Get started

Community ideas

Growing Small Accounts Without High Risk### Growing Small Accounts Without High Risk #### What to Avoid: Do not rush to make massive gains in either pips or % returns. Do not open yourself to large risk in hopes of equally large returns or profits. Do not assume taking small risk-defined trades will not grow your account. Do not sacrifice trading equity due to poor planning or lack of planning. #### What to Aim For: Determine how to realistically anticipate a favorable reward-to-risk model. Learn to respect the risk side of trade setups more than the reward. Identify trade setups that permit three reward multiples to one risk or higher. Frame good reward-to-risk setups that have little impact if unprofitable. ### The Reality of Reward to Risk Ratios | Winrate | Minimum Ratio | |---------|---------------| | 75% | 0.3 : 1 | | 60% | 0.7 : 1 | | 50% | 1 : 1 | | 40% | 1.5 : 1 | | 33% | 2 : 1 | | 25% | 3 : 1 | If your winrate is 50%, you only need 1:1 Risk to be profitable.
Education
by SerenityEquity
Best Trend Following Strategies for Gold. XAUUSD Day Trading The recent bull run on Gold is a perfect example of a strong trending market. For traders, such sentiment always provides very profitable trading opportunities. In this article, I will share with you 3 best trend-following strategies for day trading Gold that showed extremely high performance this year. So what I did, I back tested 4H/1H time frame since the middle of February when the bull market started. I tested various strategies: price action, SMC, multiple indicators, candlestick patterns ; and I was looking for the ones that showed the highest accuracy and profitability. 1. Moving Averages Crossover The first strategy that showed a very high performance was based on a crossover of 2 moving averages. Exponential MA with 30 length. Simple MA with 9 length. For entry signal, Simple MA should cross Exponential MA from the downside and a candle should close above both MAs'. Stop loss will be below the closest horizontal support. The setup is considered to be profitable if, after the entry, the price moved up at least by pips distance from entry to stop loss. 13 setups we spotted. 9 of them were profitable. Total winning rate is 69%. 2. Trend-Following Patterns The second strategy that showed a very high performance was based on classic price action patterns. I was looking for bullish patterns like bullish flag, falling wedge, horizontal range, double bottom, head and shoulders, ascending triangle, cup & handle. Bullish confirmation was a breakout and a candle close above a neckline of the pattern. The pattern is considered to be losing if after the breakout of the neckline, the price dropped below its lows. The pattern is considered to be profitable if, after the entry, the price moved up at least by pips distance from entry to stop loss. From 14th of February to 8th of April, I found 37 bullish patterns. According to the rules that I described above, 31 pattern turned out to be profitable. That gives 83% winning rate. 3. Break of Structure (BoS) The Break of Structure strategy is very old and based on breakouts of current highs. In a bullish trend, after the price violates the levels of a current Higher High HH, a bullish continuation is expected. A long trade is opened after the candle closes above HH or on a retest. With such a strategy, Stop Loss is lying below the last Higher Low HL. The setup is considered to be profitable if, after the entry, the price moved up at least by pips distance from entry to stop loss For the same period, I identified 21 Breaks of Structure. According to the rules, 18 setups were profitable. Total win rate is 85%. Remember that you should not overestimate the performance of these strategies. They work perfectly only in times of a strong bullish market. Such periods are extremely rare. However, once you see a strong bullish season, these strategies will help you to get maximum from it. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
10
ICT Breaker & Mitigation Blocks EXPLAINEDToday, we’re diving into two powerful concepts from ICT’s toolkit that can give you an edge in your trading: Breaker Blocks and Mitigation Blocks. There are one of my favourite PD Arrays to trade, especially the Breaker Block. I’m going to explain how I interpret them and how I incorporate them into my trading. Stay tuned all the way to the end because I’m going to drop some gold nuggets along the way" Ok, so first of all let’s go through what both these PD Arrays look like and what differentiates them, because they are relatively similar and how they are used is practically the same. On the left we have a Breaker Block and on the right a Mitigation Block. They both are reversal profiles on the timeframe you are seeing them on, and they both break market structure as you can see here. The actual zone to take trade from, or even an entry from, in the instance of this bearish example is the nearest down candle or series of down candles after price makes a lower low. When price pulls back to this area, one could plan or take a trade. The defining difference is that a Breaker raids liquidity on its respective timeframes by making a higher high or lower low before reversing, whilst a Mitigation Block does not do that. For this reason, a Breaker is always a higher probability PD Array to trade off from. As you should know by now if you are already learning about PD Arrays such as these is that the market moves from one area to liquidity to another. If you don’t even know what liquidity is, stop this video and educate yourself about that first or you will just be doing yourself a disservice. Alright, so let’s go see some real examples on the chart. Later on I’ll give you a simple mechanical way to trade them, as well as a the discretionary approach which I use. And of course, some tips on how to increase the probability of your setups.
