BTCUSDT Market Analysis Update Hi everyone, I hope you are doing well and I have put my opinion in Bitcoin price on the chart for you. and hope this helps you! Simple, concise, useful
Best Regards.
BINANCE:BTCUSDT
Riskmanagment
EURNZD the standout in Long-Currency's in Asia trade Wedesday
Hi everyone, I got into this trade not long ago to the long-side, but as it has plenty of potential I thought I would share.
On the 4HR timeframe, there is currently a bullish heads 'n' shoulders pattern adding some buying fuel.
There was a recent pullback so a good time to enter if you are after a Long trade.
On the chart, the indicator at the bottom is on-balance-volume which has had a good uptick today so far.
This trade is also trend-friendly, this is a Daily chart and you will see the thicker white line which is the 200EMA, the thinner dark-blue is 50EMA and Crimson colour is 100EMA. The very thick white arrowed line is the heads n shoulders neckline where price has broken out this morning.
When Does a $433.5 Million Settlement Become a Victory for Both In the complex landscape of corporate litigation, Alibaba's recent settlement presents a fascinating case study of modern business strategy. While the Chinese e-commerce giant agrees to pay $433.5 million to settle shareholder allegations, this decision might paradoxically represent a win-win scenario for both the company and its investors. The settlement, ranking among the top 50 largest securities class actions in U.S. history, raises intriguing questions about the balance between corporate governance and strategic business decisions.
What makes this case particularly compelling is the mathematics of risk management. When faced with potential damages of $11.63 billion, Alibaba's decision to settle for $433.5 million reveals a sophisticated calculation of risk versus reward. This settlement, representing less than 4% of the maximum potential damages, demonstrates how modern corporations can transform legal challenges into strategic opportunities for resolution and renewal.
The implications of this settlement extend far beyond Alibaba's balance sheet. As global markets increasingly scrutinize tech giants' practices, this case sets a precedent for how international corporations might navigate the complex intersection of antitrust regulations, shareholder rights, and market competition. The resolution suggests that in today's business environment, the true measure of corporate success might lie not in avoiding challenges, but in transforming them into opportunities for organizational evolution and stakeholder alignment.
Solana SOLUSD makes official breakout from 3 month trading range
SOLUSD in the Crypto space, in terms of daily volume it is rather shallowly traded in comparison to other big-Cap Cryptocurrency's, but its rumoured to be a front-runner during the Crypto breakout, which I believe has commenced (I better pinch myself so I don't forget). Up over 4% today Monday at time of writing during Asian session.
SILVER price shorting in Asian trade Thursday
Gold and Silver price(s) are above their 200 period moving averages and their continued uptrend seems reasonable to happen in the short to perhaps medium term, before a pullback correction kicks-into-gear for the precious metals.
So far during Thursday and as the London session begins around this time, Gold is up about 0.3% and Silver is down about -0.3%, so due to this divergence in price I took a Long in XAGUSD. It's only a 1:1 trade.
The 1% Rule: A Key to Long-Term Trading SuccessUnderstanding the 1% Risk Management Strategy in Trading
Effective risk management is the backbone of successful trading, helping traders preserve capital and avoid emotional decision-making. The 1% risk management strategy is one of the most widely used approaches, aimed at limiting the potential loss on any single trade to 1% of your total trading capital. Let’s break down how this strategy works and why it’s essential for both novice and experienced traders.
What Is the 1% Risk Rule?
The 1% risk rule ensures that a trader never risks more than 1% of their account balance on a single trade. For example, if you have $20,000 in your account, you would limit your risk to $200 on any given trade. The idea behind this rule is to safeguard your account from catastrophic losses that could occur from consecutive losing trades .
How to Apply the 1% Risk Rule
To apply the 1% rule effectively, you need to combine position sizing with stop-loss orders. Here’s how you can implement this strategy:
1. Determine Your Account Risk: Calculate 1% of your trading capital. For example, with a $10,000 account, 1% equals $100. This is the maximum amount you’re willing to lose on a single trade.
2. Set a Stop-Loss: A stop-loss helps cap your losses at the 1% threshold. If you’re buying shares of a stock at $50 and decide on a stop-loss 1 point below, your “cents at risk” is $1 per share. If you’re willing to lose $100, you can buy 100 shares ($100 / $1 per share risk).
3. Position Sizing: The size of your trade depends on the risk per share. By determining your stop-loss level, you calculate how many shares you can buy to keep your total loss within the 1% limit. This process prevents you from taking excessively large positions that could lead to significant losses .
Why the 1% Rule Is Effective
The 1% rule is effective because it keeps your potential losses small relative to your total capital. Even during periods of losing streaks, this strategy prevents large drawdowns that could lead to emotional trading or complete account wipeout.
For instance, if you experience a string of ten losing trades in a row, you would only lose 10% of your capital, giving you plenty of opportunities to recover without significant emotional stress .
Advantages of the 1% Risk Rule
1. Protects Your Capital: By risking only a small portion of your account on each trade, you prevent significant losses that could deplete your account.
2. Encourages Discipline: Sticking to the 1% rule helps instill discipline, keeping traders from making impulsive trades that deviate from their trading plan.
3. Provides Flexibility: The rule works for all market conditions and strategies, whether you are trading stocks, forex, or other assets. As long as you adhere to the 1% threshold, you can trade confidently without fear of losing too much on any single trade .
The Risk-Reward Ratio
An essential component of the 1% rule is pairing it with a favorable risk-reward ratio. Traders typically aim for a minimum reward of 2 to 3 times the risk. For example, if you’re risking $100 on a trade, you should aim for at least a $200 to $300 profit. This ensures that even with a 50% win rate, your profitable trades will outweigh your losses .
