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Harmonic Patterns

REVERSAL CHART PATTERNS: DOUBLE TOPREVERSAL CHART PATTERNS DOUBLE TOP It is a reversal pattern in an Uptrend, where market creates exactly two tops on the same price level. There are 2 types of Double top 1) Traditional Double Top If each top gap is within 9 months, then it is called “Traditional Double Top”. 2) Cyclic Double Top If each top gap is more than 9 months (or) If the time taken to form each top is more than 9 months, then it is called as “Cyclic Double Top”. How to Trade Double Top? If you saw a double top in the chart, wait for the confirmation of breakout at the recent low level. After breakout confirms at the recent low level, You can enter into the trade. The Minimum Double Top Target should be the same as the distance of the previous high to low as shown in the image
BITSTAMP:BTCUSDEducation
by UnknownUnicorn13086959
6
CONTINUATION CHART PATTERNS: RECTANGLE CHART PATTERNCONTINUATION CHART PATTERNS RECTANGLE CHART PATTERN Rectangle shape formed in the chart when the market is moving up and down between horizontal support and resistance levels. The market takes a long break from the trend move and it keeps moving up and down between the certain price level. During a trend, when the price starts moving sideways forming a rectangle, another trending move is likely to occur once price eventually breaks out of the rectangle formation. This move is likely to be at least as big as the size of the rectangle. Rectangles could be bearish or bullish depending on the trend direction. How to trade Rectangle? You can take short term trades in the Rectangle pattern. If the market reaches the bottom support of the rectangle, you can place buy trade. If the market reaches the Top of the resistance, you can place a sell trade. Wait for a breakout of the Rectangle pattern to enter into the trade. Note: Always keep placing the trade depend on the trend. Example: If the market moving in an Uptrend, place only sell trade after breakout confirmed at the Bottom Support of the Rectangle. How to confirm the breakout in trading? check here. After a breakout, the distance of the first wave inside the rectangle should be your minimum take profit target.
BITSTAMP:BTCUSDEducation
by UnknownUnicorn13086959
WHAT ARE THE MAIN EMOTIONS WE FACE WHEN TRADING?WHAT ARE THE MAIN EMOTIONS WE FACE WHEN TRADING? 1- FEAR: “The mortal enemies of the speculator are: ignorance, greed, fear and hope. (Jesse Lauriston Livermore) " -Do not open a position out of fear: it is a common mistake in trading, and it is something that we have to learn to eliminate from our operations. When we sit in front of the screen to carry out our operations we have to put aside all our emotions and focus on what is really important. Therefore we have to learn to overcome that fear that hurts us daily in our operations. Fear is something that is not lost, it is an emotion that accompanies us all our lives, but what we can achieve is to replace that feeling with another, such as security. How can we overcome fear? In order to overcome fear, apart from working on it every day, we have to have very clear rules of our operations (when to buy, when to sell, what securities to buy, where to invest, etc.) It is important to be properly trained, to be able to understand everything that happens in the market, to be able to understand why market movements happen, it will make us gain a lot of confidence in ourselves and will reduce our fear of not understanding why this action / index / pair of currency has moved like this. It is very important to have a trading plan, and to follow it without breaking any rules. Trust yourself: The fear of losing can be counterproductive, causing more losses; And it comes from a lack of confidence in your own abilities. If you constantly prepare, have a well-defined strategy and master market sentiment: it is time to trust yourself more. Practice a lot: Practice makes perfect, and the more you practice, your fear will gradually disappear. The more operations you have in your career as a trader, the more you will learn to accept that it is inevitable to lose money in this career. The market is a fluctuating environment, any operation can go wrong, due to factors beyond your control. Don't let this discourage you, proper risk management and practice will help you overcome this fear and cope with it. When you no longer sweat or your emotions make the decisions for you when you are in front of the monitor, you will know that you are on the right path 2- GREED: "Greed is of such an evil and perverse nature that it never satisfies its voracious appetite, and after eating it is hungrier than before (Dante Alighieri" * Greed is a very important emotion in trading, but it is a very dangerous emotion. Most of the people when starting in this sector want to earn more and more money, with minimal effort and as soon as possible. It is very important before operating in real, to control our greed, since otherwise it will make us trade excessively and take high risks, which instead of helping us, will burn our trading accounts. Greed will make you enter the market to open positions without control, and without having the patience to wait for the best opportunities. Greed will only make us have more positions than we can open, that we try to double and triple our accounts in a short time, that we are always changing our strategy, because the one we currently have does not give us enough operations to win in a short time, etc. .. If you feel identified with any of the cases that I have commented above, it means that you are not controlling your greed. How can we control greed? The most advisable thing is to identify the feeling of greed, making the decision that you do not have to earn a little more. We must continue with a rational trading plan, since greed can lead to excesses in trading, something similar to the famous addiction to gambling that we must avoid -Realistic targets -Control leverage -Resist the temptation -Probabilities in your favor -Forget about easy money Thank you, I hope it helps you to understand many of the emotions that you feel daily in your operation, remember that nobody gets rich overnight, it is a long road based on perseverance and perseverance.
