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Moving Averages

Simple Indicators and Setups #1: 200HMA on D1 Time ScaleThis is the beginning of what will probably only be a few posts about basic indicators/setups. Everything I chat about in these will be something that I personally use, something that is very simple to use, and something that is historically incredibly reliable. Something to keep in mind with TA is that there's a lot of garbage out there, and often times the more complex someone's TA is the more magical/fake it is. TA is never, ever, ever 100% accurate and wild cards come up that break the mold of even the most reliable setups, so keep that in mind if you decide to trade using these setups; previous results are not guarantees of future performance. Keep this in mind please and always watch out for yourself. 200 Period Hull Moving Average on the One Day Time Scale When it comes to reading price action, there are few indicators that are as useful as moving averages. The idea behind a moving average isn't to tell you where the price of an underlying has to be it's to help expose a baseline of where the market at large has been pricing an underlying over a set period of time. Moving averages provide us with price support and trend confirmation information by removing the noise of daily volatility and price swings to give a less chaotic view of price action over time. Of the different types of moving averages, my favorite is the Hull Moving Average (HMA). This is a very fast, smooth moving average that in many cases can eliminate the lag you find in Simple or Weighted Moving Averages. In fact, the HMA is kind of a sped up, bastardized Weighted Moving Average: HMA= WMA(2*WMA(n/2) − WMA(n)),sqrt(n)) One of the most reliable uses I've found for the HMA is to view underlying price in against the last 200 daily periods of price action. This is way more reliable on large to mega-cap companies but it does work reliable on the more "boomer-y" of the midcaps. In my opinion, the biggest thing that technical traders will have to look for are assets with the least potential for meme-ability and those assets are the best for this strategy IMO. So How do You Use This? I very, very, very rarely take bearish positions because for the large part stonks really do only go up for the most part. However, I've had the most success with this indicator as a bearish indicator. For me personally, this isn't an indication for me to take a bearish position necessarily, it's an indicator to deleverage and pull some money off the table until I can see what the next few days holds. So using SPX futures as an example, when the price of an underlying falls below the 200HMA on the D1 time scale, it is an incredibly reliable indication of either a downturn or a sustained period of volatility in markets. My backtesting on the assets I've used this on has shown it to be roughly 90% reliable over the past 5 years I looked back. That being said, just like with any TA, it's not reliable 100% of the time. You can see a recent (early Feb 2021) example showing an instance where price shot right back up followed by a sustained period of volatility in the markets (Mar 2021). When this occurs on larger market indexes, I do the following: Wind down on exposure to long, market reactive assets (ie: $AMD for a drop in NQ, etc) Open up long volatility plays such as $VIX or inverse ETFs Completely close 100% of my shorter dated long options plays (less than 2 months) When the daily price action falls below the 200HMA on the D1 candle, it's telling you that the underlying has approached a level of weakness that is extreme in comparison to its total performance over the past 200 days, which is no small thing. Generally, the market reacts with fear as prices weaken and sell-offs of varying degrees follow or at least rotations from sectors that increase overall volatility in the markets. The best TA is simple, it's easy to understand, and it's easy to connect with real-world motivations of how actual people behave and think. The 200HMA is a great example of this in my opinion, and is something grounded in reality that produces actual results instead of being yet another of the waterfall of fantastical garbage people like to throw out as TA.