Conclusion
The 1% risk management strategy is a powerful tool for minimizing risk and protecting your trading capital. By incorporating proper position sizing, stop-loss orders, and a disciplined approach, you can navigate the market confidently while safeguarding your account from large drawdowns. Whether you’re a day trader or a swing trader, applying this strategy will help you build consistent success over time.
By maintaining a focus on risk management, traders can shift their mindset from seeking high returns to preserving capital, which is the key to long-term success in the markets.
The Formula That Helped Me Get Into in the Top 2% of TradersI spent years testing different strategies, obsessing over charts, and trying to find the perfect entry point. It took me a while to realize that it wasn’t just about picking the right trades—it was about knowing how much to risk on each trade. This is where the Kelly Criterion came into play and changed my entire approach.
You’ve probably heard the saying, “Don’t put all your eggs in one basket.” Well, Kelly Criterion takes that idea and puts some hard math behind it to tell you exactly how much you should risk to maximize your long-term growth. It’s not a guessing game anymore—it’s math, and math doesn’t lie.
What is Kelly Criterion?
The Kelly Criterion is a formula that helps you figure out the optimal size of your trades based on your past win rate and the average size of your wins compared to your losses. It’s designed to find the perfect balance between being aggressive enough to grow your account but cautious enough to protect it from major drawdowns.
F = W - (1 - W) / R
F is the fraction of your account you should risk.
W is your win rate (how often you win).
R is your risk/reward ratio (the average win relative to the average loss).
Let’s break it down.
How It Works
Let’s say you have a strategy that wins 60% of the time (W = 0.6), and your average win is 2x the size of your average loss (R = 2). Plugging those numbers into the formula, you’d get:
F = 0.6 - (1 - 0.6) / 2
F = 0.6 - 0.4 / 2
F = 0.6 - 0.2 = 0.4
So, according to Kelly, you should risk 40% of your account on each trade. Now, 40% might seem like a lot, but this is just the theoretical maximum for optimal growth.
The thing about using the full Kelly Criterion is that it’s aggressive. A 40% recommended risk allocation, for example, can be intense and lead to significant drawdowns, which is why many traders use half-Kelly, quarter-Kelly or other adjustments to manage risk. It’s a way to tone down the aggressiveness while still using the principle behind the formula.
Personally, I don’t just take Kelly at face value—I factor in both the sample size (which affects the confidence level) and my max allowed drawdown when deciding how much risk to take per trade. If the law of large numbers tells us we need a good sample size to align results with expectations, then I want to make sure my risk management accounts for that.
Let’s say, for instance, my confidence level is 95% (which is 0.95 in probability terms), and I don’t want to allow my account to draw down more than 10%. We can modify the Kelly Criterion like this:
𝑓 = ( ( 𝑊 − 𝐿 ) / 𝐵 )× confidence level × max allowed drawdown
Where:
𝑊 = W is your win probability,
𝐿 = L is your loss probability, and
𝐵 = B is your risk-reward ratio.
Let’s run this with actual numbers:
Suppose your win probability is 60% (0.6), loss probability is 40% (0.4), and your risk-reward ratio is still 2:1. Using the same approach where the confidence level is 95% and the max allowed drawdown is 10%, the calculation would look like this:
This gives us a risk percentage of 0.95% for each trade. So, according to this adjusted Kelly Criterion, based on a 60% win rate and your parameters, you should be risking just under 1% per trade.
This shows how adding the confidence level and max drawdown into the mix helps control your risk in a more conservative and tailored way, making the formula much more usable for practical trading instead of over-leveraging.
Why It’s Powerful
Kelly Criterion gives you a clear, mathematically backed way to avoid overbetting on any single trade, which is a common mistake traders make—especially when they’re chasing losses or getting overconfident after a win streak.
When I started applying this formula, I realized I had been risking too much on bad setups and too little on the good ones. I wasn’t optimizing my growth. Once I dialed in my risk based on the Kelly Criterion, I started seeing consistent growth that got me in the top 2% of traders on TradingView leap competition.
Kelly in Action
The first time I truly saw Kelly in action was during a winning streak. Before I understood this formula, I’d probably have gotten greedy and over-leveraged, risking blowing up my account. But with Kelly, I knew exactly how much to risk each time, so I could confidently scale up while still protecting my downside.
Likewise, during losing streaks, Kelly kept me grounded. Instead of trying to "make it back" quickly by betting more, the formula told me to stay consistent and let the odds play out over time. This discipline was key in staying profitable and avoiding big emotional trades.
Practical Use for Traders
You don’t have to be a math genius to use the Kelly Criterion. It’s about taking control of your risk in a structured way, rather than letting emotions guide your decisions. Whether you’re new to trading or have been in the game for years, this formula can be a game-changer if applied correctly.
Final Thoughts
At the end of the day, trading isn’t just about making the right calls—it’s about managing your risks wisely. The Kelly Criterion gives you a clear path to do just that. By understanding how much to risk based on your win rate and risk/reward ratio, you’re not just gambling—you’re playing a game with a serious edge.
So, whether you’re in a winning streak or facing some tough losses, keep your cool. Let the Kelly formula take care of your risk calculation.
If you haven’t started using the Kelly Criterion yet, now’s the time to dive in. Calculate your win rate, figure out your risk/reward ratio, and start applying it.
You’ll protect your account while setting yourself up for long-term profitability.
Trust me, this is the kind of math that can change the game for you.
Bonus: Custom Kelly Criterion Function in Pine Script
If you’re ready to take your trading to the next level, here’s a little bonus for you!
I’ve put together a custom Pine Script function that calculates the optimal risk percentage based on the Kelly Criterion.
