DreamAnalysis | OPUSDT Possibility of Breakout and First Bullish📚 Welcome to Your Usual Channel, DreamAnalysis!
✨ Today, we’ll be taking a look at one of Ethereum’s layer-2 projects, Optimism (OP), and see when we might consider buying during the bull run.
🛠️ About the Optimism (OP) Project :
Optimism is a Layer 2 solution for the Ethereum network, designed to improve scalability and reduce transaction costs using Optimistic Rollups. This platform allows developers to deploy decentralized applications (dApps) with higher speed and lower costs, while maintaining the security of the Ethereum main layer.
📊 Weekly Time Frame :
On the weekly time frame, we can observe that OP hasn't experienced a major bull run yet and doesn't have much historical data. After breaking the downward trendline and pulling back toward the 1.196 support, we saw a drop in bearish volume, and sellers lost strength. For some time, the price has been ranging between the 1.196 support and the 1.957 resistance, without any significant movement.
Enter after breaking the 1.957 resistance.
If you're currently in a loss, you could use DeFi and staking to break even or cash out your coins if the 1.196 support is broken.
💡 Daily Time Frame:
On the daily time frame, we had a strong downtrend, but during these bearish waves, fewer red candles were recorded, and we didn’t make lower lows compared to the previous waves. This indicates buyers are back in the market.
After breaking the long-term downtrend and touching resistance, the price pulled back and once again headed toward the 1.626 resistance with decent volume. If the resistance is broken, you can even enter for spot buys with a stop-loss around 1.446, due to the higher lows according to Dow Theory.
Volume increase , Break of the RSI resistance at 59.96, which will confirm the strength of the move.
📊 4-Hour Time Frame :
In the 4-hour time frame, we're in a long-term range box, where the buyers seem to have the upper hand. Last time, the price didn’t even drop to the bottom of the range; it bounced back from the middle and moved toward the resistance.
📈 Long Position:
After the 1.626 breakout, make sure to take a long position and follow the potential bullish trend.
📉 Short Position:
Currently, we don't have a clear short trigger, unless the resistance breaks fakely, which would be a fake breakout, or if the price drops below 1.395. Right now, opening a short position is quite difficult.
💬 This wraps up today’s analysis. If you found this helpful, feel free to share it with your friends and leave a comment with your thoughts or any other pairs or coins you’d like us to analyze.
📌 These analyses are merely our ideas based on a chart that doesn’t follow strict rules. Technical analysis is an art, and these insights are not financial advice.
Riskmangement
e-Learning with the TradingMasteryHub - Growth is "simple"🚀 Welcome to the TradingMasteryHub Education Series! 📚
Looking to unlock consistent growth in your trading? Today, we’re diving into a powerful yet straightforward formula that many overlook. Growth isn’t magic; it’s a process that involves discipline, patience, and following a few key principles. Let’s explore seven strategies that can lead you to consistent success.
1. Get Rid of the Idea that You Can Calculate Profit
It’s time to rethink profit calculation. Many traders rely on risk/reward (R/R) ratios to estimate their potential profits, but the truth is, you can’t predict how far the market will go or how volatile it’ll be on the way. Setting a profit target can actually work against you. Your brain becomes fixated on that goal, which can cause you to make irrational decisions, like holding on too long when the market is telling you to exit. It’s more likely that you’ll lose out by not taking profits before reaching your target than by missing an extended move.
Instead of trying to calculate profit, focus on managing your trades as they unfold. No one knows where the market will go, but you can follow the price action and let it lead you to bigger gains than you initially expected.
2. Always Use a Stop Loss
The stop-loss order is your best friend in trading because it’s the only thing you can control. A stop loss does more than protect your capital—it measures your discipline and ability to stick to a plan. It helps you stay aligned with your risk tolerance (what I like to call your “bud meter”).
Set your stop loss at significant areas in the market. The best place to put it? Where you’d place the opposite trade. For example, if you’re buying, put the stop loss where a sell order would make sense in the current market context. This prevents you from being stopped out prematurely and ensures you stay on the right side of the momentum.
3. Add to Your Winners, Cut the Losers
Adding to winners is a game-changer. Most traders fade out of winning trades too quickly because they fear giving back profits. But by adding to positions that are moving in your favor, you’re compounding your success. Don’t worry about getting in at a higher price—if the market is showing strength, it’s a sign to follow.
