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The Best Entry on the MarketIn this model, we will examine a tactical approach to achieve high-performance entry. It all starts with an uptrend characterized by continuous structural changes. In fact, there are continuous directional changes until the retest of the supply zone on M30. Subsequently, the market reacts to this zone by pushing downwards and generating a CHoCH. Here, switching to a 1-minute timeframe, it will be possible to wait for a retest of the supply zone before entering. The trade will target the session or daily low. Greetings and happy trading to all.
Education
by Forex48_TradingAcademy
1
New Approach on Forex: Inducement LowIn my analysis model, I focus on a bearish structure, where I identify the so-called "false demand zones" (SM Trap). It all starts with a supply zone, where the price begins to decline, creating a liquidity zone with a double bottom. Subsequently, the price retests the supply zone, declines again, and breaks the false demand zone, generating another one. Then, the market starts forming decreasing lows and highs, clear signals of the ongoing bearish trend. This is where I pay attention, as it constitutes a clear signal of the developing trend. To enter the market, I prefer identifying an FVG M15, targeting weekly, daily lows, or the H4 timeframe, in line with my trading plan. I find it crucial to observe the evolution of lows and highs, as their decrease further confirms the bearish trend. I wish everyone happy trading and success in their operations.
Education
by Forex48_TradingAcademy
1
The Best Strategy of 2024: Reversal Entry ModelGood morning, today I would like to draw your attention to a model that I am integrating into my analyses for this year. In this model, we define simple structural changes either downwards or upwards, in this context downwards using two BOS. Subsequently, we define the main demand zone where the price retests. After the retest, the price breaks upwards the structure creating a CHOCH, or an internal breakout. Afterwards, the price will move into a lateral phase accumulating a lot of liquidity, and as it is known, as soon as the price absorbs liquidity above or below a range, it then moves in the opposite direction of the filled liquidity. In this case, liquidity is absorbed below in the order block zone and the price moves upwards. I recommend supplementing charts with this model and identifying these setups starting from an H4 timeframe which can be simpler compared to smaller timeframes. Best regards and happy trading to everyone.
Education
by Forex48_TradingAcademy
1
The Ultimate Strategy | ChoCh + InducementThis strategy is based on identifying a market structure, which can be bullish or bearish. In this specific case, a bullish structure characterized by rising highs and lows is considered. The expectation is for the market to change direction, creating a shock. Subsequently, the formation of a liquidity block is observed during a market consolidation phase, followed by entering a demand zone where the imbalance dictates, and the response is a downward movement, as anticipated. The target of this movement is defined graphically. Greetings and happy trading to everyone.
Education
by Forex48_TradingAcademy
3
High probability setupThis is what I'm going to be looking in the market for the next long term journey, this is a special setup based on patience, strategy and price action, high probabilities and high R:R, works better in high timeframes, we have just wait for the firt confirmation which is: 1. Shift of structure, after watching that we have to look for: 2. A good RESISTANCE/SUPPORT zone where the price is rejecting in Daily of 4H and search for a: 3. Chart pattern which can be a HEAD AND SHOULDERS OR DOUBLE BOTTOM, DOUBLE TOP..., if we have these confirmations, we can look for the last which is: 4. Candlestick pattern: in the shift of the structure which can be an engulfing, an evening/morning star or marubozu, also can be a doji with the wick for our direction Each one of these confirmations are 22% probabilities for our strategy, after getting all them we can enter the trade, put the stop loss a bit above or below the last structure point and take a 1:3 risk reward and the most important part is: SET THE TRADE AND FORGET, Allow the price to go where it has to go, don't change the T.P, don't change the S.L, accept the risk of the trade and take a loss if is the case or take a win if the market allows that, and continue with the plan, IT'S IMPOSSIBLE TO HAVE A 100% CHANCES, so even if you have all this confirmation, you can lose and you have to ACCEPT IT, for that: Stick to the RISK MANAGEMENT thinking in percentage, I recommend to use a 1%-2% per trade, and that's all BE PATIENT AND SMART, THINK IN LONG TERM Remember: "The market is a mechanism for transferring money from the impatient to the patient"
EIGHTCAP:XAUUSDEducation
by TraderEaglefx
15M Pro OrderFlow | A Unique and Profitable StrategyIn this approach, we will outline one of the best entry points on M15. The model involves quickly assessing a potential demand area by identifying a liquidity zone formed during the Fibonacci retracement at the .62-0.78 level. From this zone, the market initiates a physiological uptrend before retracing downward, creating a sharp movement with an internal break, followed by a bounce in the demand area. It is at this moment that a precise entry will be executed, aiming to reach the structure's peak. It is important to note that this model is also applicable to H1, H4, and Daily time frames. Greetings to everyone and happy trading.
Education
by Forex48_TradingAcademy
3
SMC Sell Setup: High Probability EntryGood morning everyone, today we will explore a short entry model using the concepts of smart money. This model involves entering the market in a short position after a series of specific patterns. Firstly, we start with a bearish structure where the price breaks a significant low, creating a BOS. Subsequently, we will identify the SMC zone, which is a trap zone to avoid. In this zone, the price makes a false descent before rising, creating the most important peak that we will use to evaluate a short entry. After identifying this peak, the market begins to decline, forming a CHOCH, representing an internal break. This will signal our sell point, and we could define our sell zone indicated by the POI on the chart. Once the price enters this zone, we may consider opening a short position on the security. Greetings to everyone.
Education
by Forex48_TradingAcademy
3
Perfect ChoCh : Entry + SetupWith this trading model, I aim to share with the community a particularly significant approach that has revolutionized my way of operating in the markets, especially on shorter timeframes such as 1, 5, and 15 minutes. This model involves defining a clear structure before entering the market, specifically a demand zone already present in the market. A price that reaches this zone through a double structural break (BOS) before rallying and creating an internal break (ChoCh) before returning to the demand zone. Subsequently, the price will surpass the previous high, thereby defining a new demand zone. One will then await the price to reach this zone, and once there, enter the market with the aim of reaching the supply zone depicted on the chart.
Education
by Forex48_TradingAcademy
1
5 Steps Smart Money Concept Model5 STEPS SMART MONEY CONCEPT MODEL Break of Structure (BOS): Definition: A Break of Structure occurs when the market provides the initial indication that the price is likely to reverse. For example, a new lower low and lower high signal a disrupted market structure, indicating a forthcoming reversal to the downside. Trading Approach: Traders typically align their trades with the Higher Time Frame (HTF) BOS, especially when the price closes above/below a swing high/low. Change in Character (CHOCH): Definition: A CHOCH represents an initial shift that can signal a short- or long-term price reversal. It is considered a reversal pattern, utilized by SMC traders on higher time frames for market direction and on lower time frames for trade opportunities. Implementation: SMC traders use CHOCHs on various time frames to gauge market direction and identify intraday reversals or reactions to Points of Interest (POIs). Fair Value Gap (FVG): Definition: Fair Value Gaps highlight market inefficiencies or imbalances, where buying and selling are not equal. These gaps become magnets for price, resolving the inefficiency as resting orders are filled. Utilization: Traders use FVG information to target these gaps, identifying potential entry points for long or short positions. Fair Value Gaps are considered valuable Points of Interest (POIs) in price action trading.
