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The importance of intelligence to tradingINTELLECTUAL QUOTIENT The one we hear the most nonsense about and for 1 legit piece of info there are 500 TB of crap. People are super insecure about this. Even in investing circles, where individuals are at or above average, still insecure. Academics using Finnish data (because at 19-20 men have to pass an IQ test for the military) found that 25% top IQ (IQ > 110) make up 50% of market participants 25% bot IQ (IQ < 90) make up 9% of market participants So virtually everyone reading this should be average or above, and I don't do simple magical indicators so that probably adds another filter. Academics looked at tech stocks on the Helsinki stock exchange and found that in the sample period 1/1995-11/2002 the annualized returns (dividends etc included) were: - For the 42% with the lowest IQ 9.52%. The 1rst to 4rth stanine. IQ <96. I'll call them INT 1-4. - For the 4% with the highest IQ 14.45%. The 9th stanine. IQ > 126. I'll call them INT 9. A significant difference. Remember the vast majority are passive investors that just follow the market as a whole. Imagine 1/3 of a country invests, they have a separate life they're not all active. Much of the difference in performance - which is monotonously correlated with IQ - comes from lower IQ individuals joining at the wrong time. But even when ignoring the timing, and looking at returns as if they all joined equally over time (by adding weights to the data) scientists found that INT 9 (IQ > 126) returned 14.84% and INT 1-4 (IQ < 96) returned 12.65%. So not only wrong timing but also wrong stock selection. I am guessing they regrouped 1-4 to not humiliate people with intellectual disability (INT 1)? Sources: papers.ssrn.com papers.ssrn.com Proven by science, all the big liars saying it does not matter are big liars trying to be liked. About market timing. There is a clear pattern, it just jumps at you. Page 61 of IQ, Trading Behavior, and Performance you can see for yourself so I'll keep it short: Basically like it or not, people with an IQ over 105 (37% of the population), which already is the majority of market participants, are the ones buying during the bull market, and the average and below all rush in when prices start to go parabolic, making them go even more parabolic, smart people step away, and 1-5s hold the bag and keep buying when the price is clearly in a bear market (poor pattern recognition). To all the people that joined crypto in 2017 and are going "oh no not me": The Finnish data set only looks at men over 20. And the vast majority of those are well over 30. They had more than enough time to earn some money, hear about stocks, and get into investing. The European demographic pyramid is really terrible. And of course older people invest more than broke young people that study or barely started to work. People get into investing in waves. The tech bubble was when plenty of 20 yos (back then) got in. I didn't know I could invest by myself before 2017. All of us 20-30s are just a tiny minority that makes no difference stat-wise compared to the vast number of middle aged workers and retirees. For my defense I entered at the top, during the parabola but I was not a permabull, all the bagholding 1-5s were laughing at me for being bearish... I like it here, how it is now. If Bitcoin goes vertical to over 100K the 25% at the bottom will start to appear again. And start arguing. And making circular logic. And screaming. And sending threats. Oh boy. INT 6 represents 17% of the general pop & in this data 23-24% of market participants, INT 7-9 23% of the general pop is 36-37% of market participants. You know, even today after they lowered the level drastically, only 1/3 of people completes college education (or equivalent for us French), and they're not 1-4s. Seems obvious to me that someone that struggles with a division won't be making money in the markets, do people think this is manual labor? But whatever, as I said, IQ matters because these 4 things matter: 1. Pattern Recognition: The ability to understand the world through analogies. Predicting a crash because many elements are similar to the previous crash is not very different to looking at a bunch of dominos in an IQ test and guessing which one is next in the list. 2. Numbers skills: being able to quickly calculate risk, volatility, as well as understand probabilities. Good way to avoid holding a bag and waking up "Oh what? How am I down 75%? Didn't see that coming". You have to see that coming. You need to know how much you'll make or lose if the price goes up/down by x percent, how likely it is to happen using implied volatility, and much more. 3. Planning & Problem Solving: NEW problems. Not "learn by heart your school lesson" problems. Parrots and college professors do not make great traders. Learning by heart is useless. Every time it's different. "This time it's different". You can mix this with pattern recognition and it becomes obvious where I'm getting at: dumb money ALWAYS goes "this time it's different". You should be able to adapt to new variables, solve new problems, and be able to recognize how NOT different they are. All snowflakes are different. This is literally IQ at its finest and nothing more. You either see the "different" pattern of dominos and can solve the problem or you don't have the IQ and simply do not see it (and insult people that do see it call them stupid and conspiracy theorists). 4. Dealing with a lot of info: being able to analyse much information, while ignoring distractions. Academics that looked at data unsurprisingly found that higher IQ individuals had more diversified portfolios. And also, higher IQ individuals are able to analyse more data as well as ignore distractions (according to a BBC article). How to increase my IQ? There is a way. Only 1 way I know of: "Scientists found that multitasking reduced men IQ by 15 points, lowering them to the level of an 8 year old". I am certain it's not like this for women, prob just reduces it by 5 points or something, or maybe 0 idk. We men tunnel vision. So ye just focus on 1 goal only and get good at it. This "multitasking" will make you a complete noob. Literally an 8 year old to be more precise :D. Women have same average IQ as men also. I don't really know what the differences are for investing, probably not much. They're probably better at being organised too. That's just... so bad for me you have no idea. What a mess. Obviously it's also possible to learn about numbers and improve at it... And one learns to recognize snowflakes by studying plenty of snowflakes, regardless of his abilities (just will be easier for someone who scores higher that's all). EMOTIONAL QUOTIENT Why do I write so much? Good thing there is very little research about this, so not much to say. First, no, women do not score higher (in IQ either btw). Just because there is the word "emotional" in it people assume silly things. It's just a word. Irrelevant. So I'm calling it brzbjfbrhdjf from here on. These are pretty self-explanatory honestly. People with high brzbjfbrhdjf perform better than people with low brzbjfbrhdjf. There are exceptions. I found that people with LOW empathy made better debt collectors XD Better serial killers too I bet! A doc, not sure how serious, shows how they tested portfolio managers, and these had significantly higher brzbjfbrhdjf than average people. There is very little research on brzbjfbrhdjf, as opposed to IQ that has a lot of it, but there sure is a lot of "understanding" media articles about brzbjfbrhdjf, saying how great it is, as there are tons of articles saying how awful IQ is (insecure much?) and none praising it or just listing some of the positives. The market does not care where you bought, remember? It's about what the market is feeling, so go scream "BITCOIN IS GOING TO ZERO!" and find out if: - They are mocking you (honestly): They are complacent, euphoric or thrilled, depends. Can't really teach this... Have to "feel it" idk. - They are angry (includes mocking you but if you have high "empathy" & "social skills" you can tell they are mad): Anxious - They go "pfff", "I'm over it", they sigh: Well capitulated and depressed, bottom? So many people think the world revolves around them, and when there is someone they don't like they get persuaded that person is dumb or loses money XD They think if they believe hard enough it will happen? I find it stupid, so the term "emotional" intelligence might be accurate, the intelligence part anyway. I could go on but I think that's enough. If I find something interesting I'll share. It might be more important than IQ, OR not be more important but since all investors have high IQ anyway then IQ won't matter but "EQ" will differentiate between the mediocre ones and great ones. Having both = jackpots. OF COURSE here we talk about people that put in the hours. Obviously just having "good genetics" won't make you Mr Olympia if you drink beer all day long and never work out, know what I mean? People with low empathy can make money by the way, plenty of autists (famous for not being able to understand people feelings) are great money manager. Remember Michael Burry? Predicted the housing crisis and shorted morgage swaps, great at stock picks. Famous now, made lots of money. You know what else Michael Burry did? Short WAY too early. Because people were still way thrilled back then. And he quit managing other people money (I doubt he understood their stress), in an interview he explains how they were mad even after he made them lots of money. A guy with low empathy dealing with very emotional people (very emotional doesn't mean high "emotional" intelligence) and very little self-management (also little ba**s). 1. Self-Awareness: is the ability to understand how emotions affect yourself and other people. 2. Self-Management: is the ability to control impulsive decisions. 3. Motivation: is having a passion for what you do along with a curiosity for learning. 4. Empathy: as in the ability to understand how people feel (fear, euphoria, etc). 5. Social Skills: as in being aware of the people around you, people with different point of views. The military gets the best results by filtering at entry. Rather than punish everyone because of some gamblers, regulators ought to filter at entry. In some video game, would a MAGICIAN starting with 0 STR and built as a melee tank do well? No. People with low "IQ" and "EQ" have nothing to do in this business. Better to do something else. What else that I do not know. Society has a problem with low IQ individuals, there are no jobs for them. Tech advanced too fast humans can't keep up. Just convince intelligent women to focus on their careers and give welfare to dumb ones when they have kids, that'll solve the problem long term! I do not have autism (kinda disappointed), it's not that I do not KNOW this sounds distasteful to people, I am very aware of it, it's just that I don't give a rat's ass. Not going to start lying to be popular. Plus everyone can keep burying their heads in the sand, things will just keep getting worse. Specific to investing, people will low IQ/EQ will be told everyone can make it, buy a course or whatever, waste hundreds of hours, lose their money, quit. Oh great. But for a moment they felt really good and had high hopes. High hopes that got completely crushed. Great. At least some bullshiter got to be the nice guy! Most "1-4s" know they're not super smart and avoid the market, most people that get offended are 5+ but get offended in their name because they're so virtuous or something. But idk recently they're trying to "democratize" investing, and all sort of random people with no clue what they are doing and a gambling mentality are jumping in to pump the pyramid scheme higher. This can only end badly. So I wonder, are the people pushing for this nonsense really "well intentioned"? Or just trying to keep the pyramid scheme alive a bit longer and pump their holdings at the expense of "useless eaters"?
