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THE MOST IMPORTANT FOREX FUNDAMENTALS 📰 Hey traders, Even though I am a pure technician and I rely only on technical analysis when I trade, we can not deny the fact that fundamentals are the main driver of the financial markets. In this post, we will discuss the most important fundamentals that affect forex market. 📍Unemployment rate. Unemployment rate reflects the percentage of people without a job in a selected country or region. Rising unemployment rate usually signifies an unhealthy state of the economy and negatively affects the currency strength. 📍Housing prices. Housing prices reflect people's demand for housing. Rising rate reflects a healthy state of the economy, strengthening purchasing power of the individuals and their confidence in the future. Growing demand for housing is considered to be one of the most important drivers in the economy. 📍Inflation. Inflation reflects the purchasing power of a currency. It is usually measured by evaluation of the price of the selected basket of goods or services over some period. High inflation is usually the primary indicator of the weakness of the currency and the unhealthy state of the economy. 📍Monetary policy. Monetary policy is the actions of central banks related to money supply in the economy. There are two main levers: interests rates and bank reserve requirements. Higher interest rates suppress the economy, making the currency stronger. Lower interests rates increase the money supply, making the economy grow but devaluing the national currency. 📍Political discourse. Political discourse is the social, economical and geopolitical policies of the national government. Political ideology determines the set of priorities for the ruling party that directly impacts the state of the economy. 📍Payrolls and earnings. Payroll reports reflect the dynamic of the creation of new jobs by the economy, while average earnings show the increase or decrease of the earnings of the individuals. Growing earnings and payrolls positively affect the value of a national currency and signify the expansion of the economy. Pay closes attention to these fundamentals and monitor how the market reacts to that data. What fundamentals do you consider to be the most important? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Education
by VasilyTrader
5
What is LEVERAGE in Forex💰 ❗️Leverage is a brokerage service that is a loan in the form of cash or securities provided to a trader to secure a transaction. The loan amount may exceed the amount of the trader's deposit by 10, 20, 100 or more times. By analogy with the law of physics, leverage works as a lever, enabling a trader to make deals that he would not be able to with his own funds alone. The maximum leverage on the exchange does not depend on the trader's desire and the broker's capabilities. It is calculated based on the risks established by the clearing center for each asset. For example, if the risk amount for any stock is set at 10%, a trader will be able to trade it with a leverage of 1 to 10. If the risk value is 30%, then it is impossible to get a leverage greater than 1 to 3. Making transactions on the exchange using leverage is called margin trading. It is the conclusion of purchase and sale transactions using borrowed funds issued against the security of a certain amount, which is called margin. In other words, in order to use the leverage service, you must have a minimum amount on the deposit (set by the broker), which will be the collateral. The amount of leverage in trading is the ratio of the amount of the trader's own funds to the amount of the transaction (1:100, 1:1000). For example, if this indicator is 1:500, it means that the broker provides a loan amount 499 times higher than the investor's deposit. At the same time, one part of the investor's funds and 499 borrowed funds are used in the transaction. The word "credit" scares many away, but in fact there is nothing terrible in this concept. Leverage can indeed be called a loan in the usual sense of the word, but the interest on the use of borrowed assets is significantly less than the usual bank. When transferring the positions of the transaction to the next day, a commission is withdrawn from the account in the amount of the difference in the interest rates on the loan and the deposit - the so-called swap, which can be considered an analogue of the fee for using leverage. The loss on the transaction is deducted from the trader's own funds, if as a result their volume becomes less than the permissible minimum margin value, the broker will send a notification that the money is running out and the bidder needs to either replenish the account or close the position. Such an alert is called a Margin Call. If no action is taken, the transaction will be closed automatically (Stop out). ✅How to trade with leverage Leverage is a financial instrument that, with a competent approach, allows you to make large transactions and get a good profit even on small deposits. In order to use this tool correctly, follow the simple recommendations: Focus on your own deposit. Calculate the risks based on the available amount. It is better to use a small amount of borrowed funds, which will not allow you to lose all the money at once. With any leverage size, never trade for the entire deposit. Ideally, one operation should account for 1-2% of the deposit amount. Be sure to set Stop loss levels, this will help reduce risks. ⚠️IMPORTANT! Stop loss is an order that fixes the financial result when the price of the selected instrument reaches a certain level. The Stop loss parameter can be set before opening a position or after. But there is one important point: in a sale transaction, the specified level should be no less than the current price on the market, and in a purchase transaction - no more. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
9
