benefitting from higher returns on their holdings of short-term securities. On the other hand, they are also benefitting from the fact that higher short-term rates have steadied long-term bond yields by making it clear that the Fed is taking inflation seriously. This isn’t to suggest that the Nasdaq is immune from downside risks. History shows that the risks are very real, especially in the event of an economic downturn. In the 2001 tech wreck recession, the Fed cut short-term rates from 6.5% to 1% but long-term bond yields remained relatively high, which was not a helpful combination for the tech sector. In addition to its 82% decline during the tech wreck recession, it also fell sharply during the global financial crisis, though not as badly as the S&P 500, which had a far larger weighting to bank stocks. This time around, potential threats to the Nasdaq include: The possibility of an economic downturn which could crimp corporate profits. Rate cuts which would reduce the return on cash positions. Large budget deficits and quantitative tightening which could push up long-term bond yields. Possibly tighter regulation of the tech sector in the U.S. and abroad. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By Erik Norland, Executive Director and Senior Economist, CME Group *CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
Editors' picks
CME_MINI:NQ1!Education
by CME_Group
6
Visualize $TSLA CALL pricing skew due to the upcoming earningsLet’s take a look at our new tradingview options screener indicator to see what we observe, as the options chain data has recently been updated. When we look at the screener, we can immediately see that NASDAQ:TSLA has an exceptional Implied Volatility Rank value of over 100, which is extremely high. This is clearly due to the upcoming earnings report on July 23rd. As we proceed, we notice that Tesla's Implied Volatility Index is also high, over 70. This means that not only the relative but also the absolute implied volatility of Tesla is high. Because the IVX value is above 30, Tesla’s IV Rank is displayed with a distinguishable black background. This favors credit strategies such as iron condors, broken wing butterflies, strangles, or simple short options. Next, let’s examine how this IV index value has changed over the past five days. We can see it has increased by more than 6%, indicating an upward trend as we approach the earnings report. In the next cell, we see a significant vertical price skew. Specifically, at 39 days to expiration, call options are 84% more expensive than put options at the same distance. This indicates that market participants are pricing in a significant upward movement in the options chain. The call skew is so pronounced that at 39 days to expiration, the 16 delta call value exits the expected range. This signifies a substantial delta skew twist, which I will show you visually. We see a horizontal IV index skew between the third and fourth weeks in the options chain. This means the front weekly IVX is lower than the IVX for the following week, which may favor calendar or diagonal strategies. Hovering over this with the mouse reveals it’s around the third and fourth week. In the last cell, we observe that there’s a horizontal IVX skew not just in weekly expirations but also between the second and third monthly expirations. Now, let’s see how these values appear visually on Tesla’s chart using our Options Overlay Indicator. On the right panel, the previously mentioned values are displayed in more detail when you hover over them with the mouse. The really exciting part is setting the 16 delta curve and seeing the extent of the upward shift in options pricing. This significant skew is also visible at closer delta values. When we enable the expected move and standard deviation curves, it immediately becomes clear what this severe vertical pricing skew in favor of call options means. Practically, market participants are significantly pricing in upward movement right after the earnings report. Hovering over the colored labels associated with the expirations displays all data precisely, showing the number of days until expiration and the high implied volatility index value for that expiration. Additionally, a green curve indicating overpricing due to extra interest is displayed. Weekly expiration horizontal IVX skew values appear in purple, and those affected by monthly skew are shown in turquoise blue. The 'Lite' version of our indicators is available for free to everyone, where you can also view Tesla as demonstrated. Pro indicators are available more than 150 US market symbols like SPY, S&P500, Nvidia, bonds, etfs and many others. Trade options like a pro with TanukiTrade Option Indicators for TradingView. Thank you for your attention.
NASDAQ:TSLAEducation
by TanukiTrade
Btc dominance Market Dominance: BTC's Market Cap: Bitcoin has the largest market capitalization (total value of all outstanding coins) compared to other cryptocurrencies. This significant size means its price movements have a ripple effect. Investor Confidence: Bitcoin is often seen as the most established and trusted cryptocurrency. When its price goes down, it can trigger a loss of confidence in the entire crypto market, leading to sell-offs in other cryptocurrencies. Trading Mechanisms: BTC Pairing: Many altcoins (alternative cryptocurrencies) are traded against Bitcoin (BTC) on crypto exchanges. A drop in Bitcoin's price can lead to a decrease in the altcoin's BTC value, even if its USD price remains stable. Margin Trading: Some investors use margin trading to leverage their positions, borrowing funds to amplify potential gains (and losses). When Bitcoin's price falls, it can trigger margin calls, forcing investors to sell other crypto holdings to meet margin requirements. This can lead to a broader sell-off. Investor Psychology: Correlation Bias: Investors sometimes perceive a correlation between assets even when it's not inherently strong. A decline in Bitcoin's price might lead investors to believe the entire crypto market is headed for a downturn, leading them to sell other cryptocurrencies as well. Bitcoin as a Benchmark: Many investors use Bitcoin as a benchmark for the overall health of the cryptocurrency market. A decline in Bitcoin's price can signal broader market weakness, prompting investors to sell other crypto holdings. However, there are also signs that the correlation between Bitcoin and altcoins is weakening: Rise of DeFi and NFTs: The growth of Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs) has created new sub-sectors within the crypto market with their own dynamics, less reliant on Bitcoin's price movements. Maturing Market: As the cryptocurrency market matures, individual projects are increasingly valued based on their own fundamentals and functionalities, potentially reducing their dependence on Bitcoin's price. Overall: While Bitcoin still exerts a significant influence, the relationship between Bitcoin and the broader crypto market is evolving. As the market matures and diversifies, we might see altcoins become less susceptible to Bitcoin's price swings.
