Risk
AUDNZD: Trade Update / Risk LessonWhats up guys?
This idea is correlated to the one linked below. The difference between those two is the two yellow boxes. In the first i counted the first level as yellow box wrong and so the trade made another move down. I just wanted to give my follow traders a quick update about how the idea now looks with the correct two yellow consolidation boxes. We do not expect price to rise before another move to the downside. And yes we are still in the trade, which is linked below. Remember using always something between 1-2 percent risk keeps you long term in the game and also protects you from these mistakes. I am only 0.5 percent in drawdown from this trade!
Risk Management On Harrowing TradeThis BTC trade is a little harrowing, I am long from around 4300 with small size.
It dumped out with large red volume but green buyers have stepped back in and may produce a reversal.
I may have just been too early on the trade rather than wrong outright. I originally had the downward movement marked as an ABC correction but would have done better to wait for a full 5 wave impulse with the end of the impulse marked by large green buying pressure volume.
In any case I am not going to average down even though it is still in my buying area because I am not at all sure that the selling volume is dried up. The big red vol bar on the 24th makes it hard to justify that the reversal is in place.
Regarding managing risk, I have found that scratching trades like this when they come back to break even is really a bad idea and hurts overall robustness.
It is much better to only begin tightening the stop AFTER AND ONLY AFTER the trade is somewhat profitable.
I am using the red linear regression line with wide settings for stop tightening if the trade becomes profitable. The point being that it's really important to achieve full target hits rather than getting taking out by too tight a stop.
Max risk is at 3428 and if it doesn't get stopped there it will probably take a week or more before I can tighten the stop.
Psychological trading hack #0002 (educational)In this screencast I share some of my own personal journey which I suspect may resound with many a struggling trader out there. This post is in keeping with the house rules on text-based analyses, and psychological self-analysis is the biggest most important aspect of trading. It is clearly in the category of 'Beyond Technical Analysis'
I had been thinking for many days where to start with this journey. This morning I hit on it. It is about me! Not about charts and methods. So that's where I start.
I share this for the benefit of all traders and especially new traders. I'm not saying I am right about everybody. I only know about my own journey and I think there may be some 'psychological hacks' in all this, to curtailing much suffering among other traders.
Everybody knows that discipline in trading is required, and that is primarily a psychological issue. Proven methodologies for profitability just do not work for a majority of people. So the big factor is 'the people' and what leads them to make bad decisions in trading. I've been tackling it.
Join me on the journey. This could be (though not necessarily) the most important journey of all.
Crude oil to see recovery from current levels!SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY
Chart time frame - 2 daily
Timeframe - 1 - 2 Months
Actions on -
A – Activating Event
Commodity finds Support @ current levels . Commodity to move towards the @60 level,
B – Beliefs
Crude Oil needs to consolidate before I look at going long. I will stay on the sidelines until then. Will keep u posted :)
FX_IDC:USDWTI
Happy trading.
Follow your Trading plan, remain disciplined and keep learning !!
Please Follow, Like,Comment & Follow
Thank you for your support :)
This information is not a recommendation to buy or sell. It is to be used for educational purposes only!
Option Selling Opportunities So Good They're ScaryNov 1.
Option Selling Opportunities So Good They're Scary
Nov 14.
Your account was caught in an extraordinary bout of volatility in the energy markets. In particular, natural gas prices experienced a parabolic move over the past 3 trading sessions...
The event resulted in a catastrophic loss to the portfolio.
Your account now likely not only has a zero balance - the balance is likely slightly debit.
And to think that I got a sell signal the 8 november as I was testing a 4 hour RSI divergence alert system lately (gave up on that already :D), good thing I avoided this.
Just looked bad.
Now I dare anyone to tell me again my bias causes me to miss out, and I would make alot more money if I was not so biased against every thing, go ahead, I dare you.
Tell that to the people that received margin calls and letters telling them they lost all of their money. I bet their TA told them they were very strong resistances.
