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Trade Like A Sniper - Episode 48 - HKDTWD - (18th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing HKDTWD, starting from the 3-Month chart. If you want to learn more, check out my profile.
Education
by Road_2_Funded
Trade Like A Sniper - Episode 47 - USDTWD - (18th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing USDTWD, starting from the 4-Month chart. If you want to learn more, check out my profile.
Education
by Road_2_Funded
Intraday Trading Strategy With Breakout FilterIntraday Trading Strategy With Breakout Filter Overview: This strategy is the combination of two scripts: 1. Intraday Trading Script : It exclusively for M1 and M15 timeframes. 2. Breakout Filter Script: It works at all timeframes. Note: Please read the explanation details about the script respectively. EMA lines help to understand market sentiment and identify potential support or resistance levels. MACD indicator is added to help confirm potential entry points based on momentum. Setup: Use TradingView's multi-chart layout feature, setting a minimum of two charts per layout (M1 and M15). Three charts (M1, M15, and DTF) are preferable. Add the Intraday Trading Script and Breakout Filter scripts to the layout. Note: In this example, the lowest timeframe to publish the trading idea publicly is M15. Therefore two chart in the layout is chosen for M15 and DTF. The optimum setup is M1, M15 and DTF. During Market Hours: Check the TOP GAINERS list for active counters. In TradingView: 1. Verify if the price has already broken the SnR line on the M15 chart. 2. The Breakout Filter must also appear, with a minimum of Filter 2. If Filter 3 appears at M1, M15, or DTF, it shows even stronger upward momentum. 3. If these two are valid, long entry can be considered. TAYOR. EMA 9 can represent a strong support at M15. Intraday trading requires high discipline. Follow the planned Risk to Reward ratio for entry/exit. TAYOR.
MYX:ANNJOOEducation
by hayan500
Four Factors Driving Gold Prices Relative to Silver2600 years ago, the Anatolian Kingdom of Lydia minted the world’s first gold and silver coins. In doing so, the Lydian King Alyattes and his successor Croesus introduced the world’s first exchange rate: the gold-silver cross. Like any cross rate, the amount of silver that can be purchased with an ounce of gold is driven by both demand and supply-side factors, and the cross rate is anything other than stable. Sadly, we don’t have the time series of the gold-silver ratio dating back to ancient times, but we do have data going back to the launch of gold futures on December 31, 1974. Since the mid-1970s, one ounce of gold bought anywhere from 17 ounces to as many as 123 ounces of silver (Figure 1). Figure 1: The amount of silver an ounce of gold can buy has been highly variable In addition to the impact of monetary policy, which we have covered here, the gold-silver ratio appears to be governed by four other factors: Relative volatility and the silver beta Fabrication demand and technological change Gold’s use as a monetary asset Supply-side dynamics Relative volatility and beta To borrow an expression from the equity markets, silver is the high-beta version of gold. First, silver and gold prices usually have a strong positive correlation. Since 2004 the one-year rolling correlation of their daily price moves has hovered around +0.8 (Figure 2). Second, silver is more volatile than gold. As such, when gold prices move up, silver tends to move up more, thereby lowering the gold-silver price ratio. By contrast, during bear markets, the gold-silver ratio tends to rise. Figure 2: The correlation of gold and silver price changes has hugged +0.8 since 2004. For example, when gold and silver prices peaked in September 2011, one ounce of gold bought fewer than 32 ounces of silver (Figure 3). In the ensuing bear market, the ratio rose to as high as 124 ounces of silver per ounce of gold. The ratio snapped back to 64 in 2020 as gold and silver rallied early in the pandemic. In 2024, as both metals have rallied, silver has outperformed, rising 23% in the first five months of the year compared to 12% for the yellow metal. Figure 3: Positive correlation plus much higher volatility give silver a high beta to gold Fabrication Demand and the Impact of Technological Change What is curious is that while gold and silver have rallied thus far in 2024, gold broke to new record