CME_MINI:ES1!Education
by SwingTradeAssassin
69
The trend is your friend!In this article, we will present some basic information about the bedrock of technical analysis – the trend. Technical research is founded on one main assumption: market prices move in trends as they are freely traded. Traders and investors hope to buy a security at a low price at the outset of an upward trend, ride the trend, and then sell the security at a better price when the trend stops. While this technique is straightforward, putting it into effect is incredibly difficult. Trends come in all shapes and sizes, from long-term patterns that last decades to short-term patterns that emerge minute by minute. All trends tend to have the same characteristics. Investors must choose which trend is most important for them based on their investment objectives, personal preference, and the time they are ready to spend watching market prices. Trends are obvious in hindsight, but ideally, we would like to spot a new trend right at its beginning, buy, spot its end and sell. However this ideal almost never happens, except by luck. What exactly is a trend? 1. An uptrend or upward trend occurs when prices reach higher highs and higher lows. 2. A downtrend or downward trend is the opposite: when prices reach lower lows and lower highs. 3. A sideways or flat trend occurs when prices trade in a range without significant upward or downward movement. From the investor/trader’s perspective, a trend is a directional movement of prices that remains in effect long enough to be identified and still be profitable. The most popular method amongst traders to identify a trend is looking at a graph of prices for extreme points, tops & bottoms and to draw lines between these extreme points. These lines are called trend lines . By drawing lines between tops and bottoms we get a „feeling” of the direction of price movement, rate of change of movement, and also its limits. When those limits are broken, they can warn us that the trend might be changing. Another method for the study of trends are the moving averages which smooth out and reduce the effect of smaller trends within longer trends. The number of trend lengths is unlimited. The ability for trends to act similarly over different periods is called fractal nature . When we say that the trends are fractal in nature we mean that in any period we look at we see trends with similar characteristics and patterns as each other. The trend length of interest is determined solely by the trader’s period of interest . This doesn’t mean that different trend lengths should be ignored. Because shorter trends make up longer trends, any analysis of a period must include analysis of longer and shorter trends around it. Trends are determined by supply and demand. As in all markets, whether apples, oil or used car components the economic principle of interaction between supply and demand determines prices in trading markets. Each buyer bids for a certain quantity at a certain price and each seller asks for a certain quantity at a certain price. When the buyer and seller agree and transact, they establish a price for that instant in time, whatever the reasons might be for the buyer wanting to buy and the seller wanting to sell. The technical analyst, therefore, watches the price movement and the rate of change of prices and doesn’t concern himself/herself with the reasons of the transactions because most times they are indeterminable. The number of players and the number of different reasons for their participation in supply and demand is close to infinite. Thus, for the technical analyst, it is futile to analyze the components of supply and demand except through the prices it creates. Furthermore, when someone invests or trades the price is what determines profit or loss, not corporate earnings or Federal Reserve policy. The bottom line is that the price is what determines success and fortunately, for whatever reason, prices tend to trend. . Trade with care. If you like our content, please feel free to support our page with a like, comment & subscribe for future educational ideas and trading setups.
TVC:DXYEducation
by financialflagship
134
Bitcoin 57k-53k Sell BreakdownBitcoin 57k-53k Sell Breakdown In this video I go over my personal overview on the move BTC made from around 57125-53300. The video is broken down into 2 parts! First me showing my full markup of everything pieced together. The second half is a breakdown from scratch of how I put the pieces together. Market structure was a little bit shaky as the buyers are trying to hold control but the story is able to be identified from the 4HR TF and below. Especially on the 15min price action gave all the answers to the test to see the sell. Patience is key and always pays. I utilize the Fibonacci and Elliot Wave Sequences to provide a different perspective on the sell. Giving more confirmations to follow the price action. Market structure is King & Price Action is Queen . As always THANK YOU and if you found this video helpful, please let me know by hitting that like button and/or leaving me a comment below. Also, feel free to share your opinion on this setup or other setups that you have. The more ideas we can generate together, the more informative these ideas become for newer traders. STAY BLESSED! ~T$
BITSTAMP:BTCUSDEducation
by OkayTrev
Etherum 1780-1660 Sell BreakdownEtherum 1780-1660 Sell Breakdown In this video i go over my personal overview of the sell setup that Etherum made from 1780 down towards the 1660 area. From the 4HR TimeFrame price action was telling the story that lined up beautifully for the continuation towards the down side. From the lower time frames the buyers were attempting to hold the support levels but failed to continue the trend once it made its way above the 50EMA. I utilize the Fibonacci and Elliot Wave Sequences to provide a different perspective on the sell. Giving more confirmations to follow the price action. As always THANK YOU and if you found this video helpful, please let me know by hitting that like button and/or leaving me a comment below. Also, feel free to share your opinion on this setup or other setups that you have. The more ideas we can generate together, the more informative these ideas become for newer traders. STAY BLESSED! ~T$
Education
by OkayTrev