Let’s look at how most traders handle a winning trade:
- They take small profits at 1:1 R/R ratio, move their stop loss, and try to let the rest run.
- But in doing so, they lock in limited gains and miss out on the bigger move.
Now, here’s what the top 10% of traders do:
- Instead of scaling out, they add to their winners at each significant level.
- By adding small positions as the market runs, they compound their gains, allowing the trade to grow much larger than initially estimated.
This approach not only maximizes your gains but also lowers your risk on each successive entry.
4. Only Trade in Trend Direction
Trading with the trend is like surfing—catching the wave takes you much farther than paddling against it. In bull markets, overhead resistance zones are often broken, just like support levels in bear markets. These trends are driven by large institutional players, like hedge funds and banks. Retail traders only make up a small fraction of the market, so swimming against these currents is a losing game.
About 20% of trading days in major indices are strong trending days where the market moves in one direction all day long. To take full advantage of these days, you need to add to your winning trades as the trend progresses.
5. Seek the "Brain Pain"—It’s a Sign of Growth
Your brain is wired to avoid pain at all costs, and this can be detrimental to your trading. Most traders scale out of winning positions too soon because their subconscious is trying to protect them from the fear of losing profits. On the flip side, they’ll add to losing positions, convincing themselves that they’re getting a “discount,” even when the market shows otherwise.
To become a winning trader, you need to train yourself to embrace discomfort. This means adding to your winning trades, using stop losses that you can stomach, and cutting losses as soon as your brain starts to rationalize bad decisions. Losing should never bother you—it’s part of the game. What matters is your overall growth and consistency, not avoiding pain in individual trades.
6. Don’t Do What 90% of Traders Do—Be the 10%
Want to be in the top 10%? It’s simple: avoid the mistakes of the 90%. Here’s how:
- Always set a stop loss.
- Add to your winners, don’t fade out.
- Cut losses before they snowball.
- Trade the market, not your account—don’t take revenge trades to “get even.” Focus on what the market is showing you, not what your account balance says.
The market doesn’t care about your profit target. It only cares about price movement, so align yourself with it.
7. Analyze Your Trades, Not Just Your Results
The best way to grow as a trader is through post-trade analysis. Screenshot your charts, mark your entries, stop losses, and exits, and review them daily. This helps you identify both technical and psychological weaknesses in your trading.
Think of it this way: if you had a business partner who consistently made poor decisions, you’d fire them eventually. Be your own business partner, and change your behavior if it’s not delivering results.
🔚 Conclusion and Recommendation
Growth in trading is a simple formula: get rid of fixed profit targets, control your risk with stop losses, add to winners, and cut your losers. Follow the trend, embrace discomfort, and don’t fall into the traps that 90% of traders do. Analyze your trades with an honest eye, and over time, you’ll see steady growth.
Success in trading isn’t about perfection—it’s about discipline, consistency, and continual learning.
---
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The 3-way of Economic Nightmares.I recently had a discussion on X, with regard to the Forecasting ability of High Yield Spreads. I was making the claim they do possess Leading Indicator qualities, while a gentleman took the other side of this debate.
To illustrate my views, I've put together a chart of FedFunds Rate, Unemployment Rate, and said High Yield Spreads.
This chart shows the last ~28yr of the above mentioned series, and how they "play" with one another.
A) Shows the period leading into the "DotCom" Bubble. We see High Yield Spreads rise first - Leading the other two data series. In a Coincident fashion, FedFunds then rolls over, while Unemployment shoots higher. A successful "Forecast" by High Yield Spreads of the impending Downturn/Recession. A successful Leading Indicator.
B) Shows the period leading into the "GFC". We once again see High Yield Spreads rise, this time SHARPLY, albeit with much less "lead time" than the previous example. As with example A), FedFunds and Unemployment then begin their inverse (to each other) dance. Once again showing High Yields Spread giving us that Advanced/Leading warning that things were getting fragile in the economy. A successful Leading Indicator - with admittedly less warning time.