highs of nearly $2,500 per ounce whereas silver prices remain 40% below their twin 1980 and 2011 peaks despite having outperformed gold since 2020 (Figure 4). The reason may lie in technological advances. Figure 4: Gold has hit records in 2024 while silver is still 40% below its 1980 and 2011 record highs Even before the Lydians minted the first gold and silver coins around 600 BCE, both metals had been used to make jewellery: silver since around 2500 BCE and gold since 4500 BCE. Some things don’t change. Even today, the primary use of both metals is to make jewellery. Yet, thus far this century, silver has been buffeted by two sets of technological developments: the digital revolution and the energy transition. Both have impacted the relative gold-silver ratio. In 1999, photography used 267.7 million troy ounces of silver which accounted for 36.6% of that year’s total silver supply. By 2023 photography used only 23.2 million ounces of silver or about 2.3% of 2023’s total supply due to the rise of digital photography. Meanwhile, silver’s use in electronics and batteries grew from 90 million ounces to 227.4 million ounces or from 12.3% to 22.7% of silver’s total annual supply, partially offsetting the decline in traditional photography, which may partially explain why silver has struggled to hit new highs in recent years even as gold has set records. The good news for silver, however, is that it is finding new use in the energy transition. Over the past few years silver has seen strong growth coming from solar panels, which accounted for 20% of 2023 silver demand, up from essentially nothing in 1999 (Figure 5). Solar panels may explain in part why silver has recovered relative to gold since 2020. Figure 5: Battery and solar panel demand have grown as photography demand has shrunk If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By contrast, gold fabrication demand has shown itself to be immune from recent technological developments and is still overwhelmingly dominated by jewellery demand, with electronics, dental and other uses absorbing just 17% of annual gold mining supply (Figure 6). The differences in silver and gold fabrication demand underscores that gold is considered the purer of the two precious metals. Figure 6: Gold fabrication demand has remained little changed Gold and global monetary policy Indeed, central banks around the world treat gold as money while they largely ignore silver (Figure 7). They hold a combined 36,700 metric tons of gold, the equivalent of 1.2 billion troy ounces or 13 years of global mining output. Moreover, central banks have been net buyers of gold every year since the global financial crisis. Figure 7: Central banks have been net buyers of gold since the global financial crisis Central bank buying of gold since 2009 contrasts sharply with their tendency to be net sellers from 1982 to 2007. Central banks’ accumulation of gold suggests that they want a hard asset to complement their foreign exchange reserves of dollars, euros, yen and other fiat currencies, a view that appears to have been reinforced by on-and-off quantitative easing since 2009 and increased use of financial sanctions. Central bank buying impacts gold prices directly, but only boosts silver prices indirectly via the gold market. The supply side of the equation Central bank gold buying reduces the amount of gold available to the public. Over the past decade, central bank buying has removed the equivalent of 8%-20% of new mining supply from the gold market each year (Figure 8) which may also explain why the gold-silver ratio rose significantly from 2011 to 2020 and why, even today, it remains at 2x its 2011 level. Figure 8: Net of central bank buying, gold supply has stagnated since 2003 Total gold supply net of official purchases has stagnated since 2003. Meanwhile, silver mining supply peaked in 2016 and gold mining supply peaked the next year (Figure 9). The fact that new supply is arriving on the market more slowly than in the past may be bullish for both gold and silver. Figure 9: Gold and silver respond negative to changes in each other’s mining supply. Our econometric analysis shows that gold and silver prices are negatively correlated with changes to one another’s mining supply. A 1% decrease in gold mining supply, on balance, boosted gold prices by 1.9% and silver by 3.0% from 1974 to 2023. A 1% decease in silver mining supply boosted the prices of