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Risk Management

Pyschology Tip of the dayHi guys, I haven't posted anything but analysis of the trades I may take in the upcoming week but I have not really covered pyschology maybe as much as I should be. I think this a huge part of trading that a lot of newer members may just skip or may not pay as much attention as they should to the subject. Being angry at something in your life or being upset will effect your trading and will blow your account if you cannot control your emotions. You need to have a risk management system in place that will limit your losses and give you that edge in the market in the long run. I know its super typical for people to say but trading is only a small percentage of the job, the real job is the pyschology and being able to control your self and be smart about your decisions. For example, today I had a hard time thinking if I should take my NZD / USD trade or not, I was thinking that it is what my setup would need for me to take but the only thing is there is no clear trend but there was a rejection of the beginning of a uptrend in my mind. Since, I am still feeling a little off about this trade I am going to lower my risk for this single trade and I will require a lot more confirmation before taking this trade. If the trade goes in my direction I can always go and add more to make a full percent or even more if you move your original trade to breakeven. Do not be afraid of missing out and try risking one or two more percent the single second the trade goes in your direction, the market will always be their and there will always be a trade for you to take. If not, the hardest thing for a trader to do... is not trading, sometimes being patient and waiting for your perfect setup is better than having three losses before taking a profitable trade, this is only going to loose money in the long run and will maybe make you a breakeven trader. If you guys want to see an analysis that I do for every pair that I am interested in take a look at the link below, this will be my most current analysis at the time. Thanks again, Keyslot
Education
by KeySlot
1
FX Compounding Calculator (Do You Want To Be A Millionaire?) Only one way to grow a small account into a large account. That is by treating Forex trading as a marathon race not a sprint race. Do you have 2 to 5 years? You can use the compounding calculator to calculate profits. This allows you to understand better, how your trading account will grow over time. One of the most interesting facts about compounding is, that even a moderate monthly gain turns your initial capital into a serious amount of money over time. A Forex compounding calculator is useful to simulate how compounding the initial equity and the profitable trades, with a set gain percentage, can make a trading account grow over time. It works by simulating the compounding and the reinvesting of the same chosen gain percentage of the account's total equity. With this calculator traders can input the settings in order to accurately calculate the compounding results of a set of winning trades over a period of time. The use of this calculator can demonstrate traders how powerful gains compounding can be, and, that even a moderate gain percentage of 2% (for example) per trade, can turn an account’s initial capital into a substantial amount of capital over time. You will be surprised how powerful compounding can be. My goal is profit at least 1% per trade and/or 1% per session/day. Look at chart: You Can Do It- by letting your account grow with compounding profits < this is the holy grail of building your account. Albert Einstein said,"“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
Education
by Anbat
1
YOUR SUCCESS IN TRADING | Expectations VS Reality 💰🤔☠️ Hey traders, Being a full-time trader & running a coaching program for the last three years, I met hundreds of struggling traders from different parts of the globe. Guess why the majority of them could not make it? What was the main reason for their bad luck? It wasn't their trading strategy, nor their technical analysis. The source of their failure was the expectations. Trying different trading strategies, following the signals of different signal providers, these traders expected quick gains and exponential account growth. They were actually in a state of a constant search of a holy grail, of a magic wand that will open Pandora's box to them. Just a single losing trade made them skeptical while the first losing streak made them drop the strategy and return back to the search. They keep spending thousands of dollars on trading strategies promising them close to 100% win rate. There is this common mantra, the stereotype about a pro trader: a guy with 4 screens making a quick buck on each and every market rally, driving Lambo, and living in a mansion. Unfortunately, the reality is