C) Shows us an outlier in this analysis, and for good reason. We see our 'significant' rise in High Yield Spreads, but what we do NOT see, is FedFunds and Unemployment doing their typical dance. Unemployment continues to head lower, while FedFunds begin to rise - the OPPOSITE of what they did in the prior 2 examples.
D) Shows the period surrounding Covid. Once again High Yield Spreads shoot up in a dramatic fashion, warning bells should be going off in markets. Much like 2 of the previous 3 examples, FedFunds had also been in a "hiking" cycle. And right on cue, Unemployment skyrockets; completing our 3-way from Hell.
We now find ourself in E). In the Oval we see our significant rise in High Yield Spreads, but this is accompanied by rising FedFunds, so we do not have our "danger" signal. Unemployment also remains low. We now however see High Yield Spreads beginning to turn up, with talks of Rate Cuts to FedFunds, as well as Unemployment rising.
History may not repeat, but it does often rhyme. Are we starting to see warning signs flashing? Only time will tell, but as stated in previous posts... It's definitely not a time to be leveraged, or riding on large gains you haven't secured.
TLDR; High Yield Spreads followed by Fallings FedFunds and Rising Unemployment = Market/Economic Stroke.
As always, good luck, have fun, practice solid risk management. And thank you for your time.
I have done the Heavy-lifting for YOU! CHF-JPY: H&S's Sell
Hi guys,
I have done all the heavy-lifting & planning for you on this one.
It may be as simple as hitting the 'sell-button'.
It's a Daily-chart pattern which will hold more weight,
Price has almost retraced to the neck-line,
Hop to it, take a look,
Thanks for reading.
Unlock the 10 Core Lessons Every Trader Needs for SuccessYou know that feeling when you stare at the charts, convinced you’re about to strike gold, only for the trade to go so wrong, you wonder if the market gods have a personal vendetta against you? Yeah, we’ve all been there.
But here’s the thing—it's not the market that's out to get you. It’s you.
Let’s cut to the chase: trading success isn’t just about mastering candlestick patterns or finding the perfect strategy. It’s about mastering yourself. So, I’m laying out the 10 core lessons that can stop you from sabotaging your trades—and maybe even save you from throwing your laptop out the window.
1. Emotional Self-Control (AKA Don’t Be Your Own Worst Enemy)
Ever taken a trade out of sheer frustration or FOMO? Spoiler alert: that’s your emotions talking, and they rarely have your back. Mastering emotional self-control is like giving yourself a built-in cheat code. Stay calm, stay cool, and you’ll stay profitable.
Quick task: Next time you feel emotions kicking in, take a 5-minute break before making any trade decisions. Walk away, breathe, then come back with a clear head.
2. Every Trade is a Lesson (Yes, Even the Ugly Ones)
Think that losing trade was a total waste of time? Wrong. Every trade, good or bad, is packed with insights. The market is your professor—start taking notes. You’ll find out where you’re tripping up, and trust me, you’ll trip less.
Quick task: Start a trade journal. Write down not just the outcome of each trade, but your emotions and reasoning at the time. Review it weekly to spot patterns.
3. Mindset is Everything (Cue the Zen Music)
You’ve probably heard it before, but it's worth repeating: mindset is everything. If you’re not thinking straight, your trades won’t be either. A positive mindset keeps you focused, even when the market is doing its best to mess with you.
Quick task: Before your next trading session, spend 5 minutes visualizing success. Remind yourself why you’re trading and what you’re working toward. This will keep your mindset sharp.
4. Have a Plan (Because Winging It Doesn’t Work Here)
If you’re going into trades without a solid game plan, you’re basically showing up to a knife fight with a spoon. Every trade should have a strategy, clear entry/exit points, and a reason behind it. Stop winging it—you’re better than that.
Quick task: Create a simple pre-trade checklist. Include things like entry/exit strategy, risk level, and reasons for entering the trade. Stick to it religiously.
5. Adapt or Get Left Behind (The Market Isn’t Waiting for You)
The market changes faster than your favorite Netflix series gets canceled. What worked yesterday may not work tomorrow. Be flexible, keep learning, and adapt. Otherwise, you’re going to be the guy stuck using strategies from 2010 in 2024.
Quick task: Spend 10 minutes a day researching a new trading strategy or tool. Even if you don’t use it right away, expanding your knowledge keeps you adaptable.