Trading Sessions in Forex | Trading Basics 🕰🌎 Hey traders, In this post, we will discuss trading sessions in Forex. Let's start with the definition: Trading session is daytime trading hours in a certain location. The opening and closing hours match with business hours. For that reason, trading hours are varying in different countries because of contrasting timezones. ❗️Please, note that different markets may have different trading hours. Also, some markets have pre-market and after-hours trading sessions. In this post, we are discussing only forex trading hours. The forex market opens on Sunday at 21:00 GMT and closes on Friday at 21:00 pm GMT. There are 4 main trading sessions in Forex: 🇦🇺 Australian (Sydney) Session Opens at 21:00 GMT and closes at 06:00 GMT 🇯🇵 Asian (Tokyo) Session Opens at 12:00 GMT and closes at 9:00 GMT. 🇬🇧 UK (London) Session Opens at 7:00 GMT and closes at 16:00 GMT. 🇺🇸 US (New York) Session Opens at 12:00 GMT and closes at 21:00 GMT. Asian trading session is usually categorized by low trading volumes while UK and US sessions are categorized by high trading volumes. Personally, I trade the entire UK session and US opening and usually skip Australian and Asian sessions. What trading sessions do you trade? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Education
by VasilyTrader
2
Types of Orders & Their Features📚 ⚠️One of the first things that novice traders should learn is how to use different types of orders. The exact number of orders available to you often depends on which broker you are going to use. Learning how to use different types of orders correctly is part of comprehensive trading training. ❗️The most popular types of forex orders: ✅Market orders A market order is probably the simplest and most common type of order. It is usually executed immediately by the broker if it has not arrived in too large a size or has been placed in fast-moving markets. As the name implies, market orders include buying or selling a currency pair at the current market rate. Market orders can be used by a trader for long or short positions. They can also be used to close current positions by buying or selling. One of the main advantages of market orders is that they are almost always executed. The disadvantage of using market orders is that you can get an unexpectedly unfavorable price if the market moves quickly against your position. ✅Limit orders Whenever a trader wants to specify a lower or higher price at which an order should be executed, this type of order is called a limit order. Limit orders can be used to stop losses, as well as to fix profits. The name of this type of order arises from the fact that the trader demanded that transactions concluded on his behalf be limited to transactions executed at the specified exchange rate or better. In practice, however, limit orders are usually executed at the specified price, although a broker may offer a better order execution rate to impress a particularly good client. Some traders like to use a certain type of limit order, which is called a Fill or Kill or FOK order. The first type of FOK order tells the broker to either fully execute the order at a certain price, or cancel it. The second type of FOK order instructs the broker to immediately execute all orders at the specified price, and then cancel all others. This last type of Fill or Kill order is most often used when trading large amounts. ✅Take Profit orders The take profit order is one of the most common types of limit orders. As the name suggests, it is usually used by a trader who wants to liquidate an existing position with a profit. Therefore, the price level indicated in the take profit order should be better than the prevailing market rate. If the trader's initial position is short, the take profit order will include the redemption of this short position at a price lower than the prevailing one in the market. Conversely, if they held a long position in accordance with the take profit order, it would be liquidated if the market moved up. Traders may sometimes indicate that their take profit orders are of the "All or Nothing" or AON type. This means that the order must be either fully executed or not executed at all. AONs are used to prevent partial execution of orders, which may be considered undesirable. Alternatively, traders can choose to partially fill in a smaller amount than the entire amount of the take profit order. This can be useful if the broker trying to execute the order can only execute part of the order at the exchange rate specified in the order. ✅Stop loss orders A stop loss order is another very common type of order, usually used to liquidate an existing position. Such orders are usually executed as market orders as soon as the stop loss level is triggered when trading currency at this level. In fact, when the market has gone against an existing position to a point and the exchange rate has reached the specified stop loss level, the stop loss order is executed and causes the trader to incur a loss. However, a stop loss order limits the trader's further losses if the price continues to move in the same unfavorable direction. This makes stop loss orders an important part of risk management strategies for many traders. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
3