different. Ahead you will encounter loneliness, losses, pain, and disapproval. The road to success in this game is long and dangerous. Get ready to see the skepticism in the eyes of your relatives and friends. Many years and tons of money must be spent in order to make it. But even mastering the system, becoming a consistently profitable trader you will not constantly beat the market. Your wins will just slightly outperform your losses giving you the means for living. If you are ready for that if you are courageous enough to start and to proceed no matter what, you are already one step ahead of the majority. Be prepared to work hard and practice much, set a correct goal, and sacrifice your presence for the sake of an independent and prosperous future. Are you ready? ❤️Please, support this post with a like and comment!❤️
Education
by VasilyTrader
145
Comparing a strategy with and without Safety OrdersOne important thing when day trading or scalping is risk management . To find the good balance between risk and reward . So I compared the same strategy with and without Safety Orders. Here's an idea explaining how safety orders work if you didn't know: The strategy used for this example is a daily pivot & consolidation breakout. Before I explain the results, a few definitions: Net profit = Gross Profit - Gross Loss. Basically the total profit earned by winning trades minus the losing trades. Percent Profitable = Percentage of winning trades divided by losing trades. I like to call it the winrate. Profit Factor = Profits divided by Losses. It tells how many times your profit is bigger than your loss. A strategy becomes profitable when the profit factor is greater than 1. Max Drawdown = Maximum consecutive losses. AKA, the biggest lose streak. A good indicator of how risky your strategy can be. A last few details: Both strategies have an intial capital of 10 000 €, 0.1% commission on each trade, and each order is a market one, to make sure everything gets filled. █ STRATEGY 1 - Take Profit & Trailing Stop Loss The strategy has a 7% Take profit and a Trailing Stop Loss that starts at 11%. Each order buys with the total capital without compounding (fixed 10k €) With 52 trades closed, the strategy has a profit % of 147 . It suffered a max % drop of 15.5% . The profit factor is of 2.19 . And finally, the winrate is 76.9% █ STRATEGY 2 - Take Profit & Safety Orders + Stop Loss The strategy has a 7% Take profit, 10 Safety Orders, each spaced by a 1% step, and a stop loss at 11%. Now the base order will only buy 100 €, while each safety order will buy 990 €. This is to ensure that the total capital is used and not more. Also note that the take profit is based on total trading volume. As the safety orders get filled, the target drops a bit lower. With 263 trades closed, which is due to the safety orders (5 per trade in average), the profit % drops to 79 . That is almost half of strategy 1. But, the max % drop is divided by more than 2 : only 6.9% ! The profit factor almost doubled , as it is now at 3.8 . Also, the Percent profitable increased to 83.6% . █ CONCLUSION This comparison is just an example. I did this little process over hundreds of strategies and the outcome is always the same: safety orders reduce the risk, even though they also reduce the net profit a bit, the overall profit factor is increased . So should you use them? It is up to you, but my answer is a big yes . Tips on automation: The simplest way to automate this is to place the safety orders using limit orders when the entry alert is received. Then close all deals upon take profit. If you want to use market orders, you'll have to place each safety order as the price drops through the steps. Indicators used in this example have restricted access. See my profile signature for more info. The backtest results for this pair are shown below.
Education
by cyatophilum
25
Hammer One Candlestick (How To Trade)What Is A Hammer Pattern? A hammer is a price pattern in candlestick charting that occurs when a security trades significantly lower than its opening, but rallies within the period to close near the opening price. This pattern forms a hammer-shaped candlestick, in which the lower shadow is at least twice the size of the real body. The body of the candlestick represents the difference between the open and closing prices, while the shadow shows the high and low prices for the period. This is a major reversal one candlestick pattern, especially on higher time frames. FYI: The chart notes a bullish one candlestick pattern. Yes, they can be bearish reverses on top of trends (but they are called another name). How To Trade: Put entry above bullish hammer Put stop loss below bullish hammer Put 1st target- same distance of stop to entry...for 1:1 Risk and Reward.. You can spot those hammer on any time frames- higher time frames are more reliable to trade from or 1 hour and above.
