MY APPROACH TO MAKING MONEYMy main trading principle is that the price always moves from swept liquidity levels to untouched liquidity levels by forming structure on the way.
Liquidity and Structure is a key for my trading system.
Tradingsystem
DOGE Consolidating at the 50.00% FIB
Hello dear memecoin degens! What a wonderful run from DOGE, the king of meme coins. I hope you're enjoying this!
Looking at the daily time frame, DOGE is consolidating around the 50.00% all-time Fibonacci level. It appears that the price may be forming a bull flag at this level, suggesting a potential breakout in favor of the bulls. However, nothing is certain until it actually happens.
For now, we wait for the price to make its move and simply follow along, just as we did on November 4th when I posted my idea about DOGE at the 78.60% Fib level (if you entered there, it would have been a great trade!). The system remains in a long trade, so for now, we have to wait for it to flip short before considering taking profits. Until then, we watch the action unfold.
Thank you for reading, and feel free to boost or comment.
Happy trading!
POL (ex-MATIC) Approaching the 200-Day Moving AverageHello, dear readers, and happy Thursday!
As the week comes to an end, I hope you’re all making the most of it.
Today, we’re looking at the Polygon Ecosystem Token on the daily chart. The price is approaching the 200-day moving average (200MA) and the 0.236 Fibonacci retracement level. While upside volume is beginning to lose momentum, this could be a positive sign if we consider the bull flag pattern forming with support along the black line. Typically, volume tends to drop before a significant move triggered by price patterns.
This one is definitely worth monitoring in the future.
Thank you for reading, and happy trading!
AGI PREPARING FOR LONG ENTRY
Hello, fellow crypto enthusiasts! How are you feeling this Tuesday? I hope all is well!
This is AGI on the daily time frame. The system flipped short yesterday, and today the price attempted to climb above the 200 MA but was pushed back down below it.
For now, all we can do is wait for the system to flip to the long side.
Patience is key in this game.
Thank you for reading!
AAVE PREPARING FOR LONG ENTRY
Hello, fellow crypto enthusiasts! How are you feeling this Tuesday? I hope all is well!
This is AAVE on the daily time frame. The system flipped short three days ago, and the price is currently looking for support at the 0.786 all-time Fibonacci level. Ideally, it would find support here, and the system would flip long again.
For now, we must wait and see how things play out. Conditions are looking promising for a nice long trade, but we need to wait for a clear long entry signal before acting.
Patience is key in this game!
Z-Score & Smart Money Management to Reduce LossesHow to Use Z-Score for Smarter Trading Strategies
In trading, success often depends on your ability to predict market movements and manage your capital efficiently. One of the tools that can give traders an edge is the Z-score, a statistical measure that helps identify patterns in win and loss streaks. This article breaks down what the Z-score is, how it works in trading, and how you can use it to optimize your strategies.
What is Z-Score in Trading?
In simple terms, Z-score measures the distance between an observed outcome (like a win or loss) and the average result in a set of data. In the context of trading, this data set typically represents your wins and losses over time. The Z-score is most commonly found in the range of -3 to +3, with higher scores indicating a greater probability of consecutive wins followed by losses, and lower scores representing more random, unpredictable outcomes.
A high Z-score suggests that your trading strategy is likely to go through a series of wins, followed by a series of losses . This information can help you adjust your capital allocation and manage risk better. Conversely, a low Z-score points to a more chaotic trading environment where wins and losses alternate with little predictability.
How Z-Score Can Improve Your Trading Decisions
1 • Understanding Random vs. Strategic Trading
Traders who act without a strategy tend to experience unpredictable results — one win here, one loss there. This type of trading is driven by randomness and typically has a low Z-score, meaning there is no clear pattern of consecutive wins or losses.
On the other hand, traders who use strategic approaches — like the ones developed by SOFEX —tend to see more predictable outcomes. These strategies often have a higher Z-score, signaling that you can expect a string of wins, followed by a string of losses.
2 • Capital Management Based on Z-Score
The Z-score provides crucial insights into when to adjust your capital. The general rule of thumb is:
• After a streak of wins, reduce your capital. The Z-score indicates that a loss is likely to follow after a series of wins.
• After a loss or streak of losses, increase your capital, as a win is statistically more likely to follow.