Education
by MrRenev
5
How To Add Emojis To Your ChartIf you publish a lot of research from your TradingView account, emojis will give readers another way to engage with your work. Emojis are recognized globally and can help others better understand how you're thinking or feeling. They can also be used as quick reminders or notes. Here's how you can add emojis to your chart: 1. Copy and paste an emoji directly into the text box tool like this 👋. If you need help finding an emoji to copy and paste, there are several websites that make this easy to do. You can add emojis to any text box or drawing tool that supports text. 2. The second method is to use the Signpost tool. The Signpost tool is located in the Annotation Tools menu on the left-side of the chart. Select the Signpost, place it on the chart, and then open its settings to add an emoji. The Signpost tool can be used to leave detailed notes at specific price levels. It is easy to use, fully customizable, and it can be dragged to any point on your chart. We've included a few examples on the chart above where we've also customized the background color of each Signpost. 😎🐻 🥶🐂 Thanks for reading! Let us know if you have any questions or comments. Our team is always listening and waiting to help.
Editors' picks
NASDAQ:COINEducation
by TradingView
26
PATTERNS & PITFALLS #1 The market is designed to make you fall into traps, and make you doing things. By nature, we tend to overcomplicate things and trading is one of them. As in coding, the best way to code is to Keep It Simple Stupid (kiss). One of this thing is what i call “The Home Runs Chaser”. A large majority of retail traders, slowly tendto look everyday for a stock heading up to the moon. Why does this happen? How we slowly enter into that thinking process when we start trading? So you start trading for few days or few weeks, you see a stock on an uptrend and you go long, take money and then you see the stock going up fast after you exited, what do you tell yourself? “Damn it, i should have held it a little longer, if only...” And then it happens a few more times, and BINGO you’re in it, you’re in the trap designed by the stock market: - You start looking everyday for home runs. - Now you have the “win or loss” mentality So you allow yourself to lose it. You see gains but you’re focusing on the holy grail, the holy target! LOOKING FOR HOME RUNS WILL LEAD YOU TO NOT GETTING PAID !!! Plus it will frustrates you a lot because most of the time, you won’t have the home run. => We must enter the right way of course, as usual, BUT BUT BUT, we must take quick wins when it’s on our side. => Sometimes we have low wins when the stocks have low momentums and sometimes big wins if they are big. But at every trade: you should take partial profits along the way. Exemple: you enter long in stock XYZ at 20$ with 100 shares. Your target is 22$. Instead of waiting the price to reach 22$ to sell your 100 shares, what you should do is to take partial profits. So at $20.49 you sell 25 shares, then at $20.99 you sell again 25 shares. If it goes over 21$ then you wait for the price to reach 21.30 to sell again 25 shares BUT if the price goes back to 20.50, just sell 25 shares to secure a bigger win. The remaining of the 25 shares are sold at ~ $21.97 in the case it goes up, or sold at ~ $20.20 if the price drops. That’s how you secure a win and not let the trade goes against you..... And if you have to leave your computer, just use the trailing stop with an ok spread between the price and the stop just not to be stopped too quick if the price moves down a bit before going up.
NASDAQ:UPSTEducation
by youssHark
The Fibonnaci Retracement, A Traders Best FriendWe all know what the fibonnaci is. But how do implement it into trading and how does it work? The tool i use the most is the fibonacci retracement. You drag it across the chart. Drag it on starts to ends of trends and you have a fibonacci retracement now. How does it work? Now that you have drawn your fibonacci you see these ,,zones". The most common number used in fibonacci tools are 0.618 or 1.618, also known as the golden ratio. The most common example of the fibonacci retracement you'll see are rejections from 618 zone to 382. The 764 zone is thought to be a strong rejection zone. The 1 and -0.618 are thought to be reversal zones. Between 0.5 and 0.618 is the ,,golden zone" for shorts or longs. Now lets say we have a fibonnaci with the numbers 1, 0, 0.5, 0.618, 0.764 and -0.618 and i draw it on a up trend from start to finish. What is most likely going to happen is the price will go into our ,,golden zone" and retrace up. Take profit will be -0.618 or 0. And our stops will be just bellow 0.764. You can customize your fibonnaci to your likings and test to see what works and what doesn't. The zones i recomend most are those i mentoned earlier in the example. Remember to draw the fibonnaci on trends, NOT consolidation. If you liked this little guide leave a like and share it to a friend ;).
Education
by fxAljtaric
Ways to solve our overtrading issuesHello, I have an overtrading problem. There are solutions, they are just not on the internet on trading websites. They come up with the same useless nonsense you'd expect "take some time off the screen", "don't try to get rich quick", "defeat your overtrading", "get motivated get a plan and force yourself to stick to it", "be patient" 🤦‍♂️. What is next? "Brush your teeth be a good boy and do your homework"? Or even better "do not overtrade". My brain doesn't care that "less is more" my brain is thirsty. Really there is no such thing as "placing the threshold here". There is not such thing as "not (under/)overtrading". You always either overtrade or undertrade. If we want to compare this to drawing a line, or in other words placing a barrier, it would be like placing a barrier but not 2 or 3D, there would be 20 dimensions, and all opaque, and ever changing, and you do not know which one is more important which one is less. Good luck learning by heart how to do it in a book. Of the past 5 months 4 of those had nearly no good setups for me, it was very hard. I can't just do nothing. So I took really terrible setups. Way too many. Ok let's skip the excuses. Even if I am not trying to go only for the ideal stuff at all, I've been taking way too much, I went through my logbook and I would say I took 2-3 times too many. We want to compete, we want to play the game. Most people, and most people this idea is targeted to, are at an intermediate level to advanced. Beginners that do not even have an edge well overtrading is not really hurting them is it. They do not give back profits, there are no actual profits to give back! A word for beginners. Since we're going to end up investing anyway aren't we? Well perhaps they might as well start with managing a simple low risk portfolio. Build a solid base. Might as well start with the easiest part. Least difficult. And might help avoid overtrading from the start. If I could start over I would not hesitate. Once an intermediate has his niche, a few currencies, his favorite websites & tools, and an edge, well that just won't do will it. There is no resting on laurels until we really have plenty of knowledge, strategies, instruments we can handle. Constantly look for more edges. And progressively widen the business with more currencies. Can also add commodities. With time the base grows, like a strategy game. Might want to test the new strats on a separate low stakes accounts while running the core one on the real account. A player with several edges, and a wide array of instruments, as well as a couple years experience, is what I'd call advanced. At some point if we try adding even more instruments or strategies we'll just mess it up, it takes enough time to manage our vast business already. And after several years the strategies sort of come without looking for them anyway. Plus the markets do not have infinity opportunities to offer. Just keep doing research, improve your understanding of the market, keeping updated on everything... A serious advanced trader will be busy, no worries here. The issue is there are not enough opportunities. We want to compete, we are eager to fight. If nothing happens in the market, price is just random as far as we know (only retail day gamblers will say it's not and we know how well they perform), what to do? Well there are some tricks: - First use and abuse adding to winners. If you're going to overtrade anyway, might as well do it with a winner than some choppy garbage. Not ideal, use this in last resort. Adding to winners should probably have some rules to it. Better to have bigger winners than more losers. - Go manage a portfolio on the side, invest a little / position trade. And when the urge to take a trade comes, find a good winning investment and add to it. I would not start dreaming of adding and adding and adding to Forex, but with stocks, sure. Buying an additional S&P call is like taking a new trade. Better this than gambling on 2019 EURUSD. - If you have a severe addiction and just can't help it, well... I guess in last resort there is still the option of going day gamble on the side, but this should not take your attention from your main business. This can easily eat up time & focus, and mess up results without adding anything positive.
