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Newtraders

I want to share with you some points about Risk ManagementThis topic is so important, that´s why I wanted to share it with you and hope I can reach as much people as possible. Hope it will help some :) I saw in the last years many who crashed their accounts very hard, they lost a lot of money and for some it was very dreadful! It is hard to watch this people how they burn money and bring even his own family in financial danger. That´s why risk management in trading is so heavily important, to keep yourself and your life in balance. May be some will find very helpful, or some will remember this rules again :) I will keep it a bit shorter here as in my book, but the main points are still mentioned! I can´t say it often enough, always keep your rules during trading. Trading is not the way to get rich quick, it is a serious and hard business! It take a lot of time to learn, it requires a lot of patience and it will happen a lot of failures. This failures are even more important than your success! Success will not open up how it will not work, failures will. But let´s talk about risk management! For each investment you have to consider you take for each trade the risk to lose money, that´s why it is mandatory to handle each investment with a good risk/reward distribution. You have to keep in mind, the determined risk/reward is only theoretically and can result complete different. But with knowledge you can dedicate a good entry for your trades to keep your risk as low as possible. Determine important support and resistance levels and think about all situations what could happen and what will you do, if you are going into the red or into the green? Which levels are the best entries and exits? This all will help you to determine your riks/reward ratio. What is the Risk/Reward Ratio? Successful day traders are generally aware of both, the potential risk and potential reward before entering a trade. The goal of a day trader is to place trades where the potential reward outweighs the potential risk. These trades would be considered to have a good risk/reward ratio. A risk/reward ratio is simply the amount of money you plan to risk, compared to the amount of money you believe you can gain. For example, if you think a potential trade may result in either a $400 profit or $100 loss, the trade would have a risk/reward ratio of 1:4, making it a favorable setup. Contrarily, if you risk $100 to make $100, the trade has a risk/reward ratio of 1:1, giving you the same type of unfavorable odds that you can find in a casino. Which ratio should you desire? Like described above, finding trades with high risk/reward ratios (1:2 or higher), will help you maintain higher average profits and lower average losses, making your trading strategy more sustainable. The common suggestion between traders is a distribution of minimum 1:2 ratio. In reality there are often even better ratios available, if you do your technical chart analysis or financial stock analysis. But what should you do if you have to cut losses? We have to place our stop loss right below our support or other important levels we determined before. The purpose is to cut losses before they grow too large. Stopping out of a losing trade can be one of the hardest things for traders to do consistently. However, failing to take stops can result in margin calls, unnecessarily large losses, and ultimately account blowouts. How big should I enter a position? To lower your risk I recommend to think about your size to enter a position. Overall you shouldn´t risk money you need, only deposit money in your broker you can afford. Entering small can be the smartest way to safe your account. I suggest that because of four reasons: 1. You don´t risk to much of your funds and your stop loss should be tight anyway. 2. You can average down if the price is going in the other direction, but consider this option only if you are sure what you are doing. 3. You can buy the dips/pullbacks if the trend is strong and still heading in your desired direction. 4. Your emotional control is stronger if the price movement is heading in the wrong direction. This brings us to the next topic. Should you use leverage? Yes I know, big leverage will give you big gains...but as a beginner you will not have the experience to know which trade has a very big potential or not. Even experienced traders use only a small amount to enter a position and not the whole fund. If you use leverage the losses can be much higher and the problem with that is, if you lose money, your leverage will also decrease significantly and the losses are harder to recover after each loss. So what is the answer of the question, should you use leverage? For beginners we can easily answer: Take your hands of a big leverage! You can so hardly blow up yourself with that tool, it is ridiculous. Your way back into the profit zone will probably take years. But you have to save yourself and after a period of time, a period of taking profits and cutting losses you will gain knowledge until you feel much more comfortable on the market and you understand how trading really works, then you can consider to use leverage. Conclusion: As I said, I want to share only some big points about this topic, simple and understandable, because I think many new investors don´t understand how important that topic is! Safe yourself and have fun in trading and learning! Sincerely, TradeandGrow Trade safe!