For example, if you start with $1,000 and win multiple times in a row, your first instinct might be to increase your capital to $2,000 or even $3,000. However, this is where most traders make a critical mistake .
Based on the Z-score model, it's better to decrease your capital after consecutive wins, as losses are statistically imminent. Conversely, increase your capital after a loss to benefit from the upcoming win streak.
3 • Avoid Overconfidence After Wins
Traders often fall into the trap of increasing their stake after a series of wins, assuming that the market will continue to favor them. However, the Z-score suggests that after 3-5 wins, you should lower your risk and decrease the amount you're trading. By doing so, you protect your profits from the losses that typically follow a winning streak.
4 • How to Apply This in Practice
Let’s walk through a typical trading scenario:
You start with $1,000.
You win multiple trades, so you might be tempted to increase your capital. However, if you understand the Z-score, you’ll know that after several wins, a loss is likely coming soon . Instead of increasing capital, reduce your stake, say, to $500 or $800.
When the inevitable loss comes, you’ve minimized your risk.
After this loss, you can now increase your capital back to $1,500 or $2,000, as the Z-score suggests that a win streak is more probable after a loss.
By following this approach, you avoid major losses after a win streak, and you’re well-positioned to capitalize on the next string of wins.
Key Takeaways for Traders
• Z-score predicts patterns in trading, with high Z-scores indicating win streaks followed by losses, and low Z-scores indicating a more random, unpredictable pattern.
• After consecutive wins, lower your capital to protect your profits, as losses are statistically likely to follow.
• After consecutive losses, increase your capital to take advantage of the upcoming win streak.
Managing your capital based on Z-score predictions allows you to minimize losses and maximize profits, even during market fluctuations.
Final Thoughts
Trading is as much about managing risk as it is about making profits. The Z-score strategy can help traders anticipate win and loss streaks, allowing them to adjust their capital allocation more effectively. By following this model, you can protect yourself from large losses and make smarter decisions about when to scale up or down your trades.
In summary, to optimize your trading:
• Lower capital after multiple wins to avoid large losses.
• Increase capital after losses to take advantage of win streaks.
Implementing these strategies based on the Z-score will not only improve your trading outcomes but also help you build long-term, sustainable profitability.
So the next time you're riding a win streak, remember: it's not the time to increase your stake—it's time to strategically lower it and lock in your profits.
View our video on the subject here .
Thank you for reading. Read our article on the Kelly Criterion in the Related Ideas section!
Z-Score diagram taken from EarnForex .
Why Most Traders Fail—and How You Can Succeed!The charts you provided showcase potential scenarios based on different liquidity zones (LQZ) on multiple timeframes, such as 15M, 1H, and 4H. Let's break down the key insights from the images:
Key Levels:
Weekly Flag Trendline: This yellow trendline represents the long-term trend and acts as a major resistance or support. It’s crucial to monitor price action around this level for significant moves.
4HR LQZ (Liquidity Zone) at 2,532.077: This level signifies an important area of liquidity on the 4-hour chart. It’s a potential reversal point or continuation area depending on how the price interacts with it.
1HR LQZ and 15M LQZ: These shorter timeframe liquidity zones are at 2,482.129 and 2,470.544 respectively. They act as interim targets or bounce zones based on the smaller trend movements.
Price Action Context:
Wedge Formation: The rising wedge pattern visible in all the charts, combined with slowing momentum near the top, suggests possible bearish pressure. Wedges often lead to sharp breakouts, so a breakout to the downside would align with the wedge structure.
Multi-Touch Confirmation: The multiple touches on trendlines, both support and resistance, increase the probability of significant movements. This concept is supported by multi-touch confirmation techniques.
Scenario Planning:
Upside Potential: A breakout above the 4HR LQZ suggests further bullish momentum, likely toward higher liquidity zones. This can result in a continuation to the upside, as shown with the green line projection on some charts.
Downside Risks: A breakdown below the wedge support and failing to hold the 15M or 1HR LQZ may lead to a bearish move toward the lower liquidity targets. The yellow line projections suggest a pullback to 2,485.055 and potentially lower.