BITSTAMP:BTCUSDEducation
by UnknownUnicorn13086959
WHAT ARE THE MAIN EMOTIONS WE FACE WHEN TRADING?WHAT ARE THE MAIN EMOTIONS WE FACE WHEN TRADING? 1- FEAR: “The mortal enemies of the speculator are: ignorance, greed, fear and hope. (Jesse Lauriston Livermore) " -Do not open a position out of fear: it is a common mistake in trading, and it is something that we have to learn to eliminate from our operations. When we sit in front of the screen to carry out our operations we have to put aside all our emotions and focus on what is really important. Therefore we have to learn to overcome that fear that hurts us daily in our operations. Fear is something that is not lost, it is an emotion that accompanies us all our lives, but what we can achieve is to replace that feeling with another, such as security. How can we overcome fear? In order to overcome fear, apart from working on it every day, we have to have very clear rules of our operations (when to buy, when to sell, what securities to buy, where to invest, etc.) It is important to be properly trained, to be able to understand everything that happens in the market, to be able to understand why market movements happen, it will make us gain a lot of confidence in ourselves and will reduce our fear of not understanding why this action / index / pair of currency has moved like this. It is very important to have a trading plan, and to follow it without breaking any rules. Trust yourself: The fear of losing can be counterproductive, causing more losses; And it comes from a lack of confidence in your own abilities. If you constantly prepare, have a well-defined strategy and master market sentiment: it is time to trust yourself more. Practice a lot: Practice makes perfect, and the more you practice, your fear will gradually disappear. The more operations you have in your career as a trader, the more you will learn to accept that it is inevitable to lose money in this career. The market is a fluctuating environment, any operation can go wrong, due to factors beyond your control. Don't let this discourage you, proper risk management and practice will help you overcome this fear and cope with it. When you no longer sweat or your emotions make the decisions for you when you are in front of the monitor, you will know that you are on the right path 2- GREED: "Greed is of such an evil and perverse nature that it never satisfies its voracious appetite, and after eating it is hungrier than before (Dante Alighieri" * Greed is a very important emotion in trading, but it is a very dangerous emotion. Most of the people when starting in this sector want to earn more and more money, with minimal effort and as soon as possible. It is very important before operating in real, to control our greed, since otherwise it will make us trade excessively and take high risks, which instead of helping us, will burn our trading accounts. Greed will make you enter the market to open positions without control, and without having the patience to wait for the best opportunities. Greed will only make us have more positions than we can open, that we try to double and triple our accounts in a short time, that we are always changing our strategy, because the one we currently have does not give us enough operations to win in a short time, etc. .. If you feel identified with any of the cases that I have commented above, it means that you are not controlling your greed. How can we control greed? The most advisable thing is to identify the feeling of greed, making the decision that you do not have to earn a little more. We must continue with a rational trading plan, since greed can lead to excesses in trading, something similar to the famous addiction to gambling that we must avoid -Realistic targets -Control leverage -Resist the temptation -Probabilities in your favor -Forget about easy money Thank you, I hope it helps you to understand many of the emotions that you feel daily in your operation, remember that nobody gets rich overnight, it is a long road based on perseverance and perseverance.
BITSTAMP:BTCUSDEducation
by UnknownUnicorn13086959
2
CONTINUATION CHART PATTERNS: BULLISH PENNANTSCONTINUATION CHART PATTERNS: BULLISH PENNANTS A bullish pennant is the exact opposite of a bearish pennant. It is a continuation pattern that marks a pause in the movement of a price halfway through a strong uptrend, giving you an opportunity to go long and profit from the rest of the price rise. Bullish pennants occur just after a sharp rise in price and resemble a triangular flag as the price moves sideways, making gradually lower highs and higher lows. The uptrend then continues with another similar-sized rise in price. This lesson will show you how to identify the bullish pennant and look at ways you can use it to profit from the second half of a strong uptrend. A bullish pennant marks a pause in a price's movement, halfway down a strong uptrend. It gives you the chance to make a long trade, hopefully profiting from a second big price rise.
BITSTAMP:BTCUSDEducation
by UnknownUnicorn13086959
CANDLESTICK PATTERN: HAMMERCANDLESTICK PATTERN: HAMMER The hammer candles are Japanese candles in which the price is showing that, although it wants to, it cannot advance. The hammer shaped candlestick pattern is made up of a short body with a long lower wick and is at the bottom of a downtrend. A hammer shows that although there were selling pressures during the day, ultimately strong buying pressure caused the price to rise again. Body color can vary, but green hammers indicate a stronger bull market than red hammers. Note that these candles can be considered a Japanese candlestick pattern in themselves (single candle pattern, obviously), as they have a great tendency to meet at the extremes. They are much more likely to be found at a turning point than in the middle of a trend.