the metals by 1.3%-1.6% (Figure 10). Secondary supply appears to respond to price rather than drive it. Higher prices incentivize more recycling, but recycled metal doesn’t appear to depress prices as it doesn’t bring any new metal onto the market. Figure 10: Secondary supply responds to price rather than drives it What connects the two markets is jewellery. Because gold is 70x as costlier than silver, when prices rise, demand for gold jewellery falls while silver’s jewellery demand is relatively unresponsive to price because it costs much less. Gold and silver can be seen as a sort of binary star system where the two stars orbit a common center of gravity or barycenter. Gold is the larger, more stable and more influential of the two, but it is by no means immune from silver’s pull. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By Erik Norland, Executive Director and Senior Economist, CME Group *CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
Editors' picks
CME_MINI:ES1!Education
by CME_Group
4
Blum Project Analysis!!!Today, I want to introduce you to another Tap-To-Earn project and see if it is worth your time. In the previous articles, I explained Notcoin and the Hamster Kombat project. If you have time, take a look at these articles. The name of this project is Blum . Please stay with me. ----------------------------------------------------------------------- What is Blum? The Blum Token is a cryptocurrency associated with the Blum Crypto Project on Telegram . While specific details about the creators and core team might be limited, the project focuses on community engagement, utility, and promoting blockchain adoption. The token serves various purposes within the project’s ecosystem, from facilitating transactions to enabling governance and rewarding community participation ----------------------------------------------------------------------- Now, let's check the Blum project with the help of SWOT ( Strengths-Weaknesses-Opportunities-Threats ). What is the SWOT !? SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential. 🔸 Strengths : The game's style makes it difficult for the bot to jam every token_The active Telegram community currently has 11 million followers Blum selected by Binance labs team as featured airdrop 🔸 Weaknesses : No whitepaper _ Poor website _ Boring game _ The total number of tokens is not clear - the distribution method may not be fair _ the development team is unclear_The goal of the project is very general_ Low number of followers compared to other competitors on X platform _ Currently, you can become a member by invitation only_ It only has roadmap until the end of 2024_ The game environment is very simple. 🔸 Opportunities : Hard Forks to improve the Blum project_ Willingness of big investors to invest _ Improving the website and white paper_ Improve the game environment 🔸 Threats : High number of miners _ Emergence of Whales _Unspecified fee_ Hackers _ Competitors_Laws and regulations of countries Can you add other parameters to the options above or not!? ----------------------------------------------------------------------- Conclusion : Due to the fact that there are more Tap-to-Earn games these days, we should be a little careful in choosing the game, because no matter what you like, you will eventually have an income for the time you spend. According to the description above, if you want to enter the BLUM project, you should only consider it a hobby and not spend a lot of time on it because it has many ambiguities and weaknesses. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
Education
by pejman_zwin
14
+4R Tricky NZDUSD BreakdownAnother trade breakdown ☝️Do not act based on my analysis, do your own research!! The main purpose of my resources is free, actionable education for anyone who wants to learn trading and improve mental and technical trading skills. Learn from hundreds of videos and the real story of a particular trader, with all the mistakes and pain on the way to consistency. I'm always glad to discuss and answer questions. 🙌 ☝️ALL ideas and videos here are for sharing my experience purposes only, not financial advice, NOT A SIGNAL. YOUR TRADES ARE YOUR COMPLETE RESPONSIBILITY. Everything here should be treated as a simulated, educational environment. Important disclaimer - this idea is just a possibility and my extremely subjective opinion. Do not act based on my analysis, do your own research!!
