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Gann Astro Intraday: Live Gold Trade in ActionIn this trading idea, I will provide a detailed breakdown of the live trade I executed on Monday, January 12, 2024, on gold, using advanced mathematical modules of Gann Astro. This trade was entered precisely at the market low, as I had calculated the timing of the low formation three hours in advance. While the trade setup was accurate, it took over 7 hours for the price to reach the target. In this breakdown, I will explain the complete trade analysis with supporting data, charts, and visuals. Additionally, I will dive into the psychological aspects of holding a trade for an extended period, maintaining patience, and interpreting price action as a delivery algorithm. I'll also discuss observing liquidity buildup in real-time and the mindset required to stay composed while navigating market movements. Significant points of this Gann Astro trade are as below - Detailed breakdown of the live gold trade executed on Monday, January 12, 2024, using advanced Gann Astro mathematical modules. - Trade entry was made precisely at the market low, calculated 3 hours in advance. - Explanation of the trade setup with supporting data, charts, and visuals. - Insights into the psychology of holding trades for an extended period (this trade took over 7 hours to reach the target). - Understanding price action as a price delivery algorithm and observing liquidity buildup in real-time. - Discussion on maintaining patience and composure during prolonged trades. As shown in the charts, the reversal time for gold was calculated 3 hours in advance using Gann Astro Trading principles and mathematical modules. The reversal occurred at 8:00 AM New York time, as observed on the 90-minute chart, where I anticipated the price to form a low. Now, you might wonder why the 90-minute timeframe was chosen. This ties into the universal concept that everything vibrates at a specific frequency, including markets, aligning with the significance of 3-6-9, as extensively discussed by Gann. Knowing the exact reversal time eliminates uncertainty in trading, which directly enhances trading psychology. This clarity allows for patience and composure, avoiding impulsive actions. The ability to stay calm and wait for a setup to align with your analysis is an art mastered by only a few traders. Most traders operate out of FOMO (Fear of Missing Out), often taking uncertain trades that fall under the category of gambling. True success in trading lies in patience, discipline, and the ability to observe the charts without acting prematurely. These traits separate professional traders from the majority who struggle to maintain consistency. BUY ENTRY IN GOLD LONG TRADE WITH GANN ASTRO After waiting for 3 hours, the market reached my calculated time and price level, aligning perfectly. As Gann emphasized, when time and price are equal, the market must reverse. With this principle, I executed a trade on gold using Gann Astro techniques in intraday trading. This is where the true challenge of trading begins—not in entering the trade, but in maintaining patience until the price either hits your stop loss or your profit target. Many traders fail at this critical stage due to a lack of discipline and risk management, trading without stop loss or proper planning. To trade successfully, one must approach the market with precision, patience, and a sound strategy. Key Points: 1. Stop Loss is Essential: - Trading without a stop loss is equivalent to gambling with hard-earned money. - A solid risk management strategy is non-negotiable for long-term success. 2. Risk Management Rules: - Always limit risk to 1% of your account per trade. - Never over-leverage or expose yourself to unnecessary risk. 3. Learn to Stay Patient: - Patience is a core skill in trading—waiting for the market to hit your levels and then staying disciplined in the trade. - Avoid impulsive decisions driven by fear or greed. 4.Avoid Common Pitfalls: - Many traders lose their entire capital within weeks due to poor risk management and lack of preparation. - Focus on learning proper risk management before entering live markets. By incorporating these principles, you can significantly improve your chances of success and build a sustainable trading career. Patience in trading is a skill that requires not just discipline but also a deep understanding of how to manage emotions while observing the market's algorithmic price delivery in real-time. One of the most effective ways to stay focused is by minimizing the psychological triggers that impact your decision-making. Colours like red and green can strongly influence your mood and perspective during trading, which is why I switched to black-and-white candles when I started trading back in 2019. This change eliminates the emotional bias caused by colour psychology. Additionally, hiding your profit and loss figures while trading is another powerful way to stay emotionally neutral. Seeing how much you are making or losing can trigger fear of loss or overconfidence, which may lead to impulsive decisions. Removing these distractions helps you maintain clarity and focus during your trading session. Key Points: 1. Eliminate Colour Psychology: - Switch to black-and-white candles to avoid emotional biases caused by red and green colours. - This reduces the impact of visual triggers on your mood and decision-making. 