Education
by TradeandGrow
3
10 Reasons New Traders FailOvertrading Overtrading often occurs when a trader feels compelled to be constantly active in the market, mistakenly equating frequency with profitability. It's an emotional reaction, driven by factors like the thrill of making trades, a desire to recoup losses quickly, or the erroneous belief that high trading volume automatically equates to increased profits. Overtrading can easily lead to unnecessary and costly mistakes, both in terms of the transactions themselves and the psychological stress associated with constant activity. Moreover, overtrading can lead to higher transaction costs due to increased brokerage fees and the potential for slippage, which is the difference between the expected price of a trade and the price at which the trade is executed. Additionally, overtrading can cause trader fatigue, where one becomes so engulfed in making trades that they lose sight of their broader strategy and make ill-informed decisions. Traders need to avoid the overactivity trap and focus on careful, thought-out trades based on research and analysis. Chasing Hot Tips Chasing hot tips can be alluring for both new and experienced traders. The promise of a quick profit based on so-called "insider information" can be hard to resist. However, trading on rumors or unverified information is fraught with danger. The information could be incorrect, misconstrued, or already priced into the market, which could lead to losses rather than the anticipated profit. In addition, relying on hot tips can divert a trader's focus from developing their own analytical skills. Instead of learning how to interpret market data, understand company fundamentals, or analyze industry trends, they become reliant on the advice of others. This makes their trading success dependent on factors outside of their control. Traders should focus on honing their own research and analytical skills, which allows for greater control over their trading decisions and independence from unreliable tips. Ignoring Risk Management Risk management is a key component of successful trading. Traders who ignore risk management rules can experience severe losses, even if they have a sound trading strategy. One common form of risk management is the use of stop-loss orders. These orders allow traders to limit their losses by setting a predetermined exit point for a trade should the market move against their position. Another aspect of risk management is diversification. Diversification involves spreading your investments across various assets, sectors, or geographies to reduce the risk of a single investment or group of investments performing poorly. Concentrating too much capital in a single trade or investment increases the risk of significant losses. Furthermore, allocating an appropriate amount of capital to each trade is also a crucial risk management strategy. Even experienced traders can make incorrect market predictions, and it's important to ensure that a single bad trade does not wipe out a significant portion of the trading capital. Emotional Trading Emotional trading is one of the most common pitfalls for traders. Fear and greed are powerful emotions that can significantly impact trading decisions. Fear can cause traders to panic and sell their positions at a loss during market downturns, while greed can make traders overconfident, leading them to hold onto winning positions too long or take on risky trades in the hope of higher profits. Impatience is another emotional trap that can lead to overtrading or premature entry and exit from positions. Trading requires patience to wait for the right trading opportunities and to allow profitable trades to reach their full potential. Emotional decisions often lead to poor trading outcomes and can be mitigated by following a strict trading plan and using tools like stop-loss and take-profit orders. Moreover, learning to manage emotions is an ongoing process for traders. Techniques such as meditation, regular breaks, and maintaining a healthy lifestyle can help manage stress levels and keep emotions in check. It's also crucial to review trades regularly and learn from both successes and failures. Lack of Trading Plan Having a well-defined trading plan is crucial for trading success. The plan should detail the trader's financial goals, risk tolerance, criteria for entering and exiting trades, and strategies for different market conditions. Without a clear trading plan, traders risk making impulsive decisions, veering off their initial strategy, and potentially suffering significant losses. A trading plan acts as a roadmap, guiding the trader through the market's volatile landscape. It can help maintain discipline, particularly in stressful market conditions, by providing a predefined framework for making decisions. This prevents reactive decision-making based on short-term market movements or emotional reactions. A well-crafted trading plan should also be flexible, allowing the trader to adapt to changing market conditions. Regularly reviewing and updating the plan can help traders stay aligned with their long-term goals and ensure that their strategies are still effective. Using Excessive Leverage Leverage can be a double-edged sword in trading. While it can amplify potential profits by allowing traders to control larger positions with a smaller amount of capital, it can also magnify losses. Traders who use excessive leverage can