USDCAD (1d) cautionIn the video I explain some of my methodology.
Overall I'm not one for shorting USDCAD. The safest bet - and I'm not taking it - is on the 4H time frame going long.
Trend
Study Case: How to play the trend II Description on the chart ...
See the related idea
How to play the trend I - BTC study case
Trend Following: when to consider if a buy #Singal is validIts likely for the #BTC and other coins to #down #trend or at least keep sideway for sometime. As a trend following trader, We should not be looking for the dip to buy as it wont be a low risk entry point, espcially when #volume could be a misleading parameter for lower timeframes.
Entry:
With some #technical #analysis grounds, proper #entry should be made when these conditions are met:
1. Price makes a breakout (better with chart pattern)
2. A higher than average volume.
3. Moving Averages on Price are positive (Slow<Fast<Close).
4. RSI corsses above 60.
5. RSI moving averages are positive.
Managing Trade:
To track an ascending #Trend, make sure to track:
- RSI be within 40 - 80 zone.
- Tracking Positive Reversals achieving targets.
- Positive Reversal conincides with Bearish Divergence
- Higer time frames are confirming positive signals appears in lower frames.
- always find support lines where Reversal points occur.
- proper technical #trendlines
Stop Loss:
- there are two way to place your stop loss properly. Both depends on trader’s financial risk tolerance.
1. Portfolio-based Stop: where you place stop price at the threshold where accepted risk is maximum of 2 to 3%. It really depends on how you manage risk on your portfolio or trade which may reach up to 7 to 8%.
2. Technical-basesd Stop: where a stop is placed not based on money at risk but where it is the least likely for price to hit.
- Both stop decisions should be taken before executing the trade.
Emotional Control
Trade the chart not opinions or emotions of greed or fear. Don’t let others distract you from properly manage your trade. Use what you know is works for you and stick to it. Never listen to others for help. Its your money, your business .. take full responsibilty for your decisions. You are #bullish until you are given a #sell or #short signal #technically.
Hope this would help traders finds a better #entry points where thier risk exposure is at minimum which makes it easier to manage.
@TFStrategist
Introducing 'Remora' and the 'Spaghetti Pretzel Logic Engine'Summary:
What follows is a 10min video of me giving you a peek at our latest iteration of 'Remora', a volume (only) based financial indicator....
Algorithm: Remora (because it allows even the smallest fish, to swim with the biggest sharks, without getting eaten by them. Ever.)
Version: v6 'Black Magic' Series (because we now have a new moving average (the black line) involved with trade decisions.)
Particular Iteration in Video: 'Longfin' (because it holds trades insanely long, through difficult trading conditions, designed to pop a typical stop losses.)
Available to the public: Not yet. (If you are interested, send me a message, and I'll add you to a list of people to contact, later.)
Seeking Angel Money: We need about $50k to ICO. The tokens would then be used to pay fees associated with trading, using our turnkey bot and and algorithms, and establish a market value for this particular technology, based on supply and demand.
...Remora is currently being developed for use with a bot, but I am demonstrating it in the video the way a 'human' would understand it. It appears to trade based on a signal green line, but in actuality, there are multiple types of 'logic' at play, behind the scenes (that you can throttle, based on your symbol and appetite for risk, etc.) which comprise the 'Spaghetti Pretzel Logic Engine', which is really the 'brains' behind everything) that crunches the trade volume data, and then spits out a single, actionable, trade decision, that you can count on being correct the vast majority of the time. (And when it's wrong, you will know by the next candle, and so while a false positives still happen, this particular iteration of Remora, reduced this number by more than 2 thirds, and represents a major breakthrough in logic and the evolution of this particular algorithm.)
Change of perspective: Maybe Bitcoin is dyingMy probability estimate for the south is 51% on a 12H to 8H time frame. My estimate is based on my own analysis and perspective.
I changed my mind based on new evidence and what I think is a more robust perspective.
It would be great to hear other perspectives. That's how we learn. Share and learn. I'm not here to be right or to make predictions etc.
I urge all traders not to be influenced just by my perspective. You must plan your trades and trade your plans according to your own methodology.
For more of a write up see here .
Some stuff on indicatorsI explore the use of common sense with indicators and add caution on not getting ripped off.
