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What is Trading Plan? Detailed Example A short ⚠️disclaimer before we start: the rules that will be discussed in this post are applicable only for technicians - traders that are relying on price action/structure/etc. Also, we assume that structure levels do work and for us, key levels are considered to be the safest trading zones/points. In order to increase the accuracy of your predictions analyzing different financial markets, you must learn to identify the direction of the market.📈 The identification of the market trend must be based on strict & reliable & testable rules. It can be based on technical indicators or price action Personally, I prefer to rely on price action. There are three main types of market trends: Bullish Trend Bearish Trend Sideways Market Depending on the current direction of the market, on the chart, I drew a flow chart✔️ that will help you to act safely. ➡️Sideways market signifies consolidation & indecision. Usually being in such a state the market tends to coil in horizontal ranges. To trade such a market safely, the best option for you will be to wait for a breakout of the range & wait for the initiation of the trend. ➡️Once you spotted a bullish market, do not rush to buy. Your task will be to identify the closest strong structure support . You must be patient enough to let the price reach that support first (and by the way, there is no guarantee that it will happen) and then you must wait for a certain confirmation. Only once you get the needed confirmation you can buy the market. ➡️The same strategy will be applicable to a bearish market. Spotting a short rally it is way early to just sell the asset from a random point. You must find the closest strong structure resistance and wait for the moment when the price will approach that. Then your task will be to wait for a confirmation and only when you got the reliable trigger you short the market. 🦉Try to rely on this flow chart and I promise you that you will see a dramatic increase in your trading performance. And even though it may appear to you that this flow chart is TOO SIMPLE, in practice, even such a set of rules requires iron discipline and patience. Thank you so much for reading this article, I hope you enjoy it! Let me know, traders, what do you want to learn in the next educational post?

Education

by VasilyTrader

Arthur Hayes USD Liquidity Index Formula constructed based on Arthur Hayes post, 'Teach Me Daddy'. USD Liquidity Conditions Index = The Fed’s Balance Sheet — NY Fed Total Amount of Accepted Reverse Repo Bids — US Treasury General Account Balance Held at NY Fed USD Liquidity — Number Go Up: Fed Balance Sheet — Increases RRP Balances — Decreases TGA — Decreases USD Liquidity — Number Go Down: Fed Balance Sheet — Decreases RRP Balances — Increases TGA — Increases

Education

Updated

♦️BAD MINDSET IS YOUR ENEMY♦️ ♦️Forex trading is one of the most exciting and lucrative ventures that anyone can undertake. With the right mindset and tools, one can make a lot of money by trading currencies. However, the opposite is also true. A bad mindset can lead to disastrous consequences in forex trading. It is, therefore, important for traders to understand the effects of a bad mindset and avoid them at all costs. ♦️One of the most common effects of a bad mindset in forex trading is overthinking. When traders overthink, they become too analytical and too cautious. This can lead to missed opportunities and bad trading decisions. Overthinking can also lead to indecision and second-guessing, which can be harmful in a fast-paced and dynamic market like forex. ♦️Another effect of a bad mindset is emotional trading. Emotions like fear, greed, and impatience can lead to irrational trading decisions. For example, a trader may hold onto a losing position for too long in the hope that it will eventually turn profitable. This can lead to bigger losses and a further deterioration of the trader’s mindset. Similarly, greed can lead to taking on too much risk, which can also lead to disastrous consequences. ♦️A bad mindset can also cause traders to be too dependent on their trading strategies. While having a good trading strategy is important, it is equally important to be flexible and open-minded. A trader who is too reliant on their strategy may miss out on profitable opportunities that do not fit their style. This can lead to missed profits and frustration. ♦️Lastly, a bad mindset can lead to overconfidence. Traders who are overconfident may take on too much risk or ignore important market signals. This can lead to catastrophic losses and a severe blow to the trader’s ego. Overconfidence can also lead to ignoring basic risk management principles, which is a recipe for disaster. ♦️In conclusion, a bad mindset can have a significant impact on forex trading success. Traders who are too analytical, too emotional, too dependent, or too overconfident may make bad trading decisions that can result in losses. It is, therefore, important for traders to stay calm, flexible, and open-minded in their approach to forex trading. A winning mindset can help traders achieve success and make profitable trades in the dynamic and exciting forex market. Thanks for reading bro, you are the best☺️ Like, comment and subscribe to boost your trading! Dear followers, let me know, what topic interests you for new educational posts?

Education

by SignalProvider

Diversification using TradingView Tools How to diversify your portfolio and trade across different markets and asset classes using Tradingview's data and charts Diversifying your portfolio is one of the most important strategies for reducing risk and increasing returns in the long term. By investing in different markets and asset classes, you can benefit from the different performance cycles and correlations of each asset, and avoid putting all your eggs in one basket. However, diversifying your portfolio can also be challenging, especially if you are not familiar with the different markets and asset classes available. How do you know which assets to choose, how much to allocate to each one, and how to monitor their performance over time? This is where TradingView can help you. TradingView is a powerful platform that provides you with data and charts for thousands of assets across various markets and asset classes, such as stocks, forex, cryptocurrencies, commodities, indices, futures, options, and more. You can use TradingView to research, analyze, and trade these assets with ease and convenience. In this article, we will show you how to diversify your portfolio and trade across different markets and asset classes using TradingView's data and charts. We will cover the following topics: - How to access data and charts for different markets and asset classes on TradingView - How to use TradingView's tools and features to research and analyze different assets - How to use TradingView's indicators and strategies to identify trading opportunities and signals - How to use TradingView's brokers and trading platforms to execute trades on different assets - How to use TradingView's portfolio and watchlist tools to monitor and manage your diversified portfolio By the end of this article, you will have a better understanding of how to diversify your portfolio and trade across different markets and asset classes using TradingView's data and charts. Let's get started! One of the benefits of diversifying your portfolio is that you can take advantage of the different performance cycles and correlations of different markets and asset classes. For example, stocks tend to perform well during periods of economic growth and expansion, while bonds tend to perform well during periods of economic slowdown and contraction. Similarly, commodities tend to perform well during periods of inflation and supply shocks, while cryptocurrencies tend to perform well during periods of innovation and disruption. However, to diversify your portfolio effectively, you need to have access to data and charts for different markets and asset classes. This is where TradingView can help you. TradingView is a platform that provides you with data and charts for thousands of assets across various markets and asset classes, such as stocks, forex, cryptocurrencies, commodities, indices, futures, options, and more. You can use TradingView to research, analyze, and trade these assets with ease and convenience. To access data and charts for different markets and asset classes on TradingView, you can use the search bar at the top of the page. You can type in the name or symbol of the asset you want to view, or you can browse through the categories and subcategories on the left side of the page. For example, if you want to view data and charts for stocks, you can click on the "Stocks" category on the left side of the page, and then choose from the subcategories such as "US Stocks", "UK Stocks", "Canadian Stocks", etc. You can also filter by sectors, industries, market cap, dividends, earnings, etc. Once you select an asset, you will see its data and chart on the main page. You can customize the chart by changing the time frame, adding indicators, drawing tools, annotations, etc. You can also compare the performance of different assets by adding them to the same chart. For example, if you want to compare the performance of gold and bitcoin over the last year, you can add them to the same chart by typing in their symbols in the search bar (XAUUSD for gold and BTCUSD for bitcoin) and clicking on "Compare". You will see their data and charts overlaid on each other. You can also use TradingView's tools and features to research and analyze different assets. For example, you can use TradingView's screener tool to scan for assets that meet your criteria based on various fundamental and technical factors. You can also use TradingView's news feed to stay updated on the latest developments and events that affect different markets and asset classes. You can also use TradingView's social network to interact with other traders and investors who share their ideas and opinions on different assets. TradingView also provides you with indicators and strategies that can help you identify trading opportunities and signals for different assets. Indicators are mathematical calculations that are applied to the price or volume data of an asset to generate signals or patterns that indicate the direction or strength of a trend or a reversal. Strategies are sets of rules that define when to enter and exit a trade based on certain conditions or criteria. TradingView has hundreds of indicators and strategies that you can use or create your own using TradingView's Pine Script language. To use TradingView's indicators and strategies, you can click on the "Indicators" button at the top of the chart. You will see a list of categories such as "Trend", "Momentum", "Volatility", etc. You can choose from the built-in indicators or search for custom indicators created by other users or yourself. You can also click on the "Strategies" button at the top of the chart to see a list of categories such as "Long", "Short", "Scalping", etc. You can choose from the built-in strategies or search for custom strategies created by other users or yourself. Once you select an indicator or a strategy, you will see it applied to your chart. You can adjust its settings by clicking on its name at the top of the chart. You will see its parameters such as inputs, outputs, alerts, etc. You can change these parameters according to your preferences or needs. You will also see its performance report that shows its statistics such as net profit, win rate, drawdown, etc. You can use this report to evaluate its effectiveness and suitability for your trading style and goals. TradingView also allows you to execute trades on different assets using its brokers and trading platforms. Brokers are intermediaries that connect you with the markets and allow you to buy and sell assets for a fee or commission. Trading platforms are software applications that enable you to place orders, manage your positions, monitor your account balance, etc. TradingView has partnered with several brokers and trading platforms that offer access to various markets and asset classes. To start trading on TradingView, you need to connect your broker account or trading platform to your TradingView account. TradingView supports many popular brokers and platforms, such as Oanda, FXCM, Coinbase, Binance, Interactive Brokers, and more. You can find the full list of supported brokers and platforms here: www.tradingview.com To connect your broker account or platform, go to the Trading Panel at the bottom of your chart, click on the Select Broker button, and choose your broker or platform from the list. Then follow the instructions to log in and authorize TradingView to access your account. Once you have connected your broker account or platform, you can start executing trades on different assets directly from your TradingView charts. To open a trade, click on the Buy/Sell button on the Trading Panel, select the asset you want to trade, enter the quantity, price, stop loss, and take profit levels, and click on Confirm. You can also use the One-Click Trading feature to open trades with one click on the chart. To enable One-Click Trading, go to the Settings menu on the top right corner of your chart, click on Trading Settings, and check the One-Click Trading box. Then you can click on the Bid or Ask price on the chart to open a buy or sell trade respectively. To monitor and manage your open trades, you can use the Orders and Positions tabs on the Trading Panel. Here you can see your order history, current positions, profit and loss, margin level, and account balance. You can also modify or close your orders and positions by clicking on the Edit or Close buttons. You can also use the Trade Manager tool to manage your trades more efficiently. The Trade Manager tool allows you to set multiple targets and stop losses for each trade, as well as trailing stops and break-even levels. To access the Trade Manager tool, right-click on your position on the chart and select Trade Manager. To monitor and manage your diversified portfolio across different brokers and platforms, you can use TradingView's portfolio and watchlist tools. The portfolio tool allows you to see your total portfolio value, asset allocation, performance, risk metrics, and more. You can also compare your portfolio with various benchmarks and indices. To access the portfolio tool, go to www.tradingview.com The watchlist tool allows you to create custom lists of assets that you want to track and analyze. You can add any asset that is available on TradingView to your watchlist, such as stocks, forex pairs, cryptocurrencies, commodities, indices, etc. You can also sort, filter, group, and customize your watchlist columns according to your preferences. To access the watchlist tool, go to www.tradingview.com TradingView's brokers and trading platforms integration and portfolio and watchlist tools are powerful features that can help you execute trades on different assets and monitor and manage your diversified portfolio more effectively. We hope this article has given you a clear overview of how to use these features. Happy trading!