find themselves facing losses that exceed their initial investment, leading to significant financial stress. Understanding the implications of leverage is crucial. Traders must be aware that while leverage can magnify profits, it also increases the potential for losses. Therefore, it's essential to manage leverage carefully and consider it as part of the overall risk management strategy. Furthermore, traders should consider their risk tolerance and the current market conditions before deciding on the level of leverage to use. In more volatile markets, using high leverage can be particularly risky. A conservative approach to leverage can help traders to navigate the markets more safely. Failing to Adapt The financial markets are dynamic and continuously changing, influenced by a myriad of factors including economic indicators, geopolitical events, corporate news, and investor sentiment. Traders who fail to adapt their strategies to changing market conditions can find themselves on the wrong side of the market, leading to potential losses. Staying informed about global and industry-specific news can help traders to anticipate market trends and adjust their strategies accordingly. Moreover, utilizing a range of analytical tools, including both fundamental and technical analysis, can provide insights into potential market shifts. However, it's important to balance the need to adapt with the benefits of maintaining a consistent trading strategy. Constantly changing strategies can lead to overtrading and inconsistency. Therefore, while it's crucial to adapt to significant market changes, it's equally important to stick to a well-defined trading plan and avoid knee-jerk reactions to short-term market fluctuations. Lack of Education and Practice Trading is a complex activity that requires a broad range of skills and knowledge. A lack of education and practice can leave traders ill-equipped to navigate the markets and can lead to costly mistakes. Understanding market mechanics, trading platforms, and various trading strategies is crucial for anyone hoping to trade successfully. Education should be an ongoing process for traders. The financial markets are constantly evolving, and successful traders are those who continually learn and adapt. This includes understanding economic indicators, developing technical analysis skills, and keeping up to date with market news. Practice is equally important. Using demo accounts or paper trading allows traders to test their strategies and gain experience without risking real money. These platforms simulate real trading conditions, providing an opportunity for traders to familiarize themselves with different trading situations and understand how they would react. Not Setting Realistic Expectations Setting unrealistic expectations about trading profits can lead to disappointment and may encourage risky trading behavior. It's important for traders to understand that trading involves substantial risk, and achieving consistent profits is challenging and requires a significant amount of time, effort, and discipline. While it's natural to aim for high returns, traders should also focus on risk management and capital preservation. Recognizing that losses are part of trading and learning how to manage them effectively is a vital part of achieving long-term trading success. In addition, traders should be patient and adopt a long-term perspective. It's unlikely to make substantial profits overnight, and attempting to do so can lead to overtrading or using excessive leverage. By setting realistic goals and maintaining discipline, traders can improve their chances of achieving sustainable profits over the long term. Herd Mentality Herd mentality refers to traders' tendency to follow the crowd rather than making independent decisions based on their own analysis. This can lead to inflated prices in the case of buying frenzies, or plummeting prices during panic selling. Either scenario can result in significant losses for traders who join the herd too late. It's crucial for traders to conduct their own research and analysis and to be confident in their trading decisions. While it can be helpful to be aware of market sentiment and trends, blindly following the crowd can lead to poor trading outcomes. Moreover, what works for one trader may not work for another due to differences in risk tolerance, investment horizons, and financial goals. Therefore, it's important for traders to develop their own trading strategies and to stick to their trading plan, regardless of what other market participants are doing. In conclusion, while the road to trading success is often filled with challenges and obstacles, the wisdom gained from understanding these potential pitfalls can significantly augment a trader's journey. The discipline and self-awareness fostered by managing emotions, sticking to a well-crafted plan, and avoiding the temptation to follow the herd will not only enhance trading success but also contribute to personal growth and emotional intelligence. Balancing the courage to take calculated risks with the humility to learn from mistakes fosters resilience. This resilience, paired with an insatiable appetite for learning and adapting, forms the bedrock of a successful trader's mindset. With these tools at one's disposal, navigating the turbulent waters of the financial market becomes a fulfilling endeavor, offering both financial rewards and valuable life skills.