“A combination of late summer heat, nuclear outages, hurricane disruptions, pipeline delays and now a burst of early cold weather has left inventories at critically low levels just as the winter begins,” Goldman Sachs wrote.
Volumes of benchmark Henry Hub natural gas futures on the Nymex were a record 1.6 contracts on Wednesday, more than four times the average.
The advent of shale production in the past decade subdued the market, however. Some traders made money consistently betting against the market as prices declined.
Some traders have maintained short, or bearish, positions in gas and long, or bullish, positions in crude oil and “the unwinding of positions in one of these two commodities could potentially have triggered the opposite effect on the other commodity,” Citigroup said.
The market action was so ferocious that an exchange traded note enabling retail investors to place leveraged bets on lower natural gas prices was more heavily traded than the most popular exchange-traded fund linked to US stocks.
Copying quotes from the financial times. I guess idiotic retail traders assaulted this commodity and did their usual dumb troll TA thing and they were so many of them that this happened... I guess... Lmao.
I just love looking at all these "very very strong resistances" and oscillators giving sell signals.
Of course there are also those that followed the move and made money... alot also got destroyed when it dropped 20% right after ^.^
Lmao watching screenshots of these options traders that lost everything thought. They cannot criticize me for being careful and missing out now that they cannot even afford the internet :smart:. Even those that made money are probably just gambling at that point and got lucky this time but will end up in the same boat as the losers.
Your TA looks really good when a pipeline explodes and reserves are at their lowest in 15 years. Oh ooof course, people are not going to want gas they are just going to freeze to death out of respect for "very strong resistances" and some troll indicators that get sold to newbs and never worked.
Bi-bi-bi-bi...BITCONNECT!!! HAHAHAHAHA.
I loooooooooooove BIIIIIIIIIIITCONNECT. BITCONNECT!
These greedy people that are not careful, they keep getting rekt. Very important lesson here.
"The Great Rotation"-Harsh but a Garden Variety CorrectionLooking back historically at previous corrections throughout the broad market indices. We are looking at a W pattern with Bollinger bands. You can see the previous corrections from Gov't shutdown in 2011, Oil rout of 2015-2016, and now as I call the "Great Rotation". Earnings were going to be the grand escalator to take out new high's in the S&P. Unfortunately, many of the mega-cap stocks were already priced for perfection and anything less than a stellar quarter and amazing guidance was going to lead as a unraveling of many of these heavy weights. It seems that even the retailers have been a bit tepid even though many experts are saying that the US consumer is as strong as its ever been. My case that we are not going into a full bear market, not quite yet at least, interest rates have not softened, Gold has not pick it up (off of a fear trade), and the volatility Index (VXX) has stalled for the 2nd time a the 40 mark, a large technical resistance for the VXX.
Then what turns the market? My theory is that all the economic data that we have been receiving lately and the lack of any threat of major inflation, I feel the Fed will pause in December and kick the can down to Jan-Feb of 2019 to look at raising rates. I think that will be the catalyst to ensure that our markets still have a relatively accommodating Fed. (Check out Jim Grant's CNBC Interview from 11/20/2018).
Take this opportunity do your research and find values in equities that have been oversold and keep your stops tight. Happy Trading & Happy Thanksgiving!
-KG
Why I do not do risk management and never will.First, the whole concept is idiotic.
If I was an educator and someone came to me and asked about "risk management" "how much time should I spend on it" "what risk management should I have", I'd just slap them :D
Here is your risk management plan "don't be an idiot" now go play.
Here is what (correct...) trading is: via information gathering (patterns that repeat themselves + news + experience/instinct), you choose to go long or short on a currency/stock/crypto/etc. You have a vague idea of the minimum winrate to expect how much $$$ you are putting on the table and how much you are going to get out of this (can't really know these numbers exactly just have a vague idea I think backtesting the "worse case scenario" and this giving at least 50/50 is what we need, as far as I know there are not really any mechanical systems that work out there out of quant funds that gather terabytes of data on a daily... and even them don't really know for sure and sometimes lose... if there was ... there wouldn't be for long idk I think we'd know about it). You also consider the best and worse case scenarios.
