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Risk Management

🌱Weekly quote: We know what we're doing wrong🌱🟢For many of us, our trading accounts are our cluttered homes. What we desperately need is to find our inner quiet; review our trades and trading statistics in detail and truly experience the horror of betraying our potential; and fully appreciate what we do well and embrace it with gratitude. Out of that energized awareness, we can replace the clutter with what is meaningful. Our great enemy is routine. Many times, we know what we're doing wrong, but we keep making the same mistakes. Indeed, that is the way of life's curriculum. If we fail to learn from the first lesson, we get a second and a third and a fourth: one painful opportunity after another to commit to a different path. Is that failure, or is that something to be grateful for: a curriculum that is trying, trying, trying to teach us the lessons we need to learn to be successful? 🟢We've seen that gratitude is an essential component of psychological well-being. The grateful trader is not self-focused, absorbed in how much money they could/should make. The grateful trader is thankful for the opportunities coming their way. When we look heavenward with thanks for what we've accomplished, there is an essential humility to our perspective. It's not just about us. It's not just about profits and losses. A great metric in evaluating your trading journal is to count the number of frustrated statements versus the number of grateful ones. A great metric in evaluating other traders is to count the number of self-aggrandizing statements with the number of humble, grateful ones. 🟢If losses are opportunities to learn and improve, we can sustain a grateful mindset even in times of adversity. A humble mindset is one looking to learn. A grateful mindset appreciates every opportunity to grow. A life perspective that instills and strengthens humility grounds us in the awareness that there is always something more important than me. There is always something more significant than what is simply happening here and now. We cannot succeed in trading--or any life endeavor--if it becomes our end-all and be-all. Once trading and P/L are placed on a pedestal, they control us and our experience. And that is precisely what interferes with profitability! It's great to correct your mistakes, but it's in your shining successes that you can find your path to fulfillment--and your future in markets. Hidden in your winning trades may be the key to your development as a trader. 🟢 So many developing traders look for one edge after another, one market after another, one trading style after another--all in a frantic search for success. The reality is that our best trading is hiding in plain sight, when we explore what we're trading and how we're trading it when we're most fulfilled and successful. Brett Steenbarger, Trading Psychology
BITSTAMP:BTCUSDEducation
by Yelli_trades
16
What is an ETF? (exchange traded fund) An exchange traded fund (ETF) is an investment fund that invests in a basket of stocks, bonds, or other assets. ETFs are traded on a stock exchange, just like stocks. Investors are drawn to ETFs because of their low price, tax efficiency and ease of trading. ETFs seek to provide the performance of a specified index, such as the S&P 500, and typically have low fees. Like mutual funds, ETFs offer investors diversified exposure to a portfolio of securities, such as stocks, bonds, commodities and real estate. Why are ETFs popular? While investors often associate ETFs with large stock indexes, such as the S&P 500, ETFs provide access to virtually every asset class, sector, region, theme and investment style. ETFs are popular because of their low fees, tax efficiency, liquidity and transparency. Since the first ETF was launched in 1993, the ETF industry has grown substantially, with more than $3 trillion now invested in ETFs. What are the benefits of ETFs? ETFs cost significantly less than comparable active mutual funds — and that savings can add up over time. Other benefits include: Access and liquidity. Because ETFs are traded on stock exchanges, they are easily bought or sold. Transparency. Just like mutual funds, ETFs report performance quarterly and fees daily. Diversification. ETFs provide access to a wide range of investment options, covering a broad range of asset classes, sectors and geographies. They also make it easy to select specific themes or investment styles. What are the risks associated with ETFs? Like mutual funds, ETFs carry investment risk depending on their asset class, strategy and region. Some ETFs are riskier than others. In addition, if you invest in an ETF that holds securities in a currency other than your own, movements in the foreign exchange rate may affect your returns.
OANDA:XAUUSDEducation
by TopTradingSignals
6
The Evolution of a Trader | 3 Milestones 📈 Hey traders, In this educational article, we will discuss 3 stages of the evolution of a trader. Stage 1 - Unprofitable trader 😞 The unprofitable trader has very typical characteristics: -total absence of trading skills Most of the time, people open a live account simply after completing some beginners course like on babypips website. Being sure that the obtained knowledge are completely enough to start trading, they quickly face the tough reality. -no trading plan Having just basic knowledge, of course, they do not have a trading plan. Why the hell to have it if everything is so simple?! All their actions on the market is just gambling. They open the positions randomly most of the time, simply relying on intuition. -poor risk management In 99% percent of the time, the unprofitable trader does not even think about risk management. The position sizing, stop placement and target selection are completely neglected. Trading performance of the unprofitable traders is characterized by small wins and substantial losses and negatively trending equity. Stage 2 - Boom and bust trader 😶 Usually, traders reach boom and bust stage after 1-2 years of unprofitable trading. At some moment, winning trades start to compensate losing trades, brining non-trending equity. Such traders have very common traits: -not polished trading plan Being unprofitable for so long, traders start to realize the significance of a trading plan. Sticking to the set of rules, they notice positive changes in their trading performance. However, trading plan requires to be polished and modified. It takes many years for a trader to identify all its drawbacks before it starts bringing net profits. -lack of confidence When one starts following a trading system, confidence plays a substantial role. The fact is that even the best trading strategy in the world occasionally produces negative results. In order to not give up and keep following such a system, one needs to build trust in that. The confidence that after a series of losing trades, the strategy will manage to recover. Such a trust can be built after many years of trading that strategy. Stage 3 - Profitable trader ☺️ That is the final destination. After many years of a struggling trading, one finally sees positively-trending equity. Winning trades start to outperform losing ones, leading to consistent account growth. Profitable trader is characterized by iron discipline, confidence and consistency. He knows what he is trading, when and why. His trading plan is polished, he fully controls his emotions. He never stops learning and constantly develops his strategy. Knowing the 3 stages of the evolution of a trader, one can easily identify at what stage he currently is. That will help to identify the things to be focused on to move to the next stage. At what stages are you at the moment? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Education
by VasilyTrader
21
Bullish Butterfly PatternYes, you can scalp or day trade harmonic patterns in real live time, If you know what to look for. All harmonic patterns have their own fib retracement and/or extension ranges- which need to happen- for them to be called certain names. When a PRZ happens, instead of just jumping on a trade, get a confirmation move out of PRZ and then reversal back to it with an engulfing, harami and/or pin bar candlestick setup to then do a trade. This will prevent you from getting into a move too early and help with risk management on the trade too. Be Patience equals to Be Profitable- with a strategy and/or a plan. Risk management in your priority on each trade that you do, in this Forex trading and with the high liquidity and volatility that is happening at this time with many currency's, their is no place for either fear and/or greed. Lock in profits on all winning trades. Concentrate on getting a little piece of pip pie, not getting the whole pip pie in trading.