Education

by JS_TechTrading

Fundamentals & Technical Analysis How to apply fundamental analysis and macroeconomic trends to complement your technical analysis and trading strategy Fundamental analysis and macroeconomic trends are important tools for traders who want to understand the underlying forces that drive the market. Technical analysis, on the other hand, focuses on the price action and patterns of the market. By combining both approaches, traders can gain a more comprehensive and balanced perspective on the market and improve their trading strategy. Fundamental analysis of the macroeconomic environment involves studying the economic, political, and social factors that affect the supply and demand of an asset. Some of the most relevant fundamental indicators are: - Gross domestic product (GDP): This measures the total value of goods and services produced by a country in a given period. It reflects the economic growth and health of a country. A higher GDP indicates a stronger economy and a higher demand for its currency and assets. - Inflation: This measures the change in the average price level of goods and services over time. It affects the purchasing power of money and the interest rates. A moderate inflation indicates a healthy economy with stable growth. A high inflation indicates an overheated economy with excessive money supply and a lower demand for its currency and assets. - Interest rates: This measures the cost of borrowing money. It affects the profitability of investments and the exchange rates. A higher interest rate indicates a tighter monetary policy and a higher demand for its currency and assets. A lower interest rate indicates a looser monetary policy and a lower demand for its currency and assets. - Trade balance: This measures the difference between a country's exports and imports. It reflects the competitiveness and demand for a country's goods and services in the global market. A positive trade balance indicates a trade surplus and a higher demand for its currency and assets. A negative trade balance indicates a trade deficit and a lower demand for its currency and assets. To complement technical analysis and trading strategy, traders can use fundamental analysis and macroeconomic trends to identify the long-term direction and strength of the market, as well as potential opportunities and risks. For example, suppose a trader wants to trade EUR/USD, which is the exchange rate between the euro and the US dollar. The trader can use technical analysis to identify the support and resistance levels, trend lines, chart patterns, indicators, and signals on different time frames. The trader can also use fundamental analysis to assess the economic conditions and outlook of both the eurozone and the US, as well as their relative interest rates, inflation rates, trade balances, and other factors that affect their currencies. Suppose the trader observes that the eurozone has a higher GDP growth rate, lower inflation rate, positive trade balance, and stable interest rate than the US. The trader can infer that the eurozone has a stronger economy than the US, which implies a higher demand for the euro than the US dollar. The trader can also observe that the EUR/USD is in an uptrend on the daily chart, with higher highs and higher lows, supported by a rising moving average. The trader can conclude that the fundamental analysis confirms the technical analysis, which suggests that EUR/USD is likely to continue to rise in the long term. The trader can then use technical analysis to find an optimal entry point to buy EUR/USD. For example, suppose the trader sees that EUR/USD is retracing from a recent high to test a support level at 1.2000, which coincides with a 50% Fibonacci retracement level and a rising trend line. The trader can also see that there is bullish divergence between the price and an oscillator indicator such as RSI or MACD, which indicates that the downward momentum is weakening. The trader can decide to buy EUR/USD at 1.2000, with a stop loss below 1.1900 and a target at 1.2200. By applying fundamental analysis and macroeconomic trends to complement technical analysis and trading strategy, traders can gain a deeper understanding of the market dynamics and enhance their trading performance. If you are stock trading, you should consider the following fundamental indicators which are all readily available as trends on the TradingView platform: - ROE (Return on Equity): This indicator measures how effective a company is in generating profits for its shareholders. It is calculated by dividing the net income by the shareholders' equity. A high ROE indicates that the company is using its resources efficiently and creating value for its owners. - EPS (Earnings Per Share): This indicator measures how much profit a company makes per share of its common stock. It is calculated by dividing the net income by the number of outstanding shares. A high EPS indicates that the company is profitable and can potentially pay dividends or reinvest in its growth. - DYR (Dividend Yield Ratio): This indicator measures how much dividend a company pays per share of its common stock relative to its earnings. It is calculated by dividing the total dividends by the net income or the dividend per share by the earnings per share. A high DYR indicates that the company is rewarding its shareholders with a steady income stream and has confidence in its future prospects. - FCF (Free Cash Flow): This indicator measures how much cash a company generates from its operations after deducting capital expenditures. It is calculated by subtracting the capital expenditures from the operating cash flow. A high FCF indicates that the company has enough cash to pay its debts, invest in new projects, or return money to its shareholders. - PEG (Projected Earnings Growth): This indicator measures how fast a company's earnings are expected to grow in the future relative to its current price. It is calculated by dividing the price-to-earnings ratio by the annual earnings growth rate. A low PEG indicates that the company is undervalued and has strong growth potential. These fundamental indicators can help traders to identify stocks that are overvalued, undervalued, or fairly priced based on their financial performance and future prospects. They can also help traders to compare different stocks within the same industry or across different industries and sectors.

Education

by JS_TechTrading

Investment Risk Scale When investing funds in any format, you need to understand the investment approach and risk involved in the planning you undertake. Example investment risk categories when investing capital or income are as follows: 1-2 Lowest Risk Very Cautious Risk You are not prepared to accept any exposure to investment loss although you are aware that any investment has some possibility of loss, for example if a bank holding your money was to collapse. The value of your money may also fall in real terms if inflation exceeds the return that your investment achieves. You accept that the returns from your investments are likely to be low compared to the potential returns from investments that have a higher risk rating. 3-4 Cautious Risk You are prepared to accept a higher risk of capital loss in return for the opportunity to earn more than from deposits and low risk type investments but do not wish to take as much risk as with a medium risk strategy. While there can be no guarantee, investments in this category are not likely to fluctuate in value as sharply or as quickly as a portfolio largely made up of equity investments. 5-6 Balanced Risk You are prepared to accept that the value of your investments will fluctuate with the aim of achieving higher returns in the medium to long term. You accept that there is an increased risk of capital loss over investing in more low risk investments. Medium risk investments can fluctuate in value more rapidly and quickly over a short periods of time than more low risk investments. 7-8 Adventurous Risk You are prepared to accept fairly high levels of risk with your investments, with the aim of achieving higher investment returns in the longer term. You accept that this may mean that the value of your investments may fluctuate considerably over a short periods of time and that there is an increased risk of capital loss compared with a lower risk investment strategy. Therefore, you may consider investments mainly in equities/shares and is likely to involve investment in various overseas markets as well as UK markets. This increases risk because of currency fluctuations as well as investment risk. Risk can be reduced by diversifying your investments across sectors and markets 9-10 Highest Risk Very Adventurous Risk You are prepared to accept high levels of risk with your investments, with the aim of achieving higher investment returns in the longer term. You accept that this may mean that the value of your investments may fluctuate significantly over a very short periods of time and you could lose a significant proportion (possibly all) of your investment. Please, like this post and subscribe to our tradingview page!👍