Education
by Road_2_Funded
Price Action Fluency As A Second Language: Part TwoPlease watch my previously posted part one video to grasp the fundamentals. Now, let's dive into part two. Price action fluency involves more than just technical knowledge—it requires a deep understanding of your psychological behavioral responses. Your brain will have it as its prime objective to avoid pain. It will send signals to the eyes to ignore setups that don't perfectly align. Your eyes will only see what they want to see. It is essential to train your eyes to recognize every failed setup. To observe every detail of each area, and identify every possible entry point for both directions. Leave no aspect overlooked. The goal is for your brain to understand every nuance of price action intuitively and objectively. Just like when you read a book in a language you're fluent in, your brain doesn’t pause at every letter to decipher vowels, consonants, word meanings, or sentence structures. Instead, it processes a vast amount of information naturally and seamlessly. It doesn't skip letters or words out of fear; it treats every part of the language equally and objectively. Objectivity is purity. Objectivity is clarity. Objectivity is mastery.
KRAKEN:BTCUSDEducation
by EsotericTrading
1
Comparing the new SPYU to UPRO and SPXLI am not sure if anyone else noticed, because quite frankly I completely missed it, but there is a new leveraged share on the block that aims to track the S&P 500 ( SP:SPX ). That ticker is $SPYU. Now this isn’t a conventional leveraged share. Most leveraged shares are between 2 x to 3 x max. However, this one is 4 x. Yeah, you read it correctly, 4 x the S&P. So if the S&P moves 2%, your theoretical gains are 8%. Now there are inherent risks with leveraged share usage, which I have spoken about before. Now I am not going to get into the risks involved with over-leveraging yourself. I feel like there is enough cautionary tales, both from me and others, about such travesties. But what I want to cover in this post is really just an evaluation of SPYU vs the popular others, such as SPXL and UPRO. For me, my go to has always been UPRO; however, this new one intrigued me so decided to look at it a little more closely. Overview SPYU was launched in December of 2023. Surprisingly, despite being an ETF that tracks and American index and is listed on the NYSE, this leveraged ETF is managed by a Canadian institution, the Bank of Montreal. While it is a little strange to see the Bank of Montreal offering such an asset as an American asset, this bank is well known in Canada for offering multiple types of ETFs with exposure to both American and Canadian industries. I myself have many of their products and have been pleased with the returns! Owning to SPYU’s short-ish existence, its difficult to really make long term predictions about how this will hold up over time. But I have done some comparative analysis on SPYU, UPRO and SPXL, using SPY as a benchmark, to see how SPYU has performed in its short timespan. So let’s get into the results. Correlation: Generally, the first thing you want to look at when identifying a leveraged share is the correlation. If a leveraged ETF tracks the underlying well, you are going to see a high correlation. If it struggles to track the underlying well, you will see a correlation with a lot of ‘variance’. Variance just means deviation from what would be, generally, a statistically strong relationship. So let’s take a look at our 3 amigos in relation to SPY: In the chart above, we are looking at the correlation of SPYU, UPRO and SPXL in relation to SPY over a rolling 14 period lag (in other words, a 14 day time period). Purple represents UPRO, green SPXL and Aqua SPYU. In the legend on the right, you can see the max and min correlation of the various leveraged ETFs in relation to SPY. We see that UPRO and SPYU are pretty much on par with each other, with a correlation of roughly 0.97 to 0.98. This would equate to a variance of 0.04 (a perfect correlation has a score of 1, which would be the benchmark to compare the degree of variance or drift from the ability to track the underlying). This is, from a statistical perspective, fantastic! For most instances, we would say this is pretty much on par with a perfect correlation. The same is technically true for SPXL. SPXL has a min correlation of 0.96, which equates to a variance of around 0.05, only 0.01% more than the other 2 ETFs. Statistically, these tickers are indistinguishable and there really is no statistically significant difference observed between their ability to track the underlying. What about Slippage and Returns? Slippage, which can be the result of contango and other factors, refers to a type of “loss in value” so to speak (AKA DECAY!!!). Essentially what it means is, is the ETF delivering what it says to deliver. In SPYU’s case, it says it delivers 4 x that of the S&P (or SPY). No leveraged ETF will ever be able to perfectly match their quoted returned consistently, owning to normal market volatility. However, what we want to see in a good leveraged share is very little slippage. In other words, we want to see a leveraged ETF that more frequently returns what it promises than doesn’t. To measure this, we can use an indicator I developed a while ago called leveraged share decay tracker (). Let’s kick it off with SPY vs SPYU: In this chart, we can see that over a short period of time (under 100 days), the average slippage of SPYU is around 2.4%. For the most part. We can see this quantified in variance (the difference in correlation) and drift (the monetary measure of variance). This means that, at approximately 100 days, the variance in the potential loss or gain is around $1.72. At 30 days, it is $0.25. This means, theoretically, you could be down $1.72 per share, if you intended to hold for approximately 100 days. Now, this $1.72 could be meaningless if the ETF managed to offer around the quoted returns, and indeed, it seems that it does. At 