6. Patience Pays (And Impatience Costs You Big Time)
There’s no bigger account killer than impatience. Jumping in too early, exiting too late, chasing trades—it’s a recipe for disaster. Sometimes, the best move is to wait. Trust me, patience in trading is like waiting for that perfect slice of pizza—totally worth it.
Quick task: Set up alerts for your key setups instead of staring at the screen, waiting for something to happen. This forces you to only trade when your setup is there, not when you’re bored.
7. Risk Management is Non-Negotiable (No, Seriously)
If you don’t manage your risk, you’re playing with fire—and we all know how that ends. Set stop-losses, size your positions properly, and don’t gamble your entire account on a “gut feeling.” It’s not about how much you win, it’s about how little you lose.
Quick task: Review your last 10 trades and check how well you stuck to your risk management rules. If you didn't, figure out why and correct it for the next trade.
8. Never Stop Learning (The Market Has Zero Chill)
The market is constantly evolving, and if you think you’ve got it all figured out, the market is ready to humble you real quick. Stay curious, keep learning, and don’t let complacency be the reason you get left in the dust.
Quick task: Dedicate 30 minutes a week to learning something new—whether it’s a new strategy, a new tool, or just reading up on market trends. Never stop sharpening the saw.
9. Balance Emotions with Logic (It’s Like a Jedi Mind Trick)
This is where it gets tricky. You can’t trade on pure logic, but trading on pure emotion is just as dangerous. You need to find the sweet spot—where you can recognize your emotions, but let logic steer the ship. It’s like becoming a Jedi of your own trading.
Quick task: Before you enter your next trade, ask yourself one question: “Is this based on emotion or strategy?” If it’s emotion, step back until you’re thinking clearly.
10. Focus on the Process, Not Just the Profits (Money is a Byproduct)
Everyone wants to make money, but here’s the secret: focus on nailing your process. The profits will come as a result. If you’re constantly thinking about the money, you’re missing the point. Perfect your process, and let the money follow.
Quick task: Pick one area of your trading process to improve—whether it’s your analysis, your entry strategy, or your risk management—and focus solely on that for the next week. Master the process, the profits will follow.
Master these 10 lessons, and you’ll find yourself trading with more confidence, discipline, and success. Trading is as much a mental game as it is a technical one, and by focusing on these principles, you’re setting yourself up for long-term wins.
Now, which of these lessons do you need to focus on in your own trading journey? Let me know below :)
Counter-Trend Setup Analysis
Market Context:
Current Trend: The overall market trend is bullish.
Focus: This analysis focuses on a counter-trend setup.
Setup Breakdown:
Support Area:
A multi-tested support level has been identified around 2,526.8.
This level has been tested four times, indicating potential selling opportunities for the upcoming week.
The repeated testing of this support has led to a structural break on the 4-hour timeframe, suggesting a possible change in trend, whether short-term or long-term.
Entry Analysis:
To refine the entry strategy, we analyzed the 1-hour timeframe for the following key elements:
SSR Flip Zones: Areas where the price may reverse due to previous support becoming resistance and vice versa.
Breaker Blocks: Zones where significant price movement indicates strong buying or selling pressure.
Fair Value Gaps (FVG): Price gaps that can act as potential entry points when revisited.
Previous Liquidity Areas: Zones where liquidity has previously been accumulated, often acting as turning points.
Premium and Discount Zones: Areas that indicate whether the price is above or below its perceived value, guiding entry decisions.
Risk Management:
The entry is strategically placed within the middle of the identified zones (SSR flips, FVG, and breaker blocks) to manage risk effectively.
It is vital to ensure that the entry point aligns with the overall market structure to reduce the probability of adverse price movements.
Note:
Caution: This setup is intended for traders comfortable with counter-trend trades. It is crucial to thoroughly analyze the structural shift before entering a position. Following this counter-trend setup, a comprehensive long-term analysis will be conducted to evaluate the broader market context.
CNH JPY Short Suggestion: Trade For Monday 9 Sept.24
This is the Daily chart for the Chinese Yuan & Japanese Yen. You can see following along the trend line how strong the Yuan was until a month or two ago - when it sharply sold off - 50 EMA diving under the 200 EMA creating a 'death-cross' which can signal a trend change. Even the last couple of Daily candles resumed this weakness down.