I see no "risk management" part of trading. The whole thing is risk x to z money with a to b probability to make t to v money with c to d probability. How is there a "risk management" facet? Is there a "swimming" part I should not ignore in the front crawl? Lol wut? "Oh ye it's not all about moving your arms in the front crawl you know, there is also a swimming part".
"I am not the best trader but I am really good at risk management" <=== On par with "dot com stocks can keep going up forever because the internet allows for infinite productivity it's so abstract I am so smart (not) muuuh bags" and "Bitcoin will go to 5 million $ maths and economic laws do not apply to this new thing" on the level of stupidity.
Just like the little messages we keep seing "careful trading carries a high level of risk". Anyone that needs this message is too stupid to trade.
So anyway, what this guy said about pigs it is true. You keep risking half a percent or whatever, you will grow, but you'll wait your whole life to get from 5000$ to millionaire.
At some point, you have been trading for a while and you found a gem, or you took hundreds of trades from the same strategy and you know you are good enough to get an 80% winrate (because there is no mecanical system afaik and you are going to have to be a discretionary trader to succeed), you know you can handle some big risk (poker player for example, or just don't care about money) you want to take a big leap, you are going to have to risk big. Why do alot of people become successful but never make it really big? They took the leap forward on a few thousands, but then they stopped once they got to big amounts because not warriors but little crying chihuahuas with tiny balls and just stay at that level or start teaching to make more (the 10% that are not straight up lying scammers), and ye of course the little chihuahas that get into teaching all keep repeating how you should not risk more than 1%.
All the famous billionaires Ray Dalio, George Soros, Warren Buffet, they all risked big and took big losses. Ray Dalio even had it so bad, he fired every one from his fund until only 1 person was left in it: himself :D, he had to ask his father for money haha so he might have took it a little too far.
Oh quite interestingly, the big players that took huge losses took the biggest losses on short position. Sure they're very profitable and all, but doesn't mean you should go crazy either...
When you short, you must be prepared for spikes of 200%, it has happened in the past (does not apply to currencies they're a little different), whereas long you cannot lose more than 100%.
My belief is:
- never ever go crazy on shorts, no matter what.
- do not ever go big ever until you took hundreds of trades (or less if you position trade...) and are seasoned, really know what you are doing, not "I think because I backtested this"
- having theorical experience is not enough, unless you are a supercomputer. You must have ACTUALLY traded for a while, with real money.
- when you are totally confident, if you want to accelerate that growth a little, besides improving and doing more research of course, consider upping your risk, move it from 0.5% to 3%, then 5%. going from 0.5% risk to 5% for a while means an exponential explosive difference, 20 wins with 0.5% risk equals 10% growth, with 5% risk it equals way more than 10 times more, it equals 165% returns. etc.
- Obviously always consider the worse case scenario... Anyone that says "it never can" should be gunned down on sight (not an actual call to violence), but seriously they are too stupid to trade.
- Be like a spider. Be very very very patient, for years. But when the time to strike comes, just go for it.
- Make sure you can handle the maximum possible loss (which should be capped if you never go big on shorts). For me as long as I have enough left to live and bounce back, I don't care about big risks, anything over what I stricly need to survive is bonus money menat for playing. If you do not have this mentality, do not risk that much.
- Most people that get into this game as fresh noobs directly want to start as countertrend traders AND risk big asap too. This is how they all get destroyed and we get these terrible stats, or become legends in 5% cases, and then get destroyed later on because they actually just got lucky. Then they either quit, or start risking very small, the exact opposite of what I think every one should be doing: never quit. Start very small, and when you have enough experience and are at the absolute top of your game, with no distractions, then you up the risk give that account a big boost.
*** This is not financial advice, if you go risk everything on 1 bet and end up broke, not my problem.
Now go play!
Could Ethereum bring back the Crypto Markets?As usual I have no crystal ball.