100 days, the expected return would be 42.65%, based on SPY’s trajectory. The actual return was 31.88%. This is a 10.77% difference. Had you traded SPY directly, you would be up about 21%. So the 10% slippage kind of evens out in that sense, because you are still up more than 10% than the actual underlying itself. But wait, we need to check how the other leveraged ETFs perform. Let’s look at UPRO and SPY next: So, remember UPRO promises 3 x the leverage, so the returns will likely be less than the returns on SPYU, which offers 4 x the leverage. Looking at this, we can see the average % slippage is about 0.40%. The average monetary slippage is about 0.40$. And finally, if you held for 100 days, you would only have a slippage of around 3%. So had you invested in SPY in December of 2023 , your returns would have been about 21% and your returns on UPRO would have been about 28%. And finally, let’s take a look at SPXL: Remember, SPXL promises to deliver 3x the exposure to the S&P, similar to that of UPRO. You can see it’s pretty identical to UPRO: UPRO seems to drift a bit more than SPXL; however, the difference is not statistically significant. The $ amount is also equivalent, taking into account that SPXL is approximately 1.5 x the cost of UPRO. Cointegration And finally, the last way to visualize how effective leveraged shares are at tracking the underlying is by creating a co-integration regression. This uses the price of the leveraged share to predict the price of the underlying. A leveraged share with a good relationship will be on point in predicting the price of the underlying. One that struggles will have frequent drifts and deviations from the price of the underlying. Here is all 3 tickers, compared to SPY (SPY represented by the red dotted line): From here, we can see qualitatively that SPXL tends to have more dramatic swings in both directions, then UPRO or SPYU. However, SPYU and UPRO tend to perform identically. So what’s the verdict on SPYU and the Leveraged trio as a whole? My go to for trading SPY has been UPRO. As I just recently learned about SPYU I plan to make the shift here. The results of these analysis show that, from a statistical standpoint, the differences are marginal and not significant. If you want to nail it down to “which is the MOST significant within the significance” so to speak, the winners here can be grouped by desired outcome. Here they are: Returns focus: If its returns you want, its SPYU you should do. SPYU will deliver up and above the returns of UPRO or SPXL, even in light of the drift and slippage. Under 100 days, the slippage shouldn’t be objectively notable. It will only become apparent at the 100 day mark or longer; however, SPYU still manages to deliver returns that surpass both UPRO and SPXL at that time point. Risk Management: Risk management has to go to SPXL, for the lack of slippage associated over the longer term. While SPXL does have a little wider variance, it manages to have the lowest slippage in percent and money drift. SPXL frequently delivers on what it promises. And that’s it folks! Hope you enjoyed! Safe trades as always!
AMEX:SPYUEducation
by Steversteves
2
Understanding Market Volatility and Its Impact on BitcoinIntroduction Market volatility is a crucial aspect that every Bitcoin investor and trader must understand. In this section, we'll explore what market volatility is, how it affects Bitcoin, and strategies to manage it. What is Market Volatility? Market volatility refers to the rate at which the price of an asset, such as Bitcoin, increases or decreases for a given set of returns. High volatility means that the price of Bitcoin can change dramatically over a short period, both positively and negatively. How Does Volatility Impact Bitcoin? Price Swings: Bitcoin is known for its significant price swings, which can be driven by various factors such as market sentiment, regulatory news, macroeconomic trends, and technological advancements. Investor Behavior: Volatility often influences investor behavior, leading to increased buying or selling pressure. This can result in rapid price movements, creating opportunities and risks. Market Sentiment: Positive news can lead to a surge in Bitcoin prices, while negative news can result in sharp declines. Understanding market sentiment is crucial for predicting these movements. Managing Volatility Diversification: Spread your investments across different assets to reduce risk. Diversification can help cushion the impact of volatility on your portfolio. Risk Management: Use stop-loss orders to limit potential losses. Setting predetermined exit points can protect your investments during periods of high volatility. Stay Informed: Keep up with the latest news and trends in the cryptocurrency market. Being informed allows you to make timely decisions and react appropriately to market changes. Long-term Perspective: Focus on the long-term potential of Bitcoin rather than short-term price fluctuations. A long-term perspective can help you stay calm during volatile periods. Conclusion Understanding market volatility is essential for navigating the Bitcoin market. By recognizing how volatility impacts prices and adopting strategies to manage it, you can better position yourself to take advantage of opportunities while minimizing risks. Stay informed, diversify your investments, and maintain a long-term perspective to thrive in the ever-changing world of Bitcoin.
BITSTAMP:BTCUSDEducation
by moneymagnateash
2
Here's How You CONSOLIDATE Your Portfolio Into WinnersGoing through my entire portfolio to judge performance vs Solana, which has been my golden goose this cycle. I bought TSX:FIL in October 2023. If I put that money in Solana instead, I’d be up 345% vs breakeven right now. Obviously I’m selling that position here and flipping it into CRYPTOCAP:SOL How to compare: Jump onto TradingView and on the chart name type: BINANCE:SOLUSDT/BINANCE:FILUSDT You can swap out tickers and exchanges to compare your own portfolio.