BITSTAMP:BTCUSDEducation
by BiggWigg
4
What Is "Scalping" In ForexHello Traders, We thought that we'd make a little guide to those of you who are looking at scalping as a possible trading strategy. This educational idea will give you a few things to consider and we hope that it will inform you of what you can expect from being a scalper. Our Take: Personally for us scalping isn’t our style and we wouldn’t recommend it to anyone but some people absolutely love it and are drawn into this type of trading because of the huge profit potential which is why we thought that we’d make this educational guide so that if you want to become a scalper then you know what you’re getting yourself into. Scalping can be a great way to trade but if you want to break out of that 9-5 job and not sit at a computer all day then scalping definitely isn’t your style. The reward you get from being a scalper comes with an equal risk and this is something a lot of people overlook. A Message From Us: We hope that you liked our guide and be sure to look out for our next educational guide where we’ll go over more lessons in regards to trading. If you have anything you want us to cover then please do contact us and we’ll see what we can do. We’d love it if you could show your appreciation if you liked this post and we wish you the best. Stay Safe - The JPI Team Disclaimer: This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does too. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
FOREXCOM:XAUUSDEducation
by jpeacockfx
4
EUR/USD: 17/05. Good input for sale OANDA:EURUSD I expect EUR to consolidate in the 1.0850/1.0950 range. EUR traded between 1.0855 and 1.0910 before closing slightly lower at 1.0865 (-0.010%). The fundamental tone has softened somewhat and EUR is likely to drop lower today, but any decline could be part of a lower range of 1.0839/1.0895. In other words, a clear break below 1.0845 is unlikely. Next 1-3 weeks: “Our update from Monday (May 15, spot at 1.0855) is still valid. As highlighted, the outlook for EUR remains negative and the level to watch is at 1.0805. On the other hand, a breach of 1.0945 (no change to 'strong resistance') would indicate that the EUR weakness that began mid-week is over. SELL EURUSD zone1.08600 - 1.08800 Stoploss: 1.09100 Take Profit 1: 1.08100 Take Profit 2: 1.07500
Short
by DNA_TradingFX
The risk-to-reward ratio is one of the most important thingsHi guys, This is @CRYPTOMOJO_TA One of the most active trading view authors and fastest-growing communities. Consider following me for the latest updates and Long /Short calls on almost every exchange. I post short mid and long-term trade setups too. DEFINITION The risk/reward ratio, sometimes known as the R/R ratio, is a measure that compares the potential profit of a trade to its potential loss. It is calculated by dividing the difference between the entry point of a trade and the stop-loss order (the risk) by the difference between the profit target and the entry point (the reward). Limiting Risk and Stop Losses Unless you're an inexperienced stock investor, you would never let that $500 go all the way to zero. Your actual risk isn't the entire $500. Every good investor has a stop-loss or a price on the downside that limits their risk. If you set a $29 sell limit price as the upside, maybe you set $20 as the maximum downside. Once your stop-loss order reaches $20, you sell it and look for the next opportunity. Because we limited our downside, we can now change our numbers a bit. Your new profit stays the same at $80, but your risk is now only $100 ($5 maximum loss multiplied by the 20 shares that you own), or 80/100 = 0.8:1. This is still not ideal. What if we raised our stop-loss price to $23, risking only $2 per share or $40 loss in total? Remember, 80/40 is 2:1, which is acceptable. Some investors won't commit their money to any investment that isn't at least 4:1, but 2:1 is considered the minimum by most. Of course, you have to decide for yourself what the acceptable ratio is for you. Notice that to achieve the risk/reward profile of 2:1, we didn't change the top number. When you did your research and concluded that the maximum upside was $29, that was based on technical analysis and fundamental research. If we were to change the top number, in order to achieve an acceptable risk/reward, we're now relying on hope instead of good research. The risk-to-reward ratio is one of the most important things that traders and investors should watch out for before placing a trade. Once you’ve calculated the R/R ratio for a trade, you can place your stop-loss order to limit the losses. Similarly, you can also place the book profit order to exit the position at your preferred price. If you are new to stock trading, then a 1:2 R/R ratio should be ideal. You can start experimenting after gaining some experience. But as stock trading is risky, do your own research before you start investing. You can also consult an investment advisor if your goal is to build a long-term stock portfolio. Trade with care. If you like our content, please feel free to support our page with a like, comment & follow for future educational ideas and trading setups.
