GBP/AUD short predictionsupport broke came back up to retest and now rejecting this area
broken trendlines
broken structure
mark showing us a selloff
Howtotrade
Why Daily Time Frame Analysis Will Make You a Better Trader
Most beginner traders often think that money is made in the short-term timeframes, so they go the way of intraday trading, believing that it will enable them to quickly grow their small trading accounts.
They have this belief that the lower timeframe provides more trading opportunities that can allow them to make more money in the long run.
Given, the daily timeframe offers fewer trading opportunities and may seem slow and non-exciting to most traders, but there in lie the benefits — it forces you to have patience, trade less often, and make better trading decisions.
While the intraday timeframes offer more trade setups, most of them fail, making you lose more money.
The benefits of using the daily timeframe:
A better view of the market structure
The daily timeframe helps you to have a broader perspective of the market so you can have a better view of the price structure and the stage of the market cycle.
It gives you a bigger picture of the market — you can see the price action over a longer period.
More significant support and resistance levels
The price swing points on the daily timeframe are more significant than those on the lower timeframes, and you know why — more traders are watching the daily timeframe than any other timeframe.
More reliable price action patterns
One price bar on the daily timeframe represents all the transactions that took place on that trading day, including during news releases.
So, it captures the entire day’s volume of orders, which is more significant — the lower timeframes that may even be too small to absorb all the others from a high-volume trader.
Always start your analysis from a daily time frame.
It is very insightful, and it will bring your trading to the next level.
Hey traders, let me know what subject do you want to dive in in the next post?
GBP/AUD Short Analysis 1:5 RRWe are floating beneath resistance
Tested resistance and rejected off multiple time frames
looking for solid push down
Great risk to reward setup
Learn to Read The Candlesticks Like Pro
Candlesticks give you an instant snapshot of whether a market’s price movement was positive or negative, and to what degree. The timeframe represented in a candlestick can vary widely.
Green candles show prices going up, so the open is at the bottom of the body and the close is at the top. Red candles show prices declining, so the open is at the top of the body and close is at the bottom.
Each candle consists of the body and the wicks. The body of the candle tells you what the open and close prices were during the candle’s time frame.
The lines stretching from the top and bottom of the body are the wicks. These represent the highest and lowest prices the asset hit during the trading frame.
What do candlesticks tell us?
Candlesticks can reveal much more than just price movement over time. Experienced traders look for patterns in order to gauge market sentiment and to make predictions about where the market might be headed next. Here are some of the kinds of things they’re looking for:
A long wick on the bottom of a candle, for instance, might mean that traders are buying into an asset as prices fall, which may be a good indicator that the asset is on its way up.
A long wick at the top of a candle, however, could suggest that traders are looking to take profits — signaling a large potential sell-off in the near future.
If the body occupies almost all of the candle, with very short wicks (or no visible wicks) on either side, that might indicate a strongly bullish sentiment (on a green candle) or strongly bearish sentiment (on a red candle).
Understanding what candlesticks might mean in the context of a particular asset or within certain market conditions is one element of a trading strategy called technical analysis — by which investors attempt to use past price movements to identify trends and potential future opportunities.
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What is the U.S. Dollar Index?
The U.S. Dollar Index is a measure of the value of the U.S. dollar against six other foreign currencies. Just as a stock index measures the value of a basket of securities relative to one another, the U.S. Dollar Index expresses the value of the dollar in relation to a “basket” of currencies. As the dollar gains strength, the index goes up and vice versa.
The strength of the dollar can be considered a temperature read of U.S. economic performance, especially regarding exports. The greater the number of exports, the higher the demand for U.S. dollars to purchase American goods.
The index is a geometric weighted average of six foreign currencies. Since the economy of each country (or group of countries) is of different size, each weighting is different. The countries included and their weights are as follows:
Euro (EUR): 57.6 percent
Japanese Yen (JPY): 13.6 percent
British Pound (GBP): 11.9 percent
Canadian Dollar (CAD): 9.1 percent
Swedish Krona (SEK): 4.2 percent
Swiss Franc (CHF): 3.6 percent
The index is calculated using the following formula:
USDX = 50.14348112 × EURUSD^-0.576 × USDJPY^0.136 × GBPUSD^-0.119 × USDCAD^0.091 × USDSEK^0.042 × USDCHF^0.036
When the U.S. dollar is used as the base currency, as in the example above, the value is positive. When the U.S. dollar is the quoted currency, the value will be negative.