Types of Orders In Trading | Trading Basics 🤝💱 Hey traders, In this post, we will discuss types of orders that we use in Forex trading. ➖ Market order. Trading position is opened at a current price level. Buying the asset, you will open a trading position at a current ask price. Selling the asset, you will open a trading position at a current bid price. Even though market order is the most preferable type of orders among newbie traders, I highly recommend not to use that, especially if you are a day trader. ❗️The main problem is that prices constantly fluctuate and there is a certain delay between order execution and position opening. For these reasons, the position will be opened from a random price level within the range where the market is currently staying, affecting a risk to reward ratio. ➖ Limit order. Trading position will be opened only from a desired price level. With buy limit, you will buy the asset from a certain level. (current price remains above the order) With buy stop order, you will buy the asset from a certain level. (current price remains below the order) With sell limit, you will sell the asset from a certain level. (current price remains below the order) With sell stop, you will sell the asset from a certain level. (current price remains above the order) That is the order type that I prefer. Limit order helps you to trade from a desirable level, automatically executing the order once it is reached, letting you preliminary set it. ❗️However, remember that there is one big disadvantage of that order type: there is no guarantee that the price will reach the desired price level to activate a trading position. For that reason, occasionally you will miss the trades. Try these order types on a demo account to learn how they work in practice. Which order type do you prefer? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
9
FALSE BREAK | Price Action Trading📊 ⚠️How often have you opened a key level breakout trade, and then the price turned against you? False breakout happens quite often and it is a problem for many traders who buy at highs and sell at lows. Breakout trading is a fairly popular and viable trading strategy. However, some breakouts often turn out to be false. This can be quite frustrating, not to mention that it can often lead to a losing trade. However, in many cases, an experienced trader can analyze the market situation and react to it accordingly. False breakouts can make a profit if you know how to trade them correctly. ❗️A false breakdown is a situation when the price violates an obvious level, but then suddenly changes direction. When the initial breakout of the level occurs, many traders open a trade in the direction of the breakdown. These traders are trapped when the price reverses, which triggers a series of stop losses. New traders are also entering the market, and this puts additional pressure on the price. This often turns the price into a new trend, the opposite of the initial breakout. A breakout that turns out to be false is a sign of strength in a downtrend or weakness in an uptrend. As you can see, a false breakout can easily cause significant losses for any trader. Some traders develop their entire strategy around trading false breakouts, as this can be a very powerful trading approach. Some of the best trades happen when market players fall into a trap and their stops start to work. ✅How to find patterns of false breakouts? 🟢If you do not learn how to correctly identify false breakouts, you will not be able to trade them profitably. For example, there will be situations when the price returns to the breakout point, and only then continues its movement. 🟢One of the ways to detect false breakouts is to monitor the volume. Real breakouts are usually accompanied by strong indications of trading volume at the time of the breakout. When this volume is absent, there is a higher probability that the breakout will not happen. 🟢Thus, if the trading volume is low or it decreases during the breakout, a false breakout is likely to occur. In contrast, if the volume is large or it increases, a real breakdown is likely. 🟢It is also useful to monitor not only the trading volume but also the price movement on the lower timeframe. In many cases, you will see that the price makes a very sharp pullback on the lower timeframe, which is not visible on the higher timeframe. ✅False Breakout Trap 🟢After all, many trading textbooks say that a breakout can be considered confirmed when a candle closes above the resistance level. However, the price moves in your direction for a while and then turns 180 degrees. As a result, you have a stop loss triggered. 🟢The false breakout trap includes several candlesticks, usually 1-4, that go beyond the key support or resistance level. Such breakouts occur after a strong movement, as the market has reached an important level, but the price momentum still retains its strength. Have you ever been trapped by a false breakout? ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
6
TRIPLE TOP PATTERN | Tips on How to Trade it📚 ❗️A triple top is a type of graphical pattern that is used in technical analysis to predict the reversal of an asset's price movement. Consisting of three peaks, the triple top signals that the asset may no longer be growing, and that lower prices are possible. Triple tops can occur on all timeframes, but in order for the model to be considered a triple top, it must occur after an uptrend. The opposite of a triple is a triple bottom, which indicates that the asset price is no longer falling and may rise higher. ✅How the triple vertex works The triple top pattern occurs when the price of an asset creates three peaks at approximately the same price level. The area of peaks is resistance . The pullback between peaks is called the swing minimum . After the third peak, if the price falls below the lows of the fluctuation, the model is considered completed, and traders expect further downward movement. Three consecutive peaks make the triple peak visually similar to the "head and shoulders" pattern; however, in this case, the average peak is almost equal to the other peaks, and not higher. The model is also similar to the double top model, when the price touches the resistance area twice, creating a pair of high points before falling. Triple tops are traded in almost the same way as the "head and shoulders" figures. Let's say the stock price peaks at $119, drops to $110, rises to $119.25, rolls back to $111, rises to $118, then falls below $111, which is a triple top and signals that the stock is probably moving down. ✅The value of the triple vertex Technically, the triple top pattern shows that the price cannot break through the peak area. Translated into real events, this means that after several attempts, the asset cannot find many buyers in this price range. When the