PB&J: Shadow-30PB&J: SHADOW-30 If you are new to trading, then start with this pattern! It is easy to identify, easy to learn, and easy to trade. What more could you ask for? HOW TO TRADE THE SHADOW-30 CHART PATTERN This can be an "everyday" pattern because of its reliability. It is easy to spot and simple to trade. THE SETUP The name Shadow-30 refers to a "shadow" that slices through the "30" period exponential moving average. This looks like a Hammer on the chart but it doesn't have to be perfect to be considered a Shadow-30. - The color of the real body is not important. - The shadow on the chart flushes other traders out of their position. Note: There is nothing special about the 30 period moving average. It is just a reference. Look to the left on the chart to determine support and resistance. When you are trading any kind of long lower shadow or Hammer pattern, always look for volume to be higher than the previous day . - This suggests that many traders were shaken out and demand is picking up. - This is important! THE ENTRY If you are able to trade during the day then buy on the day of the Hammer near the end of the day. You do not need any kind of "confirmation" or anything else. You only need to see that price is at a support level and that demand is coming (volume). That is all the confirmation you need. If you cannot trade during the day then place your buy stop above the high of this Hammer day. The next day you'll have to check to see if your order gets filled and then place your stop loss order. You could also use a bracket order. THE STOP LOSS ORDER There are two options for the placement of your stop loss order. Each has advantages and disadvantages. You decide what is right for you. Option 1: - Put your stop under the low of the Hammer. The advantage to this is that your stop is far away from your entry price and you will not likely get stopped out prematurely. The disadvantage to this is that because your stop is so far away, you will have to buy fewer shares in order to comply with your money management rules. Option 2: - Move down to the 1H chart and put your stop below the support area closer near the real body of the candle. The advantage to this is that you get to buy more shares because your stop is closer to your buy price. The disadvantage to this is that because your stop is so close, you may get stopped out more often, before a big move happens. TAKING PROFITS When you are trading wide range days like Hammers you will find out that many times the chart will trade sideways for a day or two. That is fine. You are already in the trade just waiting for other traders to enter. Also, the days that follow a Hammer are typically low volatility, narrow range days like Doji. Be patient! Do not get anxious to move your stop up. Wait for price to actually move in your favor before you begin trailing your stop. Once price moves in your favor, then you safely begin to trail your stop loss using your favorite exit strategy to lock in profits. TRADING TIPS Focus on those charts where the real body of the candle is close to the 30 EMA. You want as many traders as possible shaken out of this before you get in. This setup is reversed for short positions except now your are looking for charts with a Shooting Star pattern through a declining 30 EMA. Give more weight to setups where price gaps away from the previous candle to end the day in a Hammer. Always look to the left on the chart to make sure price is at a significant support or resistance area. WHEN GOOD CHART PATTERNS GO BAD Yes, you will have losing trades with this pattern. There is no pattern that will guarantee all winning trades! But with proper money, trade, and self management, you can do very well with this setup.
INDEX:BTCUSDEducation
by zerocashcool
New Technical Tools Back Tested on Old Extreme MarketsIntroduction If traders back in the day would have had the modern technical analysis tools they could have forecasted the market crashes more easily. Once the past is gone it's gone forever, but we can always go back to learn from it. Those who ignore the past are doomed to repeat it. In this publication I back tested a couple of tools which basically detect the trend direction, trend strength and momentum. Market at a Glance The charts should follow the K.I.S.S. principle, (Keep It Simple and Stupid), the simpler the better. An indicator should provide as much meaningful information as possible without being overwhelming and without pushing the limit to the analysis paralysis level. I use the classical Madrid Ribbon indicator to determine the Bias at a Glance. This indicator is very simple, and it only needs one parameter, exponential moving average or the default simple moving average, the rest is done by the script. At a glance I can get the bullish or bearish bias by just looking at the color of the indicator, green for bullish, red for bearish. The screams are all the same When the market sells, it sells, at first there is no way to know if this is a selloff or just a profit taking and an opportunity to buy the dip. By looking at the indicators, I can determine if the vector is in the red, then it's a selloff, and probably the start of a bear market, if the vector is showing weak momentum, or if it is in the brink of going in the opposite direction. A selloff is not always the same, and the indicator can help to determine the best strategy to follow. Going back to normal After a bear market, once the indicators show a weak momentum to the downside it is time to get ready to load and wait for the confirmation of the reversal to the bull side. In the following examples I back tested the Madrid Ribbon and the MAdrid Vector to get an idea of how the indicators reacted under an extreme condition, like that of the market crash in 1929, the Black Monday of 1987, the Dot Com bubble and I finally used it to glance at the present market. The Great Depression 1929 "The Roaring 20's" The feverish Stock Market. The time when everybody wanted to get in because everybody was making money. The Bull Market of 29 started in June 1924, when the Madrid Ribbon confirmed a Green Bull after a double bottom from November 1923 and May 1924. There was a reversal of the Bear trend in November 1921. The "Madrid Attack Vector'' indicator confirms the times of the duration of the trend. It