Education

by EliteTradingSignals

How Much Gold Does Your Portfolio Need?Economists make forecasts to make weathermen look good. Trying to forecast trends in complex systems is never easy. As with weather, financial markets are influenced by a myriad of factors which can make prediction akin to gambling. Time in the market beats timing the market so a far safer bet is building a diversified and informed portfolio. As mentioned in our previous paper , gold is a crucial addition to any well-diversified portfolio. Gold offers investors the benefits of resilience during crises, diversification, and low volatility while also being a good hedge against inflation. With crisis ever-present, from pandemics and geo-political conflict to financial instability and recession, uncertainty is on everyone’s lips, including central banks which bought a record 1,135 tonnes of gold last year. Central Banks have shown no signs of slowdown going into 2023, buying 74t in Jan and 52t in Feb, the strongest start to central bank buying since 2010. It is clear why, with rising global inflation due to 2 years of unprecedented QE. A decade of cheap money has its costs which are coming back to bite both consumers and central banks. This is now being played with collapsing banks and crumbling businesses. Though governments may term these exceptions, they’re the inevitable consequence of hiking rates too fast. And even though inflation has now started to cool, it is proving stubborn and the risk of recession looms. In crisis, institutions and individuals rush to gold. It’s no wonder then that gold prices spiked in March nearing an All-Time-High above USD 2,000/oz. Gold continues to trade above the key 2000 level even in April. Even now crises show no sign of slowing. Recession talks have become commonplace and phantoms of 2008 haunt with bank collapses. The world is increasingly moving towards reshoring and friendshoring, and de-dollarization is talked about more and more. It is almost inevitable that gold will break its all-time-high soon. But, buying gold is the easy part, in fact, our previous paper covered 6 Ways to Invest in Gold. Managing gold as part of a larger portfolio is more nuanced. Allocating the right amount, finding the right entry, and knowing when to cash out are all critical. This paper aims to address two questions – 1. What are the key drivers of gold prices in this decade 2. How should investors use gold in balancing portfolios to navigate turbulent times? What Propels Gold After Its All Time High? SVB and Credit Suisse pushed it to its brink. In fact, spot prices in India, Australia, and the UK sailed even above their All-Time-High. But what propels gold now? Financial Instability Was Credit Suisse the End? “The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come.” - Jamie Dimon Unfortunately, Credit Suisse was likely just a symptom of the larger problem. 2-years of near-free money has inevitably led others to make risky bets which catch up to them during periods of QT. Additionally, Credit Suisse and SVB’s collapse were both set off by an unprecedentedly aggressive rate hiking cycle. Fed is stuck between a rock and a hard place as they try to control runaway inflation with aggressive rate hikes. Higher rates for longer increase the risks of financial instability. Stubborn Inflation and Recession Risks Stubborn inflation? Wasn’t inflation on its way down after almost a year? Yes and No. Although yearly inflation has definitely cooled in most countries from their peak last year, inflation continues to tick up month-by-month above the targets that central banks have set for themselves. It is not expected to reach below their targets even before 2025 in many countries. This is because although energy and commodity prices have cooled with demand waning, core inflation continues to remain stubbornly high. Additionally, food and energy prices are still volatile. On the back of this, recession risks remain high. Recently released FOMC meeting minutes showed that officials expect a recession in the second half of the year. A recession in many countries now seems inevitable. Gold shines during recession and high-inflation environments. High Interest Rates Wasn’t the Fed done hiking? Currently, CME’s FedWatch tool shows a ~72% chance of another 25bps hike next month despite the surprisingly low US CPI print. Does another 25bps matter? What’s more important is that 25bps is the peak rate and most central banks are calling this summit a pause and not a pivot. As such, rates will likely remain high for the remainder of 2023. Gold tends to perform well during high interest rate and risk-off environments. Escalating Tensions, Friendshoring, and De-Dollarization Last but definitely not least are central banks and their gold-buying binge. Though some of this can be explained by the ultra-high inflation. It is undeniably also driven by rising political tensions. The conflict in Ukraine continues to rage and the US extend its trade war against China with the CHIPS act. This is driving many of the largest economies to reshore and friendshore key supply chains. This also means relying less on the USD which can be weaponized by the US. De-dollarization has been underway for the last 23 years as the share of USD holdings in foreign exchange reserves has declined from 71.5% to 58.3% over the past 23 years. Current conditions make it more likely that the trend will accelerate. Gold inevitably benefits from all of this as it is one of the only assets that no other central bank can print or freeze. All of these factors will likely drive gold in the coming decade. But instead of setting a price target, investors can be prudent and methodical by properly allocating it as part of a larger portfolio. Using Gold in a Portfolio From 2000 until now, the following portfolios would deliver: Since 2000, gold has been the best performing asset out of the 3 main components of a basic portfolio – Large Cap stocks (SPY), Treasury Bonds (10Y), and Gold. Gold price has risen 609% compared to SPY at +193%. Investing in 10-year maturity treasury bonds would have netted investors 110% during these 23 years. As such, larger portfolio allocation towards gold would have yielded investors far more during this period. However, this comes at the downside of higher volatility. Gold has had an average 12-month rolling volatility of 15.8% over the last 23 years, slightly higher than SPY’s 14%. Still, not all volatility is bad, especially if the returns outweigh the risk. Volatility to the upside can be beneficial to investors. In order to measure the returns from the portfolio after accounting for higher volatility-associated risk, investors can measure the risk-adjusted returns using the Sharpe Ratio and Sortino Ratio. Sharpe Ratio measures the amount of excess return generated by taking on additional volatility-related risk. The higher the Sharpe Ratio, the better the portfolio is performing relative to its risk. The figure below contains the Sharpe Ratio for each of the portfolios across the last 23 years. Since each year had a different risk-free rate due to changing monetary policy, the Sharpe ratios vary for every year and there are periods during which gold-heavy portfolios have highest Sharpe ratios and others where it has the lowest. This highlights gold's sensitivity to changes in monetary policy. Sortino Ratio also measures risk-adjusted returns like the Sharpe Ratio however it only considers the risk of downside volatility. In other words, it measures return for every unit of downside risk. The figure below contains the Sortino Ratio for each of the portfolios. A key difference between the Sharpe and Sortino Ratios can be seen in the readings for 2009. Sharpe Ratio for a gold-heavy portfolio is the lowest in 2009 due to high volatility in gold prices. However, since this was volatility to the upside, the Sortino Ratio for a gold-heavy portfolio in 2009 is the highest. In 2023, a Gold heavy portfolio has performed the best and has the highest Sharpe and Sortino Ratio due to gold's relative overperformance amid the banking crisis. DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.

Education

by mintdotfinance

❗️CONFIRMATION BIAS IS YOUR ENEMY❗️ 🏛As traders, we are constantly bombarded with information on the global economic landscape, market trends, and potential investments. With so much information at our fingertips, it is easy to fall victim to a cognitive bias known as confirmation bias. 🏛Confirmation bias, also known as selective perception, is the tendency for individuals to seek out and interpret information in a way that confirms their existing beliefs or hypotheses. In the world of trading, confirmation bias can be particularly dangerous, as it can lead traders to make decisions based on incomplete or biased information. 🏛For example, imagine you hold a strong belief that apple stocks are going to rise in the coming months. You begin to search for information to support this belief - perhaps you read articles, listen to news broadcasts, and consult financial websites that all confirm your hypothesis. Meanwhile, you are dismissing any information that contradicts your belief, such as negative earnings reports, changes in the market, or negative press. 🏛The problem with this type of thinking is that it can lead traders to ignore crucial signs that could indicate a shift in the market. Confirmation bias can cloud our judgment and hinder our ability to make objective, data-driven decisions. 🏛To avoid confirmation bias, traders need to actively seek out and consider evidence that contradicts their established beliefs. By doing so, traders can obtain a more comprehensive view of the market and make informed decisions based on all available information. 🏛Furthermore, it is essential to rely on multiple sources of information, including information from trusted analysts, financial experts, and data-driven research. Traders must be able to evaluate information objectively and dispose of preconceived notions that may color their decision-making process. 🏛In conclusion, confirmation bias is a cognitive bias that can significantly impair traders' abilities to make sound decisions in the market. Traders must be cognizant of this bias and actively work to identify and address it by seeking out multiple sources of information, analyzing data objectively, and challenging their preconceived beliefs. Only by doing so can traders ensure that their decisions are based on informed and rational conclusions, rather than biased opinions or incomplete information. Thanks for reading bro, you are the best☺️ Like, comment and subscribe to boost your trading! Dear followers, let me know, what topic interests you for new educational posts?