price drops, it forces all traders who bought during the pattern to start selling. If the price cannot rise above the resistance, there is limited potential for profit retention. As the price falls below the minimum of the fluctuation of the model, sales may increase as former buyers exit long positions and new traders open short ones. This is the psychology of the model and what helps fuel the sale after its completion. No template works all the time. Sometimes a triple top is formed and completed, which makes traders believe that the asset will continue to fall. But then the price may recover and rise above the resistance area. In order to protect, a trader can place a stop loss on short positions above the last peak or above the recent maximum of the fluctuation within the model. This move limits the risk of a trade if the price does not fall, but instead rises. ✅Trading on Triple Top patterns Some traders open a short position or exit long positions as soon as the asset price falls below the support of the model. The support level of the model is the most recent swing minimum following the second peak, or alternatively, the trader can connect the swing minima between the peaks with the trend line. When the price falls below the trend line, the figure is considered completed and further price decline is expected. To add a confirmation of the model, traders will keep an eye on the large volume when the price falls through the support. The volume should increase, which indicates a strong interest in sales. If the volume does not increase, the model is more prone to failures (the price rises or does not fall as expected). The pattern provides a lower target equal to the height of the pattern subtracted from the breakout point. This goal is approximate. Sometimes the price will fall far below the target, other times it will not reach the target. ⚠️Other technical indicators and graphical models can also be used in combination with the triple top. For example, a trader can watch the bearish crossing of the MACD after the third peak or the exit of the RSI from the overbought zone to confirm the price drop. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
5
Are You Ready to Trade Full Time? 4 Essential Signs ⭐ Hey traders, Once you mature in trading and become a consistently profitable trader, the question arises: are you ready to trade full time? Becoming a full time trade is a very significant step and my things must be taken into consideration before you make it. ✨Becoming a full time trader implies that you quit your current job, that you give up a stable income - your salary. In contrast to classic job, trading does not give guarantees. Please, realize that such a thing as stable income does not exist in trading. Trading is a series of winning and losing trades, positive and negative periods. For that reasons, remember that in order to become a full time trader, your average monthly trading income must be at least twice as your monthly expenses. ✨Moreover, even if your trading income is sufficient to cover two months of your life, that is still not enough. You must have savings. Trading for more than 8 years, I faced with quite prolonged negative periods. One time I was below zero for the entire quarter. For that reason, supporting a family and living a decent life will require savings that will help you not to sink during the losing periods. ✨Another very important sign is your correct and objective view on your trading. Please, realize that if you bought Bitcoin one time and made a couple of thousands of dollars, it does not make you a consistently profitable trader. Please, do not confuse luck with the skill. Your trading must be proven by many years of trading. ✨You must be emotionally prepared for the living conditions that full time trading will bring you. Being a full time trader implies that you are constantly at home, you work from home from Monday to Friday. You do not see your colleagues, your social life will change dramatically. I know a lot of people who started to trade full time and then realized that they can not work from home for different reasons. ⭐So what are the necessary conditions for becoming a full time traders: you should have savings that will cover the negative trading periods, your average monthly trading income should be at least twice as your monthly expenses, your trading efficiency must be proven by objective, consistent results, and you must be psychologically prepared for working from home. When these conditions are met, you can make a significant step and become a full-time trader. Are you ready to become a full time trader? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
44
FIBONACCI TOOL | common reversal levels📊 ⚠️Fibonacci levels are one of the most popular tools for analysis. These are price levels that are located in certain parts of the movement corresponding to the mathematical Fibonacci numbers. ✅What are Fibonacci numbers? 🟢In the XIII century, the famous scientist Leonardo of Pisa lived in the Republic of Pisa – the first major medieval mathematician in Europe. On the cover of one of his most famous works was attributed filius Bonacci (son of Bonacci). Hence the nickname Fibonacci. 🟢The Fibonacci numbers are a sequence of numbers derived from Leonardo's experiment on rabbits. The Pisan mathematician decided to find out how many pairs of rabbits will be in a fenced pen a year after the start of breeding (provided that there will be only one pair in the pen in the first month). In the third month, the cuts began to multiply recurrently – each subsequent number was equal to the sum of the previous two (1, 2, 3, 5, 8, 13, etc.). 