Education
by MrRenev
1
5 Strategy - To help you towards your long term Financial Goals!Hello Traders, Newbies & Fellow Friends! Today I decided to post this Educational & Motivational Post for Everyone to Read! I hope your Enjoy this Journey with me! Before we start! Id like to mention a few Things: Financial Freedom is Not an amount of money , Its a state of mind! Trust Your Brain, Not Your Gut - "When things are going well, people think it’s going to be springtime forever,” & “When things are dark and stormy, they think it’s going to be wintertime forever. But I’m a student of history, and it’s always cyclical." Cultivate Patience - Mastering your finances is just like mastering your mindset—it doesn’t happen overnight. It takes years, if not decades, to see a true transformation. “I think the secret to patience is knowing what your outcome is and focusing on still making progress, It’s about momentum and being a student of what works.” These five strategies can help you stay on track toward your long-term financial goals: 1. HOME in on what matters! Be strategic about the financial news that you consume. If you are trading on the Forex Market, there’s no need to check your chart every 10min. You will only drive yourself crazy. Instead, spend those 30 minutes doing something valuable like reading a book or watching a YouTube channel (Global Fx Education) about a financial strategy. “We’re drowning in information but starving for wisdom,” “The only way to stay strong and centered is to be clear on what you want to serve, stand guard at the door of your mind, and make sure you’re feeding your mind something besides Nonsense. - invest in yourself!! 2. LEARN to be comfortable with risk! Even the safest trading conditions have a level of risk—tolerating it is simply part of the game. “Risk is the secret to success,” “If you want to succeed at any level— in Forex Market, in your contribution to the world—you have to learn how to deal with this four-letter word.” Trading should be based on goals and what we’re trying to accomplish,” 3. FOCUS on what you already have! High achievers always tend to focus on self-improvement! But if you’re always focused on what’s missing, you’ll never be able to attain true happiness. 𝗖𝗵𝗮𝗻𝗴𝗲 𝘆𝗼𝘂𝗿 𝗺𝗶𝗻𝗱𝘀𝗲𝘁 to focus on what you do have: Perhaps you don’t possess enough money to travel and donate as much as you would like to charity, but you do possess enough to pay for a sizable share of your child’s college For Example. That’s big! 4. DON’T MAKE impulsive decisions. If you find yourself tempted to make rash decisions with your money, you’re not alone. “Humans aren’t really wired to be great investors; it’s just not the way we are built,” we often make decisions based on emotions or intuition rather than facts.” 5.KNOW your limits! The world’s most skilled investors didn’t make it big due to one or two lucky investments—they’ve spent their lives learning how to be the best at what they do.! Like an wise man always Told me - Rome wasn't Built in a Day, Take careful consideration in everything you do. Notes - Adjust Your Worldview With the volatility of the Stock market & Forex Market, political division across countries and unpredictability of the pandemic, it can often feel like we’re living during a terrible time in history. But a little dose of perspective can remind us that’s not necessarily the case. It’s human nature to see things with a negativity bias, But it’s important for Investors / Traders to have an optimistic outlook on the world. “If you accept that it’s a great time to be alive—life expectancy is going up, the population is growing, we’re innovating and we’re getting better every year—then that’s the kind of place where companies / Assets / Markets can thrive,” “And if they thrive, you’re going to do well as an investor / Trader.” Those who choose to view the world through an optimistic lens will prosper, Remember this - “Some people freeze to death in the winter,” while “Others learn how to snowboard and spend time with their family by a warm fire because they know winter is not forever.” Thank You All For Reading This Motivational / Educational Post! I hope it Has changed Your View / Trading Psychology For the future! I have Left my Previous Educational Posts Below! Something Great to do today - Like, Share this Post, Leave me a comment Below! Global Fx Education Stay Safe!
SAXO:XAUUSDEducation
by Global_Fx
3
Forex retail traders in a nutshell99% of retail FX traders are scalpers or day gamblers or "swing" traders. According to a paper on the BOJ website I'll link below, in 2015 a mindblowing 57% of retail clients were "scalpers". 86% were either scalpers (0 to 1 hour) or day gamblers (1 hour to 1 day). They excluded those with positions held over 1 month, 1 week to 1 month was only about 5%, much much smaller than all the day gambling. "Share of accounts by investment time horizon" So it's not 86% of trades it's really 86% of accounts. For something very niche that no one does. www.boj.or.jp Can't blame the FX brokers for giving their clients, which are nearly all gamblers, what they want. These gamblers looking for excitation and with get rich quick dreams. Success rate of 0% not even 1% not sure what's going on up there. They're not even meant for this business at all. Becoming a trader when you have risk & loss aversion facepalm. "It's ok I can work on my flaws and improve" It is like if being an exterminator would pay a whole lot and so people with a phobia, terrified of rats would start getting into the business "Yes I'm scared to death of rats but I can make it work, for the money do not try to demoralize me". Or snakes & spiders maybe that's a better example, more people scared of wittle spiders. Clearly ridiculous. "My whole lower body is paralysed but that won't stop me from running a marathon (on my hands?) and winning!". Since Europe banned binary options (gosh what a scam), which was at least forcing day gamblers to have fixed losses, and with the exception of a few turbos, day gamblers really have their work cut out for them: At least with online casinos they have a fixed loss. Bet 1 coin lose 1 and that's it. But when they day gamble Forex there is not "hard loss" so they can keep letting the loss get bigger and bigger (due to loss aversion). Some regulators want to fight retail trading, and keep spreading FUD about it "99% lose". What do you expect? Doesn't mean it's soooo hard, 99% lose but do not forget 99% are drunk gamblers! Forex especially since the late 2000s and even more since 2013-2015 has very little trends, not much volatility, and not that much returns to offer, so it gets a more and more negative image but FX traders are allowed to look elsewhere when nothing happens. Maybe really dumb regulators are going to ban it the moment it turns and becomes very profitable again. They have all these mental flaws: - Risk Aversion - Loss Aversion - Caring what others do and think - Casino mentality - Emotional behavior in general (FOMO, regret, confirmation bias, denial, etc many more) About the casino mentality here are 2 articles about a recent comment by Charlie Munger: www.nasdaq.com www.investopedia.com These day gamblers, at least they should pick the correct tools where they might have a chance. The best one has to be the DAX (the Dow Jones might come close too): Pros: - Very small costs (house edge is the smallest) - Lots of activity while it is open for 8 hours - I think about 1/5 days are good trend days - 90% of days have the top or bottom of the day in the first 90 minutes I think, or something like that - There are other cool stats but I don't really remember - AND many other day gamblers also bet on it! The money gamblers hope to win has to come from somewhere, well here it comes from other day gamblers. So I'm guessing all the day gamblers just do the same thing? Buy the trend when there may be one, and what separates the winners from the losers is the ones with the biggest... personalities hold their winners and have what it takes to exit losers fast... And that's it... Zero intelligence... I do not know or understand what gets the vast majority into this whole super short term game, broker propaganda? That's just how gambling mentality works? 99% can't just all be gamblers? Did people lie to them and tell them this is how you are supposed to trade? Why did I never hear about this lie myself? Does it come from what they saw in some movies and tv? (I never watch tv).
XETR:DAXEducation
by MrRenev
1
Think like a Hedge-FundImagine that you are a Hedge-Fund manager, you have a lot of money to invest. You are looking to invest in AAPL for example. Let's assume for the debate, that you as a fund manager can buy any amount of stock that is traded that day. This assumption is made because we want the Anchored VWAP to represent our position line. Anchored VWAP = is a tool that you can use that calculates the average price of volume that was traded from a certain point. In practice, since you don't have a lot of money, if you could buy 1/100M stocks each day (100M is avg volume, which means you will buy /100M), your position line will be very similar, but proportional to a private account. You decide to grow your position line when the price is after a big correction and it moved above the EMA. You go only LONG, you buy every stock that is traded (you are a Huge hedge fund manager, remember?) Path 1: You start to accumulate a position. Your position line is growing in size, but it also rises in price since you are buying stocks at a higher price. In green, you can see your position line which is also your break-even line. As you can see, the price is always above the green line, which means that you are in GREEN all the time while you are in this buying campaign. Path 2: The light blue line is where your position line will get "stuck" and will not rise if you decide to stop and not add more to your position from that point in time. Path 3: Path 3 is your position line given that you keep adding to your position even in the sideways action. You just keep buying and buying. Red line: The red line is the Anchored VWAP that will be if you want to start selling all your position. You sell every day and keep selling. This is your average selling line. Conclusion: You can see that either if you choose path 2 or 3, you will all the time be in GREEN position. If you choose to stop buying and start selling (Path 2), your average return on the position will be 32%. You entered little by little, minimum risk in the position. You have a lot of "AIR" from path 2 to where the price is currently in. This post is a continuation of the post about average-up strategy. The same line of thinking. If you like, follow and like this idea so it will be saved in your saved ideas for future reference.
