Get started

Moving Averages

Understanding the Renko Bricks (Educational Article)Today we are going to study a chart which is called a Renko chart. Renko chart is a chart which is typically used to study price movement. I use Renko chart many times to determine supports and resistnace. I find it easy and accurate way of determining supports and resistances. The word Renko is derived from Japanese word renga. Renga means brick. As you can see in the chart below it shows a kind of Brick formation. The brick size is determined wither by the user and mostly it depends of typical average movement on the stock historically. A new brick is formed once the price moves upwards on downwards in the same proportion or ratio of the typical brick. New brick is only added post the price moves in that particular proportion. A new brick might not be added in months if the price movement is not as per the ratio. At the same time a new brick might be added in a day or few bricks in a week is price moves accordingly. We will try to understand this concept further by looking at the chart in the post. We have used the chart of Reliance industries to understand this concept and concept only. Please do not consider this buy or sell call for the stock. As you can see in the above chart I have used a combination of RSI, EMA (50 and 200 days) and Bollinger band strategy. RSI support for Reliance is at 35.89 with current RSI at 40.13. Bollinger band suggests that support might be round the corner for the stock. The peaks from previous tops are used to find out further supports and resistances. Mid Bollinger band level and Bollinger band top level coincide with other pervious tops making them tough resistance when the price moves upwards. Mother line EMA is a resistance now and Father line EMA support is far away. All these factors indicate the support zones for the stock to be around 2736, 2657, 2601 and 2561 in the near term. Resistance for Reliance seem to be at 2814, 2972, 3006, 3048 and 3202 levels. Let me give a disclaimer again. The above data is for analysis purpose and to understand Bollinger band, RSI, effect of EMA and Renko Bricks only. Please do not trade based on the information provided here as it is just for understanding Renko charts. Disclaimer: There is a chance of biases including confirmation bias, information bias, halo effect and anchoring bias in this write-up. Investment in stocks, derivatives and mutual funds is subject to market risk please consult your investment advisor before taking financial decisions. The data, chart or any other information provided above is for the purpose of analysis and is purely educational in nature. They are not recommendations of any kind. We will not be responsible for Profit or loss due to descision taken based on this article. The names of the stocks or index levels mentioned if any in the article are for the purpose of education and analysis only. Purpose of this article is educational. Please do not consider this as a recommendation of any sorts.
NSE:RELIANCEEducation
by Happy_Candles_Investment
SWING TUTORIAL - TECHMIn this tutorial, we try to understand how and why the stock NSE:TECHM started going upward and how we can find the best entry while reading charts. The stock had started forming a Support at 1000 levels at June 2022 and since been retesting the same level again up to April 2023. During the same time we can observe how the MACD levels consistently kept moving upwards. This indicated that momentum was gaining and it slowly starting to turn bullish. Once the MACD finally made a successful crossover after close to 52 weeks in April 2023, this is where our Entry got created. Eventually slowly making its way right up to the Swing High levels. This trade is still in play and will probably retest its Swing High levels in the coming weeks. And if the MACD line and signal are still as split away from each other as they are on the monthly timeframe, this could also breakout from the Swing High levels and going all the way further. What do you think about this Tutorial? Would you like to more such Tutorials in the future? Give your comments in the Comments Section below:
NSE:TECHMEducation
by thepranam
The SAFEST Entry Technique - 18 Period Moving Average MethodA great deal of viewers have contacted me asking how I "time" the market. In other words, once I've identified a market as "set up" (via COT strategy or Valuation Strategy), how do I get into a trade. This video is the first in a series that will outline the entry techniques that I use. 18 PERIOD MOVING AVERAGE ENTRY METHOD: By far, this method is the safest change of trend confirmation that you will find. There are other entry techniques that will get you into the market sooner, sure. But those other entry techniques come with greater risk, and could be called "bottom picking" to some degree. The 18 Period MA Entry Method is simple. STEP 1: Plot the 18 period SMA on your chart based on the closing price. STEP 2: For LONGS , you need to see two full range candles form ABOVE the MA. From there, mark out the highest high of those 2 candles. When price trades up into that high, the trend has officially changed to bullish. For SHORTS , you need to see to full range candles form BELOW the MA. From there, mark out the lowest low of those 2 candles. When price trades down into that low, the trend has officially changed to bearish. CAVEAT: We do not count inside bars (bars that form within the range of the previous candle). If you see inside bars, skip them and continue your 2 bar count. STEP 3: Enter at market when high/low is breached. Risk management is something I will review in another video, but generally, I add/subtract 120%-150% of the 3 bar ATR. CLARIFICATION: To be clear, this entry technique should not be traded blindly. You need to have a REASON to take the trade (for example, COT strategy suggests a market is setup for a trade, or the Valuation/Ducks in a Barrel setup suggests a market is setup for a trade). CREDIT: I credit Larry Williams, Tom DeMark, Brian Schad & Jake Bernstein for their influence in these ideas. If you have any questions about this entry technique, feel free to shoot me a message. Good Luck & Good Trading.