CRYPTOCAP:BTC.DEducation
by ParabolicP
Chart Time SettingsIn the chart analysis tool that I use, selecting the right time frame is crucial for correctly interpreting and analyzing market movements. Unfortunately, I cannot upload 1-minute charts on TradingView, but I can start from a 15-minute interval. This is helpful, but I particularly recommend using shorter time frames like 1-minute or 5-minute charts for day trading. What are Time Settings? Time settings determine the period that a single candle or bar on the chart represents. For example, a 1-hour chart shows price movements in hourly intervals, with each candle representing the price action of one hour. Available Time Frames A wide range of time frames, from minutes to months, is available. Here are some of the most common options: 15 Minutes (15M): Popular among day traders who execute multiple trades within a day. (CAUTION - For the 15-minute interval, one should be able to wait 2-5 days - always conduct analysis using 1-minute and 5-minute charts for day trading.) 1 Hour (1H): For traders who want to recognize intraday patterns without tracking every movement. I never use the 1-hour view. Does anyone use 1-hour charts? What experiences have you had with them, and how long do you hold trades? 4 Hours (4H): A good compromise for swing traders who hold trades for several days. 1 Day (1D): Provides a comprehensive overview for long-term strategies. 1 Week (1W): Suitable for long-term investors observing larger trends. 1 Month (1M): Ideal for analyzing very long-term trends. How Do I Choose the Right Time Frame? Choosing the right time frame depends on my trading strategy and time horizon. Here are some of my tips: Scalping and Short-Term Trading: For scalping and short-term trades, I recommend shorter time frames like 1-minute (1M) or 5-minute (5M). These help in capturing small market movements and reacting quickly to changes. Although I cannot upload these time frames, I use them for detailed analysis. Day Trading: For day trading, I use the 15-minute (15M) charts, (1M and 5M) charts to analyze the entire trading day and respond to intraday trends. Swing Trading: For swing trading, I use longer time frames like 15-minute and 4-hour (4H) charts, and 1-day (1D) charts to follow trends over several days or weeks. Long-Term Investments: For long-term investments, weekly (1W) or monthly (1M) charts are ideal for identifying major trends and long-term movements. Multi-Time Frame Analysis A proven method is multi-time frame analysis. I examine the same market in different time frames to get a more comprehensive picture. For example, I identify a long-term trend on the daily chart and then use the 15-minute chart to find precise entry and exit points. Conclusion The right time setting can make the difference between a successful and an unsuccessful trade. Although I cannot upload 1-minute charts, I experiment with various time frames to find the one that best suits my strategy. By understanding and applying different time settings, I can improve my trading decisions and refine my market analyses.