Education

by SignalProvider

The Benefits of Keeping a Trading Journal for Your Psychology Trading can be a challenging and emotional endeavor. As traders, we must navigate through various market conditions, deal with losses, and manage our emotions. It's not surprising that many traders struggle with maintaining their psychological balance. However, one tool that can help traders keep their emotions in check and improve their trading is a trading journal. A trading journal is a document or software that traders use to track their trades, analyze their performance, and record their thoughts and emotions during the trading process. Here are some of the benefits of keeping a trading journal for your psychology: Self-Awareness Keeping a trading journal helps traders become more self-aware of their thoughts, emotions, and behaviors while trading. By recording their trades and reviewing them, traders can identify patterns in their behavior, emotions, and decision-making. This self-awareness can help traders recognize their strengths and weaknesses, and develop strategies to improve their trading. Improved Decision-Making A trading journal can also help traders make better decisions. By analyzing their trades, traders can identify mistakes they made and learn from them. They can also identify successful trades and analyze what they did right. This process can help traders develop a more effective trading strategy and improve their decision-making skills. Accountability A trading journal can help traders hold themselves accountable for their trading decisions. By recording their trades and emotions, traders can see where they went wrong and take responsibility for their mistakes. This accountability can help traders learn from their mistakes and avoid making the same ones in the future. Stress Management Trading can be a stressful activity. By keeping a trading journal, traders can vent their emotions and reduce their stress levels. Writing down their thoughts and emotions during trading can help traders release their negative emotions and feel more relaxed. This stress management technique can help traders maintain a healthy psychological state while trading. Goal Setting Keeping a trading journal can help traders set and achieve their goals. By recording their trades and analyzing their performance, traders can identify areas where they need to improve and set goals to achieve those improvements. These goals can be related to profitability, risk management, or any other aspect of trading. Setting and achieving these goals can help traders feel a sense of accomplishment and increase their motivation. In conclusion, keeping a trading journal is an excellent tool for traders to improve their psychological state while trading. By increasing self-awareness, improving decision-making, holding oneself accountable, managing stress, and setting goals, traders can improve their overall trading performance. Therefore, it's highly recommended for traders to keep a trading journal to improve their trading psychology.

Education

One Trade Does Not Define Your Trading Performance... Hey traders, 👨🏻‍💻I am trading forex for more than 8 years. During the last 5 years, I am actively posting my analysis & trades on TradingView. Growing my audience, it was very peculiar for me to contemplate the reaction of my followers to my trading performance. (by the way, we must say thanks to tradingview where the posting system does not allow to delete the posted trades so that each and every author is easily backtestable). 👩‍👩‍👧‍👧👨‍👨‍👧‍👧Those who follow me at least a half a year know that occasionally I have winning streaks when 9 out of 10 of my forecasts play out nicely. Sometimes, however, I face the drawdowns and catch a sequence of losing trades. And sometimes the performance is mixed with the probabilities being on my side slightly. 🥇While the reaction to winning streaks is quite predictable: I am praised by the members and get nice tips. The reaction to losing streaks is worth discussing in detail. It turned out that quite a huge portion of a trading community has a completely wrong understanding of a trading nature. 🤬The single loss is considered by them to be a failure, a mistake. Facing the sequence of losses, they quickly become negatively biased to the person that they have just recently praised. With the continuation of a drawdown, they blame the analyst and launch a barrage of criticism towards him. 🔍Then they are in a search again. They are looking for a trader that will be constantly right. Catching the new one during a winning streak, the cycle repeats. At some moment such people become disappointed in trading and drop this business... ❗️Losses, losing streaks and negative days/weeks/months are inevitable. If you want to become a full-time trader, you must be prepared for the fact that trading won't give you a stable income. Your equity curve will be in constant fluctuation. Your goal in this game is simply to lose less than you make. You must become disciplined enough to keep following the rules of your trading strategy no matter what. You must learn to be consistent in your actions. You should learn to perceive losing trades not as a failure but simply as the moment when the market takes its share. Feeding you, giving you the opportunity to make money out of thin air, the market definitely has a right to claim its dividends from you. ⭐️Change your mindset, learn to lose and the magic thing will happen. Let me know, traders, what do you want to learn in the next educational post?

Education

by VasilyTrader

MACD Indicator | How Does It Work? | Definition & Examples MACD is a technical indicator designed to help investors identify price trends, measure trend momentum, and identify acceleration points to fine-tune market entry timing (whether you’re buying or selling). How does MACD work? The MACD indicator has many moving parts and functions, but it’s made up of three general components: the MACD line, which is the difference between two moving averages; a signal line, which is a moving average of the MACD line; and a histogram. MACD takes the moving average concept a step further. It’s one thing to compare a fast and a slow moving average, but for MACD, that’s only the beginning. First, the MACD line is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA (i.e., fast minus slow). Why? The calculation is designed to show the relationship between the two averages, and it does so in a way that places emphasis on more recent price data. The signal line is a 9-day (or 9-period) EMA of the MACD line. In other words, it’s a moving average of the difference between two moving averages, or a “slower” version of the difference between a fast and a slow moving average. Why use a moving average of two other moving averages? The signal line calculation “smooths out” the MACD line, creating an even slower moving average that serves as the faster MACD line’s counterpart. How do you read the MACD? Pay attention to the moving averages—the MACD and the signal line—and their relation to the histogram. Note that when the MACD line (the faster moving average) is above the signal line, the bars in the histogram are above the zero line, which is a bullish signal. When the MACD line is below the signal line, the histogram bars are below the zero line, which is generally bearish. What do you want to learn in the next post?

Education

by UnitedSignals

How can AI help to improve algorithmic trading strategies?AI is transforming the field of algorithmic trading, which involves using computer programs to execute trades based on predefined rules and strategies. AI can help to improve algorithmic trading performance and efficiency by providing advanced data analysis, predictive modeling, and optimization techniques. In this article, we will explore some of the ways that AI can enhance algorithmic trading and some of the challenges and opportunities that lie ahead. One of the main advantages of AI in algorithmic trading is its ability to process and interpret large and complex data sets in real-time. AI algorithms can leverage various sources of data, such as market prices, volumes, news, social media, sentiment, and historical trends, to identify patterns, correlations, and anomalies that may indicate trading opportunities. AI can also use natural language processing (NLP) and computer vision to extract relevant information from unstructured data, such as text, images, and videos. Another benefit of AI in algorithmic trading is its ability to learn from data and adapt to changing market conditions. AI algorithms can use machine learning (ML) and deep learning (DL) techniques to train on historical and live data and generate predictive models that can forecast future market movements and outcomes. AI can also use reinforcement learning (RL) techniques to learn from its own actions and feedback and optimize its trading strategies over time. A further aspect of AI in algorithmic trading is its ability to optimize trading performance and reduce costs. AI algorithms can use mathematical optimization methods to find the optimal combination of parameters, such as entry and exit points, order size, timing, and risk management, that can maximize profits and minimize losses. AI can also use high-frequency trading (HFT) techniques to execute trades at high speeds and volumes, taking advantage of small price fluctuations and arbitrage opportunities. AI can also help to reduce transaction costs, such as commissions, fees, slippage, and market impact, by using smart order routing and execution algorithms that can find the best available prices and liquidity across multiple venues. However, AI in algorithmic trading also faces some challenges and limitations that need to be addressed. One of the main challenges is the quality and reliability of data. AI algorithms depend on accurate and timely data to perform well, but data sources may be incomplete, inconsistent, noisy, or outdated. Data may also be subject to manipulation or hacking by malicious actors who may try to influence or deceive the algorithms. Therefore, AI algorithms need to have robust data validation, verification, and security mechanisms to ensure data integrity and trustworthiness. Another challenge is the complexity and interpretability of AI algorithms. AI algorithms may use sophisticated and nonlinear models that are difficult to understand and explain. This may pose a problem for traders who need to monitor and control their algorithms and regulators who need to oversee and audit their activities. Moreover, AI algorithms may exhibit unexpected or undesirable behaviors or outcomes that may harm the traders or the market stability. Therefore, AI algorithms need to have transparent and explainable methods that can provide clear and meaningful insights into their logic and decisions. However, there are also ethical and social implications of AI in algorithmic trading. AI algorithms may have an impact on the market efficiency, fairness, and inclusiveness. For example, AI algorithms may create or amplify market inefficiencies or distortions by exploiting information asymmetries or creating feedback loops or cascades. AI algorithms may also create or exacerbate market inequalities or exclusions by favoring certain groups or individuals over others or by creating barriers to entry or access for new or small players. Therefore, AI algorithms need to have ethical and social principles that can ensure their alignment with human values and interests. In conclusion, AI is a powerful tool that can help to improve algorithmic trading strategies and performance by providing advanced data analysis, predictive modeling, and optimization techniques. However, AI also poses some challenges and risks that need to be addressed by ensuring data quality and reliability, algorithm complexity and interpretability, and ethical and social implications. By doing so, AI can create a more efficient, effective, and equitable algorithmic trading environment for all stakeholders.