Education
by Tradius_Trades
2
How to ride trend and exit positions using Shlionz MAsBuy Signal: Trend Start: Buy when EMA 50 crosses above EMA 200. Pullback Entry: Buy when the price pulls back to MidBB or EMA 50 in an uptrend, with WMA 10 crossing above MidBB. Confirmation: EMA 5 crossing above EMA 10 (WMA 10) can serve as additional confirmation for entry. Sell Signal: Trend Reversal: Sell when EMA 50 crosses below EMA 200. Pullback Exit: Sell if WMA 10 crosses below MidBB or EMA 50 after a pullback. Confirmation: EMA 5 crossing below EMA 10 (WMA 10) can signal a potential exit or further downside. Risk Management: Stop-Loss: Below MidBB or EMA 50. Take-Profit: At key resistance levels or based on a risk-to-reward ratio. Implementation Summary. Buy Entry: EMA 50 crosses above EMA 200. Price pulls back to MidBB or EMA 50. WMA 10 crosses above MidBB. EMA 5 crosses above WMA 10 for confirmation. Sell Exit: EMA 50 crosses below EMA 200. Price closes below WMA 10 and MidBB. EMA 5 crosses below WMA 10 for confirmation. Incorporating EMA 5 adds a faster-moving element to your strategy, helping you to react more quickly to short-term changes and providing additional confirmation signals.
COMEX:GC1!Education
by shlionz
A Guide on How to Stay on the Right Side of Market RiskStaying on the right side of the market is the only thing that matters in investing. The goal is simple: be long the things that go up and avoid the things that go down. Although this sounds straightforward, investors often focus too much on the upside potential and forget about the downside. In reality, avoiding the downside is by far the most important factor that will have the biggest impact on your total returns. This is because a -50% loss will always require a +100% gain just to break even. Step 1: Follow the Trend The most effective method to stay on the right side of the market is by following the trend, primarily through moving averages. The two most common types are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). The EMA assigns more weight to recent price movements, making it more responsive and effective for signalling the start of a downtrend, while the SMA offers a clearer view of the longer-term trend. The simplest way to construct a trend-following indicator is to combine a short-term EMA with a long-term EMA. A buying signal is triggered when the short-term EMA crosses above the long-term EMA, and a selling signal is triggered when it crosses below. This systematic approach ensures clear and actionable signals. Optimizing this strategy involves backtesting various EMA combinations to strike a balance between minimal trading frequency, lowest maximum drawdown, and highest profit factor. It’s also crucial to select assets that have historically adhered to trends, as these are more likely to continue doing so. Assets that typically adhere to trends, such as cryptocurrencies, fiat currencies, commodities, and tech stocks, are often driven by speculative or uncertain future expectations. By incorporating a longer-term SMA and adding a safety margin to the calculation, you can help minimize false signals from the EMAs. It’s advisable to compare asset performance not only against the USD pair but also against the safest investable asset in the selected asset class. This comparison helps determine if the additional risk is worth taking. Step 2: Draw the Lines Trend-following strategies are effective only with a clear market trend. Without it, prices may exhibit range-bound movements and generate false signals. Drawing trend lines and identifying horizontal support and resistance levels are crucial for enhancing the accuracy of these signals. The most reliable entry points typically follow a confirmed breakout from these lines, with older lines often indicating more significant breakouts. When drawing trend lines, it’s crucial to use both normal and logarithmic chart scales. The most reliable trend lines appear consistent across these scales, with a breakout observed on both further confirming the trend. Additionally, identifying reliable patterns like head and shoulders, inverse head and shoulders or double tops and bottoms can further validate trend breakouts. TradingView’s pattern recognition tools can automate this process and provide price targets, which can be helpful but are not always guaranteed. Step 3: Understand the Macro Following current macroeconomic conditions can enhance your understanding of the overall business cycle. The primary macro forces that influence asset markets are growth, inflation, and policy. These factors are subjective and not directly quantifiable, making them unsuitable for direct investment decisions. However, they are useful for assessing the market’s risk appetite, which should influence only your position size and not your systematic approach. The US Composite Leading Indicator (CLI) is one of the most informative macroeconomic indicators, providing insights into potential economic growth trends and helping anticipate inflections in the business cycle. Monitoring the US inflation and unemployment rates is also beneficial, as they significantly influence monetary policy. While minor fluctuations may not provide much insight, sustained trends that align with the Federal Reserve’s targets of 2% inflation and low unemployment are indicative of a healthy economy. Furthermore, tracking global liquidity can reveal the real-time effects of monetary and fiscal policies implemented by major central banks and governments. This serves as a valuable tool to assess the market’s risk appetite. In conclusion, this guide helps investors stay on the right side of the market by adopting a systematic approach that captures bull markets while avoiding major downturns. Recognizing that the future is unpredictable and that markets are driven by momentum, this method can both preserve and grow your wealth in a less stressful way. A disciplined, systematic approach, executed dispassionately, is essential for navigating market uncertainties. All indicators discussed are publicly available or can be accessed on my profile. Disclaimer: This article is for informational and educational purposes only and should not be construed as investment advice.