Education
by Yelli_trades
3
Options Blueprint Series: Swap Strategies for High VolatilityIntroduction CME Group Gold Futures have always been a cornerstone in the commodities market, offering investors and traders a way to hedge against economic uncertainties and inflation. With the current market environment exhibiting heightened volatility, traders are looking for strategies to capitalize on these fluctuations. One such strategy is the Straddle Swap, which is particularly effective in high volatility scenarios. By utilizing the Straddle Swap strategy on Gold Futures, traders can potentially benefit from price swings driven by news events, economic data releases, and other market-moving occurrences. Strategy Explanation The Straddle Swap strategy is designed to capitalize on high volatility by leveraging options with different expirations. Here’s a detailed breakdown of how this strategy works: Components of the Straddle Swap: 1. Buy one call option (longer expiration) This long call option benefits from upward price movements in Gold Futures. 2. Sell one call option (shorter expiration) This short call option generates premium income, which offsets the cost of the long call option. As it has a shorter expiration, it benefits from faster time decay. 3. Buy one put option (longer expiration) This long put option benefits from downward price movements in Gold Futures. 4. Sell one put option (shorter expiration) This short put option generates premium income, which offsets the cost of the long put option. It also benefits from faster time decay due to its shorter expiration. Rationale for Different Expirations: Longer Expirations: The options with more days to expiration provide a longer timeframe to capture significant price movements, whether upward or downward. Shorter Expirations: The options with less days to expiration decay more quickly, providing premium income that reduces the overall cost of the strategy. This helps mitigate the effects of time decay on the longer-dated options. Market Analysis Using TradingView Charts: To effectively implement the Straddle Swap strategy, it’s crucial to analyze the current market conditions of Gold Futures using TradingView charts. This analysis will help identify optimal entry and exit points based on volatility and price trends. The current price action of Gold Futures along with key volatility indicators. Recent data shows that the 1-month, 2-month, and 3-month Historical Volatilities have all been on the rise, confirming a high volatility scenario. Application to Gold Futures Let’s apply the Straddle Swap strategy to Gold Futures given the current market conditions. Identifying Optimal Entry Points: Call Options: Buy one call option with a 100-day expiration (Sep-25 2024) at a strike price of 2370 @ 64.5. Sell one call option with a 71-day expiration (Aug-27 2024) at the same strike price of 2370 @ 53.4. Put Options: Buy one put option with a 100-day expiration (Sep-25 2024) at a strike price of 2350 @ 63.4. Sell one put option with a 71-day expiration (Aug-27 2024) at the same strike price of $2350 @ 52.5. Target Prices: Based on the relevant UFO support and resistance levels, set target prices for potential profit scenarios: Upper side, target price: 2455. For put options, target price: 2260. Potential Profit and Loss Scenarios: Scenario 1: Significant Upward Movement If Gold Futures rise sharply above 2370 within 100 days, the long call option will generate a potentially substantial profit. The short call option will expire in 71 days, limiting potential losses. Scenario 2: Significant Downward Movement If Gold Futures fall sharply below 2350 within 100 days, the long put option will generate a potentially substantial profit. The short put option will expire in 71 days, limiting potential losses. Scenario 3: Minimal Movement If Gold Futures remain relatively stable, the premiums collected from the short options (71-day expiration) will offset some of the cost of the long options (100-day expiration), minimizing overall losses. Further options could be sold against the long 2350 call and long 2350 put once the shorter expiration options have expired. Specific Action Plan: 1. Initiate the Straddle Swap Strategy: Enter the positions as outlined above following your trading plan, ensuring to buy and sell the options at the desired strike prices and expirations. 2. Monitor Market Conditions: Continuously monitor Gold Futures prices and volatility indicators. Adjust or close the strategy if necessary based on significant market changes. 3. Manage Positions: Use stop-loss orders to limit potential losses. If the market moves favorably, consider exiting the positions at the target prices to lock in profits. 