When the money is on the floor - take it!In this viog I spotted a set up and did not plan to trail. So, the money is on the floor and I take it. Greed and FOMO are not the ways to go.
I share how I use some indicators and price movement to assess the situation before entry. I trade what I see, not what I hear. :))
The most important things in trading:
1. See
2. Assess
3. Calculate if risk is acceptable.
4. Define entry.
5. Decide on exit.
Exit strategies do not have to include a target. I know some people who have missed loads of profits because price missed a targets by about 2 - 10 pips. I call that silly.
The important issue is to have exit criteria, which could be any set of situations on the chart that you define. A 'target' therefore does not have to be a fixed point. In trend-following trading for example there are no targets at all. But there are exit criteria.
But nothing is perfect. If the situation changes and there is doubt about exit, just take the money!
Log Vs Linear TradingAsk a hundred traders whether you should be using Log charts or Linear charts and you will get as many answers. The real answer seems to boil down to - Look at both and find what works.
On the lower time frames there is often not a big difference. Log is often considered best for longer-term charting, but that is not an absolute.
Badrosha on twitter writes: twitter.com
You can test the difference between Linear and Log for yourself. Try these ideas to see if you notice any differences:
->First, use " Magnet Mode " (symbol of a magnet on low left of options on left side of your chart) and pick your two points of a trend using a "Ray" (continuous line). On magnet mode the ray will stick to the top of a candle body or wick for you.
>Second, start to shuffle between the log and linear to find the story they are telling.
-LOG charts are generally considered to be better in a parabolic rally.
-Linear is often considered best for ENTRIES because it can potentially show Down Trend breakouts, short swing trade set ups, and pattern breakouts before the log chart will.
-Log is often considered best for EXITS and long term charting. Log shows - Up Trend breakouts, long swing expiration, or short entries sooner than linear.
>With Linear you can see classic entries on breakouts, which is the confirmation on a broken trend. While with log, you rarely find a good one - if price action starts to return on a breakout the percentage change (log) will can give false signals - unless in "parabola."
The bottom line: there is not a "right" answer. What matters is if it works, not whether one is right philosophically or intellectually. Look at the history of a chart and look at what has worked, because one of the tenants of Technical Analysis is "History Repeats Itself."
On the daily chart of BTC 0.00% right now, there is a potentially important difference between Log and Linear charts. Follow the instructions above for Magnet mode and a Ray and switch between Log and Linear. Also shown in the charts here. This difference is why a lot of traders disagree right now on whether we are in a continuation of the bearish trend , or the start of a new, potentially bullish , trend.
Ari-Wald, C.F.A, C.M.T Analyst Wolfe Research @AriWald
For me, I’m a Log-always analyst. While the differences are many times negligible, there are times that Log scaling provides a considerably stronger view of the stock’s trend vs. Arithmetic scaling, but I’ve never found the opposite to be true. The advantage of Log is clearly seen at long-term horizons or during big price moves at lower prices.
As an extreme example, drawing a trendline on an arithmetic chart of the S&P 500 0.05% from 1930-current is not an accurate depiction of the index’s trend during that period in my view. We realize that a 10 point move from 20 to 30 (50%) is not the same as a 10 point move from 30 to 40 (33%). A line on a log chart would look like a curve plotted on an arithmetic scale in this example – but consider that the price on this arithmetic scale gives an inaccurate view of price, in my opinion, and therefore the curved trendline is justified.
So overall, if I’m going to use a Log chart in this situation I should maintain my defaults on Log because I won’t encounter a time when I’m at a disadvantage, only times when Log is preferred.
Pete-L-Brandt – C.E.O. 2 Factor LLC @PeterLBrandt
As a trader I do not use log charts. However, I can see some advantages to log charts for analysts who exam very very long-term trends.
The reason I do not use log charts is that they are irrelevant to me as a futures trader. The value of a $15 move in the S&P 0.05% was the same to me when S&Ps traded $150 as it is today when the S&Ps are at 1700 or so, even though on a percentage basis the $15 change was 10% of the price in 1983 and less than 1% of the index today.