NASDAQ:NVDAEducation
by ingeforberg
5
Navigating the Waves: Elliott Wave Theory and Key IndicatorsEducational Technical Analysis on example chart of UFO Moviez India Elliott Wave Analysis and Key Moving Averages Disclaimer This study is for educational purposes only and does not constitute trading or investment advice. The analysis presented focuses on one potential scenario based on Elliott Wave Theory and other technical indicators. Trading and investing involve substantial risk, and individuals should consult a financial advisor before making any decisions. Introduction to Elliott Wave Theory Elliott Wave Theory is a form of technical analysis that traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective activities. The theory posits that stock prices move in predictable patterns or "waves" based on investor sentiment. Principles of Elliott Wave Theory 1. Wave Patterns: According to Elliott, market prices move in five waves in the direction of the main trend (impulse waves) and three waves in a correction against the main trend (corrective waves). 2. Wave Degrees: Waves are fractal in nature, meaning that smaller waves form part of larger waves, and this pattern repeats on all time frames. 3. Wave Characteristics: - Wave 1: Usually the smallest impulse wave. - Wave 2: Corrects Wave 1 but does not exceed its starting point. - Wave 3: Typically the strongest and longest wave. - Wave 4: Corrective wave that is usually less severe. - Wave 5: Final leg in the direction of the main trend. Current Analysis of example chart of UFO Moviez India Based on the chart and Elliott Wave Theory, UFO Moviez India is currently suggesting an impulsive and momentum-driven 3rd of the 3rd wave ahead, with an invalidation level at 106. Key Observations: 1. Wave Count: - Wave (1): An initial 5-wave impulse has completed. - Wave (2): A corrective ABC pattern. - Wave (3): Currently unfolding with sub-waves i, ii, iii, iv, and v marked. - Wave 3: In the larger context is forming. 2. Breakout: - There is a breakout above the downward trendline with good volumes, indicating strong bullish momentum. 3. Key Moving Averages: - Price Trading Above: - 50 EMA, 100 EMA, and 200 EMA - 50 WEMA, 100 WEMA, and 200 WEMA - Crossed above 20 MMA Technical Indicators and Levels - Price: 148.54 INR (as of the latest close) - Support Levels: - Nearest Invalidation Level: 106 INR - Major Support: 57.20 INR - Resistance Levels: - Immediate Target: 175.58 INR (Wave 1 of larger degree) - Fibonacci Extension Target: 220.51 INR (1.618 extension of Wave 1) Conclusion The Elliott Wave analysis of example chart of UFO Moviez India indicates a potentially strong bullish trend as the stock is in the 3rd wave of a larger impulse. The breakout above the trendline with significant volume further supports this bullish outlook. However, it is crucial to monitor the invalidation level at 106 INR, as a break below this level could invalidate the current wave count and suggest a different scenario. Educational Purpose Notice This analysis is provided for educational purposes only. It is not an investment or trading advice or tip. Trading and investing in financial markets involve risk, and it is important to do thorough research and consult with a financial advisor before making any investment decisions. I am not Sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses. Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Hope this post is helpful to community Thanks RK💕 Disclaimer and Risk Warning. The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
NSE:UFOEducation
by RK_Chaarts
2
5 tips for building a professional trading mindsetHey traders Building a professional trading mindset is crucial for success in the forex market. Here are five tips to help develop and maintain a professional approach: 1 . Develop Discipline and Patience: Stick to a Trading Plan: Develop a detailed trading plan that outlines your strategies, risk management rules, and goals. Adhere to this plan consistently to avoid impulsive decisions. Be Patient: Understand that success in trading doesn't happen overnight. Be patient and wait for the right trading opportunities that align with your plan. 2 . Embrace Continuous Learning: Stay Informed: Keep up-to-date with market news, economic indicators, and geopolitical events that can impact the forex market. Learn from Mistakes: Analyse your trades, both successful and unsuccessful, to identify what worked and what didn’t. Use this knowledge to improve your strategies. 3 .Manage Emotions: Stay Calm Under Pressure: Trading can be stressful, especially during volatile market conditions. Practice techniques to manage stress and maintain a clear, focused mind. Avoid Overtrading: Don’t let emotions drive you to overtrade. Stick to your trading plan and avoid chasing losses or getting overly greedy after wins. 4 . Implement Strong Risk Management: Use Stop-Loss Orders: Protect your capital by setting stop-loss orders to limit potential losses on each trade. Diversify Trades: Avoid putting all your capital into a single trade. Diversify your trades to spread risk across different currency pairs or financial instruments. 5 . Set Realistic Goals and Expectations: Define Clear Objectives: Set specific, measurable, achievable, relevant, and time-bound (SMART) goals for your trading activities. Understand the Learning Curve: Recognise that becoming a successful trader takes time and effort. Set realistic expectations regarding your progress and returns. By incorporating these tips into your trading routine, you can build a professional mindset that enhances your decision-making, improves your performance, and increases your chances of long-term success in forex trading.
Education
by Costy13
6
How to use Moving Averages like a proIn this video I describe how I use Moving Averages to trade and to stay in sync with the market. Popular Moving averages include the 9, 21, 50, or 200. Feel free to use Simple Moving averages or Exponential moving averages, both works fine, and I like to use the EMAs because they are a little quicker to respond to price movement. I also go over a trading strategy for going long or short in the market once the 50 EMA starts to change directions, I will take a position in that direction. So, if the 50 EMA goes down for a long time, I will take a long once it starts to point up. Thank you for watching!