4. Reevaluate Periodically: Periodically reevaluate the positions as the options approach their expiration dates. Make any necessary adjustments to the strategy based on updated market conditions and volatility. By following this type of trade plan, traders can effectively implement the Straddle Swap strategy, taking advantage of high volatility in Gold Futures while managing risk through careful monitoring and the use of stop-loss orders. Risk Management Effective risk management is crucial for success in options trading, particularly when employing strategies like the Straddle Swap. Here, we will discuss the importance of risk management, key techniques, and best practices to ensure that traders can mitigate potential losses and protect their capital. Importance of Risk Management: Minimizing Losses: Trading inherently involves risk. Effective risk management helps minimize potential losses, ensuring that a single adverse move does not significantly impact the trader’s overall portfolio. Preserving Capital: By managing risk, traders can preserve their capital, allowing them to stay in the market longer and capitalize on future opportunities. Enhancing Profitability: Proper risk management allows traders to optimize their strategies, potentially increasing profitability by avoiding unnecessary losses. Key Risk Management Techniques: 1. Stop-Loss Orders: Implementing stop-loss orders helps limit potential losses by automatically closing a position if the market moves against it. For the Straddle Swap strategy, set stop-loss orders for the long call and put options to exit positions if prices reach predetermined levels where losses would exceed the desired trade risk set by the trader. 2. Hedging: Use hedging techniques to protect positions from adverse market movements. This can involve purchasing protective options or futures contracts. Hedging provides an additional layer of security, ensuring that losses in one position are offset by gains in another. 3. Avoiding Undefined Risk Exposure: Ensure that all positions have defined risk parameters. Avoid strategies that can result in unlimited losses. The Straddle Swap strategy inherently has limited risk due to the offsetting nature of the long and short options. 4. Precision in Entries and Exits: Timing is crucial in options trading. Ensure precise entry and exit points to maximize potential gains and minimize losses. Use technical analysis key price levels such as UFO support and resistance prices, and volatility indicators to identify optimal entry and exit points. 5. Regular Monitoring and Adjustment: Continuously monitor market conditions and the performance of open positions. Be prepared to adjust the strategy based on changing market dynamics, such as shifts in volatility or unexpected news events. Additional Risk Management Practices: Diversification: Spread risk across multiple positions and asset classes to reduce the impact of any single trade. Other liquid options markets could be WTI Crude Oil Futures; Agricultural products such as Wheat Futures, Corn Futures, or Soybean Futures; Index Futures such as the E-mini S&P 500 Futures; and even Bond and Treasury Futures such as the 10-Year Note or the 30-Year Bond Futures. Position Sizing: Carefully determine the size of each position based on the trader’s overall portfolio and risk tolerance. Education and Research: Stay informed about market conditions, economic indicators, and trading strategies to make well-informed decisions. By incorporating these risk management techniques, traders can effectively navigate the complexities of options trading and protect their investments. Ensuring more precision with entries and exits, using stop-loss orders, and implementing hedging strategies are essential practices that contribute to long-term trading success. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Editors' picks
COMEX:GCV2024Education
by traddictiv
10
Sending Tradingview Alerts Directly To TelegramHello, To send alerts from Tradingview to Telegram we usually need third party programs to connect the two , while using the third party services there are few problems that you will encounter , one of them is the speed of process another one being that sometimes the alert is not sent to Telegram and there is usually a cost in using such programs and you are also sending your information to the third party . this video will teach you a new method that does not use a third party program and allows you to send the alerts directly from Tradingview to Telegram.
Education
by zarafshani20
21
Compound Trading Strategy: Definition and UseCompound Trading Strategy: Definition and Use Compounding is a powerful strategy that includes reinvesting returns from trades to achieve exponential growth over time. According to theory, by consistently reinvesting returns, traders can potentially increase their capital base. This article explores the mechanics, benefits, risks, and practical steps to effectively implement a compound trading strategy, providing valuable insights for traders aiming for long-term growth in the financial markets. Understanding Compound Trading Compound trading is a strategy that involves reinvesting returns from trades to increase the volume of future trades, aiming for exponential growth over time. Unlike simple trading, where traders might withdraw returns after each effective trade, compounding leverages these returns to progressively build a larger trading capital. The concept is rooted in the principle of compound interest, where the returns generated are reinvested to generate additional gains. In trading, this means each effective trade adds to the capital base, which then potentially earns more in subsequent trades. This snowball effect can potentially amplify the growth