Education

by JS_TechTrading

Patience is a Virtue in Trading! Learn Why: In trading, timing is everything. Winning traders are patient. They know how to control their impulses so as to act decisively at the opportune moment. Rather than acting on a whim, they carefully devise a detailed trading plan, in which precise entry and exit strategies are specified, and strictly follow it. Discipline is the key to successful trading. Although discipline can be learned, some people are more disciplined and self-controlled than others. It is useful to determine where you stand on this trait, and if you’re impulsive, developing psychological strategies to compensate for it will allow you to trade profitably. Research studies have demonstrated that some people have difficulty delaying gratification. In the jargon of behavioural economics, they “discount delayed rewards.” That is, they would rather take a small profit now, instead of waiting for a larger profit later. Depending on your style of trading, discounting a delayed reward can be a problem. For a long-term investor, for example, it is necessary to buy-and-hold long enough for one’s long term strategy to play out. There may be minor fluctuations during the waiting period, but seasoned investors have learned to wait it out. Most novice investors, in contrast, impulsively sell as the masses panic and buy the stock back at a top, which usually results in a losing trade. If you are a long-term investor, it is necessary to be able to control your impulse to make a profit and allow the price to rise over time. Even shorter-term traders, such as a swing trader, must fight the urge to sell early. Although trades are held for much shorter windows, a swing trader must know how to wait patiently for the optimal time to sell. Selling a winner too early is not going to allow one’s account balance to increase exponentially at an ideal rate. The scalper is at the opposite end of the spectrum. Most scalpers feel an overpowering need to take a quick profit as soon as they can get it. To some extent, it may be wise for a person who has trouble patiently waiting for the price of an investment instrument to increase to become a scalper. The conventional wisdom these days, however, is that decimalization has made scalping less viable. It is useful to take other steps to work around one’s inclination to sell prematurely. For example, one can use the automatic settings on one’s trading platform to specify an exit strategy. It has often been said that looking at one’s screen during the trading day is like sitting in front of a slot machine and trying to resist gambling. It’s hard. Just as the one-armed bandit tempts recreational gamblers, charts and indicators on a computer screen tempt seasoned and novice traders alike to make hasty trading decisions. It may be useful to refrain from constantly looking at how a particular stock or commodity is doing while you’re waiting for your trading plan to play out. If you have to walk away, while having the automatic settings on to manage risk, then, by all means, turn off your screens or walk away. It is also useful to objectify the trade. The more you can learn to view the trade objectively, as if you just don’t care what happens, the more you’ll be able to resist the temptation to close out a trade prematurely. A cold, rational approach to trading, along with a detailed trading plan, is the best defence against impulsive trading decisions. Patience is a virtue when attempting to trade profitably. It is useful to remember that humans have a strong, natural tendency to avoid risk and loss at all costs. This tendency often protects us from harm, but there are times when it can compel us to act impulsively. We are naturally inclined to avoid losses at all costs, even if it means selling a potentially winning trade before it reaches fruition. Unless one can let winners increase in price sufficiently, profits won’t balance out losses. The ability to control one’s impulses and wait for larger, delayed rewards is vital for long-term survival. It’s worth developing this ability. Hey traders, let me know what subject do you want to dive in in the next post?

Education

by TopTradingSignals

Forex market players: Who trades Currencies and Why? The foreign exchange market is used by banks, investment companies, companies and even individuals who want to either cover themselves against the risk of foreign exchange fluctuations or to speculate in hopes of making a profit. 95% of all forex transactions are purely speculative in nature. Only 5% of all forex transactions result from international companies who need to convert their money back to the company's main operating currency. Commercial banks are the main participants in the forex market, but their "market share" is slowly shrinking. Currently, 43% of all transactions pass through the interbank market, as opposed to 63% in 1998 and 53% in 2004. In terms of forex trading activity, the main role of banks is to serve as middlemen for the other market participants. Their objective is to make profits through "market making", which means that they offer their clients a "buy" price and a "sell" price. Institutional investors are the second biggest players. They include investment and insurance companies, pension funds and hedge funds. They participate in forex trading in order to cover their stock, bond and currency portfolios and they represent 30% of all foreign exchange transactions. Central banks intervene to manage their stock of currency and state money. Their transactions represent 5% to 10% of all forex trading volume. The central banks can also intervene in order to defend their respective currencies and to adjust economic or financial inbalances. Brokers allow private individuals to access the forex market by transmitting their clients' orders to commercial banks or to trading platforms. They get paid from the spread or by charging a commission on each transaction. Multinational companies participate in forex trading in order to convert their money during import or export activities. Their transactions represent approximately 5% of all global forex transactions. Some companies even have their own trading floors, with traders speculating in order to make profits and to reduce the risks related to exchange rate fluctuations. Private investors/individuals have recently been trading the forex market as well, thanks to the internet, which allows them to have real-time access to currency exchange rates. Today, their transaction volume adds up to over 5% of all forex transactions. Please, like this post and subscribe to our tradingview page!👍

Education

by EliteTradingSignals

Trading Success Through Journaling: Reflect, Learn & Grow Hello traders, today we will talk about how journaling can be a really helpful tool for you in your trading journey. Journaling is a simple yet powerful tool that can help you gain insight into your mental and emotional state, identify patterns and triggers, and make more informed decisions. In this post, we'll explore how you can use journaling to improve your trading performance. 1. Reflect on your emotions: After each trade, take a moment to journal about your emotions during and after the trade. This can help you identify patterns in your emotional responses and provide insight into how certain emotions may affect your trading decisions. 2. Identify triggers: By journaling about specific events that preceded a trade, you can identify the triggers that lead to your emotional responses. This can help you take steps to manage your emotions before they affect your trading decisions. 3. Evaluate your decision-making: After each trade, take a moment to journal about the decision-making process you used. This can help you identify any biases or patterns in your decision-making that may be affecting your trading results. 4. Set goals and track progress: Use journaling to set goals for your trading and track your progress over time. This can help you stay motivated and focused on your long-term goals. 5. Increase self-awareness: Journaling can help you become more self-aware of your thoughts, feelings, and behaviors. This can help you identify any negative thought patterns and work to change them, which can lead to improved trading performance. To make the most of journaling, you should be honest with yourself and write down what you truly feel and think. Journaling is a powerful tool for reflection, learning and making adjustments for the future. It's important to note that journaling is not a standalone strategy, but rather it's a tool that can be used in conjunction with other analysis and indicators to inform trading decisions. Also, you don't need any specific equipment, just a pen and a notebook, and you can journal at any time. In conclusion, journaling can be a powerful tool for traders looking to improve their performance and manage stress. By gaining insight into their mental and emotional state, traders can make more informed decisions and improve their overall trading results. Give it a try and see how it can help you in your trading journey. I would love to hear about your own experiences with journaling in trading. Please feel free to share your thoughts, feedback, and tips in the comments section below. Your input and feedback is valuable to me and to the trading community!