You can easily enter the variables to fit your trading strategy.
// @description Calculates the optimal risk percentage using the Kelly Criterion.
// @function kellyCriterion: Computes the risk per trade based on win rate, loss rate, average win/loss, confidence level, and maximum drawdown.
// @param winRate (float) The probability of winning trades (0-1).
// @param lossRate (float) The probability of losing trades (0-1).
// @param avgWin (float) The average win size in risk units.
// @param avgLoss (float) The average loss size in risk units.
// @param confidenceLevel (float) Desired confidence level (0-1).
// @param maxDrawdown (float) Maximum allowed drawdown (0-1).
// @returns (float) The calculated risk percentage for each trade.
kellyCriterion(winRate, lossRate, avgWin, avgLoss, confidenceLevel, maxDrawdown) =>
// Calculate Kelly Fraction: Theoretical fraction of the bankroll to risk
kellyFraction = (winRate - lossRate) / (avgWin / avgLoss)
// Adjust the risk based on confidence level and maximum drawdown
adjustedRisk = (kellyFraction * confidenceLevel * maxDrawdown)
// Return the adjusted risk percentage
adjustedRisk
Use this function to implement the Kelly Criterion directly into your trading setup. Adjust the inputs to see how your risk percentage changes based on your trading performance!
USOIL Price Analysis: Double Bottom Breakout Targets $78.37🛢️ USOIL Price Analysis: Double Bottom Breakout Targets $78.37 and $83.67
USOIL (WTI Crude Oil) shows a bullish reversal pattern on the D1 timeframe , with a double bottom breakout signaling potential upward movement. Traders are eyeing key targets, with the first at $78.37 and the second at $83.67 . Here's a breakdown of the setup:
🔍 What is a Double Bottom Pattern?
A double bottom is a bullish reversal pattern that forms after a downtrend. In this pattern, the price hits a support level twice and bounces back. This suggests that sellers have been exhausted, and buyers are stepping in to increase prices. The breakout occurs when the price closes above the peak between the two lows, confirming the pattern.
🚀 Key Price Targets for USOIL
With the double bottom confirmed, here are the following potential price targets:
1. First Target – $78.37:
After the breakout, the immediate upside target is $78.37 . This level is based on a measured move from the bottom of the pattern to the breakout point, giving traders their first profit-taking zone.
2. Second Target – $83.67:
Should the bullish momentum continue, the next target to watch is $83.67 , where further resistance is expected. A move toward this level would signify a more extended upward trend in USOIL.
⛔ Stop Loss – $66.23
To manage risk, traders should consider placing a stop loss at $66.23 . This level is below the pattern's low, where a breakdown would invalidate the bullish outlook and potentially trigger further downside.
📊 Factors Influencing USOIL
Several factors could affect the success of the breakout:
Global Supply and Demand: Changes in OPEC policies, US shale production, and geopolitical tensions can significantly impact oil prices.
Economic Growth: A robust global economy often increases oil demand, increasing prices.
USD Strength: Since oil is traded in US dollars, a stronger dollar can put downward pressure on oil prices, while a weaker dollar may support further gains.
🛠 Trading Strategy
For traders looking to capitalize on this breakout, consider the following:
Entry Point: After the breakout, buying near the current price with targets of $78.37 and $83.67 could provide a favorable risk/reward ratio.
Risk Management: Place your stop loss at $66.23 to protect against unexpected market reversals.
💡 Conclusion
The double bottom breakout on the D1 timeframe suggests that USOIL is poised for a potential rally towards $78.37 and $83.67 , with a protective stop at $66.23 . To navigate this opportunity effectively, traders should stay vigilant of key market factors and global developments.
🔔 Stay tuned for more updates on USOIL and other fundamental market movements.
AMD is setting up for another long-run
Jan / Feb 2024 Advanced Micro Devices broke-out & cursed up the charts.
Then it took a couple of months to pullback & then entered some months of consolidation.
Now, its pulled back like a sling-shot and ready to go again.
Plus, it has so much in common with Nvidia.
Is the S&P 500's Bull Run a Mirage?The S&P 500's recent all-time high has ignited a frenzy of optimism among investors. However, as the market reaches unprecedented heights, questions arise about the sustainability of this bull run and the potential risks lurking beneath the surface.
While the allure of soaring stock prices is undeniable, investing in a market at its peak carries inherent risks. The concentration of returns within a few dominant stocks (such as Nvidia, Alphabet, and Amazon), coupled with the potential for geopolitical shocks and economic downturns, introduces significant uncertainty. The dot-com bubble serves as a stark reminder of the market's cyclical nature and the perils of overvaluation.
To navigate this complex landscape, investors must adopt a balanced approach. Diversification, coupled with a keen understanding of economic indicators, geopolitical events, and corporate news, is essential for making informed decisions. By recognizing the potential pitfalls and taking proactive measures to mitigate risk, investors can position themselves for long-term success in the ever-evolving market.
The S&P 500's future remains uncertain, but by approaching the bull market with a critical eye and a strategic mindset, investors can navigate the challenges and capitalize on the opportunities that lie ahead.
This Simple Strategy Could Make You a Fortune in the Gold Marketprice action of Gold Spot (XAU/USD) in relation to the trendlines and patterns indicated.
Chart Analysis
1. Weekly Flag Trendline:
- The first chart shows a trendline forming a "flag" pattern on a higher time frame (possibly weekly or daily). This flag appears to be a bullish continuation pattern, indicating that after the consolidation within the flag, the price might continue in the direction of the prior trend, which seems to be up.