Education
by Forex48_TradingAcademy
1
2024 US Recession | Key Factors2000 DOT-COM CRISIS The dot-com crisis, also known as the "dot-com bubble" or "dot-com crash," was a period of economic turbulence that affected the technology and telecommunications sectors in the late 1990s and early 2000s. Here are some key points: Euphoria Phase: In the 1990s, there was a boom in the technology and dot-com industry fueled by irrational investor euphoria. Many companies secured significant funding, even if they had weak or nonexistent business models. Excessive Valuations: Valuations of technology companies skyrocketed, often based on exaggerated growth projections and unrealistic expectations. This led to rampant speculation in financial markets. Bubble and Collapse: In 2000, the dot-com bubble began to burst. Many investors realized that numerous technology companies were unable to generate profits in the short term. This triggered a massive sell-off of stocks and a collapse in tech stock prices. Economic Impacts: The crisis had widespread economic impacts, with the loss of value in many technology stocks and the bankruptcy of numerous companies. Investors suffered heavy losses, and this had repercussions on the entire stock market. Economic Lessons: The dot-com crisis led to a reassessment of investment practices and taught lessons about the importance of carefully analyzing companies' fundamentals and avoiding investments based solely on speculative expectations. Following this crisis, the technology sector experienced a correction but also contributed to shaping the industry in a more sustainable way. Many companies that survived the crisis implemented more realistic and sustainable strategies, contributing to the subsequent growth and development of the technology sector. 2007-2008 FINANCIAL CRISIS The 2007-2008 financial crisis was a widespread event that had a significant impact on the global economy. Here are some key points: Origins in the Subprime Mortgage Crisis: The crisis originated in the U.S. real estate sector, particularly in subprime mortgages (high-risk). An increase in mortgage defaults led to severe losses for financial institutions holding securities tied to these loans. Spread of Financial Problems: Losses in the mortgage sector spread globally, involving international financial institutions. Lack of transparency in complex financial products contributed to the crisis's diffusion. Bank Failures and Government Bailouts: Several major financial institutions either failed or were on the brink of failure. Government interventions, including bailouts and nationalizations, were necessary to prevent the collapse of the financial system. Stock Market Crashes: Global stock markets experienced significant crashes. Investors lost confidence in financial institutions, leading to a flight from risk and an economic contraction. Impact on the Real Economy: The financial crisis directly impacted the real economy. The ensuing global recession resulted in the loss of millions of jobs, decreased industrial production, and a contraction in consumer spending. Financial Sector Reforms: The crisis prompted a reevaluation of financial regulations. In response, many nations implemented reforms to enhance financial oversight and mitigate systemic risks. Lessons Learned: The financial crisis underscored the need for more effective risk management, increased transparency in financial markets, and better monitoring of financial institutions. The 2007-2008 financial crisis had a lasting impact on the approach to economic and financial policies, leading to greater awareness of systemic risks and the adoption of measures to prevent future crises. 2019 PRE COVID In 2019, I closely observed a significant event in the financial markets: the inversion of the yield curve, with 3-month yields surpassing those at 2, 5, and 10 years. This phenomenon, known as an inverted yield curve, is generally considered an advanced signal of a potential economic recession and has often been linked to various financial crises in the past. The inversion of the yield curve occurred when short-term government bond yields, such as those at 3 months, exceeded those at long-term, like 2, 5, and 10 years. This situation raised concerns among investors and analysts, as historically, similar inversions have been followed by periods of economic contraction. Subsequently, in 2020, the COVID-19 pandemic occurred, originating in late 2019 in the city of Wuhan, Hubei province, China. The virus was identified as a new strain of coronavirus, known as SARS-CoV-2. The global spread of the virus was rapid throughout 2020, causing a worldwide pandemic. Countries worldwide implemented lockdown and social distancing measures to contain the virus's spread. The economic impact of the pandemic was significant globally, with sectors such as tourism, aviation, and hospitality particularly affected, leading to business closures and job losses. Efforts to develop a vaccine for COVID-19 were intense, and in 2020, several vaccines were approved, contributing to efforts to contain the virus's spread. In 2021, the Delta variant of the virus emerged as a highly transmissible variant, leading to new increases in cases in many regions worldwide. Subsequent variants continued to impact pandemic management. Government and health authorities' responses varied from country to country, with measures ranging from lockdowns and mass vaccinations to specific crisis management strategies. The pandemic highlighted the need for international cooperation, robust healthcare systems, and global preparedness to address future pandemics. In summary, the observation of the yield curve inversion in 2019 served as a predictive element, suggesting imminent economic challenges, and the subsequent pandemic confirmed the complexity and interconnectedness of factors influencing global economic health. 2024 Outlook The outlook for 2024 presents significant economic challenges, outlined by a series of critical indicators. At the core of these dynamics are the interest rates, which have reached exceptionally high levels, fueling an atmosphere of uncertainty and impacting access to credit and spending by businesses and consumers. One of the primary concerns is the inversion of the yield curve, manifested between July and September 2022. This phenomenon, often associated with periods of economic recession, has heightened alarm about the stability of the economic environment. The upward break of the 3-month curve compared to the 2, 5, 10, and 30-year curves has raised questions about the future trajectory of the economy. Simultaneously, housing prices in the United States have reached historic highs, raising concerns about a potential real estate bubble. This situation prompts questions about the sustainability of the real estate market and the risks associated with a potential collapse in housing prices. Geopolitical instability further contributes to the complexity of the economic landscape. With ongoing conflicts in Russia, the Red Sea, Palestine, and escalating tensions in Taiwan, investors are compelled to assess the potential impact of these events on global economic stability. The S&P/Experian Consumer Credit Default Composite Index, showing an upward trend since December 2021, suggests an increase in financial difficulties among consumers. Similarly, the charge-off rate on credit card loans for all commercial banks, increasing since the first quarter of 2022, reflects growing financial pressure on consumers and the banking sector. In this context, it is essential to adopt a prudent approach based on a detailed analysis of economic and financial data. The ability to adapt to changing market conditions becomes crucial for individuals, businesses, and financial institutions. Continuous monitoring of the evolution of economic and geopolitical indicators will be decisive in understanding and addressing the challenges that 2024 may bring.