NASDAQ:QQQEducation
by PappyTrading
You are (probably) using MAs wrongWhen it comes to moving averages, people tend to forget what they are. A moving average is just as the name suggests - an average of the chosen number of candles that moves (once a new candle prints). I know it seems obvious to most, but why then, when it comes to lengths we seem to be so confused about it? When choosing the length of a MA - what do you look for? "Magical" Fibonacci Numbers? Most common length 200, because you were told that's what everyone uses? But let's thing about it for a second. What is an EMA200, for example? It's an exponentially weighted average of the past 200 candles. So why would it be so "important"? MA200, if you're on a 15-minute timeframe represents two hundred 15-minute candles, or, in different words - an average price of the past 50 hours. MA200 on a 5-minute timeframe represents two-hundred 5-minute candles, which equals to about 16 and a half hours. Is there anything special about the average price of the past 16.5 hours? Of course not. The way moving averages should be looked at, in my humble opinion is by using them to look at an average price of the past periods that actually matter. Periods like Daily, Weekly, Monthly. If you're a scalper who trades 1-minute charts, perhaps you want to know what the average price of the past 15 minutes, 1 hour and 4 hours is. To do that you would divide 15 by 1, giving you MA length of 15 representing the average price of the past 15 minutes. If you're a day trader, like me, who loves trading 5 and 15-minute timeframes, I want to know the average prices of the past hour, 4 hours and Daily. Weekly and Monthly averages also give me potential targets, or potential areas of interest. Hence the length of forementioned moving averages would be 12, 48, and 288 (on a 5-minute chart) and 4, 12, and 96 (on a 15-minute chart). I recently created an Indicator that automatically calculates these lengths based on your chosen higher timeframes of interest and your current timeframe, so you don't need to calculate these lengths yourself. However, you can very easily do the same by making a simple calculation. How many of my current timeframe candles are in a higher timeframe that I want to know. You can use the same method in calculating length of other things, like a RSI, for instance. Perhaps you wondered, like I did, why the period 14 is used to calculate the RSI. Fortunately we can adjust these periods and perhaps find an edge in the market. Hope this short post clarifies some things. I will be publishing the Timeframe Based Moving Averages script soon. Cheers
PEPPERSTONE:BTCUSDEducation
by hundredtoamillion
Myopic loss aversion and market experience█  Myopic loss aversion and market experience Myopic Loss Aversion (MLA) is a behavioral bias that severely affects trading behavior, particularly the tendency to avoid losses more aggressively than to pursue equivalent gains. This bias can lead you to make suboptimal decisions, such as selling winning assets too quickly or holding onto losing assets for too long. Today, we're exploring a study by Mayhewa et al. that explores the interaction between MLA and market experience. Quick Results: Remarkably, experienced traders showed significantly reduced signs of MLA when operating in familiar market environments or under conditions of low-frequency information updates. This suggests that both familiarity with market dynamics and a strategic reduction in the overload of market information can help temper emotional, short-sighted decision-making. █  Study Overview ⚪ Methodology and Participant Structure The research, conducted by leading economists, employed an experimental market setup where participants engaged in trading sessions under controlled conditions. The study distinguished between inexperienced and experienced traders to gauge how repeated market exposure influences MLA. Participants were divided into two main groups based on their trading experience, with further subdivisions based on the frequency of financial information they received. One group received continuous updates (high-frequency information), while another received less frequent updates (low-frequency information), allowing the study to isolate the impact of information frequency on trading behavior. ⚪ Experimental Design The core of the experimental design involved a series of trading tasks where participants were required to make investment decisions across several trading periods. The study introduced a key modification from previous research by incorporating a 'moving average' display—showing the average asset values alongside real-time prices. This addition was intended to reduce cognitive load and help participants make more informed decisions by providing a clearer context for the asset's performance over time. ⚪ Initial Hypotheses The researchers hypothesized that: Traders with more market experience would exhibit less myopic loss aversion than their less experienced counterparts. Providing a moving average of asset values would help mitigate the MLA effect by smoothing out the emotional impact of short-term price fluctuations and emphasizing longer-term trends. Less frequent information updates might reduce MLA by limiting the 'noise' or emotional reaction to price movements, thus encouraging more rational, long-term thinking. █  Key Findings ⚪ Impact of Information Frequency The frequency at which traders receive market information plays a crucial role in shaping their trading decisions and susceptibility to Myopic Loss Aversion (MLA). The study found that high-frequency information updates, which provide continuous price data, tend to exacerbate MLA. This is because constant exposure to market fluctuations heightens emotional responses, leading traders to make more short-term decisions to avoid perceived losses. Conversely, less frequent information updates can help mitigate MLA. By reducing the noise from constant price movements, traders are encouraged to focus on longer-term trends rather than reacting to short-term volatility. ⚪ Role of Market Experience The study revealed that experienced traders with substantial exposure to market dynamics show markedly reduced signs of MLA in familiar trading environments. These traders may be better equipped to handle the emotional pressures of trading, well not so much. The research also indicated that experienced traders might revert to MLA behaviors in different trading setups or allocation tasks with which they are less familiar. ⚪ Moving Averages and Cognitive Effects The findings suggest that displaying moving averages is effective in reducing MLA. Traders with access to moving averages were less likely to make impulsive decisions based on short-term losses. Instead, they were more inclined to consider the overall trend and value of the asset over time. This cognitive tool helps traders maintain a broader perspective, which is crucial for mitigating emotional biases and making more informed, strategic decisions. █  Conclusion Understanding and mitigating Myopic Loss Aversion (MLA) is crucial for improving trading outcomes, particularly in the volatile and fast-paced markets. Experienced traders tend to exhibit lower levels of MLA in familiar environments, but they are not entirely immune to it. The context-dependent nature of MLA reduction among experienced traders highlights the importance of continuous adaptation and learning. Additionally, reducing the frequency of information updates and utilizing moving averages can help traders maintain a broader perspective, further mitigating the impact of MLA. █  Reference Mayhew, B. W., & Vitalis, A. (2014). Myopic loss aversion and market experience. Journal of Economic Behavior & Organization, 97, 113-125. doi:10.1016/j.jebo.2013.10.007 ----------------- Disclaimer This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
Education
by Zeiierman
1
Trend Definition: NVDA ExampleUptrend Rules Strong : Second closing candle above the high of the first breakout candle. Semi-strong : Price reaches above the high of the breakout candle at any point. Weak : The second candle post-breakout closes above the 34 EMA (high) of the breakout candle. Downtrend Rules Strong : Two consecutive candle closes below the 34 EMA (Low). This does not consider the relative levels of these closes, only that both are below the 34 EMA (Low). Semi-strong : Price drops below the low of the first breakdown candle at any point. Weak : A second candle closes below the low of the first breaking candle, establishing lower lows.