2. Hide Profit and Loss Figures: - Turn off the display of your profit and loss numbers on the trading platform. - This prevents emotional reactions like fear of loss or overconfidence from influencing your trades. 3. Stay Focused on Price Action: - Concentrate solely on the market's price delivery without distractions. - Train yourself to analyse the market algorithm objectively without emotional interference. 4. Build a Calm Trading Environment: - Create a setup that minimizes external triggers and focuses on clear decision-making. - Practice mindfulness and emotional control to remain patient and disciplined. By implementing these steps, you can enhance your trading psychology and improve your ability to read the market with greater clarity and precision. Once you master the foundational skills of managing emotions and maintaining patience, the real challenge begins—understanding the price delivery algorithms and their underlying intentions. The market operates on an algorithmic framework, where price delivery is designed to build liquidity and then seek it. To identify this process, you need to observe where liquidity is being left in real-time, which is often around old highs and lows. These areas act as targets for the algorithm as it seeks to capture liquidity. In the chart, I have marked the live formation of liquidity in the market, illustrating how the algorithm builds and targets these zones. By understanding this process, you gain an edge in predicting the market's next moves. Keeping a detailed record of every trade, you take is crucial for long-term success in trading. Use software tools to record live trades and store the data systematically. This practice allows you to review your past performance, analyse what worked, and identify areas for improvement. Journaling is an essential habit in trading, as it not only tracks your progress but also accelerates your learning curve. The most successful traders consistently review their past trades, assess their strategies, and refine their approach to stay ahead in the game. It’s been 6 hours since I entered the trade. I was patient and have mastered the art of trading psychology. With Gann Trading astro techniques and years of trading experience backed by data, I’ve honed my mindset for consistent success. For new traders, here are 10 ways to improve your trading psychology: 1. Cultivate Emotional Discipline. Mastering trading psychology begins with controlling emotions like fear and greed. Recognize emotional triggers and respond with logic, not impulsivity. 2. Develop a Trading Plan. A well-structured trading plan helps eliminate emotional decision-making. Include entry, exit, and risk management strategies to stay disciplined. 3. Practice Risk Management. Never risk more than a small percentage of your capital on a single trade. Knowing your maximum loss tolerance minimizes stress and preserves mental clarity. 4. Keep a Trading Journal. Record every trade, including rationale, outcomes, and emotions. Regularly review the journal to identify patterns and areas for improvement. 5. Focus on Process Over Outcome. Prioritize consistent execution of your strategy rather than obsessing over profits. This shift in mindset builds confidence and long-term success. 6. Learn to Accept Losses. Losses are a natural part of trading. Accept them as learning experiences rather than personal failures to maintain a positive mindset. 7. Practice Visualization and Mental Rehearsal. Visualize different market scenarios and how you will respond. Mental rehearsal prepares you for stressful situations and improves decision-making. 8. Stay Patient and Avoid Overtrading. Wait for high-probability setups that align with your strategy. Overtrading often stems from impatience and leads to unnecessary mistakes. 9. Maintain a Balanced Lifestyle. Take care of your physical and mental health. Regular exercise, proper nutrition, and adequate rest are essential for maintaining focus and emotional stability. 10. Seek Continuous Education. Stay updated with market trends, refine your strategies, and learn from experienced traders. An informed trader is a confident and less emotionally reactive trader. Once you follow all these steps, the market rewards you with good trading profits. Just like in this chart, I entered at the low and exited at the top by practicing patience and executing trades only with a Gann astro and mathematical edge. This disciplined approach ensures consistent results and builds the foundation for long-term trading success. 1. Gann's Principle: Time is More Important than Price. Understanding the timing of market movements is crucial, as time often dictates the outcome of trades more than price levels. 2. Everything in the Universe Vibrates on Specific Frequencies. Market trends and patterns are influenced by universal vibrations, making it essential to align trading strategies with these natural cycles.
CAPITALCOM:GOLDEducation
by GannAstroTrader
Possible shorting opportunity on MNQ for FridayMy directional bias for Friday 17 January 2025 is Bearish with the Focus on price trading lower to fill in the BISI after finding some sort of support in premium levels. My Focus is the PDL at 21171.75 and then possibly the low of the BISI at 21143.75 for the discount draw on liquidity. I also like the fact that yesterday price wicked higher to clear the PDHs and then filled in the premium SIBI and found rejection off the D -OB lower quadrant. So lets see how price delivers today....