NASDAQ:AAPLEducation
by ZoharCho
1
Mitigating High Risk Long Positions with CoveringStop losses are an, often unwelcome, but ultimately necessary and life saving tactic to day trading. When going long, setting a high stop loss can be beneficial for getting out of bad trades quickly with small losses, and opening yourself up up more opportunities for good trades. Setting a low stop loss on the other hand, can be beneficial by greatly increasing your profit. Many trades that seem bad initially end up rallying and turning profitable. Generally speaking, the lower your stop loss, the higher your percentage of good trades. The downside to a low stop loss of course is that trades take longer, locking your funds up, and what if price actually hits your super low stop loss? You've lost a super amount of money. In my trading career so far, I've preferred a low stop loss. Losing out on a good trade due to a conservative stop loss is more painful to me than the risk presented by a liberal one. But this is a high risk to accept. Losing, say, 20% of my trading capital is definitely something I want to avoid, but not at the cost of a high stop loss. So, I can hedge my position, mitigate my risk, in one of a few ways. I can open a short position when I see my long position go south. Or I can engage in Dollar Cost Averaging: I buy more as the price falls to lower my average position size and ultimately my target profit. These are good options, but come with their own side effects. Opening a short position opens you up to risks associated with a short position, i.e. price suddenly shoots up. And Dollar Cost Averaging requires additional funds to keep buying. What else can I do? Enter "Covering". From Investopedia: "To cover is to take a defensive action to lower the risk exposure of a position" The graph attached here is a demonstration of Covering (the exact spots for buying/selling were picked hastily; this example is purely conceptual and an ideal situation). The basic idea is: when price begins to fall, sell it, just like a stop loss. However, unlike a stop loss, the intention is to buy back in at a lower price when price begins to rise again. This is like dollar cost averaging, because you're, in a sense, lowering your average position size. The difference is you don't need additional funds. This is also like short selling, because you rely on the price continuing to fall, but you haven't borrowed anything in order to benefit from this fall. As you can see in the diagram, as you sell and buy back, the amount of shares/coins/whatever you can afford off your initial capital increases, thus either increasing your profit if the trade hits the profit target, or decreasing your losses if the trade hits your actual stop loss. Here's how Ive been setting up my covers: When price begins to fall, I set a conditional market sell somewhere below the nearest support. If price falls to this level, I immediately sell everything Once I've sold all my shares, I set a trailing stop loss for the cover; I generally do ~1.2%. If, after I sell, price rises 1.2%, I buy back as many shares as I can with the money I got from selling earlier. Ideally, this trailing stop falls well below where I sold. Rinse and repeat until price either hits your original take profit or your original stop loss. Some things to note. Do not buy below your original stop loss! The purpose of this strategy is to respect your original decision, not make new ones . This is meant to mitigate a high risk situation, don't expose yourself to more risk in doing so. Also, you theoretically want to buy back above your original stop loss, even if it looks like it's going to fall through. Make your own call here, but by not buying back, you've essentially just changed where your original stop loss is, and thus changed your original trade decision. Of course, nothing is without its own risks. It's quite possible that you get stopped out for a loss every time you sell, i.e. you sold, price went up, so you buy back at a higher price to stay in the trade. This will eat into your profit if the profit target is eventually hit, or simply add to your losses if the stop loss is hit. From my point of view, that risk is less painful than the risk of hitting a low stop loss without covering. You theoretically give yourself more chances of being right with these micro trades inside of your larger trade, and if you get lucky, as is the case in my diagram, you might actually profit even if your original stop loss is hit. This strategy requires attention, for sure, but if you're both strategic and lucky, you can really save yourself from the downsides of a high risk trade without adding money to the pool, or exposing yourself to short selling risk.
COINBASE:COMPUSDEducation
by tapRoot_coding
1
How To Get Out of a Good Trade? - Setting Your TPHi Traders, today's topic regarding 'How To Get Out of a Good Trade? - Setting Your TP' . Are you still struggling to set a proper profit target? Or are you still watching some of the best trades reverse against you? It can be frustrating sometimes watching some of the best runners turn into a breakeven OR losing trade. These are some of the methods I personally use to get out of a great position ( Trade Management ) 1. Technical levels (S&R zones) - This is mostly related to 'set and forget' type setup, you identify everything before hand, set your TP at key levels (broader thesis), leave it to run. But one thing when you're setting your target at key levels, you have to first understand the market condition then compare it to the current volatility. Eg. if the market is in a choppy range and you're setting your target at the all-time-high, it makes no sense (unrealistic) . - Also know that S&R are zones, so if you're setting your target at the absolute tip of the resistance, there'd be times where market just reverse against you, because mostly likely you've neglected the " zone " factor 2. Trailing Stops (Moving averages OR Prior high/ low) • Moving Averages This is great when you're looking for an extension sort of market movement, such as trading a flag/ exhaustion pattern. You're betting that the market will keep banging into your intended direction. How to trail it? You must first Identify the strength of the trend - Medium OR Weak trend (deep pullback) = 50ema to trail it - Strong trend (shallow pullback) = 18ema to trail it • Prior high/ low This is great when the market is in a strong trend, and your thesis is telling you that it MUST respect the higher highs & higher lows/ lower highs & lower lows sequence - Go down to lower timeframe such as 15m, everytime when price forms a minor level, trail your stops to that structural area - This method also helps you to keep track with the fresh momentum If you're constantly watching the market reverse against you, there few main issues are - You're having your target way too far (unrealistic TP), identify the daily ATR, then understand the probable and possible. - You're looking for an extension move in a ranging condition (market isn't going to keep ripping into one direction, there will be times where it ranges, this is when you MUST have a realistic target such as setting them at previous swing high/ low) 3. Fixed RR This is great if you're looking for a more systematic method to handle your TP & emotion at the same time - Eg 1:3RR - But by using this method, you'd somehow decrease your long-term expectancy as you're getting out of position way too soon sometimes - Yes you do eliminate some effort to figure out your TP in every setup, but you'd tend to have many ' re-entries ' too, as the frustration of getting out of a good position too early is overwhelming too. Feel free to comment below what's your worst nightmare in trading! "I know where I'm getting out before I get in." - Bruce Kovner Trade safe as usual. Do follow my profile for daily fx forecast & educational content.
KRAKEN:BTCUSDEducation
by TraderNeoh
33
8 Steps To Make A Forex Trade!!8 Step To Make A Forex Trade: 1) Start the Trading Platform- The first step is opening the trading platform. 2) Open The Chart- Now choose a currency pair and open a chart. Select a time frame. 3) Add Indicators (if you want too)- or skip this step. 4) Place The Order- Now prepare to place the order. 5) Set The Stop Loss And Take Profit Levels- Now set your stop loss and take profit levels. This step is optional but highly recommended. Experienced traders have found that setting a stop loss at half the pip amount or less than your take profit level can set you up for long-term success. This is because you can be right less than half the time and still come out at the end of the week, month, year ahead if you have a favorable risk-reward. Setting the stop loss will limit your losses if the market does not move in the preferred direction. Setting the take profit level will make sure that the trade exits in profit once the market makes the downward move that is expected. It can be an advantage to set these levels when you place the trade because once the trade is actually in the market, the pressure can make it difficult to make decisions. 6) Order Confirmation- Submit order and wait for confirmation screen. Confirmation is important as is ticket number because you may need to reference the ticket number if you need to call broker about trade. Of course, you don't want anything wrong to happen with execution, but if there is a mistake in execution on part of broker you will need to go to them with confirmation and ticket number so they can correct their mistake and credit account back if necessary. 7) The Waiting Period (Waiting Not Trading Is Where You Make Or Lose Money)- Now waiting period begins. This is the more difficult concepts in Forex trading. Some traders find it helpful to turn off the screen and get away from the market once they've entered so that they are not constantly fretting over market moves. Either way, sticking to a good risk reward is a favorable approach and whether your stop or take profit order gets hit, you have done your job correctly. 8) Trade Completion- Finally, the trade is complete. Trade results can be only three, which are makes money, loses money or breaks even. Remember in trading to do four things: Win Big, Win Small, Lose Small but Never ever Lose Big!!! Risk management on all trades is necessary.