TVC:US03MYEducation
by Forex48_TradingAcademy
1
Forex Fundamentals: Building Winning StrategiesForex trading success hinges on a well-defined strategy, as it sets a clear direction and methodology, whether it be scalping, day trading, or another approach. Key to this is understanding the market conditions under which your strategy thrives, as different strategies perform variably across market environments. Employing technical indicators is crucial in providing insights and aiding in decision-making, but they must align with your overall strategy for coherence and effectiveness. The core of any trading strategy lies in its entry and exit criteria. These criteria ensure disciplined and non-impulsive trading decisions, allowing for entry and exit from the market at the most opportune times. Equally vital is stringent risk management, which protects your capital by defining the risk per trade and setting maximum drawdown limits. In tandem with this, appropriate position sizing mitigates the risk of substantial losses and maintains the health of your trading account. Backtesting the strategy against historical data is indispensable for understanding its potential effectiveness and challenges. This, followed by forward testing in real-time conditions, often in a demo environment, allows for fine-tuning and adaptation to current market dynamics. Constant adjustments and optimization of your strategy are necessary as financial markets are ever-evolving, and a static strategy is often a recipe for failure. However, the strategy itself is only part of the equation. The psychological aspect of trading – maintaining discipline and managing emotional responses – is equally critical. Regular performance evaluations and reviews provide insights into the strategy's effectiveness and areas that require improvement, fostering a cycle of continuous learning and adaptation. In the realm of Forex trading, patience and consistency are not just virtues but necessities. The development, implementation, and refinement of a trading strategy is a meticulous and ongoing process. Success in trading emerges from a disciplined approach, a willingness to learn continuously, and an adaptability to evolving market conditions. It's a journey where each step, from understanding market conditions to psychological resilience, plays a pivotal role in shaping a trader's path to achievement.
Education
by Wiiso
The best trading setup with Entry!In this model, we observe a market that begins to consolidate before a sharp decline, during which liquidity is created with an imbalance. Immediately after, there is an upward movement with rising highs and lows, forming a bullish liquidity trendline. When the price reaches a point where it starts to consolidate, dual liquidity is generated on the buy side in the upper part of the consolidation. Subsequently, a false upward movement occurs, during which the price gains liquidity from the previous order block created by the initial sharp decline. This creates an excellent opportunity to enter a short position, with the aim of reaching the minimum of the main decline. Updates will be provided with an example applied in a real case study. Greetings and happy trading to everyone from Nicola.
Education
by Forex48_TradingAcademy
1
Choch Entry & Liquidity Model | Trading StrategyIntroduction: The trading strategy "Choch Entry & Liquidity Model" has emerged as an innovative model in the financial domain, focusing on market entry and liquidity. This approach is built upon key principles aimed at maximizing returns and effectively managing risk. Fundamental Principles: The strategy relies on an entry approach known as "Choch Entry," which is presumed to provide precise trading signals based on specific indicators. This method aims to capture significant price movements through a detailed analysis of market data. Liquidity Management: Another distinctive element of this strategy is its focus on liquidity. The "Liquidity Model" seeks to optimize order execution, ensuring that the strategy can enter and exit the market efficiently, minimizing slippage and price impact. Practical Implementation: The practical implementation of this strategy requires a thorough understanding of financial instruments and indicators used in the model. Traders must be able to adapt the strategy to changing market conditions and constantly monitor key variables to make informed decisions. Risks and Challenges: As with any trading strategy, it is crucial to understand the potential risks and challenges associated with the "Choch Entry & Liquidity Model" strategy. Market volatility, sudden changes in economic conditions, and other factors can influence outcomes. Conclusions: The "Choch Entry & Liquidity Model" trading strategy represents an intriguing approach that combines targeted entry with careful liquidity management. Its effectiveness depends on the trader's proficiency in consistently and flexibly applying key principles, adapting them to the changing dynamics of the market.
Education
by Forex48_TradingAcademy
Master Candlesticks: The key trading success!Here's an analysis of various candlestick patterns commonly used in technical analysis of financial markets: Dragonfly Doji: This candlestick has a small body with a long lower shadow and no upper shadow, indicating significant price exploration lower but closing near the opening price. It is often interpreted as a signal of a potential bullish reversal. Morning Star: A bullish reversal pattern that forms in a downtrend. It consists of three candles: a long bearish candle, followed by a shorter candle signifying uncertainty, and a third long bullish candle. Doji: The Doji is a candle with a very small body, indicating that the opening and closing prices are nearly equal. This pattern reflects market indecision. Three Bullish Candles: This pattern consists of three consecutive bullish candles, often interpreted as a strong bullish signal, especially if it occurs after a downtrend. Three Bearish Candles: Opposite to the Three Bullish Candles, this pattern shows three consecutive bearish candles and can indicate a strong bearish signal. Bullish Engulfing: A two-candle pattern where a bullish candle follows and completely "engulfs" the body of the preceding bearish candle. It indicates a potential trend reversal to the upside. Hammer: This candle has a small body and a long lower shadow, indicating that the market has rejected lower prices. It's considered a bullish reversal signal. Gravestone Doji: Similar to the Dragonfly but with a long upper shadow and no lower shadow, suggesting that prices rose but were then rejected, often interpreted as a bearish reversal signal. Hanging Man: This candle resembles a Hammer but occurs at the top of an uptrend, suggesting that bearish pressure is starting to emerge. Morning Doji Star: A variation of the Morning Star, where the middle candle is a Doji. This pattern further strengthens the indication of a potential bullish reversal. Each of these candle formations provides valuable insights into market sentiments and potential trend reversals. However, it's important to use them in conjunction with other forms of technical analysis for greater reliability. Have a nice trading day.
Education
by Forex48_TradingAcademy
10 Rules for Successful Trading1. Study. Learn how financial markets work. Years ago I took Khan Academy's free courses on the financial markets. It really helped reinforce what I already knew, taught me new stuff and solidified my confidence in understanding how the financial markets work. Here's the link: www.khanacademy.org Learn the basics of Technical Analysis. For this part I read "Technical Analysis of the Financial Markets" by John Murphy. I read the whole book not once, but twice, and I constantly refer to it to refresh my memory. You can also get the supplemental workbook to do exercises and test your proficiency. Link: www.amazon.com Learn the basics of Macroeconomics and Microeconomics. Khan Academy also provides excellent free courses in this subject area with quizzes and tests to confirm your proficiency. This part is important for understanding the big picture. Link: www.khanacademy.org 2. Develop a trading plan. Write out your trading plan step-by-step and follow it every time. If you don't do this, you won't be consistently profitable in the long term. Never trade on a whim, even if you fear missing out on a big move. I would rather miss out on a big move up because I took the time to develop a plan than jump in without a plan and experience a big move down. Here's a good resource for how to develop a trading plan: www.ig.com 3. Find a trading mentor. Find someone who is more experienced than you and learn from them. I was able to connect with a very experienced trader here on Trading View with whom I share watchlists and get trade ideas from. We chat regularly and confirm or critique each other's ideas. Having a trading mentor has been invaluable to my trading. It's important to find someone who is trustworthy and competent, and willing to critique your trading ideas. Often we as traders only see what we want to see in the chart and miss or ignore obvious clues that go against our theory. For example, what one person sees as a triple bottom (bullish) another person may see as a bear flag (bearish). Another way to learn from other traders is to subscribe to traders who post high-quality content on Youtube. I subscribe to a few great trading Youtubers who give me all kinds of insights. My trading has definitely improved because of learning from other traders. With this said, don't go overboard. Find just a couple of good people to follow. You don't want to follow dozens and dozens of traders as you will suffer from information overload. 4. Manage risk. Preserving your capital is necessary to stay in the game, so you need to manage risk. No matter how good your charting may be, some of your trades will go against you and will need to get out. That's why I always use stop losses and get out of a trade at a certain predetermined level. Stop losses always limit loss, but do not necessary limit profit. This in turn allows you to only be right half of the time (or in some cases even less) and still be profitable. The topic of stop losses actually warrants it own discussion. In the future, I will be writing a post on how to place your stop losses. Other risk management strategies include: limiting the amount of margin you use, only risking a certain percentage of your portfolio on any given trade, and diversifying your portfolio. A key difference between trading and investing is that investing does not (typically) employ stop losses. Long-term investors typically manage risk by using diversification. 