by CRYPTOMOJO_TA
11
Signals service stung with $727,000 compensation at court.I have long been an opponent of signals services and many other services that claim to be providing educational content - I have to declare. To avoid any issue that might breach the 'house rules', I have not named the company in question or any individuals. The Financial Conduct Authority is a legal regulatory entity (nothing to do with actual trading). The facts in this rare but important judgement are fully in the public domain. I ask the moderators to allow this post to remain so that traders can have discussions about it and exchange important information or experiences. The judgement of the Court will serve as 'lessons' for new and some seasoned traders. Signals services will become more cautious in their disclaimers. However, the courts are likely to see through their words. For one such (nameless) service not related to this post, I showed that an educator of traders would need to do no real trading at all. They would make more money from 'training' than trading. So lucrative is the business. New traders especially need to be very cautious. My opinion - which is not advice - is that new traders should stay well clear of 'services'. Why? Because new traders are vulnerable and more easily exploited. I believe there is enough free and good educational content on Tradingview. All that provides enough knowledge to get going on Tradingview's paper trading account. But knowledge is not experience or skill. Trading is not something you learn a formula about and go off to get rich. It is about discovering your true self and learning from experience. I have steadfastly refused to join 'services' who have approached me from my personal messages on Tradingview. I never provide signals. What you see is what you get and it will always be free and without obligation.
BITFINEX:BTCUSDEducation
by Captain_Walker
24
CHALLENGE: AUDJPY - PLACE YOUR BETSAhoy! There is money to be made and lost here! 🤦‍♂️😂 I'm short with with an affordable loss. Others may wish to go long with an affordable loss. It's not about how right you are but how much you limit your loss if you're wrong. This is a nice one for new traders to experiment with on a paper trading account. 👊 Trading is a strange activity i.e. you can't make money unless you're prepared to lose. 😟 Disclaimers : This is not advice or encouragement to trade securities on live accounts. Chart positions shown are not suggestions. No predictions and no guarantees supplied or implied. Heavy losses can be expected if trading live accounts. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
by Captain_Walker
Gut Felling in trading. How long it takes to " feel" the market?I hear many traders talking about gut feeling, especially when referring to very good traders. I hear them saying that you will, at some point, feel what the market will do next. Many explain it as a sixth sense or cannot it explain it at all. I say to them the explanation behind is a much simpler one. Gut feeling in trading, most of the cases, is nothing else but subconscious pattern recognition. There is nothing magic here, it is simply related to how the human brain works in day to day life. The trader looks at his screen for thousands of hours. Every day, he tries to analyze the price movements, while the brain stores the information in an abstract way into neural maps. Millions of neurons fire and wire together and create complex memory banks which include associated emotional responses. Day after day after day, these memory banks are reinforced and restructured until the neural maps are hardwired. This process is all subconscious. The part which is even more interesting is the way the human brain retrieves the needed information stored in those complex neural maps. This mechanism is also done subconsciously and this is why many label it as “gut feeling”. So, when a trader instantaneously “feels”, in an apparently strange way, what he should do when he sees a particular market event, his brain has subconsciously identified a store pattern. You may ask yourself: So what? What difference does it make knowing this? I say it makes. When you understand how your brain works you should also realize that you have at your disposal an extraordinary working instrument, but this will not guarantee your success by itself. Those neural maps need quality data. Programmers are accounted with the saying “garbage in garbage out”. It’s the same with the human brain. If you don’t put the true intellectual effort in your day to day market observations, if you don’t approach what you see from multiple angles, if you don’t analyze your own emotional reactions, then your neural maps will be built on superficial data. You will only reinforce all sorts of ineffective pattern recognition processes, no matter how long you stare at the screens. By contrast, if you do it right, your “gut feeling” will evolve and become very valuable. Evolving as a trader is not only a function of how much time you spend trying. What really matters is what you are really doing and how you are doing it. This explains why so many traders cannot become profitable even after years of trying. They are caught in inefficient and superficial ways of looking at the market. So many retail traders rely exclusively on technical patterns. They don’t understand what really moves the markets and how those patterns are formed. They spend years and years switching from a technical indicator to another, without realizing they are unconsciously accumulating only superficial data. Some realize the trap … most don’t
OANDA:XAUUSDEducation
by Mihai_Iacob
7
H&S pattern play on EURJPY Glad to be back after a bit of time off chasing other responsibilities of mine. EURJPY has broken down through what I see as a head & shoulders pattern play neckline.The measured move is some 200-250 pips lower providing the neck line break is held. I suspect bounces back to that neck line will be met with resistance. Hold under the neckline and this opens the door to the 89 SMA at the very least. Heading into the Asian trade day and let’s see if we get a bounce into our sell zone. As always all the best to your trades. Trade idea is meant as educational information. Plan your own trades and trade your own plans. Just because I’ve taken this position doesn’t mean you should. If you aim to trade along, the risk is all yours.