Education
by myforexblog
WHAT IS APY IN CRYPTO ?💹 APY (Annual Percentage Yield) is the amount of money an investor will earn in a year if the money is reinvested after each accrual period. The calculation formula is compound interest. In cryptocurrencies and decentralised finance (DeFi), APY is used to express the returns users can get from staking, liquidity mining and other types of income farming. 📍 UNDERSTANDING APY CALCULATION APY allows users to understand what annual returns they can expect from their investments, taking into account reinvestment of interest earned. This helps to compare different investment opportunities in cryptocurrency startups: ➡️ Comparing the returns of different cryptocurrencies in staking, income farming on one exchange. ➡️ Comparing the yield of staking one coin on different exchanges. The rate, which is calculated using the simple interest formula, only takes into account the initial investment amount. In comparison, APY gives a more accurate idea of how much an investor will earn, taking into account the re-investment of interest 📍 THE APY CALCULATION FORMULA IS: APY is the Annual Percentage Yield r is the interest rate per period (in decimal form, e.g. 0.05 for 5%) n is the number of times interest is compounded per year For example, if an investment has an annual interest rate of 5% compounded quarterly, the APY would be: APY = (1 + 0.05/4)^(4) - 1 = 5.127% This means that over a year, the investment would earn an effective annual return of 5.127%, taking into account the compounding effect. Note that this formula assumes that the interest is compounded at the end of each period, which is often referred to as "compounding frequency". The more frequently interest is compounded, the higher the APY will be. 📍 THREE CRUCIAL POINTS TO KEEP IN MIND ARE: 1️⃣ Frequency of interest accrual. The more frequently interest is accrued, the higher the APY will be, even if the nominal interest rate remains the same. 2️⃣ Reinvestment. APY assumes that all interest earned is reinvested, which increases the total return. 3️⃣ Transparency. APY provides a more accurate representation of potential returns compared to a simple interest rate. APY is a forecast and actual returns may vary. It may be affected by market volatility, changes in interest rates, risks associated with a particular investment product. APY is specified for each product and each coin separately, you can find this information on the website of the cryptocurrency exchange. To understand the amount of earnings, you need to know the period of accrual of income. For example, accrual in staking can occur both every minute and every day. In addition to APY, there is another key rate to consider: APR (Annual Percentage Rate). Similar to APY, APR is a rate that measures the yield of an investment, but it is calculated using the simple interest formula. While APR is commonly associated with the cost of borrowing at an interest rate, it can also be applied to investments. Like APY, APR is not a fixed value, as it can fluctuate based on network activity and other factors. 📍 CONCLUSION APY is a critical parameter that represents the return on an asset with compound interest, taking into account the reinvestment of profits after each accrual. This metric is essential when evaluating the feasibility of staking or other income-generating opportunities. For instance, it can help you decide whether to stake Coin A or convert it to Coin B and stake it instead. By comparing APY rates for different coins and staking options, you can make informed decisions about where to allocate your assets to maximize your returns. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣
Education
by Lingrid
3
Comparing the new SPYU to UPRO and SPXLI am not sure if anyone else noticed, because quite frankly I completely missed it, but there is a new leveraged share on the block that aims to track the S&P 500 ( SP:SPX ). That ticker is $SPYU. Now this isn’t a conventional leveraged share. Most leveraged shares are between 2 x to 3 x max. However, this one is 4 x. Yeah, you read it correctly, 4 x the S&P. So if the S&P moves 2%, your theoretical gains are 8%. Now there are inherent risks with leveraged share usage, which I have spoken about before. Now I am not going to get into the risks involved with over-leveraging yourself. I feel like there is enough cautionary tales, both from me and others, about such travesties. But what I want to cover in this post is really just an evaluation of SPYU vs the popular others, such as SPXL and UPRO. For me, my go to has always been UPRO; however, this new one intrigued me so decided to look at it a little more closely. Overview SPYU was launched in December of 2023. Surprisingly, despite being an ETF that tracks and American index and is listed on the NYSE, this leveraged ETF is managed by a Canadian institution, the Bank of Montreal. While it is a little strange to see the Bank of Montreal offering such an asset as an American asset, this bank is well known in Canada for offering multiple types of ETFs with exposure to both American and Canadian industries. I myself have many of their products and have been pleased with the returns! Owning to SPYU’s short-ish existence, its difficult to really make long term predictions about how this will hold up over time. But I have done some comparative analysis on SPYU, UPRO and SPXL, using SPY as a benchmark, to see how SPYU has performed in its short timespan. So let’s get into the results. Correlation: Generally, the first thing you want to look at when identifying a leveraged share is the correlation. If a leveraged ETF tracks the underlying well, you are going to see a high correlation. If it struggles to track the underlying well, you will see a correlation with a lot of ‘variance’. Variance just means deviation from what would be, generally, a statistically strong relationship. So let’s take a look at our 3 amigos in relation to SPY: In the chart above, we are looking at the correlation of SPYU, UPRO and SPXL in relation to SPY over a rolling 14 period lag (in other words, a 14 day time period). Purple represents UPRO, green SPXL and Aqua SPYU. In the legend on the right, you can see the max and min correlation of the various leveraged ETFs in relation to SPY. We see that UPRO and SPYU are pretty much on par with each other, with a correlation of roughly 0.97 to 0.98. This would equate to a variance of 0.04 (a perfect correlation has a score of 1, which would be the benchmark to compare the degree of variance or drift from the ability to track the underlying). This is, from a statistical perspective, fantastic! For most instances, we would say this is pretty much on par with a perfect correlation. The same is technically true for SPXL. SPXL has a min correlation of 0.96, which equates to a variance of around 0.05, only 0.01% more than the other 2 ETFs. Statistically, these tickers are indistinguishable and there really is no statistically significant difference observed between their ability to track the underlying. What about Slippage and