CME_MINI:MNQH2025Short
by ProphetTheTrader
8
GANN Intraday Trading: Stop Trading Like a Retail Clown !GANN Intraday Trading: Stop Losing Money Like Retail Traders – Live Trade Breakdown Today, I'm dropping a bomb on the retail herd mentality. This is the live trade I executed just 5 minutes ago, something you'll NEVER see from the 95% of retail losers out there. Why? Because they’re stuck chasing worthless indicators, drawing meaningless trendlines, and blindly following retail 'angles'—all of which are absolute trash. Let me set this straight: price is NOT everything. You’ve been sold lies, and like donkeys, you’ve followed them into the pit of consistent losses. The market moves on TIME, not price. This is something retail sheep will never understand because they’re too busy following the noise. Time is king—Gann himself said it, and today, I’ll prove it. Watch closely as I show you how I knew the exact moment the market would reverse. This is precision retail traders can’t even dream of because they’re stuck in a broken system. Ready to wake up and leave the 95% behind? Watch and learn. Show me the so-called guru or retail trader 'king' who can predict market reversals in advance with pinpoint accuracy like I just did below. They can’t, and you know it. And here’s what happened market reversed exactly at the point I calculated, and unlike the usual retail garbage, I didn’t just talk; I took the live entry too. Do you ever see this level of precision and time-based entry from any so-called 'retail gurus' or 'trendline masters'? No, because they can’t even come close to this. This is the real way to trade—TIME-based trading. The market turned at the exact time I calculated, not just with predictions but with live intraday execution. Using Gann's astro techniques, you can read the market like a banker. This isn’t gambling; it’s precision trading backed by unparalleled insights. Now that you've seen how the market responded precisely to everything I outlined, here’s the complete trade breakdown for your review. Now that we’ve begun the trade explanation, it’s important to note that I won’t be revealing details that aren’t meant for public exposure. Instead, I’ll guide you through a few foundational steps to expand your understanding. In this instance, I calculated the market’s time using the ascendant, which moves approximately 1 degree every 4 minutes on average. You might wonder why I chose the ascendant instead of any planet. Let me clarify: in Gann Astro Trading, especially for intraday trading, no planetary body fits the rapid movement requirements of such trades. The fastest-moving planet, the Moon, doesn’t suit intraday precision but is better suited for swing trading. By understanding these principles, we’re able to execute trades with precise timing and strategic intent. And watch step by step as the market price unfolded exactly as I predicted it would. Precision like this isn't coincidental—it's the result of calculated strategy and deep knowledge of Gann Astro Trading principles. Don't waste time on retail nonsense. Follow me and learn the actual way of trading, where time is the key, not just some random indicators. This is the real deal, not the typical retail approach. Let me show you how the market moves with precision and timing—join me in mastering the true art of trading.
CAPITALCOM:GOLD
by GannAstroTrader
1
How to Calculate the Exact Time of Market Reversal - LIVE TRADEDoes the market feel random to you? Like a casino where your trades are gambles, hoping for the best while fearing the worst? Well, it's time to rethink everything. Markets aren’t random; they operate with algorithmic precision , and in this live trade, I’ll show you exactly how. Using Gann Astro principles combined with advanced mathematics, I calculated the precise time of a market reversal—down to the minute. This isn’t some generic indicator, supply-demand, or support-resistance nonsense that makes you wonder if trading is a rigged game. Retail strategies are like trying to drive blindfolded; they ignore the fundamental truth of the market: time is more important than price , and the market's movements are governed by an intricate algorithmic system. With over 5 years of deep expertise, I’ve moved beyond the clutter of retail methods to uncover how planetary cycles, mathematical models, and time-based analytics drive price delivery . This is not just theory—watch the market respond to the exact reversal I predicted, proving the power of this method. Forget gambling; this is science . If you’re tired of losing money to the randomness of retail tools and want to learn how to master the true precision of the markets, DM me for exclusive one-on-one training. Step into the world of professional trading and leave the chaos behind.
CAPITALCOM:GOLDEducation
by GannAstroTrader
4
Potential trade setup on BRTUSDWe are looking at a short trade on BRTUSD based on the stretch strategy. There is trend and direction alignment with this trade. Trade has taken out the upper stretch but higher timeframes trend and direction is to the downside. We will take the trade with a higher probability towards opposite stretch level being taken out. We will exit the trade once range has been achieved. Trader Order Details: BRTUSD(Short) E - 71.55 SL - 72.43 T - 70.40 We will be tracking this move and updating the post as we go along on the charts and on video. Keep a look out for it traders.