The Trinity Rule Approach:
Confluence Setup: If price interacts with three major zones (like the 4HR LQZ, wedge support, and Weekly Flag Trendline), we can assess whether these align with other signals. This rule adds extra confirmation for higher-probability setups, as discussed in your document.
Overall, price action shows a decision point around the wedge and liquidity zones, with strong reactions expected in either direction.
GOVT ETF: Bullish Reversal on the Horizon?The GOVT ETF, representing U.S. Treasury Bonds, shows signs of a potential bullish reversal, according to our proprietary QuantEdge Momentum System.
Key Indicators:
Z-Score:
The Z-Score has surged to 1.60, signaling an overextension to the downside in the past months. This indicates that the recent downward momentum might be exhausted, leading to a possible trend reversal.
Z-Score of RSI:
The Z-Score of RSI at 1.72 shows a significant bullish momentum shift. This suggests that the asset might be gaining strength, with buyers stepping in to push prices higher. The crossing above 0 confirms that bullish sentiment is currently prevailing.
Cumulative Volume Delta (CVD):
The CVD indicator reflects a strong buying pressure, as demonstrated by the marked shift from deep negative territory (-451,481,504) towards a less pronounced negative reading. This shift suggests that the selling pressure has weakened, and buyers are beginning to dominate the market.
Price Action:
The price has broken above the green momentum cloud, signaling a potential shift from a downtrend to an uptrend. Given the alignment of other indicators, this could be the beginning of a bullish phase for GOVT.
Projection:
Over the next quarter, GOVT is likely to experience a bullish correction, driven by strong buying momentum. The ETF could target resistance levels in the $25.00-$26.00 range if the current momentum continues. The Z-Score and RSI suggest that the upside could be substantial as the ETF looks to recover from recent losses.
However, caution is warranted if the Z-Score or RSI starts to diverge negatively, as it could indicate the potential for a correction or consolidation before resuming the uptrend. Monitoring these indicators will be crucial to confirm the strength of the reversal.
Based on the proprietary QuantEdge Momentum System, GOVT appears poised for a bullish quarter. Investors looking to capitalize on U.S. Treasury Bonds might find this an opportune time to consider GOVT as a potential buy.
A Simple/Consistent Trading Strategy Using AnchorBars For AllI was talking with a friend today and he stated he just wanted something simple and consistent.
He stated he was using Weekly, Daily, and 30 Min charts to try to confirm his trade setups.
He did not want to swing for trades too often - only when the Weekly, Daily, 30 Min charts aligned.
I've build multiple systems somewhat like the one I'm showing you in this video. The trick to managing this system is to avoid consolidation periods. When price settles into an extended sideways range - you want to cut your trading down to almost NOTHING and wait for a more defined trend.
Here you go. Simple and easy.
If you don't understand AnchorBars, you can learn more on my other TradingView videos.
Go Get Some...
POLYXUSDT | Testing the New Trading SystemMarket Context
Exciting times as we put our new trading system to the test with POLYXUSDT!
Strategy: Buy the Dip
We spotted a trendline break on the 5M chart and used adjusted Fibonacci levels to set up our limit orders. Here's the plan:
LIMIT Order 1: 0.5169 | TP: 0.5415
LIMIT Order 2: 0.5080 | TP: 0.5163
LIMIT Order 3: 0.5000 | TP: 0.5078
Results
We hit LIMIT #3 and secured a solid 2.53% gain! 🎉
This system is showing promise—let’s see how it continues to perform. Stay tuned for more updates and trades!
STOP asking this dangerous two word questionWhat if?
This simple two word question is a psychological trap that traders often encounter.
And it does nothing more than undermine their decision-making process and overall trading performance.
This question will open a box of doubts, hypotheticals, and second-guessing.
This can paralyze action, distort risk assessment, and divert focus from the present to an endless maze of unrealized possibilities.
Let’s look into the psychological effects and what you can do to stop it from creeping in.
Psychological Impact
#1: Doubt and Hesitation
Constantly questioning “What if?” introduces doubt into the decision-making process.
For traders, you need to make decisions quickly and with confidence.
If you have any hesitation when you take a trade, it can lead to missed opportunities or entering positions at less than optimal prices.
#2: Fear of Missing Out (FOMO)
“What if this stock skyrockets after I sell?”