NASDAQ:NVDAEducation
by cch31
Double EMA Strategy...For Beginners Hey Rich Friends, Happy Monday! It's a new week which means many new opportunities to get into the market...but it doesn't mean that you have to take all of them. Make sure you focus on finding the best setups by sticking to your plan and following your confirmation checklist. The best out of 25 will give you a good idea of your win/loss ratio. If you are still struggling to find a SIMPLE strategy that works for you, try using this Double EMA strategy that I apply to my trades. Let me know what you think and if it works for you! Today we will cover: 1. How to use EMAs on Tradingview 2. Double EMA Strategy 3. Feel confident taking a buy or sell in Forex trades 4. Trade with the trend Peace and Profits, Cha
Education
0
by MoneyMantraCha
19
Where to Put Your TP and SL | Learn in 10 MinutesHey Rich Friends, This quick video will explain how I easily find my TP and SL for my Forex Trades. I've noticed how many new traders struggle with this, so hopefully this video will help. Here is what I do: 1 . Identify the overall trend of the market. It is important to understand that a Selling market will look like a roller coaster going up, have more red candles and it will continue to create Lower Highs and Lower Lows. A Buying market will look like a roller coaster going down, have more green candles, and continue to create Higher Highs and Higher Lows. This is very important. 2 . Collect my confirmations for the potential trade. Here are some questions I ask myself: - What color is the current candle? - Are the candles above or below my EMAs? - Have the EMAs crossed? - Is my Momentum indicator facing up or down? Is it positive or negative? - Is my Stochastic facing up or down? Is the Indicator's financial value above 50? These are the answers you should get: - Bullish/Buying: Green, Above, Up, Over, Higher, and Positive - Bearish/Selling: Red, Below, Down, Under, Lower and Negative 3. Enter the market at Market Execution or set a Pending Order. 4. Choose my TP and SL using the Long position tool for buying and the Short position tool for selling. Buys: Place TP above previous high and SL below the previous low Sells: Place TP below previous low and SL above the previous high - Peace and Profits, Cha
Education
0
by MoneyMantraCha
10
RSI as a Trend ToolMost people use the RSI as a momentum indicator, trying to find Overbought/Oversold (OBOS) conditions, and/or divergences. However there is also a way to use it as a Trend Tool. There is a mathematical relationship that connects the RSI and EMA's. The formula is RSI(x) cross-over 50-line = Close cross-over EMA(2x) i.e. RSI(14) cross-over 50 line = Close cross-over EMA(28) This one of the properties of the RSI, which I discovered when taking a more indept look into momentum indicators, which ultimately led to the discovery of the MACD-v in 2014/2015 The MACD-v was then publicly disclosed in 2022, in the form of a a paper called "MACD-v: Volatility Normalised Momentum", which was awarded: It has won 2 International Awards: 1. The “Founders Award” (2022), for advances in Active Investment Management from the National Association of Active Investment Managars (NAAIM) 2. The “Charles H. Dow Award” (2022) for outstanding research in Technical Analysis, from the Chartered Market Technicians Association (CMTA)
CME_MINI:ES1!Education
by AlexSpiroglou
AMA versus SMA. Is smarter really better?█ Adaptive versus Simple Moving Average Trading Strategies. Is smarter really better? Computer-aided trading systems have revolutionized the way trading decisions are made. We now employ sophisticated algorithms to predict market movements and execute trades at optimal times. Among these, moving average(MA) strategies stand out for their simplicity and effectiveness among the many available strategies. This study by Craig A. Ellis and Simon A. Parbery compares two prominent MA strategies: the Adaptive Moving Average(AMA) and the Simple Moving Average(SMA). Conclusion: While adaptive moving average strategies may provide an edge in certain market conditions by capturing trends more efficiently than simple moving averages, investors must carefully consider transaction costs. These costs can significantly impact net returns, particularly in frequent trading strategies. Findings suggest that the effectiveness of adaptive versus simple moving average trading strategies is nuanced in varying market conditions, with no one-size-fits-all answer. Investors should weigh the potential benefits of adaptability against the increased costs and risks associated with such strategies. █ Moving Average Trading Systems Among the various types of moving averages, the Simple Moving Average(SMA) and the Adaptive Moving Average(AMA) are particularly noteworthy due to their distinct characteristics and applications in trading strategies. ⚪ Simple Moving Average and Its Calculation SMA is one of the most basic moving averages in trading. It calculates the average price of a security over a defined number of periods. The SMA is straightforward to compute; you sum up the security's closing prices for a set number of periods and then divide this total by the number of periods. This process results in a smooth line that traders can overlay on their price charts to assess the direction of the trend. For example, a 20-day SMA would add up the closing prices of the past 20 days and divide the total by 20. This calculation is continuously updated as new closing prices become available, giving traders a dynamic view of the market's trend. // Function to calculate the SMA using an array sma(source, length) => // Initialize an array to hold the prices prices = array.new_float(length) // Fill the array with the most recent `length` prices for i = 0 to length - 1 array.set(prices, i, source ) // Calculate the sum of the array elements sum = array.sum(prices) // Return the average sum / length ⚪ Adaptive Moving Average and Its Calculation The Adaptive Moving Average (AMA), proposed by Perry Kaufman in his book "New Trading Systems and Methods," represents a significant advancement in moving average technology. Unlike the SMA, which gives equal weight to all data points, the AMA adjusts its sensitivity based on the market's volatility. This adaptability makes the AMA particularly useful in identifying market trends with varying degrees of volatility. The core of the AMA's adaptability lies in its Efficiency Ratio (ER), which measures the directionality of the market over a given period. The ER is calculated by dividing the absolute change in price over a period by the