ACTIVTRADES:BRENTShort
by masterthemarkets2010
Transitioning from Successful Demo Trading to Live TradingHow to Avoid Choking Your Live Account The journey from demo trading to live trading is often more challenging than most traders anticipate. The image you’ve shared captures the key steps of this transition—from mastering a demo account to navigating the psychological hurdles of live trading. While demo trading is an essential part of a trader’s education, live trading introduces emotional and psychological challenges that many traders find difficult to manage. Let’s dive into the key stages and explore how to transition successfully without choking your live account. 1. Successful Demo Trading At the start, many traders achieve consistent results in demo trading. In a demo environment, there’s no real money at stake, which allows for calm, calculated decisions and plenty of room for mistakes. It’s here that you develop and fine-tune your strategy without the fear of financial loss. However, the ease of success in a demo account can create a false sense of security about your readiness for live trading. 2. Transition to Live Trading Moving from demo to live trading is a crucial moment. Many traders believe that because they are profitable in demo trading, they are automatically ready to replicate that success in a live account. However, the difference between the two is the introduction of real money and real emotions. The fear of loss and the pressure to protect your capital can interfere with the clear thinking that guided you in the demo environment. 3. Overthinking Begins In live trading, overthinking is a common problem that often creeps in early. Unlike demo trading, where decisions flow effortlessly, live trading introduces hesitation. Traders tend to question their strategies, second-guess their analysis, and get caught up in minute details that don’t necessarily matter. The fear of making a wrong decision becomes amplified when real money is on the line, often causing traders to overanalyze market movements. 4. Paralysis by Analysis As overthinking intensifies, traders can fall into what is known as paralysis by analysis. This happens when you analyze the market so extensively that you become too hesitant to make any trading decisions. Constantly doubting your entry points, second-guessing signals, or being afraid of missing out can lead to missed opportunities and a lack of trading action. At this stage, fear dominates logic, and traders may either overtrade or avoid trading altogether. 5. Trading Failure Inevitably, if you allow overthinking and paralysis to take control, it can lead to trading failure. This failure isn’t necessarily about blowing your account—it’s about failing to follow your trading plan, succumbing to emotional decisions, and deviating from the strategy that made you successful in demo trading. Fear of losing, coupled with poor decision-making, can lead to a downward spiral. 6. Need for Strategy When traders hit a rough patch, they realize the importance of sticking to a well-defined strategy. A consistent strategy should not only outline entry and exit points but also incorporate risk management, stop-loss placement, and clear goals. At this stage, traders must revisit their demo strategies and adapt them to the emotional reality of live trading. Importantly, the need for strategy isn’t just about the technical side—it’s about managing emotions and sticking to the plan under pressure. 7. Implementing Strategies Having a solid strategy is one thing, but implementing it consistently in live trading is a different challenge. This stage is where traders must learn to trust their strategy, let go of the fear of losses, and maintain emotional discipline. It’s crucial to trade small positions at the beginning to minimize the emotional impact of any losses. Gradually scaling up as confidence grows allows for emotional adjustment without the added pressure of large financial risk. 8. Successful Live Trading The final stage is successful live trading, where traders have mastered not just the technical aspects of their strategy but the emotional and psychological elements as well. Success in live trading is marked by consistent execution of a plan, disciplined risk management, and the ability to stay calm during market fluctuations. At this point, you’ve learned to manage your emotions, handle losses gracefully, and take profits when the time is right. Tips to Avoid Choking Your Live Account Start Small: When transitioning from demo to live trading, start with a small account. Even if you’re profitable in demo trading, your psychological state will change when real money is at stake. Trade with smaller positions until you feel comfortable managing your emotions in a live setting. Have a Trading Plan: Stick to the same strategies that worked in your demo account. A well-defined trading plan will give you clear guidelines to follow, even when emotions run high. Make sure your plan includes risk management and contingency plans for when trades don’t go your way. Control Emotions: Live trading introduces a range of emotions—fear, greed, anxiety, and excitement. The key to success is emotional discipline. Set your stop losses and take profits before entering a trade and avoid changing your plan mid-trade based on emotion. Risk Management: Risking too much on a single trade is one of the fastest ways to lose your live account. Never risk more than 1-2% of your total account balance on any trade. This will help you stay calm and reduce the emotional pressure to win every trade. Accept Losses: Losing trades are part of the game. Even professional traders have losing trades, but they manage those losses with proper risk management and emotional control. Accept that losses are a part of trading and avoid chasing the market or trying to win back losses impulsively. Regular Reflection: After each trading session, take time to reflect on your trades. What went well? What could have been improved? This reflection will help you adjust and improve your strategy over time. Conclusion Transitioning from demo trading to live trading is more about managing emotions than it is about mastering the technical aspects of trading. While the technical skills you develop in demo trading are essential, emotional discipline is what separates successful live traders from those who struggle. By starting small, sticking to your strategy, and managing your risk, you can avoid choking your live account and set yourself up for long-term success in the markets.