Education - 1) Trend & ChannelTo become a good trader
- Trend is the first think to know and understand;
o Trend always stronger than channels, ranges so ever,
o Trying to trade against trend is one of biggest mistake to do, which is sometimes experienced traders are doing
o If you wanna understand the trend you should look longer timeframes; in forex you can use weekly or monthly charts to understand it, in cryptocurrencies daily charts are cool enough, as i backtested
o Once you see the way, then you can start to look another indicators, channels, ichi, harmonics, fibs, ew, bb whatever you use
- Channels are second strong think to trade with;
o i just pinned one but as you see in the chart there are lots of them, and also there will be much more if you look at shorter timeframes
o Main think about trade with channels is; channel has to be on the same page with trend
o Second think is you should anticipate it before it occurs
- This is going to be my first educational document that i’m sharing, so feel free to criticize and add useful information with comments to make it better for me and community
Price Action Lesson 6: Shooting Star Candlestick Pattern Def.Shooting Star Candlestick Pattern Definition:
When the price highly increases during a day, but decreases to what it was at the beginning of the day or even lower, a considerable bearish retracement is occurred.
The candlestick of this price action in the daily time frame is a Shooting Star.
The Shooting Star in the daily time frame is a very strong signal for the possibility of more decrease in price during next days.
Example: The chart shows the price of Gold in the time frame of 30 minutes. On Sep 08, 2017 the price significantly increased from 1348.80 to 1357.53, then it decreased more, and at the end of the day to it was closed at 1346.07.
The corresponding Shooting Star candlestick of this price movement in the daily time frame is also drawn on the chart to better describe the concept.
What is the job of a trend-following trader?The chart is not going to tell anyone whether to go long or short. I cut deeper than that. This post is about what I see as the job of a trader, who wants to be consistently profitable over a long time using trend following strategies.
The following therefore excludes systems that tend to have fixed targets, such as harmonic trading and exploiting levels of support and resistance. Trend-followers usually do not have fixed targets as they do not know how far a trend would go before changing.
My job as a trend-following trader is to do the following:
Estimate probability of direction of future price movement based on a sound system of analysis.
Engage losses but make them controlled and reasonable within a sound methodology.
Exploit probability of price movement in a favoured direction by trailing the trend.
Have realistic expectations of gain in any single trade relative to the Average True Range (or other suitably reliable measure of volatility).
For trading situations where the Average True Range is high, stop-losses need to be acceptable and broad. Sometimes 2 x Average True Range is used as a rule of thumb. However, human judgement has to prevail. On occasions some instruments have a pattern of spiking deeply down or up, and recovering. For those a stop-loss of 3 x Average True Range may be better to avoid being stopped out. If 3 x Average True Range or even 2 x Average True Range is unacceptable as a loss I do not enter the trade. Too often new traders are spiked out and left behind.
Average True Range varies by time frame and naturally so does visual appreciation of volatility.
Make volatility your friend - and treat her with respect. Develop ' nerves of steel '.
Price Action Lesson 7: Conditions of a Perfect Shooting StarConditions of a Perfect Shooting Star:
Body is short.
The height of the candlestick (the difference between high and low price) is tall enough and it's more than the Daily ATR(264). The taller the Candlestick is, the stronger the Shooting Star.
The upper shadow (also known as upper wick or tail is the distance between the high price and the close or open price, whichever is higher) should be very tall, over than 75 percent of the Daily ATR(264) is better.
The lower shadow (also called bottom wick or tail is the distance between the low price and the close or open price, whichever is lower) is nonexistent or very short. It should be less than 25 percent of the Daily ATR(264).
The Shooting Star with the bearish body is stronger than the one with the bullish body.
- The picture shows a perfect Shooting Star candlestick .
As seen, the height of the candlestick is tall, but the body is very short. Also, the upper shadow is very tall and the lower shadow is very short.
The close price is lower than open price, therefore the body of this Shooting Star is bearish , and the strength is very high.
The MARKET STRUCTUREOkay, so im going to try, to break down the meaning of the market structure for you guys. I will try to keep it simple becouse it really is simple. You allready know about it but never though about it this way.
So, how is market made? What does it do?
We all know, it's mooving up and down all the time, and we know it doesn't moove in straight lines (if it would, we would all be millionares).
But if we think of pullbacks as flags and we know that flags are continuation patterns would it make any difference to you?
IT DID TO ME. It opened my eyes. The market was suddenly full of flags and a lot easier to understand what is happening.