So, I see the Yuan falling some more and perhaps quite swiftly down to the levels and take-profit levels I have clearly marked.
One thing to be aware of is that the Yuan is heavily oversold at the moment & I see demand coming back into it very soon after this final 'flush-down' plays-out. Then we might trade it back up when I see enough demand coming back into it.
easy_explosive_trader
Chris
BTCUSDT.P Range Preparing For BreakoutBased on technical analysis of the candlestick charts, I believe that BTCUSDT is in a range period, where it's continued to fluctuate around 56-62K for weeks.
It's accumulating liquidity to produce a large breakout move.
The key to mastering this move is watching and waiting to see big volume candles either breaking out of support or resistance, then tailoring your entry based on the outcome of the move.
It is definitely NOT advisable to trade during this range, always look for a big volume candle('s) before entering any trade, otherwise you're entering in the dark.
ALWAYS HAVE AN EXIT PLAN before you enter a trade, whether it's a SL or another tactic, risk management is super important.
Jesse Livermore: Trading Lessons From an Iconic Trader● Jesse Livermore, a successful stock trader, built a fortune of $100 million in 1929. He operated independently, using his own capital and strategies. Livermore preferred trending stocks and used price patterns and volume analysis to decide trades.
● Livermore's Trading Principles
(1) Trade with the trend
A well-known saying is "The Trend Is Your Friend." Livermore preferred to trade stocks that were trending and avoided sideways market.
(2) Get confirmation before entering any trade
Hold off until the market shows clear signs before making a move. Being patient can lead to significant profits.
(3) Trade with a strict stop-loss
It is crucial to set a strict stop-loss for every trade, and it's important to know the stop-loss level before starting any trade. This approach can help a trader avoid significant losses.
(4) Trade the leading stocks from each sector
Livermore liked to trade stocks that were leaders in their industry. He thought this approach could increase his chances of winning.
(5) Avoid average down losing trades
He chose to exit the position rather than averaging it down.
(6) Avoid following too much stocks
It's quite challenging to monitor numerous stocks simultaneously. Focusing on a smaller number of stocks could lead to better trading opportunities.
RISK MANAGEMENT IN TRADINGRISK MANAGEMENT IN TRADING:
Why It's More Important Than Win Rate
🔵 INTRODUCTION
In the world of trading, many newcomers fixate on finding the "perfect" strategy with the highest win rate. However, experienced traders know a secret: risk management is the real key to long-term profitability. In this post, we'll explore why managing your risk effectively is more crucial than your win rate, and how it can make the difference between success and failure in your trading career.
🔵 UNDERSTANDING RISK MANAGEMENT
Risk management in trading refers to the process of identifying, analyzing, and accepting or mitigating the uncertainties in investment decisions. It's about protecting your trading capital from excessive losses and ensuring you can survive to trade another day.
Key concepts in risk management include:
Position sizing: Determining how much of your capital to risk on each trade
Stop-loss orders: Predetermined points at which you'll exit a losing trade
Risk-reward ratio: The potential profit of a trade compared to its potential loss
Diversification: Spreading risk across different assets or strategies
Effective risk management is like wearing a seatbelt while driving. It won't prevent accidents, but it can significantly reduce the damage when they occur.
🔵 THE MYTH OF WIN RATE
Many novice traders believe that a high win rate is the holy grail of trading. After all, if you're winning most of your trades, you must be making money, right? Not necessarily.
Consider this example:
Over 100 trades:
Trader A: (90 x $100) - (10 x $1000) = $9000 - $10000 = -$1000 (Loss)
Trader B: (40 x $300) - (60 x $100) = $12000 - $6000 = $6000 (Profit)
This demonstrates that a high win rate doesn't guarantee profitability if your risk management is poor.
🔵 HOW RISK MANAGEMENT CONTRIBUTES TO PROFITABILITY
Effective risk management contributes to profitability in several ways:
1. Capital Preservation: By limiting losses on each trade, you ensure that you don't deplete your trading capital during inevitable losing streaks.
2. Maximizing Gains: Proper risk management allows you to size your positions appropriately, maximizing gains when your analysis is correct.