Education
by Anbat
2
Bullish Cypher PatternOn the AudJpy 4 hour chart example of a bullish cypher pattern. Yes, all harmonic patterns have their own Fib. Ret and extension percentages you need to look up and know, if you use harmonic patterns in your trading. Higher timeframes of 1 hour, 4 hour and daily work the best when using harmonic patterns, but can work on smaller timeframes- just less time for you to set up trades and react to candlesticks in real live time. Always wait for all harmonic patterns to 100% complete before you make a trade in opposite direction. Number one rule is wait for all harmonic patterns to complete before entering in any trades, related to being the safest times to get in and having the best risk reward setups with highest win percentages in trading, then to jump in too early because you are not patience, but have a need to trade rather then wait. Risk management is always #1, control what is in your hands to do like: What pair you trade, what price you get in, what session you trade and what time you are trading a certain pair. Also, entries, exits and/or targets, stop losses, etc... Stay healthy & get wealthy- Note: I will be looking at 1 hour charts on AJ for bullish trades to start this coming week off- r/t the completion of the bullish cypher pattern on example chart of 4 hours- there is around 70 pips to the upside to the target area of at least 50% on the fib. retracement tool (here on TV).
Education
by Anbat
1
✍️WEEKLY QUOTE: You don't need to know in order to make money✍️...Having an awareness or an understanding of some principle, insight, or concept doesn't necessarily equate to acceptance and belief. When something has been truly accepted, it isn't in conflict with any other component of our mental environment. When we believe in something, we operate out of that belief as a natural function of who we are, without struggle or extra effort. To whatever degree there is a conflict with any other component of our mental environment, to the same degree there is a lack of acceptance. It isn't difficult, therefore, to understand why so few people make it as traders. They simply don't do the mental work necessary to reconcile the many conflicts that exist between what they've already learned and believe, and how that learning contradicts and acts as a source of resistance to implementing the various principles of successful trading. The answer is quite simple: The typical trader doesn't predefine his risk, cut his losses, or systematically take profits because the typical trader doesn't believe it's necessary. The only reason why he would believe it isn't necessary is that he believes he already knows what's going to happen next, based on what he perceives is happening in any given "now moment." If he already knows, then there's really no reason to adhere to these principles. Believing, assuming, or thinking that "he knows" will be the cause of virtually every trading error he has the potential to make (with the exception of those errors that are the result of not believing that he deserves the money). If he believes that anything is possible, then there's nothing for his mind to avoid. Because anything includes everything, this belief will act as an expansive force on his perception of the market that will allow him to perceive information that might otherwise have been invisible to him. It's the ability to believe in the unpredictability of the game at the micro level and simultaneously believe in the predictability of the game at the macro level that makes the casino and the professional gambler effective and successful at what they do Their belief in the uniqueness of each hand prevents them from engaging in the pointless endeavor of trying to predict the outcome of each individual hand. They have learned and completely accepted the fact that they don't know what's going to happen next. More important, they don't need to know in order to make money consistently. Because they don't have to know what's going to happen next, they don't place any special significance, emotional or otherwise, on each individual hand, spin of the wheel, or roll of the dice. In other words, they're not encumbered by unrealistic expectations about what is going to happen, nor are their egos involved in a way that makes them have to be right. As a result, it's easier to stay focused on keeping the odds in their favor and executing flawlessly, which in turn makes them less susceptible to making costly mistakes. From Trading in the Zone by M. Douglas
BITSTAMP:BTCUSDEducation
by Yelli_trades
19
How To Set Trading Goals!Hey Traders, Setting trading goals is always a fun discussion and something I actually really enjoy talking about. It is possibly one of the most simple tasks with getting started in investing or day trading, yet it is a task that so many get wrong. It's like starting a Sprint race, only you're starting the race facing the other direction. So, today we're going to dive into how to set goals, what they should look like and how we can start getting you running on that race, or even if you started the race, to give you that little speed boost so you can get back on track be sprinting for that finish line, which is where you want to be. It is very common, especially with beginners in trading, that when asked what are their trading goals, they're going to leave you with some kind of percentage or dollar amount and what they're trying to achieve per week or per month. It's easy and it's their aspirations is why they are in the game. They want to make X amount of money and they've been able to divide it down to figure out what they need to make each day in order to reach that goal. Now, most people will sit back and judge that goal on whether or not they think it's achievable and then they'll say well done and give the trader a pat on the back. Only what that person is done by telling this trader that it is good feedback is re firmed that there facing the wrong way at the start of the race and telling him to still Sprint that direction. We trade an unpredictable market. That means no matter who you are or where you are, unless you have some kind of insider information, you have no idea which way a stock, currency or any type of asset is going to move. We base our decisions off of probability. We play on whether or not we have an edge over the market and as long as we win enough we will make profit in the long term and that is how trading works. What that means is we are never sure on how much money we will make or whether or not we will