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BITCOIN, short-term targetAs it can be observed from the chart, the price has managed to form a triangle pattern. The triangle is getting squeezed and more squeezed. The best thing to do would be waiting for a breakout before opening transactions. However, the price is located at the lower boundary of the triangle, so we are expecting a push to the upside from here. The target would be the upper boundary of the triangle (the descending trendline) What do you think about it, ladies and gents? Feel free to drop your opinions and ideas in the comment section below
BITSTAMP:BTCUSDLong
by Investroy
13
Currency Correlations: The unspoken truthHappy Friday, ladies and gents, and welcome on our another educational post for the day. Today, we are gonna talk about positive currency correlations and examine how they impact our trading. But to begin with, what is currency correlation? Currency correlations are a statistical measure of the extent that currency pairs​ are related in value and will move together. If two currency pairs go up at the same time, this represents a positive correlation, while if one appreciates and the other depreciates, this is a negative correlation. As it can be clearly inferred from the graph, the charts of EUR/USD and GBP/USD have been chosen to be scrutinised. These two currency pairs are highly correlated and are moving in the same direction. As we can see, 2 major similarities have been identified on the Daily timeframe charts of both currency pairs. However, there are a lot more than just 2. As it can be inferred from Similarity #1, the price managed to leave a long wick in late February 2020 for both pairs. Looking at Similarity #2, we can observe that the price is forming a top for both pairs and preparing to reverse and continue its move to the downside. Now that we have talked about the basics, let's move on and talk about some problems faced by currency correlations. Most of the time, new traders do not pay attention to this basic concept and make false decisions without noticing. I have seen hundreds if not thousands of traders that ignore the rule of currency correlations and make irrational conclusions like the following: opening Buy positions on EUR/USD and opening Sell positions on GBP/USD. Of course, you can do that as well, depending on the timeframe that you are trading and depending on how long you are planning on keeping the trades open. However, on the longer term trading, you won't be able to succeed. Furthermore, most of the new traders open buy or sell positions for both of the trades, which results in increasing their risks. If you open BUY or SELL positions for both trades at the same time, and the price moves in the opposite direction of your bias, you are gonna lose both of the trades. Again, not in all cases, but 80-90% of the time, as the two pairs are highly correlated. What can be done to avoid being the victim of the highly correlative pairs and keep it safe? There are two strict rules that we follow, which have always worked for us: -Open positions for the trade with the better setup or -Open positions for both trades but cut the lot sizes by half So in the first case, we compare the two setups that we have, in our case it's either EUR/USD or GBP/USD. For instance, let's say that EUR/USD gives us more confluences for opening a transaction. Therefore, what we do is, we ignore GBP/USD and trade EUR/USD. For the second case, let's say that we use 1.0 lot size to open transactions. What we can implement, is using 0.5 for each trade and opening positions for both EUR/USD and GBP/USD. I hope you liked this educational post, family! If you have any suggestions on what we should post next as an educational post, feel free to let us know in the comment section below. Have an awesome upcoming weekend, everyone!
Education
by Investroy
29
HOW TO SET PROPER TAKE PROFITS AND STOP LOSSES 🧙‍♂️Knowing patterns is one thing and using them to the fullest potential is another. Above, we've depicted 3 major patterns commonly used by traders during a technical analysis (wedges and pennants will be covered next week). We all know how to notice them on the charts and general shapes. However, a lot of traders don't know how to act once they notice these patterns and we're here to clarify that. First, let's look at the proper entry points for these patterns. A general rule of thumb would be to enter the trade at the neckline once we get a closure below/above it. This way we can increase the probability of a trade and make sure the pattern is still valid. What about the take profit? Well, from tons of observations by a lot of talented traders there is a theory that the move following these patterns would be: 1) Double TOP/BOTTOM: the same as the distance from the neckline to the top or bottom 2) Head and Shoulders: the same as the distance from the neckline to the head 3)Rectangle: the same as the range of the rectangle This way we can maximize our profits made from the trades based on these patterns. Lastly, let's look at the Stop Losses for our trades. This one really depends on your trading style. More conservative traders (for instance, we like to keep our SLs tight as possible) would go with the mid-range of the pattern ensuring at least a 1:2+ Risk-Reward Ratio. However, if you're using this pattern as an indication that the price will follow further than the expected TP1, you may as well slightly increase your stop loss (not advised). This is pretty much what you have to do once you notice one of the patterns above and you want to capitalize on the opportunity. Safe trades and stay tuned for more posts! Ah also, it's Investroy's birthday this weekend, so if you have time, stop by and wish the HAPPY BIRTHDAY to the team :)
BITSTAMP:BTCUSDEducation
by Investroy
24
BITCOIN, bulls are taking over?If we take a look at the Daily timeframe chart, we can observe that the price has formed a Double Bottom pattern, which indicates that a possible reversal is going to happen. Moreover, we can see how the price price strongly rejected the structure drawn on the chart, which signifies that the bulls have advantage over the bears. We will be opening BUY positions and aiming for the target illustrated on the chart. The trade is a middle-term one. Let's reach the target first, before analysing the chart again and making predictions on where it may move next. Feel free to share your thoughts and opinions in the comment section, people!
Long
by Investroy
18
GOLD, two sides of a storyThe price is currently consolidating around an important key area. From here we will be waiting for more confirmations before either going long or short. If the price manages to print some strong bullish candles and bounce off the structure, we will be opening BUY positions and aim for the target identified on the chart. On the opposite side, if the price manages to break the plotted zone and come back to re-test it, we will be opening SELL positions and aiming for the level illustrated on the graph. Are you long or short on this one, family? Feel free to drop your ideas in the comment section below!
OANDA:XAUUSD
by Investroy
9