Education
by Anbat
When to enter? Does it even matter?With value investing everyone knows: Buy when there is blood in the street, when a good company has a P/E ratio of maybe under 10. But with currencies, other than the advice "50% to 61.8% fib" and a whole lot of troll "buy every bottom sell every top with the magic indicator or magic drawing on the chart" there is no common knowledge. We can look at this recent example where the price dropped, went sideways, and then dropped hard. We could keep looking at winning examples when selling or buying at the top of these bands or ~61.8% retracement The only way to know how good they are is by backtesting a large number and writing down the stats. But are there other ways to enter? Rather than write an entire novel with chapters I will simply go through a list of screenshots Some say it doesn't matter where you enter... It does and it doesn't, depends what you mean by that. First Second Third Fourth Fifth Sixth Seventh Eight Ninth Final This is all simplified to make my point, or points I guess. So you can't just say "entry doesn't matter". People that tried trading, failed, got into "holy grail" safe good boy passive S&P in the last 70 years averaged bla bla bla wake me up, they're the ones saying this. Oh so it does not matter if they buy a stock at a P/E of 8 or 280? Of course it matters!!! Entry matters! BUT where you enter EXACTLY does not matter. I'm not sure how to put it, but go through the examples and you see what I mean. Sometimes it matters, but even if you miss it there are other ones, and these entries are going to be at least a small area "of opportunity" anyway. Well it's more complicated than a "yes" or "no". There are plenty of ifs. And plenty of ways to approach this. Look, Warren Buffett bought too early or later and sold too early all the time. And? Most famous investor in the world. Is there an optimal super entry that gives better results than anything else? Statistically there has to be one, so yes. If we spend ages making stats and we find it do we know it will remain this particular one? Probably not... Can we find it without it just being hindsight bias? Probably not... Would having the mighty perfect entry (I didn't say find every exact bottom, that's not actually possible) make a big difference to our results? Lol you might go from 20% returns to 20.5%. Probably even less. The endless search for the holy entry newbs seem to all be obsessed with... Fool game. It's same as with video games, Starcraft, Lol, Dota, W3. Or chess... Newbs go "I will farm for 40 minutes full eco ignore military, full Nasus q, full catch his pawns, I'll be a monster and they'll see", 15 minutes later "Ok tough guy just wait late game you will feel sorry", 5 minutes later "Victory!" or "GG easy noob", 1 minute later "Report Nasus useless afk trash ebay account". Haha I laugh every time. They really make all the same type of newbie "late game" and "magnet logic" mistakes, 80% of retail FX goes into "day trading" because "hey I figured out I'll get more trades and therefore grow my account faster duh", "Hey you can't lose if you don't sell", "Hey I have this brilliant martingale average down", "Hey wassup wassup wassup I found a trick", "hey if I go for lots and lots of little wins, take my profit fast I'll win small but very often and scale", "hey if I run conservative robots that only return 1% but I run 500 of them...", "hey if I add all these conditions". What a circus. Miss the good old days. Can't humiliate noobs with trading their account is secret, they open their mouths when they get lucky then vanish, and it's not a 1 v 1 or 3 v 3 or whatever it's a 1 v whole market. Even if we cooperate and share ideas it's still a 10 v 10 million or idk. There is however the "bull vs bear" thing. But the Bitcoin bulls from 2018 from 15k to 3k almost all left (losers) and the few ones that stayed pretend they won (or they're too dumb to figure out they were on the wrong side of the market). S&P 500 bear tears are pretty delicious at the moment by the way. You both can say entry matters and entry doesn't matter and be mostly right. Don't waste too much time trying to perfect it. Calculating max risk, probabilities of drawdown, when to exit, when to hold, when to add, how to trail, correlations, those are at least as important as the entry. What I can say is entering very early, far from the stop, out of fear of missing out is bad, and entering very late for a giant risk to reward is greedy and bad. Around 50% retracement is often a good compromise. Stats will help choosing areas and price action (stats such as: over the past 10 years on breakouts would it work out to enter in the big red candle? How about on the previous low? How about 61% fib when the price reacts near the previous low? Etc). Entry doesn't go alone, for example when you average in a sideways within a trend well you'll want to move your stop each time you add according to your average price. That's a whole other subject. Coming up with a whole strategy even simple and even once you sort of understand the markets and have the basics of price action is still clearly going to take a couple hundred hours at best... Just writing this took me a little over 2 hours, and I rushed it, and I obviously don't start from scratch I researched all of this. Just writing an intro like this about entries and stops and targets and trends and pullbacks and breakouts and timeframes and risk and all the other stuff, not even with stats, that alone probably would take 100 hours by itself. How long it takes to convince yourself to hold winners and cut losers and quit a gambler mentality however = infinite time, just quit now you'll save time (thousands of hours!), investing is not for you. Oh and finally, an entry "signal" is a joke. You don't go from 0 to 100 "wow this would be a great buy because of this entry", that's beyond ridiculous. You are supposed to be watching something before getting in and waiting on certain conditions to enter (pullback after breakout), never heard of anyone that had "entry signals". When George Soros went short the GBP it was "because of the entry" but he had a whole theory. The "entry" wasn't a magical signal it's simply he was close to the floor, well ceiling, and had a big RR with big odds! And he explains how "I was selling weeks before", he actually "dollar cost averaged" as I explained. He didn't wait for a certain magical point, he wasn't greedy waiting for a 1 pip stop.