Returns? Slippage, which can be the result of contango and other factors, refers to a type of “loss in value” so to speak (AKA DECAY!!!). Essentially what it means is, is the ETF delivering what it says to deliver. In SPYU’s case, it says it delivers 4 x that of the S&P (or SPY). No leveraged ETF will ever be able to perfectly match their quoted returned consistently, owning to normal market volatility. However, what we want to see in a good leveraged share is very little slippage. In other words, we want to see a leveraged ETF that more frequently returns what it promises than doesn’t. To measure this, we can use an indicator I developed a while ago called leveraged share decay tracker (). Let’s kick it off with SPY vs SPYU: In this chart, we can see that over a short period of time (under 100 days), the average slippage of SPYU is around 2.4%. For the most part. We can see this quantified in variance (the difference in correlation) and drift (the monetary measure of variance). This means that, at approximately 100 days, the variance in the potential loss or gain is around $1.72. At 30 days, it is $0.25. This means, theoretically, you could be down $1.72 per share, if you intended to hold for approximately 100 days. Now, this $1.72 could be meaningless if the ETF managed to offer around the quoted returns, and indeed, it seems that it does. At 100 days, the expected return would be 42.65%, based on SPY’s trajectory. The actual return was 31.88%. This is a 10.77% difference. Had you traded SPY directly, you would be up about 21%. So the 10% slippage kind of evens out in that sense, because you are still up more than 10% than the actual underlying itself. But wait, we need to check how the other leveraged ETFs perform. Let’s look at UPRO and SPY next: So, remember UPRO promises 3 x the leverage, so the returns will likely be less than the returns on SPYU, which offers 4 x the leverage. Looking at this, we can see the average % slippage is about 0.40%. The average monetary slippage is about 0.40$. And finally, if you held for 100 days, you would only have a slippage of around 3%. So had you invested in SPY in December of 2023 , your returns would have been about 21% and your returns on UPRO would have been about 28%. And finally, let’s take a look at SPXL: Remember, SPXL promises to deliver 3x the exposure to the S&P, similar to that of UPRO. You can see it’s pretty identical to UPRO: UPRO seems to drift a bit more than SPXL; however, the difference is not statistically significant. The $ amount is also equivalent, taking into account that SPXL is approximately 1.5 x the cost of UPRO. Cointegration And finally, the last way to visualize how effective leveraged shares are at tracking the underlying is by creating a co-integration regression. This uses the price of the leveraged share to predict the price of the underlying. A leveraged share with a good relationship will be on point in predicting the price of the underlying. One that struggles will have frequent drifts and deviations from the price of the underlying. Here is all 3 tickers, compared to SPY (SPY represented by the red dotted line): From here, we can see qualitatively that SPXL tends to have more dramatic swings in both directions, then UPRO or SPYU. However, SPYU and UPRO tend to perform identically. So what’s the verdict on SPYU and the Leveraged trio as a whole? My go to for trading SPY has been UPRO. As I just recently learned about SPYU I plan to make the shift here. The results of these analysis show that, from a statistical standpoint, the differences are marginal and not significant. If you want to nail it down to “which is the MOST significant within the significance” so to speak, the winners here can be grouped by desired outcome. Here they are: Returns focus: If its returns you want, its SPYU you should do. SPYU will deliver up and above the returns of UPRO or SPXL, even in light of the drift and slippage. Under 100 days, the slippage shouldn’t be objectively notable. It will only become apparent at the 100 day mark or longer; however, SPYU still manages to deliver returns that surpass both UPRO and SPXL at that time point. Risk Management: Risk management has to go to SPXL, for the lack of slippage associated over the longer term. While SPXL does have a little wider variance, it manages to have the lowest slippage in percent and money drift. SPXL frequently delivers on what it promises. And that’s it folks! Hope you enjoyed! Safe trades as always!
AMEX:SPYUEducation
by Steversteves
2
The Psychology of Mass Behavior in Trading and How to Overcome Hello Traders, Understanding the psychology of mass behavior in trading is crucial for success in the markets. This post delves into key psychological phenomena and provides strategies to overcome these biases. Key Psychological Phenomena 1. Herd Behavior: Traders often follow the crowd without independent analysis. This can lead to bubbles and crashes. 2. Emotional Contagion: Emotions like fear and greed spread rapidly among traders, driving irrational market behavior. 3. Overconfidence and Optimism Bias: Traders overestimate their ability to predict market movements and believe they are less likely to face negative outcomes. 4. Information Cascades: Decisions are based on the actions of others rather than personal analysis. 5. Confirmation Bias: Traders seek out information that confirms their beliefs, ignoring contradictory data. 6. Availability Heuristic: Overestimating the likelihood of events based on recent news or experiences. 7. Loss Aversion: The pain of losses is felt more acutely than the pleasure of gains, leading to irrational decision-making. 8. Social Proof: Looking to others’ actions for cues in uncertain situations. 9. Fear and Greed: These emotions drive market movements, often leading to panic selling or speculative bubbles. How to Overcome These Biases 1. Risk Management: Implement strict risk management strategies, such as stop-loss orders and position sizing, to protect against irrational market moves. 2. Contrarian Investing: Consider taking positions contrary to prevailing market trends when there is a strong indication of herd behavior. 3. Diversification: Spread investments across different assets to reduce the impact of market volatility driven by mass behavior. 4. Continuous Learning: Stay educated about market psychology and remain aware of your biases. 5. Emotional Discipline: Develop a trading plan and stick to it, regardless of market noise. Meditation and mindfulness can also help maintain emotional balance. 6. Independent Analysis: Conduct thorough research and analysis before making trading decisions. Rely on your judgment rather than following the crowd. 7. Seek Feedback: Engage with a trading community or mentor to gain diverse perspectives and avoid confirmation bias. By understanding and mitigating the effects of mass behavior in trading, we can make more rational, informed decisions and improve our trading performance. Let’s strive to be mindful of these psychological factors and continue to learn and grow as traders. Happy trading!