FX:XAUUSDEducation
by pow_removetheguesswork
Potential trade setup on GBPUSDWe are looking at a short trade on GBPUSD based on the stretch strategy. There is direction alignment with this trade, though the trend is still uptrend phase 2. Trade has taken out the lower stretch. We will exit the trade once range has been achieved. Trader Order Details: GBPUSD(Short) E - 1.3082 SL - 1.3095 T - 1.3024 We will be tracking this move and updating the post as we go along on the charts and on video. Keep a look out for it traders.
Short
by masterthemarkets2010
GBPUSD Live Week 40 Swing zonesAfter 12 weeks of consistent trades; seems about time to trial live. Yep, Week 40 will be real money trades. Starting with a balance of $200 and SL of 10-15 pips, this should give about 13-20 trades before blowout (hopefully not). Some trades will missed, entries off; yea, most of us have a 9-5ish job and need sleep. Week 40 SZz are set. Price action determines trades Trading is risky, am trading with money i can afford to lose. Follow and journey with me
Short
by PinchPips
Dangerous Lies Your Backtest TellsDangerous Lies Your Backtest Tells We are easily hooked on the dopamine rush of seeing profitable equity curves during backtesting. The allure of parabolic returns is often so strong it is blinding to the inherent flaws that exist, to varying degrees, in every backtest. Backtesting, while often seen as an essential step in designing and verifying trading strategies - is far from a foolproof method. Many traders place too much confidence in their backtested results, only to see their strategies fail when used in the live markets. The reality is that backtesting is riddled with limitations and biases that lead to a false sense of security in a strategy’s effectiveness. Let’s take a comprehensive look into the many flaws of backtesting, and explore the common pitfalls of using a simple back test as your only method of verifying a strategy's efficacy. 1. Choosing the Winning Team After the Game is Already Over (Selection Bias) When selecting which instruments for backtesting, it is common to choose assets you are already interested in or those that performed well in the past. This introduces selection bias, as the strategy is tested on assets that may have been outliers. While this may produce impressive backtest results, it creates an illusion of reliability that may not hold up when applied to other assets or future market conditions - a theme that will be common for most of the explored backtesting drawbacks. Example: Imagine backtesting a Long only strategy using only tech stocks that surged during a market boom. The strategy might look incredibly successful in the backtest, but when applied to other sectors or different market phases it will most likely fail to perform - because the selection was based on past winners rather than a broader, more balanced approach. 2. You Only See the Ships that Make it to Shore (Survivorship Bias) Similar to the above, survivorship bias occurs when backtests only include assets that have survived of the test period - excluding those that were delisted, went bankrupt, or failed entirely. This creates a skewed dataset, inflating performance metrics beyond reasonable levels once again. By only focusing on assets that are still around, you overlook the fact that many others didn’t make it - and these failures could have significantly impacted the strategy’s results. By ignoring delisted companies, or rug-pulled crypto projects, you inherently induce a selection bias - as purely because your chosen instruments didn’t go to zero they must have performed better. Example: Suppose you backtest a low-cap cryptocurrency strategy. If your backtest spans for, say, five years the test can give the illusion of success - but what’s missing is the hundreds of tokens that were launched and failed during the same period. How can we possibly assume that we will be lucky enough to only pick tokens that survive the next five years? 3. Reading Tomorrow’s News Today (Look-Ahead Bias) Look ahead bias occurs when future information is unintentionally used in past decision making during a backtest. This can often occur due to coding errors in an automated system which leads to unreasonable and unrepeatable results. Look-ahead bias isn’t limited to algorithmic backtesting - it can also affect manual backtests. Traders will often miss false signals because they can already see the outcome of the trade. This knowledge of the future can affect the accuracy of a manual backtest - both as a conscious decision by the trader but also subconsciously. if Current_Price < Tomorrows_Close strategy.entry("Enter a Long Position", strategy.long) // An extreme example 4. Perfecting the Final Chord, but Forgetting the Song (Recency Bias) Recency bias occurs when traders place too much emphasis on the most recent data or market conditions in a backtest. This usually occurs when a trader feels they missed an opportunity in the past few months - and tries to develop a strategy that would have captured that specific move. By focusing too heavily on recent history, it is easy to neglect the fact that markets usually move in long cyclical phases. This over optimisation for recent conditions will, at best, result in a strategy that performs well in the short term but fails as soon as market dynamics shift. Example Frustrated by missing the most recent leg of the bull market, a trader develops a strategy that would have perfectly performed during this period. However, when the trader begins live trading at the top of the market, the strategy quickly fails. It was only optimized for that short and specific market phase and was unable to adapt to the changing market conditions. 