5. Be humble. Check your ego at the door. It does not matter if you're right. The only thing that matters is your money. Never stay in a trade because you don't want to admit that you were wrong. I've seen plenty of charts that looked amazing and then a black swan event happens. Perhaps one of the best ways to think about it is to consider this paraphrased statement from the legendary trader Larry Williams: "Regardless of past performance, never forget that every new trade you make only has a 50% chance of success." I have seen some Trading View users who are completely consumed by pride and post their win rates and super high-profit percentages. I steer clear of these traders because they fail one major rule of good trading: staying humble. Past performance is not a guarantee of future performance. 6. Keep a journal. This one is very important. Whenever I learn something new about trading, I write it down in a trading notebook. Whenever I make a mistake, I write down what went wrong and what I learned from the mistake. My trading notebook contains my strategies both for bear markets and bull markets, contains the steps for my daily routine, contains my screener criteria, and contains a listing of all the important things I've picked up over the years of trading. 7. Track your assets. Employ some kind of a method for tracking your performance. Even though it's time-consuming, I use a spreadsheet. 8. Avoid speculation. Never trade based on speculation or emotion. Never buy or sell an asset because of fear (whether fear of a market crash or fear of missing out on a huge rally). Never enter into a position simply because you like the company, and similarly do not avoid selling your position because you love the company too much. The most successful traders are rigorously unemotional and unattached. In my opinion, I define anything that does not involve an analysis of data as speculation. I have also come to learn that by the time everyone is talking about something, it is usually at peak mania and will not go up further. For example, when your co-worker or close friend is talking about how much they made from Bitcoin, it's probably time to sell. Similarly, if you see everyone on social media posting photos of how much it costs to fill up their car with gas, it probably means we're at the peak of gas prices. 9. Learn how to use your charting platform. One of the best things I ever did to master my charting was to spend a few weeks doing nothing but just learning all the features on Trading View. When I first signed up for Trading View I was overwhelmed by all the tools, indicators, strategies, and ideas on here. So I knew I had to take a timeout from trading and just learn the tools first. For several weeks rather than focus on trading, I focused on learning Trading View. I favorited indicators that work best for my strategy, I created layouts and explored every nook and cranny on the platform. Trading View is incredibly powerful because it provides access to so much data. Having access to data is power. By taking the time to learn how to use all of its tools, I was able master the financial markets to a degree that I can now make predictions just good as those high-paid Wall Street analysts. Your subscription will pay for itself through the profits you make. 10. "Look first. Then leap." Always chart out your entry point, stop loss, and profit target before entering a trade. Ask yourself: How much risk am I willing to take for how much profit? Here's a great resource from Investopedia that inspired this post: www.investopedia.com This list of good trading rules is nowhere near comprehensive, so please leave a comment below to share your rules and tips for successful trading!
AMEX:SPYEducation
by SpyMasterTrades
132
HOW-TO apply an indicator that is only available upon request?Recently, I've realized that my typical day involves constant encounters with indicators. For example, when the alarm clock rings, it's an indicator that it's morning and time to get up. I am checking the phone and once again paying attention to the indicators: battery charge and network signal level. I figure out in just one second that such a complex element of the phone as the battery is 100% charged and the signal from the cell towers is good enough. Then I’m going out on a busy street, and it's only because of the traffic light indicator that I can safely cross the road to reach the parking lot. Looking at the on-board computer of my car, with its many indicators, I know that all the components of this complicated mechanism are working properly, and I can start driving. Now, imagine what would happen if none of this existed. I would have to act blindly, relying on luck: hoping that I would wake up on time, that the phone would work today, that car drivers would let me cross the road, and that my own car would not suddenly stop because it ran out of gas. We can say that indicators help to explain complex processes or phenomena in simple and understandable language. I think they will always be in demand in today's complex world, where we deal with a huge flow of information that cannot be perceived without simplifications. If we talk about the financial market, it's all about constant data, data, data. Add in the element of randomness and everything becomes totally messed up. To create indicators that simplify the analysis of financial information, the TradingView platform uses its own programming language — Pine Script . With this language, you can describe not only unique indicators, but also strategies — meaning algorithms for opening and closing positions. All these tools are grouped together under the term "script" . Just like a trade or educational idea, a script can also be published. After this, it will be available to other users. The published script can be: 1. Visible in the list of community scripts with unrestricted access. Simply find the script by its name and add it to the chart. 2. Visible in the list of community scripts, but access is by invitation only. You'll need to find the script by its name and request access from its author. 3. Not visible in the list of community scripts, but accessible via a link. To add such a script to a chart, you need to have the link. 4. Not visible in the list of community scripts; access is by invitation only. You'll need both a link to the script and permission for access obtained from its author. If you have added to your favorites a script that requires permission from the author, you'll only be able to start using the indicators after the author includes you in the script's user list. Without this, you will get an error message every time you add an indicator to the chart. In this case, contact the author to learn how to gain access. Instructions on how to contact the author are located after the script's description and highlighted within a frame. There you will also find the 'Add to favorite indicators' button. The access can be valid until a certain date or indefinitely. If the author has granted access, you will be able to add the script to the chart.
NASDAQ:TSLAEducation
by Be_Capy
LONG Strategy I Use With The Logical Trading Indicator V.1In this post I want to explain how I use the Logical Trading Indicator V.1 that I published as a community script here on TradingView. The following strategy is what I use on a daily basis with a number of different assets, primarily crypto and FOREX, but can work with just about any asset with a chart. This post is not specific to one particular timeframe, but I made the chart on the 1HR as that is the timeframe that the default settings were keyed in on. It is based on a LONG strategy. A SHORT trade would be just the opposite, which I will also make a post about as well. When I sit down to the charts, I set my alerts so the indicator tells me when to trade so that I can go about my day and make my moves with the alerts hit. This keeps me with a mechanical strategy that I can use to help keep my emotions out of the trade. Steps I take to prepare for a LONG trade: STEP 1: Set alert and watch for a bullish cross of the basis line. This indicates that the trend is changing and to be on the lookout for momentum change as well as the BUY signal. STEP 2: Set alert and watch for the next BUY signal. This happens when the price is above the basis line and the ATR meets the multiple set in the settings. So by default it is set to 2x multiple. So when the price jumps 2x the ATR figure, that means we are getting some serious bullish momentum and it is time to enter a long trade. STEP 3: Although this indicator works on a trailing stop loss strategy, it's always good risk management practices to set what I call an emergency stop loss. This protects your capital in-case everything just goes wrong. I set my emergency stop loss inside or just to the outside of the lower bollinger band range. This gives your trade room to move and go in the direction that it is indicating, but protects you incase the market turns quickly and you aren't paying attention. STEP 4: Set alert and watch for Take Profit signals. This happens when the price closes inside the upper bollinger band range, which also indicates an 'overbought' range similar to an RSI. The signal fires when the next candle closes below the band. This let's you know the momentum has changed and it could be a great time to take at least 50% or more of your position off the table. STEP 5: Set alert and watch for a bearish cross of the basis line. This indicates that the trend is starting to change and is when I usually close out the rest of the trade. STEP 6: You can set an alert to let you know when the SELL signal fires. This is the absolute LAST chance to get out in profit. This is the trailing stop loss signal that is built into the indicator. With my particular strategy, I am usually out of the trade at this point, but if I didn't get a chance to do anything when I got the bearish basic cross, I am definitely closing everything out when I see that SELL signal. This is also when you could be looking into flipping bearish and taking a SHORT trade, then it's just the opposite. I hope this helps answer some questions that people might have about how to use the Logical Trading Indicator V.1!