🟢If any number from the sequence is divided by the previous one, you get a number tending to 1.61803398875… This number is the "golden ratio". In algebra, such a number is called the Greek letter phi. When dividing any number from the sequence by the following, the inverse of phi 0.618 is obtained. When dividing any number from the sequence by the number following one, 0.382 is obtained. In this form, Fibonacci numbers are much more familiar to traders. ✅Correction levels 🟢Correction (retracement) - movement against an existing trend. The correction "absorbs" part of the trend movement. Of the Fibonacci numbers, 38.2 are mainly used for correction levels (from the previous trend movement), 50%, 61,8%, 78,6%. 🟢Correction levels are based on candle wicks, in other words, on their maximum or minimum points. To build a correction level, you need to find a trend. Fibo levels can be asymmetrical, so it is especially important to pay attention to where the beginning and end of the wave on which the level is being built are located. 🟢On a downtrend, 0% at the bottom, 100% at the top. When ascending, the opposite is true. The most significant correction level is 61.8. When a breakdown of this level occurs, a new trend in the opposite direction usually begins. After that, it is necessary to build a new corrective level. 🟢Correction pattern – movement between minor correction levels. After such a move, the price usually moves to the key level of 61.8. 4 patterns are depending on which levels of correction the price concerns. ❗️Even if the skills of analyzing the state of the market by Fibonacci levels will not be a big advantage in trading, then in any case it is a great (and to some extent integral) experience of technical analysis. Fibo levels can be combined with a footprint, deltas, and other tools. The trader will understand only in practice if it is possible to benefit from this or not. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
4
CUP & HANDLE. How the pattern works☕️ ✅This pattern is not as popular among traders as "Head and Shoulders", "Double Top" and other classic patterns of technical analysis. However, this does not mean that it is not so effective. In fact, the "Cup & Handle" pattern is in no way inferior to the above patterns in its reliability and, if used correctly, can bring considerable benefits to the trader. ✅Below we will look at how the "Cup & handle" is formed, what are the signs of authenticity of the formed pattern, and the trading strategy for it. ⚠️How the "Cup & Handle" formation is formed The formation of this pattern occurs on an uptrend and is a sure sign of its continuation (subject to the conditions of authenticity of the pattern). In essence, it is a cup - an uptrend correction. The price reaches a strong resistance level, cannot overcome it, and smoothly rolls back, forming the left wall of the cup. Then it smoothly unfolds along the bottom and rises to test the level again. Having reached the level, it rolls back down again. This rollback should be much smaller than the previous one, and it forms a handle. The handle of the cup is very often formed in the form of a "Flag" pattern. The "Cup & handle" pattern is considered fully formed when the price, having formed a "handle", returns up and breaks through the resistance level from which the pattern formation began ⚠️Confirmation of the truth of the "Cup & handle" pattern There are several conditions, without which the formed pattern cannot be considered true. These are the conditions: 1️⃣To begin with, as mentioned above, for the formation of this pattern, it is necessary to have an uptrend. Without a trend, there is no point in looking for this formation on the price chart, because even if you find a drawing of an ideal cup with a handle, it will be just a drawing that has no meaning. 2️⃣The depth of the forming cup should not exceed 2/3 of the height of the previous uptrend. The optimal depth of the cup is within 1/3 - 2/3 of this value. The depth of the forming handle should not exceed a value equal to ½ of the depth of the cup. 3️⃣The most reliable is the "Cup & Handle" pattern formed on daily or weekly timeframes. Of course, it can also be formed on hourly charts, but where the probability of its triggering is somewhat lower. 4️⃣The "Cup & handle" pattern should be confirmed by the indicators of the volume indicator. Volumes should grow at a time when the price is moving in the direction of an uptrend and fall when it decreases. Also, a sharp surge in volume should accompany the moment of breaking through the price level at the end of the formation of the figure. 🟢Trading strategy based on the "Cup & handle" The entry into the position is carried out after the completion of the formation of the figure. It is recommended to wait for the price to close above the resistance line. To do this, you must constantly monitor the schedule in anticipation of the right moment. There is also a strategy for opening a position on a pending order, in which case there is no need to sit and wait for the completion of the figure. A pending order is placed at a level slightly above the resistance level (approximately 10 points) and is triggered if the figure is completed. The target level for this pattern is the height of the cup, laid up from the resistance level. Therefore, we set the profit-taking level of TAKE PROFIT either at the target level or 10-15 points below it. As for the STOP LOSS limit order, it should be placed at the level of the bottom of the handle (or slightly lower). ❗️In conclusion, I will say once again how important it is to correctly identify the "Cup and Handle" formation before you start trading on it. Carefully re-read the rules confirming this pattern. Try not to mess with the patterns formed on small timeframes. Take your time, be patient, and remember that the absence of open positions can also be considered an excellent position. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
6