Overnight and into this morning, I've been watching the order-book action on Coinbase . What was striking was the amount of volume being exchanged on Ethereum compared to BTC.
In essence BTC volume appeared to be quieter than Ethereum. I'm talking about he 'buckets' of trades - not the actual amounts of money. See my 44 second clip of this morning (linked not sure it will show).
It sort of makes sense cuz Ethereum is far cheaper than BTC if you wanna get throw your money in now. Price is near the bottom and that's attractive for your neighbour next door.
One thing has been proven in all markets is that when all hope is gone, that's often a time when it's best to buy (go long) - a t your own risk of course .
I'm long on BTC and ETHUSD with acceptable stop-losses on the 1h time frame. This is not an invitation for others to follow.
Disclaimers :
The representations herein are indicative, not predictive and do not imply any past, present or future performance of the individual making the representation. Under no circumstances does any graphical or other representation imply, encourage or recommend the buying or selling of securities, or the making of any kind of investment or trade. No guarantee of accuracy is provided for reported facts. No insight into practical aspects of trading or investment is provided. There are no cloaked, or implied meanings or expectations to be received. Gambling in financial markets is strongly discouraged .
Trading or investing in securities, crytpocurrencies or tokens of any kind carries serious and/or catastrophic financial risks. Those who lack the knowledge, skill and experience in those markets should avoid taking those risks.
You are responsible for your own due diligence. Should you take financial risk by acting on this representation or any interpretation of it, you do so entirely at your own risk.
This declaration is consistent with UK and European law on representations, implied contracts and the common law in relation to negligence.
BENEFITS AND RISKS OF TRADING 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY
BENEFITS AND RISKS OF TRADING 101
a) Market Action
Market Action is determined as the summary of data showing the trading activities in the market, which determines the differentiation between the price of the currency on which profit or loss can be generated. The rate of change in profit and loss is provided in Market action summary. This can enable the investors to determine which FOREX they should sell or buy in the market.
b) Liquidity
1. Market liquidity determines the extent to which a market, it can be a real estate or a trading market, which can allow selling and buying of assets at stable prices. In the trading market, the liquidity of securities is considered as ease of selling and buying the securities without affecting the price of the assets.
2. While trading in a FOREX market with a high volume, the bid price offered by a buyer on each share and the asking price on which seller is willing to sell shares, if based on the same or close amounts than the market highly liquid.
3. The difference between the prices is considered as the spread. The market liquidity usually affects when the difference or spread between the ask prices and bid prices increase.
c) Leverage
Traders determine margin and leveraging as the two important aspects of leveraging. The loan provided by a broker is considered as a margin, which enables traders in leveraging the securities and funds through the account to accomplish large trade activities. However, it is necessary to open and get an approval on a margin account.
The FOREX market usually uses 2:1 leverage, this means that investor can buy almost double of the amount they hold in their trading account. This means that if the investor has $50,000 then they can purchase $100,000 of currency in case their trading account leverage is 2:1.
d) Economic risks
Economic risk arises due to the changes in macro economic conditions. These risks are much capable that they can introduce changes in investments of shareholders and bondholders in the market. These changes can be the result of changes in government regulation, exchange rates, and political stability. International investment carries more investment risk as compared to domestic investment. The main reason that economic risk can adversely affect the corporate investments is due to the fact that economic risks can violate the economic sustainability.
Happy trading :)
Sugar LongSUGARUSD
Entry
-Above highs of pinbar
Stop
-Below lows of pinbar
Target
-2 times stop
Risk Management
-Risk 1% to 2%
-Ratio: 2:1
An important lesson: bad traders and investorsThere so many random people starting hedge funds & all they have to do is shadow the market and voila, you are a millionaire (this is 100% true), in a batch of thousands of people some are going to be lucky - simply a normal distribution - and get better results and end up billionaires instead of millionaires.
They are certainly good at marketing and presentation all that stuff to attract dumbvestors.
Alot of people that really know this business say that 95% - or more - are complete frauds. I mean, at least they are able not to lose money.