OANDA:XAUUSDEducation
by efmarquez4
Developing Emotional Resilience: Bouncing Back from LossesOkay, fellow TradingViewers, it’s time we tackle a topic that may make you a bit uncomfortable. But, rest assured — it’s for your own good! Today, we explore the realm of emotional resilience and, more precisely, how to bounce back from losses. Losses are inevitable. Ask anyone — even the big dogs in the industry have gone through painful losses (as you’ll see at the end of this write-up). Drawdowns so severe that they’ve nearly put hedge funds out of business (just ask Ray Dalio). And yet, bouncing back from losses is what has helped these one-time losers to develop emotional resilience and make the best out of the experience. Acknowledge the loss, but don’t overblow it Accept that losses happen and they’re a natural part of the trading journey. No matter how skilled or successful you are, you will have losing positions every once in a while. First, make sure you find out what went wrong. And second, don’t dwell on the losses too much and don’t let them cloud your prospects of becoming a better trader. Size your positions according to risk tolerance Never let a single position wipe out your entire account if it turned against you. We know how attractive it is to bet big on currencies swings spanning European countries . But keep in mind that, in such case, the old market adage "You're as good as your last trade" will hold true and it may not be pretty. There are two main ways to prevent the wipeout of your account with a single trade — don’t bet too big (or use too much leverage). If you do bet big, make sure you have a tight stop loss that won’t let your balance get washed out and drawn underwater. Always think about defense before you think about offense. Let your strategy take care of your trading You won’t have to be emotional if you let your strategy take care of your trading. Having the right trading plan will eliminate the need to react on the spot and make rushed decisions out of emotion. A solid strategy can empower you to withstand even the harshest market conditions with your chin up and trading account unscathed. Embrace the power of habit and routine In trading, consistency is key. Create for yourself a nice and easy-to-follow trading routine. This may include making your cup of coffee before you sit to do some chart reading. Or get a workout in before you read the daily news. Whatever will help you stay disciplined and emotionally balanced — do more of that. Invest in yourself and then trade the markets Your most valuable asset isn’t your trading account — it’s you. Invest time in learning, reading, watching interviews of successful traders and financiers. Read books on finance and trading, study the economic calendar , or sign up for a paper-trading account to test your trading skills risk-free. The more knowledge and practice you soak up, the more resilient and prepared you will become. Know when to step back and get a break Sometimes, the best thing to do after a loss is do nothing at all. It’s understandable if you feel emotionally unstable, off-kilter and overwhelmed when the markets gives you a slap in the face. Especially if you’re just starting out in the volatile trading space. What to do then? Unplug, unwind, recharge. The market will still be there tomorrow — go touch grass and come back with a refreshed perspective. Celebrate the wins — no matter how small Trading has to be about more than just coping with losses. Give yourself a nice pat on the back for every little victory. Made a successful trade? Or even got out at breakeven thanks to your stop loss? Perfect. Recognize and celebrate these moments. They’re little milestones to remind you that you’re on the right path to success. Loss advice from the big dogs in trading Let’s wrap up some with loss advice from the world’s best traders and see how they dealt with the blows of Mr. Market. Paul Tudor Jones , hedge fund manager: “Losses are not your problem. It's how you react to them. Ignore losses with no plan, or try to double down on your losses to recoup, and those losses will come back like a Mack truck to run over your account.” Ray Dalio , founder of the world’s largest hedge fund Bridgewater, on how he viewed a near-bankruptcy experience: “I needed to balance my aggressiveness and shift my mindset from thinking ‘I’m right’ to asking myself, ‘How do I know I’m right?’ It was very, very painful, yet it changed my way of thinking. It was one of the best things that ever happened to me.” George Soros , pioneer of the hedge fund industry: “It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.” Let’s hear from you How do you usually deal with a trading loss? What’s the best thing a loss has taught you? Comment below and let’s spin up a nice discussion!