BID AND ASK BASICS📚 🔴In all markets, there is a price at which a market participant is willing to buy an asset and a price that suits the seller. At the same time, traders intend to carry out a purchase and sale transaction only within the amount that is profitable for them. ⚠️In the foreign exchange market, the ask line is the cost of buying an asset or the price that is set by the broker in the Buy order. ⚠️Bid - accordingly, the cost at which the broker opens a sell order when accepting an application for the sale of currency from a trader. ❗️The spread is the difference between ask and bid prices. To be more precise, the spread is the difference between the best bid and ask offers for a specific asset over a certain period. Thus, the spread is dynamic, changing over time. The spread value is formed by the initial value set by the broker, as well as due to the volatility of the currency. The spread can vary from 0.1 to 100 points. ✅In the market of physical goods, a similar example can be given: a seller and a buyer, haggling, narrow the difference between prices that satisfy them, bringing them to one at which they make a deal. ✅In the foreign exchange market, the spread between prices is the commission charged by the broker. It should be borne in mind that the broker takes a commission regardless of the volume of the transaction and its result. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
6
5 MUST READ TRADING BOOKS 📚 Hey traders, You frequently ask me to share a list of trading books that I personally recommend. In this post, I gathered 5 books every trader must-read. Please, note that in that list I included the books that changed my perception of trading. Most of them focus on the psychological aspects of trading and do not teach any particular trading strategy. 📕Trading in The Zone by Mark Douglas. Douglas uncovers the main fallacies of newbie traders. He focuses on the psychological aspect of trading and its tremendous role in this game. Relying on studies of the human psyche the author teaches readers to beat the ingrained mental habits. 📔The Black Swan by Nassim N. Taleb. Even though that book is not about trading, it uncovers the aspect of probabilities in life and our perception of them. Especially, Taleb focuses on very rare and extremely low probability events that humans frequently neglect in their predictions and the impact of their occurrence in our lives. 📘The Disciplined Trader by Mark Douglas. One more book from Douglas. This paper describes the mindset of a successful trader, useful habits and traits. It is looking for reasons why most of the traders fail. The author teaches how to properly react to losing and winning trades and changing market conditions. 📙Market Wizards: Interviews with Top Traders by Jack D. Schwager. Best traders of the entire world share useful insights of trading. Top experts in the industry talk about their journey, about their path to success and share their valuable experience. 📗Trend Following by Michael W. Covel Trend is our friend. That is the axiom no one doubts. The only problem is that it is not that simple to follow the trend. In this book, Covel describes a profitable and efficient trend-following trading strategy adopt. Of course, reading these 5 books does not guarantee that you will become a consistently profitable trader but I consider them to be very impactful. I always said that a proper mindset is one of the most important things in trading and these books will help you to build it. Did you read these books? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
6
COMPOUND INTEREST | Time is on your side📚 ❗️As it turned out, not all traders are familiar with such an important concept as compound interest. Meanwhile, the use of compound interest in trading can be a very effective tool for making a profit. In short, compound interest is the accrual of interest on interest, and if in detail, then read on. ✅The formula for calculating compound interest has the form: Compound percentage = (P (1 + g)^ n) – P, where P – the amount originally invested; r – interest rate; n is the investment period. Let's say you invested an amount of $ 10,000, every year the interest received is added to the principal amount, and new interest is accrued for a larger amount. If the investment period is 5 years, and the interest rate is 10% per annum , then after the specified period, taking into account the compound interest, you will receive a profit in the amount of: (10000(1+0.10)^5)-10000=6105.1$ And without taking into account the compound interest, the profit for the same period will be: 1000050,10-10000=5000$ As you can see, using compound interest (or in other words reinvesting profits) brought additional income in the amount of: 6105.1-5000 = 1105.1 $. ✅It seems that the figures presented above are not impressive, but the use of compound interest in trading can truly work wonders. In what way? Let's take another look at the compound interest formula described above. It is obvious from the formula that you can increase profit by increasing any of its components. Let's not touch the amount originally invested, but play with the value of the investment period and the interest rate. To begin with, let's imagine that we will reinvest the profit not every year, but every month. Then the investment period will be 12 5 = 60 months. The interest rate corresponding to this investment period will be equal to: 10%/12=0.833%. Let's substitute these values into the formula for calculating the compound percentage: (10000(1+0.00833)^60)-10000=6449,8$ As you can see, under the same conditions, but with monthly reinvestment of profits, the income will already be $ 6449.8- $6105.1 =$344.7 more. Well, if the trader's income is not 0.833% per month, but, for example, 5% monthly, then under the same conditions and for the same period, the profit will already be: (10000(1+0. 05 )^60)-10000=176791,86$ Felt the difference, impressive, isn't it? And what if you reinvest profits not monthly, but daily? Let's figure it out. With an average yield of 5% per month, the average daily yield will be 5%/21= 0.238% (here 21 is the number of working days in a month). The investment period will be 5360=1800 days. Let's substitute the data into the compound interest formula: (10000(1+0.00238)^1800)-10000=711617,5$ This is already 711617.5-176791.86 = 534826 $ more than with monthly reinvestment of profits. More than half a million dollars (and this with an initial investment of only ten thousand)! That's impressive. That's what compound interest is in action. ⚠️This is about theory. In practice, it is impossible to achieve a constant percentage of profit every day. Some days a trader inevitably ends up with a loss, some with a profit, and the size of these losses and profits is always different. So it is unlikely to substitute the value of the percentage of profit per day in the above formula. However, the very essence of compound interest, clearly shown above in figures, gives the trader a fairly powerful tool for earning. A trader can and should use compound interest when creating his own money management system. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