Education
by MrRenev
9
Morning Star (Three Candlestick Signal)Example Chart: Down Trend, then Reversal Upwards Morning Star (Three Candlestick Signal/Pattern) 1) Large Red Candlestick 2) Undecided Candlestick (small Doji) 3) Large Green/Blue Candlestick- going up at least 1/2 way of 1st Large Red Candlestick *Trade Bullish or Buy trading is indicated after this bullish morning star signal or pattern occurs afterwards- I see price action on EurAud continuing to go upwards for rest of this month. These happen on all time frames, but higher ones have higher win rates and less noise in price action.
Education
by Anbat
1
HOW-TO: Losses can and will always unfold in TradingIn this help Tutorial, I would like to take a look at losing trades, as show you that losses can and will unfold, no matter what Trading approach you take. In the video we take a look at a losing trade on the 3min NQ. I know that 3min is shorter time frame than we usually look at in TradingView, but it illustrates the example well. As you will see, losses will always unfold when Trading that is why it is important to keep them small. One technique to achieve this is the use of Position Sizing. This varies the number of Lots / Contracts / Shares you take to keep your initial risk small and (more importantly), constant across all your setups. For Futures we suggest a maximum of 2% of your Trading Account size. Over time, your aim should be then to have Profits that are much larger than your losses. That is why we always look at Risk (or R) units for loses and Profits. In this way your Profits can be large in relation to your losses. It is so important to understand, and accept, that no matter what trading approach you take in your own trading, that losses can and will occur. That is why it is vital to keep those inevitable losses small, and Position Sizing is one method to achieve that.
CME_MINI:NQU2021Education
by MTPredictor
1
Trading Charts (What Do You See?)What do you see on attached one hour EurAud price action? (you should write down your answers to as many as you can)-Commonsense Here are some questions to ask yourself? (Yes, there are other questions to answer) - its the only way to trade Forex for the long term. 1) Any sideways price action? 2) Any downward price action? 3) Any upward price action? 4) What session (Sydney, Tokyo, London or NY) did price action move? 5) What pair are you trading (EurAud)- Which part is in session? Are they strong or weak? 6) What time in session is it? before major news? before session open? during two session overlap? Tokyo/London or London/NY? 7) Where is price action right now? Around a psychology round number? Per chart: 1.60500 or 1.60000. Yes, there are more psychology round numbes. 8) Where is high or low of day with this pair? Do high and lows occur mostly or generally at around same time of session with this pair? Part of edge? 9) When did big bank or institutional candles get involved? How could I have been on same move with them with right risk management? 10) Any doji candlesticks? undecided. When did they happen? Could I have traded a breakout of that range? 11) Any engulfing two candlestick patterns? If yes, when did they happen and how could I have been on that trade? 12) Any pin bar three candlestick patterns? If yes, when did they happen and how could I have been on that trade? 13) When is low liquidity and volume in Forex session per day? End of London to End of Tokyo (12 hrs). Should you be day scalping or scalping during these low liquidity and volume times of day? Scalping only. 14) What is pair doing on higher time frames of 4 hour, daily, weekly and monthly? 15) What is the pip value, lot size on this pair? 2% of $10,000 is $200. Always keep your risk the same on every trade- make trading mechanical. 16) Should I trade a Gbp/Jpy trading during NY session? Yes, during overlap (4hrs) of London/NY session is high liquidity and volume to trade.