BITSTAMP:BTCUSDEducation
by UnknownUnicorn13086959
5 Ways To Enhance Your Trading Psychology (Tips)Welcome to mindset Monday, where I will share something trading psychology-related. In this post, I will be breaking down 5 things that have helped my trading psychology over the years. Trading is not only a game of strategy, but there is a level of self-awareness involved as well. The 5 things that have helped me are basic brainwave science, limiting social media, diet, letting go, and having a trading ritual. Let’s discuss them further. 1. Your Brainwaves & Binaural Beats Did you know? When you wake up your brain is in what’s called “Alpha” state? Believe it or not this is actually not ideal for trading. When your brain is in Alpha state, it is actually in a more relaxed mode, Alpha is typically a state someone is in when they meditate or are about to fall asleep. It takes the average person 30-60 minutes after they wake up to transition out of Alpha and into the “Beta” state. Beta waves are what your brain is in when it feels “on.” When you are doing homework, working out, or even at a work, your brain is in Beta. How does this relate to trading? Well, back when I was obsessed with charts (in a dangerous way) I would wake up and just hop on the chart and try to trade. I would literally hop out of bed and look at my laptop. I now allow myself one full hour to transition into Beta before I begin trading, this allows me to operate at full capacity and stay sharp and alert. I also use an app on my phone called binaural beats. The app will actually play Beta waves through headphones, and while your listening to it will help your brain switch into it faster. I recommend looking into binaural beats apps, a quick google search will explain more to you. In trading, it’s important to find as many ways as possible to stay mentally sharp. This is one I use. 2. Limit Social Media I’ve seen it and I’m sure you have, the people on Instagram, Facebook, and other platforms flashing pictures of how many pips they are catching and how they are scaling accounts by 5000% in 8 days. That’s great and all, but this could potentially DESTROY you when you sit down and look at the charts. As humans, we are always comparing ourselves to other people, and when we see someone else doing better we either get down on ourselves, get inspired, or think that we need to do that too, or we aren’t performing up to par. Trading is unlike anything out there. You aren’t competing with anyone, it’s about you and the chart, your mind needs to be clear to tap into your zone. The issue with social media is people get googly-eyed at money and the lavish life but trading is not about that, it’s simply about building habits, when you take your mind off of your execution and systems and you start thinking you need to scale up quicker, you are going to be trading simply off emotion and probably make mistakes. Silencing my social media from flashy traders was one of the best decisions I have ever made. 3. Your Diet What you put into your body can affect your mind greatly. If you eat more whole foods, and get some exercise regularly these actions lead to a good feeling. Your brain will release more serotonin, this will help increase your mood. When you feel good about yourself. You usually have more confidence, and when you have more confidence, that is going to come through in your trading and your life, you’ll feel more confident in your intuition and decisiveness, and as traders, all we do every day is make decisions! 4. Let Go Let go of everything, let go of yesterday’s bad trade, let go of an argument you had with a loved one, try and let go of any stress you may feel. Meditate for 15 minutes if you need to. Beat the crap out of a pillow. Release that energy because if you don’t you may exert it onto the chart. Every trade is a brand new trade, the market doesn’t care about your problems, it will tick on with or without us. I have tried yelling at EURUSD when it stops me out, and I found that I never get a response from my computer screen. If you’re having a bad day, just step away and get a fresh start tomorrow. 5. Consistent Ritual Man, I can’t emphasize this enough, when you have a strategy, the name of the game just becomes execution really. You need to train your brain/subconscious to simply repeat your strategy over and over. In my opinion, the best way to do this is to trade from the same location. If you trade at home, do it in the same spot every time. Do something that puts your brain into “trading mode,” for me, it is making a cup of tea. I wake up, eat food, and once that cup of tea gets made, I started thinking “it’s game time.” Did you know that Tom Brady takes a nap two hours before every game? This is an example of his ritual, yours can be anything you want, affirmations, visualizing, anything you feel you can do before sitting down that will trigger your “trader state of mind.” I’m not a psychologist, but I hope this article gave you value, or maybe just gave you a break from reading posts about charts and setups. Just sharing my experiences. Let’s Elevate, Gio P.S. Every week I share a forex outlook, educational content and trade ideas, right here on tradingview. Make sure to follow so you don’t miss them!
Education
by elevatedinvestor
25
Literally surfing the waves! Plan your trade & trade your plan!A back-to-back-to-back win with a short trade then long trade then a short trade when the APFs were taken. Currently there are 4 upcoming opportunities to Long or Short depending on future market/price action. Literally surfing the waves. The market setup, entry, SL, TP, and POR as seen in the chart. Good luck and TAYOR! Abbreviations / Keywords: LTF - Lower Time Frame HTF - Higher Time Frame TF - Time Frame TRS - Trend Reversal Strategy CRT - Counter-Retail Technique / Break-out APF - Advance Pattern Formation W4C - Waiting for Confirmation LLCC - Lower low, lower close HHHC - Higher high, higher close SL - Stop loss TP - Target Profit POR - Point of Ruin RRR - Risk Reward Ratio Risk Disclaimer: This is not a trade signal hence we'll not be held responsible for any losses that will occur in your account during trading. You and you alone are responsible for deciding if you are comfortable accepting the potential risk involved in trading. So trade at your own risk and do not invest money you cannot afford to lose. Do your own due diligence.