I started to make a lot easier analysis, with a lot less crap on my charts and my trades start to hit a lot more profits.
It helped me a lot when I was a novice trader, so I hope, it will help you guys too.
Let me show you what I mean by pullback = flag.
THE FLAG THEORY
Here's a 1h chart pullback.
And now here is a 15min chart(same part)
So take some time now, go and close up some pullbacks on smaller charts. It's the same on other timeframes too.(ex. daily pullback is a flag on a 4h chart, or in another look, a 4h trend ). By the way, pullback is a non-avoidable thing. It allways happens. You get a bigger moove, then you get a flag, again a bigger moove, flag and so on... Pullbacks occur by breaking the zones, trendlines. When the zone is broken, price usually pulls back before continuing the trend.
Okay, there is another thing that I need to break down before proceeding the flag theory. And it is the shift of momentum.
THE SHIFT OF MOMENTUM
Okay so we have market trending in a sell direction and suddenly a big bullish moove appears.(I will show it on a 1h chart, but it looks the same on every timeframe)
So we are selling.
And BOOM, this moove appears.
Are you going to look for a sell after that moove? NO.
Big mooves in shorter time mean THE SHIFT OF MOMENTUM.
It usually indicates, that the market is changing direction and will be trending in the other way from then on.
This is not a 100% thing. There is allways a chance it will change direction again and end up in the wrong direction for you. But i wouldn't be looking for a sell after this moove.
So what if we take the FLAG THEORY and SHIFT OF MOMENTUM, and use them togather?
Just let me show you another thing first.
That is a 15min shift of momentum.
And that's how it looks on a 1h chart.
You see? There is a big 1h candle. After this big 1h candle closed, I would of entered a buy position and put a stop loss below the low of the flag.(but ofcourse only if it would appear on a zone and fibo lvl) So now you can moove to your charts and observe what kind of mooves happen after a pullback. It's usually a bigger candle indicating a shift of momentum and market showing you, it's ready to jump in a trade.
Another example on a daily and monthly chart.
That is a daily EURJPY chart.
And that's monthly.
I will be looking for a long term sell after a big daily flag.
And you allso want to know, that if you are a trend trader, you never want to counter the trend direction by selling an up trend for example.
On an up trend you search for buys, on a downtrend you search for sells on a timeframe you prefer. If there's a downtrend on a 4h chart and you like the 4h chart you want to be selling the pair. Same for the other direction.
I hope i helped you but now it's your turn to test it out. Like and follow for more posts:)
Price Action Lesson 5: Weak Hammer (Example)Weak Hammer (Example):
The chart shows the price of Bitcoin vs. US Dollar. In 02/02/2018, as it says, buyers couldn't raise the price above the day open price, the D1 candle seems a Hammer with bearish body. So the final result wasn't clear and the next day, sellers could pullback the price. (Consider the red thick arrow)
Price Action Lesson 4: Weak hammerWeak hammer:
For having successful and steady transactions, Simple detection of market patterns is not enough. But with a deeper look, we should calculate the success possibility of each pattern. One of the determining power Parameters of hammer stick is about Descending or ascending that the body can be. Thus, if the body of hammer is ascending, Possibility of starting an ascendant wave is very high.
The opening price of the day, is very important. This price - is the previous day's closing price, in fact it is the price that they had a war at in previous day where buyers and sellers come to equilibrium. So on the day that the Hammer is forming. If buyers can raise prices to the point of closing price of yesterday, and by the end of the day, they keep the price at the top of it, they will be the winners of the war. If we can raise the price above yesterday's closing price, they are not conclusive winners of today’s war, and this war will continue for the next few days.
Thus, if the body of hammer is ascending, Possibility of the beginning Ascending wave is very high. But if the body of hammer is Descending, Possibility of the beginning Ascending wave is less. In this case, it is said a weak hammer has made.
- The picture shows a hammer candlestick with descending body.
. As what can be seen, candle’s height is tall, but it has very short body height. Also Lower Shadow is long, and the upper shadow is very short.
. As regards the Closing Price of market is under its Opening Price, therefore the body of this hammer is Descending, and the power is very low. Possibility of the beginning ascending wave is less.