2. Price Action Inside the Flag:
- Within the flag, there is a period of consolidation marked by the parallel trendlines. The price has been respecting these lines, creating higher lows and lower highs, indicating indecision or preparation for a breakout.
3. Potential Breakout Zones:
- Key breakout zones are marked by the upper resistance of the flag pattern around the 2,530 level and the lower support trendline of the flag around the 2,470 level. A breakout above the upper resistance could signal a continuation of the prior uptrend, while a break below the lower support could indicate a reversal or deeper pullback.
4. Smaller Patterns:
- On the second chart (1-hour time frame), there's a more detailed view of recent price action with a potential bearish flag or pennant forming, suggesting a temporary pullback or consolidation within the larger flag. This smaller pattern appears to be within a trading range bounded by the horizontal support and resistance levels.
5. Key Support and Resistance Levels:
- The charts show horizontal support around the 2,433.301 level, which aligns with a historical low that could serve as a significant support level. Similarly, the resistance level is around 2,530, where the price has repeatedly failed to break above.
6. Current Market Context:
- The price is currently hovering around 2,497, near the middle of the trading range, suggesting indecision. This midpoint could be a neutral zone where the price could move in either direction based on upcoming market momentum or news.
Trading Strategy and Considerations
- Entry Points:
- If considering a bullish scenario, a long entry could be planned near the lower support line of the flag, around 2,470, with a stop loss slightly below the flag's support to manage risk. A breakout above the 2,530 resistance could also provide a good entry point for a continuation of the uptrend.
- For a bearish scenario, a short entry could be considered if the price breaks below the 2,470 support level, confirming a breakdown from the flag pattern.
- Risk Management:
- The proximity of the price to both upper and lower boundaries of the flag pattern provides clear levels for stop placement. This helps in managing risk effectively, keeping losses contained if the trade goes against the initial bias.
- Monitoring Price Action:
- Watch for potential breakouts from the smaller patterns within the flag, as these could provide early signals of the larger move's direction. It would also be essential to keep an eye on volume changes, as increased volume could confirm the validity of a breakout or breakdown.
By aligning your trades with these patterns and key levels, you can take advantage of the potential setups provided by the price action within these consolidating formations. Ensure to adapt to new market conditions and stay disciplined in executing your trading plan.
Hidden Costs of Trading You Must Know
In this educational article, we will discuss the hidden costs of trading.
1 - Brokers' Commissions
Trading commission is the brokers' fee for opening a trading position.
Usually, it is calculated based on the size of the trade.
Though most of the traders believe that trading commissions are too low to even count them, the fact is that trading on consistent basis and opening a couple of trading positions weekly, the composite value of commissions may cut a substantial part of our profits.
2 - Education
Of course, most of the trading basics can be found on the Internet absolutely for free.
However, the more experienced you become, the harder it is to find the materials . So you typically should pay for the advanced training.
Moreover, there is no guarantee that the course/coaching that you purchase will improve your trading, quite often traders go through multiple courses/coaching programs before they become consistently profitable.
3 - Spreads
Spread is the difference between the sellers' and buyers' prices.
That difference must be compensated by a trader if one wished to open a trading position.
In highly liquid markets, the spreads are usually low and most of the traders ignore them.
However, being similar to commissions, spreads may cut the substantial part of the overall profits.
4 - Time
When you begin your trading journey, it is not possible to predict how much it will take to become a consistently profitable trader.
Moreover, there is no guarantee that you will become one.
One fact is true, you should spend a couple of years before you find a way to trade profitably, and as we know, the time is money. More time you sacrifice on trading, less time you have on something else.
5 - Swaps
Swap is the fee you pay for transferring a position overnight .
Swap is based on a difference between the interests rates of the currencies that are in a pair that you trade.
Occasionally, swaps can even be positive, and you can earn on holding such positions.
However, most of the time the swaps are negative and the longer you hold your trades, the more costly your trading becomes.
The brokers' commissions, spreads and swaps compose a substantial cost of our trading positions. Adding into the equation the expensive learning materials and time spent on practicing, trading becomes a very expensive game to play.
However, knowing in advance these hidden costs, the one can better prepare himself for a trading journey.
Never Trade Without Stop Loss!
Hey traders,
Talking to many struggling traders from different parts of the world, I realized that the majority constantly makes the same mistake : they do not set a stop loss .
Asking for the reason why they do that, the common answer is that
these traders consider the manual position closing to be safer, implying that if the market goes in the opposite direction, they will be able to much better track the exact moment to cut loss.
In this article, we will discuss why it is crucially important to set a stop loss and why it is the number one element of your trading position.
What is Stop Loss?
Let's discuss what is a stop loss . By a stop loss , we mean a certain price level where we close our trading position in loss. In comparison to a manual closing, the stop loss (preferably) should be set at the exact moment when the order is executed.
On the chart above, I have an active selling position on Gold.
My entry level is 2372, my stop loss is 2381.
It means that if the price goes up and reaches 2381 level, the position will automatically close in a loss.
Why Do You Need a Stop Loss?
Stop loss allows us limiting the risks in case of unfavorable movements .
On the chart above, I have illustrated 2 similar negative scenarios : 1 with a stop loss being placed and one without on USDJPY.
In the example on the left, stop loss helped to prevent the excessive risk , cutting the loss at the beginning of a bearish wave.
With the manual closing, however, traders usually hold the negative positions much longer , praying for a reversal.
Holding a losing trade, emotions intervene. Greed and fear usually spoil the reasoning, causing irrational decisions .
Following such a strategy, the total loss of the second scenario is 6 times bigger than the total loss with a placed stop loss order.
Always Set Stop Loss!
Stop loss defines the point where you become wrong in your predictions. Planning your trade, you should know in advance such a point and cut your loss once it is reached.