Education
by jonnieking
Inverted Head and Shoulders: A Comprehensive GuideThe Inverted Head and Shoulders pattern is a popular and reliable reversal pattern that signals a potential shift from a downtrend to an uptrend. Understanding and identifying this pattern can provide traders with profitable trading opportunities. Anatomy of the Inverted Head and Shoulders Pattern. Left Shoulder: The price declines to a trough and subsequently rises. Head: The price falls again, forming a lower trough. Right Shoulder : The price rises once more before declining to a trough similar to the left shoulder. Identifying the Pattern To accurately identify an Inverted Head and Shoulders pattern, look for the following characteristics: Three Troughs: The head should be the lowest point, with the two shoulders on either side. Neckline: Draw a trendline connecting the peaks of the two shoulders. This line acts as a resistance level. Breakout Confirmation The pattern is confirmed once the price breaks above the neckline with increased volume. This breakout indicates a reversal of the previous downtrend and the start of a new uptrend. Trading the Inverted Head and Shoulders Entry Point Enter a long position when the price closes above the neckline. To reduce false breakouts, consider waiting for a retest of the neckline as support. Stop-Loss Place the stop-loss order below the right shoulder to limit potential losses. This level provides a cushion against false breakouts and unexpected market movements. Target Price The target price can be estimated by measuring the distance from the head to the neckline and projecting this distance upward from the breakout point. Example: Example Reference image of chart ONGC on Daily Time Frame shared below Distance from Head to Neckline: 62 points Breakout Point: 280 points Target Price: 342 points Practical Example of ONGC chart The neckline is drawn connecting the two peaks at 280 level. A breakout occurs at 280 level with increased volume and now candle closed bullish at 288 levels with Good intensity of Volumes. Key Points to Remember Volume: Volume should increase during the formation of the pattern, especially at the breakout point. Timeframe: The pattern can form over various timeframes, but it is more reliable over longer periods. Market Context: Always consider the broader market context and other technical indicators to confirm the pattern. Conclusion The Inverted Head and Shoulders pattern is a powerful tool for traders looking to capitalize on trend reversals. By understanding its structure and applying disciplined trading strategies, traders can enhance their ability to identify and profit from these patterns. 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 Happy Trading! 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:ONGCEducation
by RK_Chaarts
2
Buy the Rumour, Sell the News: Trading Strategy in ForexBuy the Rumour, Sell the News: Trading Strategy in Forex and Crypto Navigating the volatile terrain of forex and cryptocurrency markets demands a strategic edge, one that ‘buy the rumour, sell the news’ can offer. This method, rooted in market psychology, plays on the anticipatory reactions of traders to unconfirmed information about significant events. In this FXOpen article, we explore this strategy, break down how to implement it, and look at an in-depth example. Understanding the Buy the Rumour, Sell the News Trading Strategy The concept of ‘buy the rumour, sell the news’ is a well-known approach in forex and cryptocurrency markets, encapsulating how traders act on information before it becomes public. This strategy revolves around the anticipation of events or developments that can significantly impact market prices. Essentially, it involves trading assets based on unconfirmed information or 'rumours' about upcoming events that are expected to have a given positive or negative effect on the asset's value. The logic is to trade while prices are still reacting to speculation, with the aim of potentially closing the position after the news breaks and the market reacts, typically when prices peak momentarily. The essence of this strategy lies in understanding market psychology and how speculation can drive prices. Traders often monitor various channels for hints of developments that could influence asset prices, such as policy changes, economic indicators, or other announcements in the forex and cryptocurrency sectors. Once the anticipated news is officially released and the initial market reaction occurs, it's common for prices to stabilise or even reverse as traders lock in their returns, having capitalised on the price movement generated by the speculation. Steps to Buy the Rumour and Sell the News In forex and crypto markets, the strategy of "buy the rumour, sell the news" doesn't come with a set playbook of entry and exit points. This is because the strategy hinges on market dynamics and sentiment, which are inherently difficult to analyse. However, traders can follow certain steps to better position themselves to take advantage of this phenomenon. Identifying an Important Market Event The first step is pinpointing an upcoming event that could significantly sway market prices. This involves focusing on events that are of paramount importance to the market, not just any minor news release. When it comes to ‘buy the rumour, sell the news’, examples may include: - Interest rate announcements by central banks - Release of major economic indicators (GDP, Non-Farm Payrolls, unemployment rates, inflation data, etc.) - Policy changes or economic forecasts by governments or financial institutions - Geopolitical developments - One-off events (e.g. COVID-19) The relevance of an event can vary; for instance, inflation data might be more crucial in times of high inflation vs. when the economy is grappling with