“What if this stock isn’t ideal?”
What if this trade hits my stop loss?”
This type of questioning can lead to either:
~ Holding positions too long.
~ Not holding positions long enough.
~ Not taking the trade.
~ Or missing great opportunities that come your way.
#3: Overtrading
Conversely, the fear of missing out can also lead to overtrading.
“What if this is the next big opportunity?”
Regardless on whether the trade lined up or not.
You might be compelled to jump into trades without proper analysis or strategy.
This will increase your trades, costs and your exposure to risk.
#4: Regret and Rumination
Traders who focus on “What if?” scenarios may dwell on past decisions, and this could lead to regret and rumination.
This backward-looking perspective can hinder the ability to learn from mistakes and make more informed decisions in the future.
So let’s try prevent the WHAT IF? Scenario.
Don’t you think?
Managing “What If?” in Trading
#1: Develop a Trading Plan
Make sure you have a clear, well-thought-out trading plan.
This will help you to minimise second-guessing.
If you have pre-defined entry, exit, and risk management rules in advance, you’ll be able to reduce the temptation to ask “What if?” and instead focus on executing your strategy.
#2: Embrace Risk Management
When you understand and accept the inherent risks of trading can alleviate the stress of “What if?” questions.
Effective risk management will help ensure you to prepare for all types of outcomes.
And you’ll handle your losses without deviating from your strategy.
#3: Stay Present
You need to be in the NOW moment.
This way you’ll be able to avoid the trap of hypotheticals.
Ask the questions:
Has my trading system aligned?
What is my daily and weekly bias?
#4: Accept Uncertainty
Recognise that market conditions are inherently unpredictable as I’ve mentioned many times.
The only thing you should have your mind set to are the probabilities and possibilities of trades lining up.
No outcomes can be foreseen or controlled.
All you can do is follow your strategy accordingly and forget about the prompt “WHAT IF?”.
Final words:
I think I have covered all the ways you need to stop worrying about the unknown.
You need to stop asking “WHAT IF?”. And start saying “NOW DO”.
Let’s sum up why we would ask the hypothetical question when we trade:
#1: Doubt and Hesitation
#2: Fear of Missing Out (FOMO)
#3: Overtrading
#4: Regret and Rumination
Managing “What If?” in Trading
#1: Develop a Trading Plan
#2: Embrace Risk Management
#3: Stay Present
#4: Accept Uncertainty
No FOMO when you trade - 5 ReasonsSo you missed a trade.
Or you are you often gripped by the fear of missing out (FOMO) in the trading world?
It’s a common feeling.
But let me tell you.
You might miss a train, but the next one is always on the way.
And the stock market will always be there for you to pump out more profit opportunities for you.
Today, I want you to not worry to much about FOMO. And I don’t want you to kick yourself and here’s why…
Impulsive Decisions: The Enemy of Rational Trading
Ever jumped into a trade just because it ‘felt right’?
It’s like grabbing a chocolate bar at the checkout – it’s tempting, but not always a good idea.
You need to get rid of the idea of wanting to impulse trade (trade for the sake of it).
Rather have your trading plan and stick to it by all means.
If you miss a trade – LOOK for the next one.
Not a low probability trade. Wait for the next high chance of success trade and you’ll be happy you did so.
Research: Your Secret Weapon
Trading without research is like driving with your eyes closed. You might get lucky and not crash, but it’s a risky gamble.
You need to put in the time to research and analyse the markets accordingly.
Understand the why behind your trades. Research is your crystal ball in the trading world.
Chasing the Market: A Fool’s Errand
Ever seen a stock skyrocket and felt like you’re missing the party?
You might feel the same with Bitcoin or a stock that has underperformed in a while.
The worse you can do, is try to chase the market.
If you missed the trade. Move on and find the next perfect trade that is linin up.
Patience is your ally.
Precision analysis is also the key.
Remember, markets move in cycles. Wait for your moment.
Big Risks: Big Rewards or Big Regrets?
It’s like betting all your chips on red.
It can pay off, but it’s a rollercoaster ride.
So you need to remember that risk and money management is key.
Balance optimism with realism.
Use stop-loss orders, adjust with trailing stop losses – get out with time stop losses.
And most importantly – Protect your capital – it’s your trading lifeline.