Short
by PipsTradingClub
2
BTC HR1 Forecast , Bounce back !Based on my novice analysis, price has hit a major support zone and has created 2 new higher-lows. • Price trend has also crossed over. • Price could hit a major support & resistance level of 10,811 or it may push through towards 11,250. I am very optimistic about this - I am not taking the trade but I am watching it to see if my analysis is correct. Please add any suggestions! Anything is appreciated. I’m trying to learn Naked and I have to practice on every chart I see!! GLGT
BITFINEX:BTCUSDLong
by UnknownUnicorn9913667
3
NEW TRADER AND STILL BACKTESTING MY METHOD, WHAT DO YOU THINK???I just started to back test my trading plan but still unsure if this would be a good analysis of the chart and whether it was a good place to put my stop loss and take profit if anyone has any recomendations or any feedback i would reallyappreciate it thank you very much. i saw that it was a down trend so i marked it with a trendline and also it was rejecting my support so i looked for a break out and a confirmation, my EMA crossed the red which was ma first confirmation of a continuation and den i waited for any bullish candlesticks and noticed a high amount of red candlesticks and the noticed that there was a hammer and a doji so i decided to 'place the trade' right after those candles and pulledmy take profit to my oter support and kept my stop loss afew pips the support it broke.
Short
by kevin2304
Monday morning arm chair quarterback analysis Another Forex trading snack. Well like that the market does what it wants too! The market is never wrong! So what went wrong with my take on the SPX and what I was seeing in the markets? Nothing! Nothing at all. News hit about potential positives with the Covid 19 virus... well traders and algo’s that have had 11 years of bullishness in the markets fueled by the Fed and government manipulation along with near zero rates and you get these kind of emotional moves. Thing is emotional fire doesn’t last. I can see several targeted resistance zones for the SPX on it sudden straight line move. Depending on the markets move and more importantly the NY close of the day. So here is what I’m seeing as Some possibilities.... We gapped higher to day Monday and we could just as easily Have a reversal Tuesday to fill the gap again and continue the grind. Next we could get a daily close above the 61.8 which technically would be a positive for farther moves higher to maybe the 200 day SMA at 2975-3000 We could get a farther move higher to the 124 or the 1.618 Fib extensions from recent highs to lows. That zone is around 3050-3075 ish area. Next we could get to the Fib re trace of the 78% at 3130-3150 from the measured move of the all time high to the recent virus low. So what one has the highest probability of the greatest resistance to current emotions in this move? Side note the AUDUSD which had tracked the SPX really well of late is under preforming. Full disclosure here I tried to short AUDUSD But was caught on the wrong side of market emotions. Don’t get me wrong! I favor shorting SPX because emotional straight line moves favor a reversal to a higher degree then continuing on a higher On a straight line move. But that’s my opinion. Offer your ideas, views, comments, or criticism, all are welcome here. If you don’t make dust in the markets then you will certainly eat dust. All the best in your trades. As usual this isn’t trading advice, but intended fir educational uses or exchanging trading ideas with other free thinkers. Trade at your own risk.
SP:SPXShort
by PipsTradingClub
EURUSD double bottom trade ideaIt’s Friday! TGIF Here’s another Forex trading Snack. After the ECB enacting unlimited QE yesterday during it meeting EUR was shaken with volatility and created what can be viewed as a double bottom pattern. After breaking the neck line and holding it, the path of least resistance I believe is toward completion of the pattern. That should take us towards 1.1200-1.1250 which is also the area of a downward top trend line of a weekly wedge pattern. Longer term should that weekly pattern break it points towards a massive short squeeze. But let’s not get a head of ourselves. First things first. Should you trade this idea the risk is all yours. In trading you either make dust or you eat dust! All the best.