Editors' picks
Education
by TradingView
7
EGO NO GO Traders’ Downfall: Six Actions to AvoidThere is NO place for ego and bravado with trading. If it falls under your personality, you have been warned. Do you know why? Because ego and emotion are traders’ kryptonite. In this piece, we’ll dive into the egotistical trader’s playbook and shine a light on six actions that could be crippling your trading game. EGO NO GO #1: Overtrade: More is Not Always More Overtrading is like trying to sprint a marathon; it’s unsustainable and a fast track to burnout. You need to pace yourself or you’re going to get a spasm or a stitch. As a trader, you’re not a machine-gun trader, firing rounds at every shadow. You need to only look and wait for the highest probability trades. Remember, it’s about the right trades, not just more trades. Solution: Quality Over Quantity as I always tell my MATI Traders! EGO NO GO #2: Revenge Trade: The Emotional Spiral After a loss, I know it feels tempting to jump straight back into the markets in order to recover your funds. But let’s face it… Revenge trading is about as effective as using a leaky bucket to bail water out of a sinking ship. Solution: Keep Cool and Carry On Clear your head. Take a walk, grab a beer – The market will always be there for you the next day. And it will probably dish out even better trades. Remember, the market doesn’t know you, and it certainly doesn’t owe you. Stick to your plan, not your pride. EGO NO GO #3: Ignore Risk Management: The Silent Killer If you ignore risk management, it’s like skydiving without checking your parachute. What if you jumped and instead of a parachute you’re wearing a backback? Don’t laugh, these things happen. With trading you need your risk management measures: Stop loss of less than 2% Drawdown management when the portfolio goes down. Risking money you can emotionally handle to lose. Making sure of your trade size. Checking your risk to rewards. Ensuring you’ve protected your positions. Solution: Plan Your Risk Decide on your risk parameters before you enter a trade, and then—this is key—stick to them. Your future self will thank you. EGO NO GO #4: Dismiss Market Analysis: Gut Feelings vs. Hard Data You also need to check the weather. By weather I mean, look at the news events coming out for the day and week. Is it NFP (Non Farm Payrolls)? – The day when you DON’T day trade. Is it CPI (Consumer Price Index)? – The day you DON’T Trade Is it FOMC where the federal committee talks and causes volatility? Solution: Check the news events and be vigilant. EGO NO GO #5: Blame Everything: The Pointless Game When trades go south. They look to blame. They point fingers to their mentors, their strategy, themselves. There is NO blame game with the markets. If you followed your rules, strategies, risk to reward and everything else – You did the best of your ability for that trade. Solution: Own your trade to Hone your trade It Accept responsibility, learn from your mistakes, and grow stronger. It’s the only way. EGO NO GO #6: Fail to Adapt: Evolve or Be Left Behind The market is a beast that’s always changing. I always say adapt or die. Feel the general market’s environment. Know whether it’s in a favourable or unfavourable period. Tweak your system to improve your metrics. Change the markets by adding or removing ones that aren’t working. Take ego out of the analysis. Solution: Stay Sharp, Stay Updated FINAL WORDS: I’m sure you already feel less egotistical when it comes to trading. And that means, this article has done it’s job. Whenever you feel ego creeping in, remember this article save it and store it. In fact go through all the articles that resonate, print them and store them in a file. It will be your guide to trading well! Let’s sum up the ego tendencies and how to avoid them… Avoid Overtrading: Less can be more. No Revenge Trading: Act with strategy, not emotion. Stick to Risk Management: It’s your safety net. Conduct Market Analysis: Never trade uninformed. Stop the Blame: Learn and move forward. Adapt to the Market: Evolve your strategy to stay relevant.
