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Technical Analysis OverviewThe investment decision is based out of two different ways: Fundamental Analysis: Analyzing a company's financial statement Technical Analysis: Understanding the market sentiment behind price trends Technical Analysis The study of statistical trends, collected from historical price and volume data, to identify opportunities for trade. Assumptions of technical analysis Market discounts everything History tends to repeat itself (psychological) Price moves in trend (reflexive) Trend A trend is the overall direction of a market or an asset's price identified by trendlines. Three possible trends: Uptrend: Asset going up, making higher highs or higher lows Downtrend: Asset going down, making lower highs or lower lows Sideways: Asset trades in horizontal channel Technical Analysis considers: (Basics of Technical Analysis) Price Chart Patterns Volume-Momentum Indicator Oscillators Moving Average Support Resistance levels Movements are not linear, the price will face resistance as it goes up or support as it goes down. -‍Resistance: Level where an uptrend can be expected to pause or rebound due to a concentration of sellers. -Support: Level where a downtrend can be expected to pause or rebound due to a concentration of buyers. Technical Indicators broadly serve three functions to alert, to confirm, and to predict. There are two types of indicators: Leading Indicator: Leads the pice, generates a signal for trading opportunities. Eg. Oscillators i.e. RSI, CCI, Stochastic, Williams %R, Momentum, etc. Lagging Indicator: Follows trends and patterns, reduces the risk in exchange for missing early opportunities. Eg. Moving Averages, Bollinger Band, and MACD. A few myths about Technical Analysis: TA is only for short trading or day trading- TA can be used in all time frames, from 1 minute monthly charts TA has a low success rate- Solely TA can give you profits if used effectively Technical Analysis is quick and easy- Continued success requires in-depth learning, practice, good money management, and discipline Ready-made technical analysis software can be helpful- Such software may provide insights about trends or patterns but cannot guarantee profits, use of backtesting is necessary TA can provide price predictions accurately- TA is about probability and likelihood, and not guaranteed thereby price ranges can be predicted The winning rate in TA should be higher- Profitability does not depend solely on win-rate, it also incorporates risk-reward ratio Limitations of Technical Anlaysis Tend to give mixed signals when used in isolation, confusing traders TA is all about probability and signal cannot guarantee a successful trade even after thorough analysis Often technical analysts use indicators in different methods and may form a biased view regarding the same stock Many a time the technical signal may lag, and by the time proper signal is generated it is possible that the trade might be over A single trading strategy may not work in all scenarios as markets tend to be extremely dynamic Few Trading Mistakes Beginners Make: Starting with real money The best way to get acquainted with trading rules is to have a demo with virtual money before investing in real money, you can perform paper trades on Mudrex Not examining situation by yourself Make your own strategy, test them on the Mudrex platform, and then follow the same plan to trade by understanding things on your own Inevitable Losses Set risk limits for yourself and trade accordingly and accept the losses you face Margin Trading in the beginning It is not recommended to margin trade until and unless you understand the risk completely as crypto trading is rewarding yet risky Following the herd Before making a start with real money, make a set of rules which needs to be followed and have stop losses to limit the loss incurred on your trade ---------------------------------------------------------------------------------------- If you find the post useful, please like and share our ideas with the community! - Mudrex
COINBASE:BTCUSDEducation
by Mudrex
19
GBPJPY H4 testing /1000%+ gain data for 1000+ trades since 2007 Hi All Pleased share some back testing results on the H4 timeframe across some xxxjpy pairs, mainly GBPJPY. By testing H4 we have access to more data in time, so this video shows testing from 2007 with over 1000+ trades , so a substantial back test in my opinion. Entry is clear - we just follow the entry on screen Exit is clear - 3 exit options - Stop Loss (all of our SL's are dynamic and based from ATR - so we take into account volatility on every trade - you can still risk the same amount!) - TP3 target based on 1:8 Risk to Reward or lastly, close and enter on a reverse signal if this happens before the other 2 possible outcomes. Regards Darren
Education
by pow_removetheguesswork
Meet Percy - 'YOUR' new Trading E-Mentor - he's cool......Percy is a great guy... he can be a girl too and you can call him or her whatever you wish. I just chose the name Percy, I think its quirky. :-) BUT .... Percy can help you like he helps me - Let me introduce you to him. He tells me when to enter a trade, when to close a trade, what lot size to use - he helps me stay on track when I feel like closing early (Percy hasn't closed so I shouldn't) he helps me ignore them voices of increasing my risk. Percy works incredibly hard, he has back tested over 4200 trades to help me identify my edge in the market. Percy is simply a legend, I trust him, I have confidence in him and I follow his lead. Get a Percy. Regards Darren