3. Emotional Stability: Knowing that your risk is controlled reduces stress and emotional decision-making, leading to better trading choices.
4. Consistency: A solid risk management strategy provides a structured approach to trading, leading to more consistent results over time.
🔵 RISK-REWARD RATIO
The risk-reward ratio is a fundamental concept in risk management. It compares the potential profit of a trade to its potential loss. For example, a risk-reward ratio of 1:3 means you're risking $1 to potentially make $3.
Here's why it's crucial:
A favorable risk-reward ratio allows you to be profitable even with a lower win rate.
It forces you to be selective with your trades, only taking those with the best potential outcomes.
Example:
(40 x 2) - (60 x 1) = 80 - 60 = 20 (units of profit)
🔵 RISK-REWARD AND WIN RATE CHEATSHEET
Understanding the relationship between risk-reward ratios and win rates is crucial for long-term profitability. Here's a quick reference guide to help you visualize how different combinations affect your overall results:
1:1 Risk-Reward Ratio
- Breakeven Win Rate: 50%
- To be profitable: Win rate must exceed 50%
1:2 Risk-Reward Ratio
- Breakeven Win Rate: 33.33%
- To be profitable: Win rate must exceed 33.33%
1:3 Risk-Reward Ratio
- Breakeven Win Rate: 25%
- To be profitable: Win rate must exceed 25%
1:4 Risk-Reward Ratio
- Breakeven Win Rate: 20%
- To be profitable: Win rate must exceed 20%
Key Takeaways:
Higher risk-reward ratios allow for profitability with lower win rates
Consistently achieving risk-reward ratios above 1:3 can lead to substantial profits even with win rates below 50%
Always consider both win rate and risk-reward ratio when evaluating a trading strategy
Remember: A high win rate with poor risk management can still result in overall losses
Use this cheatsheet as a quick reference when planning your trades and assessing your overall trading strategy. It reinforces the importance of maintaining favorable risk-reward ratios in your trading approach.
🔵 MATHEMATICAL DEMONSTRATION
Let's look at a more detailed example to show how risk management impacts profitability:
Scenario 1 (Poor Risk Management):
Win Rate: 60%
Risk per trade: 5% of capital
Reward per trade: 5% of capital
Starting Capital: $10,000
Number of trades: 100
Result after 100 trades:
60 winning trades: 60 x ($10,000 x 5%) = $30,000
40 losing trades: 40 x ($10,000 x 5%) = $20,000
Net Profit: $30,000 - $20,000 = $10,000
Ending Capital: $20,000
Scenario 2 (Good Risk Management):
Win Rate: 40%
Risk per trade: 1% of capital
Reward per trade: 3% of capital
Starting Capital: $10,000
Number of trades: 100
Result after 100 trades:
40 winning trades: 40 x ($10,000 x 3%) = $12,000
60 losing trades: 60 x ($10,000 x 1%) = $6,000
Net Profit: $12,000 - $6,000 = $6,000
Ending Capital: $16,000
Despite a lower win rate, Scenario 2 still results in significant profit with much lower risk to the trading account.
🔵 PRACTICAL TIPS FOR IMPLEMENTING RISK MANAGEMENT
1. Always use stop-loss orders: Determine your exit point before entering a trade and stick to it.
2. Follow the 1% rule: Never risk more than 1% of your trading capital on a single trade.
3. Calculate position sizes based on your stop-loss: Adjust your position size so that if your stop-loss is hit, you only lose the predetermined amount.
4. Maintain a favorable risk-reward ratio: Aim for a minimum of 1:2, preferably 1:3 or higher.
5. Diversify your trades: Don't put all your capital into one trade or one type of asset.
6. Keep a trading journal: Track your trades to identify patterns and areas for improvement in your risk management.
🔵 CONCLUSION
While a good win rate is certainly desirable, it's clear that effective risk management is the true foundation of trading success. By focusing on controlling your risk, you can achieve profitability even without an exceptionally high win rate.
Remember, the goal in trading isn't to be right all the time—it's to be profitable over time. Prioritize risk management in your trading strategy, and you'll be well on your way to long-term success in the markets.
Take action now: Review your current trading approach and assess how you can improve your risk management strategies. Your future trading self will thank you!