The cool thing is they have alot of money, and this money is ripe for the picking. They almost always underperform indices, and bring so much cash in, I think in late 2017 they had over 800 billion usd into stocks. Bringing plenty of volatility and volume, so easy to just ride on their backs when something strats trending then they follow the momentum and push it strongly...
So today, let us look first at Bill Ackman. This guy became a billionaire somehow, probably just what a random normal distribution does, and he was bullish on valeant pharmaceuticals at 200$. Now what did it look like back then?
Looks like a complete bubble. He is probably one of these guys that does not believe in TA.
But any way you look at it you can clearly see it lost momentum, and it looks like a bubble.
There was 1 small support and that is it. The price skyrocketed, of course there is a strong possibility it just skyrockets down...
What did he do? Buy "the dip" at 200$, then he refused to sell because "it cannot go lower I am sure about this" and he even BOUGHT MORE "cheap" as the thing was going down. He wanted to hold it "for the long term" but under pressure and to convince investors he had not entirely lost his mind he ended up selling at something like 10-15$. Cringe.
His fortune was over 2 billion, and now he only has 1 left. He used to be called "baby Buffet". No more. People just do not understand normal distributions.
Second story.
"Vadim Perelman was a young hedge fund hot shot not so long ago, overseeing a portfolio in the hundreds of millions at the age of 31, hopping on corporate boards, and issuing lengthy slide presentations about his favorite stock picks. But then Perelman placed an enormous bet on a single company, Walter Investment Management."
Translation: Freshly out of school nerd started with wins due to how normal distribution works. He ended up with hundreds of millions quickly. And he probably considered himself a "legend". The new Warren Buffet, the genius of finance that would reinvent trading.
Let's look at the story. I cannot find the chart in trading view so it is going to be all text.
Trading legend and young prodigy Vadim Perelman hedge fund was the largest shareholder of Walter Investment Management in June 2015 when the share was quoted 23$.
Perelman’s U.S. stock portfolio has gone from $854 million in 2013, including the notional value of a large number of options, to $35 million in September 2016, SEC filings show.
Trading legends never cut losses...
THIS
ACTUALLY
HAPPENS
IN
REAL
LIFE
REALLY????
There are so many examples, but I had enough for now.
So not be one of those. Trading is easy, seriously, but some qualities are required, such as IF you go all in on something (why?) do not let it drop 95% before getting out. Or in other words, the quality of not being a complete moron.
Nothing warms my heart more than watching an arrogant fool that gets lucky and thinks he is this superhero get struck by reality and fall face first on the hard ground. If they get angry it is even better. An amazing treat.
On the flip side you might get the one that is really good but starts with bad luck, but I doubt that happens often...
I just cannot believe all these "common errors" of trading I keep hearing all the time... but then I see experienced educated professionals make them... what is this? Really?
"Oh I cannot just open a trade and forget about it or just follow my rules" why? why? People are broken lmao.
Avoid all these dumb mistakes never cutting losses not being disciplined overtrading FOMOing etc and seriously it's basically impossible not to make money trading.
Maybe I'll teach a dog or a 5 years old one day.
Oh I think Dan TheChartGuys daughter knows how to make money and she is 10. Not sure but I think that is what I heard.
Now that the crypto bubble is over, I will miss seeing a new "legend" pop out of nowhere get a lucky streak of 3-4 winners once every 3 days, call himself the son of god himself, blow up and disappear.
People that are interested in trading - I think - are less dumb than alot of the people that appear during bubbles such as crypto.
In all seriousness, I hope this never changes, thousands of morons playing with hundreds of billions of dollars, booooii I'm feeling tingles as I type this, the potential to rob them is enormous. For someone addicted to charts and that learns new things every day. Luckilly I am one of those.
I CANNOT WAIT for my trading week to start, see some fear, see some panic selling and buy these dips then run away with their money.
US 10Y Breakout Recently USTs moved a lot lower as yields continued to push higher on inflation fears and hawkish guidance and communication from Fed. With investors and traders focusing on the 3.5% before any significant correction in stocks.