make money. Which means it is unreliable to set money based goals because we have no idea what the market is going to deliver for us. We can have expectations over the long term, but short term. As long as we are trading true to our strategy, it is honestly up to the market whether or not we take home profit or whether we cop losses. Now we understand this because it's trading, right? We got into this market knowing that. So why do we attempt to set money related goals when we know it's just unrealistic and really hard to achieve such consistency when you're looking at short term goals? Baffling right? Now, for some of you may just woke up to this fact, "oh yeah, that is very unrealistic." For others, you may have already known this. Either way, what we're going to do is dive into where you should be setting your goals and what should they look like. My favorite goal to set and to see other people set is consistency within myself. It's to track your own decisions, marking your own movements. When actually trading, if you can become consistent within yourself, you will see consistency in your results, because you'll be able to trade that strategy without having to worry about your own decisions or emotions affecting your decisions. So, what I always did is obviously have a trading plan, have this trading plan and have set guidelines in what you have to do. Post trading as well. When it comes to filling out worksheets, maybe Excel spreadsheets you're trading, log your data, fill it all out. Get yourself a spare calendar, put it on your wall and every day that you do everything to your plan, win or loss on the charts, everything you were supposed to according your strategy, your plan, and filling out all of your Excel spreadsheets, give yourself star. Then every single trading day you get a little star on that calendar and your goals should be set around that. If you find you're being consistent within yourself and consistent in your decision making, then you will be able to determine whether or not your strategy is good or bad, and you'll be able to achieve consistent results long term. Do not base your goals on dollar figures base your goals off of performance. It is the only thing you can actually control. Stop playing around with the idea of setting goals outside of the market or outside of your results. Yes, it is fun to set dollar amount goals. Yes, it is fun to Daydream, but you get stuck in that Daydream Cloud and there may be times where you have a perfectly good trading strategy. You're able to trade it perfectly as well, but you're not hitting your goals. And the reason that might be is because your strategy may not be able to hit those dollar value goals even on perfect days. It happens. So set goals on what you can control, not on what you want the market to deliver. How did you go about setting your goals? How do you do it now? Let me know in the comments. I hope you enjoyed this little post and I'll see you next time. -Jordon Mellor
SP:SPXEducation
by TradeThePool
4
What Is An Imbalance, Fair Value Gap (ICT) or Inefficiency?What Is An Imbalance, Fair Value Gap (ICT on YouTube) and/or inefficiency in price (all the same thing) An imbalance can be defined as an imbalance between buyers and sellers. A bullish imbalance has more buyers behind it and a bearish imbalance has more sellers behind it. When you see an impulsive move to the upside or downside in the market with no wicks overlapping full-bodied candles, this is where imbalances in the market are formed. They can happen on all time frames, but easier to trade on higher ones, especially after high impact news happen. When looking for an imbalance in the market, simply look for any candle which has a full body and look for the part of the candle that isn’t overlapped by the previous and next candles’ wicks. This signifies an imbalance in the market because there were few transactions going on between buyers and sellers. (On chart) we can see how sellers completely overpowered buyers. Wicks usually represent price oscillating up and down within the time it takes to print that candle, showing that price is efficient. So when you see a full-bodied candle with no wicks overlapping it, you’ve identified a clear imbalance in price. Price Imbalance Is An Imbalance Between Buyers & Sellers The reason we call it an imbalance is not only because it’s an imbalance between buyers and sellers, but because there is literally an imbalance in the market. If we have an impulsive move to the upside it’s because there are no sellers to absorb the buying pressure of the bulls (bid up). This means that there is no resistance from sellers to stop the buyers from pushing the price up extremely rapidly. On the other hand, if we have an impulsive move to the downside it’s because there are no buyers to absorb the selling pressure of the bears (bid down). This means that there is no resistance from buyers to stop the sellers from pushing the price down extremely rapidly. Imbalances in the market can also be viewed as inefficiency in price, telling us may be banks or financial institutions involved in the aggressive movement of price we’re seeing. Again, if we think about it, most impulsive moves and imbalances in the market happen as a result of there being no liquidity in the form of orders to stop price from being met with resistance and slowing down. In an efficient market, we typically see price trade in a range of fair value for that asset where sellers sell when they perceive the price of the asset is high (premium), and buyers buy when they perceive the price as low (discount). By doing this, it creates a high momentum move and imbalance in the market that is much like a gap in price. In some cases, this price manipulation may be a part of an institution’s plan to generate liquidity, and therefore we may see price seek to “fill” that imbalance or close that gap before pushing back into the same direction that price impulse from. Naturally, most imbalances in the market represent inefficiency in price, and therefore there is usually a good chance that price will return to fill that imbalance (in order to make price efficient again). While this isn’t always the case (price can just continue to push away from imbalances that form in the market), we can sometimes see price seek to mitigate the imbalance, or the zone that the imbalance originated from, and therefore look to take a trade in the direction of the imbalance in order to profit off of price moving in that direction to mitigate it! Trade Smarter not Harder.