6
Moving Average | Two Profitable Ways to Use 📊 Hey traders, In this post, we will discuss two efficient ways to apply the moving average(s) indicator in your trading. Please, note that the settings for a moving average depend on many factors and can not be universal. Time frame, your style of trading and many other factors should be taken into consideration when you define the settings. 1️⃣The first very efficient way to apply moving average is to consider that to be a strong support/resistance. Such a method is appropriate for trend-following traders. A very important condition to note applying MA as the structure is that the market should be trending: it should trade in a bullish or bearish trend, not in sideways. 📍In a bullish trend, a moving average will provide you a relatively safe point for buying the market after a pullback. Quite often after a test of MA, the price tends to bounce all the way up to a current high and even go higher to the next highs. 📍In a bearish trend, a moving average will serve as a strong resistance and quite often will indicate a completion point of a retracement leg after a strong bearish impulse. 2️⃣The second way to apply moving average is to apply a combination of 2 MAs with different settings (one with a bigger and one with a smaller length). Such a method is usually applied by counter-trend traders. And again, a very important condition to note, is that if you want to apply this method efficiently, remember that the market must be trending, it should be bullish or bearish. Your task will be to track an intersection of two MAs. 📍In a bullish trend, a crossing of two moving averages with a high probability will indicate a trend violation and initiation of a new bearish trend. Such a signal usually serves as a trigger to open a short position. 📍In a bearish trend, a crossing of two moving averages will signify a violation of a bearish trend and the start of a new bullish trend. The intersection by itself will be a signal to open a long position. Your task as a trader is to find the most accurate inputs for MAs. With backtesting and experience, you will find the settings applicable to your trading style. What indicator do you want to learn in the next post? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
95
ENGULFING CANDLE | powerful price reversal📚 ✅The engulfing model (external bar) is mainly a reversal pattern (although in rare cases it may indicate a continuation of the trend). It looks like two candles, the first of which is small, and the second is large, with a body larger than the entire previous candle, and directed in the opposite direction. ✅From the point of view of crowd movement, such a pattern means that the strength of the current trend is drying up (this is evidenced by the small size of the first engulfing candle). The crowd does not know in which direction to move and, figuratively speaking, is marking time. The appearance of a powerful candle that absorbed the previous one and closed in the opposite direction marks the beginning of a new, strong trend. ⚠️There are several mandatory conditions that the pattern must meet in order for its signal to provide the maximum probability of working out: 1️⃣Before the pattern itself, there must be a downtrend or an uptrend in the market. The movement may be small, but its presence is mandatory; 2️⃣The body of the second candle should be of a different color and orientation (bearish after bullish and bullish after bearish). Shadows may not be absorbed, but then the signal is considered weaker; 3️⃣The body of the second candle should have a contrasting color with respect to the body of the first. The exception is when the body of the first candle is very small (doji or close to it). ❤️ Please, support our work with like & comment! ❤️
Education
by UnitedSignals
7
Overextended Markets (Overbought And Oversold)1) Bollinger Bands: Some traders will determine the market as "over-extended" when the price is piercing above or below the Bollinger bands. If above then the price is considered overbought and price may start to reverse. If below then the price is considered oversold and the price may start to reverse. 2) Stochastic RSI: some traders will determine the market as "over-extended" once the price is over the 70% line or below the 30% line. The bottom 30% means the price might be oversold and buyers are projected to come in. When the price is above the 70% line the market is considered overbought and sellers are projected to come in. 3) Supply And demand When we have 3x continuation patterns in a row DBD or RBR in a row, we can draw a downward or upward aggressive trend line (momentum line). When this happens, we consider the market overextended and call it the “elastic band effect”. stretch out an elastic band to the breaking point and let go, the elastic band snaps back at a high-speed force and hurts. This is the same for trading, When the market is overextended and breaks the downward or upward momentum line, we can assume the market will snap back and remove 2 if not 3 of the opposing zones that gave us the ability to draw the aggressive momentum line. Buying or selling the pullback into the demand or supply is usually a good call if the criteria are met for a good trade.