Education
by Anbat
1
All candlestick patterns for Trading : Bullish reversal patternsHello everyone 😃 In this article we present Most useful bullish reversal patterns of candlesticks and How to trade with them. ( Sorry for my irregular chart 🤦‍♂️ I'm not good in drawing 😁 ) 📊 What is Candlestick charts ? Candlestick charts are a type of financial chart for tracking the movement of securities. They have their origins in the centuries-old Japanese rice trade and have made their way into modern day price charting. Some investors find them more visually appealing than the standard bar charts and the price actions easier to interpret. Candlesticks are so named because the rectangular shape and lines on either end resemble a candle with wicks. Each candlestick usually represents one day’s worth of price data about a stock. Over time, the candlesticks group into recognizable patterns that investors can use to make buying and selling decisions. 📍 Bullish reversal Candlestick Patterns : Over time, groups of daily candlesticks fall into recognizable patterns with descriptive names like three white soldiers, dark cloud cover, hammer, morning star, and abandoned baby, to name just a few. Patterns form over a period of one to four weeks and are a source of valuable insight into a stock’s future price action. Before we delve into individual bullish candlestick patterns, note the following two principles: 1- Bullish reversal patterns should form within a downtrend. Otherwise, it’s not a bullish pattern, but a continuation pattern. 2- Most bullish reversal patterns require bullish confirmation. In other words, they must be followed by an upside price move which can come as a long hollow candlestick or a gap up and be accompanied by high trading volume. This confirmation should be observed within three days of the pattern. 📌 The bullish reversal patterns can further be confirmed through other means of traditional technical analysis—like trend lines, momentum, oscillators, or volume indicators—to reaffirm buying pressure. There are a great many candlestick patterns that indicate an opportunity to buy. We will focus on five bullish candlestick patterns that give the strongest reversal signal. 🈺 Now let's talk about patterns that we provided on chart.. ! - Hammer : Hammers have a small real body and a long lower shadow. 📚 The hammer candlestick shows sellers came into the market during the period but by the close the selling had been absorbed and buyers had pushed the price back to near the open. - Inverted hammer : The Inverted Hammer formation is created when the open, low, and close are roughly the same price. Also, there is a long upper shadow which should be at least twice the length of the real body. 📚 The Inverted Hammer candlestick formation occurs mainly at the bottom of downtrends and can act as a warning of a potential bullish reversal pattern. - Dragonfly DOJI : The open, high, and close prices match each other, and the low of the period is significantly lower than the former three. This creates a "T" shape. 📚 A dragonfly DOJI after a price decline warns the price may rise. If the next candle rises that provides confirmation. - Bullish kicker : This pattern is characterized by a sharp reversal in price over the span of two candlesticks. 📚 Traders use kicker patterns to determine which group of market participants is in control of the direction. - Bullish spinning top : A spinning top is a candlestick pattern that has a short real body that's vertically centered between long upper and lower shadows. 📚 Spinning tops are a sign of indecision in the asset; the long upper and lower shadows indicate there wasn't a meaningful change in price between the open and close. - Bullish engulfing : This pattern appears in a downtrend and is a combination of one dark candle followed by a larger hollow candle. 📚 Bullish engulfing patterns are more likely to signal reversals when they are preceded by four or more black candlesticks. - Bullish harami : It is generally indicated by a small increase in price (signified by a white candle) that can be contained within the given equity's downward price movement (signified by black candles) from the past couple of days. 📚 A bullish harami is a candlestick chart indicator for reversal in a bear price movement. - Tweezers bottom : A tweezers bottom occurs when two candles, back to back, occur with very similar lows. 📚 Tweezers are more meaningful as part of other trends, especially pullbacks. - Morning star : A morning star is a visual pattern made up of a tall black candlestick, a smaller black or white candlestick with a short body and long wicks, and a third tall white candlestick. 📚 The middle candle of the morning star captures a moment of market indecision where the bears begin to give way to bulls. The third candle confirms the reversal and can mark a new uptrend. - Morning DOJI star : A Morning Doji Star consists of a long bearish candle, followed by a Doji that has gapped below it, then a third bearish candle that closes well within the body of the first candle and in doing so confirming the reversal. It is considered a strong bullish price reversal candlestick pattern. 📚 It is considered as a signal of a potential upcoming reversal of the current trend of the market. - Bullish abandoned baby : It forms in a downtrend and is composed of three price bars. The first is a large down candle, followed by a doji candle that gaps below the first candle. The next candle opens higher than the doji and moves aggressively to the upside. 📚 This pattern signals the potential end of a downtrend and the start of a price move higher. - Three white soldiers : The pattern consists of three consecutive long-bodied candlesticks that open within the previous candle's real body and a close that exceeds the previous candle's high. 📚 Three white soldiers are considered a reliable reversal pattern when confirmed by other technical indicators like the relative strength index (RSI). 📌 These candlesticks should not have very long shadows and ideally open within the real body of the preceding candle in the pattern. - Three line strike : The bullish formation is composed of a big green candle, 3 up candles, and one down candle erasing the advance made by the prior 3 candles. 📚 After prices trend in a particular direction, they will pause before refreshing higher. This is seen as a continuation pattern and is different from a pattern that would signal a reversal. - Three inside up : The three inside up pattern is a bullish reversal pattern composed of a large down candle, a smaller up candle contained within the prior candle, and then another up candle that closes above the close of the second candle. 📚 Consider using these patterns within the context of an overall trend. For example, use the three inside up during a pullback in an overall uptrend. 📌 These patterns are short-term in nature, and may not always result in a significant or even minor trend change. - Three outside up : The three outside up and three outside down patterns are characterized by one candlestick immediately followed by two candlesticks of opposite shading. 📚 Three outside up/down are patterns of three candlesticks that often signal a reversal in trend. 📌 Each tries to leverage market psychology in order to read near-term changes in sentiment. - Three stars in the south : It is formed by three black or red (down) candles of decreasing size following a price decline. 📚 The pattern indicates a bullish reversal, although the price should ultimately move in the expected direction before taking a trade. This is called confirmation. 📌 The three stars in the south candlestick pattern is a very rare pattern that doesn't typically precede large price moves. - Bullish stick sandwich pattern : One candlestick pattern is the stick sandwich because it resembles a sandwich when plotted on a price chart - they will have the middle candlestick oppositely colored vs. the candlesticks on either side of it, both of which will have a larger trading range than the middle candlestick. 📚 Candlestick charts are used by traders to determine possible price movement based on past patterns; These patterns may indicate either bullish or bearish trends, and so should be used in conjunction with other methods or signals. - Matching low : The matching low pattern is created by two down candlesticks with similar or matching closing prices. 📚 The pattern occurs following a price decline and signals a potential bottom or that price has reached a support level. - Break breakaway : The first candle in the formation is long and black. The second candle is also long gaps away from the first in the direction of the trend. The third candle can be either color, but does not show a change in trend direction. The fourth candle continues in the direction of the proceeding trend. The fifth candlestick has a long white body, opens against the trend and continues in that direction to close the gap. 📚 The Bullish Breakaway pattern is a five candle reversal formation that occurs during a downtrend. - Bullish Tri-Star : Tri-Star patterns form when three consecutive DOJI candlesticks appear at the end of a prolonged trend. 📚 A Tri-Star is a three line candlestick pattern that can signal a possible reversal in the current trend, be it bullish or bearish. 📍 A Tri-Star pattern near a significant support or resistance level increases the probability of a successful trade. - MARUBOZU : A large real body, There will be no shadow at either sides of the candle, The color of the candle will be of a significant meaning. 📚 MARUBOZU means “bald head” or “shaved head” in Japanese, and this is shown in the absence of wicks or shadow on the candlestick, meaning that the opening or closing price will be the same as the maximum prices of the candle. The absence of shadow indicates that the trading session opened at a high price and close at a low price at the end of the day (or the opposite). 🔴 NOTES : - There are many bullish reversal patterns that we only present most useful patterns for trading ! - Most of them have 2 definition and direction ( Bearish and Bullish ) and we only present bullish reversal patterns ! - For better result in your trading, You need to confirm patterns through trend lines, momentum, oscillators, or volume indicators. ⏰ Best timeframes to work with candlestick patterns : Traders usually use Monthly, Weekly, Daily, 4-Hour, Hourly, 15-Minute and even 1-Minute timeframes. Ideally, traders pick the main timeframe they are interested in and then choose a longer and a shorter timeframe to complement the main one. The longer timeframes typically contain fewer and more reliable signals. The shorter timeframes usually contain more signals with less accuracy. There are several types of traders, and they have different trading styles. 📍 We will provide more contents for candlestick patterns in next weeks ! So stay tuned and support us with your LIKES, COMMENTS and FOLLOWINGS... Have a great moments. @Helical_Trades
NSENG:ACADEMYEducation
by Helical_Trades
122
A different side of the storyWhenever the price is at a structure/zone/psychological level, market makers always find a way to build momentum before moving the market. I know a lot of people who post videos on youtube explaining some terms and market approach never touch the part of being trapped by the market makers and also failing to detect a pullback or reversal. This knowledge is needed and can only be obtained by those who really want to know how the BANKS trade against us. So lemme cut it short, as soon as the price is at a level, market makers give false signals/ bait to a lot of new traders or even old traders and they all take it at the same period of time. Its not that they know exactly where your stops are, or how much is on your account. They just move against you and you with a small account will be trapped in the hunt for the big accounts stops. So my advice to you is to always wait for this hunts to happen and sell or buy after that, Dont be a break and retest trader. Its very dangerous.