Education
by Anbat
5
What Is Leverage (in Forex trading)?Leverage allows you to potentially trade more money than you have in your current account. Your broker gives you a loan of 1:10 up to 1:50 leverage for your trading, in the U.S.A. (see chart attached). You can change all amounts and % per trade on the chart. Remember less leverage you put down on a trade, the higher margin (deposit or cash out of your account is needed) to place trades, yes that is how your broker protects you and them from a big huge loss by a forex trader. Also, this how you prevent margin calls from your broker from taking on to much risk. Forex trading involves several things: 1) You account size 2) Leverage used. Higher leverage means you need less margin (broker deposit) per trade. Smaller trades you can do higher leverage with proper risk control. Higher trades you can do smaller leverage with proper risk control. Then you trade for the long-term, not just for a short period of times. 3) Required cash margin that your broker needs to hold for each trade that you are in. Protection for yourself and broker during your trade. 4) Percentage % used per trade (risk controlled by you)< Always do this on every trade that you do. 5) Lot size (you decide before any trades are done). Standard size: 1= 100,000= $10, Micro lot 1= 10,000= $1 or Mini lot 1= 1,000= 0.01 (on USD pairs) 6) Always use a STOP LOSS when trading (so you can determine, amount of risk per trade and/or lot size proper for each trade you do.) You always want to use normally less then 5% risk per trade, so that 20 losing trades in a row does not blow your account. Risk management of your account is what will determine if you succeed or fail in forex trading. If you have a 1% or 2% per risk per trade with a 60%, 70% or higher win rate, with yes compound interest, you will see very high profits in the longer term and your forex account grow fast. The secret is leave your account alone and let it grow. Actually, forex trading involves another ten things, which you can control are: account size, candlestick setups, entry, exit, targets, pair you trade, leverage you use, price you get in, session you trade and time you trade, lot sizes, risk per trade 1% to 5% (less is more).
Education
by Anbat
1
🟩TRADING HACKS: You're doing ENOUGH 🟩 This video is about the importance of thinking in RR and %. The main point is when you think you haven't earned enough is $ amount - and so you want to trade more and more, which leads to poor trade quality - remind yourself that trading is highly scalable, and so it's ok to imagine you have a 20x more capital at the moment. So x20 your profit in the trade and ask yourself how I feel now, is this enough for the day? Remember, if you're consistent, you'll be able to scale the account relatively easy.
BITSTAMP:BTCUSDEducation
by Yelli_trades
38
Successful traders think like chess playersEvery day I get many questions from traders and more than half of them are: "What will X asset do today, will it rise or fall" or "Do you think X asset will reach Y price?" With very few exceptions, I say "I don't know". Surely my interlocutor will think that I don't want to tell him/her or that I'm an idiot. In fact, the correct answer is another: "I don't care" And now, dear reader, you will think not that I am an idiot, but a complete one. But bear with me a little more and let me explain using a real trading example on EurUsd Let's say we consider taking a trade on this pair so, we ask ourselves what do we know about it? 1. Fundamentally the USD is favored 2. The trend is down for more than a year. So, we want to trade in the direction of the trend and sell this pair Looking closely at the chart we see that EurUsd is contained in a downwards channel and recently found support in the 0.99 zone. Last week, the pair corrected and reached a high at 1.0150 and reversed exactly from the channel's resistance, leaving a nice and strong bearish engulfing on our daily chart. Going further with our judgment, where do we want to sell this pair? Now, considering my approach, I see a good place to sell in the 1.0030-1.0050 zone. So we set a sell limit order in that zone (Remember, professional traders use pending orders) We also consider at this moment the point where our bearish outlook is negated. We get 1.0150 for our stop loss. Now, using again my personal trade, let's say we set the selling order at 1.0030, with a stop loss at 1.0150 we have a potential loss of 120 pips. We know that every pip move on EurUsd represents 1usd for 0.01 volume, so 12usd potential loss on 0.01 trade for our trade. Now, let's consider volumes. What potential loss are we "comfortable" with? For the sake of example let's say 120 USD, so a 0.1 volume. Now let’s see where we can take profit. 0.97 zone is the falling channel's support, so there. Looking at such a trade we have 120 pips or 120 USD potential loss with 330 pips or 330 potential profit. This gives us a close to 1:3 risk-reward ratio, a very good one. And now, maintaining the analogy from the title is the market’s “move” turn And the market can do only 2 things at this point: fill our pending order or not. Considering that I don't hold pending orders after NY's close, if the market doesn't reach my level by then, I will remove the order, and tomorrow I will start over again by analyzing the market. The second is to trigger our limit order as is also the case for my trade, and we are in a running trade now. Now, with a trade running is again the market's move. So, what are the possible scenarios? 1. The market rises and hits our SL. Although an undesirable scenario, we knew from the start that it’s a possibility and like every trade, this also carries a risk. We considered it and assumed it from the start and didn't trade more than we could afford to lose in a trade. So, we take it like a stoic and move on to the next trade and market analysis 2. The lovely scenario in which EurUsd breaks 0.99 support and falls to our target. So, our reasoning was correct and we now have a trade that brought 330usd in our pocket, but more importantly we traded disciplined with a good R: R 3. The market falls below 0.99 but reverses. Now we can also consider some action - Move SL in BE and let the trade run - Close half to get some money off the table and move SL into BE - Close all trade In conclusion: As you can see, you don't need to be Gary Kasparov to be a good trader, the market's "moves” being in fact just a few. All you need to do is to be aware of these moves and have a plan for each of them. This way you will not end up wondering every minute "where will EurUsd go, it will rise, it will fall", you will not trade emotionally or recklessly. As Benjamin Franklin once said: "Those who failed to plan, plan to fail", but it is not your case, because, as a good trader you always trade with a plan and know from the beginning all that the market can do. Best regards! Mihai Iacob