JSE:J200Education
by Timonrosso
THE EMOTIONAL TRAP: UNDERSTANDING THE DANGERS OF TILT IN TRADINGAs everyone knows emotions are one of the main components of success in trading. And not only in trading, but also in life. And the problem is that everyone knows about the negative sides of excessive emotionality, but they still keep making the same mistakes. The mistake is that in the moment of calmness a person underestimates the harm that emotions can cause. They miss the moment when signs of leaving the state of calmness appear and then they have to deal with the consequences of actions made in an unbalanced state. In trading, tilt is an equivalent of an ordinary argument. A situation in which a person goes out of the balanced state and actually loses control over what is happening. In legal terminology, this is called a "Heat of Passion". But if in law the legislation calls the heat of passion a mitigating circumstance, then in trading the market does not care about emotions - all the consequences fall on the trader. 📍 THE HIDDEN DANGERS OF TILT The more emotion is eliminated from trading, the more logical and effective it becomes. However, emotions are an inherent part of human character, and it is impossible to completely eradicate them. Statistics reveal that traders between the ages of 20 and 30, as well as those above 50, are most susceptible to emotional influences. This can be attributed not only to their level of experience but also to their ability to manage themselves and remain objective. Young adults, just starting their careers, often exhibit a sense of recklessness, while the older generation tends to become complacent and lose their grip on their emotions. 📍 THE DANGERS OF TILTING IN TRADING ARE: • Loss of emotional control, leading to impulsive decisions that are not guided by logic or a well-thought-out trading system. • Emotions, whether negative (such as fear and anxiety) or positive (like euphoria and excitement), can take over, causing mistakes and irrational decisions. • Emotional reaction to every emergency situation becomes a habit, making it challenging to separate rational thinking from emotional responses. This habit can be difficult to break and can lead to consistent mistakes in trading decisions. • Tilting can also result in the violation of risk management rules, such as closing profitable trades prematurely or holding onto losing positions for too long, which can have severe consequences for one's trading account. One common occurrence that can lead to tilt is when a trade almost reaches its target level, only to suddenly reverse, resulting in a loss or lost profit. This can be frustrating and demotivating. Another scenario is when a trader opens a trade based on an obvious trend, only to see it turn unprofitable. When a trader is 100% certain of their forecast, but it proves to be incorrect, it can lead to an emotional outburst. This emotional response can cloud their judgment and lead to impulsive decisions that worsen the situation. Interestingly, professionals in other fields, such as poker and chess, have identified similar causes of tilt. In these games, tilt is often categorized into distinct groups. Understanding these causes can help us develop strategies to recognize and manage our own tilt, ultimately improving a performance and overall trading experience. 📍 THE CAUSES OF TILT IN TRADING CAN BE ATTRIBUTED TO SEVERAL FACTORS 1. Bad luck: Despite probability theory suggesting that the outcome of positive or negative events is 50/50, a streak of bad luck can still occur. This is due to the variability in trading systems and the role of luck. A trading system may perform well on one occasion but poorly on another. 2. Unfairness: Unjust market practices, such as sudden spread widening, market maker manipulation from brokers, can evoke feelings of tilt. Cryptocurrency markets, in particular, are susceptible to market maker games. While it's challenging to combat broker injustice, acknowledging and accepting market unpredictability can help manage tilt. 3. Fear of loss: Defeat is an inherent part of trading, but not everyone is willing to accept it. The way individuals perceive loss can significantly impact their emotional response. Some people learn from their mistakes, while others become overwhelmed by emotions. 4. Mistakes: Regrettable mistakes, especially those caused by inattention or failure to acknowledge a correct prediction, can lead to tilt. It's essential to recognize that mistakes are inevitable and develop strategies for addressing them without allowing emotions to dictate decision-making. 5. Uncertainty: Doubts about the accuracy of a signal or fear of loss can prevent traders from taking action, even when they're confident in their forecast. Developing intuition, trusting oneself, and practicing self-awareness through demo accounts or small accounts can help alleviate this type of tilt. 6. The desire to win back losses: The urge to recoup losses at all costs can lead to impulsive decisions and further losses. 7. Despair: This emotional state is characterized by a complete breakdown in judgment, leading to reckless decisions and potentially resulting in the loss of one's deposit and abandonment of trading altogether. 📍 THE CONSEQUENCES OF TILT IN TRADING CAN BE SEVERE AND FAR-REACHING Some common consequences include: 1. Impulsive and reckless trading decisions, often characterized by haphazardly opening trades without a clear plan or strategy. 2. Emotional fear can lead to premature exits from the market, even when the exit signal is not supported by technical or fundamental factors. This can result in missed opportunities and lost profits. 3. Doubts about the correctness of one's actions can lead to chaotic decision-making, causing traders to hastily change trade volumes, pending orders, and other settings. 4. When a stop-loss is triggered, emotional traders may impulsively open a trade in the opposite direction, often due to a local pullback on a strong trend or market maker manipulation. This is a classic example of emotional decision-making. 5. In an attempt to salvage a large loss, traders may decide to "wait it out" in the hope that the price will eventually break even. However, this approach often ends in a stop-out, as the loss continues to grow. 6. Greed can also be a consequence of tilt, as traders become obsessed with maximizing their profits and take excessive risks. This can lead to devastating losses and damage to the trading account. Tilt in trading is often more prevalent after a losing trade, rather than after a profitable one. This is because the emotional impact of a loss can be more significant and lingering, whereas a winning trade may prompt a sense of relief and complacency. However, this second type of tilt, which occurs after a winning trade, can be particularly dangerous. When a trader experiences a series of profitable trades, they may start to relax and let their guard down, leading to a loss of control and discipline. This can quickly snowball into a desire to win back their profits, which can spiral out of control and ultimately lead to emotional exhaustion and burnout. This phenomenon can be attributed to the psychological principle of "relapse," where individuals who have made significant progress in overcoming their biases or impulses may revert to old habits when faced with success. In the context of trading, this can manifest as reckless behavior, impulsive decisions, and an inability to distinguish between rational and emotional decisions. 