We constantly monitor the performance of DXY because very often it gives us great trading opportunities.
What do you want to learn in the next post?
3 Things To Do After You Lose A TradeWe have all been there. You analyze a trade setup. You know how much you're going to risk on a trade. You enter the trade just to come back to your chart and find you've been stopped out.
It's not fun. It sucks. You thought the setup would work because you followed you rules. The thing is, the market is the market.
In my early stages of trading I hated being stopped out. My reasoning was because. I had no idea how to make up for my loss.
I thought if I just plotted more lines and levels on my chart I could enter the trade again and make my money back.
The problem I kept running into was I had no idea why I lost the trade or how to handle my feelings. I also had no real plan on how to adjust to the price change.
I honestly thought my levels or trend lines didn't work. It was deeper than that.
What changed?
I had to change the way I viewed the market and my next steps to recover my loss. Not only that, I had to learn how to be "ok" with losing money.
I created a 3 Step Process that would increase my probability of winning my next trade. Because we are a trading family, I thought I'd share it with you.
Step 1: Access my previous trade
You hear this all the time, "I made a mistake thats why I lost the trade." The true question is did you really make a mistake or did you follow your trading rules?
When I follow my rules no mistakes are made. When I lose a trade that can mean 1 thing. The market reversed. This leads me to step 2.
Step 2: Change my bias
In the book The Unknown Market Wizards by Jack Schwager, I heard the most beautiful and profound statement by one of the wizard traders. He said, "I realized I have a right to change my mind about my trade at any time."
I can't tell you how that made me feel. I've been doing that all along, but this market wizard summed up my actions in just one sentence.
When I'm stopped out that means I have to change my mid about the direction of the trade. I made being stopped out so simple so I won't confuse the next action I should take. That leads me to step 3, update my chart and adapt to the new price movement.
Step 3: Update and Adapt
I have a no nonsense rule and that is to stop trading in 1 direction if I'm stopped out. Go opposite. I'm a true trend trader. I don't naturally trade against the trend. It gets me in trouble.
So at the first sign of trouble, I adapt.
See, USDCHF was in a downtrend.
I sold the trade at 0.92835( sell limit) and overnight I was stopped out. It happened so fast and just as fast as I was stopped out, I knew I had to become the buyer.
My Mental
In the recent past, being stopped out would have spooked me. Now, its making me want to come back to the charts to face my fear. I used to have a fear of success and failure. Now I have a hunger to want to succeed and learn.
Putting on trades is a bit more fun since I've began working with pending orders. They challenge me. Especially in situations when price reverses and I'm stopped out.
I pray you gained new insight and a key takeaway on what you can do next after you lose a trade.
Just remember, losing a trade doesn't make you a loser, it makes you a trader.
Comment down below what your takeaway was. I'd appreciate it if you could like the post. It helps boost my Trading view reputation. Much love,
Shaquan
ENGULFING CANDLE - Powerful Price Reversal
Engulfing candlestick pattern is the most popular candlestick pattern. Engulfing candlestick is formed when it completely engulfs the previous candle.
There are two types of engulfing candlestick patterns.
Bullish Engulfing Pattern
Bearish Engulfing Pattern
For a perfect engulfing candlestick, no part of the first candle can exceed the shadow (or wick) of the second candle. This entails that the low and high of the second candle entirely covers the first. But the major emphasis is on the body of the candle.
The bullish candle gives the best signal when it appears below a downtrend and shows a rise in buying pressure. The pattern mostly causes a reversal of a current trend. It’s due to more buyers entering the market and driving prices further up. The pattern involves two candles, with the second green candle completely engulfing the previous red candle with no regard to the length of the tail shadows.
The bullish candlestick tells traders that buyers are in total control of the market, following a previous bearish run. It is often seen as a signal to buy and take advantage of the market reversal.