Education
by Mihai_Iacob
17
EDUCATION WHAT IS DRAWDOWN | 3 Types Of Drawdown ExplainedHey traders , is it drawdown . The account drawdown is the highest observed loss from the highest value of the deposit to the lowest value of the deposit at a certain period of time . Imagine you started to trade with 10,000 $ account . At the end of the year , your account size reached 15,000 $ . 1 However , at some point through the year the deposit value dropped to 6,000 $ . It was the absolute minimum for the one - year period . At some point , your net loss was -4,000 $ or 40 % of your account balance . The account drawdown is 40 % . ! Knowing the account drawdown is very important for the risk assessment of the trading strategy . Usually , 50 % and bigger drawdown signifies an extremely high risk . There are 3 types of drawdown to know Current drawdown - a temporary drawdown associated with the negative total value of opened trading position ( s ) at present . Once you start trading with 10,000 $ deposit , you open several trading positions . Being opened , with the constant price movements , your potential gains fluctuates from positive to negative . For examples , with 3 active trades : EURUSD ( -500 $ at present ) ; GBPUSD ( + 200 $ at present ) ; GOLD ( -100 $ at present ) your current account drawdown is -400 $ or 4 % of your deposit . Fixed drawdown - the negative value of the closed trading position ( s ) at present for a certain period of time . While some of your trades remain active , some are already closed . Imagine the same deposit - 10,000 $ . On Monday you opened 6 trades , 2 still remain active and 4 are already closed . Your total loss from your closed trades is -500 $ . Your fixed Monday's drawdown is 5 % . Maximum Drawdown - the maximum observed loss from
CRYPTOCAP:TOTALEducation
by dr_heidary
WHAT IS DRAWDOWN | 3 Types Of Drawdown Explained 📚 Hey traders, In my videos, I frequently use the term "drawdown". Many of you asked me to explain the meaning of that term and share some examples. The account drawdown is the highest observed loss from the highest value of the deposit to the lowest value of the deposit at a certain period of time. Imagine you started to trade with 10,000$ account. At the end of the year, your account size reached 15,000$. However, at some point through the year the deposit value dropped to 6,000$. It was the absolute minimum for the one-year period. At some point, your net loss was -4,000$ or 40% of your account balance. The account drawdown is 40%. ❗️Knowing the account drawdown is very important for the risk assessment of the trading strategy. Usually, 50% and bigger drawdown signifies an extremely high risk. There are 3 types of drawdown to know. Current drawdown - a temporary drawdown associated with the negative total value of opened trading position(s) at present. Once you start trading with 10,000$ deposit, you open several trading positions. Being opened, with the constant price movements, your potential gains fluctuates from positive to negative. For examples, with 3 active trades: EURUSD (-500$ at present); GBPUSD (+200$ at present); GOLD (-100$ at present) your current account drawdown is -400$ or 4% of your deposit. Fixed drawdown - the negative value of the closed trading position(s) at present for a certain period of time. While some of your trades remain active, some are already closed. Imagine the same deposit - 10,000$. On Monday you opened 6 trades, 2 still remain active and 4 are already closed. Your total loss from your closed trades is -500$. Your fixed Monday's drawdown is 5%. Maximum Drawdown - the maximum observed loss from the highest value of the deposit before a new maximum is reached. Starting to trade with 10,000$ you are already trading for 5 years. Your account were growing rapidly and at some moment it reached 25,000$. Then the recession started. You faced a dramatic loss of 12,500$ before you started to recover. That was the maximum observed loss for the period. Your maximum account drawdown was 50%. ❗️Different types of drawdown give a lot of insights about a trading strategy. Its proper assessment will help to spot a high risk strategy and to find a conservative one. Constantly monitor your account drawdown and always check the numbers. What is your highest account drawdown? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Education
by VasilyTrader
15
How to calculate which lot size to useAs mentioned several times before, we risk 1% of our total trading capital per transaction. In simple terms, we risk 1 egg out of the 100 that we have in the basket in an attempt to get more eggs. However, even though the average price mark where we place our Stop Loss is 30-60 pips away from the entry price, SL levels set differ from one trade to another, and different currency pairs have various differences in pricing (major pairs have small differences for the most part, while minor and cross-pairs have big gaps in pricing). This article will demonstrate 3 random scenarios and illustrate which lot sizing is needed to be used based on the Stop Loss set and the percentage of the total capital risked while taking into account the size of the trading account. All numbers are imaginary in order to diversify the visualisation of the portrayed examples and give a better understanding of the case. Enjoy the idea and don't forget to drop your questions in the comment box below!