BITSTAMP:BTCUSDEducation
by thelogicaldude
2
Option TradingOption Trading work based on a contract that gives the buyer the right to buy or sell a certain asset, at a predetermined price (strike price) within a certain time period. A very simple task, but is there a clear technical analysis method that can provide consecutive wins? This post is not trading advice, just a statistical hypothesis test. I will try in 100 candles, and stop if the win rate is below 70% If you are an options trader, or are interested in learning the system I use, please follow this post.
BITFINEX:ETHUSDEducation
by AzrulAzir
Deep dive into SmartBot strategy [Skyrex]Overview The system is designed to continuously monitor assets price movements, identifying formation of bases, and providing alert notifications when these bases and/or layers are either breached or adhered to. System settings are adjusted by machine learning model applied to historical price action data. Release Notes These major features and enhancements were introduced since the first launch of the system in November 2021 Enhanced script efficiency for faster compilation and integration; Introduced a "Layer Settings" section for customized layer configurations; Added options for setting a take profit percentage; Exchange commissions implemented into statistic calculations; Implemented a new "Take Profit" plot series, including a data point in the data window, to facilitate trade closure at the current base line; Added a plot series to display emerging bases during active trades on the current base line; Introduced an option to make custom early trade exits including after reaching breakeven; Implemented a setting for enhanced trade exit strategies; Adjusted the minimum layer value for Layer 1 to exchanges’ “minNotional” filter; Modified the start month condition to a calendar month basis for improved initial rendering of base lines; Consolidated all "Layer # Cracked" and "Layer # Respected" X-crosses into a unified "Layer # Cross" set to streamline the Data Window list; Eliminated base/layer line shifts to the Base Marker to simplify chart rendering calculations; Added option to set custom exit conditions at each Layer; System is rebuilt from PineScript programming language to Python using libraries: TA-lib, python-binance, CCXT, scikit-learn; Implementation of Machine Learning based on scikit-learn; Added Bayesian classifier and obtain the corrected indicator’s values; Implemented labeled Elliott wave data once a month for additional model training; Enhanced Signal Issuance Module based on Python 3.10, making decisions based on model predictions, and sending trading signals according to the second-level trading strategy algorithm, implemented using the TA-lib library, in the form of a JSON file to the panel via Webhook; Enhanced integration of Fractal DCA system with Machine Learning extension to ensure seamless and adjusted to market conditions signals production for SmartBot public beta test launch; System structure Identification of Bases The system is engineered to detect pivot lows within a fractal configuration, subsequently verifying their eligibility as bases in alignment with the principles of fractal strategy trading1. The validation process for a pivot low encompasses several checks: Confirmation that the rate of change in price during declines and rebounds surpasses a specified threshold; Verification that the volume at the pivot low exceeds the moving average of volume, determined by a predefined length; Assurance that the volume magnitude significantly exceeds the moving average of volume; Assessment to ensure that the newly identified base is sufficiently distanced from the previous range, employing a specific percentage difference threshold in price. Understanding Fractal Patterns A fractal pattern represents a repetitive configuration observable on price charts, which is instrumental in forecasting reversals amidst broader, more erratic price movements. These fundamental fractals typically consist of five or more bars. The criteria for fractal identification are as follows: A bearish turning point is identified by a pattern where the central bar has the highest high, flanked by two lower highs on each side. A bullish turning point is marked by a pattern where the central bar has the lowest low, surrounded by two higher lows on each side. The fractals depicted in figure below exemplify ideal patterns. It is important to note that while numerous variations of less perfect patterns may occur, the essential structure of the fractal must be preserved for its validity. A notable limitation of fractals as a system is their inherent nature as lagging indicators. Specifically, a fractal cannot be established until a minimum of three bars have completed on the price chart. In the context of the Fractal trading strategy, it is the bullish fractal pattern that is utilized for base identification. The system is equipped with a feature that permits customization of the number of bars that constitute the bullish fractal. The default configuration is set to a 6-bar fractal pattern. This pattern is instrumental in validating price declines and subsequent rebounds. In the latest update, the algorithm has been modified to accommodate a more flexible approach in analyzing the lows of each bar during these declines and rebounds. Instead of requiring a strictly ascending sequence, the revised algorithm focuses on confirming that the pivot point is indeed the lowest, and that the observed declines and rebounds surpass the pre-established ranges. Validation of Cracks and Bounces The process of validating cracks and bounces begins with the identification of a bullish fractal pattern, as per the system's fractal pattern settings. Upon recognizing such a pattern, the system counts the bars to the left and right of the lowest pivot point and then calculates the Price Rate of Change (ROC). The Price Rate of Change is a momentum indicator that quantifies the percentage difference in price between the current price and the price from a specified number of periods ago. The ROC is determined using the following formula: ROC = (Most recent closing price - Closing price n periods ago) / Closing price n periods ago x 100 As demonstrated in figure below, the system employs a 3-3 fractal pattern to calculate the ROC. In this example, the ROC for the Price Drop was computed to be 33.97%, and the ROC for the Price Bounce was 35.93%. These two values are then compared against the predefined “Minimum Price Drop (%)” and “Minimum Price Bounce (%)” settings. Should the ROC values for both Price Drop and Bounce surpass the established thresholds, the base is deemed valid and qualifies for additional validation. Settings either of these parameters to zero (0) implies that the system will bypass this validation step and accept any bullish fractal pattern as valid Volume Validation Methodology In accordance with the principles of Fractal trading, volume plays a crucial role in validating a base. It is primarily used to corroborate the market's robust response in preventing a further decline in price. This is typically evidenced by a "spike" in volume on the price chart, signaling a strong market reaction to the current price level. Moreover, the Fractal trading system acknowledges that volume analysis is particularly pertinent at lower timeframes, where block trades occur. These block trades may not be as discernible in higher timeframes (e.g., on a 1-hour chart). Consequently, while the system incorporates Volume Analysis to gauge the market's reaction at a potential base, this feature is not activated by default, given its optional nature. Volume analysis involves scrutinizing the quantity of shares or contracts traded within a specific timeframe. This analysis is a key tool for technical analysts, who integrate it with other indicators to inform their trading strategies. By examining volume trends alongside price movements, investors can ascertain the significance of price changes in a security. The system executes volume analysis through two distinct methods: Comparison of the volume at the low pivot point against the volume moving average, based on the following criterion: ( > ) = True Application of a multiplication factor to the volume, ensuring it surpasses the volume moving average by a specified margin: ( > ) = True In the following example, volume is greater than volume moving average: Ensuring adequate spacing between bases The system possesses the capability to be configured in such a manner that it spaces out the formation of new bases at a predetermined distance from the existing base. This feature is instrumental in preventing the occurrence of multiple bases being identified near one another. The left chart has 3 base lines that are very close