High Emotions: The Trader’s Kryptonite
The infamous emotional rollercoaster might make you take the wrong trades.
It will result in you making rash, quick and irresponsible decisions.
So try to keep emotions at bay, stay calm to trade.
Develop a mindset that is calm and collected. Remember, the market doesn’t care about your feelings.
Final words:
So you know that FOMO is another dangerous habit to develop as a trader.
Rather, say to yourself this mantra.
There is always another and better trade on the way, and I don’t have to catch every single trade that presents itself.
Let’s sum up the reasons why FOMO is dangerous.
Impulsive Decisions: The Enemy of Rational Trading
Research: Your Secret Weapon
Chasing the Market: A Fool’s Errand
Big Risks: Big Rewards or Big Regrets?
High Emotions: The Trader’s Kryptonite
#EURUSD - 23012024Yesterday; I called for a move down from strong level then up. We got the down to the buy level and we got a bounce but eventually it closed near the lows with price unable to break the BZ.
If I were to short, I would like to see a re-test of 1.0904 strong level for a rejection to target 1.0862. If market just move down from here, I am looking for a possible down move to 1.0862 to form a higher low for a move higher. Next strong support is 1.0842 for the long to 1.0902 then 1.0962.
#EURUSD - 26122023On Friday, I called for a move higher. It nicely hit my level and came down back to PZ.
Price action is still neutral to bullish and trend is up. Could see a deeper pullback to 1.0982 but look to go long for a move higher as long as BZ holds. 1.1062 is next target.
How to choose a trading system to fit you?Today I want to address the answer to a question that is asked very rarely but is critical to long-term performance. This question has the following form:
What is the best system for me?
Imagine that you have a system that is easy to understand and use. You spend no more than half of the month in the market, and during this time you earn enough to not only cover your monthly expenses, but you will also be able to allocate more capital to further trades and to increase your positions. You spend up to 2 weeks a month on trading. You can use the rest of the time for whatever you want, such as relaxing, visiting family and friends, whatever interests you!
Most beginner traders I have met want to learn a system that will allow them to make money as quickly as possible. Preferably very fast and very much. BUT instead of achieving their goal, they become providers of capital to the market. This is the result of this very approach.
I want you to realize that there is a whole industry: books, system providers, analysts, media - that knows how to lure a newcomer into the market and extract money from him. To do this, they use simple tricks - they target your greed: "you can make a lot of money, very quickly, here's the recipe, here's the magic indicator, here's the fantastic system that will make you rich very quickly, the Holy Grail"... and so on.
I want you to realize that novice traders are lured into a trap by the fact that someone has used the way their mind sets goals to manipulate them.
Today we will use a similar mind mechanism, but for a completely different purpose. Let's break it down...
You work two weeks a month, which gives you 10 trading days, the rest is spent on other activities.
Your total monthly costs are... (X)
Let's assume that you want to "earn a living," i.e. cover your monthly costs, but also save some money and increase your trading capital (Y).
So, by a simple calculation we find out that you should make a profit every month on the market (W): W = X + Y
Now consider, how much is 'X' and 'Y' for you?
The amount of money marked 'W' will be our benchmark: you need a system that will give you exactly that much or more per month. You need a system that will allow you to do it in 10 trading days or less (as we planned).
10 trading days you can do 20-30 trades, because 3 trades a day is really a lot! It's important that they are good, well-prepared - only then they have a chance to bring you the expected result. Regardless of the system, probably/average 10-12 of them will be profitable, the rest will be loss-making or will reach or close to breakeven.
Most traders, after making these simple calculations, change the way they view their system, change their perspective, this means that they begin to see the system as what it should be: a good tool to achieve their own goals. They calm down, they know what they are looking for, and they know that they have the basis for a realistic plan to achieve their goals. They are less susceptible to primitive manipulations based on greed - to which we are susceptible until we become adults.
The basis for changing our view of gains - as a necessary result of actions and losses - as an indelible effect of the system. And at the end of this part of the lesson, let's directly answer the question... So which system should you choose? - The one that will help you achieve your goals.
Let's now go to the story...