Education
by TheForexSamurai
Position Trader VS Momentum TraderDifferent between 2? 1) Position trader is person whom maintain buy or sell with condition applied, which when price is below target, they do buy or sell until reach his target 2) Momentum trader is person whom only target buy or sell with condition, which is when price is successfully breakout, they buy or sell up to his target. 3) Changing from those two type of trading, give different impact or payback. For example during market upset, most of trader are eager to trade momentously in short period. But this doesn't applied to position trader which only goes well with market is on-the-go rally. What is my strategies? 1) For most important part in trading, always remember to do your "Trading Plan" before entering the market 2) Particularly after choosing your best stock counter, remember to plot your basic "Resistance/Support" position. 3) Not to forget, plot your 'TP' profit target & 'SL' stop lost point. What's next step? 1) Suggesting if you are going to enter stock which has a 50:50 chances of winning, please be ensure to start entering with lowest buy. (at your rate) in a last close point. 2) Monitor the price action. Do additional buy when there is a potentially breakout successful. 3) Realized your TP or SL when it necessary.
XEducation
by Glem
3
Commodity Prices and Currency MovesCommodity Prices and Currency Moves When trying to distinguish the relationships between certain commodities and currencies around the world it helps to realize that situations can change and the relationships are fluid. However, there are some time-tested relationships that have been established over the years that may continue to hold true well in to the 21st century. Let’s take a look at a few of the most reliable correlations between commodities and the currencies they influence. AUD/USD – Markets eye data AUD/USD and Silver What are commodities? The prevailing thought around trading circles is that Gold and the AUD/USD (Australian Dollar / U.S. Dollar) is the ultimate correlation to follow, however, Silver is actually more reliable. It’s no secret that Australia has a significant portion of their economy tied to mining, but most don’t realize the scale with over 2% of the workforce employed by it, over 5% of the GDP relying upon it, and it contributes around 35% of the nation’s exports. Therefore, the fluctuations of the metal market have a large impact on the outlook for the AUD. Pound to Canadian Dollar USD/CAD and West Texas Intermediate Crude Oil Commodity Prices and Currency Moves best currency pairs Benefits of trading the forex market West Texas Intermediate or WTI is the main type of oil traded in North America and is incredibly influential to the Canadian economy. It’s no secret that the U.S. is the world’s foremost consumer of oil (at nearly 19 million barrels per day (bpd), well ahead of 2nd place China at almost 11 million bpd), but many people don’t realize how they get said oil. Live FX News Many make the false assumption that Saudi Arabia is the nation with which it relies on a majority of its oil imports, but a third of oil imports comes from Canada, with Saudi Arabia contributing just over 17%. Interestingly, out of the 19 million bpd the US consumes 10 million bpd are produced in-house, but since Canada exports so much oil to their larger neighbors to the south, their currency is intrinsically tied to the value of the black gold. USD/NOK and Brent Crude Oil While these correlations are the most recognized and reliable in the early part of the 21st century, it doesn’t mean that they are the only ones. There are plenty of commodities around the world, and the ever-changing global landscape means that certain industries will diminish while others rise up. According to some estimates, the known oil reserves will only supply the world until around 2040, after which we may have to find another form of making our machinations operate. Commodity Prices and Currency Moves
Education
by fxpremiere
Charting Basics – Bars vs. CandlesticksCharting Basics – Bars vs. Candlesticks Charting Basics – Bars vs. Candlesticks Services Online What are bars and candlesticks? A chart is a graphical representation of historical prices. The most common chart types are bar charts and candlestick charts. Although these two chart types look quite different, they are very similar in the information they provide. Bar and candlestick charts are separated into different timeframes. Each bar or candlesticks represent the high, low open and close price for a specific period of time Charting Basics – Bars vs. Candlesticks candlestick trading Understanding Forex Charts When looking at a daily chart , each bar/candle represents one day of trading activity Charting Basics – Bars vs. Candlesticks gold trading basics When looking at a 15min chart, each bar/candle represents a 15 min period, or session, of trading activity. Why are bars and candlesticks important? Technical Analysis includes the study and mapping of trends and price patterns through various technical indicators, or studies. This relationship between price and time can help traders not only see and interpret more data, but can also help pinpoint areas of indecision or reversal of sentiment Charting Basics Bars vs Candlesticks Pound Set to Snap Losing Streak Vs US Dollar COVID-19 (This will be discussed in more detail within the Understanding Candlesticks section of the course) As a result, technical analysis is used to help determine the probabilities entries and exits in order to develop a strategy, or methodology forex trading signals Candlesticks Trading Bearish candles are typically red. It means the opening price was higher than the closing price for the specified time interval. Bullish candles are typically green. It means the opening price was lower than the closing price for the specified time interval Charting Basics Bars vs Candlesticks Technical Forex Strategies Charting Basics Bars vs Candlesticks Social trading Live Forex Signals Social trading involves the free sharing and using of information amongst a group of traders. The information provides access to new trading ideas, risk management and client sentiment. Social trading integrates the exchange of information into an online discussion. It creates a community feeling as traders can work together to plan specific trading ideas. In addition to sharing research, traders can also pool funds to generate greater gains. Social trading is a broad category of trading and can include elements of copy trading and mirror trading. Traders can share information about individual trades that can be copied by other traders, or specific trading strategies that can be mirrored by other investors. Social trading can span the foreign exchange markets, as well as stock and commodity markets. Is social trading profitable? There are several benefits associated with social trading. Even if one is not open to online social interactions with other traders, there are specific aspects of social trading that can be beneficial. Social trading chatrooms with a moderator allow traders to follow trades and ask questions. This can be a good way for novice traders to learn more about trading and how to make profitable trades. How does social trading work? Social trading is generally performed on social trading platforms. Investors can trade