Never trade without a stop loss.
How to Do Your Own Research (DYOR) in Crypto? – by WhiteBITDisclaimer: the following post was originally published by WhiteBIT .
Hello, Traders!
Have you ever heard the phrase “Do Your Own Research,” or DYOR? No, it's neither a trendy clothing brand nor just a catchy phrase — it's an important practice. DYOR has become the primary guiding principle for crypto investors to make informed decisions. Let’s explain what DYOR means and how to conduct your research effectively.
What Does DYOR Mean? Why Is It Important?
DYOR is a call to action for investors to research and dig into the fundamentals of any asset or project before investing. Sounds simple, right? But why is it so important? Well, think about it this way: the Internet is flooded with all sorts of information, and not all of it is reliable.
So, DYOR urges you to dig deep, find the facts, and make your own decisions. It is your shield against misinformation and hype. It’s about diving deep into the project’s details and understanding its technology, team, and market potential. By researching, you’re not just relying on someone else’s opinion — you’re forming educated conclusions. Now that we’ve covered why DYOR is critical, let’s look at some of the ways traders and investors used to do proper research.
How to Do Your Own Research? How to Research a Crypto Project?
Crypto research involves using various sources and tools to get all the information you need:
– Analytical Platforms: Visit popular analytics platforms to get a first impression of the cryptocurrency. These platforms offer essential data, including market capitalization, trading volume, price history, and other key metrics.
The numbers can tell you a lot. Take social media and community channels, for example. They can give you a sense of how popular a project is. But here’s the catch: 🚩 watch out for bots and fake accounts. They can skew the numbers and paint an inaccurate picture of real interest. So, ask yourself: Is the community actively engaged? Are conversations genuine and buzzing naturally?
You also need to consider factors such as asset price, market capitalization, circulating supply, total supply, daily active users, token/coin holder distribution, and trading volume to get a sense of the project’s progress and the community’s involvement.
– White Paper Analysis: It’s a smart move to dive into a project’s core documents, like the White Paper – the project’s manifesto. It’s crafted by the team to pinpoint a problem and lay out how their product, technology, or token/coin plans to solve it. These are the sources you must explore when doing crypto research. Key points also include the technology behind it, the development team, tokenomics, and the project roadmap.
– Sentiment Analysis: It is all about working out the general mood of the market or a specific asset. By understanding how investors feel about a cryptocurrency, you can identify whether it is overvalued or undervalued. Tools like the Fear and Greed Index can help track market sentiment.
– Competitor Analysis: Analyzing competitors helps you understand the strengths and weaknesses of various projects. Compare technologies, use cases, and market performance to identify the best investment opportunities.
– Project Website and Social Media Analysis: A website should provide transparent information about the team and technology. 🚩 include poorly designed websites, missed deadlines, and a lack of transparency. Media activity can offer insights into a project's community and current status. Look out for active and engaged followers, how often the project updates, and what kind of community interactions there are.
Questions to Answer Before Investing
Before diving into any cryptocurrency investment, it's essential to ask yourself several key questions to ensure you're conducting thorough research. Here's a checklist to guide your DYOR crypto process:
What Problem Is the Project Solving?
How Does It Differ from Competitors?
Does It Follow Its Roadmap and White Paper?
What Are the Legal Regulations in Your Country?
Has It Raised Funding? Who Are the Investors?
Who Are Its Partners and Supporters?
How Is It Promoted? What Marketing Strategies Are Used?
What Are the Trends on Google and Social Media?
What Is the Tokenomics? How Are Tokens Distributed?
Are There Any Red Flags?
So, doing your own research is more than just a suggestion. Any information you can gather about a crypto project is invaluable and worth the time and effort. The more you know, the better equipped you are to make informed decisions and avoid potential pitfalls.
Remember, “Knowledge is power". As Benjamin Franklin famously said, “An investment in knowledge pays the best interest.” So, commit to your due diligence—your future self will thank you. D.Y.O.R.
How to Do Your Own Research (DYOR) in Crypto?Hello, Traders!
Have you ever heard the phrase “Do Your Own Research,” or DYOR? No, it's neither a trendy clothing brand nor just a catchy phrase — it's an important practice. DYOR has become the primary guiding principle for crypto investors to make informed decisions. Let’s explain what DYOR means and how to conduct your research effectively.
What Does DYOR Mean? Why Is It Important?
DYOR is a call to action for investors to research and dig into the fundamentals of any asset or project before investing. Sounds simple, right? But why is it so important? Well, think about it this way: the Internet is flooded with all sorts of information, and not all of it is reliable.
So, DYOR urges you to dig deep, find the facts, and make your own decisions. It is your shield against misinformation and hype. It’s about diving deep into the project’s details and understanding its technology, team, and market potential. By researching, you’re not just relying on someone else’s opinion — you’re forming educated conclusions. Now that we’ve covered why DYOR is critical, let’s look at some of the ways traders and investors used to do proper research.
How to Do Your Own Research? How to Research a Crypto Project?
Crypto research involves using various sources and tools to get all the information you need:
– Analytical Platforms: Visit popular analytics platforms to get a first impression of the cryptocurrency. These platforms offer essential data, including market capitalization, trading volume, price history, and other key metrics.
The numbers can tell you a lot. Take social media and community channels, for example. They can give you a sense of how popular a project is. But here’s the catch: 🚩 watch out for bots and fake accounts. They can skew the numbers and paint an inaccurate picture of real interest. So, ask yourself: Is the community actively engaged? Are conversations genuine and buzzing naturally?
You also need to consider factors such as asset price, market capitalization, circulating supply, total supply, daily active users, token/coin holder distribution, and trading volume to get a sense of the project’s progress and the community’s involvement.