A bearish engulfing chart pattern is a technical pattern that indicates lower prices to come. It consists of a high (green) candle followed by a large down (red) candle that engulfs the smaller up candle. The pattern is necessary because it signals that sellers have overtaken the buyers. These sellers are aggressively driving the price downwards, more than buyers can push up.
A bearish pattern indicates that the market will soon enter a downtrend, following a past increase in prices. The pattern signals that the market has been taken over by bears and could push the prices even further down. It is often seen as a sign to enter a short position in the market.
THE FOREX SUCCESS PYRAMID
What is your recipe for success in trading?
Developing traders often don’t understand, when you are asking to be a successful (or professional) trader, you are asking not just to build a pyramid, but to sit on top of it. What most forget is the base is the biggest part of the pyramid and the foundation for building higher levels.
As the pyramid continues to grow higher, it gets a little more complicated, but you have a base (foundation) and structures in place to carry the stones up to the higher levels.
But just like a pyramid, there are more stones at the base and this takes more time to build. Also like a pyramid, there are more traders at the base (not making money or breaking even) then there are at the top.
However, with structures and rhythm in place, the fruits of your labor will result in a steady conditioning of your muscles (discipline, diligence and psychology). This will allow you to take on greater and greater heights, challenges and climb the pyramid of trading. Having forex trading discipline, diligence and psychology will give you a sense of confidence and a feeling of mastery over the process.
This is the pyramid of trading and the attributes needed to climb to higher levels.
While most traders spend time trying to find profitable trades, or the next great system, make sure you take time out to build the attributes which develop your trading muscles (discipline, diligence and psychology). By yourself this can be a very difficult task so it helps to create mechanisms in your life to build these habits.
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Learn to Read Candlestick Strength | Trading Basics
Hey traders,
In this educational article, we will discuss how to objectively measure the market momentum with candlesticks.
Please, note that the concepts that will be covered in this article can be applied on any time frame, however, higher is the time frame, more trustworthy are the candles.
Also, remember, that each individual candle is assessed in relation to other candles on the chart.
There are three types of candles depending on its direction:
🟢Bullish candle
Such a candle has a closing price higher than the opening price.
🔴Bearish candle
Such a candle has a closing price lower than the opening price.
🟡Neutral candle
Such a candle has equal or close to equal opening and closing price.
There are three categories of the strength of the candle.
Please, note, the measurement of the strength of the candle is applicable only to bullish/bearish candles.
Neutral candle has no strength by definition. It signifies the absolute equilibrium between buyers and sellers.
1️⃣Strong candle
Strong bullish candle signifies strong buying volumes and dominance of buyers without sellers resistance.
Strong bearish candle means significant selling volumes and high bearish pressure without buyers resistance.
Usually, a strong bullish/bearish candle has a relatively big body and tiny wicks.
2️⃣Medium candle
Medium bullish candle signifies a dominance of buyers with a rising resistance of sellers.
Medium bearish candle means a prevailing strength of sellers with a growing pressure of bulls.
Usually, a medium bullish/bearish candle has its range (based on a wick) 2 times bigger than the body of the candle.
3️⃣Weak candle
Weak bullish candle signifies the exhaustion of buyers and a substantial resistance of sellers.
Weak bearish candle signifies the exhaustion of sellers and a considerable bullish pressure.
Usually, such a candle has a relatively small body and a big wick.
Knowing how to read the strength of the candlestick, one can quite accurately spot the initiate of new waves, market reversals and consolidations. Watch how the price acts, follow the candlesticks and try to spot the change of momentum by yourself.
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Learn Pros & Cons of Trading on Demo Account
Hey traders,
In this article, we will discuss demo account trading.
We will discuss its importance for newbie traders and its flaws.
➕Pros:
Demo account is the best tool to get familiar with the financial markets. It gives you instant access to hundreds of different financial instruments.
With a demo account, you can learn how the trading terminal works. You can execute the trading orders freely and get familiar with its types. You can get acquainted with leverage, spreads and volatility.
Trading on paper money, you do not incur any risks, while you can see the real impact of your actions on your account balance.