together. No percent of change for new bases 5% percent of change for new bases Base Line Placement The system supports configurable settings for determining the positioning of the base line. This line can be set at the low point of the bar, or alternatively, at the lower value between the opening and closing prices. A comparative analysis of these two distinct options is presented, utilizing the same fractal pattern for evaluation Base Placed on Low Base Place on Open A critical consideration in this context is that if the bar defining the pivot low (termed as the Base Reference Bar) exhibits a lower value than either of the two placements, then the placement will default to utilizing the low of the Base Reference Bar. Base Placement on Low of Reference Bar Understanding Layering Functionality Elucidation of Layers and Their Respective Unit Types The system is designed to accommodate a maximum of nine (9) distinct layers, each equipped with its own set of crack and respect alerts. Layers can be set dynamically through API requests or preconfigured at a position start; unit value can be configured in two ways: as a percentage of the price, as a fixed quantity (such as BTC, USD, etc.). Assigning a value of zero (0) to a layer effectively deactivates it. A “respected” layer definition In the system's framework, a layer is classified as “cracked” when the market price descends beneath the specified layer price threshold. An alert is activated whenever this occurs. However, the criteria for a layer being acknowledged as “respected” can be determined through one of two selectable options. A layer is recognized as respected based on the following price action scenarios: 1. "Respected Base" - means that the system will consider all layers that are cracked below the base as respected when the price action returns to the base after a base crack. For example, consider this chart below: As illustrated, the initial base along with layers 1 and 2 are breached. However, when the price subsequently ascends, the entire configuration is deemed adhered to upon the base being respected. Consequently, in this scenario, a total of four alerts are activated: Base breached; Layer 1 breached; Layer 2 breached; Base respected. Moreover, it is noteworthy that no alert is generated upon the second breach of Layer 2. Therefore, under these settings, a layer is only recognized as breached once while the base breach is in effect. Once the base is respected, the system resets the states of the layers. Hence, if these layers are breached again post-reset, new alerts will be issued accordingly. 2. "Cracks Next Layer First" - means that the system will consider all layers that are cracked below the base as respected when the price action returns to the layer after the layer below it is cracked. For example, consider the chart. Again, the cracked state is restored when the price is returned to the base. While the last layer will never be considered respected since there is no “Next Layer” to be cracked. Duration of layered trading activity The duration of layered trading within the system is adjustable, allowing to define the maximum permissible number of cracks per base. Upon reaching this threshold, the system ceases to issue alerts for further price movements across the layers. Instead, it shifts its focus to identifying new bases as they emerge. A base is deemed to be cracked upon the breach of the first layer. The system offers a configurable option to set a maximum limit on the number of bars for which a layered trade can be active. Upon the breach of the 1st layer, the system initiates a count of the duration, in terms of bars, for which the trade remains active. Should this duration surpass thepredefined maximum threshold, the system will then classify the base as disregarded and start recognizing new base candidates as they emerge. This feature is particularly beneficial in preventing the system from persisting indefinitely on the same base. By default, this setting is assigned a value of 0 bars, indicating that it is initially inactive. The system additionally offers a feature to manage the initiation point for base detection. This functionality is crucial in ensuring that the detection process does not commence amidst an ongoing, long-duration cracked base. Such a scenario could potentially hinder the identification and charting of new bases, thereby impacting the effectiveness of the trading strategy. The system also provides the ability to control the starting point of the base detection so that you can ensure that you are not starting in the middle of a cracked base that is long running in duration, thus preventing new bases from being detected and place on the chart. Risk management settings The system is designed to incorporate a "Take Profit" feature, which enables to exit a trade following a base crack, thereby mitigating the risk of the base not being respected. Alongside the Take Profit functionality, the system also allows for the configuration of Break Even and Stop Loss parameters. These can be activated at predetermined layers, offering users the flexibility to tailor the timing of their application. Furthermore, the system facilitates the input of specific exchange buy and sell commission rates. This inclusion is critical for refining the Take Profit calculations, ensuring they are as accurate as possible to realize the intended profit margins. These configurations play a pivotal role in recalculating the Take Profit price line with each layer crack. It's important to note that the efficacy of this setting is contingent on the "Layer Is Respected When Price" being configured to "Respects Base." In scenarios where this is not the case, the Take Profit price line will experience an upward adjustment whenever layers are respected. Therefore, the optimal utility of this setting is realized when it is paired with the "Respects Base" configuration. The calculation of the Take Profit line value will inherently treat the Stop Loss Percentage as a negative figure. Consequently, there is no requirement to specify a negative number for this setting. Accompanying this text are screenshots that demonstrate diverse instances of these settings being applied within a chart context Take Profit with Layer Activation Settings Disabled Take Profit Activated at Layer 3 Break Even Activated at Layer 3 Stop Loss Activated at Last Layer
Education
by Skyrexio
High Returns, Low Risk: Unveiling a Winning Investment StrategyI am pleased to introduce a robust long-term strategy that seamlessly combines performance with an enticing risk profile. This strategy involves strategically investing in ETFs indexed on the S&P 500 and ETFs backed by physical gold. Let's delve into the rationale behind selecting these two assets: S&P 500: 1. Automatic Diversification: Instant exposure to a diverse array of companies, mitigating the risk associated with the individual performance of a single stock. 2. Low Costs: ETF management fees are typically low, facilitating cost-effective diversification. 3. Liquidity: Traded on the stock exchange, S&P 500 ETFs offer high liquidity, enabling seamless buying or selling of shares. 4. Historical Performance: The S&P 500 has demonstrated consistent long-term growth, making it an appealing indicator for investors seeking sustained growth. 5. Ease of Access: Accessible to all investors, even those with modest investment amounts, requiring only a brokerage account. 6. Simple Tracking: The S&P 500 index simplifies market tracking, eliminating the need to monitor numerous stocks individually. 7. Dividends: Companies included often pay dividends, providing an additional income stream. 8. Long-Term Strategy: Ideal for investors pursuing a long-term approach, S&P 500 ETFs are pivotal for gradual wealth building. 9. Geographical Diversification: Investing in an S&P 500 ETF offers not just sectoral but also geographical diversification. Despite the U.S. base, many included companies have a global presence, contributing to international portfolio diversification. Moreover, Warren Buffett's 2008 bet, where he wagered $1 million on the passive S&P 500 index fund outperforming active fund managers over a decade, underscores the difficulty even seasoned financial experts face in surpassing the market's long-term return. This further strengthens the notion that choosing an S&P 500-linked ETF can be a prudent and effective investment strategy. Investment in Physical Gold ETFs: 1. Exposure to Physical Gold: Designed to reflect the price of physically held gold, providing direct exposure without the need for physical acquisition, storage, or insurance. 2. Liquidity: Traded on the stock exchange, physical gold ETFs offer high liquidity, allowing investors to buy or sell shares at prevailing market prices. 