BITSTAMP:BTCUSDEducation
by Investroy
42
Reminescence of a Scam Operator (ANTI SCAMMER GUIDE)Reminiscent of the roaring 1920s, the 2020 epidemic and the inability to work for many people brought an influx of new retail investors to the public market. Furthermore, the FED's decision to prop up the market by dropping interest rates combined with stimulus checks handed out by the U.S. government lured in even more investors who were hungry for profits. Although the market sensation also brought a rise of omnipresent scams across all trading platforms. Lack of workforce, sophisticated methods, and automated bots often play into the hands of perpetrators who try to get ahead of the platform and its users. Therefore, we decided to write this concise article with the purpose of helping new investors to recognize good apples from bad ones. The most common means of communication for criminals is to use private chat, public chat, comments, ideas, and headline references. Several examples of red flags are shown below. RED FLAGS AND OTHER POINTS: Asking for personal information and TradingView account information One common tactic criminals use to exploit their victims is to ask for personal information or account information (login and password). This information should not be disclosed to anyone, including someone claiming to be a platform's employee/support (as these people tend to have access to this information). Asking for trading account information Another standard method bad actors use is asking for trading account information. On such occasions, a perpetrator asks for existing account information or requests a victim to create a new account; then, a perpetrator usually asks the victim to invest money into the account and let them use it in return for shared profits. False promises The third point probably accompanies every other point on our list. This point relates mainly to false promises about trading achievements, which often include statements about having a high win rate, high net worth, and an unbeatable trading system. Financial gurus and lavish lifestyles A high follower count and strong social media presence do not equal reliability. Perpetrators often portray lavish lifestyles across social media platforms to entice more people and trick them into buying a trading signal service or trading course (or any other service). The public image does not necessarily have to match a person's authentic lifestyle. Indeed, trading as a career is highly time-consuming and does not come with trading from a vicinity of a pool or ski resort; that is just public perception. Trading signals and trading courses Unfortunately, most of the time, trading signal services (for buy) lack performance and do not consider subscribers' risk tolerance and account sizes. In regard to trading courses, we hold a similarly low opinion of them as we think learning a skill to trade goes far beyond a few hours of any trading course. Unrealistic win-rate claims Most brokerages report that their retail clients lose about 50-90% of the initial capital, especially when trading CFDs. Therefore, we would like to put in perspective how realistic claims about a high win rate really are. Professional traders tend to peak at approximately a 50% win-rate over a consistent period. Thus, claims about a 90% or higher win rate are likely to be false. Guaranteed moves and risk-free investments Another tactic of scamming utilizes guaranteeing moves in the market. However, there is nothing like a guaranteed move since the market constantly changes and is influenced by complex factors. These are just few points we included, however, we ask a public to share their own points in the comment section. DISCLAIMER: This content serves solely educational purposes.
SP:SPXEducation
by Tradersweekly
68
How to use the Multibit-System x8 ProcessorFirst, the bases of this chart: what is multibit: its a way to transmit 16 bools from one indicator to the next, based on the library this is called daisy chaining, so to use that stuff u need at least a TV-pro+ license, but i would recommend premium, as you also have more data to analyze here you see how its basically looking, x8 can do 8 channels, starting from the bottom which is 0 to the top which is channel 7 what is a classic signal: its a signal for daisy chaining based on a trigger line which can do -1, 0, +1 for short,long, neutral What to see in that Idea: 5 indicators chained into a row which are finally a combined to a strategy almost Nadaraya-watson -- configured to deliver classic signal on cross-inside --> to Digitalsignal plot x8 L3 Processor -- configured to convert a classic to a multibit to channel 0(L),1(S) --> to Multibit plot L1 L2 RSI -- configured to deliver a multibit signal on channel 2(oversold),3(overb.) --> to Multibit plot all the data is now into the daisychain multibit link (so channel 0 1 2 3 used) x8 L3 Processor -- here a lot more of the magic begins: MDB: channel 0 to ch. 0 (filtering small moves (+-4%) MDB: channel 1 to ch. 1 (filtering small moves (+-4%) TON: channel 2 to ch. 4 prolonging 2 by 10 bars TON: channel 3 to ch. 5 prolonging 2 by 10 bars AND: channel 0 and 4 to channel 6 AND: channel 1 and 5 to channel 7 finaly its configured to send out a classic signal from channel 6 and 7 -> 6 is +1 7 is a -1 else 0 --> to Digitalsignal plot you can now do alarms on the x8 processor Digitalsignal (trigger above and below 0 for long short) FINISHED, OR: L5 Backtest MK5.5 grabbs the x8 processor (Digitalsignal) and does the risk management and does its magic with the settings in the indicator --> delivers alarms how the position gets managed with a alarmmessage {{strategy.order.alert_message}} in the alarmconfig, than you get the custom texts from the module Functions inside the x8 Processor (you can read the signaltranscoder library for more details) And and condition - 1 2 or 3 signals to on channel line 2 output channel Or condition - 1 2 or 