sum of the absolute differences in daily prices over the same period. // Calculate the Efficiency Ratio (ER) change = math.abs(close - close ) volatility = math.sum(math.abs(close - close ), length) ER = change / volatility The ratio helps determine how efficiently the price is moving in one direction. A higher ER indicates a more directional market, prompting the AMA to react quickly to price changes. A lower ER suggests a consolidating market, leading the AMA to respond more to recent price changes. █ Data and Research Methodology The data set encompasses daily closing prices for three major stock indices: the Australian All Ordinaries, the Dow Jones Industrial Average (DJIA), and the S&P 500, spanning from 1980 to 2002. This period provides a comprehensive view of market behavior, including various economic cycles, bull and bear markets, and periods of high volatility. Such a diverse data set is crucial for testing the robustness of the AMA in different market environments. This study investigates whether AMA's adaptive nature results in superior performance compared to the more static SMA and the passive buy-hold approach. The key steps in the research methodology include: Parameter Selection: Identifying optimal parameters for both AMA and SMA to ensure a fair comparison. This involves selecting the look-back periods and thresholds for triggering buy or sell signals. Strategy Implementation: Developing trading strategies based on AMA, SMA, and a buy-hold benchmark. Each strategy is applied to the data set to simulate real-world trading, with buy or sell signals generated according to the specific rules of each approach. Performance Evaluation: The performance of each strategy is assessed using several metrics, including total return, risk-adjusted return, and maximum drawdown. This comprehensive evaluation aims to determine the effectiveness of AMA in navigating various market conditions compared to SMA and buy-hold strategies. Statistical Testing: Conducting statistical tests to ascertain the significance of the differences in performance outcomes among the strategies. This includes tests for statistical significance in returns and risk metrics, providing a robust framework for comparison. Sensitivity Analysis: Exploring how changes in the parameters of AMA and SMA affect the strategies' performance. This analysis helps understand the flexibility and adaptability of AMA in response to different market dynamics █ Results The empirical analysis focused on comparing the performance of Adaptive Moving Average (AMA) and Simple Moving Average (SMA) strategies across a variety of indices, including the S&P 500, Dow Jones Industrial Average (DJIA), and NASDAQ. The performance metrics were primarily based on the total return over the investment period, the Sharpe ratio, and the maximum drawdown to assess each strategy's risk-adjusted returns and resilience during market downturns. The table demonstrates that the AMA strategy consistently outperformed the SMA strategy across all indices regarding total return and Sharpe ratio, indicating a superior risk-adjusted return. However, it's important to note that the AMA strategy also experienced slightly higher drawdowns than the SMA in certain instances, suggesting a potentially higher risk during market downturns. ⚪ In discussing the market timing ability of AMA, the analysis found that AMA could better adapt to changing market conditions, thereby capturing trends more efficiently than the SMA strategy. This adaptability resulted in higher returns during periods of significant market movements. However, when accounting for transaction costs, the advantage of AMA over SMA diminished, particularly in markets characterized by frequent, small movements that triggered more trading activity by the AMA strategy. █ Reference Ellis, C. A., & Parbery, S. A. (2005). Is smarter better? A comparison of adaptive, and simple moving average trading strategies. Research in International Business and Finance, 19, 399-411. ----------------- Disclaimer This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
OANDA:XAUUSDEducation
by Zeiierman
7
Beating the S&P500 (SPX) Buy&Hold strategy by 16 timesS&P500 (SPX) strategy using Stochastic RSI Min-Max, normalized Volatility and Trailing Stop signals, beats the Buy&Hold strategy by 16 times Embarking on the quest to time the market accurately, the 'Holy Grail' of strategies, led me to create a script to approach this goal. Unlike other strategies that I tested, this one not only surpasses the long-term S&P500 Buy&Hold approach but does so by a remarkable 16.38 times! Initially, I employed an A.I. program based on an LSTM Neural Network using TensorFlow. Despite achieving a 55% next-day prediction accuracy for short/long positions, I sought improvement using a heuristic pine-scripting approach, incorporating stochastic RSI oscillators, moving averages, and volatility signals. With default parameters, this strategy, freely available as "XPloRR S&P500 Stock Market Crash Detection Strategy v2" delivered a staggering 2,663,001% profit since February 1871. In the same period, the Buy&Hold strategy "only" generated 162,599% profit. Picture this: a $1,000 investment in 1871 would now be worth $26,630,014 by February 2024. Check it out for yourself loading this strategy. The script operates as a Stochastic RSI Min-Max script, automatically generating buy and sell alerts on the S&P500 SPX. What sets it apart? The strategy detects "corrections," minimizes losses using Trailing Stop and Moving Average parameters, and strategically re-enters the market after detecting bottoms using tuned Stochastic RSI signals and normalized Volatility thresholds. Tailor its parameters to your preference, use it for strategic exits and entries, or stick to the Buy&Hold strategy and start new buy trades at regular intervals using buy signals only. In the pursuit of minimizing losses, the script has learned the effectiveness of a 9% trailing stop on trades. As you can clearly see on the upper graph (revolving around 100), the average overall green surfaces (profits) of all trades are much bigger than the average red surfaces (losses). This follows Warren Buffets first rule of trading to "Never lose money" and thus minimizing losses. Update: Advanced S&P500 Stochastic RSI Min-Max Buy/Sell Alert Generator I have also created an Alerter script based on the same engine as this script, which auto-generates buy and sell alert signals (via e-mail, in-app push-notifications, pop-ups etc.). The script is currently fine-tuned for the S&P500 SPX tracker, but parameters can be fine-tuned