Education
by ChartW1zard
2
Be Realistic ! there are always alternative scenariosit is vital for all traders to control their emotions. getting excited is natural for everyone but if you want to be a successful trader you have to learn how to control your feeling. we trade based on the facts not feelings!. there are always alternative scenarios and a wise trader should be prepared in advance. being aware of alternatives can help you to control your feelings and manage your trade well. one tool to manage the trade is using Multi Unit Trade Strategy which will be discussed in another separate post. Here I want to introduce some alternatives for market path when a trader enters to a trade after an ABC correction . First I should emphasize that I used BIDU chart just as an example and I do not claim that BIDU will follow what has been shown on the chart. Alternatives after a possible ABC corrections are: 1- starting a new impulse wave and making a new major high : traders hope for this scenario and enter into the trade for making noticeable profit but does it always happen? 2- what we consider a wave C is not actually what we considered and it was in fact wave 3 of a descending impulse wave. experienced traders have faced this scenario many times. I showed this possible scenario on the BIDU Chart. 3- Stock may make a flat correction. this alternative has been drawn on the chart and you can see it's internal structure. flat corrections can be very misleading. be cautious !. 4- Dobule or triple Three correction. this scenario may pose huge loses to unexperienced traders when they feel correction is over and they see market is going up but suddenly every thing will change. Also recognizing a new entry point is not so easy in this type of correction. an example of a Double Three Correction has been shown on the chart. Good Luck Friends
NASDAQ:BIDUEducation
by SaeedSajedi
4
5 Tips for Newbie Trader💯1. Two dangerous extremes On the way to making a stable income in the financial markets, newbie traders face two extremes: a) First - you can learn a lot and for a long time, but you still can't go to real trading. b) The second is to start without knowledge. Both paths lead to failure. By the way, it is the traders who have lost funds from ignorance of the principles of trading, and mainly create a negative image of the financial markets. You can't make money without knowledge! And to separate the process of gaining knowledge from practice too. Therefore, a beginner in the financial markets must both learn and practice. 2. Best instruments to trade for a newbie trader Now forex brokers provide a wide range of financial instruments within one trading platform: currency pairs, CFD contracts on stocks, futures , cryptocurrencies, commodities ( oil , gold , silver , etc.). It's easy for a beginner to get lost in this variety. In order to facilitate the choice, study separately the features of the different types of markets. 3. Trading psychology: the third pillar of successful trading An important factor to pay attention to when reading books for beginner traders is the ability to manage your own emotions. Trading is an amazing area. All your habits, behavior patterns, strengths and weaknesses of character are immediately reflected in the trading account and bring results in monetary terms. So you either earn or lose. Newbie trader, faced with a storm of emotions in the process of trading, should know: he is not alone. Most traders experience the same feelings, and those who have been making money in this area for a long time have learned to turn them to their advantage. And we are ready to share tips. 4.What a beginner trader needs to know about money management You already know that trading in financial markets is a high risk area. However, this risk is completely manageable, and if you know how to do it, you will be able to earn consistently. In addition to a profitable trading strategy, a trader needs an understandable money management system and competent risk management. The safety of your account depends on them. Here are the ingredients for a good money management system: a) Stop loss. It must be set correctly, according to the requirements of the market and your trading strategy. It will allow you to reduce your risk if your prediction turns out to be wrong or out of date. b) The ratio of risk and reward in each trading position. Usually trading strategies provide for it at a level of 1: 3 and higher. The minimum allowed ratio is 1: 2, only then the deal makes sense. c)The volume of the trade entry. Along with a stop loss, it determines how much or a percentage of your trading account you risk on each trade. d) Risk per position. Based on the mathematical expectation of a trading strategy, it is necessary to decide what percentage will be the maximum risk in each transaction. The smaller it is, the safer your trade. 5. Trading and life: how to organize your work So, you have decided to start making money through trading. Motivating pictures with a trader who sits under a palm tree with a cocktail in his hands and spends an hour a day to check how profit is dripping into his account - this is clearly not about the start of a career. At the very beginning (and eventually too) you need to have an organized working day for trading. 1) Set aside time on weekdays that you will devote to trading. 2) Do not combine it with other activities: dinner, watching TV series, spending an evening with your family, etc. Trading requires extreme concentration. 3) If you are a beginner, take the study plan presented in this article, allocate the stages in time and systematically, without scattering, move along it to your first profit. 4) Before you start trading, do a market analysis every day. ___________________________________________________ P.S. Can you add more, wolves?🔥
HITBTC:CRDTUSDEducation
by Berzerk_invest
9
All candlestick patterns for Trading : Bearish reversal patternsHello everyone 😃 In this article we present Most useful bearish reversal patterns of candlesticks and How to trade with them. ( Sorry for my irregular chart 🤦‍♂️ I'm not good in drawing 😁 ) 📊 What is Candlestick charts ? Candlestick charts are a type of financial chart for tracking the movement of securities. They have their origins in the centuries-old Japanese rice trade and have made their way into modern day price charting. Some investors find them more visually appealing than the standard bar charts and the price actions easier to interpret. Candlesticks are so named because the rectangular shape and lines on either end resemble a candle with wicks. Each candlestick usually represents one day’s worth of price data about a stock. Over time, the candlesticks group into recognizable patterns that investors can use to make buying and selling decisions. 📍 Bearish reversal candlestick patterns : Bearish reversal candlestick patterns can form with one or more candlesticks; most require bearish confirmation. The actual reversal indicates that selling pressure overwhelmed buying pressure for one or more days, but it remains unclear whether or not sustained selling or lack of buyers will continue to push prices lower. Without confirmation, many of these patterns would be considered neutral and merely indicate a potential resistance level at best. Bearish confirmation means further downside follow through, such as a gap down, long black candlestick or high volume decline. Because candlestick patterns are short-term and usually effective for 1-2 weeks, bearish confirmation should come within 1-3 days. To be considered a bearish reversal , there should be an existing uptrend to reverse. It does not have to be a major uptrend, but should be up for the short term or at least over the last few days. A dark cloud cover after a sharp decline or near new lows is unlikely to be a valid bearish reversal pattern. Bearish reversal patterns within a downtrend would simply confirm existing selling pressure and could be considered continuation patterns. There are many methods available to determine the trend. An uptrend can be established using moving averages, peak/trough analysis or trend lines. A security could be deemed in an uptrend based on one or more of the following : - The security is trading above its 20-day exponential moving average (EMA). - Each reaction peak and trough is higher than the previous. - The security is trading above a trend line. 🈺 Now let's talk about patterns that we provided on chart.. ! - Hanging man : The hanging man is characterized by a small "body" on top of a long lower shadow. The shadow underneath should be at least twice the length of the body. 📚 The hanging man represents a potential reversal in an uptrend. While selling an asset solely based on a hanging man pattern is a risky proposition, many believe it's a key piece of evidence that market sentiment is beginning to turn. The strength in the uptrend is no longer there. - Gravestone DOJI : A gravestone DOJI is a bearish reversal candlestick pattern that is formed when the open, low, and closing prices are all near each other with a long upper shadow. 📚 A gravestone DOJI is a bearish pattern that suggests a reversal followed by a downtrend in the price action. 📌 A gravestone pattern can be used as a sign to take profits on a bullish position or enter a bearish trade. - Bearish kicker : This pattern is characterized by a sharp reversal in price over the span of two candlesticks. 📚 Traders use kicker patterns to determine which group of market participants is in control of the direction. 📌 The pattern points to a strong change in investors' attitudes towards a security that typically follows the release of valuable information about a company, industry, or economy. - Shooting stars : A shooting star is a bearish candlestick with a long upper shadow, little or no lower shadow, and a small real body near the low of the day. 📚 A shooting star occurs after an advance and indicates the price could start falling. The formation is bearish because the price tried to rise significantly during the day, but then the sellers took over and pushed the price back down toward the open. - Bearish spinning top : A spinning top is a candlestick pattern that has a short real body that's vertically centered between long upper and lower shadows. 📚 The real body should be small, showing little difference between the open and close prices. 📌 Since buyers and sellers both pushed the price, but couldn't maintain it, the pattern shows indecision and that more sideways movement could follow. - Bearish engulfing : A bearish engulfing pattern is a technical chart pattern that signals lower prices to come. The pattern consists of an up (white or green) candlestick followed by a large down (black or red) candlestick that eclipses or "engulfs" the smaller up candle. 📚 A bearish engulfing pattern can occur anywhere, but it is more significant if it occurs after a price advance. This could be an uptrend or a pullback to the upside with a larger downtrend. 🔴 The pattern can be important because it shows sellers have overtaken the buyers and are pushing the price more aggressively down (down candle) than the buyers were able to push it up (up candle). - Bearish harami : A bearish harami is a two bar Japanese candlestick pattern that suggests prices may soon reverse to the downside. The pattern consists of a long white candle followed by a small black candle. The opening and closing prices of the second candle must be contained within the body of the first candle. An uptrend precedes the formation of a bearish harami. 