Education

Updated

25 Trading Rules for Guaranteed Success!Hi traders! Before we dive into the 25 trading rules that can lead you to success, let's take a moment to reflect on this three things that are key to successful trading: First, there's " content. " This is all the information that traders use to make decisions, both from the market and from their own gut. It's really important to have access to reliable and up-to-date info, so you can avoid making costly mistakes. The second thing is " mechanics. " This is all about how you actually trade: the tools you use, the strategies you employ, and so on. It's crucial to master these mechanics before you can hope to make any money. Finally, there's " discipline. " This might be the most important of all. You need to be disciplined in your approach to trading, making smart decisions every time and sticking to your plan. It can be tough, but it's absolutely essential for long-term success. To help with this, you might consider reviewing a set of trading discipline rules every day to keep you on track. To improve your trading discipline, it's important to consistently reinforce good habits. Consider reviewing these 25 rules of trading discipline daily before beginning your trading session. It only takes three minutes, and it can help remind you how to conduct yourself throughout the day. Think of it as a helpful routine, like saying a prayer or setting intentions for the day ahead. #1 - DISCIPLINE PAYS OFF: MAXIMIZING PROFITS IN THE MARKET When it comes to trading, being disciplined pays off. If you can maintain discipline, you're more likely to make profits and avoid losses. The market rewards traders who can stay focused and make rational decisions. Remember, discipline equals increased profits. #2 - STAY DISCIPLINED EVERY DAY AND THE MARKET WILL REWARD YOU, BUT DON'T CLAIM TO BE DISCIPLINED IF YOU ARE NOT 100% OF THE TIME. It's crucial to be disciplined in trading, but it's not a part-time commitment, like saying you quit smoking but still sneaking a cigarette. If you're only disciplined in nine out of ten trades, you can't consider yourself a disciplined trader. It's the one undisciplined trade that can seriously harm your overall performance. Discipline must be practiced in every trade, every day, and only then will the market reward you. #3 - ADJUST YOUR TRADE SIZE WHEN TRADING POORLY Many successful traders abide by this rule. Instead of continuing to lose money on multiple contracts per trade, why not lower your trade size to just one contract on the next trade and save yourself some cash? Personally, I lower my trade size to one contract after two consecutive losing trades. Once I have two profitable trades, I increase my trade size back to its original amount. Think of it like a baseball player who has struck out twice. The next time at bat, he adjusts his grip on the bat and shortens his swing to make contact. Similarly, in trading, adjusting your trade size and aiming for just a small profit or a break-even trade can help turn your losing streak around. Once you've got two consecutive winning trades under your belt, you can increase your trade size again. #4 - NEVER TURN A WINNER TRADE INTO A LOSER ONE We've all been tempted to break this rule before, but we should aim to avoid it in the future. The root of the problem is greed. The market moved in our favor and gave us a profit, but we weren't satisfied with a small gain. Instead, we held onto the trade hoping for a bigger profit, only to watch the market turn against us. We hesitated and the trade turned into a significant loss. There's no need to be greedy. It's just one trade. You'll have many more opportunities throughout the day and in future trading sessions. The market always offers opportunities. Remember that one trade shouldn't make or break your performance for the day. Don't let greed ruin your trades. #5 - DON'T LET YOUR BIGGEST LOSS EXCEED YOUR BIGGEST WIN It's a good idea to keep track of all your trades during a session. By doing so, you'll have a better understanding of your performance and be able to make better decisions. Let's say your biggest win so far in the day is 30 Pips on EUR/USD. If you have a losing trade, make sure it doesn't exceed those 30 Pips. If you let a loss go beyond your biggest win, then when you calculate your total gains and losses, you'll end up with a net loss. That's definitely not what you want, so be careful and stick to your plan. #6 - DEVELOP A CONSISTENT METHODOLOGY AND STICK TO IT: AVOID CHANGING STRATEGIES DAILY To be a successful trader, it's important to have a solid game plan. This means writing down the specific market setups or prerequisites that need to happen for you to enter a trade. Your methodology doesn't have to be anything fancy, but you should have a clear set of rules or price action that you follow in order to make trades. If you're using a proven methodology and it doesn't seem to be working in a particular trading session, don't try to come up with a completely new strategy overnight. Instead, stick with what works and has been successful for you in at least half of your trading sessions. Having a consistent methodology will help you make more informed and confident trading decisions. #7 - BE YOURSELF. DON’T TRY TO BE SOMEONE ELSE. In trading, it's important to be yourself and not try to be someone else. It can be tempting to try and emulate successful traders or follow their strategies, but ultimately, you need to find what works for you. Everyone has their own unique personality, risk tolerance, and trading style. Embrace your strengths and weaknesses and develop your own approach. Don't compare yourself to others or try to be someone you're not. The most successful traders are those who stay true to themselves and their own strategies. Remember, you are the only one who knows what's best for you and your trading journey. #8 - ALWAYS PRESERVE YOUR CAPITAL: PROTECT YOUR ABILITY TO TRADE ANOTHER DAY Always prioritize protecting your capital in trading. It's important to never risk more than you can afford to lose, as the consequences can be devastating. One of the worst feelings in trading is not being able to continue because your account equity has dipped too low. To avoid this, I suggest setting a daily loss limit that you stick to, such as $500. If you hit that limit, it's time to turn off your computer and call it a day. Remember, you can always come back tomorrow with a fresh mindset and a new opportunity to trade. #9 - EARN THE RIGHT TO TRADE WITH BIGGER SIZE To earn the right to trade with bigger size, it's important to prove that you can consistently generate profits with smaller trades. Traders who rush into larger trades without sufficient experience and success are putting themselves at risk of significant losses. By demonstrating discipline, patience, and a solid track record of profitable trades, traders can gradually increase their position size and take on more risk as their skills and confidence grow. Remember, trading with bigger size is a privilege that must be earned through diligent practice, hard work, and a commitment to continuous improvement. #10 - HOW TO CUT YOUR LOSSES IN TRADING It's important to remember that having a losing trade doesn't make you a "loser." However, if you don't exit the trade once you realize it's not working out, then you're not making smart decisions as a trader. Trust your gut - if you have a feeling the trade is no good, it probably isn't. It's better to exit the trade and cut your losses rather than risk losing even more money. Every trader experiences losing trades throughout the day, including myself. On average, I have about one-third of my trades as losers, one-third as break-even trades, and one-third as winners. But the key is to exit losing trades quickly so they don't end up costing you too much. By doing this, even though I have more losing and break-even trades than winners, I still end up going home with a profit. #11 - THE BENEFITS OF TAKING A SMALL LOSS EARLY IN TRADING Sometimes traders in the pit will joke around and say things like "You're not a loser until you get out" or "Not to worry, it'll come back." But in reality, these phrases are just affirmations that it's time to exit a trade when it's not working out. Once you recognize that a trade is no good, the best thing to do is to exit immediately. Don't wait and hope that it will turn around. It's never a good idea to let losses pile up - cutting your losses early is a smart move that can help protect your capital and keep you in the game for the long run. #12 - WHY HOPING AND PRAYING IN TRADING IS NOT A WINNING STRATEGY As a new and undisciplined trader, I used to pray to the "Bond god" whenever I found myself in a tough trade position. I hoped for some sort of divine intervention to save me, but it never came. I eventually learned that praying to any "futures god" was a waste of time. The best thing to do is to just get out of a bad trade and cut your losses. Trusting in your own trading plan and strategy is much more effective than relying on luck or divine intervention. #13 - WHY TRADERS SHOULDN'T WORRY TOO MUCH ABOUT NEWS IN THE MARKET. IT'S JUST HISTORY... As a trader, it can be tempting to constantly monitor news and events in the market. However, it's important to remember that news is just history. By the time it reaches the public, it has already been factored into the price of assets. So, worrying too much about news can actually be detrimental to your trading strategy. While it's important to be aware of major news events, such as economic reports or geopolitical developments, it's not necessary to react to every piece of news that comes out. Instead, focus on developing a solid trading plan based on technical analysis and risk management strategies. Stick to your plan and don't let emotions or external events dictate your trades. Ultimately, successful trading is about making informed decisions based on market data, not reacting impulsively to the latest news headline. So, don't worry too much about news in the market. Remember that it's just history, and focus on developing a disciplined and informed trading approach. #14 - DON'T SPECULATE , IF YOU DO, YOU WILL LOOSE Speculating in the financial markets can be tempting, especially when you see others making big profits. However, it's important to remember that speculation is risky and can often lead to losses. When you speculate, you are essentially making a bet on the future direction of a particular asset or market, without having a clear understanding of the underlying fundamentals. The problem with speculation is that it's based on assumptions and predictions, which are often influenced by emotions and biased opinions. This can lead to overconfidence and a false sense of security, which can quickly evaporate when the market turns against you. Instead of speculating, it's important to focus on sound trading principles such as risk management, discipline, and a solid trading plan. By following these principles, you can reduce your exposure to risk and increase your chances of success in the long run. So, if you want to avoid losses and build a sustainable trading career, avoid the temptation to speculate and focus on the fundamentals. #15 - EMBRACE LOSING TRADES: LOVE TO CUT YOUR LOSSES "What do you mean by love to lose money? Are you crazy?" Well, no, I'm not crazy. What I mean is that you should accept the fact that losing trades are part of the game in trading. The key is to get out of your losing trades quickly and love doing it. By doing so, you can save a lot of your trading capital and become a better trader in the long run. So, don't be afraid of losing, embrace it and learn from it. #16 - WHEN TO EXIT A TRADE: SIGNS IT'S NOT GOING ANYWHERE Have you ever noticed when the market is just not moving? It's like everyone is content with the current prices, and no one is really interested in buying or selling. Well, when this happens, it's time to take a step back and wait for the market to heat up again. There's no point in wasting your time, energy, and money in a stagnant market. It's better to wait for the right opportunity to place your trades and make some profit. Trust me, it'll be worth the wait. #17 - BIG LOSSES: THE DAY KILLER When you suffer big losses, they can ruin an entire day's worth of hard work in achieving small wins. Not only that, but they can also take a toll on your psyche and emotions, leaving you feeling defeated and demoralized. It can take a significant amount of time to regain the confidence that you once had before the big loss. It's important to keep this in mind and manage your risk appropriately to avoid such setbacks. #18 - THE POWER OF CONSISTENCY IN TRADING: DIGGING YOUR WAY TO SUCCESS Consistency is key when it comes to successful trading. Making a little bit every day and consistently digging your way towards success is much more effective than taking big risks and filling in your progress with losses. By focusing on consistency, traders can build a solid foundation for long-term success in the market. It takes discipline, patience, and a willingness to stick to a well-defined strategy, but the rewards can be significant. So dig your ditches and don't fill them in, and with time and effort, you'll see the power of consistency in action. #19 - CONSISTENCY BUILDS CONFIDENCE AND CONTROL And Again...Consistency is a key component in achieving success in any area of life, including trading. When you consistently follow a trading plan, execute your trades with discipline, and manage your risk effectively, you build confidence in your abilities and gain control over your emotions. This confidence and control can help you navigate the ups and downs of the market with a clear head, and ultimately lead to greater success in your trading endeavors. #20 - LEARN TO SCALE OUT YOUR WINNERS Scaling out winners means taking partial profits on a winning trade instead of closing the entire position at once. This approach helps traders lock in profits and reduce risk by allowing them to ride the remaining portion of the trade with less pressure. Learning to scale out your winners requires discipline and a solid understanding of your trading plan, but it can be an effective strategy for maximizing gains while minimizing losses. #21 - MAKE THE SAME TRADES OVER AND OVER AGAIN Making the same trades repeatedly might seem boring, but it's an essential strategy for successful trading. By mastering a few reliable setups, you can gain a deeper understanding of the market and become more confident in your decision-making. Remember, consistency is key, and repetition is the foundation of mastery. #22 - DON'T ANALYZE, PROCRASTINATE OR HESITATE Over-analyzing, procrastinating, and hesitating are common pitfalls that many traders fall into. However, these behaviors can lead to missed opportunities and ultimately, losses. It's important to have a clear plan and execute it without hesitation. Don't let analysis paralysis get in the way of taking action in the market. Remember, in trading, time is money, and every second counts. #23 - STARTING AT ZERO: THE BEHAVIORAL KEYS TO TRADING SUCCESS Every trading day is a fresh start for everyone, with each of us beginning at the same level playing field. But as soon as the market opens, it's our actions and mindset that determine our success or failure. Adhering to the 25 Rules can lead to profitability, while neglecting them can result in poor performance. So, it's up to us to approach each trading day with discipline and focus to achieve the desired outcome. #24 - THE MARKET: THE ULTIMATE JUDGE The market is the ultimate judge and jury in the world of trading. No matter how good a trader you think you are, it is the market itself that determines your success or failure. Respect the power of the market and learn to adapt your strategies accordingly. #25 - STICK TO YOUR PLAN: THE FINAL RULE OF TRADING The last and most important rule in trading is to repeat your trading process every day and focus solely on your own trading plan. Avoid following others' ideas and stick to your own strategy. Consistency is key, and by repeating your process every day, you will build discipline and increase your chances of success in the market. Thanks