– White Paper Analysis: It’s a smart move to dive into a project’s core documents, like the White Paper – the project’s manifesto. It’s crafted by the team to pinpoint a problem and lay out how their product, technology, or token/coin plans to solve it. These are the sources you must explore when doing crypto research. Key points also include the technology behind it, the development team, tokenomics, and the project roadmap.
– Sentiment Analysis: It is all about working out the general mood of the market or a specific asset. By understanding how investors feel about a cryptocurrency, you can identify whether it is overvalued or undervalued. Tools like the Fear and Greed Index can help track market sentiment.
– Competitor Analysis: Analyzing competitors helps you understand the strengths and weaknesses of various projects. Compare technologies, use cases, and market performance to identify the best investment opportunities.
– Project Website and Social Media Analysis: A website should provide transparent information about the team and technology. 🚩 include poorly designed websites, missed deadlines, and a lack of transparency. Media activity can offer insights into a project's community and current status. Look out for active and engaged followers, how often the project updates, and what kind of community interactions there are.
Questions to Answer Before Investing
Before diving into any cryptocurrency investment, it's essential to ask yourself several key questions to ensure you're conducting thorough research. Here's a checklist to guide your DYOR crypto process:
What Problem Is the Project Solving?
How Does It Differ from Competitors?
Does It Follow Its Roadmap and White Paper?
What Are the Legal Regulations in Your Country?
Has It Raised Funding? Who Are the Investors?
Who Are Its Partners and Supporters?
How Is It Promoted? What Marketing Strategies Are Used?
What Are the Trends on Google and Social Media?
What Is the Tokenomics? How Are Tokens Distributed?
Are There Any Red Flags?
So, doing your own research is more than just a suggestion. Any information you can gather about a crypto project is invaluable and worth the time and effort. The more you know, the better equipped you are to make informed decisions and avoid potential pitfalls.
Remember, “Knowledge is power". As Benjamin Franklin famously said, “An investment in knowledge pays the best interest.” So, commit to your due diligence—your future self will thank you. D.Y.O.R.
Fear and Greed Index in the Cryptocurrency Market
Hello, Traders!
The cryptocurrency market is well-known for its wild price swings, isn't it? These ups and downs often stir up strong emotions in traders and investors. Ever felt a bit of fear or greed when watching those price charts? You're not alone. These emotions play a massive role in trading decisions and market trends. That's where the Fear and Greed Index comes in. It helps us put a finger on the market's mood, giving us a clearer picture of what's driving the latest moves.
What is the Fear and Greed Index?
The Fear and Greed Index Crypto is a pretty complex index designed to gauge investors' prevailing emotions and attitudes toward the cryptocurrency market. This index aggregates various indicators to present a single numerical value ranging from 0 to 100. A number of 0 means “Extreme Fear,” while a number of 100 means “Extreme Greed.”
Fear arises during periods of high volatility, negative news, or significant price declines. When fear takes over, investors tend to sell off their assets to avoid further losses, leading to prices going down even more. This phenomenon is known as Panic Selling.
Greed takes over when things are going well, when prices are going up fast, and everyone feels optimistic. During these times, investors typically feel the Fear of Missing Out (FOMO), which can lead to them buying aggressively and overvaluing assets. This can cause the market price of an asset to exceed its intrinsic or fundamental value.
The index consists of several key components:
Volatility (25%): Measures the current volatility and max drawdowns compared to average values over the last 30 and 90 days. Increased volatility signifies fear among investors.
Market Momentum/Volume (25%): This measure compares current trading volume and market momentum to historical averages—high buying volumes in a buoyant market signal greed.
Social Media (15%): Analyzes social media trends, focusing on specific cryptocurrency-related hashtags' frequency and engagement rate. A high rate of social media activity indicates greed or overhype.
Surveys (15%): Collect data from public sentiment surveys, providing direct feedback on investor sentiment.
BTC Dominance (10%): Examines Bitcoin's market dominance relative to other cryptocurrencies. Increasing dominance suggests fear as investors seek the perceived safety of Bitcoin.
Trends (10%): Analyzes Google Trends data for cryptocurrency-related search queries. A significant increase in searches for “Bitcoin Crash” indicates fear.
The Psychology of Fear and Greed in Trading
The Fear Greed Index is an excellent tool for traders looking to align their strategies with market sentiment.
Contrarian Investing: Warren Buffett's famous principle, “Be fearful when others are greedy and greedy when others are fearful,” aptly applies perfectly to the cryptocurrency market. Savvy investors often adopt a contrarian approach, buying when others are fearful and selling when others are greedy.
Risk Management: By monitoring the index, traders can gauge the overall market risk environment. If you see high levels of fear, it might be a good idea to take a cautious approach. On the other hand, if you see high levels of greed, it could be a good idea to tighten Stop-Loss orders to protect your gains from a potential market reversal.
Market Timing: Timing the market is notoriously challenging. The index can help you identify potential turning points. For instance, if you see extreme fear levels, waiting for the market to rebound might be a good idea. If you see extreme greed, it could be a sign of a correction.
Emotional Regulation: Awareness of the current market sentiment can help traders manage their emotions. Recognizing that extreme fear or greed is prevalent in the market can encourage more disciplined and rational decision-making, reducing the impact of emotional trading errors.
Interpretation of the Fear and Greed Index
The Fear and Greed Index is interpreted on a scale from 0 to 100, with specific ranges indicating different levels of sentiment:
Extreme Fear (0-24): Significant fear in the market, considered a buying opportunity.
Fear (25-49): Reflects general fear among investors.
Neutral (50): Suggests a balanced market sentiment.