within a community and replicate the style of expert traders. Moderators, who are usually experts, drive these discussions. Social trading can also involve aspects of copy trading and mirror trading. An offshoot of social networking, social trading has created a different way to test financial information. In the past, investors would focus either on fundamental analysis or technical analysis . With forex trading, however, traders can share information about the current market environment and offer insight into future market movements, thus driving trading decisions. For some traders, it has changed the rules of analysis. Most social trading takes place online. It provides traders with psychological support and can offer different points of view. By emulating some of the techniques learnt in a social trading environment, traders can often improve their trading strategies, risk management techniques and trading psychology . Forex trading focuses on short-term trading. This can in turn provide additional liquidity to the markets. Using social trading, one can also access the historical performance of members and can see the returns produced by specific strategies. Social trading forum Social FX platforms often provide a chart forum and social newsfeed. Members are constantly providing information about a specific subject. Traders can post their trading ideas as well as information to back up their thesis. Below is an example of a social trading interaction inside our online Next Generation trading platform, on the trading forum. Traders can engage with other traders and our market analysts to discuss the price evolution of the financial instruments that they are currently watching. Create a live account to access this exclusive feature of our platform. It can be used as a forex trading forum, stock trading forum, or for any other financial market that you are interested in trading. Social trading vs copy trading With FX trading, one can garner ideas from many social trading networks. Copy trading, on the other hand, involves solely copying the trades of another investor. The goal of copy trading is for the trader to have the same positions as the investor they are copying. When copying another trader, one doesn’t receive the layout of the trader’s strategy and follows their trades blindly. Traders can also invest their capital in a thematic investment. These are funds that turn capital over to specific traders who then act as portfolio managers. In essence, one is participating in copying funds. This is a bit like a funds investment, but instead of investing in hedge funds, one is investing a pool of capital into a fund that copies multiple traders. This provides diversity in copy trading and allows returns to be uncorrelated. Traders can perform this on their own, but it’s imperative for traders to ensure that they are not putting all their eggs in the same strategy basket. What are the risks of social trading? Like any trading activity, there are risks involved in social trading a market. Whether when copying another investor’s strategy or using the information to create their own trading decisions, traders should understand that there are risks involved and subsequently create their own risk management strategy. All trading leaders will, at some point, lose money. Individuals should feel comfortable that the risks are in line with their individual tolerance levels. The more capital risked, the greater the reward. They should also be aware that some social trading platforms charge a fee. When allocating capital to forex trading, traders should start with determining the amount of capital they are willing to lose to generate the gains they are looking to achieve. They must also be realistic. For instance, a trader cannot expect to risk $50 to make $5,000. Traders should carefully look through the risk profiles associated with different social trading leaders and see if they are in line with expectations. While one can set up an algorithmic trading mechanism, it is considered unwise to leave money unattended. As a very minimum, it is recommended that traders check their trades at least once every day. The best due diligence is to understand the logic behind the trading decisions made by a leader, and to be interactive in asking questions about the strategy one is using. Summary Social involves the sharing and using of information amongst a group of traders. There are several types of social trading, including strategy mirroring and copy trading. The information provided in social trading allows access to new ideas, risk management, and sentiment. Social trading can drive a community feeling as investors work together to formulate specific trading ideas. News feeds in social trading platforms offer access to real-time ideas that describe a strategy in detail. In addition to sharing research, social trading can also involve pooling funds to generate greater gains. Social trading community Some platforms provide a search criteria so traders can customize their social trading experience. Traders should test drive their trading for a while first before they start copying other investors. Traders should also ensure that the risk score is in line with their expectations and the maximum drawdown is not outside their tolerance level. This can mean that they have an average return of 20% annualized but will regularly make and lose more than 50% on their trades. If the average return is 20% and the standard deviation of the returns is 50%, the Sharpe ratio is 0.4. Why trade CFDs on currency pairs? If, on the other hand, the average return is 20% and the standard deviation of the returns is 10%, then one will have a Sharpe ratio of 2. This is very good. The maximum drawdown offers information about the peak-to-trough drop. One should understand that if a leader has a maximum drawdown of 30%, a trader copying this person’s trades could lose 30% from peak-to-trough. MT4 Copy Trading In our interactive trading platform, our forex trading community and stock trading community are particularly popular in comparison with other assets. You can access forex commentaries and stock market chatrooms to keep up to date with the latest news and analysis of the financial markets. using forex signals
BITFINEX:XRPUSDEducation
by fxpremiere