Education

Fibonacci Trick for measuring Risk to Reward Ratio If you don't use your fibb tool much, (save your settings as a template first if you do) or for just a quick check to see if there is enough reward for the risk in the trade, you can set up your Fibonacci in increments of 1 (2.5 is 1:1.5) Do this as far as you like. You can extend lines left or right to check if the R Ratio you are looking for will fit this market structure, or if you should wait for a better set up. I happen to see this in a YouTube video, and thought it was very interesting and more than useful... The settings are as follows : 0 - loss/stop loss price 1 - 1 unit of risk (100 percent) 2 - 1 unit of risk plus 1 unit of reward (1:1) 2.5 - 1 unit of risk, 1.5 unit reward (1:1.5) 3 - 1 unit of risk, 2 unit reward (1:2) ..... and so on. Then just save it as a template for quick set up later -- Example of use 6 (600 percent) is 1:5. Just subtract 1 for the risk and the remaining is the reward ratio. Each 100 percent mark is a single unit of risk (-1) In MT4 its much better to see it directly, as you can label the levels how you wish (using the same formula)

Education

by ForexStoryteller

Producing Recurring Income in Gold Gold has long been a darling of investors. Its holders - whether households or central banks - seek refuge in the yellow metal in times of crisis. Gold is a resilient store of wealth, offers durable portfolio diversification, exhibits lower volatility relative to equities & bonds, and serves as an inflation hedge. But it has a big downside. As mentioned in our previous paper , gold pays zero yield. Shares pay-out dividends. Debt earns interest. Property delivers rents. But gold? Zero! There are multiple methods of generating yield from gold. This paper illustrates a risk-limited, easy to execute, and capital-efficient means of producing yield by investing in gold. Innovation in financial markets enables even non-yielding assets such as gold to produce regular income. A class of derivatives known as call options can be cleverly deployed to generate yield. Call options are derivative contracts that allow its buyers to profit from rising prices of the underlying asset. When prices rise, call option holders earn outsized gains relative to the options price ("call premiums"). Unlimited upside with limited downside describes the call option holder's strategy in summary. What has that got to do with generating yield in gold? Everything. For every buyer, the market requires a seller. Options sellers collect call premiums which comprise the income. Many widely believe that options are weapons of mass wealth destruction. Not entirely wrong. Used poorly, options devastate investors' portfolios. Deployed wisely, options help astute traders to better manage their portfolio, generate superior yield on their assets, and construct convexity (disproportionate gain for fixed amount of pain) into their investing strategies. Fortunately, a covered call is a strategy which uses options prudently. As the strategy involves holding the asset whose prices are expected to rally, the risk of the strategy is hedged with risks well contained. Gold Covered Call involves two trades. A long position in gold and a short position in out-of-the-money gold calls. In bullish markets, investors gain from call premiums plus also benefit from increase in prices. Covered calls not only enable investors to generate income but also reduce downside risk if asset prices tank. A covered call trade in gold can be implemented in a margin efficient manner using CME’s Gold Futures and Options. A long position in CME’s Gold futures (“Gold Futures”) gives exposure to 100 troy ounces (oz) of gold per lot. Combining long futures with a short call option on Gold Futures at out-of-the-money strike allows investors to harvest premiums. Selecting an optimal strike and an expiry date is critical to successfully execute covered call strategies. First, Strike. It is the price level at which the call option transforms to be in-the-money. Strikes which have daily volumes & meaningful open interest enable options to be traded with ease and provide narrow spreads. Strikes that make options expire worthless benefits the covered call options holder. Second, Expiry. Options have expiry. Options sellers thrive on shrinking expiry for generating yields. Investors selling call options optimise their risk-return profile by selecting an expiry with higher implied volatility (IV). Option prices are directly proportional to IV. Higher IV leads to larger premiums enriching returns. SIMULATION AND PAY-OFF MATRIX This paper illustrates a covered call strategy in gold using the CME Gold derivatives market: 1. Long one lot of Gold Futures expiring in Oct (GCV3) at $ 2,050/oz. 2. Sell one lot of Call Options on Gold Futures expiring in Oct at a strike of $ 2,275 collecting a premium of $ 40/oz. The pay-off matrix simulates the trade P&L under four likely outcomes among many possibilities at trade expiry: a. Gold rises past the strike ($ 2,400): Options get assigned to the buyer. Covered call option holder incurs loss of $ 85/oz (=$ 2,400 - $ 2,275 - $ 40) from short call offset by profits from long futures ($ 350 - $ 85) = $ 265/oz. Each GC contract has 100 troy ounces of gold, so total profit will be $ 265 x 100 = $ 26,500. b. Gold rises but remains below the strike ($ 2,250): Options expire worthless to the buyer. Seller retains premium in full. Covered call option holder profits from long futures + call options premium ($ 200 + $ 40) = $ 240/oz. Each GC contract has 100 troy ounces of gold, so total profit will be $ 240 x 100 = $ 24,000. c. Gold price falls marginally below the entry price ($ 2,030): Options expire worthless to the buyer. Covered call option holder loses money from long futures and thankfully the loss is offset by call options premium (-$ 20 + $ 40) = $ 20/oz. Each GC contract has 100 troy ounces of gold, so total profit will be $ 20 x 100 = $ 2,000. d. Gold price falls ~5% below the entry price ($ 1,950): Options expire worthless to the buyer. Covered call option holder loses money from long futures and the loss is partially offset by call options premium (-$ 100 + $ 40) = -$ 60/oz . Each GC contract has 100 troy ounces of gold, so total loss will be -$ 60 x 100 = -$ 6,000. The chart below describes the pay-off from Gold Futures (Long position), Gold Call Options (short position) and Covered Call (combination of the two trade legs). MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.