shows a dull market in November 1922, a Peak and an exhaustion with a Bearish reversal. In May 1926 there was a painful correction, pinpointed by both the Vector and the Ribbon, a consolidation and a continuation of the Bullish market. In August 1928 the mass committed to the euphoric upward move for a juicy 60% return for the year. A correction and another leg of 30% which would make around 90% riding the trend with perfect timing. After this point the buying stopped. No more bidders, no more upside, smart investors and short term traders run for the exit. By lack of demand the ask price tumbled until it found bidders. This happened pretty fast but it is detectable. The initial drop was recovered (buy the dip) still in the bull territory, but there is a warning, the vector already displayed a divergence between the trend and the trend strength, it was weak and it is not a good sign, the trend had reached exhaustion and it's time to be extremely cautious. The correction made the index dipped -30%, after which point one wave of short sellers were covering their initial short positions, and some other dip buyers were stepping in. At this point, both Madrid Ribbon and Madrid Vector show the trend is already in bear territory, so this "back to normal" was only the start of the historic decline. It was not a free fall, it was a stepped fall with approximately -30% declines and recoveries of +20%, until the total market fall from peak to bottom reached -90%. The accounts were wiped off and the bankruptcies piled up. Both the Vector and the Ribbon show the "Sell the Peak'' points. Everything in the red means the Bear Market is going on, until the Vector shows a weakness in the selling and the Ribbon shows no new "Lower Lows" are made, this signals a Bullish Reversal. Black Monday 1987 Once the Madrid Ribbon signaled the trend reversal going from red to green, the Bull Market was pinpointed to start in July 1984, from that point the Market went up, it reached 100% return from bottom to top, it corrected about 10% and kept on going until it peaked at 2700 points. By 1987 the computers had taken over the stock market, when several bulls took profit at around the target level, this event triggered the circuit breakers and liquidated the positions, the Flash crash took a dive of 35% from top to bottom. The Madrid Vector detected the last low momentum and the Madrid Ribbon detected the double top, this signals a momentum divergence and a possible reversal. Note that during the time the Dow Jones reached 1940 points and it started to consolidate. At some point the Madrid Vector signaled a low momentum and trend divergence, which didn't finish the bull market since the market found support. The old saying says "never short a dull market", it applies here, the Madrid Vector remained signaling a Bull Market with low momentum, but never went to the Bearish side. Nobody becomes poor by taking profits anyway. The market went for two more cycles, from July 1986 until April 1987 and the grand finale from May 1987 to September 1987. The expansion from the Madrid Ribbon shows the level of euphoria in the market. The Market became too complacent and overconfident. That's the point where there's liquidity in the market to exit at a profit if the entry was well calculated. This bear market didn't last for too long, and once the Madrid Vector signaled a low bearish momentum the market was ready to resume the uptrend. The Dot Com Bubble This case was similar to the Black Monday, euphoric market, almost no momentum to the upside according to the vector, a failed double top and a reversal. The low momentum signaled at the end of the trend is a sign of a reversal. The Madrid Ribbon shows the closing prices are already under it and in the red, this is a Bear Market. There are short recoveries where the short sellers and the target pivots act as temporary support, which is shortly after broken. This Dot Com Bubble shows a sign of relief in 2002, but the Madrid vector shows the little momentum to the upside, and not enough to trigger a trend reversal. It is on the second weak momentum point where the price starts to find a floor, there are less sellers and the institutional money is positioning. The uptrend was ignited in April 2003 and the bull rally started. The end of this leg is signaled also by these two indicators. The Ribbon shows a bearish development, the trend tries to go back to normal, but at this time the Madrid Vector already shows a very deep red level, the recovery is the "Going back to normal" trap which is used to liquidate the positions and ride the Bear. Present Day 2021 2016 showed two big dips, one in August 2015, the second in January 2016, These were two big testing points, a double bottom that was used to see how firm the ground was before going long and strong in 2016. The red dips are shown in the Madrid Vector and the Madrid Ribbon. Once the trend picked up and the Market started to make new highs (HH) the euphoria picked up until January 2018 when a full expansion of the ribbons was suddenly stopped by a critical low momentum on the Vector, it is a divergence that signaled a reversal, the market tried to make a second top but the momentum was very weak and the market just consolidated. Later in September 2018 the market went for the double top on weak momentum, this is a very bearish sign that ended in "The Nightmare Before Christmas", plus the Santa Gift for those who traded on Christmas Eve and rode the late 2018 early 2019 Santa's Rally. A couple of dips with strong upward momentum on three waves and then COVID put a halt in the market. This is signaled by a weak bull momentum at the double top, again a bearish reversal. The only thing is this has been a huge reversal that practically wiped off the last four year rally. The market took the dip, the vector signaled a weak bear momentum and it is a sign of bullish reversal. The momentum was weak when the Madrid Ribbon was changing colors. This is the Support/Resistance fight, and the market could have taken another dive down to test its commitment, however the market decided to go in full force and the momentum started to timidly grow until what we see today. We have again a full bullish momentum, with an expanding Ribbon. So we're completely in the green and with an Euphoric market .... again.