upon request for other trackers or stocks. If you are interested in this alerter-version script or fine-tuning other trackers, please drop me a message or mail xplorr at live dot com. How to use this Strategy? Select the SPX (S&P500) graph and set the value to "Day" values (top) and set "Auto Fit Data To Screen" (bottom-right). Select in the Indicators the "XPloRR S&P500 Stock Market Crash Detection Strategy v2" script and set "Auto Fit Data To Screen" (bottom-right) Look in the strategy tester overview to optimize the values "Percent Profitable" and "Net Profit" (using the strategy settings icon, you can increase/decrease the parameters). How to interpret the graphical information? In the SPX graph, you will see the Buy(Blue) and Sell(Purple) labels created by the strategy. The green/red graph below shows the accumulated profit/loss in % of to the initial buy value of the trade (it revolves around 100%, 110 means 10% profit, 95 means 5% loss) The small purple blocks indicate out-of-trade periods The green graph below the zero line is the stochastic RSI buy signal. You can set a threshold (green horizontal line). The vertical green lines show minima below that threshold and indicate possible buy signals. The blue graph above the zero line is the normalized volatility signal. You can set a threshold (blue horizontal line) affecting buy signals. The red graph above the zero line is the slower stochastic RSI sell signal. You can set a threshold (red horizontal line). The red areas indicate values above that threshold. However real exits are triggered if close values are crossing below the trailing stop value or optionally when the fast moving average crosses under the slow one. The red areas above the threshold are rather indicative to show that the SPX is expensive and not ideal to enter. Please note that in bullish periods the red line and areas can stay at a permanent high value, so it is not ideal to use as a strict sell signal. However, when it drops below zero and the green vertical lines appear, these are strong buy signals together with a high volatility. These Parameters can be changed Buy Stochastic Lookback Buy Stochastic Smoother Buy Threshold Buy Only After Fall Minimum % Fall Sell Stochastic Lookback Sell Stochastic Smoother Sell Threshold Sell Only With Profit Minimum % Profit Use Sell MA Fast MA Sell Slow MA Sell MA Sell Threshold Use Buy Volatility Volatility Smoother Volatility Threshold Use Trailing Stop Use ATR (iso of a fixed percentage for the trailing stop) ATR Lookback Trailing Stop Factor(or fixed percentage if "use ATR" is false) Trailing Stop Smoother Important : optimizing and using these parameters is no guarantee for future winning trades!
SP:SPXEducation
by XPl0RR
Best Moving Average Strategies For Beginners 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. Here is how a simple moving average is applied as a support in a bullish trend on Gold. The price reacted multiple times to that and strong bullish movements initiated from that. 📍In a bearish trend, a moving average will serve as a strong resistance and quite will often 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. Take a look how 2 moving averages with different input length perfectly predicted a violation of a bullish trend on Gold and initiation of a bullish wave after a correction. 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. Hey traders, let me know what subject do you want to dive in in the next post?
BITSTAMP:BTCUSDEducation
by VasilyTrader
10
MA my understanding I know that the topic of moving averages has been fairly explained in crypto and other trading markets, and every trader has a good knowledge, and usage cases for them, but here I will share my own view of the moving averages, and how I use them for trading without relying on technical or educational sources by any means. Starting with a recap on the main idea of moving averages, the moving part of the name indicates a change in the final results based on time period specified by the trader such as 5,10,15,21,31,50,100,150, 200, you name it, for the last x candles to consider while calculating the average of their cumulative x price divided by their number. things you need to consider when using the moving average include: 1. Its an old and well known method to analyze price action 2. Many traders use it as a part of their trading strategy 3. It removes the noise from the price, and helps to identify trends sometimes 4. Traders rely on predefined moving averages lengths such as 21,30,50,100,150, and 200 so using these fixed values for your moving averages gives you better analysis of the market now for the usage cases that work for me with MA: 1. Showing support and resistance for new coins, I rely on the moving average to predict support and resistance since new coins form new supports and new resistances alone the way, indicators cannot work, and identifying levels is almost impossible, thus many traders will rely on the sole usage of MA for their support and resistance. 2. Identifying trend change some trends can be clearly seen or predicted by using MA crosses, such as the famous golden cross of the 50 and 200 MA, and smaller crosses including 21 crossing 50 to identify an uptrend, or vice versa. 3. Eliminating FOMO if the price suddenly fluctuates up, and the moving average is still moving smoothly on the same level, jumping in the market will be considered pure FOMO. The moving average can support sudden jumping in prices by showing an increase overtime, while sudden jump in the price with a moving average moving horizontally indicates that price could fall fast since no preparation of the market is found. Indicators are really helpful when relying on MA in TA, so here I will share indicators I use when considering MAs: 1. Cryptonite's EMA Field I really on this indicator a lot since it provides the ability to use 9 different EMAs, customize their colors, see their crossing on chart, and receive alerts of crossing. 2. RSI oscillator by TradingView RSI is surely a different topic, but using RSI with MA of the RSI to show bullish and bearish movements is extremely helpful when trading. 3. Volume oscillator by TradingView this indicator shows the volume of the coin, which is also not our topic, but using the volume with its MA helps finding resistance points in the chart, and predicting where the price could possibly reach before starting a reversal. Hope you all benefit from the explanation I provided, and always remember, never quite trading even if you are left with only $1, as there is always a brighter future in the market.