3. Diversification: Gold's unique reaction to market dynamics makes it a valuable diversification asset, potentially reducing overall portfolio risk. 4. Lower Costs: Compared to physically buying gold, investing in physical gold ETFs proves more cost-effective in terms of transaction costs, storage, and insurance. ETF management fees are also relatively low. 5. Transparency: Managers regularly publish reports detailing the gold quantity held, ensuring transparency about underlying assets. 6. Accessibility: Physical gold ETFs offer easy market access without the need for physical possession, appealing to investors avoiding gold storage and security management. 7. Gold-backed ETFs: These ETFs physically hold gold as the underlying asset, with investors often having the option to convert their shares into physical gold. After extensive research and backtesting across diverse ETFs covering various asset classes, including bonds, real estate, commodities, and stocks of financially stable companies, my findings notably highlight a standout option during times of crisis: physical gold ETFs. The strategy hinges on leading indicators, powerful economic tools. Leading Indicators: Leading indicators, or forward indicators, are crucial tools in economics and finance for anticipating future trends. In contrast to lagging indicators, which confirm existing trends, leading indicators provide early signals, aiding informed decision-making based on anticipated economic developments. Key characteristics include: Trend Anticipation: Early insight into upcoming changes in economic activity, facilitating preparedness for market developments. Responsiveness: Quick reactions to economic changes, sometimes preceding other indicators. Correlation with the Economy: Association with specific aspects of the economy, such as industrial production, consumer spending, or investments. Examples include: • Housing Starts: Providing early indications of the real estate market and construction investments. • Net New Orders for Durable Goods: Indicating business investment intentions and insights into the manufacturing sector's health. • US Stock Prices: Considered a leading indicator reflecting investor expectations. • Consumer Confidence: Measuring consumer perceptions and influencing consumer spending. • Purchasing Managers' Confidence and Factory Directors: Offering insights into production plans and future economic trends. • Interest Rate Spread: Indicating economic expectations and influencing borrowing and investment decisions. Returning to the strategy, I leverage entry points calculated by a meticulously developed strategy incorporating leading indicators applied to the SPY chart. The achieved performance of 3496% since 1993, with 15 closed trades, significantly surpasses a buy-and-hold position yielding 1654% in performance. Notably, the maximum drawdown is 5.44%, a stark contrast to the over 50% drawdown seen in an investment in the S&P 500. Upon the indicators signaling the end of the long position, I close my SPY positions and transition to positions in physical gold ETFs. In our example, choosing the GLD ETF yields a performance of 173%, adding to our total performance. While the maximum drawdown, considering the addition of the investment in physical gold ETFs, is 17.65%, slightly higher than the drawdown on the strategy applied to the SPY, it remains impressive for such a prolonged period. Now, if we conduct the backtest since 2007: SPY : performance of 751 %, max drawdown of 4.02 % GLD : Performance of 153 % Since 2015: SPY : performance of 131 % GLD : Performance of 37 % Disclaimer: The information shared is for educational purposes only and is not financial advice. Investing involves risks, and past performance is not indicative of future results. Consult with a qualified financial advisor before making investment decisions. The author is not liable for any financial losses incurred.
AMEX:SPYEducation
by Julien_Eche
6
Trading strategyA trading strategy encompasses a set of guidelines for initiating a position. A trading system encompasses a set of rules for consistently profitable trading. This involves a clear comprehension of your strategy, specifying the assets you trade, the setups you utilize, the risk involved, preferred timeframes, and other pertinent details. Consistency: A meticulously crafted action plan serves as a tool to maintain a steady trading strategy while minimizing the sway of emotions on your decision-making. Such consistency often yields more predictable results and enhances overall performance over time. Confidence: Equipped with a playbook, you can trade with increased self-assurance, knowing that you are following a tried-and-tested strategy. This confidence alleviates stress and anxiety, enabling you to maintain focus and make sound decisions. Adaptability: In the face of shifting market conditions, having a playbook at your disposal empowers you to adjust and fine-tune your strategies as needed. This adaptability is a critical factor in staying ahead and sustaining success in the constantly evolving realm of trading. 4 distinct components that constitute a trading strategy: Context: Context encompasses the surroundings and circumstances related to a trading idea or event. It is crucial for a comprehensive understanding of the situation and is vital for maximizing the potential of your trading strategy. Many traders erroneously believe that a trading strategy is simply about identifying patterns or triggers along with basic risk management. For instance, some may focus on trading Order Blocks. However, the key to making Order Blocks a profitable tool lies in applying the correct context. Patterns: The second component involves identifying the triggers or patterns that dictate when to enter a position. Context is applied to these triggers for in-depth analysis, aligning them with the risk-to-reward parameters defined in your trading system. Triggers can vary widely and should be chosen according to your individual trading style and strategy. Position Management: Inexperienced traders often find themselves overwhelmed when they enter a position, leading to irrational decisions. Defining a repeatable process for managing your trades is essential. This process should align with the goals set out in your trading strategy. For instance, if your strategy aims for a risk-to-reward ratio of 3R or higher, your approach will differ from someone targeting a minimum of 1.5R. To ensure consistency, it's crucial to avoid excessive discretion when managing positions, such as attempting to achieve a 1:5 risk-to-reward ratio, placing short stops, or averaging down. Instead, aim for strict consistency, gradually honing your skills. Risk Management: The final facet of any trading system is risk management. Poor risk management is a leading cause of trader failures. It often results from excessive leverage and a lack of understanding. Your risk management plan doesn't need to be overly complex, but it must be clear and diligently adhered to. By following a robust risk management strategy, you can avoid the pitfalls that ensnare many inexperienced traders who destroy their accounts due to reckless trading practices. It may vary depending on your trading style, but for day trading I recommend the following: * 1% maximum risk per trade * 2% maximum per day * 6% maximum per week * 10% maximum per month 6 essential steps to build and refine your trading strategy: Determine Your Trading Style: Start by defining your trading style, whether you are a day trader, swing trader, or long-term investor. This choice guides your selection of appropriate strategies, time frames, and risk management techniques. For instance, specify your preferred win rate (e.g., 50%+), risk-to-reward ratio (e.g., 2R minimum), and trading style (e.g., scalping, position trading, or swing trading). Research and Select Strategies: Explore various trading strategies and choose the ones that align with your trading style, risk tolerance, and financial objectives. You may want to consider strategies like Smart Money trading, which could be particularly beneficial. Define Entry and Exit Criteria: For each selected strategy, outline precise entry and exit criteria. Determine your stop loss and profit targets to ensure you execute trades accurately and limit potential losses. It's crucial to establish a well-defined trade management plan that guides step-by-step position management. For example, decide to move your position to break-even when a 1:1 risk-to-reward ratio is reached, open trades exclusively with a 1:2 ratio, or close 50% of your position at 1:1 and the remaining 50% at 1:3. Establish Risk Management Rules: Implement robust risk management rules to safeguard your capital. These rules might include setting a maximum percentage of your account balance to risk per trade or using Expert Advisors to automatically determine position sizing for risk control. Test Your Strategies: Prior to committing real capital, test your strategies using historical market data or a demo account. This testing phase allows you to refine your strategy and build confidence in your approach. If you cannot achieve positive results on a demo account, it's advisable to avoid risking real money until you've honed your skills. Analyze Your Trades: Maintain a comprehensive trade journal recording the strategy used, entry and exit points, and relevant market conditions for each trade. Regularly review your trade results to pinpoint areas for improvement and adapt your trading plan accordingly. Analyzing your trades is crucial for continuous growth as a trader. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