TVC:DJIEducation
by Madrid
97
A 100% profitable strategy on BitcoinHello guys, in the Daily chart of Bitcoin after last candle close, recently something bullish happened, short term 5 Moving average crossed long term 20 Moving average. MACD is also supporting the further upward movement in the daily chart. this is a bullish signal in an uptrend. this is one of my swing trading strategies in Bitcoin market. I'll go long with a low leverage margin, whenever this daily Moving average crossover happens. I'll close the position as soon as the opposite situation happens which is short term 5 daily MA crossing down the long term 20 daily MA. A useful tip to this strategy is to combine it with a oscillator indicator like MACD or STOCHASTIC to prevent the fake outs. For example do not go long if the STOCH is at overbought territory and do not go short if It is at oversold territory. Disclaimer** This strategy doesn't work in a range market condition. Only use it in trendy markets. You can go back in the chart and backtest this strategy, it is pretty great for swing trading. Please like and share this idea if you like it. Thanks for your attention
Education
by TiranTrading
3
How to import Quandl data into TradingViewQuandl is a data library with all sorts of useful macroeconomic data. Unfortunately a lot of it you have to pay for, but there are also many data series you can access for free, including the "Blockchain" library with lots of useful data such as Bitcoin transaction fees. To access Quandl data, go to quandl.com. In the left-hand column, check the "Free" box to ensure your search results include only free data sets. Then type what you're looking for in the text box (e.g. "US wages" or "Bitcoin transaction cost"). Click the name of a data set in the search results. You should now see a chart. On the right hand side of the chart, click the "TradingView" button to import to TradingView. For an example of how to use this data, watch the video or check out my previous idea on Bitcoin transaction fees as a predictor of Bitcoin's price:
CEducation
by ChristopherCarrollSmith
42
Bollinger Bands - Contraception for your Price ActionSo i thought i’d do another educational post, this time on the Bollinger Bands. I’ll try and keep this as a brief introduction to the basics of Bollinger Bands so you can do your own research to fully understand what the indicator is doing and showing, there is no point putting a fancy indicator on your chart if you have no idea what it is showing you. Bollinger Bands measure, Price & Volatility, potential Support and Resistance, & it can also give you a sense of if an asset is Overbought or Oversold, although its best practice to use another indicator to get confirmation of being Oversold or Overbought because the price can walk the Upper and Lower Bands for extended Periods. The Standard Bollinger Bands is composed of a 20-period Simple Moving Average (SMA) which is its Middle Band, it also has an Upper Band & a Lower Band which envelopes the SMA. The outer bands are a +/- 2 Standard Deviation (StdDev) of the 20-period SMA in whatever timeframe you are in. A Simple Moving Average (SMA) is an unweighted average of the Previous 20-period Values in whatever timeframe you are in, so for the 1min chart, the SMA period will be an unweighted average of the previous 20 mins, for the 1hr chart, the SMA period will be an unweighted average of the previous 20 hours, for the Daily chart, the SMA period will be an unweighted average of the Previous 20 days and so on and so on. You are able to change the SMA to any period you want, some trading sites also allow you to change the SMA into an Exponential Moving Average (EMA). Changing the timeframe from the standard 20-period SMA to a faster SMA like a 10-period, will allow faster entry into possible buy & sell points but could be prone to false signals, because of this, most people keep the SMA at the Default of 20-periods to avoid possible false buy/sell signals. You can change the StdDev settings, but you must know what you are doing as you cannot just add any number for shits and giggles, for example, a 20-period SMA is 2 StdDev, a 10-period SMA is 1.5 StdDev and a 50-period SMA is 2.5 StdDev as default. For those interested, & from my understanding of it, the Population Standard Deviation used in the Bollinger Bands system is a measure of the +/- dispersion/variation of the mean or the sum of a collection of values, the values being the 20 periods, so a +/- deviation value away from its Midpoint Basis in whatever timeframe you are in. I won’t go into the calculations because everyone will stop reading & it’ll also hurt my head because i cannot even count. So the + is the Upper Band and the - is the Lower Band. So looking at the Bollinger Bands, we now know that the Middle Band is the basis & the Upper and Lower Bands are +/- Standard Deviations of that Middle Band Basis in whatever timeframe you are in. With Low Volatility, the closer the Upper and Lower Bands are to its Price & Middle Band Basis. The more volatile the Price action is in either direction, the further away the Price will move from its Middle Band and move closer to its Upper or Lower Bands depending on if it’s Bullish or Bearish. Along with the Price, the Upper and Lower Bands will also expand outwards and move away from its Middle Band. With extreme volatility the Price may even wick out or close a candle out of its Upper or Lower Bands. If there has been a period of Volatility which has come to an end, then you will see the Upper and Lower Bands start to contract inwards. You can use the Middle Band as potential Support and Resistance Levels depending on if the Price is above or below it. You can also