📚 A bearish harami is a candlestick chart indicator for reversal in a bull price movement. 📌 Traders can use technical indicators, such as the relative strength index (RSI) and the stochastic oscillator with a bearish harami to increase the chance of a successful trade. - Dark cloud cover : Both candles should be relatively large, showing strong participation by traders and investors. When the pattern occurs with small candles it is typically less significant. 📚 Dark Cloud Cover is a candlestick pattern that shows a shift in momentum to the downside following a price rise. The pattern is composed of a bearish candle that opens above but then closes below the midpoint of the prior bullish candle. 📌 Traders typically see if the candle following the bearish candle also shows declining prices. A further price decline following the bearish candle is called confirmation. - Evening star : An evening star is a stock-price chart pattern used by technical analysts to detect when a trend is about to reverse. It is a bearish candlestick pattern consisting of three candles: a large white candlestick, a small-bodied candle, and a red candle. 📚 Evening star patterns are associated with the top of a price uptrend, signifying that the uptrend is nearing its end. - Evening DOJI star : The Evening DOJI Star is a bearish reversal pattern, being very similar to the Evening Star. The only difference is that the Evening Doji Star needs to have a doji candle (except the Four-Price Doji) on the second line. The DOJI candle (second line) should not be preceded by or followed by a price gap. 📚 The pattern, as every other candlestick pattern, should be confirmed on the next candles by breaking out of the support zone or a trendline. If the occurrence is confirmed, then its third line may act as a resistance area. It also happens, however, that the pattern is merely a short pause prior further price increases. - Bearish abandoned baby : A bearish abandoned baby is a specialized candlestick pattern consisting of three candles, one with rising prices, a second with holding prices, and a third with falling prices. Technical analysts expect that this pattern signals at least a short-term reversal in a currently upward trending price. 📚 This is a rare pattern that has a fairly strong track record for forecasting a short-term downward trend. The key item of the pattern is the middle day, which should have a gap in front of it and following it, and which should close the session with price unchanged. - Three black crows : The black crow pattern consists of three consecutive long-bodied candlesticks that have opened within the real body of the previous candle and closed lower than the previous candle. 📚 Three black crows is a bearish candlestick pattern used to predict the reversal of a current uptrend. Traders use it alongside other technical indicators such as the relative strength index (RSI). - Tweezer top : A tweezers topping pattern occurs when the highs of two candlesticks occur at almost exactly the same level following an advance. 📚 Tweezers are more meaningful as part of other trends, especially pullbacks. - Three inside down : The three inside down pattern is a bearish reversal pattern composed of a large up candle, a smaller down candle contained within the prior candle, and then another down candle that closes below the close of the second candle. 📚 The down version of the pattern is bearish. It shows the price move higher is ending and the price is starting to move lower. Here are the characteristics of the pattern. - Three outside down : The three outside down describe a pair of three-candle reversal patterns that appear on candlestick charts. The pattern requires three candles to form in a specific sequence, showing that the current trend has lost momentum and might signal a reversal of an existing trend. 📚 The first candle marks the beginning of the end for the prevailing trend as the second candle engulfs the first candle. The third candle marks an acceleration of the reversal. - Advance block : Advance block is the name given to a candlestick trading pattern. The pattern is a three-candle bearish setup that is considered to be a reversal pattern—a suggestion that price action is about to change from what had been an upward trend to a downward trend in relatively short time frames. 📚 An advance block is a three-period candlestick pattern considered to forecast a reversal. The pattern's success at predicting reversal is barely above random. - Bearish stick sandwich : One candlestick pattern is the stick sandwich because it resembles a sandwich when plotted on a price chart - they will have the middle candlestick oppositely colored vs. the candlesticks on either side of it, both of which will have a larger trading range than the middle candlestick. 📚 These patterns may indicate either bullish or bearish trends, and so should be used in conjunction with other methods or signals - Matching high : The first line of the pattern appears as a long line whereas the second one can be either long or short. Both candle lines need to close at the same level. Additionally, the opening of the second candle need to be higher than the opening of the previous candle. 📚 The Matching High is built of two MARUBOZO candles having white bodies. In other words, it can be a White MARUBOZO or a Closing White MARUBOZO. - Bearish breakaway : The bearish breakaway is a formation of five candlesticks where the first is always bullish and the last is always bearish. The middle candlesticks will be rising and can be either bearish or bullish, but will usually be bullish. 📚 A bearish breakaway is a chart formation that can appear in a rising market when the price starts to pull or break away gradually to the downside. - Bearish Tri-Star : Tri-Star patterns form when three consecutive DOJI candlesticks appear at the end of a prolonged trend. 📚 A Tri-Star pattern near a significant support or resistance level increases the probability of a successful trade. - MARUBOZO : The black MARUBOZO is simply a long black (down, or red on the charts below) candle, with little to no upper or lower shadows. The pattern shows that sellers controlled the trading day from open to close, and is therefore a bearish pattern. 📚 How to avoid false MARUBOZO signals and setting stop-loss : If bearish, take a short when price falls below; Place a stop above candlestick. 🔴 NOTES : - There are many bearish reversal patterns that we only present most useful patterns for trading ! - Most of them have 2 definition and direction ( Bearish and Bullish ) and we only present bearish reversal patterns ! - For better result in your trading, You need to confirm patterns through trend lines , momentum, oscillators, or volume indicators. ⏰ Best timeframes to work with candlestick patterns : Traders usually use Monthly, Weekly, Daily, 4-Hour, Hourly, 15-Minute and even 1-Minute timeframes. Ideally, traders pick the main timeframe they are interested in and then choose a longer and a shorter timeframe to complement the main one . The longer timeframes typically contain fewer and more reliable signals. The shorter timeframes usually contain more signals with less accuracy. There are several types of traders, and they have different trading styles. 📍 We will provide more contents for candlestick patterns in next weeks ! So stay tuned and support us with your LIKES, COMMENTS and FOLLOWINGS... Have a great moments. @Helical_Trades
NSENG:ACADEMYEducation
by Helical_Trades
57
The Importance of a Trading Plan - How To Create One?Hi Traders. Today's topic is regarding 'How To Create a Trading Plan?'. Throughout my personal trading career, trading plan is often neglected by majority of novice Traders. A trading plan shouldn't be something complicated and heavy, simplicity is the key. Set realistic objectives and checklists that you are able to stick to it strictly on a daily basis. These are some of the important elements should be included 1. Instruments Know which instruments you are trying to focus on. In your earlier phase, focus on one instrument, really dig into it, put in the work to master the craft. 'Diversification may preserves wealth, but concentration builds wealth.' - Warren Buffett 2. Timeframe Multiple timeframe / Top-Down analysis is vital, it allows you to identify the long-term trend & short-term sentiment. But avoid distracting yourself with too many timeframes OR irrelevant timeframes. I'd always suggest to not look at more than 3 timeframes. A. Entry timeframe: Identify a timeframe that you'd find your entry triggers and place your trade, such as 5-30m charts (Lower timeframe) B. Analyzing timeframe: Identify two higher timeframes that'd allow you to view the bigger picture better, such as 1h - 4h charts (Higher timeframe) Eg. If you are a scalper, it is pointless for you to analyze the weekly chart. Eg. If you are a swing trader, looking at the 5m chart could be too intensive for your brain. 3. Risk Management This is the most important aspect that'd determine your long-term profitability. A. Risk per trade: Percentage-based risk is the most common method to manage your risk, such as 1-2% risk per trade. B. Maximum daily & weekly drawdown: Identify what's the worst scenario you'd allow yourself to sink into. There will be times where you are trading on tilt, things just get worse. This is when your maximum drawdown comes into play, pulling yourself out of the emotional vortex , prevent yourself from those irrational behaviour. 4. Personal Strengths & Weaknesses Explore your personality. Trading is about knowing your strengths & weaknesses, then leverage them into your advantage. There's no way you can completely eliminate emotion in trading, we're all human. But what's more important is to organize your mind to control its performance. A. Aggressive: If you're an aggressive trader, focus more on a trending condition, you should probably avoid the sideway condition (over-trade/ revenge trade tendency) B. Conservative: If you're an overly conservative trader (fear & hesitation elements), you should probably reduce down your checklist and simplify your trading system. 5. Strategies/ System This relates to your personal strengths & weaknesses too. Develop strategies/ system that suit your personality the most, then keep improving it. Identify which market condition you're the best at (Trend/ Range/ Channel), then develop successful strategies to capitalize on these market states. 6. Routine/ Action Plan Successful Traders tend to find trading to be a 'boring' process, they simply scan through charts, identify setups that fits into their criteria. Have a set of routine, simplify them and stick to them everyday even if you feel lazy. Eg. Spend 1h per day to analyze the market before you jump onto any trades Eg. Journal your trades every night Eg. Spend 1h per day to review & reflect your progress If you still don't have a Trading Plan, take action and create one now! 'Success comes from consistency, not what you do occasionally.' - Neoh Trade safe as usual, keep your risk managed. Do follow my profile for daily fx forecast & educational content.