Price Action Lesson 3: Hammer, The first sign of beginning ...Hammer, The first sign of the beginning Ascending wave:
Hammer shows that the war between buyers and sellers, at the beginning of the day sellers could create significant reduction in price, with their high investments. But when the price had come to the lowest extent of it, many of buyers have entered with more investments than sellers. And again they could increase the price close to what it was at the beginning of the day or may even more. And at the war that was between buyers and sellers, the buyers have been the winners of the day, and the market is largely in control of them. Thus, the possibility of further price increases in the coming days is enormous.
example: picture Shows, currency pair of EUR/USD -0.31% in a 30 minutes time frame.
At the beginning, by increasing investments of sellers, the price became to 1.16886 But in this range with the arrival of large buyers to the market and overcome to turnover of shopping on sales transactions, the price increased again. Sellers could increase the selling price due to the amount of demand from buyers. The starting price is may be at 1.17495 but it increased by the end of the day to 1.17578.
As what can be seen, after forming Hammer , an Ascending wave started and the Price have increased more.
Price Action Lesson 2: Conditions of a Perfect Hammer Conditions of a Perfect Hammer:
. Body height must be short.
. The total height of the candle must be taller than the Daily ATR-264. The taller the candle is, the stronger the Hammer is.
. The lower shadow’s length should be very tall. It is better to be over 75 percent of the Daily ATR-264.
. The upper shadow does not exist, or if it does, it is very small. It shouldn't be more than 25 percent of the Daily ATR-264.
. The hammer that has an ascending body is stronger than the one which has a descending body.
Hammer Candlestick Pattern DefinitionHammer Candle Stick Definition
If there was a large drop in price in the middle of the day, but before the day ended it increased to what it was at the beginning of the day and even more, a significant upward return occurred. The candlestick of this change (move) will be a Hammer in a daily time frame. A Hammer formation on the daily time frame is a very strong indication for probability of increasing price in next days.
Example: The picture shows currency pair of EUR/USD in a 30 minute time frame. On Ausust 09, 2017 the price significantly decreased from 1.17495 to 1.16886 or even lower. But after that, it increased rapidly at the end of the day to 1.17578 and then closed.
Also in this picture - for better understanding - the Hammer Candlestick in the daily time frame - in the result of changes in a day - is drawn.
Cashing out on market asymmetries Skip to the second paragraph to get to the point, first paragraph discusses observations...
What you see in the bottom of the screen is a script I recently published just for fun; it's a momentum measurement for bitcoin against several fiat pairs and crypto pairs, and all summed together. The top of the screen is essentially the btc price, but somewhat more reactive. What is really interesting here is that on the morning of 21.11 the red line (which represents the sum of bitcoin momentum across multiple pairs) took a steep dive to an order of magnitude less than it has often been at (bottom pink circle), an obvious red flag for long holders. Then 3 hours later the XBTUSD price took a quick decline as well! The steep decline in the momentum looks largely responsible by the DASHBTC pair, but took a few hours to show in the BTCUSD pair. The reason so many prices of cryptos are stable is because of the work of the people doing arbitrage, this normalizes the market. However in this case it took longer than expected, possibly for a number of reasons, due to time of day, blockchain verification delays, or simply there are not so many arbitrage bots on the DASHBTC pair, or any other reason... Then 3 hours later the bitcoin price followed suit. The insane divergence of DASHBTC from the overall value of BTC can be taken in only 2 ways: Dash has a sudden market strength, or money is moving from BTC to DASH, possibly foreshadowing a decline in BTC.
What would be interesting is a suite of indicators that measure how volume moves through a specific crypto to find its overall worth (ie. multiple exchanges and multiple pairings). If a lot of money is being poured into, or out of, one pair then the overall value may also be effected with a time delay. Enough of a time delay to get a great position (like the 3 hours mentioned above). I will need to think about how to appropriately measure this, normalizations schemes, volumes, momentum, price, ect... If anyone wishes to discuss ideas related to this I would be more than happy to talk.
Cheers!