5. Forcing the Square into the Round Hole (Overfitting) Overfitting occurs when a strategy is excessively optimized for historical data, capturing noise and random fluctuations rather than meaningful patterns. Overfitting is common when traders test too many parameter combinations, tweaking their strategy until it fits the past data perfectly. In contrast to the previous point, this over optimisation can occur on data of any length, whether years or even longer periods. Example Adjusting a large range of parameters in a high frequency strategy by incredibly small increments and deciding to use the calibrations that yield the highest performance. 6. Mixing Oil and Water (Conflating Trend and Mean Reversion Systems) Traders often attempt to design strategies that perform well in both trending and mean reverting environments, which leads to muddled logic and poor performance in ALL environments. A trend following strategy is meant to capitalize on sustained price movements, and should naturally underperform during mean-reverting or ‘ranging’ periods. In a range-bound market, a trend-following strategy will often buy near the top of the range after detecting strength, only for the price to reverse. Conversely, a mean reversion strategy is built to profit from oscillations around a stable point and forcing both approaches into a single system results in unrealistic backtest performance and poor real-world results. One of the common mistakes is when a trend following strategy ‘accidently’ performs well during mean-reverting periods. This skews the backtest metrics because any gains during non-trending markets are multiplied significantly during actual trends. As a result, the backtest shows artificially positive performance - but the strategy quickly falls apart in live trading. Normally, a trend following strategy would incur losses during a range-bound market and only begin to recover once a new trend emerges. However, if a strategy is overfit to handle both the trend and mean reversion periods of the past, it doesn’t need to recover losses and instead compounds gains during the entire trend. This creates inflated backtest results that won’t hold up in real trading. Example: A trader develops a trend following system that, through over-optimization, performs surprisingly well during mean-reversion phases. In the backtest, the strategy shows strong returns, even in ranging markets. However, in live trading, the system fails, leaving the trader with poor performance. Instead, the trader should have accepted ‘lower’ returns from a strategy that wasn’t overfit - because in live markets robust strategies with mediocre backtests perform better than overfit strategies that only excel in backtesting. 7. Seeing the World Through a Keyhole (Limited Data Skewed by Outliers) Strategies built on assets with limited data are highly susceptible to skew results, especially when outliers dominate the dataset. Without sufficient data, it becomes nearly impossible to assess whether a strategy can consistently perform into the future. Some strategies, like trend following, are designed to capture outliers, that is, the periods of performance above the norm. The issue arises when testing on a small sample as it’s difficult to determine if the strategy can consistently capture trends or just got lucky. Example: A trader develops a trend following strategy for a cryptocurrency that has recently launched. The backtest shows massive gains, as it is common for projects to make large returns as soon as they are listed. However without enough data history, it is impossible to assess the actual effectiveness of this strategy, as its performance metrics are positively skewed by the ‘listing pump.’ The image shows a cryptocurrency project launched in October 2020. At first glance, the EMA Crossover strategy appears profitable, but a closer look reveals that most of the profit comes from the first trade, which is considered an outlier. If that trade was removed, the strategy as a whole would become unprofitable. Following this strategy is essentially betting on the project to experience another sharp rise similar to what occurred in 2020. While technically this isn’t impossible, it is much riskier - a more proven and verified strategy would increase your probability of success. 8. Designing a Car that Doesn’t Fit on the Road (Execution Constraints and Positions Sizing) In backtesting, real world constraints such as minimum or maximum order sizes are often ignored, leading to unrealistic trade execution. Traders may find that they either don’t have enough capital to satisfy the minimum order size - either immediately or after a small drawdown. Additionally, compounded returns on a backtest can lead to absurd positions sizes that could never be bought or sold in the real market. This particularly is more problematic for deep backtestests. Example: A backtest shows spectacular growth, with the account size ballooning overtime and resulting in an extremely high profit percentage. However, in real-word conditions, the required position size to continue executing the strategy becomes so large that it exceeds the liquidity of the market - making it impossible to receive comparable profit percentages on real world trading. 