Education
by Anbat
1-2-3-4 Reversal Trading Strategy (Part 2 of 2 Bearish) 1-2-3-4 Forex Reversal Trading Strategy A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2 , 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules. A trader can confirm the reversal trade using a technical indicator such as DMI or MACD. (or other ones) 1-2-3-4 Basic Rules for Short Trades Point (1): The high in an up trending currency market. Point (2): A downward correction in the up trend, the lowest bar in the correction before the price moves back up to point (3). Point (3): The high in the move up from Point (2) but a failure to make a new higher high(Point 1). Point (4): Go short 1 pip below point (2) Daily chart of GBPAUD shows and example of a sell 1-2-3-4 Reversal Trading Strategy, with a 1: 5+ Risk Reward setup. 50 pip stop and 285 target. This would have been a six day trade, but can use this same strategy on lower time frames. I use the Fib Extension tool for profit targets, help alot.
Education
by Anbat
1-2-3-4 Forex Reversal Strategy (Part 1 of 2 Bullish)A 1-2-3-4 reversal chart pattern is build up of 4 definable points, known as point 1, 2 , 3 and 4. A typical 1-2-3-4 chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules. A trader can confirm the reversal trade using any technical indicator such as DMI or MACD (or others). 1-2-3-4 Basic Rules for Long Trades Point (1): The low in a down trending currency market. Point (2): An upward correction in the downtrend, the highest bar in the correction before the price falls back up point (3). Point (3): The low in the move down from Point (2) but a failure to make a new lower low(Point 1). Point (4): Go long 1 pip above point (2) Noted daily EurUsd chart example has a 1: 3+ Risk Reward setup with a 30 pip stop and 100 pip target/profit. This would have happened within 6 days, yes this can be used on shorter time-frames, but I would not go lower then 15 minutes or 1 hour using this strategy. I used the Fib Extension tool for profit areas when using this strategy to set targets. 127.20% extension target looks great for most profits, like this chart.
Education
by Anbat
Without this, you will not become a profitable trader Yes, this is risk management. Without proper risk management, your trading strategy based on levels, indicators, patterns, etc.will not make any sense. Any trading strategy should be supported by strict risk management, where the maximum allowable losses per transaction and the risk ratio are observed:the profit is always more than 1/2. You don't have to be right in every trade. It's just that your profit in successful transactions should be greater than the losses in unprofitable transactions. This correct use of risk management will lead you to success. ____________ The example shows one of the real scenarios of any trading system where the rules of risk management are observed: Deposit of 10,000$ The risk per transaction is -1% (or -100$) Total trades: 4 profitable trades = +14% 10 losing trades = -10% Total: +4% (or + 400$) Even though only 30% of the total number of profitable transactions, we still have a profitable result. Learn risk management and become a consistently profitable trader. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
128
Fibonacci Expansion (How To Use)PLOTTING A FIBONACCI EXPANSION: - Select the Fibonacci Expansion Tool 1) Start From The Top Of The Trend (In A Down Trend) 2) Set The Middle Point Where The Correction Started 3) Set The 3rd Point, Where The Correction Ended Possible Target areas and/or zones are plotted below this 3rd point for you to utilize as per your risk management and trading style. *For an uptrend set up you would just need to turn the above upside down, not hard but will help lessen your stress when trading FX.