Greed (51-74): Indicates rising greed among investors.
Extreme Greed (75-100): Signifies high levels of greed, often considered a signal to lock in profits.
Pros and Cons of Using the Fear and Greed Index
Pros:
– Gives you the lowdown on what the market is thinking, which helps you understand its mood;
– Extreme readings can signal critical points for market entry or exit.
– Enhances decision-making by supplementing technical and fundamental analysis. So, it improves your decision-making by adding to what you already know about the market.
Cons:
– Shouldn't be the only thing you consider when deciding; you need to do more research;
– Market sentiment can change quickly, so these indicators aren't always reliable;
– They don't show you what's happening in the market right now. They can't predict the future.
Conclusion
The Fear Greed Index is a helpful tool for understanding the cryptocurrency market's psychology. It provides insights that can enhance trading strategies and risk management practices. However, market sentiment is a complex concept rooted in human emotions and behaviors, which requires even more attention and more in-depth analysis. While the Greed and Fear Index should not be the sole basis for trading decisions, using other analytical tools and sound judgment can significantly improve a trader's ability to make informed and timely decisions.
KOG - "Fail to plan, plan to fail" Traders,
The market is designed to confuse retail traders, the reason for that is they know 95% of you enter these markets with no plan. You’re not aware of the levels, you’re not charting the pairs you trade, and you lack the basic skills to manage your money and your risk. You need to have a plan before you enter a trade, you need to have a strict set of rules, and everything should line up as much as possible before you take the entry. By the time new traders understand they need a plan, they’ve blown their accounts and blame the markets.
Every trader, before they start their day needs to have a strict set of rules they abide by before entering the markets for a trade. There are many variations and most will have their own rules, but to start you off here are a few we set out for our traders. They're not uncommon, simple steps to take to keep you safe in the markets.
Is the market ranging or trending?
We have to adapt our trading style in accordance with what the market is doing. If it’s a trending market, we know we have a clear direction on the pair and we know the levels of the trend as well as the levels that are provided. We then add the target to this and now have a clearer understanding of where price may support or resist before continuing the trend. When the market is ranging, we adapt our trading style knowing that we’re going to experience a lot of choppy price action as well as extreme up and down swings. We plot the range, we add the levels, and we now have a clearer understanding of support and resistance as well as the range high and low. When the range breaks and confirms the break, you know whether you should be entering or getting out of a trade. Holding on to hope will kill your account and you will then blame the market.
Are there key levels above or below?
Key levels on a chart are really important to understand. You need to add the levels on the long term charts and the levels on the short term charts. This gives you an idea of where price may go before it either supports or resist the price. It also tells you whether price is going to continue in the direction if the key level breaks and the turns into either support or resistance. You can now plan, if the price continues into that level how much will my account be in drawdown, will I be able to hold, do I need to hedge, should I take the loss and switch direction. Holding on to your bias and hope will very likely kill your account, you’ll then blame the market.
How much capital am I risking?
You need to treat this as a business, no matter what your account size. Every day there are large institutions who want to take your money away from you, you’re in this market to take from them and give them as little as possible. You should have a risk model in place, am I going to risk a certain percentage of my account? Am I going to stick to a stop loss of a certain amount of pips? Am I going to have a risk reward that makes sense? Your stop loss and risk management plan is your best friend in this market, it allows you to limit the losses and live to trade another day. It also allows you to trade with a fresh mind everyday because you’re not holding on to hope. Traders fail because they don’t have a risk model, they then get stuck in a drawdown which doesn’t allow them to trade because they’re waiting the entries that are in drawdown to come back into the price range. Cut your losses early, if you’re wrong you’re wrong, don’t let your ego right checks your butt can’t cash! Holding on to losing trades with no risk model will likely blow your account, you’ll then blame the market.
Are there any new events?
News events can move the markets in a very aggressive way but will move the price into the levels that you should already have added to your charts. News brings volume and a lot of traders will use this to their advantage to either scalp or to get good entries on the pairs they trade. It’s best practice to not trade before the news releases unless you’re already in the right way of the market. “The trade always comes after the event”, wait for the price to be taken to the level they want to either buy and sell, wait for a confirmed reversal on the smaller time frames, once everything lines up, then look to take an entry. Trading news events comes with years of practice, it also takes a lot of discipline and the ability to manage risk, not only that but you have to be willing to switch your bias in an instance if you get it wrong. Most traders lack this experience, trade news events like it’s a normal day on the markets and then blow their accounts in one hit, you’ll then blame the market.
Am I following my trading plan?
“Fail to plan, plan to fail”. As above, you need to plan every single trade you take, make sure the market conditions are in your favour, make sure the price is at the right levels, make sure your risk model is in place, make sure you’re aware of the risks involved if it doesn’t go your way. By doing all of this and making a plan, you know what the worst case scenario will be, by knowing that you’re emotions and psychology won’t be affected that much and you will build your confidence. You’ll then develop your strategy and you’ll have a better understanding of what kind of ROI you can consistently make in the markets. Have the discipline to follow your plan and stick to it like a you’re a robot. Get used to taking losses, this is part of the game you’re in. Your wins just need to be bigger and you’re on your way to becoming a consistent trader. Most traders don’t follow their plan, they then blow their accounts and you’ll blame the market.
Hope this helps at least some of you stay the right side of the markets and we wish you the very best in your trading career.
As always, trade safe.
KOG
GBP/CHFHello Agn,
I am sending you this message in a hurry and hope you receive it quickly. I want to inform you that I missed my chance to enter yesterday, but now I have another opportunity to go in and see some higher prices. However, this decision is risky, so please remember to manage your risk and enter with the minimum possible risk. Think of it as a fun rollercoaster ride with a chance of earning some income.