However with the recent push hitting 3.23%, US stocks plunged sparking global risk off sentiment. As such USTs found support from safe haven flows.
Technically, price is getting squeezed in with a resistance at 97.87 with rising lows. Price will break either way
A) price breaks upside - for this to play out general risk off sentiment will remain adverse, with stocks moving lower. targeting $98.70 28SEP high.
B) If price holds the resistance and continues in this downwards trend back towards OCT lows at 96.90. If this was the case would hold the final part of position for a further push to the downside. Fundamentally, stocks would bounce and global risk sentiment would improve... maybe the catalyst for this scenario is strong US earnings this week coupled with strong GDP growth advance reading on Friday.
Both trades offer good risk to reward... Personally I favor option B, continuation of the downwards trend but have no problem getting long on a confirmed break above the resistance. Will wait for a breakout before taking any action
Buy opportunity for Gbp/usd ...after crazy ride Hey traders ,
for the days ahead , i see that the price in all time frames except 1min and 5 min and 15 min the trend is downtrend , the price is above MA 200 so we have to search about short bias but this is not for me right now , second the AOV- area of value is on the new support -the old resistance and closed on Friday with new resistance on 1.28400.
The entry Trigger was the nice reversal candle on H4 ,or you can see it on lower time frames.
If this bullish setup continues we aim on 1.29000, if this break the next station is on the lows of 1.26634
Set stop loss 1.28000
Care its high risk trade because the Trend is downtrend and the news is not good for gbp , but we cant see the reversal candle and dont use it ,
the main trade on this one is that will fall down , but for the week ahead maybe bounce at the price that mention before.
Thank You
$USDCHF EPIC 7 to 1 RETURNSFundamentals: CHF hasn't been acting in traditional safe haven character, with global risk sentiment in the "off" position and CHF is weakening. Unsure why this is, but if you look at yield spread between treasuries and CH10 its been widening all year as treasury yields rally and CH10 yield is relatively unchanged on the year. jan2018 spread= 250bps & Oct spread = 320bps implying higher for this market. Coupled with that I wonder if theres a carry trade developing for this market, with Fed rates at 2.25% with outlook set to hike through 2019 past 3% and the Snb with rates at -0.75% also generating demand for this market.
Technical: However I like the technicals for this trade. 1.0050 is a huge resistance level and the reward for the trade is 7 to 1, taking profits along the way. I think due to the bullish factors for this market, generally stronger USD and weaker CHF id move my stop loss to breakeven quicker than normal.
Theres also the possibility that the resistance level may break to the upside in which case would look for bullish trade.
$USDJPY - RISK OFF TRADE. BONUS $EURJPY & $GBPJPY TRADESRecently seen risk aversion in the market with US equities almost 9% off the recent peak (SP), US 10 year yields off the highs from 3.25% as low as 3.11% where there is near term support, Traditional high yielding FX (AUD lower, NZD lower, EUR lower, GBP lower), WTI crude 14% off recent peak and safe haven flows lifting JPY, gold, silver and US bonds.
We're now seeing US equities stabilizing at 2700, USDJPY holding $112, US 10Y yield stalling at 3.11%, gold pausing for breath at $1235 resistance... as the market decides where to go next.
If $USDJPY stays above $112 this trade doens't count and can expect a rally and re-test of recent peak at $114.50.
If the risk off continues, JPY will strengthen across the board, key measure will be USDJPY will break through $112. Currently, trend line support and horizontal S&R @ $112 handle holding this market up, if that were to break, could take this market down to the $110 area, as always, taking profits along the way and managing stop loss.
There are other alternative trade ideas... that offer higher reward to risk ratios... EURJPY GBPJPY as posted below. As EUR is weak across board due to growth and political reasons... with the Euro Area PMIs missing this morning again and situation in Italy still at logger heads continued weakness for EUR and no clear light in sight. Sentiment is very bearish this market. Note that ECB rate decision Thursday and i cant see how Draghi can be optimistic about the slowdown of growth in EU.. what will his comments be on QE ending in DEC, growth, Trade tensions... at worst he could say that QE may be extended due to economic slowdown that Dovish rhetoric would be very negative for EUR across the board.