use the Upper and Lower Bands as potential Resistance Levels, and also as potential entry levels for longs or shorts respectively. The Lower and Upper bands will point outwards and inwards depending on if the Price is contracting or expanding respectively. With normal volatility, if you use the default 20-period SMA & 2 StdDev settings, then the price action will possibly remain within the bands for roughly about 90% of the time. The Price will eventually move back in to the Upper or Lower Bands if there has been a period that the Price has been outside of the Upper or Lower Bands. What is great about the Bollinger Bands is that you can apply it to any chart and timeframe that has enough previous trading data, and use it to get a feel for the assets volatility over time. A key thing to look out for is the Bollinger Bands Squeeze, this happens when you buy latex contraception that’s too tigh……… sorry…… this happens when volatility has slowed & the Upper and Lower Bands contract, envelope and stay close to the Price & Middle Band so essentially Price action is trading sideways within a channel made up of the Lower and Upper Bands. The Bollinger Bands Squeeze Pattern can potentially end in a big breakout upwards or downwards. Bollinger Bands can also be used to see Bullish W-Bottoms or Bearish M-Top signals in the Price. These signals have 4 steps that need to happen for it to be considered valid but i’ll let you do your own research on that. The Price can also walk along the Upper and Lower Bands for an extended period of time depending on if the Price is Bullish or Bearish. It’s best practice to use complementary indicators like Volume, RSI, ADX, STOCH or MACD to try and get confirmation or any potential breakout. I actually use the Bollinger Bands on my charts in conjunction with the Ichimoku Cloud. On a side note, having a grasp of the basics of the original Bollinger Bands crated by John Bollinger is the first step to really understanding it and properly using it to enable you to make wise decisions with your money/investments. If you have an understand of the original Bollinger Bands, then that can help you with understanding other price enveloping indicators like what David ‘WycoffMode’ Ward has created. David has created his own genius take on the Bollinger Bands called Bad Ass Bollinger Bands, which is quite fascinating because it shows multiple +/- Standard Deviations for whatever timeframe you are in. You could potentially use these as multiple Support and Resistance Levels for whatever timeframe you are in and also look for any potential cascading effect from lower to higher timeframes using these multiple +/- StdDev levels, he does state however that to get the best out of it, you have to use it with his Phoenix Ascending indictor, which from what I’ve seen, i think it complements his Bad Ass Bollinger Bands by showing Momentum, Upwards and Downwards Pressure & potential Trend Crossover, this agrees with what i have said above, about using other complimentary indicators with your Bollinger Bands like RSI or MACD. From what I have seen of David’s Bad Ass Bollinger Bands, one of the many benefits of having multiple +/- Standard Deviations, 8 in total, 4+ & 4-, is that you end up with a closer to 95-99% of the Price action staying within the Bollinger Bands for more accuracy. 99% because if there is extreme volatility, that may still cause a Candle Wick to poke its head out. This new indicator is potentially a real game changer. This is just my opinion from what i have seen of it, so i could be completely wrong & David could say it doesn’t mean anything that i've typed and he’s gonna hunt me down for typing complete bollox. Below is a pic to show you the differences between the original Bollinger Bands and the Bad Ass Bollinger Bands. In any case, it’s best practice that when using your charts, you should have a range of indicators to complement each other, an indicator for Momentum, Volatility, Trend, Price, Volume ect. You do not need to add 4 indicators on your chart that show the same thing. If your using RSI then you don’t really need the STOCH, If you’re using MACD then you don’t really need ADX or Parabolic SAR. If you’re interested in learning more about the Ichimoku Cloud System, please click on the below pic which will take you to an educational post i did about it. I hope you have found this brief intro helpful & i hope it encourages you to do your own research to find the best trading strategy for you. Cheers 👍
BINANCE:ADAUSDEducation
by TradingThroughTheLens
6
EURUSD 1D MEAN REVERSION TRADING STRATEGYBest Mean Reversion Strategy: Before we get to that point, first and foremost, let’s see what tools we need to use for this strategy. The best mean reversion indicator that works 85% of the time is the RSI indicator. So, you will need the RSI oscillator on your charts. Now, there is one more important thing that needs to be done. The RSI settings must be changed from the default 14-period to 2-period RSI. So, we’re having not just any type of RSI, but a very fast RSI. Levels are 10 & 90. The other technical indicators we’re going to deploy on the charts are: 10-period simple moving average. 