Education
by Anbat
9
8 TRADING HABITS OF SUCCESSFUL TRADERS👩‍💻👨‍💻 Hey traders, Consistently profitable traders have a lot of things in common. Watching how they act and following their ideas & thoughts we can spot a lot of commonalities among them. In this article, I have collected 8 trading habits that a trader should have to become successful. 1️⃣ - Continuous Learning 📚 The markets are infinitely deep in their nature. Trading & constant monitoring of the market always unveil new, uncharted elements and things. With 8 years of day trading, I can't help wondering how many new things I learn each and every day. With continuous learning you evolve, you become better and it improves your trading performance & results. 2️⃣- Emotional Stability 🙏 The market is a wild beast who always wants to bite us. And most of the time it manages to do that: drawdowns, losing streaks... Those who trade for at least 1 year know how unpredictable and unstable the market is. A perfectly looking trading setup can easily turn into a big losing trade. Of course, that is painful, of course with more and more losers, the anxiety will pursue us, the stress will overwhelm us. Only by remaining stable and calm, you will manage to overcome the negative periods. Learn to control your emotions, learn to take losses! 3️⃣ - Constant Practice 💪 Pro traders never stop, they always watch the charts, they always monitor the prices, and follow the market. Trading requires constant TRADING. Just spending one single week on a vacation without charts, you can not imagine how hard it is to return back. The trading skills must be constantly maintained. 4️⃣ - Trade Journaling 📝 Pro traders always assess their past performance & results. They track each and every trading position that they opened. Both losing trades and winning trades require analysis and observations. Only by studying the past results the trader can improve his trading performance and evolve. Only by identifying mistakes & peculiar commonalities, the trader learns to lose less than he makes. 5️⃣ - Anticipation of Different Outcomes 👁 Everything can happen in financial markets. Pro trader always reasons in probabilities. He knows that 100% chances do not exist. Accepting the probabilities the trader (even while opening the trade) is always ready for completely different outcomes and accepts each and every move of the market. 6️⃣ - Flexibility & Adaptivity 🕺 The markets are always changing. If you were trading before COVID crisis, I guess you feel how the reality among us shifted. With fundamental changes in our daily lives, the markets changed as well. It is hard to say what exactly has altered though, however, we all can feel it. In order to survive in a constantly changing environment, one should adapt. One should look for ways to be one step ahead. To beat an evolving market, the traders should constantly polish their trading strategies, drop the things that don't work anymore, and adopt the new, reliable ones. That is the only way to stay afloat. 7️⃣ - Selection of Right Markets 📈 The trader always knows what to trade and he always has a reason. He admits that some financial instruments are appropriate for his trading style while some are completely not. Pro trader does not wander around aimlessly from one market to another. He has a plan to follow and rules to rely on. 8️⃣ - Realistic Expectations ⭐️ Many newbie traders drop trading just because of wrong expectations. The desire to get rich quick, to catch 20/1 risk to reward trades without substantial losses is playing a dirty trick with them. The true trader is not greedy, in contrast, he is humble and the only thing that he wants is simply to win more than he loses and make that amount sufficient enough to have a good living. Adapting these 8 habits, you will see dramatic improvements in your trading. And even though most of them require a substantial effort and many years of practicing, trust me, it is worth it and it will help you in your daily life as well. Would you add some other habits to this list?🤓 Let me know in a comment section. ❤️Please, support this idea with a like and share your feedback in a comment section!❤️
BINANCE:BTCUSDEducation
by VasilyTrader
30
Fibonacci Extensions Part 5What Are Fibonacci Extensions? Fibonacci extensions are a tool that traders can use to establish profit targets or estimate how far a price may travel after a pullback is finished. Extension levels are also possible areas where the price may reverse. Key Takeaways: Common Fibonacci extension levels are 61.8%, 100%, 161.8%, 200%, and 261.8%. The Fibonacci extensions show how far the next price wave could move following a pullback. Fibonacci ratios are common in everyday life, seen in galaxy formations, architecture, as well as how some plants grow. Therefore, some traders believe these common ratios may also have significance in the financial markets. Extension levels signal possible areas of importance, but should not be relied on exclusively. The Difference Between Fibonacci Extensions and Fibonacci Retracements While extensions show where the price will go following a retracement, Fibonacci retracement levels indicate how deep a retracement could be. In other words, Fibonacci retracements measure the pullbacks within a trend, while Fibonacci extensions measure the impulse waves in the direction of the trend.
Education
by Anbat
Fibonacci Retracement Definition Part 4Fibonacci Retracement Definition Is: In finance, Fibonacci retracement is a method of technical analysis for determining support and resistance levels. It is named after the Fibonacci sequence of numbers, whose ratios provide price levels to which markets tend to retrace a portion of a move, before a trend continues in the original direction. A Fibonacci retracement forecast is created by taking two extreme points on a chart and dividing the vertical distance by important Fibonacci ratios. 0% is considered to be the start of the retracement, while 100% is a complete reversal to the original price before the move. Horizontal lines are drawn in the chart for these price levels to provide support and resistance levels. Common levels are 23.6%, 38.2%, 50%, and 61.8%. Yes, you can add or change any and/or all of these numbers to your trading style- they can be used to enter a trade, set stop loss and targets. This retracement percentage lines are short term reversal areas to possible take new trades with the main trend of day, week or month.