of the account balance. To illustrate, consider a trader starting with $1,000 and achieving a 5% return each month. Instead of withdrawing the $50 profit, the trader reinvests it, increasing the capital to $1,050. The next month, a 5% return on $1,050 yields $52.50, and so on. Over time, the capital grows at an accelerating rate, thanks to the reinvestment of returns. However, the power of compounding also comes with increased risk. As the capital grows, so does the amount at stake in each trade. This requires careful risk management and discipline to avoid significant losses that can also compound. Traders need a solid strategy, consistency, and a clear understanding of market conditions to take full advantage of compound trading. To access real-time charts and develop your own strategy with more than 1,200+ trading tools, head over to FXOpen’s free TickTrader platform. Compound Trading: Calculation To understand the mechanics, let’s delve into the mathematical foundation. The core formula for calculating compound returns is: E = P * (1 + r)^n Where: - E is the ending balance, - P is the initial principal (starting capital), - r is the monthly return rate, - n is the number of intervals compounded over (months) Note that percentages are expressed as decimals. For instance, if a trader starts with $1,000 and achieves a monthly gain of 5%, the formula calculates how the capital grows over time. After one month, the capital would be: E = 1000 * (1 + 0.05)^1 = 1050 After two months: E = 1000 * (1 + 0.05)^2 = 1102.50 This compounding effect accelerates as time progresses. By the end of 12 months, the capital grows to approximately $1,795.86—a 79.586% return compared to a 60% return if returns aren’t reinvested (5% of $1,000 each month). After 24 months, the compounded capital is now worth $3,225.10 vs $2,200. It’s also possible to estimate the power of compounding if a trader knows their win rate and average risk-to-reward ratio. The formula for calculating the long-term effects of compounding with this information is: E = P * ((1 + %win) * (1 − %loss))^(N * WR) Where: - E is the ending balance, - P is the initial capital - %win is the percentage of profit gained per winning trade - %loss is the percentage of loss per losing trade - N is the total number of trades - WR is the total win rate For instance, consider a scenario where the same trader has a win rate of 60%, with a risk-to-reward ratio of 1:2, meaning the trader risks 3% per trade to gain 6%. Using the formula above, we can calculate the total return after 100 trades: E = 1000 * ((1 + 0.06) * (1 - 0.03))^(100 * 0.6) The effect can be substantial, with the trader’s capital potentially growing to $5,304.64 after 100 trades. After 200 trades, the capital may grow to $28,139.21. Benefits and Risks of a Compound Trading Strategy Compounding offers a unique approach to growing trading capital by reinvesting returns. While it holds significant potential, it's crucial to understand both its benefits and risks to make informed decisions. Benefits of Compound Trading - Exponential Growth: Reinvesting returns allows traders to take advantage of compound interest, leading to accelerated capital growth over time. - Enhanced Returns: As the trading capital increases, the absolute gain on each trade becomes larger. - Disciplined Trading: Compounding encourages a long-term perspective and disciplined trading practices, as traders focus on consistent returns rather than short-term gains. - Increased Capital Base: By reinvesting gains, traders continuously increase their capital base, providing a cushion to absorb market volatility and potential losses. Risks of Compound Trading - Increased Risk Exposure: As the capital grows, the amount at risk in each trade also increases, which can lead to significant losses if not managed properly. - Market Volatility: Financial markets are inherently volatile, and sudden market changes can adversely affect compounded investments, leading to substantial capital erosion. - Emotional Pressure: Larger positions can increase emotional pressure on traders, potentially leading to impulsive decisions that deviate from the trading strategy. - Overconfidence: Continuous success can breed overconfidence, causing traders to take undue risks or abandon their disciplined approach, which can result in significant losses. Practical Steps to Start Compound Trading Using compounding in trading requires a blend of strategic planning, discipline, and consistent tracking. Here are the practical steps traders can follow for an effective compounding journey: 1. Setting Clear Goals and Expectations Before getting started, it's crucial to establish clear financial goals and realistic expectations. Traders typically determine what they aim to achieve—whether it's a certain percentage of growth per month or a specific financial milestone. Understanding that compounding is a long-term strategy helps set the right mindset and manage expectations. 2. Creating a Detailed Trading Plan A well-defined trading plan is essential. This plan should outline the trading strategies to be employed, including entry and exit points, risk-to-reward ratios, and criteria for reinvesting returns. Consistency in following the plan is key to leveraging the advantages of compounding. 