John likes to drive fast and participates in street racing. Adrenaline, risk, quick decisions, control over himself and the car in narrow streets is what he likes. Charles is a phlegmatic, he likes to think everything through, he doesn't like to make hasty (read quick) decisions. He prefers when events unfold calmly and he has time to think about how best to react to them.
John and Charles are two different people with different temperaments. Let's consider what systems will work best for them and why?
What trading systems are best and why?
1. Imagine now that we have a super great scalping system. It can produce excellent results as shown by the statements (account results) of people who play with it. It gives several signals a day, the position itself lasts from a few to several minutes. Such trading requires concentration, quick analysis of the situation, ability to make quick decisions.
Who do you think is more likely to consistently make money with this system? The active John or the phlegmatic Charles
The answer is John, the system is more suited to what is natural to him and what he likes. Karol will not find himself in situations of making dozens of quick decisions a day. That is, he can force himself very, very hard and even get results, but it will be hard for him because his mind and psyche function in a different mode.
2. Now we have a second great system: long-term, where we hold positions for weeks or even months. Here we have a very long time to decide on the entry, including what size we will enter. Here Charles, on the other hand, may have a definite advantage, this is the time scale he likes and is mentally prepared for such a mode of operation. For John, on the other hand, it can be an ordeal, not enough that nothing happens, in addition, when the system enters at a loss it sits there for two weeks and "you can go crazy."
A colleague who made his money from scalping told me that once when he entered a long position (by accident, he entered a scalp but there was a big move so he left the position) the situation destroyed him mentally. From scalping he had a habit of constantly controlling the position so for nearly a month he slept only on weekends. He made excellent money on the position, but the experience so exhausted him mentally that he told himself never again, this money is not worth his damaged psyche.
On the other hand, a long-term trader, after training in scalping, said that it's not for him, because "on the minutiae is pure chaos, nothing here gets to me."
As you can see from these two examples - depending on what you are used to and what mode your brain is comfortable with - you will have the best results with a system that is tailored to your temperament, risk appetite and decision-making mode.
By playing with other systems you can achieve success, but it will require you to work and change within yourself. I have seen situations where Charles, forced by life to change, was able to quickly mobilize and change his mode of work, thinking. He was able to learn new things quite quickly and did well in the new situation.
Was it the discovery (out of necessity) of new talents far removed from what he knew, or was he simply malleable enough that he had to find himself, and tried for so long until he found himself? I don't know, many times working with people I have seen how they can mobilize incredibly when needed. Based on this, I can say that most of us have reserves, possibilities and abilities that we are completely unaware of.
The rocks are changing. Systems that worked a year ago don't work today, systems we know today won't work tomorrow or a year from now. Trading requires following the changes. Take the example of Charles and John, two people who play with a scalping system.
Of the two, John is likely to see changes sooner. Charles, struggling with himself and his natural inclinations will be more preoccupied with himself, it just won't reach him as quickly that something has changed.
Our main brain mode will either help or hinder us from noticing market changes. Charles will adjust more slowly, that is, the same system in his hands will have more losses than John, who will adjust smoothly to the changing situation.
Summary
1. We have some main mode of mind and psyche and some systems will suit us better and others will not. It's worth trying different approaches to see what we'll feel most comfortable with and where we'll get good results most easily.
2. It's worth trying different things, including extreme ones - from scalping to long-term trading.
Also because short- and medium-term traders, when successful, usually move to longer terms, also because their systems don't work like they used to, as entering with larger positions starts to affect the markets (here Forex is an exception, due to the liquidity and depth of the markets).
3.When trying different things, be aware that it will require you to learn new habits and find your way into other ways of thinking. That is, work not only on learning the system, but also on yourself.
As a result, you will become more flexible and responsive to change, expanding the number of your mental tools with which you perceive, analyze and understand markets.
It's also a step toward being one of the top earners.
Great Trader, if you liked this article give it a boost 🚀 and drop a comment! I read all of them. Have questions, let me know in a comment
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
One Trade a Day SYSTEMWell today was 2 trades... same setup:
From the today PLAN :
I think 4287 may play an important role tomorrow. At time of this post we last traded 4290.
Go long if above 4287 at 10 am or
GO short if below 4287
This worked out for +30 move down
Thank you for watching. If want to know more link is below.