Education
by xxr50
1
Trick to make your single MA strategy effectiveI’m going to show you a simple trick you can use to make your MA strategy effective. For most traders, identifying the trend is hard. Using a moving average might be the best solution because of its objectiveness. (because we are using pure math when using MAs) The common way to trade MAs is to buy if price is above the MA and to sell if price is below the MA. This is a basic strategy. Entries Now, I’m going to show you the tweak you can add to make it effective. Use the 30 period SMA this time. I HIGHLY recommend you use this strategy on high timeframes like 4H or Daily. Trading on a low timeframe chart might put the odds against you because of all the noise. Also, if there's a big gap messing with your entry or exit, wait for the market to stabilize and give you clearer signals. Patience is key. 👉 For a buy: Buy on the first close above the SMA whenever price crosses above it (unless this is steeply pointing downwards). This signal can also be used to add to your existing positions. 👉 For a sell: Sell on the first close below the SMA whenever price crosses below it (unless this is steeply pointing upwards). This signal can also be used to add to your existing position. Exits There are 2 exits you can use: Stoploss and condition-based exit. 👉 Buy exit 1. For a condition-based exit, there should be 2 closes below the MA. Find the 2 latest significant relative lows. Find the one which is lower. Exit when any of those 2 closes is below that lower one. What are relative lows? Relative lows are lows which have their left & right bar higher than them. Example of relative lows: Exit example: In the picture above, we can see a buy at the left of the chart. Then, we see 2 closes below the MA and the 2nd bar which closed below the MA broke the lowest significant relative low. 2. For the SL based exit, it is below the lowest low of the two latest relative lows. Example: 👉 Sell exit 1. For a condition-based exit, there should be 2 closes above the MA. Find the 2 latest significant relative highs. Find the one which is higher. Exit when any of those 2 closes is above that higher one. What are relative highs? Relative highs are highs which have their left & right bar lower than them. Example of relative highs: Exit example: In the picture above, we can see a sell at the left of the chart. Then, we see 2 closes above the MA and the 2nd bar which closed above the MA broke the highest significant relative high. 2. For the SL based exit, it is below the highest high of the two latest relative highs. Example: 👉 SL Tip: trail the stop based on the next significant relative lows/highs as the trend progresses. This locks in profits and provides more room for the trend to unfold. This strategy can be used on any type of MA with any period. The principles still remain the same. Use an Exponential MA or a Weighted MA for intraday trading because these MAs are more sensitive to recent price action. They give more importance to the most recent prices. This strategy works best in a trending market. This will fail in a sideway market. So, to lessen the chances of that happening, always use this strategy with proper price analysis. Use the Elliot Wave Theory or Smart Money Concepts or anything else to understand the context of the market. Then after you've understood the context of the market, you can perhaps use this strategy as an entry trigger. Remember, no strategy is foolproof. I encourage you to backtest and experiment this thoroughly. I hope you got value from this!
Education
by SamaaraDas
Navigating Moving Averages: Decoding Simple vs. Exponential 📊📈 Moving averages (MA) serve as foundational tools in technical analysis, offering insights into market trends and potential entry/exit points. This article delves into the comparison between two primary types: Simple Moving Averages (SMA) and Exponential Moving Averages (EMA), providing traders with a comprehensive understanding of their differences, applications, and advantages. Differentiating Simple and Exponential Moving Averages 1. Simple Moving Averages (SMA): - Calculate by averaging closing prices over a specified period, providing a smooth representation of price trends. 2. Exponential Moving Averages (EMA): - Prioritize recent prices, assigning more weight to the latest data points, leading to quicker responses to price changes. Understanding the differences and applications of Simple and Exponential Moving Averages empowers traders with versatile tools for analyzing trends and making informed trading decisions in various market conditions. 📊📈 Do you like this post? Do you want more articles like that?
Education
by ProSignalsFx
2
The CORRECT way to trade MAsMost people have traded with moving averages. They end up being frustrated and losing money. That’s because they’re not using them correctly. I’m going to show you how to use moving averages the right way. Where it works and where it doesn’t To get good trades using moving averages, there’s just 1 thing to do. The thing you need to do is move to a higher timeframe. Stick to 1H, 4H and Daily charts. Sounds simple, right? It is simple but extremely effective. When this strategy is used on higher timeframes, it works amazingly. But on lower timeframes, you end up getting a lot of false signals. Also, use this strategy for potential reversals and trend continuation entries. Avoid using them in a sideways market. (I’ll talk about how to avoid a sideways market) Remember, the higher the time frame is, the better and more reliable the signal is. MA pairings These are the best MA pairings you can use: - 13 EMA & 21 SMA - 5 & 20 SMA - 10 & 50 SMA The big secret Now, after using the moving averages to trade, you will still get fake outs. You will still get caught in sideways markets. But there is a way to make the signals extremely reliable and filter out false signals. You can use the Death cross and the Golden cross. A Death cross is used for a sell. It happens when the longer period MA is ALREADY sloping downward and the shorter period MA crosses below it. Example: A Golden cross is used for a buy. It happens when the longer period MA is ALREADY sloping upward and the shorter period MA crosses above it. Example: These are used to avoid sideways markets. Summary This strategy is supposed to be used on high timeframes like the 4H and Daily chart. Rules for a buy: - The shorter period MA crosses above the longer period MA - The longer period MA should be either flat or already be sloping up (this is important) - Never take a buy if the longer period MA is sloping downward Rules for a sell: - The shorter period MA crosses below the longer period MA - The longer period MA should be either flat or already be sloping down (this is important) - Never take a sell if the longer period MA is sloping upward Please do not use this on lower timeframes like 1M, 5M, 15M and 1H. I hope you got value from this!
Education
by SamaaraDas
38