3 signals to on channel line 2 output channel XOR, XAND, NAND, NOR (this are basic Logic combiners) TON - wants a signal over a minumum selectable length to let it pass TOF - prolongs a signal by length selected next 2 are little bit more tricky MDP (MinimumPercentagePromille) - only lets pass a signal if it minimum grows or shrinks xxxx promile Parameters: would be: 1=Input, 2= 950(5% shrink), 3= 1050(5% grow) 4=outputchannel 5= MDP RATE - wants a amount of signals in a defined length Parameters: 1= input, 2= candleamount, 3= minimum count 4= output 5= RATE that list are most functions a strategy uses, so you can combine more indicators in a row without the need to code around every time you wanna try something. There are now several multibit indicators out in the wild from me, each of my indicators which i touch again or update will be compatible. at least for Level 1 Indicators i do a 1,0 -1 Classic signal which a x8 can turn into a multibit very quicky. a implementation reference code you can see here: at the bottom of the script, both versions, classic and multibit have fun
BYBIT:BTCUSD.PEducation
by djmad
3
📖 STEP 5 to MASTER TRADING: Create a Checklist 📖 🟩 Checklist is the necessary and essential part of your trading plan 🟩 If you already have a trading plan - that’s really great. Now it’s time to take one step further and create a checklist. You will refer to it before each and every trade, and you’ll enter only if 100% of the checklist is present. You can have different kinds of trading plan, it can have 5 or 50 pages - and it will describe your overall approach. Unfortunately, when it comes to executing your edge in the market, it’s very easy to bend your rules “just a little bit”, and all of a sudden you find yourself taking trade that is only a distant reminder of your actual trading setup. Most traders will damage their account not because their strategy is bad but because they start to take random set up outside of their trading edge. Blowing the account usually doesn’t take more than several hours of emotional trading. So that’s why it’s essential to have a short and clear checklist, usually up to 10 sentences usually that describes, point by point, what your trade entry looks like. You can even check every point before entering a trade (I do it). Of course, with time you’ll perfectly remember that checklist, but it’s also important to honestly follow it without checking every time, and the rule-following skill itself is a separate topic. 🟩 You're trading randomly if you don't have a checklist 🟩 Think about it. How many traders are constantly looking for “something else”, one more strategy. Instead of grinding deep into some specific concept, pattern or trading system, they will run to the next one with the first normal losses. They are running on the surfice for years instead of going deep to the core of trading - which, in my opinion, is the perfection of one strategy. Sometimes they even find what they like and what starts to show some kind of results. But then some time passes, and after any kind of emotional stress (would it be euphoria after a winner or fear and anger after a loser), he can start to deviate from his rules. A beginner can be so emotional that he can enter random trades, one after another, in the course of a few hours, destroying a big part of his account. There are a lot of other issues behind such inefficient behavior, however, a checklist is one of the first steps to handling it. Because if you don’t truly know what you’re looking for at the market, you’ll take the first trade you’ll find. 🟩 "Right or wrong" mentality is a fundamental flaw 🟩 You’re only right when you’re following your rules, and you’re only wrong when you take random setups. Again: even if you have a loser but you followed your setup - you're right, and even if you have crazy profit but it was a random trade - you're wrong, because this approach is not stable long-term. Yes, traders do predict the price movements in a way, but only as a side effect of following their rules and executing their system. A trader will not be fixed on his predictions, and because he drew a box or a line, he will not expect the market to obey his colored drawings. A trader’s job is to take a setup based on his experience and testing, and he should let go of the expectations and his trade, managing on the way of course. This is a very deep question, in my opinion, and deserves a separate post later. That’s why next time when you’ll see someone asking: “Should I buy or sell sir?”, you can surely tell the person is in the very beginning of his journey. 🟩 How to create a checklist? 🟩 Take a moment and describe in the short form how does your entry look like. What are your rules for Structure, Zones of interest, what is your entry confirmation, and what is your risk and management? I like to actually checkmark every point before each of my trades, so I’m sure I’m following my plan. Here’s an example of what my checklist looks like: 🎁Bonus for everyone still reading :) If you’re struggling with any discipline issues, ask yourself a question: “If I would receive a fully funded 100k account, for free, would I start to follow my rules and would I be more disciplined than I am now, and would I start “trading the right way” at last?” Try to be honest with yourself. It may seem strange, but many novice traders think that something should happen before they will “really stick to their plan”. It could be “just one more good winner”, or “if only I had bigger capital”, or “when I finish this yet one more educational course’’ - and AFTER that I’ll do what I know I should be doing. So, if your answer to that question is yes, then this is a clear indication you’re still in a very beginner mindset. Try to realize that ANY external change will not change the way you are. You need to change yourself FIRST, the way you behave in the markets and your mindset, and then everything external will follow.