Thank you, and I hope this message helps you.
Here is WHY You Must Learn TRADE MANAGEMENT
Hey traders,
In this post, I will share with you my tips for trade management in Forex trading .
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 (and occasionally take profit), 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.
Take a look at this long trade on Gold. When the price comes closer and closer to a stop loss, many traders can not take a psychological pressure and remove stop loss, being afraid to take the loss.
However, most of the time, stop loss will help you to limit your losses. You can see that after Gold reached stop loss, the price dropped much lower. Removing the stop loss, you would inquire bigger losses.
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.
Above is one more example, why the earlier you close the trade in a loss, the better. Modifications and adjustment of your stop loss will most of the time lead to even bigger losses.
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.
Above is the example of trade management rules in Forex trading. After GBPUSD reached a key support, a long position was opened from that. Once the price moves up by a certain distance, stop loss will be moved to entry. Take profit will be the closest key resistance.
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.
Just imagine what could happen with your trading account, if you kept adding to a losing short position in a recent crazy bullish market on Gold.
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.
Above is the example how you could easily miss a lot of pips on Gold, simply because the market temporarily stuck on some resistance.
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.
A Trading Plan MUST Include A Sound Risk Management StrategyOne of the biggest mistakes a trader can make is to neglect the aspect of risk management. In this video, I divulge the most pivotal lesson I’ve gleaned from my experience in trading. During the initial years of my trading journey, I disregarded the importance of risk management, which proved to be detrimental in a significant way. The watershed moment of my trading career came after incurring substantial financial losses. This experience was a stark revelation of the imperative nature of a robust risk management strategy for trading success. It was an excruciatingly costly lesson. Should you have bypassed dedicating time to understand risk management, you might be on the brink of a potential calamity. By watching this video, I hope you can sidestep the blunder I once made in the nascent stage of my trading endeavors.
Avoid Forex Mayhem with Good Risk ManagemenTrading forex? Stop gambling with your capital! This video exposes the massive mistake new traders make - using inconsistent lot sizes. It's a recipe for disaster, blowing accounts and crushing dreams.
But there's good news. Discover the secret weapon of successful traders: consistent lot sizing.
In this actionable video, you'll learn:
Why fluctuating lot sizes blindfold you to risk and leave you exposed
The simple formula to calculate safe and sustainable lot sizes
How consistent sizing fuels confidence and boosts profits
Bonus tips to maximize your forex trading performance
Say goodbye to trading nightmares and hello to controlled growth! Watch this video now and take control of your forex future.
P.S. Don't be the trader left behind. Watch before it's too late!
🧿How to be a Trader, not a Gambler⛔Hi.
✅Using technical analysis and fundamental analysis at the same time:
By combining technical and fundamental analysis, you pay attention not only to the patterns and behavior of price action traders in the past, but also to the fundamental and economic factors that act as the driving engine of market movements (macroeconomics). Together, these two approaches provide greater ability to understand market fluctuations and also create a harmonious relationship between charts and economic factors active in the market, allowing you to determine more effective entry and exit points and make your decisions using Take a more comprehensive and principled view.
✅Mastery of a strategy
A strategy for a trader is like a guide to a lost traveler. A trading style helps you stay on track and achieve your long-term goals.
With the strategy in sensitive market conditions, you will not get confused and incur irreparable losses. You also analyze your transactions more accurately.
There are different strategies in forex, but it is better to have a strategy that you completely trust and that is very efficient and profitable.
✅Accuracy of transactions with risk to reward greater than 1 :
A gambler doesn't care when it's the right time to enter a trade. Sometimes the markets do not have the conditions to enter into the transaction and they do not give you a good reward for the risk. Once you have analyzed the market as a professional trader and your entry triggers are activated, you actually have to wait until you can implement the rules of capital management.
In these cases, you should watch until the market gives you a risk to reward of 1 to 2 or 3 and the entry is allowed.
✅Capital management
As a trader, it is necessary for you to have risk management in trading to preserve your capital. Not using capital management may empty your entire financial account. Gamblers do not care about capital management and they may invest their entire assets in one trade. Therefore, it is better to determine the amount of your loss in each trade and exit when the trade does not go according to your expectations. Of course, loss is an inseparable part of the trading system; If the loss is small, a lesson will be learned from it and it will be helpful in the future.
🔔In the end, regardless of the above, like a gambler, your percentage of success versus loss is 50-50 in each trade, but if you follow the above, you can increase your win-to-loss percentage.
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❤️If this text was useful for you, please like it and share it with your friends
What do you do when your trading plan fails? Yesterday I wrote about a beautiful chart pattern that was forming on the Bitcoin daily time frame that ended up failing not long after I wrote the post. That kind of thing will shake a trader to their core, especially if they thought it was going to play out, but ended up losing their shirt.
This is why it is important to set stop losses, so that if the trade does go the other way, you will be out of the trade before it gets too bad. This is simply called risk management, and is one of the biggest things that any trader, especially new traders need to master.
Trading is a business of statistics and probabilities. Just because something has worked for you in the past, doesn't mean it is going to work for you every time. So when something like a bullish pattern that you have traded many times fails, you have to reassess and move on to the next trade. Out of 100 trades, that pattern may only work 6 or 7 times which gives you a 60-70% chance of it working in your favor. That's how it works, nothing is ever 100% in this game. So you always have to be ready for things to not work out the way you think they should.
If they don't work out, don't freak out! Just learn from your mistakes, readjust your plan, and move along to the next trade! Hopefully things like this will help you better understand the importance of a good risk management plan.
Be safe out there everyone and trade logically!