slowed GDP growth. Likewise, it’s important to consider timing; significant events often lead to market movements in the days and weeks before the official announcement as traders assimilate and act on relevant economic data. On the other hand, an event with moderate importance, like PMIs, may see traders only begin to accumulate a position on the day of the event. While these economic events can be important in ‘buy the rumour, sell the news’ cryptocurrency strategies, given that many are paired against the US dollar, crypto is typically influenced more by idiosyncratic events. Examples of rumours include: - Bitcoin ETFs - Bitcoin halvings - Network upgrades - Adoption/integration with mainstream finance or platforms - Hacks - ‘Whale’ activity Forming a Directional Bias After identifying an event, the next step involves forming a directional bias. This typically requires analysing: - Related economic data and trends - Consensus expectations - Analyst reports - Market sentiment and positioning indicators, like Myfxbook's sentiment analysis, the Crypto Fear and Greed Index, or the Commitment of Traders reports In doing so, traders can align themselves with the prevailing market sentiment. Analysing the Market Trend Determining the prevailing market trend is crucial and is done with respect to the timeframe and context of the expected event. For short-term events, examining trends on 1-hour to daily charts may be best. Real-time price data, from 1-minute to monthly timeframes, can be found in FXOpen’s free TickTrader platform. The alignment of current price trends with market expectations can signal a good opportunity to position oneself in anticipation of the event. For example, if the consensus leans towards the Federal Reserve hiking interest rates due to high inflation and low unemployment, and this expectation is reflected in a strengthening USD, traders might find an opportune moment to position themselves accordingly. Technical analysis can similarly aid in pinpointing a precise entry point. Managing the Position With a position taken based on the anticipated event, the trader then looks to the market's reaction to carry the trade in the desired direction. As for exiting the position, one approach could be to do so just before the news breaks, pre-empting a potential reversal as the market digests the news. This strategy banks on the assumption that many traders will act similarly, leading to a swift change in market direction. An alternative approach involves trailing a stop loss, which could be activated by the increased volatility surrounding the news announcement. This method holds potential for gains if the news contains unexpected details that further fuel the initial market reaction, such as a more significant rate hike by the Federal Reserve or more hawkish language than previously anticipated. Forex Case Study: Bank of Japan Hikes Interest Rates Japan's economic landscape has historically been characterised by persistent low inflation, which regularly fell below its 2% target since the 1990s. This led to the Bank of Japan (BOJ) adopting a low interest rate, with rates dropping to 0% since late 2010 and -0.1% since 2016, aiming to sustainably push inflation back to 2%. Post-2008, many central banks maintained low interest rates. However, as inflation began to rise after the COVID-19 pandemic, most started a hawkish monetary policy. The United States, for instance, responded to record domestic inflation by raising interest rates to 5.5%. However, Japan was an outlier, maintaining its -0.1% rate. This led to a strong rally in the USD/JPY currency pair. The narrative around an exit from negative interest rates had been growing in 2024. However, the rumour hadn’t yet been credible enough to see the yen strengthen. This began to shift in late February 2024, with some suggesting the BOJ was reconsidering its prolonged negative monetary policy. On February 29th, BOJ board member Hajime Takata hinted at a potential policy shift away from negative interest rates, emphasising the central bank's attention on inflation and wage renegotiations as a determinant for exiting its accommodative stance. This statement initiated a notable decline in the USD/JPY rate. Further fueling expectations, core inflation data released on March 5th showed a 2.5% year-over-year increase. On March 8th, Japanese media outlet Jiji reported that the BOJ was considering scrapping its expansionary yield curve control program. According to Bloomberg, this led to market-implied odds of a BOJ rate hike surging from 26% at February's end to 67%. On March 13th, Nikkei, another reputed Japanese outlet, reported that the BOJ decision would come down to annual wage negotiation outcomes, which were due later in the week on the 15th. Despite the growing anticipation of a rate hike, the market's reaction was nuanced; USD/JPY began to rise prior to Nikkei’s report. After all, the expected shift from -0.1% to 0% interest rates would only slightly alter the significant interest rate differential with the US, maintaining a bullish outlook for USD/JPY. When wage negotiations concluded with a 5.28% increase on March 15th, a rate hike on March 19th became almost certain. USD/JPY had climbed from a low of 146.478 on March 8th to open the week on March 17th at 149.011. The meeting on March 19th saw the BOJ raise rates to 0%, as widely expected. Anyone still having long positions in JPY closed their position, and USD/JPY climbed significantly higher, reaching 151.816 just a day later. Buy the Rumour, Sell the News Meaning in This Scenario This case exemplifies the ‘buy the rumour, sell the news’ strategy's complexity. Initially, the yen strengthened on speculation and uncertainty surrounding the BOJ's policy shift. However, as the market began to realise a rate hike was a significant