Demo account is the best instrument for developing and testing a trading strategy, not risking any penny.
The absence of risk makes demo trading absolutely stress-free.
➖Cons:
The incurred losses have no real impact, not causing real emotions and pressure, which you always experience trading on a real account.
Your performance (positive or negative) does not influence your future decisions.
Real market conditions are tougher. Demo accounts execute the orders a bit differently than the real ones. That is clearly felt during the moments of high volatility, with the order slippage occurring less often and trade execution being longer.
Trading with paper money allows you to trade with the sums being unaffordable in a real life, misrepresenting your real potential gains and providing a false confidence in success.
Even though we spotted multiple negative elements of demo trading, I want you to realize that it still remains the essential part of your trading journey and one of the main training tools. You should spend as much time on demo trading as you need to build confidence in your actions, only then you can gradually switch to real account trading.
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4 Signs that Say You’re Ready for Full-Time Trading
For forex traders, nothing embodies freedom more than those who trade full-time. After all, full-time traders enjoy freedom from their box-type offices, freedom of time, and freedom to choose which trading opportunities to take.
Unfortunately, this brand of independence isn’t for everyone. Just like too much freedom can do more harm than good for some economies, not all traders are ready to trade full-time.
So how do you know when you’re ready for full-time trading? From what we’ve seen from online forex communities, we can narrow it down to four signs:
1. You have enough capital
Trading full time means that you’ll be quitting your job, your primary source of income. And, because you’re realistic, you know that you probably won’t be making any serious trading money in your first few months.
2. You have tried and tested other methods and strategies
Not only do you need to have a strategy that has proven to be profitable for you, but you also have to have other equally qualified methods that would work for other trading conditions. After all, you never know when and for how long the market trends will shift!
3. You have spent a considerable amount of time trading LIVE
Trading a live account brings forth trading psychology hurdles that you wouldn’t get from trading demo accounts.
In addition, you have to have a fairly good grasp of your trading strengths and weaknesses, and, more importantly, you should know how to stick to a trading plan before you make trading your full-time job.
4. Trading is your passion
Trading currencies is what motivates you to get up and get busy every morning.
Remember that while full-time trading would provide you more opportunities to catch market movements, you don’t need to be a full-time trader to be consistently profitable.
What do you want to learn in the next post?
Learn How Candlesticks Are Formed
A candlestick chart reflects a given time period and provides information on the price's open, high, low, and close during that time. Each candlestick symbolizes a different period.
Here are the main 4 elements of a candlestick:
Body
The body is the major component of a candlestick, and it's easy to spot because it's usually large and colored.
Within the interval, the body informs you of the opening and closing prices of the market. The open will be below on a green candle. The reverse is true for a red candle. The market declined during the time, thus the open is the top of the body and the close refers to the bottom of a candle.
Wick
The wick is the line that extends from the top to the bottom of the body of a candlestick.
The upper wick emerges from the body's top and indicates the greatest price achieved throughout the time. The lower wick commonly referred to as the tail, is at the body's bottom, marking the lowest price.
Open Price
The initial price exchanged during the development of a new candle is represented as the open price. If the price begins to rise, the candle will become green and the candle will turn red if the price falls.
Close Price
The closing price is the most recent price exchanged during the trading phase. In most charting systems, if the closing price is lower than the open price, the candle will turn red by default. The candle will be green if the close price is higher than the open price.
High Price
The highest price exchanged throughout the time is shown by the upper wick or top shadow. Its absence indicates that the price at which the asset opened or closed is the highest traded price.
Low Price
The lowest price exchanged throughout the time is shown by the lower wick or low shadow. When there is no such lower wick or shadow, this indicates that the price at which the asset opened or closed is the lowest traded price.
Hey traders, let me know what subject do you want to dive in in the next post?
The 5 Outcomes Of a Trade | How not to blow your account
Successful traders know there are 5 outcomes that can come out of a trading position. When managed well these outcomes can lead to great success. However, when manage badly can cause disaster to a trader’s account.
Below I’ll highlight and discuss the possible 5 outcomes of a trade and how you can manage them.