Education
by Anbat
​​YOUR PROFIT FORMULA | Three Essential Ingredients 🤔💭💫 Hey traders, We must admit that it is phenomenally difficult to become a consistently profitable trader. This journey requires years of practicing and training, constant losses, and nervous breakdowns. If you are a struggling trader, if you are still looking for your way to succeed in this game, here is the formula that will help you to chase consistent profits. 💰Consistent profits = 📝Trading Strategy + 🤬Emotions + 📈Market Sentiment Let's discuss each element separately. 📝Trading Strategy: To be in profit in a long run requires an understanding of what do you actually trade. You must have strict and objective entry conditions. You must rely on the objective & verifiable rules for the execution of market analysis. You must have a plan to follow. A plan that is backtested and proved its efficiency. 🤬Emotions: Even the best trading plan, the most accurate trading strategy can be easily beaten by emotions. Emotional decisions such as revenge trading and early position close can easily blow the account of any size in a blink of an eye. The most disappointing thing to note right here is the fact that you can be taught how to execute technical analysis but you can not be taught to control your emotions. Your main enemy here is yourself and being in a constant battle with your greed and fear it is very easy to go broke. Only by being humble, disciplined and patient, you can successfully apply a trading strategy. 📈Market Sentiment: Mastering your emotions and having studied a trading strategy, it looks like it is finally the time to make money. However, occasionally the market tends to be irrational. Being chaotic and unpredictable, sometimes the market neglects every technical and fundamental rule. Crisis, euphoria: the reasons can be different. The fact is that such things happen. And it is your duty to learn to deal with unfavorable market conditions. 💰To become a consistently profitable trader, you must become the master of these three elements. Only then the doors to freedom and independence will be opened to you. ❤️Please, support this idea with a like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
51
Zombie Companies and You!Much of the massive amount of new money the Fed is printing is going into Zombie Companies. How Zombie Companies Survive Zombie Companies are firms that don’t survive by producing value for their customers. Instead, they survive by parasitically draining resources from the overall economy by borrowing at near 0% interest from the Federal Reserve. The Federal Reserve just creates this money out of thin air. How this Harms Everyone So this borrowing has the same negative effect on everyone’s paycheck purchasing power as criminal counterfeiters do. Instead of consumers having the power to support businesses that do provide valuable goods and services, the Fed effectively steals that money from consumers and gives it directly to corporations without them having to produce value for consumers. Stolen Productivity Gains Productivity gains allow the government to do this without increasing the consumer price inflation too much. In the first half of the 20th century, the financial benefits of technological innovation and productivity gains were generally evenly enjoyed by society. Immediate Effects on the Stock Market The immediate effect of dumping money into corporations is that their stock value rises. You can see this in the recent explosive growth in the US stock market. However, it can’t go on forever, because it would lead to catastrophic hyperinflation as seen many times throughout history and most recently in Venezuela. Long-Term Effect of Sustaining Zombie Companies You can see the long-term fallout in Japan’s “Lost Decade”. Japanese banks continued to support weak or failing firms. The result was three decades of poor economic growth. Long-Term Effect of Killing Zombie Companies This effect can also be seen in the Stagflation of the 1970s. The US abandoned the Gold Standard in 1972 allowing the Federal Reserve to print as much as they wanted. What followed was almost no economic growth for a decade and a 17X explosion in the price of gold relative to the dollar. Then Jimmy Carter appointed Paul Volker the chairman of the Fed. Volker had a will of steel required to force America to endure the short-term pain of increasing interest rates. This pain took the form of massive unemployment as zombie companies went bankrupt or were forced to restructure to live within their means. However, the long-term result was two decades of great stock market performance through the ’80s and ’90s. Possible Future Scenarios Based on all past periods of massive monetary supply inflation like this, it’s very likely the US will eventually reach a point where the bubble pops and there’s a stock market crash. Pre-Crash Strategy Ideally, you’d have the Federal Reserve and Wall