How to Apply a Position Size Calculator in Forex Trading
In this educational article, I will teach you how to apply a position size calculator in Forex and calculate a lot size for your trades depending on a desired risk .
Why do you need a position size calculator?
Even though, most of the newbie traders trade with the fixed lot , the truth is that fixed lot trading is considered to be very risky .
Depending on the trading instrument, time frame and a desired stop loss, the risks from one trade to another are constantly floating .
With the constant fluctuations of losses per trade, it is very complicated to control your risks and drawdowns.
A lot size calculation , however, allows you to risk the desired percentage of your capital per trade , limiting the maximum you can potentially lose.
A lot size is calculated with a position size calculator .
How to Measure Lot Size for Trades?
Let's measure a lot size for the following trade on EURUSD.
Step 1:
Measure a pip value of your stop loss.
It is the distance from your entry level to your stop loss level.
In the example on the picture, the stop loss is 35 pips.
Step 2:
Open a position size calculator
Step 3:
Fill the form.
Inputs: Account currency, account balance, desired risk %, stop loss in pips, currency pair.
Let's say that we are trading with USD account.
Its balance is $10000.
The risk for this trade is 1%.
Step 4:
Calculate a lot size.
The system will calculate a lot size for your trade.
0.28 standard lot in our example.
Taking a trade on EURUSD with $10000 deposit and 35 pips stop loss , you will need 0.28 lot size to risk 1% of your trading account.
Learn to apply a position size calculator. That is the must-use tool for a proper risk management.
Kira!& Captain Renzo In a bustling town nestled by the sea, there was a young trader named Kira. Her dream was to navigate the vast and unpredictable market waters, much like a seasoned fisherman seeking the best catch. Her mentor, an old trader named Captain Renzo, often spoke of the market as a treacherous sea full of challenges and opportunities.
"Ahoy, Kira!" Captain Renzo would say with a twinkle in his eye. "The market is our battlefield, and our money is our ammunition. Every trade we make is like casting our net into the ocean."
Kira was eager to conquer this sea of opportunities, but she soon learned that dangers lurked beneath the surface. Captain Renzo taught her about the enemies of trading: Fear, Greed, Rush, and Hesitation.
"Fear can paralyze us, making us doubt our decisions," Captain Renzo warned. "Greed tempts us to chase after more, even when we've already secured a good catch."
Kira nodded, absorbing his wisdom. "And Rush," she asked, "what does Rush do?"
"Rush," Captain Renzo explained, "makes us act hastily without considering the currents of the market. And Hesitation? It causes us to miss out on great opportunities while we stand idle."
As Kira embarked on her trading journey, she encountered these enemies time and again. Fear whispered in her ear during market downturns, urging her to abandon ship. Greed beckoned her to hold on for just a little longer, risking everything for more profit.
But Captain Renzo had taught her well. He emphasized the importance of risk management above all else. "Just like a skilled sailor who knows the tides," he said, "a trader must understand risk. It's the compass that guides us through stormy seas."
Kira learned to beat Fear by calculating her risks before setting sail on a trade. She countered Greed by setting clear profit targets based on risk management principles. Rush was tamed through diligent technical analysis, ensuring she weighed her risks and rewards before casting her net.
One day, Kira shared her struggles with Captain Renzo. "Captain, sometimes I feel like I'm missing out on bigger opportunities."
Captain Renzo smiled knowingly. "Ah, Kira, remember the fisherman's tale. If you catch a fish, be grateful for your catch. Don't throw it back into the sea in pursuit of more. Those who master this patience and discipline become the whales of the market."
Kira nodded, her determination renewed. With each successful trade managed with discipline and risk awareness, she grew wiser and more confident. She knew that mastering these skills was the key to navigating the tumultuous market waters.
And so, armed with Captain Renzo's teachings and her own newfound resilience, Kira set sail each day, ready to face the enemies of trading and emerge victorious in the ever-changing sea of opportunities.
The Being of your story!
we ask Allah reconcile and repay
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.
Trading Psychology and Your Losses
Hey traders,
In this post, we will discuss a common fallacy among struggling traders: overestimation of a one single trade .
💡The fact is that quite often, watching the performance of an active trading position, traders quite painfully react to the price being closer and closer to a stop loss or, alternatively, coiling close to a take profit but not being managed to reach that.