possibility, two pivotal developments occurred. - First, the certainty of a policy change grew. While there were a few unknown events, like the wage negotiations, the market massively increased its expectation for a hike in the week prior to the meeting, as evidenced by Bloomberg’s reporting. In hindsight, the anticipation of the end of yield curve control may have been the ‘news’ event that all but confirmed the hike for the market, leading to the rise in interest rates being priced in completely. - Second, traders recognised that the actual impact of the hike would be minimal on the fundamental USD/JPY relationship, given the still substantial interest rate differential of 5.5% vs the previous 5.6%. This scenario underscores the importance of considering the broader context and market expectations surrounding news events. While economic data releases tend to be more uncertain and may not be fully priced in, some events may offer strong clues well before the actual announcement. If the outcome of an event becomes all but a certainty thanks to these clues, the rumour may no longer be valid, leading to it being priced in as news. At this point, a trader could take an opposite ‘buy the news, sell the rumours’ approach, potentially capitalising on the market's expectation that this shift in fundamentals has already been baked into the price. The Bottom Line In a realm where information is king, mastering the "buy the rumour, sell the news" strategy could offer traders a competitive advantage in forex and cryptocurrency markets. This approach not only demands an acute sense of market sentiment and trends but also a disciplined approach to risk management. For those looking to navigate these waters with an experienced partner, opening an FXOpen account could be your gateway to informed and strategic trading in the dynamic world of forex and crypto CFDs. FAQs What Does It Mean to Buy the Rumour, Sell the News? ‘Buy the rumour, sell the news’ is a trading strategy in which traders buy or sell before an anticipated event and close trades once the event occurs or the news is released. Traders capitalise on price movements driven by rumours or speculation prior to the official announcement, then close position to lock in potential returns as the market reacts to the news, which may already be reflected in the price. How to Buy the Rumour and Sell the News? Traders can implement this strategy by staying informed about upcoming events that could impact market prices, such as economic announcements. Monitoring market sentiment and trends helps in forming a directional bias. Traders position themselves based on speculative anticipation, planning to exit their positions when the news breaks and the market adjusts. Should I Trade Based on the News? Trading on the news can be a viable strategy, especially for those adept at interpreting market sentiment and reactions to news events. However, it requires an understanding of how news impacts different markets and the ability to act swiftly on information. Risk management and a clear strategy are crucial, as markets can be highly volatile following news releases. At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
2
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
The Psychology of Mass Behavior in Trading and How to Overcome Hello Traders, Understanding the psychology of mass behavior in trading is crucial for success in the markets. This post delves into key psychological phenomena and provides strategies to overcome these biases. Key Psychological Phenomena 1. Herd Behavior: Traders often follow the crowd without independent analysis. This can lead to bubbles and crashes. 2. Emotional Contagion: Emotions like fear and greed spread rapidly among traders, driving irrational market behavior. 3. Overconfidence and Optimism Bias: Traders overestimate their ability to predict market movements and believe they are less likely to face negative outcomes. 4. Information Cascades: Decisions are based on the actions of others rather than personal analysis. 5. Confirmation Bias: Traders seek out information that confirms their beliefs, ignoring contradictory data. 6. Availability Heuristic: Overestimating the likelihood of events based on recent news or experiences. 7. Loss Aversion: The pain of losses is felt more acutely than the pleasure of gains, leading to irrational decision-making. 8. Social Proof: Looking to others’ actions for cues in uncertain situations. 9. Fear and Greed: These emotions drive market movements, often leading to panic selling or speculative bubbles. How to Overcome These Biases 1. Risk Management: Implement strict risk management strategies, such as stop-loss orders and position sizing, to protect against irrational market moves. 2. Contrarian Investing: Consider taking positions contrary to prevailing market trends when there is a strong indication of herd behavior. 3. Diversification: Spread investments across different assets to reduce the impact of market volatility driven by mass behavior. 4. Continuous Learning: Stay educated about market psychology and remain aware of your biases. 5. Emotional Discipline: Develop a trading plan and stick to it, regardless of market noise. Meditation and mindfulness can also help maintain emotional balance. 6. Independent Analysis: Conduct thorough research and analysis before making trading decisions. Rely on your judgment rather than following the crowd. 7. Seek Feedback: Engage with a trading community or mentor to gain diverse perspectives and avoid confirmation bias. By understanding and mitigating the effects of mass behavior in trading, we can make more rational, informed decisions and improve our trading performance. Let’s strive to be mindful of these psychological factors and continue to learn and grow as traders. Happy trading!