Managing Risk Efficiently in Six StepsManaging Risk Efficiently in Six Steps Any analyst or trading guide will tell you how important it is to manage your risk. However, how does one go about managing that risk? And what exactly do they mean by managing risk? Here is a step-by-step guide to one of the most important concepts in financial trading. 1. Determine Your Risk Tolerance This is a personal choice for anyone who plans on trading any market. Most trading instructors will throw out numbers like 1%, 2% or on up to 5% of the total value of your account risked on each trade placed, but a lot of your comfort with these numbers is largely based on your experience level. Newer traders are inherently less sure of themselves due to their lack of knowledge and familiarity with trading overall or with a new system, so it makes sense to utilize the smaller percentage risk levels. Once you become more comfortable with the system you are using, you may feel the urge to increase your percentage, but be cautious not to go too high. Sometimes trading methodologies can produce a string of losses, but the goal of trading is to either realize a return or maintain enough to make the next trade. For instance, if you have a trading method that places one trade per day on average and you are risking 10% of your beginning monthly balance on each trade, it would only theoretically take 10 straight losing trades to completely drain your account. So even if you are an experienced trader, it doesn’t make much sense to risk so much on one single trade. On the other hand, if you were to risk 2% on each trade that you place, you would theoretically have to lose 50 consecutive trades to drain your account. Which do you think is more likely: losing 10 straight trades, or losing 50? BALANCE $10,000 10% $1000 10 $10,000 5% $500 20 $10,000 3% $300 33 $10,000 2% $200 50 $10,000 1% $100 100 2. Customize Your Contracts The amounts of methodologies to use in trading are virtually endless. Some methods have you use a very specific stop loss and profit target on each trade you place while others vary greatly on the subject. For instance, if you use a strategy that calls for a 20-pip stop loss on each trade and you only trade the EUR/USD, it would be easy to figure out how many contracts you may want to enter to achieve your desired result. However, for those strategies that vary on the size of stops or even the instrument traded, figuring out the amount of contracts to enter can get a little tricky. One of the easiest ways to make sure you are getting as close to the amount of money that you want to risk on each trade is to customize your position sizes. A standard lot in a currency trade is 100,000 units of currency, which represents $10/pip on the EUR/USD if you have the U.S. dollar (USD) as your base currency; a mini lot is 10,000. Currency Trading If you wanted to risk $15 per pip on a EUR/USD trade, it would be impossible to do so with standard lots and could force you in to risking either too much or too little on the trade you place, whereas both mini and micro lots could get you to the desired amount. The same could be said about wanting to risk $12.50 per pip on a trade; both standard and mini lots fail to achieve the desired result, whereas micro lots could help you achieve it. In the realm of trading, having the flexibility to risk what you want, when you want, could be a determining factor to your success. 3. Determine Your Timing There may not be anything more frustrating in trading than missing a potentially successful trade simply because you weren’t available when the opportunity arose. With forex being a 24-hour-a-day market, that problem presents itself quite often, particularly if you trade smaller timeframe charts. The most logical solution to that problem would be to create or buy an automated trading robot, but that option isn’t viable for a large segment of traders who are either skeptical of the technology/source or don’t want to relinquish the controls. Trading Signals That means that you have to be available to place trades when the opportunities arise, in person, and of full mind and body. Waking up at 3am to place a trade usually doesn’t qualify unless you’re used to getting only 2-3 hours of sleep. Therefore, the average person who has a job, kids, soccer practice, a social life, and a lawn that needs to be mowed needs to be a little more thoughtful about the time they want to commit. Perhaps 4-Hour, 8-Hour, or Daily charts are more amenable to that lifestyle where time may be the most valuable component to trading happiness. Another way to manage your risk when you’re not in front of your computer is to set trailing stop orders. Trailing stops can be a vital part of any trading strategy. They allow a trade to continue to gain in value while the market price moves in a favorable direction, but automatically closes the trade if the market price suddenly moves in an unfavorable direction by a specified distance. When the market price moves in a favorable direction (up for long positions, down for short positions), the trigger price follows the market price by the specified stop distance. If the market price moves in an unfavorable direction, the trigger price stays stationary and the distance between this price and the market price becomes smaller. If the market price continues to move in an unfavorable direction until it reaches the trigger price, an order is triggered to close the trade. 4. Avoid Weekend Gaps Many market participants are knowledgeable of the fact that most popular markets close their doors on Friday afternoon Eastern Time in the US. Investors pack up their things for the weekend, and charts around the world freeze as if prices remain at that level until the next time they are able to be traded. However, that frozen position is a fallacy; it isn’t real. Prices are still moving to and from based on the happenings of that particular weekend, and can move drastically from where they were on Friday until the time they are visible again after the weekend. How to Trade Forex This can create “gaps” in the market that can actually run beyond your intended stop loss or profit target. For the latter, it would be a good thing, for the former – not so much. There is a possibility you could take a larger loss than you intended because a stop loss is executed at the best available price after the stop is triggered; which could be much worse than you planned. Managing Risk Efficiently in Six Steps While gaps aren’t necessarily common, they do occur, and can catch you off guard. As in the illustration below, the gaps can be extremely large and could jump right over a stop if it was placed somewhere within that gap. To avoid them, simply exit your trade before the weekend hits, and perhaps even look to exploit them by using a gap-trading technique. 5. Watch the News News events can be particularly perilous for traders who are looking to manage their risk as well. Certain news events like employment, central bank decisions, or inflation reports can create abnormally large moves in the market that can create gaps like a weekend gap, but much more sudden. Just as gaps over the weekend can jump over stops or targets, the same could happen in the few seconds after a major news event. So unless you are specifically looking to take that strategic risk by placing a trade previous to the news event, trading after those volatile events is often a more risk-conscious decision daily forex signals 6. Make It Affordable There is a specific doctrine in trading that is extolled by responsible trading entities, and that is that you should never invest more than you can afford to lose. The reason that is such a widespread manifesto is that it makes sense. Trading is risky and difficult, and putting your own livelihood at risk on the machinations of market dynamics that are varied and difficult to predict is tantamount to putting all of your savings on either red or black at the roulette table of your favorite Vegas casino. So don’t gamble away your hard-earned trading account: invest it in a way that is intelligent and consistent. MANAGE YOUR TRADES, MONEY & RISK So will you be a successful trader if you follow all six of these tenants for managing risk? Of course not, other factors need to be considered to help you achieve your goals. However, taking a proactive role in managing your risk can increase your likelihood for long term success.