200-period moving average. Note* Another thing to keep in mind is the recommended time frame is the daily chart. Intraday charts won’t work because the fast-period RSI will generate a lot of false signals on lower time frames. Now, let’s see how we can combine the 3 indicators into a profitable mean reversion strategy. The first obvious question is when to buy and sell currency. To answer this question the mean reversion trading strategy needs to satisfy 3 triggers: The price needs to be above the 200-day EMA. This means that the overall price is in an uptrend so, we’re only going to look for buy signals in bull markets. Second, we look for the price to below the 10-day SMA, which shows a deviation from its mean. Last but not least, we look at the RSI to overshoot below 10, which signals that we’re in oversold territory. Note* For sell signals use the same trading rules but in reverse. Once all 3 conditions are satisfied we enter a trade at the open of the following day. Once we’re in a trade we also need, we also need to know when to exit the market. This is where the 10-period simple moving average comes into play again. What we’re looking for is for the price to reverse back to the 10-period SMA strategy. More often than not the price will overshoot to the upside and break above the 10-period SMA. So, to fully capitalize on the entire move we use multiple take profit targets: The first profit target is to cash half of the position once we touch the 10-period SMA. The second portion of your position is left until we break and close above the 10-period SMA. Based on our backtesting result, on average your trades should reach the second target within 1-3 days. The longer you keep your position open, the lower the chances of the trade to succeed. As a general rule, you should cash out of your entire position within the first 3 trading days. Now, we have left out for last the most important part, which is managing risk. When it comes to the protective stop loss we’re advising not to place a stop loss right away, but instead, use a time stop. Let me explain… Based on our backtesting results we have found that a lot of the times the market will do a false breakout below the previous day low (high) and hurt our position. So, to avoid this scenario we have found a great trick to move around it. Our rule is very simple: If by the first half of the day our position shows a loss, we close that trade and call it a day. This is a risky play but we have the edge on our side to play this kind of trick. After all, trading is a risky game and everyone needs to decide for themselves how to manage risk. Final Words – Best Mean Reversion Strategy In summary, the most alluring thing about mean reversion trading is the high win-loss ratio and the simplicity behind it. One thing to keep in mind is that the mean reversion strategy tends to perform poorly when the market is in a hard-mode trend. But that shouldn’t be much of a big deal since the market is ranging 75% of the time. The key takeaways from the mean reversion trading strategy are as follow: Mean reversion can be used with all asset classes (stocks, commodities, currencies or cryptocurrencies). Range trading and overbought/oversold signals work the best with this method. Adjust the RSI settings to a fast-period. You can generate quick profits – short holding time periods. A trading tip – use a time stop instead of a price stop. Thank you for reading! Mean Reversion Trading Strategy with a Sneaky Secret. In this guide, you’ll learn a mean reversion trading strategy with some trading secrets that will assist you to limit the downside. The first part of the guide will highlight what is mean reversion trading, while in the second part we’ll reveal the mean reversion strategy and how you can fine-tune it to fit your personality. If this is your first time on our website, our team at Trading Strategy Guides welcomes you. Make sure you hit the subscribe button, so you get your Free Trading Strategy every week directly into your email box. The mean reversion trading systems are more appealing to a lot of traders because it tends to have a higher win rate as opposed to the trend following strategies. Even when the markets are in well-established trends, mean reversion happens quite often. So, there are more opportunities to profit from mean reversion trading. Let’s kick the ball rolling and start with the basic by first explaining what is mean reversion in trading and then we’re going to reveal 5 trading principles that can be used with the mean reversion strategy. Table of Contents 1 What is Mean Reversion Trading? 2 How Mean Reversion Trading Works? 3 Why the Mean Reversion Strategy Works? 4 Mean Reversion Trading Strategy 5 Final Words – Best Mean Reversion Strategy What is Mean Reversion Trading? Put it simply; mean reversion trading assumes that over time the prices of any asset (stock, commodity, FX currency or cryptocurrency) in time will revert back to the mean or average price. In other words, reversion to the mean trading comes down to the old saying: “What goes up must come down.” The mean reversion theory is at the foundation of many trading strategies that involve buying and selling of those asset class prices that have deviated from their historical averages. The idea is that in the long-term prices will return back to their previous average prices and normal pattern. Example of mean reversion trading strategies includes: Reversals. Pullback trading. Retracement. Range trading system. Overbought and oversold strategies. Our best mean reversion strategy is to trade those price ranges that occur after a severe price markup or markdown. In this case, reversion to the mean implies trading around the middle of the range as our average price. In essence, mean reversion is playing around a central value be it the middle of the range, or a moving average, or however you wish to express it. The reversion to mean trading system tends to produce a higher win rate in those instances where we can notice extreme changes in the price. We can measure extreme price changes relative to the time frame used. Obviously, there is also a probability that the price will not revert back to its mean. This can indicate that there