Then theres GBP which has the same outlook, economic data isnt great and the continued Brexit deadlock, GBPUSD technically breaking key technical levels and sentiment is very bearish on this market.
With US GDP reading on Friday (which is expected to be strong) and mixed earnings season with lot of analysts talking about how sales and revenue are slowing. Be worth keeping an ear on the sqwark (or Twitter) to note whether earnings are good/ bad and whether this GDP figure is good/ bad as a factor in determining where the risk sentiment will go next
NASDAQ / D1 : Parabolic risk taking... problems ahead !NOTE : Sorry I misplaced the trump's election in the timeline... Sorry about that little glitch !
Hope this idea will inspire some of you !
Don't forget to hit the like/follow button if you feel like this post deserves it ;)
That's the best way to support me and help pushing this content to other users.
Kindly,
Phil
How To Calculate Pip Value, Risk & Trade Size TutorialHey Traders, in this idea we are going to break down step by step, how a professional trader calculates pip value, risk and trade size. The focus of this lesson is aimed towards helping you get an idea of how you can create your own risk management plan in order to remain consistently profitable over a long period of time. You can have the best strategy in the world and still lose consistently without a solid risk management plan. In fact, in my personal experience with teaching traders, I have found that many traders who do not succeed are actually using a profitable strategy! These traders would have made money if they followed their risk management rules but that tends to go out the window when we do not see how the numbers work out for ourselves (among many other reason). It is important that you use these calculations that I have broken down on these charts over and over again until it makes perfect sense to you and then apply them to your own trading. If you do nothing else at least make sure the numbers work for you! I hope this short tutorial helps you get started on creating your own risk management plan and please be sure to comment below with any questions you may have. If you like this tutorial please give this lesson a thumbs up and I will cover more on this topic In a future lesson.
Thanks Traders, If you would like access to a spreadsheet that automatically calculates all of this for you, please request one using the link below and I will send you my personal spreadsheet for free.
goo.gl
Also if you have not done so please follow me at TradersNsights Facebook page as I plan to start posting daily market updates and predictions over there that may be helpful to you.
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Ethereum's Constantinople Testnet FailedThe attention of the Ethereum community has been massively focused on the upcoming update called “Constantinople”. This is a huge step for the Ethereum blockchain, as the Constantinople was meant to bring a variety of upgrades, which were expected and needed. On 13 October 2018, Constantinople was put on the testnet, but failed to work.
While it is unclear if it was the lack of miners on the ETH network for the Constantinople to fail, but certainly it is of great interest to miners. Why? Because this upgrade would lower the reward for the miners, and instead of getting 3 ETH, they will get only 2 ETH as a block reward. However, at the same time, Constantinople should reduce the inflation rate, which makes it more attractive for investors.
While the update failed, investors didn’t seem to have any reaction as price remained within a very narrow range; between btc 0.031 support and 0.032 resistance. Both of these are the Fibonacci retracement level, and its clear how the 38.2% level is currently acting as the resistance. Although, looking at he 61.8% Fibs support, it was broken on the 11 October, and later, on the 15 October it was rejected.
There is an impression that market is going through the uncertainty, as ETH/BTC price struggling to establish a clear direction during the past 3 days. Yes, it spiked up on the 15 October, reaching the btc 0.0344 high. However, the 88.6% Fibs support, 200 Moving Average and the long-term downtrend were rejected, and the 4h closing price below the btc 0.032 resistance.
As the downside risk is very high, price might decline further, reaching either btc 0.0292, 0.0281, 0.0271 support. Nevertheless, for this to happen, 4h close must be below the btc 0.03 psychological support. On the upside, close above the btc 0.032 might be considered as a buy signal for short-term investors, and ETH/BTC should re-test the btc 0.034 resistance.