XEducation
by fxpremiere
1
Harmonic Patterns With Advanced Explanations Check It Out Harmonic price patterns are those that take geometric price patterns to the next level by utilizing Fibonacci numbers to define precise turning points. Unlike other more common trading methods, harmonic trading attempts to predict future movements. Let's look at some examples of how harmonic price patterns are used to trade currencies in the forex market. ----------- KEY TAKEAWAYS Harmonic trading refers to the idea that trends are harmonic phenomena, meaning they can subdivided into smaller or larger waves that may predict price direction. Harmonic trading relies on Fibonacci numbers, which are used to create technical indicators. The Fibonacci sequence of numbers, starting with zero and one, is created by adding the previous two numbers: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. This sequence can then be broken down into ratios which some believe provide clues as to where a given financial market will move to. The Gartley , bat, and crab are among the most popular harmonic patterns available to technical traders. ---------- Geometry and Fibonacci Numbers Harmonic trading combines patterns and math into a trading method that is precise and based on the premise that patterns repeat themselves. At the root of the methodology is the primary ratio, or some derivative of it (0.618 or 1.618). Complementing ratios include: 0.382, 0.50, 1.41, 2.0, 2.24, 2.618, 3.14 and 3.618. The primary ratio is found in almost all natural and environmental structures and events; it is also found in man-made structures. Since the pattern repeats throughout nature and within society, the ratio is also seen in the financial markets By finding patterns of varying lengths and magnitudes, the trader can then apply Fibonacci ratios to the patterns and try to predict future movements. The trading method is largely attributed to Scott Carney although others have contributed or found patterns and levels that enhance performance. Issues with Harmonics Harmonic price patterns are precise, requiring the pattern to show movements of a particular magnitude in order for the unfolding of the pattern to provide an accurate reversal point. A trader may often see a pattern that looks like a harmonic pattern , but the Fibonacci levels will not align in the pattern, thus rendering the pattern unreliable in terms of the harmonic approach. This can be an advantage, as it requires the trader to be patient and wait for ideal set-ups. Harmonic patterns can gauge how long current moves will last, but they can also be used to isolate reversal points. The danger occurs when a trader takes a position in the reversal area and the pattern fails. When this happens, the trader can be caught in a trade where the trend rapidly extends against him. Therefore, as with all trading strategies, risk must be controlled. It is important to note that patterns may exist within other patterns, and it is also possible that non-harmonic patterns may (and likely will) exist within the context of harmonic patterns . These can be used to aid in the effectiveness of the harmonic pattern and enhance entry and exit performance. Several price waves may also exist within a single harmonic wave (for instance, a CD wave or AB wave). Prices are constantly gyrating; therefore, it is important to focus on the bigger picture of the time frame being traded. The fractal nature of the markets allows the theory to be applied from the smallest to largest time frames. To use the method, a trader will benefit from a chart platform that allows him to plot multiple Fibonacci retracements to measure each wave. Types of Harmonic Patterns There is quite an assortment of harmonic patterns , although there are four that seem most popular. These are the Gartley , butterfly , bat, and crab patterns.
BITSTAMP:BTCUSDEducation
by GoldenEngine
11
Gartley Pattern Cheat SheetHello, guys! Here is a cheat sheet for the very reliable pattern - Gartley. If you are able to find it on a chart the successful trade can be executed. The most important thing for gartley is the proportions which should be approximately like on the chart. There are four most popular Gartley's types: -Crab -Butterfly -Bat -Classical Please, write in comments how are your trades with this pattern, it's very interesting to know! DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.