📍 CONCLUSION Ultimately, the responsibility for our actions and emotional state lies solely with ourselves. The key to maintaining emotional control is to stick to our system, regardless of the outcome. This means resisting the temptation to deviate from our strategy, even when we're experiencing a streak of success or facing a series of losses. It's crucial to recognize that emotions can be unpredictable and potentially destructive forces. When we feel the urge to take action outside of our predetermined plan, whether due to elation or frustration, we must take a step back and reassess. If we're experiencing a series of successful trades, it's essential to take a break before we become complacent and let our emotions get the better of us. Similarly, if we're on a losing streak, taking a break can help us clear our minds and approach our trading with a clearer head. The ability to control ourselves is often the deciding factor between success and failure in any endeavor. By acknowledging this and prioritizing emotional regulation, we can develop the discipline necessary to maintain a consistent and profitable trading strategy. Remember, self-control is not about suppressing our emotions, but about acknowledging them and making conscious decisions that align with our goals. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣
Education
by Lingrid
14
Premium & Discount Price Delivery in Institutional TradingGreetings Traders! In today's educational video, we will delve into the concepts of premium and discount price delivery. The objective is to provide you with a comprehensive understanding of institutional-level market mechanics. Before we proceed, it is crucial to define what we mean by "institutional level" and "smart money," as these terms are often misunderstood. We will also address the common misconceptions about who the liquidity providers are in the market. By grasping these foundational concepts, you will gain a new perspective on the market, realizing that its movements are not random but calculated and precise, orchestrated by well-informed entities often referred to as smart money. If you have any questions, please leave them in the comment section below. Best Regards, The_Architect
Editors' picks
Education
by The_Archi-tect
10
How to use Fibonacci Retracement ?‼️ Forex traders use Fibonacci retracements to pinpoint where to place orders for market entry, taking profits and stop-loss orders. Fibonacci levels are commonly used in forex trading to identify and trade off support and resistance levels. After a significant price movement up or down, the new support and resistance levels are often at or near these trend lines . Usually the price retracts to 50% or until OTE (0.618, 0.705, 0.79) before another impulse movement occurs.
OANDA:XAUUSDEducation
by Snick3rSD
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
Market Structure Identification !!Hello traders! 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 structure
OANDA:XAUUSDEducation
by Snick3rSD
6 INEVITABLE Stock Market DownturnsIn the world of stock trading, and crypto trading, volatility is as much a part of the landscape. Whether you’re a day trader or a long-term investor you’re bound to undergo different degrees of stock market downturns, drops and crashes. And each level of downturn has its own set of characteristics, challenges, and strategies for recovery. Let’s dive into the nuances of market downturns, so you can navigate these stormy waters with confidence and savvy. DOWNTURN #1: Down -2%: A Ripple of Volatility Think of a -2% drop in the stock market as your morning coffee spilling over a bit—it’s unpleasant but hardly the end of the world. This level of decline is typically seen as a blip of volatility, a common occurrence in the stock markets that often corrects itself in the short term. DOWNTURN #2: Down -5%: The Pullback Perspective When the market drops by 5%, it’s is often referred to as a pullback and, while it might cause a bit of concern. However, if you look at the bigger time frame, you’ll see it might not signify a long-term trend. DOWNTURN #3: Down -10%: Entering Correction Territory A 10% drop is a clear signal that the market is in a correction phase. This is where the uptrend will come to a temporary halt and the market will drop and correct itself. You’ll see moving averages will cross down and the medium term trend will be showing downside. You’ll also most likely look for shorts (sells) and take advantage of the correction. DOWNTURN #4: Down -20%: The Bear Market Looms Now we’re in the territory of the bear market. This is generally characterized by a 20% or more drop. It might be time to look into more defensive stocks or sectors, such as utilities or consumer staples, which tend to be less affected by economic downturns. DOWNTURN #5: Down -50%: The Market Crash Crisis A 50% plunge is the equivalent of a financial earthquake, causing widespread panic and uncertainty. It’s quite rare, but when it happens, it’s all hands on deck. We saw this in the financial crisis. We saw this during the tech bubble. We saw this with the oil crisis. Silver Linings: Even in the darkest times, opportunities can be found. And whenever we’ve had a crash with world markets, they have turned up, made a come-back and moved to all time highs. DOWNTURN #6: Prolonged downside: The Depression This one I don’t have a number for you. Unlike recessions, which are typically shorter and less severe, depressions are rare and can last for several years, causing long-term damage to a country’s economic health. The most famous example is the Great Depression of the 1930s, which started with the stock market crash in 1929 and lasted for about a decade in most countries. During this period, unemployment rates soared, reaching as high as 25% in the United States, while industrial production, prices, and incomes plummeted. Conclusion: Steady as She Goes As I like to say. It’s important to know that the downtrends, downturns and downside will come. We need to be clued up and prepare for these situations. That way we’ll take advantage as traders of what to do. With the right approach, you can not only survive these downturns but emerge stronger and thrive profitably on the other side.
TVC:SA40Education
by Timonrosso