Support:
1. 0.0310
2. 0.0300
3. 0.0292
4. 0.0281
5. 0.0271
Resistance:
1. 0.0320
2. 0.0344
3. 0.0376
99% of day traders consistently lose money (educational)In this screencast I present results of a scientific study carried out on day trading, in the Taiwan Stock exchange. I explore some volatile instruments that some day traders may get stung by.
The results of the Taiwan study are shocking. Disbelief leads people to argue that 'that's in Taiwan - so what?'. However the results are informative of cognitive and behavioural characteristics of day traders, more widely.
Even if the results are 50% applicable outside of Taiwan, they are seriously worrying.
For those interested in reading the study, Google: "Do Day Traders Rationally Learn about Their Ability".
So, what does it all mean? For me it means:
1. That the knowledge, skill and experience required to be consistently profitable are extreme.
2. Day traders are most at risk of burning their accounts and departing never to return.
3. Even seasoned traders are at huge risks of losing money.
4. It isn't about methodology - it is about 'individual trader psychology'
New traders need to be very cautious in following experts. A fair few of seasoned traders have set up training programmes, from which I suspect they make more money training, than in trading. Hard evidence on that is of course not easy to come by. But it's not me just saying so - a handful of true experts out there have said similar.
[ For the avoidance of doubt, I have committed never to sell anything to new or seasoned traders. What you see is what you get. I do not need anybody's money. ]
VIPS low-risk buy, high reward potentialThis is a short term play that, if all goes well, could turn into a long-term play.
NYSE:VIPS is currently at the bottom of a micro uptrend channel (orange lines), looking to test the two major trend bear trend lines on the 4hr and Daily.
I'm using a low risk entry on the bottom of the channel with a stop under the low of today which would be a confirmation of an exit of the channel.
I'm using a profit target based on stock remaining in the channel and resistance at the Daily trend line (solid light blue line).
There will most likely be resistance at the 4hr trend line (light blue dotted line) but a break of that trend line should give enough momentum to test the major Daily trend line.
Move up stops under new lows that remain along the bottom of the upward channel, let the trade continue if it's a winner but take the profits if the channel fails.
This is a 15 minute chart.
This is a step back on the larger time frame, the Daily, to show the major trend lines that could serve as major breakouts if broken, especially if they are retested once broken and hold to show confirmation.
On the weekly chart, there is trend angle play dating back to 2012 (red line) that could come into play. If it does get broken, retested and held with confirmation, then VIPS is looking at a long term major reversal to the upside.
This is a long shot but the potential is there if the 6 year red trend line comes back into play.
But let's stick with the original game plan on the micro trend channel on the 15 min chart and if it keeps going, great.
Remember, risk management is key!
Tomorrow is another day!
Good luck!
An update to our US equities chart=> We have an update to our S&P chart (see attached for our previous idea on the weekly)
=> This selloff was telegraphed miles in advance in our telegram group because of the correction in yields due to inflation and rates.
=> The caveat which underpins the rush to the doors is politics with the US mid-terms around the corner we are dangerously close to trigger capitulation to the downside.
=> If these current lows hold next week then we may bounce into November otherwise we are aligned for a real bloodbath for the coming quarters.
=> This is a very advanced trading environment and we would highly recommend staying sidelined unless you can keep the emotions in check.
=> Well done to all those who made a few on the recent sell-off from our telegram group and best of luck to those tracking these current levels
USD/CNH technical strategy for risk off=> What are we tracking here?
=> This is a very complex environment with major risk off flows from large funds in play last week.
=> Bears are refusing to capitulate and give the highs defending with everything they have meaning we can use the highs at 6.9586 as a line in the sand for triggering further risk-off flows, especially in the broader EM space.
=> On the political side we have the potential for the US to label China as a currency manipulator here as early as next week so this noise will provide the ebb and flow.
=> To the downside we will have to see a daily close below 6.9119 to provide some respite.
=> GL all those tracking this one or in live trades