Fear of loss make traders make emotional decisions :
extending stop loss or preliminary position closing.
The situation becomes even worse, when after the set of the above-mentioned manipulation, the price nevertheless reaches the stop loss .
Just one single losing trade is usually perceived too personally and make the traders even doubt the efficiency of their trading system.
They start changing rules in their strategy, then stop following the trading plan, leading to even more losses.
❗️However, what matters in trading is your long-term composite performance . A single position is just one brick in a wall. As Peter Lynch nicely mentioned: “In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.”
There are so many factors that are driving the markets that it is impossible to take into consideration them all. And because of that fact, we lose.
The attached chart perfectly illustrates the insignificance of a one trading in a long-term composite performance.
Please, realize that losing trades are inevitable, and overestimation of their impact on your trading performance is detrimental.
Instead, calibrate your strategy so that it would produce long-term, consistent positive results. That is your goal as a trader.
Its ok to take a LOSSThis video breaks down how its ok to take a loss even when our plan does work out in the long run. We have to be able to maintain these good risk management habits even if we are eventually right. Because in the event we aren't right on the end we have a much heavier loss that's harder to recover from.
A Trader's Guide to Profitability and SuccessGreetings, fellow traders!
As a seasoned veteran of the financial markets, we've witnessed firsthand the transformative power of trading, its ability to elevate individuals to new heights of financial freedom and fulfillment. Yet, we've also observed the struggles of many aspiring traders, their goals & dreams marred by a lack of guidance and a clear understanding of the intricacies involved.
So, let's delve into the five key aspects that underpin long-term trading success:
1. Crafting a Trading Plan: Your Compass in the Market Storm.
A well-defined trading plan serves as your beacon, guiding you through the turbulent waters of the markets. It's not a rigid set of rules but a dynamic roadmap that adapts to changing market conditions.
2. Unveiling Market Secrets:
To make informed decisions, you must become an astute market detective, meticulously analyzing market trends, economic factors, and company fundamentals. This involves mastering technical and fundamental analysis, and always staying abreast of market-moving news and events.
3. Taming the Risk Beast: Risk Management – Your Shield Against Trading Perils
Risk management is the cornerstone of trading success, shielding you from the perils of impulsive decisions and excessive losses. It's about setting stop-loss orders, limiting position sizes, and diversifying your portfolio – strategies that safeguard your capital and ensure long-term sustainability.
4. Conquering Emotions: Mastering the Emotional Rollercoaster
The financial markets are a psychological battleground, where fear and greed can lead to disastrous trading decisions. To emerge victorious, you must cultivate emotional control, adhering to your trading plan and avoiding impulsive actions driven by fleeting emotions.
5. Embracing Continuous Learning: The Path to Perpetual Trading Prowess
The financial markets are a dynamic entity, constantly evolving and presenting new challenges and opportunities. To stay ahead of the curve, you must embrace continuous learning, stay updated with market trends, explore new trading strategies, and adapt to changing market conditions. Continuously refine your knowledge and skills to improve your trading performance.
Stay tuned for more educational content and don't forget to trade with care!
24-01-24 AUDUSD Long Entry Signal on 4H Chart 24-01-24
AUDUSD Long Entry on 4H Chart
Entry Price: 0.65700
Stop Loss Price : 0.65300 / 40 Pips
Take Profit: 0.66300 / 60 Pips
Risk To Reward : 1 for 1.5
Trade Grade: b +
CONS:
- Momentum more bearish + upside down v-shape (price usually likes to continued in the 2nd leg) of the V)
PROS:
- The price levels have made a solid support zone
- Could be lots of Buy Side Liquidity in the stop loss area
- For every Buy order there needs to be a sell order
A. this is critical for the trade due to the potential shift in the market to bullish
B. The lows have a higher probability to hold due to large Central Banks, Hedge Funds , ETC wanting to hold the lows. So they can buy against the trend to fluid enough liquidity
C. They might Induce market participates into selling in order to produce enough liquidity to cause a bullish leg of momentum to the upside.
D. I accept the risk and I will place a pending order.
Main Goal:
-Increase Win Rate this Quarter. Currently at 44%-
I have Placed a pending order. If anyone needs ideas with trade management please leave a comment.