OANDA:XAUUSDEducation
by efmarquez4
Applying a Champions Mindset to TradingWith the Wimbledon tennis championships starting this week, it seems only appropriate that we take inspiration from tennis GOAT Roger Federer, whose wisdom extends far beyond the court. It’s Only a Point In a recent speech at Dartmouth College in the US, Roger Federer, a 20-time major winner, shared insights from his tennis career that resonate deeply with those pursuing success in day trading: “In the 1,526 singles matches I played in my career, I won almost 80% of those matches. Now, I have a question for you, what percentage of points do you think I won in those matches? Only 54%. In other words, only top-ranked tennis players win barely half of the points they play.” These words, while referring to tennis, hold a mirror to the experience of highly successful day traders, who can finish profitable on 80% of trading days but manage win/loss ratios hovering around 50%. Losing frequently is a reality they manage with resilience and strategy. “When you lose every second point on average, you learn not to dwell on every shot… When you play a point, it has to be the most important thing in the world, but when it’s behind you, it’s behind you. This mindset is crucial because it frees you to fully commit to the next point and the next point after that with intensity, clarity, and focus.” The Psychology of Champions Elements of Federer’s tennis speech touches the core of elite trading psychology. Mastering each trade with intensity, clarity, and focus, while maintaining detachment from individual outcomes, forms a clear pathway to success. “You want to become a master at overcoming hard moments… The best in the world are not the best because they win every point; it’s because they know they will lose again and again and have learned how to deal with it.” Practical Applications of Federer’s Mentality Here are practical tips on applying a champion’s mindset to your trading: • Focus on Process Over Outcome: Emphasise executing your trading plan flawlessly rather than fixating on individual trade results. This approach aims to cultivate discipline and consistency, enabling you to make decisions based on logic and strategy rather than emotions. • Learn from Losses: Traders applying this mindset can look to use losses as opportunities to refine their strategy and improve decision-making. • Maintain Emotional Balance: Try to avoid letting wins or losses dictate your emotional state. Developing techniques such as mindfulness or journaling can help to manage stress and keep your emotions in check. • Commit to Continuous Improvement: Just as Federer constantly evolved his tennis game, traders could embrace continuous learning and adaptation in trading. • Resilience in Hard Times: Developing mental toughness to navigate challenges takes time. Traders could look to build a support system, whether through mentors, trading communities, or personal networks, to help you stay motivated and resilient. Conclusion While the parallels between trading and tennis can only go so far, the psychological insights of a true champion should not be underestimated. By adopting a mindset that prioritises process, resilience, and continual improvement, traders are better placed to navigate the complexities of the market with confidence and clarity. As Wimbledon unfolds, let Federer’s wisdom inspire you to approach your trading with the same intensity, focus, and strategic clarity that defines a champion. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Editors' picks
Education
by Capitalcom
4
Mastering Your Emotions in the Financial Markets: Essential TipsHello Navigating the financial markets can be a rollercoaster of emotions— fear, greed, FOMO, and more. These feelings often drive irrational investment decisions. Understanding and managing these emotions is crucial for successful trading. So, how can investors sharpen their psychological edge? One must-read book on market psychology is "Trading in the Zone" by Mark Douglas. Douglas likens a top trader to a world-class athlete, both achieving success through mental discipline and consistent systems. To help you reach this "zone," here are five valuable tips: 1. Develop a Trading Plan A trading plan is your roadmap through the financial markets. It outlines the conditions for buying, selecting companies, and selling. By adhering to this plan, you remain accountable and avoid impulsive decisions. 2. Keep a Trading Journal A trading journal is essential for assessing your progress and identifying areas for improvement. Document your trades, thoughts, and market observations. This self-analysis will help you refine your strategies and understand your trading psychology. 3. Set Realistic Expectations and Build Confidence Confidence is key in trading. Confident traders take calculated risks and accept the outcomes. Build confidence by practicing on a demo account, treating it as real money, and setting achievable goals. 4. Practice Risk Management Effective risk management is non-negotiable. Determine risk/reward ratios, use stop losses, and trade reasonable sizes. These practices safeguard your capital and ensure long-term success. 5. Consider a Trading Therapist Yes, trading therapists exist! Like athletes with coaches, traders can benefit from psychological support. A trading therapist helps shift your mindset from emotional to logical, improving your risk management and decision-making. Embrace these strategies to handle your emotions and enhance your trading performance. Remember, mastering market psychology is as important as understanding market trends.
NASDAQ:AMDEducation
by thesharkke
3
How to Send Alerts from Tradingview to Telegram I found a new way for sending alerts from tradingview to telegram channel or telegram group by using webhook. I’ve been looking for a while and most of the ways had problems. Some of them had delays in sending the alerts and were not secure because they were using public bots. Some of them required money and were not free. Some of the ways needed coding knowledge. The way I recommend does not have these problems. It has three simple steps: 1. Creating a telegram channel or group; 2. Creating a telegram bot by using botfather; 3. Signing in/up in pipedream.com. I made a video for presenting my way. I hope it was helpful and if you have any questions make sure to comment so I can help you. Thank you!
Editors' picks
Education
by zarafshani20
317
Trade the TREND with 4 Trend Indicators4 Trend Indicators you can use to identify the current MACRO Trend. It's always important to know where your market is currently trading. Is it bullish, bearish, or range trading? If you have established the trend, you can trade with the trend instead of against it. Trading against the trend ( for example shorting during a bullish cycle ) adds unnecessary risk to an already risky trade (leverage). 1) Bollinger Bands 2) Logarithmic View 3) Super Trend 4) Moving Averages + RSI Let me know how YOU determine the macro trend! _________________________ BINANCE:DOGEUSDT MEXC:ETHUSDT KRAKEN:BTCUSD COINBASE:SOLUSD
Editors' picks
Education
by CryptoCheck-
4
EBS Base Breakout SetupHey everybody got my camera working for this trade idea. Here we have the ebs stock setting up for a breakout in an uptrend and we're hoping for a bullish continuation here. I describe my entry points my stop loss and my profit target one and the logic behind them and how to position your share count so you can manage your risk and prepare to lose as much or as little money that you want if the trade goes against you every decision in this trade has meaning and logic to it that pertains to the particular stock and the setup therefore you know why you are doing everything that you're doing when trading. Let me know if you have any questions or if this is new to you or if you need help setting it up or calculating how much money you should win or lose. The only issue with this stock is that it's not in the technology sector and it's not in the communication sector so it is not in the most high performing sector right now although the healthcare sector is performing pretty decently with financials as well.