3. Tracking Profits and Losses Maintaining a detailed record of all trades is vital. Using a spreadsheet to log profits and losses allows traders to monitor their progress and analyse the effects of compounding on their capital. It can be useful to review this weekly and monthly to check how aligned a trader is with their goals and potentially reassess their approach. 4. Establishing Withdrawal Strategies For those trading full-time, it's important to establish how much can feasibly be withdrawn while still allowing the capital to grow. This involves balancing personal financial needs with the goal of compounding returns. Deciding on a fixed percentage or amount to withdraw periodically can help maintain this balance. 5. Maintaining Discipline and Emotional Control Holding on to large amounts of money and coping with potential losses requires significant discipline. Traders must remain calm and stick to their plan, especially during volatile market periods. Emotional decision-making can derail the strategy, so it's crucial to maintain a level-headed approach. 6. Treating Trading Like a Business Effective compound trading requires treating it as a business. This means reinvesting returns back into the trading account to fuel growth, just as a business would reinvest earnings to expand. Viewing trading through this lens encourages a professional and strategic approach. 7. Protecting Compounded Capital During trading slumps or periods of high market volatility, it's essential to protect the compounded capital. This can be achieved by limiting risk exposure, most often by adjusting position sizes. Preserving capital during downturns ensures that there is still a solid base to build on when the market—or the trader's own mindset—stabilises. 8. Using Technology and Tools Leveraging platforms and tools that offer automated tracking, analysis, and risk management features can streamline the process. These tools can help maintain consistency, make data-driven decisions, and stay disciplined. Compounding Trades Compounding trades, also known as pyramiding, involves increasing the size of a position as it becomes profitable. While compounding capital focuses on reinvesting returns to grow the trading account, compounding trades means adding to an existing position during a trade to potentially maximise returns. Pyramiding is typically employed when traders have strong confidence in their position or are engaged in long-term trades. For example, if a trade is performing well and moving in the anticipated direction, traders might add more capital to that position. This approach can significantly amplify returns from a trade since the increased position size benefits from the continuing favourable price movement. However, pyramiding trades carry substantial risks. Adding to a position increases the overall exposure, and if the market turns, losses can be magnified. This risk underscores the importance of only adding to winning trades. Adding to losing trades in an attempt to lower the original entry price can be detrimental. This practice, often called averaging down, significantly increases risk and is generally not recommended. Some strategies incorporate pyramiding as a core component. These strategies usually involve strict criteria for adding to positions, such as specific price levels or confirmation signals to ensure the trade is still valid, and are usually considered advanced. The Bottom Line Compounding offers traders a powerful strategy to grow their capital over time through disciplined reinvestment of returns. By understanding its mechanics, advantages, and risks, traders can harness the potential for significant long-term growth. Ready to start your compounding journey? Open an FXOpen account today and leverage our tools and resources to improve your trading journey. FAQs What Is Compound Trading? Compound trading involves reinvesting returns from trades to grow capital exponentially. By adding the returns back into the account, traders can potentially achieve significant long-term growth as the capital base increases. How to Start Compound Trading? To start compounding, traders set clear financial goals, develop a detailed trading plan, and maintain a record of all trades. Consistency and discipline are also key to reinvesting returns while managing risks effectively. How Do You Compound a Trade? Compounding a trade, or pyramiding, involves increasing the size of a position as it becomes effective. Traders typically add to winning trades to maximise returns and avoid adding to losing trades to manage risk. How to Compound a Trading Account? To compound a trading account, traders reinvest returns rather than withdraw them. Using a strategy that consistently generates positive returns, maintaining detailed records, and adapting your trading plan based on performance and market conditions is key. Effective risk management can help protect and grow your capital over time. 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
Trade Like A Sniper - Episode 46 - USDPLN - (17th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing USDPLN, starting from the 3-Month chart. If you want to learn more, check out my TradingView profile.