is a real shift in the market sentiment and we’re in a new paradigm. Now that we know what is mean reversion trading, let’s see how the mean reversion regression works. How Mean Reversion Trading Works? With mean reversion, we’re looking to trade against the heard. A lot of the times when you’re doing mean reversion trading, you’ll be quick in-and-out of a trade. That’s why day trading mean reversion strategy works better. There are other different ways to trade with the mean reversion strategy, including: Price stretch from a simple moving average strategy. A break outside the Bollinger Bands strategy and a return back to the mean. A test of support and resistance strategy while the price is consolidating. The linear regression is clearly slopping upwards and it’s acting as a magnet to the price. Each time the price deviates from the average price line it snaps back to it outlining the reversion to the mean concept. The main advantages of the mean reversion strategy include: Effective exit strategy – the take profit target is always the average price. High win rate – the shorter the mean reversion time frame used the higher the win rate. Good risk-adjusted returns. All trading strategies have their own pros and cons. The biggest flaw is that once you’re in a trade you’ll often see first a loss before you see a profit. The main components of the mean reversion strategy should include: 1. Entry signal after the price has moved away from its average price. You can simply calculate how far away percentage-wise are from the mean or use an ATR strategy multiple declines or simply use a volume oscillator to gauge oversold/overbought readings. 2. Exit signal gives you a way out once you get into a trade. 3. Broad market timing. Why the Mean Reversion Strategy Works? Mean reversion is a key element part of how all financial markets work. Mean reversion happens because the prices have a tendency to overshoot and undershoot their intrinsic value. These “price anomalies” happens because the impact of new information that hits the market takes time to be digested by the market. The market participants will take some time to understand the new information as the information is filtered slowly. Additionally, it takes time for the market to establish a fair value. Secondly, mean reversion trading also works because prices also move based on collective emotions. What this means for traders is that the price tends to overshoot to the downside a bit more than they overshoot to the upside. This is true because fear tends to be a bigger emotion than greed. Let’s put the puzzle pieces together and construct our reversion to the mean trading strategy.
Education
by Tradingstrategyguides
3
Tips and Tricks to create an EMA Crossover SystemIn this video I show you how to set up an EMA Crossover system as proscribed by Market Wizard Ed Seykota: -How to find what EMA lengths to use -How to reduce whipsaws -How to read the strategy results -What type of risk to use and how to limit drawdown -How to deal with higher fees -How to set up the alerts when you find a good EMA length combination Summary: -I've programmed the above methodology: search for "EMA Crossover" in the indicator search and pick the author "gregoirejohnb". -The Slow EMA should be 3x the Fast EMA -To take more trades: DECREASE the Length -To take fewer trades: INCREASE the Length -To reduce whipsaws: INCREASE the multiplier -Test a Long Only strategy on historically strong markets Remember, there are no magic numbers so don't stress over the "perfect" EMA lengths. Get the settings that look good to you with enough profit and as low of drawdown as possible, and then go trade. The secret to trading is limiting your risk!
Education
by gregoirejohnb
21
How to use MTF T-Line (8 EMA)T-Line stands for Trigger Line and is 8 EMA, concept invented and taught by American trader Steven Bigalow. He uses daily 8 EMA and stays in trades as long as price is above or below 8 daily ema. If price closes below or above 8 daily ema in the opposite direction he exits. I went further with this concept, implementing Multitimeframe 8 ema trading system which is very effective. For that one needs indicator able to plot higher resolution EMAS on lower resolution charts (Moving Average Collection by Wataru Inoue can do that - www.mql5.com - better than TradingvIew MTF ma function). But you need a powerful PC (8 GB RAM at least) as many PC freeze when applying MTF indicators especially on many charts. For exits, reversal or entries you may add Pivots (Camarilla, Fibonacci Pivots seem to be most effective resistance support levels, especially longterm ones yearly, monthly, weekly). But you are free tp use Ichimoku, daily, monthly, weekly highs, lows or whatever level tools convinient. At least this system will help you to stay on the right side of the market. This sytem works well with gold, oil, sp500, eurusd, btcusd and many other pairs. Good luck my friends!
Education
by ICFX
How To Trade EMA here i have set very good example on how you can trade EMA it's common for every asset that it follow the price of EMA ( the moving average ) let's take example i set 7 ema on weekly chart so it's total 49 days moving average so if price make bounce above this ema on weekly something has been cooking in the asset . it's 49 days downtrend same breakdown of EMA ( exponential moving average ) also shows upcoming correction in price on higher timeframe so don't ignore moving average use this EMA with the triangle and other pattern and make your trading better any asset always respect it moving average price if fall below major ema than it will take resistance if goes up than it will bounce when it touch EMA
Education
by TheLightCrypto