1. Small Profit
This is when a position ends in a very small profit, for trend traders, this is usually the case. However, in this situation, there is no loss.
2. Small Loss
This is when you lose a small amount at the close of your position. This is part of normal and good trading. In fact, you should cut your losses early. Taking small losses or cutting your losses early will help you stay in this business long term.
3. Breakeven
This is a position where you really didn’t make or lose any money. They’ll come too, they are not necessarily bad trades. These types of trades may just mean you should find re-entry to the position or may just be a quick exit without a loss or profit.
4. Big Profit
This is when a position ends in a very big profit. This type of trade does not come too often but when they do come they are the trades that move your general account return for the period to the next level. As a trader, these are the type of trades you should look forward to.
5. Big Loss
This is when a position ends up closing at a very big loss. This type of trade should never happen on your trading account as a pro-trader. This is the type of trade that can blow your trading account. It’s why you should know how to cut your losses quickly and take a small loss.
I’m glad I’ve been able to share with you the possible outcomes of a trade and how you can manage them properly. A simple knowledge like this can suddenly turn your trading account to become profitable.
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Forex Market: Who Trades Currencies & Why
The foreign exchange or forex market is the largest financial market in the world – larger even than the stock market, with a daily volume of $6.6 trillion.
The forex market not only has many players but many types of players. Here we go through some of the major types of institutions and traders in forex markets:
Commercial & Investment Banks
The greatest volume of currency is traded in the interbank market. This is where banks of all sizes trade currency with each other and through electronic networks. Big banks account for a large percentage of total currency volume trades.
Central Banks
Central banks, which represent their nation's government, are extremely important players in the forex market. Open market operations and interest rate policies of central banks influence currency rates to a very large extent.
A central bank is responsible for fixing the price of its native currency on forex. This is the exchange rate regime by which its currency will trade in the open market. Exchange rate regimes are divided into floating, fixed and pegged types.
Investment Managers and Hedge Funds
Portfolio managers, pooled funds and hedge funds make up the second-biggest collection of players in the forex market next to banks and central banks. Investment managers trade currencies for large accounts such as pension funds and foundations.
Multinational Corporations
Firms engaged in importing and exporting conduct forex transactions to pay for goods and services.
Individual Investors
The volume of forex trades made by retail investors is extremely low compared to financial institutions and companies. However, it is growing rapidly in popularity.
There is a reason why forex is the largest market in the world: It empowers everyone from central banks to retail investors to potentially see profits from currency fluctuations related to the global economy.
What do you want to learn in the next post?
Learn How to Apply a Position Size Calculator
Hey traders,
In this educational article, I will teach you how to apply a position size calculator and calculate a lot size for your trades depending on a desired risk.
First of all, let's briefly discuss why do you need a position size calculator.
Even though, most of the newbie traders trade with the fixed lot, the truth is that fixed lot trading is considered to be very risky.
Depending on the trading instrument, time frame and a desired stop loss, the risks from one trade to another are constantly floating. With the constant fluctuations of losses per trade, it is very complicated to control your risks and drawdowns.
A lot size calculation, however, allows you to risk the desired percentage of your capital per trade, limiting the maximum you can potentially lose.
A lot size is calculated with a position size calculator.
It is integrated in some trading platforms like cTrader. If it is absent in yours, there are a lot of free ones available on the internet.
Step 1:
Measure a pip value of your stop loss.
It is the distance from your entry level to your stop loss level.
In the example on the picture, the stop loss is 290 pips.
Step 2:
Open a position size calculator
Step 3:
Fill the form.
Inputs: Account currency, account balance, desired risk %, stop loss in pips, currency pair.
In the example, we are trading with USD account. Its value is $20000. Trading instrument is EURUSD.
Step 4:
Calculate a lot size
The system will calculate a lot size for your trade.
0.069 standard lot in our example.
Taking a trade on EURUSD with $20000 deposit and 290 pips stop loss, you will need 0.069 lot size to risk 1% of your trading account.
Learn to apply a position size calculator. That is the must-use tool for a proper risk management.
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EURNZD: Bearish Continuation
I spotted a classic trend following setup on EURNZD.