9. Death by a Thousand Paper Cuts (Not Accounting for Fees, Commissions and Slippage) When performing a backtest, traders often overlook critical transaction costs such as fees, slippages and spreads. These seemingly small costs can accumulate and significantly erode profits, especially strategies that rely on frequent trades with a low average return per trade. Slippage also should include execution slippage - the time delay between receiving a signal from a system, placing an order and its execution. This is particularly problematic for lower timeframe trading where even minor delays can drastically swing a strategy from profitable to unprofitable Example: A day trader runs a backtest on a scalping strategy and sees parabolic returns. However in live trading, the small profits from each trade are wiped out by broker commissions, spreads and the slippage that occurs from both position sizing, and when trades are executed slightly later than expected. This strategy, while successful in the backtest, failed to account for the ‘death by a thousand paper cuts.’ 10. Filling Half of the Grocery Cart (Partial Order Fills) In low liquidity environments, or when trading large position sizes, partial order fills are common - meaning traders only get a portion of their order executed at their desired price. This can significantly impact returns. Backtests will usually assume complete fills at the exact target price. However, in reality a trader experiencing a partial order fill must decide whether to complete the position at a worse price or leave a portion of the target position size out of the market. Both choices will lead to results that are not comparable to the backtested results. Example: A trader places a limit order to buy 100 shares of a low-liquidity stock at a price of $10. The order is only partially filled, with 60 shares bought at $10, while the remaining 40 shares require the new, higher price. The trader now faces the choice of paying more, or leaving part of the trade out. This is a major deviation from the backtest, which assumed the complete position was bought at $10. 11. Betting on Lightning Striking Twice (Black Swan Events) Black swan events are rare, inherently unpredictable, and have a significant impact on financial markets. Strategies designed to avoid drawdowns during these events are at risk of being overfit. Traders often fall into the trap of building systems that avoid drawdowns during past black swan events - overfitting their strategies to these rare occurrences. These strategies are unlikely to succeed in regular market conditions and contain no extra edge in protecting a trader from future black swans events. Example: After the FTX collapse caused a sharp drop in crypto prices, a trader chooses to develop a swing trading strategy designed to avoid all losses during this event. However, by optimizing the strategy to exit positions before the collapse, the trader unintentionally overfits it. As a result, the strategy begins to sell off positions too early in other situations, cutting profits short. Prior to the FTX collapse, the market was still in an uptrend, and there were no clear signs of an impending downturn - so attempting to optimize for such a rare event ends up compromising the strategy’s performance in more typical market conditions. 12. Expecting a Weeks Pay After Only Working One Shift (Time of Day and Day of Week Restrictions) Many traders are only able to trade during specific hours or days of the week, yet their backtests often include data from periods where they are unavailable - such as overnight sessions. This creates an unrealistic expectation of returns. For example, in markets like crypto that trade 24/7, backtesting a day trading strategy on the full market period gives a false impression of potential profits if you can only trade during certain hours. Additionally, market participants also differ depending on the time of day, as entire countries wake up and go to sleep at different times of day. One could make the assumption that human behavior as a whole might be the same, but the number of participants and liquidity will definitely change. Example: A day trader backtests a strategy using 24/7 crypto market data - but is only able to trade on weekday afternoons due to other commitments. 13. Siphoning Gas from a Moving Car (Capital Drain and Addition) Backtests frequently assume infinite compounding, where no capital is ever added or withdrawn from the trading account. In practice, however, traders will regularly add or remove funds - which significantly impacts the performance of a strategy. For instance, withdrawing money during a drawdown forces the strategy to work harder to recover losses, as it now requires higher returns to break even. Similarly, adding capital can skew results by altering position sizing. While it is necessary to manage capital in this way, backtests usually don’t account for these changes and once again, leads to results that are not repeated in practice. Example: A trader consistently pulls a portion of profits from their account each month. In the backtest, no withdrawals are considered, and the strategy appears highly profitable. However, in live trading these regular withdrawals put pressure on the account, and especially over longer periods of time, this reduced level of compound will lead to significant underperformance relative to the backtest due to the reduced compounding effect on returns. 14. Your Subscription Service Increase Price Without You Realizing (Interest Rates and Funding Costs) The ‘cost of capital’ - such as leverage costs, interest rate and funding fees - can fluctuate over time, but backtests often overlook these dynamic costs or even fail to account for them altogether. In live markets, these changes can significantly erode profit margins. Not considering these costs, especially the factors affecting their variability, can easily turn a profitable backtest into an unprofitable strategy in live trading. Example: A trader backtests a strategy for use in cryptocurrency perpetual futures. The strategy is designed for bull markets but fails to account for the rising funding rates frequently seen during periods of high demand. As the cost to maintain an open position skyrockets, the trader’s profit margins quickly shrink, making the strategy far less viable than the backtest indicated. This is particularly dangerous because as the funding fees erode the position’s margin, the liquidation price rises faster than expected, potentially resulting in the entire position being liquidated - even though the trade appeared profitable on paper. 