Education
by pow_removetheguesswork
3
CTA TRADING STRATEGY - ONLY SYSTEM YOU NEED TO USE1 What is CTA Trading? 2 Types of CTA Trading Strategies 3 How does CTA Trading Strategy work? 4 CTA Trading Strategy 4.1 CTA Trend Filter Rules 4.2 CTA Trading Rules for Entries 4.3 CTA Trading Diversification 5 Final Words – CTA Strategy 1 What is CTA Trading? In finance, CTA is an abbreviation for Commodity Trading Advisor. A CTA is a professional money manager or a hedge fund who trade futures contracts, commodities, options and certain foreign exchange instruments in more than 150 global markets. Note* Trading futures and options involve a high risk of losing your investment. Learn more about other tricks used by CTAs here: Hedge Fund Strategies and Tools Used on Wall Street. Basically, in CTA finance, a commodity trading advisor tends to run managed futures strategies with OPM (other people’s money). As you might think in the US, managed futures are regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) so you can be sure the CTA fund strategy use strict risk management rules. Now, you might be wondering, what are managed futures? In layman terms, managed futures are a type of unconventional investment approach in which the portfolio is actively managed by professional money managers like CTAs. This also explains what is a CTA fund. CTA trading looks for ways to make money in both up and down markets. So in other to accomplish this, they will implement a multitude of CTA futures trading strategies. 2 Types of CTA Trading Strategies Institutional traders have several CTA trading strategies that can use to thrive in any type of market environment. The two of the most popular CTA investment strategies that can be used by a CTA fund are: Systematic strategies Discretionary strategies These two leading strategies used by the CTA investment funds are largely available to be used by the small investor as well. The difference between systematic and discretionary trading is the following: Systematic CTAs are relying on automated trading strategies and models that use chart pattern recognition signals, trend following signals and technical analysis removing the human intervention Discretionary CTAs are relying on macro data analysis and trades are executed at the discretion of the CTA fund manager Note* There are also CTA commodity trading strategies that focus on niche trading plays like market-neutral strategies or delta-neutral strategies. Now, our team of experts at Trading Strategy Guides will focus on CTA systematic strategies. Why? Well, it’s because when we remove the emotion element from the equation of trading we improve our odds of success. Now of course, if you have a gut feeling that comes from tens of years of trading experience, you can override the trade signals of your CTA strategy at your discretion. No CTA investment strategy is foolproof. 3 How does CTA Trading Strategy work? The mechanisms behind the CTA trading strategy are similar to any other trading strategy. You’ll be surprised to learn that most CTA strategies are based on simple stuff like moving averages, momentum indicators or pattern recognition. They are mostly CTA technical analysis based strategies. However, we can distinguish at least two differences. First… The main ingredient of a CTA investment strategy is contingent on the ability to construct a diversified portfolio. That’s investing in several global markets and trying to capture both bullish and bearish trends. Second… The CTA trading models rely heavily on analyzing a huge amount of price data that encompasses even 100 years worth of data. These two elements are what makes the CTA strategy so much more reliable when it comes to correctly predict the direction of the trend and being profitable. Not all trends are created equal, so by diversifying their portfolios, CTA managers can increase their chance of actually capturing a really big trend. Our team of experts will outline a CTA trading algorithm that can be used without the need of having fancy financial models. You can trade this CTA strategy from any trading platform that offers charting packages. 4 CTA Trading Strategy In this section, we’re going to provide you with a framework to build a trend following model based on price action. We’re also going to provide you with some of the foundations of how the CTA trading strategy works. When you go through the process of building a trend-following model, it’s important to first have a strong foundation. But, the reality is that most trend-following rules attempt to achieve the same results i.e. capturing the trend. Once you grasp that no matter how much you twist the trend following system rules, in the grand scheme, it doesn’t affect the outcome of your trading activities. As we mentioned earlier, the value of the CTA trend trading system comes from diversification. Now, don’t worry if you don’t know any decent trend following system. We’re going to share with you some CTA trading rules that will help you achieve the same results as the top CTA fund managers. A - CTA Trend Filter Rules The trading rules are the least important thing with trend-based systems, however, to maximize gains it’s important to be able to detect trends as early as possible. In this regard, we’re going to reveal two of the most important moving averages used on Wall Street since early 1900. The 50-day moving average in combination with the 100-day moving average is our