EURUSD 4H How to use the 50/100 sma as your Price Action GuideThe 50 and 100 sma are my guides for price movement on my charts. Price trends, ranges or consolidates. When price moves in between the 50 and 100 sma I call that my in side range. Price can move quickly through both or mostly it will consolidate. If I enter an inside range trade I do not expect to have price momentum going through that space. Also many times price will move from one ma to the middle of the inside range and then return to that original ma and either cross back over that ma and continue moving away. Or price will make a second attempt to cross through the inside range to the other ma and complete it this time. When price is in a trend or a larger range it can be far away from these two ma's. Price will want to return to these ma's . Price will either bounce off the first ma and continue the trend or return to the range res/sup line. Or price will go through the inside range and continue on. In this case when price crosses the last ma it will move with momentum. I always look for the 800 ma on a 15m chart and see how long price has not touched it. So if price structure looks like the 800 sma could be a TP I use it. I also try to see if there is a larger range box price is moving back and forth in and use those sup/res lines as TP. If price moves up to the top of the larger range and makes new highs then possibly a new trend is starting. Watch for fake break outs from the range box so I usually will wait on the breakout for a break of the trendline - a hook back toward the trendline - and a go with continuation candle patterns with the new trend.
Bullish Consolidation 1-2-3-Breakout PatternThis is a great example of the 1-2-3-Breakout pattern on Bitcoin using the Daily chart.
This pattern can be applied to any equity. Chart patterns represent human behavior and that is a constant among all asset classes.
Point 1 - The First Test - The New High
Price reaches a new high and pulls back when investors take profits.
Price falls.
Point 2 - Second Test
New buyers come in and price tries to attack the highs for a second time. Often this attack fails, because there just aren't as many buyers as before, and people who didn't get a chance to sell at (1) now have a chance, so they sell and run to the bank.
Price falls.
A trend line has now formed between point 1 and 2. This downward trend line basically shows us that price is making lower highs. What we want is to see a higher high, which is an uptrend. Pretty easy right?
Well we can't see a higher high until we break out of the downtrend, meaning, we have to break out of this trend line.
Point 3 - Third Test
People start to watch the trend line as well, so it becomes a self-fulfilling prophecy and the price starts to get stuck under the trend line.
In general, we know that we have less buyers here than before. So here we ask the question, will we ever breakout of this downtrend? Or will we crash down because the buyers are disappearing
Point 4 - The breakout
Now we have the answer. This is VERY OFTEN the fail or succeed point of a pattern like this. After 1,2 and 3 tests of the downtrend, either buyers will give up and go home, meaning sellers take over and price breaksdown OR new buyers come in from somewhere, or maybe they were just waiting for lower prices to buy. Whatever the reason, they step in and start buying. We breakout of the downtrend line, and that inspires more buyers to come in because they were the ones waiting for the trend line break. And then price starts moving fast because everyone wants to buy. THen the media says "this is a great buy" and boom more people come in.
Until finally....we reach a new high price (1) once again. Investors take profits and the whole cycle repeats itself.
If we IDENTIFY the patterns, and RECOGNIZE the breakout points, then we can be prepared to jump in at a favorable point.
A thread about STRUCTURE!This entire thread will be for STRUCTURE!
In the "idea updates" column I will be posting all types of
corrective and impulsive structures!
When it comes to trading the waves, the 12345ABC we all
love to draw when we first learned about the theory will be
useless (most of the time)
What we should focus on is if we're in correction, and if so
how the heck can we trade the next impulse!
Every instrument I look at i will post here.
As long as there is structure it will be fine to be posted here!
Follow the Trend, My Strategy!This is my trading plan. You can look through my published ideas to look at other examples.
I need 3 reasons to enter a trade.
1. A clear direction. I use 3 emas 50, 100, and 200 as shown in the chart.(Required)
2. A horizontal support/resistance area. (Required)
3. Price retrace to one of the emas to act as resistance. (preferably than fib)
4. Fib continuation 0.382, 0.5, or 0.618 level.
Placing a stop loss.
My target for stop loss is between 10-25 pips.
I place my stop loss behind the horizontal and/or the next ema.
My target price is always 2 times more pips than I risk.
----------------------------
I trade between 15 pairs, and on 30 minute time frame.
One reason is to counter F.o.m.o trading(Fear of missing out).
Counters Revenge trading because my trade size is smaller, and the opportunities are endless.
Counters Gambler's Fallacy because I require 3 reasons to enter a trade,
I don't enter a trade and expect to win after losing 3 times in a row, I place a trade based on my strategy.
I'm still trying to evolve as a trader, as you can see that throughout my published ideas.