15. You Can’t Ride the Wave Past the Shore (Alpha Decay) In highly competitive markets, especially in high-frequency trading, the edge of a strategy (alpha) can erode over time as more participants exploit similar inefficiencies. This gradual loss of profitability - known as alpha decay - often isn’t captured in backtesting, which assumes static market conditions. Alpha decay is particularly relevant in high-frequency trading, where competition and frontrunning are more intense, while it tends to be less of an issue in higher time-frame swing trading. 16. Playing Chess Against Yourself and Expecting to Win Every Time (Psychological Factors) Psychological biases still affect fully systematic traders. The assumption that traders will follow their strategy without hesitation or emotional interference rarely holds true in live trading, especially during periods of drawdown or high volatility. Manual and automated traders alike feel the same compulsion after experiencing drawdown. The temptation to tweak or abandon a strategy during this period is strong and often leads to the worst decision. It is well documented anecdotally that many traders find that after modifying a ‘losing’ strategy, the new version performs worse than the original, as it has been adjusted to avoid the losses of the past and misses future gains by virtue of overfitting. Example: An algorithmic trader watches as their automated strategy experiences a significant drawdown. Panicking, the trader tweaks the parameters in order to avoid further losses. Shortly after, the original strategy would have recovered, but the modified version continues to struggle as the adjustments were made in reaction to short term losses instead of accounting for long term performance. Final Note: Congratulations if you made it this far! This might not be the most exciting topic, but it’s essential knowledge for every trader and investor. This article was written to warn you of the dangers of relying on backtests - and provides a checklist of common pitfalls to watch out for. Whether you’re running your own backtest or reviewing someone else’s, it’s critical to look beyond the shiny numbers and assess the real-world viability. What looks great on paper may not hold up in the real world. Best of luck in the markets - but remember: stay prudent, and you’ll make your own luck!
INDEX:BTCUSDEducation
by QuantraSystems
6
Potential trade setup on GBPUSDWe are looking at a short trade on GBPUSD based on the stretch strategy. There is direction alignment with this trade, though the trend is still uptrend phase 2. Trade has taken out the lower stretch. We will exit the trade once range has been acheived. Trader Order Details: GBPUSD(Short) E - 1.3274 SL - 1.3307 T - 1.3217 We will be tracking this move and updating the post as we go along on the charts and on video. Keep a look out for it traders.
Short
by masterthemarkets2010
U.S. Dollar Index Upward Price Movement Until End of September?Here’s my analysis of the chart: I anticipate an upward movement in the U.S. Dollar Index until the end of September. Please note, this is based solely on time analysis, so the bar charts displayed do not predict future price levels. The trade is still in its early stages, making it relatively low-risk. However, if the price falls below the current candle (first vertical line), this analysis will no longer be valid. Let's see how it plays out, but be prepared to reassess if the price action invalidates the analysis. SpaceIchimoku
TVC:DXYLong
by SpaceIchimoku
9/16 LIVE TRADING IDEAS (STOCKS, FX, & COMMODITIES) | EDUCATION Join me as I document trading ideas for tomorrow 9/16/2024 and look through our watchlist for trading ideas. This is for educational & documentation purposes. As a part of our accountability challenge we are responsible for tracking our trading ideas daily and reviewing markets to train our eyes to look for our edge. STOCKS, FOREX, & COMMODITIES Watchlist. I use technical analysis to qualify trading opportunities and strickly pay attention to the daily chart. Feel free to leave comments on what you agree with or what you think is rubbish. This is a community effort and all opinions are welcome. Trade Safe, TL Turner
by TLTurnerTV
GBP/JPY Trade Setup: Short Position on Rising WedgeI've identified a rising wedge pattern on the GBP/JPY hourly chart and have taken a short position based on this bearish formation. I'm executing this setup with two entries: First Entry: At the top of the rising wedge, with an entry at 189.520. Second Entry: On a confirmed break of the wedge, around the 187.93 area, based on an hourly close below the pattern. The rising wedge is often a precursor to a bearish reversal, and I'm positioning for a downside move. This two-pronged entry strategy allows me to capitalize on both the potential resistance at the top and the momentum if the wedge breaks to the downside. I'll continue to monitor the trade and update as it progresses.
Short
by CryptoHydro
USD/CAD Trade Setup: Long Position from Fibonacci Golden PocketI've entered a long position on USD/CAD, using the Fibonacci retracement for my setup. The entry is based on the golden pocket level, a key area between the 61.8% and 65% retracement levels, which often acts as strong support. Although I've been underwater on this trade for a while, I'm still confident in the strength of the golden pocket. My stop loss is strategically placed below this level at 1.37115 to protect against further downside. I'm targeting the 0.382 Fibonacci level for my final take-profit at 1.38110. I'm also considering adding to my position if we get a four-hour close above the EMA on the 4-hour chart, which would further confirm the bullish setup. I'll keep you posted as the trade develops.
Long
by CryptoHydro