KRAKEN:BTCUSDEducation
by TraderNeoh
6
How to identify a correction for the next impulse move ? How to identify if a correction is finished/completed and ready for the next impulse move ? Hello everyone: In this educational video I will go over how to properly identify a correction in price action analysis. I recently made a price action workshop live stream video that went over everything on impulse - correction, structures/patterns, continuation and reversal corrections, but I still get a lot of questions on identifying corrections itself. How to draw, use the trendlines to identify a correction, and how to understand they are going to complete/finish. In my opinion this is the most important part in technical analysis. We need to understand that the market moves in phrases, it can only be in the impulsive phrase or corrective phrase. The key to trading is to understand when a correction finishes, we are going to get the impulsive phrase which will give us traders a better edge in the market to enter, where the momentum is strong. I have made many educational posts on price action analysis, specifically on continuation or reversal correction, which I will put the links below. Any questions, comments, or feedback welcome to let me know. Thank you Jojo Price Action Workshop www.tradingview.com Impulse VS Correction Continuation and Reversal Correction Multi-time frame analysis Continuation Bull/Bear Flag Reversal Ascending/Descending Channel Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Expanding Structure/Pattern
BINANCE:BNBUSDEducation
by jojofang0901
62
Where to start as a beginner trader?Millions of new traders come to trade the markets every day, but most get out with a smaller capital and more knowledge. Trading is a game of odds. nothing is 100%. So how do we turn the odds into our favor? There are two ways to become a profitable trader but they all come down to knowledge. This one i recomend. Since you are going to take loses anyway, pay for a course, book or mentor. You will not make it in this business without spending a cent (or losing it in a trade). You can even atend trading classes. Just make sure to backround check whichever method you chose. This way is harder and takes more time. it is learning the hard way. You trade without any knowledge and learn as you go. Of course, do this on a demo account. You will probably commit trades on a demo account (which is fine) but just remember you bought yourself knowledge but not a mindset. So now, you know the basics of trading and its concepts. What is left to do is work the numbers. Make a trading plan. Find a strategy that works with the right risk managment and you are on your way to become a profitable trader. If you have problems with closing trades early or something similar, check out my other educational post. As always, good luck traders.
Education
by fxAljtaric
5
How amateurs design a strategy versus how masters do itThe amateur gets this really no brain system where an indicator or chart pattern or robot or telegram sends them a signal then it's just a matter of placing a limit order with target and stop loss. And walk away to avoid messing with it because of "emotions". And it is the same process for every strategy no matter what any instrument etc you name it. Well to be fair 100% of the amateur strategies are the same: Reversal. Buy if price go down, Sell if price go up. They found the holy grail of my. They actually even pat themselves on the back for having something this simple. And it does not even end there. Adding insult to injury, they actually try to simplify it. Reminds me of these day traders that made sure their emotions would not get in the way and "just left the computer and when I come back it will all be better", and when they came back they had lost everything. On the opposite the master first of all has a different process for every strategy, he will not trade a pullback the same way he does a breakout. The setup that he can get anywhere he wants it does not matter, this is just the 1rst step of here I mentionned 14. I cannot make it simpler than this, al these steps are necessary. Once the setup is here and correlations, quality, and the stop is checked, you need some conditions to enter, you can't just "simplify" and remove this step, nor the stop, nor the quality of the setup one does not simply pick any piece of junk that presents itself. Not only for each strategy there is a different process. But for each instrument too, now now in Forex majors they all behave in a similar manner so we don't have to completely re-invent the wheel each time. But if one looked at stocks the time frame is different, breakouts do not act the same way, pullbacks are smaller maybe, trends obviously are much stronger and one can keep adding, if you keep adding in FX well good luck! They don't go very far. Also for 1 instrument and strategy the 14 steps are not the same each time: Depending on step "quality" or "entry conditions" for example, what follows will vary, if you entered a breakout early on and answered to the question "Where can I hope target is?" with "far" then the trailing will be a different sub-process supported by experience + excel statistics + intuition + current conditions. Usually Forex at around 5R I stop adding and I get a tighter stop, but if the target is far and China said they are selling then I will hold on get a wider not tighter stop and add more and aim for the moon. It's such a lack of respect that novices expect it to be simple and try even to simplify it, "all you have to do is control your emotions". Same thing as a clown that learns chess moves by heart then expects he can play against GM. Same thing as a clown that thinks he does not need a lawyer all he needs is "the book of laws" and defends himself. Same thing as all the clowns and conspiracy theorists that self diagnose, in 5 minutes and call it a day too. And ignore counterproof. You can't even write it down, not even code a program, each if leads to 10 new if, one would have to spend a lifetime or writing IFs and GOTOs, and it would still miss intuition and current news/conditions/ the current paradigm. It is a long road and there is not a big magical wormhole shortcut. Jesse Livermoore ended up having to sell trading courses, but I don't think he ever said it was simple and you should "not overcomplicate it", did he? In the case of gold: Since 80% think in terms of winrate they see that often the robot thing works, or the exiting winner early thing also has a high winrate. But their brain basically has a bug, a manufacturing error, and this is a bad method, which is why over time they lose money. I'm not the one saying it, scientists are saying the brain of most people has a built-in error, not adapted to the modern world or to reality. Not 1 in 5 new traders will bother calculating the stats for the entry. And not 1 in 5 of those will bother calculating the stats for trailing stop and adding. Either by going with excel enter the numbers to get the stats, or spending enough time to gain experience. They'd love to buy these stats somewhere with a clic I am sure. 1 in 5 times 1 in 5 here you're about at 5% left already. This is the hardest game in the world, not the easiest. My eyes hurt when I see certain claims I swear...
TVC:GOLDEducation
by MrRenev
4
Pending Entry Sell Limit Order (4/4)A pending sell limit is an order placed above price and expecting price then to go down. If you think that price action will continue downwards, but first retrace upwards then use a pending sell limit order. Two risks: Price action not reversing high enough to hit your entry price before going down and second possibility is price action continues upwards hitting your stop loss before going downwards. On noted EurUsd daily chart, trade setup gave a 1:3 risk reward. 50 pip stop loss and 150 pip target or profit. On larger couple or few day trades on higher daily time frames, using lower lot sizes might be part of your risk management and plan.
Education
by Anbat
Pending Entry Buy Limit Order (3/4)If you want to buy a pair at a lower price and think price action will go lower before price action goes higher in your trade direction, then use a pending buy limit order which is placed below current price and if your entry price is hit on its retracement, then buy limit order is activated. You are in trade. Two risks are price retracement does not hit your entry price and take off in a bullish or upper wards direction without your trade and/or price retraces thru your entry prices and keeps going lower and hits your stop loss. To avoid some of these use major support or resistance areas, previous price action left on chart and fib ret tool, which a lot of price reversals hit the 50% to 61.8% then reverse up in bullish trend or major trend direction. On EurUsd daily chart, noted 1:4 risk reward trade with a 40 pip stop/160 pip target. Use the right risk management for your account size and trade according to your plan. Good luck.
Education
by Anbat