primary tools to gauge the trend direction. Here are the rules to determine the uptrends and downtrends: We’re in an uptrend if the 50-day moving average is above the 100-day moving average. We’re in a downtrend if the 50-day moving average is below the 100-day moving average. These trend filter rules are quite simple, nothing complicated here. The trend-following rules are designed to keep you with the dominant trend and to reduce the risk of getting whipsawed by the price action. Now, you might be wondering… How do I decide to enter the trend? B - CTA Trading Rules for Entries There are many CTA technical analysis tools that can be used to trigger your entry. However, make no mistake, no matter how much you want to improve on your trade entry, in the long run, it doesn’t matter. In the context of a trend market timing is secondary to things like position sizing. So, to keep things simple… We enter a long position when we break and close above the 100-day moving average. And, vice versa, we enter a short position when we break and close below the 100-day moving average. Don’t be a novice trader and focus all your energy on your entries. But, instead, try to analyze how to diversify your holdings and how much to risk on each trade. This brings us to the next point. C - CTA Trading Diversification Here is the thing… Some trends are stronger than others. Inherently, some stocks can develop stronger trends than others. Secondly, there may be long periods, where the market is flat and no trend is presented. In some instances, when we don’t have a catalyst for trend development, the market can stay trendless for years. At the same time, when the market is not trading we can also have lots of false signals. Now, the key idea is to cover more than just one market and built up a portfolio of trades, the same as in our latest forex basket trading strategy. When you try to catch trends from multiple instruments at the same time you increase your odds of success. Let me explain… Trends come in different forms and shapes. Some trends will last for a very short period of time. Other market trends will reverse on you, right when you enter the market. The idea is that you will incur losses. It’s inevitable. But, with diversification, it will allow you to catch a big trend as well. No one knows what market trends will continue to develop and what market trends are doomed to die unless of course, you have the Holy Grail. So, by diversifying in multiple trends you can take small hits her and there, but if one market emerges with a strong trend you can overcome all your losses and finish the line with a lot of profits. Just for simplicity, we’re going to assume we’ve bought the above three stocks Apple, Facebook and Twitter. All of the three stocks started to emerge into an uptrend, more or less, around the same time. What is the first thing that pops up though your mind studying the 3 stock charts? The trends developed on the Twitter and Facebook chart price were short-lived. So, he took a hit on those two trades. However, with our Apple trade, we were able to recover all of our losses and make a nice profit. That’s the power of CTA diversification in action. Now, what if we told you that the CTA fund managers use position sizing in their favor to further turn the odds of success. What do we mean by that? CTA trend following strategies also uses volatility-based position sizing. The trading principles are simple, allocating different position sizes based on the level of stock volatility: Take larger position sizes for less volatile stocks Take bigger position sizes for higher volatile stocks With this approach theoretically, each trade should have the same impact. Most CTA funds use the Average True Range (ATR) as a proxy measurement of volatility. Final Words – CTA Strategy In summary, CTA trading offers an exciting opportunity for both long and short investors. With the CTA trading strategy, you can achieve a true diversification of your portfolio by spreading the risk across several positions. However, you have to keep in mind that generating positive returns are dependent to your skills to identify good trading signals. Outstanding returns can’t be achieved only through diversification. So, here is a short recap of the CTA strategy: A systematic approach is superior to a discretionary approach Define the uptrend and downtrend combining the 50-day MA and 100-day MA Diversify your portfolio with multiple positions Use volatility-based position sizing to maximize your profits
NASDAQ:AAPLEducation
by Tradingstrategyguides
20
DowntrendYou can make money from an uptrend or a downtrend in trading. Downtrends tend to move faster than uptrends, which is why you will find some traders who opt to only short sell assets in order to capitalize on the quick price action. Many kinds of research show that financial instruments can trend more than 30% of the time. The rest of the time, the active moves sideways. Do you want to know how to identify and trade a downtrend? In this post, we discuss what a downtrend is, how to spot and trade them. What Is a Downtrend? A downtrend is moving of price action in an asset lower over some time and is most recognizable by prices creating lower lows and lower highs. What you need to know is that a downtrend is composed of two types of price waves. They include: -Impulse -Correction For example, if the asset price was 0.0024, then drops to 0.0014, then rallies to 0.0020 and again falls to 0.012. These price movements will create a price wave. What