BITSTAMP:BTCUSDEducation
by Yelli_trades
19
Learn TOP 5 Tips For Trade Management 📖 Hey traders, In this post, I will share with you my tips for trade management. But first, let me elaborate on what is exactly a trade management. Trade management is the set of rules and techniques applied for managing of an already active position. Trade management is a very important element of any trading strategy that should never be neglected. 1. Never remove a stop loss Being in a huge loss, many traders refuse to admit that they are wrong. Instead, watching how the price moves closer and closer to a stop loss, they remove stop loss hoping on a coming reversal. The alternative situation may happen when the price is going sharply in the desired direction. Watching the increasing profits, traders remove a stop loss, being afraid to miss bigger profits. Both situations may lead to substantial, higher than initially planned losses. Driven by many factors, the market can easily burn all gains and move against the desired direction much longer than traders stay solvent. For these reasons, never remove a stop loss. It must be always set. 2. Never modify your stop loss if a position is in loss Watching how the price moves closer and closer to a stop loss is painful. Instead of removing stop loss, some traders move it and give the market more space for reversal. Even though such a technique is safer than the complete stop loss removal, it is still a very bad habit. Each stop loss adjustment increases the potential loss, not giving any guarantees that the market will reverse. It is highly recommendable to keep your stop loss fixed and let the price hit it and admit the loss. 3. Know in advance your profit protection strategy Where do you take your profit? Do you have a fixed tp level or do you apply trailing stop? You should always know the answers. Coiling around take profit level but not being able to reach it, the price makes many traders manually close the trade or move take profit closer to current price levels. Another common situation happens when the market so quickly reaches the desired TP level so the traders remove TP hoping to make bigger than initially planned profit. Such emotional interventions negatively affect a long-term trading performance. TP removal may even burn all profits. Do not let your greed intervene, and always follow your rules. 4. Never add to a losing position Watching how the price refuses to go in the intended direction and cutting a partial loss, many traders add to a losing trade in hopes that the market will reverse and all the losses will be recovered. Again, such a fallacy usually leads to substantial losses. Remember, you can add to a position only AFTER the market moved in the desired direction, not BEFORE. 5. Close the trades manually only following rules Quite often, newbie traders manually close their trades because of some random factors: they saw someone's opposite view, or they simply changed their mind. Remember, that if you opened a trade following your trading plan, you should always have strict rules for a position manual close. Do not let random factors affect your trading. Following these 5 simple tips, your trading will improve dramatically. Remember, that it is not enough to spot and accurate entry. Once you are in a trade, you should wisely manage that, following your plan. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
5
🔔TRADING HACKS: Use alerts or go crazy🔔In my trading, I really like using alerts and recommend everyone to do the same. The main ways of using them for me are: 1. While waiting for a tap into my Area of interest. 2. After entry, for waiting at my breakeven level. 3. Also for waiting for the First partial level, the second partial as well of course. I use them in other ways as well, for example, it helps me while I'm waiting for confirmation to set up. It's great to install a Trading View app so that you can receive notifications on your phone.
Education
by Yelli_trades
9
Some helpful trading tips ✅✅Trading Advise from Richard Dennis who turned a $400 trading account into $200 million. 1. Whatever method you use to enter trades, the most critical thing is that if there is a major trend, your approach should assure that you get in that trend. 2. A good trend following system will keep you in the market until there is evidence that the trend has changed. 3. When you have a position, you put it on for a reason, and you’ve got to keep it until the reason no longer exists. 4. You should expect the unexpected in this business; expect the extreme. Don’t think in terms of boundaries that limit what the market might do. 5.  Trading decisions should be made as unemotionally as possible. 6. Trade small because that’s when you are as bad as you are ever going to be. Learn from your mistakes.
BITSTAMP:BTCUSDEducation
by cryptobrainbox
Stop Loss Alone is not Risk Management - What is Your SystemTo be successful, you must develop consistency in your trading. You can achieve this by creating a system to trade. One that provides an edge to fit your lifestyle and personality. Discipline is required to stick to your system so that you can measure results (wins and losses) over a large number of trades. A simple journal helps you to measure your trades. This provides edge and success unfolds over time, requiring a strong mindset to create, adhere and measure. Goals are achievable through steps that are part of the process. Things to consider when developing your system are: Market Phase, Price Structure, Areas of Value, Areas of Entries as well as Exits, Multi Time Frame Analysis, Trend Lines, Support and Resistance, Dynamic Support and Resistance etc. Pro Tip: Trade clean and don't clutter your charts. Trade around a couple of levels with a single indicator. Be PATIENT to let trades come to you once you have made a trading plan. And when the market enters your zone, be READY to take action and trigger your entry based on rules. If you're a new trader or a struggling trader, feel free to reach out and ask me a question. If you liked this idea or if you have your own opinion about it, write in the comments. The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations.
Education
by imr4nkh8n
ETH/USD Main trend. Accumulation/Distribution. Pivot pointsThe chart shows the main trend (most of it) of this cryptocurrency. The timeframe is 1 week. Most people "trade" and do not understand the profit values of the price from the real set zones (not hamsters). Also shown are the recruitment zones (horizontal channel) and partial reset zones (until the triangle decoupling) of previously gained positions of large market participants. The last video explained this in detail and showed it on the example of this coin. Even taking into account that this triangle (1.5 years) is a position reset. That doesn't mean that this formation must necessarily break down. But, this is something to keep in mind, especially the +3600%. Volatility narrowing, that is, the end of triangle formation is a “doubt zone”—the “market fuel” (small and medium market participants) for the impulse is clamped down. That is, the decoupling of the triangle and the direction of further trend development. The price is clamped into a triangle. A formation of this magnitude will only unravel due to future world shocks, especially financial ones. Who knows, maybe this time there will be no correlation at all, as the time of "coming out of the shadows" approaches. Always trade within your working range (for example 1 day), always understand where the price is in the main trend. Based on this understanding, limit the risks, and make a decision about reducing (partial liquidation) or, on the contrary, about adding to the position. Locally on the 1-day timeframe a wedge is formed on the decline. I've shown all the decoupling options for this trading situation in detail in this trading idea, as well as in the video. ETH/USDT Local trend. Channel. Wedge. Pivot zones. Under idea fixed my previous trading as well as training/trading ideas where I accompanied the price in updates for quite a long period. Note the exact values and more. You can use the material in them as educational, based on reality. Remember, the basis of trading is not guessing (that's what everyone wants to do), but your trading strategy and risk management based on your knowledge and experience. Those who want to guess tend to lose money. Do not be such characters in the market, that is, its fuel. I wish all smart people a big profit, and wish all stupid people to wake up from the dream of stupidity.
Education
by SpartaBTC
6