UEducation
by Skyrexio
9
Break support/Resistance , give confirmation?Break support/Resistance , give confirmation? - We usually trade base on S/R to find the entry point, exit or to predict the trend. - One of an effective and simple way in trading is to trade when price breakout from a S/R level - However, to identify an area or a point of good S/R in trading is mostly based on trading style, knowledge and trading experiences from each individual. Today I would like to talk about Breakout in trading. When it is breakout, when it is failed breakout. Before talking about breakout, we need to identify price closes above a S/R level or below a S/R level . Examine the below chart: However, in the chart we also find the situations that market didn't follow the mentioned rule. In the above case, if we carefully examine, we would see a pair of candle close below a resistance zone and make price go down. And price is still following rule of breakout and give confirmation as usual. There are a lot of S/R appear in trading market. So, we have to choose by our own which is the S/R zone to play in each situation depending on our own experiences. No situation is exactly the same with each other! In the same above situation, at the same S/R level that we identified and used before, prices move differently (at that points, mostly our stoploss is hunted) Here, experienced traders would easily recognize failed breakout based on trend analysis, or the way prices breaks, or at least don't follow the breakout. We can analyze in a simple way as follow: And then price continues its trend I have presented some simple cases of successful breakout, failed breakout or fake breakout in the above chart. I would like to receive the contributions from the community to learn from each other. Noone is right or wrong all the time. Every wrong or right cases have its own price. Hope that people would not keep silence instread of telling what you know or learned. Nothing has its own value unless it spent some prices. I hope that people would give a way their knowledge, don't try to hide for your own if not we are all failed to this market. More information www.investopedia.com
Education
by DatTong
14
Break support/Resistance , give confirmation?Break support/Resistance , give confirmation? - We usually trade base on S/R to find the entry point, exit or to predict the trend. - One of an effective and simple way in trading is to trade when price breakout from a S/R level - However, to identify an area or a point of good S/R in trading is mostly based on trading style, knowledge and trading experiences from each individual. Today I would like to talk about Breakout in trading. When it is breakout, when it is failed breakout. Before talking about breakout, we need to identify price closes above a S/R level or below a S/R level . Examine the below chart: However, in the chart we also find the situations that market didn't follow the mentioned rule. In the above case, if we carefully examine, we would see a pair of candle close below a resistance zone and make price go down. And price is still following rule of breakout and give confirmation as usual. There are a lot of S/R appear in trading market. So, we have to choose by our own which is the S/R zone to play in each situation depending on our own experiences. No situation is exactly the same with each other! In the same above situation, at the same S/R level that we identified and used before, prices move differently (at that points, mostly our stoploss is hunted) Here, experienced traders would easily recognize failed breakout based on trend analysis, or the way prices breaks, or at least don't follow the breakout. We can analyze in a simple way as follow: And then price continues its trend I have presented some simple cases of successful breakout, failed breakout or fake breakout in the above chart. I would like to receive the contributions from the community to learn from each other. Noone is right or wrong all the time. Every wrong or right cases have its own price. Hope that people would not keep silence instread of telling what you know or learned. Nothing has its own value unless it spent some prices. I hope that people would give a way their knowledge, don't try to hide for your own if not we are all failed to this market. More information www.investopedia.com
Education
by DatTong
11
Support and Resistance, A way to draw a horizontal line !Support and Resistance, A way to draw a horizontal line ! Support, S and Resistance, R 1. Definition 1.1. Support is a zone where price moves up. 1.2. Resistance is a zone where price moves down. - Support and Resistance can interchange when that zone is overcome by price 2. Support and Resistance levels 2.1. Horizontal line 2.2. Trendline 2.3. Moving averages 2.4. A Fibonancci level that you often use (Fibo 61.8) 2.5. A ratio of pattern AB=CD , or a Fibo derived from Harmonic pattern …. Support and Resistance level are mostly depending on the trading skills and experiences of individuals You and me would discuss a way to draw a horizinteal line - S1: Change the chart to Line chart (because I prefer Closed price) - S2: Choose zones where price is mostly reacting to that zone, then draw a horizontal line at those zones - S3: Change back chart to candle chart of bar chart and adjust the horizontal line to make it look approriate Just only 3 steps for us to draw a support/resistance line o Attention: - I emphasis that Support/Resistance is a zone, not a line. We usually based on historical data to plot the horizontal support/resistance zone. There fore, the close of candle or the shadow of it getting over that zone are quite common - Because we base on historical data to plot it, so it doesn't have significant value in some specific cases. Not every time that price approaches that zone and bounce back. And not all the bouncing back case meet our expectation. - All should depend on the surrounding theme of market, we have to look careful on specific cases to consider applying the Support/Resistance zone logically. - All market are freely traded so there is always a chance to form a brand new Support/Resistance . Good luck !
OANDA:XAUUSDEducation
by DatTong
23
Support and Resistance, A way to draw a horizontal line !Support and Resistance, A way to draw a horizontal line ! Support, S and Resistance, R 1. Definition 1.1. Support is a zone where price moves up. 1.2. Resistance is a zone where price moves down. - Support and Resistance can interchange when that zone is overcome by price 2. Support and Resistance levels 2.1. Horizontal line 2.2. Trendline 2.3. Moving averages 2.4. A Fibonancci level that you often use (Fibo 61.8) 2.5. A ratio of pattern AB=CD , or a Fibo derived from Harmonic pattern …. Support and Resistance level are mostly depending on the trading skills and experiences of individuals You and me would discuss a way to draw a horizinteal line - S1: Change the chart to Line chart (because I prefer Closed price) - S2: Choose zones where price is mostly reacting to that zone, then draw a horizontal line at those zones - S3: Change back chart to candle chart of bar chart and adjust the horizontal line to make it look approriate Just only 3 steps for us to draw a support/resistance line o Attention: - I emphasis that Support/Resistance is a zone, not a line. We usually based on historical data to plot the horizontal support/resistance zone. There fore, the close of candle or the shadow of it getting over that zone are quite common - Because we base on historical data to plot it, so it doesn't have significant value in some specific cases. Not every time that price approaches that zone and bounce back. And not all the bouncing back case meet our expectation. - All should depend on the surrounding theme of market, we have to look careful on specific cases to consider applying the Support/Resistance zone logically. - All market are freely traded so there is always a chance to form a brand new Support/Resistance . Good luck !
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OANDA:XAUUSDEducation
by DatTong
31