CME:6S1!Education
by MoneyballAustin
2
3 Important Terms Every Trader Must Know | Trading Basics📚 Hey traders, In this post, we will discuss 3 very important market situations that every trader must be able to recognize: breakout, retest, and fakeout. ❗️Please, note that the essential element of all these terms is structure: vertical and horizontal key levels. 📍Breakout is a situation when the market breaks the identified horizontal support or resistance, or a vertical trend line. Breakout is a very important event that signifies the willingness of buyers/sellers to violate the structures. Violation of support signifies a strong selling pressure while a violation of resistance signifies a high buying momentum. Usually, the structure breakout is confirmed with a candle close. For confirmation of a breakout of support, a candle close below that is needed. For confirmation of a breakout of resistance, a candle close above is required. 📍Retest is the situation when the price returns back to broken horizontal support or resistance, or a vertical trend line after a confirmed breakout. For a structure breakout, high trading volumes are needed. Usually, after a breakout, the market participants are locally exhausted and a correctional movement follows. That may lead to a retest of a broken structure. Most of the time, after a retest a strong impulse follows. For that reason, for many traders, the retest is applied for trading entries. 📍Fakeout or false breakout is the situation when the price has not enough strength to maintain its direction after a retest of a broken structure. Instead, the market returns back below/above the broken resistance/support. Fakeout is one of the main reasons, why structure traders lose money. One of the ways to avoid fakeout is to monitor trading volumes during a structure breakout. A volume spike is needed to confirm the strength of the market participants while low volumes most of the time signify a manipulation. Learn to spot breakouts and false ones, and try to trade on a retest. Let me know what do you want to learn in the next post? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
BITSTAMP:BTCUSD
by VasilyTrader
10
Supply & Demand Zones - Learn To Trade Like A ProHello Traders, here's an educational post about how to trade Supply & Demand Zones. First off I would like to say... I highly recommend that you watch some youtube videos on this topic. I can only cover so much in one post and you will have a much better understanding of these zones after watching some videos. Either way Supply & Demand zones are one of the most effective methods for trading and if you can learn to master them you can make a lot of money. Supply & Demand Zones - S&D zones are exactly what they sound like. They are zones where Supply & Demand exist... (Again, please watch some videos to understand this better) - Basically, they are areas on the chart where there is heavy buying and selling pressure. - At S&D zones, there is a high probability that price will get rejected from those levels. - Knowing this we can take either a long or short trade. - There are actual technical reasons why price should get rejected at these levels. Knowing this we have a higher probability of success. ***An important thing to note is that you don't just enter a trade every time a S&D zone is hit. You want to look for signs of reversal. This is pretty easy to spot if you understand candlestick formations. Look for reversal candles, you can also check the shorter time frames to see if price is struggling to break the level. That's pretty much it for the post, a visual representation is much more effective in this situation so please reference the chart. ***Once again please watch some videos. I gave you they basic info but there is still much more to learn regarding this topic. Supply & Demand Zones are one of my favorite ways to trade so I really hope everyone enjoys this posts! Thanks everyone and best of luck trading!
BYBIT:BTCUSD.P
by natef1
1
Candlestick Action | How Candles Are Formed🕯 ❗️Japanese candlesticks as a technical analysis tool were invented earlier than others, but they were not widely used immediately. By the name, it is easy to guess that Japan became the "homeland": local rice traders used this method already in the 18th century. However, due to the geographical remoteness and closeness of the country from external "visitors", this type of chart gained popularity much later, when exchange life was already actively boiling in Europe and the USA. ✅What is hidden behind the candlestick chart? 🟢A candle is formed from 4 prices: opening, closing, high and low for a certain period of time. If we take a timeframe of a minute, then each candle will indicate the price movement within this minute, if an hour is inside an hour, if a day is inside a day. The distance between the opening and closing price is the "body" of the candle, and the tails show to what lows and highs the price reached. If the opening price was higher than the closing price, then the candle will be black; and vice versa: if the opening price is lower than the closing price, then the candle will be white. It turns out that candles are, in fact, the psychology of the market, they most accurately reflect the fears and hopes of its participants. 🟢The charts of Japanese candlesticks themselves are valuable for analysis: the resulting models are interpreted as models of reversal or continuation of the trend. It is also important to understand: each individual candle or a combination of candles is just a way of depicting the actions and moods of all bidders for the period we have chosen (day/week/ month, etc.). The fact is that human behavior is quite formulaic in the same situations, and that is why various methods of chart analysis are so popular with investors and traders. 🟢Looking at only one or several candlesticks, a "savvy" viewer can easily understand whether the market is set to rise or fall, change the current trend or its continuation, increase the momentum of movement or its attenuation. ⚠️It is important to understand that the behavior of individual bidders develops into a general market movement, which can be "read" using charts of Japanese candlesticks and their basic models. Therefore, your optimal investment decisions will be supported by the most effective moments of entry or exit from the position, which will significantly improve the financial result. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
15