Trading in a bullish trend, the price formed a symmetrical triangle on 4H.
Its bearish breakout will most likely push the pair lower.
Goals: 1.6435 / 1.6395
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DEMONS OF TRADING | Don't Think Like This
Have you ever wondered what helped all those professionals of Wall Street become successful? You will be surprised, but the key to their reached heights is hidden in their mistakes. Yes, that is right. Most professional and successful traders made many mistakes before they got to the top.
Making mistakes is ordinary and sometimes even necessary because you learn when you make them. The crucial point of this idea is never to repeat those mistakes because some errors may cost us a fortune. That is why we gathered 10 most common trading mistakes to prevent you from faults and losses.
Little preparation
Entry to the Forex market is relatively easy, so people have a light-minded attitude towards trading knowledge. Beginner traders, especially, think that theory is not a big deal, and they will be able to build it up without a peep. However, it does not work this way.
Miscalculating the risk/reward ratio
For some reason, many traders believe that higher win trades are more profitable than lower ones. Sometimes, this idea even gets paid off, and due to blind luck, trades, where the potential risk exceeds the reward, benefit. However, in most cases, such trades are a sure way to lose money in the longer term.
Avoiding risk management
Risk management should be the core of your trading because it helps cut down losses. Trading without risk management is like skydiving without a parachute.
Neglecting market events
Relevant market news is essential as economic events influence the direction of trading during the day. So, if you are not aware of the financial reports or earnings, you might skip the volatility.
To win the game, you need to develop your thinking and how you participate in the game. You are in a market trading against professional traders. Your goal is to think like a professional. That is the only way to survive in this game.
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Learn How to Trade Descending Triangle Pattern
Descending triangle formation is a classic reversal pattern. It signifies the weakness of buyers in a bullish trend and bearish accumulation.
⭐️The pattern has a very peculiar price action structure:
Trading in a bullish trend the price sets a higher high and retraces setting a higher low.
Then the market starts growing again but does not manage to set a new high, setting a lower high instead.
Then the price drops again perfectly respecting the level of the last higher low setting an equal low.
After that one more bullish movement and one more consequent lower high, bearish move, and equal low.
Based on the last three highs a trend line can be drawn.
Based on the equal lows a horizontal neckline is spotted.
❗What is peculiar about such price action is the fact that a set of lower highs signifies a weakening bullish momentum: fewer and fewer buyers are willing to buy from horizontal support based on equal lows.
🔔 Such price action is called a bearish accumulation.
Once the pattern is formed it is still not a trend reversal predictor though. Remember that the price may set many lower highs and equal lows within the pattern.
The trigger that is applied to confirm a trend reversal is a bearish breakout of the neckline of the pattern.
📉Then a short position can be opened.
For conservative trading, a retest entry is suggested.
Safest stop is lying at least above the level of the last lower high.
However, in case the levels of the lower highs are almost equal it is highly recommendable to set a stop loss above them all.
🎯For targets look for the closest strong structure support.
❤️If you have any questions, please, ask me in the comment section.
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The Iceberg Illusion: The hidden logic of success
We often get mesmerized by someone’s above the surface success and don’t factor in all the below the surface opportunity-costs they paid to achieve that success.
This is the ‘iceberg illusion’. It’s been a fav analogy of mine for years. And yet, this just might be a better visual for sport than the ‘iceberg illusion’.
You see… the hyper focus on outcomes is one of the biggest failings (or façades) that comes from social media. It creates a false impression of what leads to success.
We see the success, but not the work that went into it… The unseen hours, necessary failures, setbacks, crises of confidence, the not-now’s (to the countless asks), the loneliness, the late nights and early mornings; and, all the wobbling that comes before the walking—much less running.
There are no shortcuts. There are no overnight successes.
The iceberg doesn’t move quickly. It’s not sped up. It just moves consistently; at often a barely discernible speed.
What do you want to learn in the next post?
Learn Cup & Handle Pattern | Profitable Trading Strategy For Beg
A Cup and Handle is a bullish continuation chart pattern that marks a consolidation period followed by a breakout.