Education

by mintdotfinance

AI and Algorithmic Trading #1 AI and Algorithmic Trading #1 - Introduction to AI and Algorithmic Trading In recent years, algorithmic trading has become increasingly popular in the world of finance. Algorithmic trading refers to the use of computer programs to automate the trading process, including the analysis of market data, the identification of trading opportunities, and the execution of trades. As algorithmic trading has become more prevalent, artificial intelligence (AI) has emerged as a key tool for traders looking to gain a competitive advantage in the market. In this article, we'll provide an overview of AI and its role in algorithmic trading. What is Algorithmic Trading? Before we dive into AI, let's first define algorithmic trading. Algorithmic trading, also known as automated trading or algo trading, is a method of executing trades using computer programs. These programs can analyze market data, identify trading opportunities, and execute trades at a speed and efficiency that is impossible for human traders. Algorithmic trading can be used for a variety of trading strategies, including high-frequency trading, statistical arbitrage, and trend following. What is AI? Artificial intelligence refers to the ability of machines to perform tasks that would typically require human intelligence. AI can be divided into several categories, including machine learning, natural language processing, and pattern recognition. Machine learning is a type of AI that involves training algorithms to learn from data, enabling them to make predictions or decisions without being explicitly programmed. Natural language processing involves teaching machines to understand and interpret human language, while pattern recognition involves identifying patterns in data. Benefits of AI in Algorithmic Trading One of the key benefits of using AI in algorithmic trading is the ability to make faster and more accurate trading decisions. AI algorithms can analyze vast amounts of market data in real-time, identifying trading opportunities and executing trades with a speed and efficiency that is impossible for human traders. Additionally, AI algorithms can learn from their mistakes and adjust their strategies accordingly, leading to more consistent and profitable trading outcomes. Challenges of AI in Algorithmic Trading While the benefits of AI in algorithmic trading are significant, there are also potential challenges associated with this technology. One of the main challenges is the need for high-quality data. AI algorithms rely on large datasets to learn from, and if the data is incomplete or inaccurate, the algorithms may produce flawed results. Additionally, AI algorithms may be subject to biases, both in the data they are trained on and in their decision-making processes. Finally, there are ethical considerations around the use of AI in trading, particularly around the potential for AI to exacerbate market volatility or contribute to systemic risk. The Future of AI in Algorithmic Trading Despite these challenges, it is clear that AI will continue to play an important role in algorithmic trading in the years to come. As the technology continues to develop, we can expect to see even more sophisticated AI algorithms being used to analyze market data, identify trading opportunities, and execute trades. Additionally, we may see new applications of AI in areas such as risk management and portfolio optimization. Conclusion In conclusion, AI is an increasingly important tool for traders looking to gain a competitive advantage in the world of algorithmic trading. By using AI algorithms to analyze market data and make trading decisions, traders can operate with a speed and efficiency that is impossible for human traders. However, there are also potential challenges associated with using AI in trading, including the need for high-quality data and ethical considerations. As the technology continues to develop, we can expect to see even more sophisticated applications of AI in the world of algorithmic trading.

Education

by JS_TechTrading

8 Trading Tips to Help You Increase Your Trading Profits Whether you are just getting started or you’ve been on your journey for a while now, you’ve probably discovered that day trading is not easy. You’re putting your hard-earned money on the line and facing new challenges daily. That said, every challenge you conquer takes you one step closer to your ultimate goal. Small behavioral changes can have profound impacts. Your goal is to minimize losses and maximize profits in order to increase your net profitability. Here are some tips: 1. Avoid Overtrading Traders are ambitious, sometimes too much so. Many traders feel the need to always be doing something. It’s important to remember that trading requires patience, and the quality of your trades is far more important than the quantity. 2. Avoid Under-trading Do you ever find a great trade setup that you don’t take action on, only to look back later and realize your idea was spot on? 3. Take Control of Your Losses As traders, we’re always focused on profits. After all, the main goal of trading is to turn money into more money. It’s easy to get carried away and forget about the very real potential for losses. In reality, limiting losses has the same net effect as increasing profits. 4. Simplify Your Approach There is an incredible amount of data available to traders in this digital millennium. This data is intended to improve our decision-making abilities, however it can also be overwhelming. 5. Trade Robotically As you begin to simplify your approach to trading, you can focus on making your strategy more robotic. The goal is to take all emotions out of trading so you can take a systematic approach to your trading. 6. Learn Your Strengths and Weaknesses Becoming a successful trader requires introspection, self-analysis, and evolution. Simply put, you need to analyze your own behavior and look for areas of improvement. 7. Double Down on What’s Working Learn to double down on areas of strength. Focus your efforts to trading activity that yields the highest rewards. 8. Don’t be Afraid to Go Back to Square One If you find yourself in a rut, don’t hesitate to go back to basics. In the trading world, a simple piece of advice can be a game changer. We’ve all heard quotes, lessons, or tips that have elevated our trading to new levels. What’s the best trading tip you’ve ever received? What do you want to learn in the next post?

Education

by UnitedSignals

⚠️ Risk:Reward & Win-Rate Cheatsheet The reward to risk ratio (RRR, or reward risk ratio) is maybe the most important metric in trading and a trader who understands the RRR can improve his chances of becoming profitable. Basically, the reward risk ratio measures the distance from your entry to your stop loss and your take profit order and then compares the two distances. Traders who understand this connection can quickly see that you neither need an extremely high winrate nor a large reward:risk ratio to make money as a trader. As long as your reward:risk ratio and your historical winrate match, your trading will provide a positive expectancy. 🔷 Calculating the RRR Let’s say the distance between your entry and stop loss is 50 points and the distance between the entry and your take profit is 100 points . Then the reward risk ratio is 2:1 because 100/50 = 2. Reward Risk Ratio Formula RRR = (Take Profit – Entry ) / (Entry – Stop loss) 🔷 Minimum Winrate When you know the reward:risk ratio for your trade, you can easily calculate the minimum required winrate (see formula below). Why is this important? Because if you take trades that have a small RRR you will lose money over the long term, even if you think you find good trades. Minimum Winrate Formula Minimum Winrate = 1 / (1 + Reward:Risk) 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️

Education

Scalping vs Day Trading vs Swing Trading | Learn What is Best Knowing which trading style suits you best is a difficult question to answer, but the choice you make is not permanent. In fact, many novice traders will experiment with some or all of the various styles before settling on a method and strategy that suits their lifestyle and the funds they have to risk. Scalping The first trading style of this guide is called "scalping". Scalping is a form of trading where traders aim to achieve profits from relatively small price changes. Scalpers enter and exit the financial markets within a short time-frame, which is usually a matter of a few seconds, or minutes (but the maximum is a few hours) and are known to use higher levels of leverage. Day trading Many traders think that day trading and scalping are similar. Although both trading styles do take place within one trading day, there are important differences that we need to highlight. Day traders open and close substantially less setups compared with scalpers. These traders sometimes open one setup a day, and often not more than a couple per trading day. Although they both trade intraday, the day trader's strategy is to focus on the best opportunities of the day, and to hold on for a larger profit target. Therefore, a day trader usually holds on to a trade for several hours but not more than one full trading day. Swing trading The last trading style of our guide is called swing trading, which is a style in which traders enter and exit sporadically, holding trades over a few days or weeks. Swing trading is a system whereby traders are aiming for intermediate-term trading opportunities, and is significantly different to long-term trading. Whichever trading style applies to you, it's important to find out, as the trading style you choose will have a profound effect on your trading outcomes and your ultimate profitability. ✅LIKE AND COMMENT✅ Please, like this post and subscribe to our tradingview page!👍

Education

by EliteTradingSignals

😎MYTHS ABOUT TRADING BUSTED😎 ⚛️The world of trading is full of myths and misconceptions. We often hear stories of overnight successes and devastating losses. It can be difficult to separate truth from fiction when it comes to trading. In this article, we will debunk some of the most common trading myths and provide the facts to help you make better investment decisions. ❌Myth: Trading is Gambling ✅Fact: Trading involves analyzing market trends, researching companies and industries, and making informed decisions based on data. Successful traders do not simply rely on luck; they systematically evaluate risk and reward before making trades. ❌Myth: You Need to be a Financial Expert to Trade ✅Fact: While a basic understanding of the market is important, you do not need a degree in finance to be a successful trader. There are numerous resources available to help beginners learn the basics of trading, including online courses, tutorials, and mentorship programs. ❌Myth: Day Trading is the Best Way to Make Money Quickly ✅Fact: Day trading involves buying and selling assets within a single trading day in order to profit on short-term price movements. While it can be lucrative, it is also risky and requires significant time and effort. Many successful traders prefer to take a long-term approach, focusing on investments that will appreciate over time. ❌Myth: You Need a Lot of Money to Start Trading ✅Fact: While having a larger investment portfolio can certainly provide more opportunities for profit, you do not need a huge amount of money to start trading. Many online brokers offer low minimum account balances, making it easier for beginners to start investing. ❌Myth: Trading is Only for the Wealthy ✅Fact: Trading is accessible to anyone with an internet connection and a willingness to learn. While high net worth individuals may have more resources to invest, anyone can start trading with a little bit of research and a willingness to take calculated risks. ❌Myth: Technical Analysis is the Only Way to Predict Market Trends ✅Fact: Technical analysis involves analyzing charts and data to predict future market trends. While it can be a valuable tool, it is not the only way to make informed trading decisions. Fundamental analysis, which involves evaluating a company's financial health and growth potential, is equally important. ❌Myth: Trading is a Solo Endeavor ✅Fact: Trading can be a solitary activity, but it is important to take advantage of opportunities to learn from and collaborate with other traders. Online forums like Tradingview, mentorship programs, and networking events can all provide valuable insights and support. ✳️In conclusion, there are many myths surrounding trading that can prevent individuals from taking advantage of its potential benefits. By separating fact from fiction, traders can make informed decisions and increase their chances of success. Whether you are a seasoned investor or a beginner, knowledge and education are essential to achieving your financial goals. Thanks for reading bro, you are the best☺️ Like, comment and subscribe to boost your trading! Dear followers, let me know, what topic interests you for new educational posts?

Education

by SignalProvider

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