13
HOW-TO: Minervini Pullback StrategyGeneral Description and Unique Features of this Script 1. Our script/strategy utilizes Mark Minervini's Trend-Template as a qualifier for identifying stocks and other financial securities in confirmed uptrends. Mark Minervini, a 3x US Investment Champion, developed the Trend-Template, which covers eight different and independent characteristics that can be adjusted and optimized in this trend-following strategy to ensure the best results. The strategy will only trigger buy-signals in case the optimized qualifiers are being met. 2. Our strategy is based on supply/demand balance in the market, making it timeless and effective across all timeframes. Whether you're day trading using 1- or 5-min charts or swing-trading using daily charts, this strategy can be applied and works very well. 3. We also incorporate technical indicators such as RSI and MACD to identify low-risk pullback entries in the context of confirmed uptrends. By doing so, the risk profile of this strategy and drawdowns are being reduced to an absolute minimum, giving you peace of mind while trading. Minervini’s Trend-Template and the ‘Stage-Analysis’ of the Markets This strategy is a so-called 'long-only' strategy. This means that we only take long positions, short positions are not considered. The best market environment for such strategies are periods of stable upward trends in the so-called stage 2 - uptrend. In stable upward trends, we increase our market exposure and risk. In sideways markets and downward trends or bear markets, we reduce our exposure very quickly or go 100% to cash and wait for the markets to recover and improve. This allows us to avoid major losses and drawdowns. This simple rule gives us a significant advantage over most undisciplined traders and amateurs!   'The Trend is your Friend'. This is a very old but true quote. What's behind it??? • 98% of stocks made their biggest gains in a Phase 2 upward trend. • If a stock is in a stable uptrend, this is evidence that larger institutions are buying the stock sustainably. • By focusing on stocks that are in a stable uptrend, the chances of profit are significantly increased. • In a stable uptrend, investors know exactly what to expect from further price developments. This makes it possible to locate low-risk entry points. The goal is not to buy at the lowest price – the goal is to buy at the right price! Each stock goes through the same maturity cycle – it starts at stage 1 and ends at stage 4   Stage 1 – Neglect Phase – Consolidation Stage 2 – Progressive Phase – Accumulation Stage 3 – Topping Phase – Distribution Stage 4 – Downtrend – Capitulation This strategy focuses on identifying stocks in confirmed stage 2 uptrends. This in itself gives us an advantage over long-term investors and less professional traders. By focusing on stocks in a stage 2 uptrend, we avoid losses in downtrends (stage 4) or less profitable consolidation phases (stages 1 and 3). We are fully invested and put our money to work for us, and we are fully invested when stocks are in their stage 2 uptrends. But how can we use technical chart analysis to find stocks that are in a stable stage 2 uptrend? Mark Minervini has developed the so-called 'trend template' for this purpose. This is an essential part of our JS-TechTrading pullback strategy. For our watchlists, only those individual values that meet the tough requirements of Minervini's trend template are eligible. The Trend Template • 200d MA increasing over a period of at least 1 month, better 4-5 months or longer • 150d MA above 200d MA • 50d MA above 150d MA and 200d MA • Course above 50d MA, 150d MA and 200d MA • Ideally, the 50d MA is increasing over at least 1 month • Price at least 25% above the 52w low • Price within 25% of 52w high • High relative strength according to IBD. We have developed an algorythm (for TradingView) that uses Minervini’s trend template as a qualifier. This means that the strategy only generates trading signals in case the selected elements of the trend template are being met. The user is fully flexible to adjust the requirements of this Trend-Template qualifier: This strategy is normally applied to the daily chart ideal for selecting individual stocks for trend-following strategies. Nevertheless, Minervini’s principles are timeless and this alogrithmic strategy with the Trend-Template qualifier can also be applied to any other timframe. The qualifier #9 (RS-Ratings) can be modified and optimized in the strategy’s settings to fit your individual needs. In general, it should be noted that ideally all 8/8 trend template criteria are met. Stocks or other securities that meet only some of these 8 criteria can also be very promising candidates for this strategy, provided that backtesting yields good results. The Pullback Strategy For the Minervini pullback strategy, only stocks and other financial instruments that meet the selected criteria of Mark Minervini's trend template are considered. If not, the strategy will not generate any signals. Further prerequisites for generating a buy signal is that the individual value is in a short-term oversold state (RSI). When the selling pressure is over and the continuation of the uptrend can be confirmed by the MACD after reaching a price low, a buy signal is issued by the pullback strategy. Stop-loss limits and profit targets can be set variably. Relative Strength Index (RSI) The Relative Strength Index (RSI) is a technical indicator developed by Welles Wilder in 1978. The RSI is used to perform a market value analysis and identify the strength of a trend as well as overbought and oversold conditions. The indicator is calculated on a scale from 0 to 100 and shows how much an asset has risen or fallen relative to its own price in recent periods. The RSI is calculated as the ratio of average profits to average losses over a certain period of time. A high value of the RSI indicates an overbought situation, while a low value indicates an oversold situation. Typically, a value > 70 is considered an overbought threshold and a value < 30 is considered an oversold threshold. A value above 70 signals that a single value may be overvalued and a decrease in price is likely , while a value below 30 signals that a single value may be undervalued and an increase in price is likely. For example, let's say you're watching a stock XYZ. After a prolonged falling movement, the RSI value of this stock has fallen to 26. This means that the stock is oversold and that it is time for a potential recovery. Therefore, a trader might decide to buy this stock in the hope that it will rise again soon. Moving Average Convergence Divergence (MACD) The MACD (Moving Average Convergence Divergence) is a technical indicator used in both short-term and long-term trading strategies. The indicator was developed by Gerald Appel and is one of the most well-known indicators for the stock market. The MACD consists of two lines calculated by the difference between two moving averages. The first line is a fast moving average that targets a short period of time. The second line is a slow moving average that targets a longer period of time. In addition, a trigger line is calculated, which consists of another moving average of the MACD line. The MACD line is the difference between the fast and slow moving average. The greater the difference between the two lines, the more likely a subsequent price increase. The lower the difference, the more likely a subsequent price drop is. If the MACD line crosses upwards over the trigger line, this is a buy signal that signals a potential price increase. If the MACD line crosses down below the trigger line, this is a sell signal that signals a potential price weakening. This strategy is applicable to all timeframes and the relevant parameters for the underlying indicators (RSI and MACD) can be adjusted and optimized as needed.
BITSTAMP:BTCUSDEducation
by JS_TechTrading