Chart patterns form when the price of an asset moves in a way that resembles a common shape, like a rectangle, flag, pennant, head and shoulders, or, like in this example, a cup and handle.
There are two parts to this chart pattern:
The cup
The handle
The cup forms after a downtrend and is followed by an uptrend and looks like a bowl or rounding bottom.
As the cup is completed, the price trades sideways, and a trading range is established on the right-hand side and the handle is formed.
A breakout from the handle’s trading range signals a continuation of the previous uptrend.
The cup should resemble a bowl or rounding bottom.
The perfect pattern would have equal highs on both sides of the cup, but in the real world, just like when finding someone to marry, perfect doesn’t exist.
After the high forms on the right side of the cup, there is a pullback that forms the handle.
The handle is the consolidation before the breakout.
The handle needs to be smaller than the cup. The handle should not drop into the lower half of the cup, and ideally, it should stay in the upper third.
If the Cup and Handle pattern completes successfully, the price should break above the trend established by the “handle” and go on to reach new highs.
The buy point occurs when the asset breaks out or moves upward through the old point of resistance (right side of the cup).
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Learn How to Apply Multiple Time Frame Analysis
Hey traders,
In this article, we will discuss Multiple Time Frame Analysis.
I will teach you how to apply different time frames and will share with you some useful tips.
Firstly, let's briefly define the classification of time frames that we will discuss:
There are 3 main categories of time frames:
1️⃣Higher time frames
2️⃣Trading time frames
3️⃣Lower time frames
1️⃣Higher time frames are used for identification of the market trend and global picture. Weekly and daily time frames belong to this category.
The analysis of these time frames is the most important.
On these time frames, we make predictions and forecast the future direction of the market with trend analysis and we identify the levels, the areas from where we will trade our predictions with structure analysis.
2️⃣Trading time frames are the time frames where the positions are opened. The analysis of these time frames initiates only after the market reaches the underlined trading levels, the areas on higher time frames.
My trading time frames are 4h/1h. There I am looking for a confirmation of the strength of the structures that I spotted on higher time frames. There are multiple ways to confirm that. My confirmations are the reversal price action patterns.
Once the confirmation is spotted, the position is opened.
3️⃣Lower time frames are 30/15 minutes charts. Even though these time frames are NOT applied for trading, occasionally they provide some extra clues. Also, these time frames can be applied by riskier traders for opening trading positions before the confirmation is spotted on trading time frames.
Learn to apply these 3 categories of time frames in a combination. Start your analysis with the highest time frame and steadily go lower, identifying more and more clues.
You will be impressed how efficient that strategy is.
❤️If you have any questions, please, ask me in the comment section.
Please, support my work with like, thank you!❤️
Cognitive Biases in Forex Trading
This article explores the cognitive biases in forex trading. The biases discussed in this article can play a significant role in any form of speculative trading and investing, not just forex trading.
A cognitive bias is a systematic flaw in how we think. Cognitive biases are present in every decision we face.
Anchoring Bias.
People rely too much on reference points from
the past when making a decision for the future -
they are "anchored" to the past.
Loss Aversion.
This is when people go to great lengths to avoid
losses because the pain of loss is twice as
impactful as the pleasure received from a win.
Confirmation Bias.
The confirmation trap is when traders seek
out information that validates their opinions
and ignore any theories that invalidate them.
Superiority Trap.
Many traders in the past have lost large sums
of money simply because they have fallen prey to
the mentality of overconfidence.
Herding.
Many traders in the past have lost large sums
of money simply because they have fallen prey to
the mentality of overconfidence.
Pay close attention to your decision making to spot the fallacies.
What do you want to learn in the next post?
Price Action basics: Major trend reversal (the setup explained).Price Action basics: Major trend reversal (the setup explained).
Hello traders, today I have decided to make a small educational chart on how to trend infamous pattern major trend reversal.
A bull trend is a series of higher lows and highs, and a bear trend is a series of lower highs and lows. Trading a major trend reversal pattern is an attempt to enter at the start of a new trend, hoping that a series of trending highs and lows will follow.
Enjoy.
Trade safe,
Trader Leo,