Editors' picks
NYSE:EBSEducation
by PappyTrading
4
Developing Emotional Resilience: Bouncing Back from LossesOkay, fellow TradingViewers, it’s time we tackle a topic that may make you a bit uncomfortable. But, rest assured — it’s for your own good! Today, we explore the realm of emotional resilience and, more precisely, how to bounce back from losses. Losses are inevitable. Ask anyone — even the big dogs in the industry have gone through painful losses (as you’ll see at the end of this write-up). Drawdowns so severe that they’ve nearly put hedge funds out of business (just ask Ray Dalio). And yet, bouncing back from losses is what has helped these one-time losers to develop emotional resilience and make the best out of the experience. Acknowledge the loss, but don’t overblow it Accept that losses happen and they’re a natural part of the trading journey. No matter how skilled or successful you are, you will have losing positions every once in a while. First, make sure you find out what went wrong. And second, don’t dwell on the losses too much and don’t let them cloud your prospects of becoming a better trader. Size your positions according to risk tolerance Never let a single position wipe out your entire account if it turned against you. We know how attractive it is to bet big on currencies swings spanning European countries . But keep in mind that, in such case, the old market adage "You're as good as your last trade" will hold true and it may not be pretty. There are two main ways to prevent the wipeout of your account with a single trade — don’t bet too big (or use too much leverage). If you do bet big, make sure you have a tight stop loss that won’t let your balance get washed out and drawn underwater. Always think about defense before you think about offense. Let your strategy take care of your trading You won’t have to be emotional if you let your strategy take care of your trading. Having the right trading plan will eliminate the need to react on the spot and make rushed decisions out of emotion. A solid strategy can empower you to withstand even the harshest market conditions with your chin up and trading account unscathed. Embrace the power of habit and routine In trading, consistency is key. Create for yourself a nice and easy-to-follow trading routine. This may include making your cup of coffee before you sit to do some chart reading. Or get a workout in before you read the daily news. Whatever will help you stay disciplined and emotionally balanced — do more of that. Invest in yourself and then trade the markets Your most valuable asset isn’t your trading account — it’s you. Invest time in learning, reading, watching interviews of successful traders and financiers. Read books on finance and trading, study the economic calendar , or sign up for a paper-trading account to test your trading skills risk-free. The more knowledge and practice you soak up, the more resilient and prepared you will become. Know when to step back and get a break Sometimes, the best thing to do after a loss is do nothing at all. It’s understandable if you feel emotionally unstable, off-kilter and overwhelmed when the markets gives you a slap in the face. Especially if you’re just starting out in the volatile trading space. What to do then? Unplug, unwind, recharge. The market will still be there tomorrow — go touch grass and come back with a refreshed perspective. Celebrate the wins — no matter how small Trading has to be about more than just coping with losses. Give yourself a nice pat on the back for every little victory. Made a successful trade? Or even got out at breakeven thanks to your stop loss? Perfect. Recognize and celebrate these moments. They’re little milestones to remind you that you’re on the right path to success. Loss advice from the big dogs in trading Let’s wrap up some with loss advice from the world’s best traders and see how they dealt with the blows of Mr. Market. Paul Tudor Jones , hedge fund manager: “Losses are not your problem. It's how you react to them. Ignore losses with no plan, or try to double down on your losses to recoup, and those losses will come back like a Mack truck to run over your account.” Ray Dalio , founder of the world’s largest hedge fund Bridgewater, on how he viewed a near-bankruptcy experience: “I needed to balance my aggressiveness and shift my mindset from thinking ‘I’m right’ to asking myself, ‘How do I know I’m right?’ It was very, very painful, yet it changed my way of thinking. It was one of the best things that ever happened to me.” George Soros , pioneer of the hedge fund industry: “It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.” Let’s hear from you How do you usually deal with a trading loss? What’s the best thing a loss has taught you? Comment below and let’s spin up a nice discussion!
Editors' picks
Education
by TradingView
7
Identifying and forecasting trends using MMOHThis MMOH ticker tracks how many stocks are over their 100D Moving Average. You can think of it like an RSI, where >75 is overbought, <25 is oversold and ~40 is neutral. I've found I can forecast trends, and spot pivots; using bull/bear divergence lines, and paying attention to the critical levels. Around 40 usually gets some swift bear/bull action, and we are approaching it. Pass or fail, it's gonna start making big moves. I could see another 10-20% blow-off top, but we're def due for some bear sooner rather than later, imo. I also like to compare this to the MMTW, MMFI, & MMTH which are 20D, 50D, & 200D. They have the same tickers specifically for SPY and NDX that start S5 or ND. They are NDTW NDFI NDOH NDTH S5TW S5FI S5OH S5TH
MEducation
by Nicklaus68