you need to know is that Impulse price waves are larger (0.0024 to 0.0014), while corrective waves are much smaller 0.0014 to 0.0020. Trends form when the asset price makes progress. It can either be in one direction or another. If the impulse wave moves down, followed by a corrective wave up, it means that the asset price has made a downside move. The downtrend will continue as long as the impulse waves down and corrective waves up in trading. Key Characteristics of a Downtrend Several things characterize a downtrend which is easily recognized in charts as you can see below: Lower Peaks and Troughs Lower peaks and troughs characterize downtrends with lower lows and lower highs taking place as you can see in the chart above. It’s also important to note that trends can form in different time frames. You can have intraday trends as well as macro trends on the daily and weekly charts. News Catalysts News catalysts is another characteristic that can push asset into a downtrend. Increase in Market Participants When the asset price goes downs, the number of sellers increases, which means supply exceeds demand. The increase in market participants who are now convinced that the declining asset price is temporary will begin to rise. As such, the number of customers buying the assets increases while the number of sellers decreases. How to Trade a Downtrend A downtrend occurs across all assets and time frames. Traders can trade them over longer-term time frames such as daily, weekly, and monthly or short-term charts like a tick and one-minute charts. What you ought to know is that the same trend trading concepts apply whether the trader is looking at a daily, weekly, or monthly chart. Tools You can detect a downtrend using technical and fundamental analysis using volume and volatility as well. Use trend lines during trend analysis. By creating a trend line over an asset chart’s high pivot points or under pivot low points. This is a great visual indicator of resistance and support. It also offers a clue to the direction of the price change and speed. Short sellers profit from downtrends by borrowing then selling the assets immediately with an agreement to buy them in the coming future. Also known as short selling, traders benefit from the difference between the lower future price and current sale price. If you are planning on short selling, do so during the corrective wave. Using Fibonacci retracement levels will isolate sections where correction stops and reverses. You can also wait for the correction to stop rallying. By doing so, you allow the price to move sideways, and when it starts to drop, make a short trade. lace a stop loss on every trade to manage risk. Remember, to exit a short trade with a profit the prices need to be lower than what you sold them for. Trading Tips Look for prices to reach previous highs but are not able to breakthrough. This is a good indication that buyers are no longer seeing value in the asset and we could be setting up for a move lower. Use previous highs as a stop location. Look for a break in previous lows to confirm the downtrend. Profits should be taken as prices flush below previous lows and stops should be adjusted to the last previous high. Final Thoughts There are a couple of mistakes you should avoid. Firstly, never fight the overall trend on the higher time frames. If you do so, you may find yourself in a downtrend with no reason to buy. Secondly, never trade too much. Trends are temporary. Even if they are strong or have a potential for making profits, never risk too much on any one trade. This is true, especially if you have a small account or just starting. Don’t be greedy. What we recommend is to start small and scale-up. Starting with a small deposit, you gain crucial knowledge and experience. As such, you will be confident about increasing your trading sizes. Lastly, take some time to learn. To be successful in trading, you need to keep learning. Stay on your toes at all times. By keeping abreast of what is happening in the market. Commit yourself to learn and surrounding yourself with more experienced traders to do that. If this post has 300 likes, I will make a post about the uptrend Best regards EXCAVO
EEducation
by EXCAVO
13
Using the strategy tester to prove WTD performance!Use the strategy tester with our strategy to check the weekly performance, use it also as a trading journal - you simply need to follow it at least! We can see all of the trades for the week and the profit and loss. Strong gains this week with a 20% gain risking 1% per trade - even more on some 30 minute entries. A great week, catching big JPY moves in particular. and holding them! This is NOT just an indicator, its far more than that as you can hopefully see. These gains do not include the 300+ pip move on Gold or indices, etc. Regards Darren
Education
by pow_removetheguesswork
1
Scalping opportunity on the 1m/3m/5m timeframes .....Those that like to scalp or want to learn can using our strategy. Its very clear to see how to follow price as shown - also our members can test using our strategy tester and hone in on the settings and parameters even further. However, this video is just showing standard settings. Either follow price or use the labels for SL and TP targets. Part close at TP2 and leave TP3 until the reverse signal or SL to entry, could work too. Lots of different ways to manage the position once you are in - even taking 15 pips a time would have worked a treat. Regards Darren Blue FX
Education
by pow_removetheguesswork
4