Long
by PipsTradingClub
Gold and a diamond 1H patternHere is another Forex trading snack! Diamond patterns don’t happen all that often. New traders might be asking what does it mean, and how can we trade it? Diamond patterns are called reversal patterns usually found at tops or bottoms of trends. The blue trend lines form a 4 sided diamond pattern and price continues to go up and down inside of the pattern first getting larger then compressing ever smaller forming the diamond until the break out occurs. With XAUUSD this pattern has been building inside of what looks to be a bearish short term wedge point lower. This smaller inside diamond pattern then could point to the blue box around 1500 area as target and resistance level. Because of it’s a short term chart pattern, and that it has been building after a short term decline ( top of this wedge pattern ) it could also bounce to retest the top trend. Usually diamond pattern targets are determined by taking top price and bottom price ( the top and bottom of the diamond pattern shape ) and projecting that distance from the break. Using this, the pattern Points to the top side right at top trend line around 1544 And if down targeted price would be 1500 Because this diamond pattern is a 1H chart pattern, built inside of a what looks like a longer chart time wedge, not necessarily at a true top or bottom trend, price could go either way. One could conclude it is at a bottom of a very short trend so targeting the top of the wedge makes sense. Personally shorter term chart patterns are for the most part very short term in ability to trade them, so should mainly be used to trade off the longer projected targets those short term patterns point to and suggest this could be the next targeted move. Diamond patterns are rare, so for new traders to take note and study them as they occur in the markets could also add another tool into your trading tool box. In life you either make dust or you eat dust. All the best traders.
FOREXCOM:XAUUSD
by PipsTradingClub
GBPUSD sell now?Welcome to Forex Trading Snacks I know it’s the GBP! And some traders are asking is it time to sell it now because of it’s recent pop up from a short term bottom? No one up to this point has asked me if it was a good time to buy it for the same reason? So if everyone is short why is it moving up? Truth is there is only one good reason for getting into a trade short or long... That is to try to make money! However there are many reasons to get out of a trade, all of which cause an opposite move in price to the majority of trade positions / trend. Example with the GBPUSD a lot of traders are selling it driving price and thus creating this trend down, but when these traders want to unwind the trade / get out / lighten up on their short positions, they must buy it! And that buying pushes the price higher until either sellers enter, or sellers panic and want to leave their short positions and try to get out at any cost. The later can cause an impulsive move or a squeeze with lots of followthrough. That option in my opinion has a minimal chance in happening at this time. Of coarse if there were some surprising new news on Brexit then anything is possible. Barring any surprising news, my trading outlook is to the short side of this pair. Because of it’s bounce today and because of price action, I favor a short at or around the 1.2250-1.2325 area. From its recent swing high, this down move has had at least 2 bounces retracing the trend by 250-300 pips. With today’s price action we are currently only about 50-70 pips away from my lower range. In addition we have a down sloping top trend line of the swing move that is coming in at the middle of my range as well. With the 21 EMA daily moving average currently sitting 1.2200 Seller might be looking to take profits and then looking to again establish new shorts at higher prices. I just happen to be in that camp. These views, trade ideas, opinions, are for training purposes only. This idea is not trading advice. If you decide to trade any ideas that are posted you also assume all risk of loss should there be any. In trading you either make dust, or you eat dust! All the best
Short
by PipsTradingClub
AUDNZD trade ideaOne good thing about trading Currency, there is always another trade. And at times setups show up in groups of similar patterns across multiple pairs. Longer term chart patterns are much more reliable as patterns to play. First being a longer time frame chart pattern means more trades have been applied to form these pattern, and when they break—the moves are much more sudden and have a greater momentum behind them. All of which attracts new money into the direction or squeezes out those who are on the wrong side of the trade. AUDNZD is just one pair where I have spotted a potential 5 wave Elliott pattern. This pattern usually is a sign of a 3 wave correction that should be coming, In other words a reversal pattern that can be played to a high degree. My chart here is a 4H chart and what I see as the potential 5 wave top seems to be in place. ( it’s really not a top till it has been retested or a new top reset ) Usually in Asia trade or early in European trade after a bigger move in NY trade, a new push to retest the newly tops or bottoms in such wave patterns happen to a higher degree. So for the over night ( my night that is ) I’m going to place a short order close to the marked 5th wave and another a tad bit higher ( in case of a retest or a new top takes place.) I’ll place a 50 pip stop, and will target 1.0440-60 as my first profit target. Al the best in your trades Remember, either you make dust or you eat dust. Plan your trade and trade your plans.
Short
by PipsTradingClub