Education
by Road_2_Funded
2
Trade Like A Sniper - Episode 44 - EURNOK - (17th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing EURNOK, starting from the 3-Month chart. If you want to learn more, check out my TradingView profile.
Education
by Road_2_Funded
reflecting on 2 year milestoneWell, its been two years now,not profitable but the bleeding has definately been stopped. hovering around the break even zone for what feels like eternity,started in futures with the minis right out of the gate and got handled,never tracked anything,never journaled,what I did do right was stick to my strategy.with the exception of two or three really bad "revenge trade" episodes that ended in big losses i stuck to the plan. in an effort to minimize risk i switched to forex, $1 risk sounded alot better than $10 to me.and it was. i'm still trading forex. i stick to eur/usd and aud/nzd because the two have little effect on each other.the amount of technical analysis i've absorbed over the last 2 years is extensive but hands down, the most improvement has come in the emotional side of things,the psychology. i do track my trades now and i do have some technical rules for entry but other than that my strat is still pretty much the same as it was. what i dont do is force a trade every day.i dont go on diatribes when i lose about how "rigged"this whole game is,and it is rigged. but its winnable. i no longer watch youtube videos and call it studying, i study candles now.i look at last weeks price action,i review every trade,i used to trade on a 1 min chart. these days the 1hr feels to fast for me.I still enjoy trading but in a very different way than in the beginning..the thrill of rolling the dice is gone and has been replaced with a cold determination to see this through,properly, to the end. if theres an idea in here i guess its this. Dont give up,Get better
Education
by unusualsuspects
1
Navigating Investment Decisions with Tradingview: Apple exampleHello, Investing and trading can easily scare participants in most cases. However, the different tools that Tradingview offers can make the work easier for you the investor. In this case I will be using a candlestick chart, a closer look at the price action, The date & price range tool, The vertical line tool and a combination of the financial data provided on the TV platform. 1st, My goal is to seek to understand the company. This can be done on the tradingview platform. This is very important because it builds a base on how the company makes its revenue as well as how its costs would look like. As per the platform. www.tradingview.com Apple, Inc engages in the design, manufacture, and sale of smartphones, personal computers, tablets, wearables and accessories, and other variety of related services. It operates through the following geographical segments: Americas, Europe, Greater China, Japan, and Rest of Asia Pacific. Investing is greatly an act of faith and understanding how the organization has performed in numbers is very key. Although this cannot be assurance that the company will keep performing that way in future, the Tradingview platform gives you a historical view of how the company has performed, its asset quality vs liabilities as well as the cashflow positions. The above for our specific company can be found here www.tradingview.com Once you have understood the story of the company and linked your narrative to the numbers, very key is to understand key upcoming events for the company and also how investors have reacted to the share price over a considerable period of time. Our company apple has ranged between prices of USD 165 & USD 200. This is since July 2023. The company continues to be in a range for that period and is currently trading at around USD 168.45. This gives us a great entry price since the company's fundamentals remain quite strong. Using the date & range tool shows us that the company took 99 days to move from price USD 198 to USD 166. This represents an erosion of -16% but still a short opportunity. The company then took 51 days to move back to its top of USD 198 per share. Just by merely looking at how fast the company is rising when it hits our bottom is great to show that the upwards momentum is stronger. Using this I shall be looking for buy opportunities from our current level with my target at the top. The vertical line is very key in helping us know where we begin our analysis. Very key also to bring into the analysis is the aspect of risk management which helps us set targets as well as identify areas where we need to exit our trades & relook at our analysis once again. Conclusion: Tradingview offers powerful tools that empower investors to make informed investment decisions. By leveraging features such as financial data analysis, market sentiment tracking, technical analysis, and risk management, investors can navigate the complex world of investing with confidence. Using Apple Inc. as a case study, we've demonstrated how Tradingview's tools can enhance investment strategies and drive success in the dynamic financial landscape.
NASDAQ:AAPLEducation
by thesharkke