Street’s insider information that would help you predict the timing of the crash and get out in advance. Then you could keep enjoying the amazing returns from the bubble as long as possible. However, for the rest of us, the best we can probably do is put our money in precious metals ETF’s to be protected from these losses. Post-Crash Scenarios 1. Fed Responsibly Raises Interest Rates If the Federal Reserve begins behaving responsibly at that point, they would raise interest rates and force all the zombie companies to go bankrupt or restructure to begin surviving by providing value and earning money. This was the approach of Fed Chairman Paul Volker in 1979. Higher interest rates will temporarily increase unemployment and make the stock market sharply fall even more in the short term. However, after this correction, it will great opportunity to sell your gold ETF’s get back into the stock market at the bottom and enjoy significant future growth. 2. Fed Continues Low-Interest Rate Policy This was the approach of Japan in the ’90s. The zombie companies were kept on life-support. The result was that it took 3 decades for the market to get back where it was before the crash. Given that it’s unlikely anyone has the political will to cause the short-term pain of higher interest rates, this seems like the most likely scenario.
TVC:GOLDEducation
by mikepsinn
How to use trendline to identify price action structure/patternHi everyone: Many have asked me about how to properly use trendlines to identify price action structures and patterns. So in today’s educational video, I will go over this topic in more detail. First, I use the trendline as a “frame” to identify structures and patterns, and NOT use it as a Support/Resistance. What I do is to put in the trendline for the highs and lows of the price action that can help me to pinpoint what the price is doing, what kind of a correctional structure that it is currently in. Typically after an impulse phase of the market, then we start to identify a structure/pattern by connecting the swing highs and lows. Second, as I always point out in my videos/streams, a structure/pattern needs at least 2 swing highs and lows to classify as a structure. Certainly more swing highs and lows are good, but it's not necessary. Often I get asked about the “third touch” or more. To me it's not necessary, but if price does form the third touch, I would proceed the same as the price has a second touch. Third, we are identifying the price action correctional structure, and sometimes the market is not perfect, it will not give you a textbook looking bullish flag as an example. Hence the backtesting and chartwork from each trader is important to get your mind familiarized with the market and its “imperfect” development of the price action. After identifying the impulse phase, then look to see what the market is doing. Is it falling into a consolidation ? Not much movement except sideway price action, or ascending/descending like consolidation will give you a clue on whether the price is correcting to continue, or correcting to reverse. Take a look at the educational videos I have made in the past regarding the type of correctional structures we typically see in the market. All the videos are down below. Continue to backtest and do chart work to get familiar with drawing in the structures/patterns. The more you do these, the better and easier it is for you to identify them in your trading journey. Remember, the market is not perfect, so not all the structures/patterns will be “Textbook” like on the real, live market. Learn to deal with the “imperfect” market, so you can better utilize price action analysis to your advantage. Any questions, comments or feedback welcome to let me know :) Thank you Below are all my price action structures/patterns videos on different type of corrections. Continuation and Reversal Correction Identify a correction for the next impulse move in price action analysis Impulse VS Correction Multi-time frame analysis Continuation Bull/Bear Flag Parallel Channel (Horizontal, Ascending, Descending) Reversal Ascending/Descending Channel Reversal Rising/Falling Wedge Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Continuation/Reversal Expanding Structure/Pattern
OANDA:XAUUSDEducation
by jojofang0901
61
Supply & Demand zone trading (Continuation and Confirmation)You should use a few charts when you trade (I use three minimum)- daily, 4 hour and 1 hour (enter on either 4 hour or 1 hour) scalps or day trades. You want to used supply and demand zones to trade from, either continuations or bounces out of back into major trends. Please practice finding and trading out of during your trading- in zones is mostly accumulation and sideways/ or ranging price action. As noted on example charts: both demand and supply zones can switch after price action breaks areas and turn into the opposite one. Be flexible.
Education
by Anbat
1