29082023 - #GBPUSDOn Friday, I said to look for a pullback in GBPUSD after a move higher (). The turning point I gave almost marked the highs while the target I have at 1.2550 capped the lows. Yesterday market moved higher, dipped but moved back the highs. Near term, DXY seemed to have found a top (bottom for GBPUSD).
Today, UK is back from the holidays yesterday thus expect some extra volatility, while there are some high impact US news which should point to the next direction for the markets. Overall we can see that price is supported by the PZ and MBZ and capped by the DBZ and WBZ.
Looking to see if we can get a move higher to the WBZ before sell comes. For now, price has started to move up, with 1.2616 as a strong resistance. Would like to see a dip here, preferably to trade back to the PZ, find support and move higher - 1.2640 as first target, with a possible pullback then a move higher to WBZ at 1.2674.
24082023 - #GBPUSDYesterday was a volatile day for GU. I said 1.2766 or so could be a turning point with EU 1.0880 (). That was much the top for GU (EU did not go as high) as market start to come down, and sold off even further after a re-test of OP, down to 1.2620 where a double support is, and market rallied on the news closing with a long wick. Time for DXY to turn?
If you look at the various currencies, I would say that GU does look slightly weaker (with the long wick yesterday, which indicate price might re-visit the wick) but if you look at AU and EU, price action does look more bullish for upside. And DXY did form an ugly bearish candle yesterday but it sold down the DBZ And WBZ. So the plan for today. DXY is at a key support and given that price is much overextended with the rally, I am looking for price to pull back first before possibly going higher. Actually GU formed a nice base above PZ but IMO look to go long at a better price, as indicated by the arrow. Will update again in the group.
23082023 - #GBPUSDLet's review. Yesterday () I was looking for upside in GU and EU, with 1.28/10 as strong resistance and for EU 1.0936. Market ended up going to 1.28 for GU and 1.0930 for EU, finding resistance before coming back down, with EU forming new lows. The 1.2724 level which I gave initially was good for another bounce. But what's for today?
I would say that price action for yesterday was neutral to slight bearish. Bearish because there was a rejection from a move higher and also market closed below the WBZ (slightly below DBZ). I would say neutral though because it did not make a lower low. But of course I need to consider the bearish EU too.
TBH I am not too sure about the directions for today. But I will say this. Above GU 1.2732 and EU 1.0844, be cautiously bullish for a move to GU 1.2760 and EU 1.0880-90; after which I will look at price action and other set ups to determine on a possible rejection then or a move higher.
We have a magnitude of impact news which could move GBPUSD thus will update again more in the group.
22082023 - #GBPUSDYesterday's levels () worked well, with confluence with EURUSD.
EURUSD held the PZ while GBPUSD was weaker but eventually the level I gave 1.2714 worked perfectly for a move to 1.2760, though less than the 1.2776 resistance.
What's for today? Yesterday's move was labored but eventually price moved higher and it is now above the WBZ. EURUSD price action was somewhat bullish yesterday too thus this confluence makes me more bullish.
Plan for today: as long as GU 1.2738 holds with EU 1.0892, good for a move to 1.2780 and 1.2812. That should correspond with EU 1.0936 where strong resistance expected and thus a pullback is likely.
5 Trades this week & +2.40% 😆 / Part 1In this Weekly Review I breakdown my thought process for my first 4 trades of the week. The video was cut short due to a 20 Minutes max length for tradingview. I just learned about this since I am new to video analyses on tradingview. I will be uploading the Part 2 for my final (5th) trade of the week at some point this weekend.
If you enjoyed the video, please leave a rocket or a comment 😁
I will be making more video analysis for the channel as I have been enjoying them myself. Anyways have a nice weekend.
06062023 - #AUDJPY $AUDJPYMarket came down very slight yesterday, and was supported at PZ, forming a tweezer type of candle. Similar move this morning with the down move to test yesterday's low but now market 20 pips higher. USDJPY is weaker but overall, yesterday's price action is not a clear reversal candle.
Possible move for today, IMO (with important AUD news later); the thesis would be if yesterday's candle is an intermediate high. Price is now between PZ and BZ. If you ask me, could get a move lower to 91.76 which would be a good location to look for longs. For now, price below PZ, is a short for a move to 92 and 91.76.
