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What To Expect After The Fed rate Cut: 9-18-2024 (Fed Day)This video is really designed to teach you some basics about Fibonacci Price Theory (FPT) Analysis. I wanted to show you how I see the charts using FPT and why, sometimes, I might be seeing things differently than you do on the charts. In my world, there are simple constructs that are evident on every chart. Supply & Demand zones, trending/flagging, and most importantly Fibonacci Price Theory constructs. Fibonacci Price Theory is the basis of all my analysis. It is the ground-level structure I look for in price on all charts. Then, I move to more advanced indicators and other analysis types to develop a Success/Failure outcome (trend/trade expectation). What I do is not hard to understand - it just takes practice. Fibonacci & Gann techniques are infinitely adaptable to any type of price action. I use another technique I call the Tesla Price Amplitude Arcs which often help me identify where/when price events may happen - but that is for another video (maybe). Ultimately, it comes down to understanding the structure and intent of price action (either success or failure) and how to position your trades for that success or failure of any price event. There are really two types of traders: trend traders and counter-trend traders. Trend traders try to catch the explosive price moves as trend events. Counter-trend traders try to catch major reversal levels in price and try to profit from counter-trend price moves (reversals/reversions). Using FPT, you can learn to execute both type of trading styles and improve your ability to see the market trends/setups more clearly. I hope this video helps you learn to become a better trader and helps you understand my Plan Your Trade videos more clearly. At least you'll be able to understand how I see charts and what drives much of my thinking related to chart. Get some. #trading #research #investing #tradingalgos #tradingsignals #cycles #fibonacci #elliotwave #modelingsystems #stocks #bitcoin #btcusd #cryptos #spy #es #nq #gold

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29:28

Nasdaq-100 Index. The Psychological Aspects of Round Numbers In the complex dance of commerce and finance, price tags play a key role in influencing consumer decisions. While it’s a fairly common psychological assumption that every penny and cent counts when it comes to getting the best deal, human psychology often deviates from this linear logic. In this educational post, we explore the irresistible appeal of round numbers, and how they often trump other considerations when making transaction decisions. The Irresistible Attraction to Round Numbers We do often believe that every penny counts in our transactions. However, research shows a striking deviation from this assumption. In scenarios where people choose a price, such as tipping at a restaurant or donating to beloved author or website, they disproportionately choose round numbers — like $ 5, $ 10 or $ 20 — far more than would be predicted by chance alone. One could argue that this is due to the rejection of change, a reluctance to waste time on small change, and the unwillingness to bother with complex mathematics. However, even in cases where the exact bill is not an issue (e.g., cashless card payments), the preference remains. For example, diners faced with a non-round bill (for example $ 34.67) are more likely to give non-round tips ($ 15.33), but only so that the total is a neat round number ($ 50). Why do we prefer round prices? And what is the psychology behind it? 1) Cognitive simplicity: The human mind is programmed to simplify and seek simplicity. Numbers like 10, 50, or 100 inherently feel “cleaner” and less chaotic than 17, 62, or 84. This desire for neatness gives us a sense of accomplishment. 2) Perception of quality: The marketing world has long capitalized on this preference for round numbers. Brands strategically associate round prices with premium quality. On the other hand, odd prices like “29.99” or “34.99,” while ubiquitous, subconsciously signal here's a discount or a bargain. 3) This preference is not limited to prices. People exhibit this tendency to round in other aspects of life as well. Our repeated exposure to round numbers is common in a variety of contexts, both in everyday life and during financial transactions, which contributes to an unconscious bias toward them. This cognitive ease with round numbers further perpetuates the preference. The stock market’s behavior and its fluctuations around these significant, round numbers is not a coincidence in general; there is a psychological explanation. Market Psychology of Round Numbers When the market reaches round numbers such as 500 or 1,000, 2,500 or 5,000, 10,000 or 20,000, it attracts the attention of both active traders and casual investors who may not even be actively following the market. As in everyday life, people often use round numbers as thresholds for making investment decisions. For example, some may decide to enter the market if a major index such as the Nasdaq-100 has exceeded 10,000, or they may decide to sell some of their stocks if the Nasdaq-100 has reached 20,000. These round numbers act as magnets for sellers as they mark important milestones given the relatively high rarity of a round number. If the market has the potential to move higher, it first needs to absorb the selling pressure around the round numbers and establish equilibrium before continuing its move higher. If we analyze the market behavior over the last decades, we will see clear patterns at round numbers. Let us take a closer look at a few examples. 1) Indian Stock Index, Sensex BSE:SENSEX Sensex, one of the major market indices in India, has its share of round number syndrome. For example, when Sensex reached 10,000 points in Q1 2006, it experienced significant market activity, with the index fluctuating by as much as 30 percent in Q2. The same phenomenon occurred at multiples of 10,000. Thus, at 20,000 points, which the Indian market reached at the end of 2007, the index collapsed by more than 60 percent over the next 4 quarters of 2008. Later the 20,000 mark has been reached again in the second half of 2010, and the index again suffered a decline of more than 20 percent during 2011. Later Indian stock market index reached the 30,000 mark in the first quarter of 2015, and its led to a price decline of more than 20 percent in the next 4 quarters, while 40,000 mark in the fourth quarter of 2019 - led to the market decline by 30 percent on the wave of COVID-19 sales. 2) Gold market OANDA:XAUUSD As in the previous example, round numbers often become key points of congestion for Gold market, when the market tries to break even higher, but the forces of buyers and sellers may be unequal. For example, spot Gold reached the $ 1,000 mark for the first time in the Q1 2008, which, following the logic discussed above, led to sales and 30 percent decrease. Gold spot buyers have tried a lot to reach $ 2,000 mark in 2011, but it brought the market down by 45 percent over the next 5 years. There were also a lot of unsuccessful attempts to jump above $ 2,000 in 2020-2022. Finally Gold spot surged above $ 2,000 only in Q4 2023, its led to further price increase, up to 2500 US dollars per ounce. 3) US stock index, Nasdaq-100 index NASDAQ:NDX The Nasdaq-100 index approached the 10,000 point mark for the first time in Q1 2020, which could have contributed to the sell-off. In fact, this is what happened, as the market then plunged by more than 30 percent in March 2020, and only thanks to monetary support measures and the reduction of US interest rates to almost zero, the index was able to break the 10,000 barrier by the end of Q2 2020. Reaching the 20,000 mark by the market index in Q2 2024, as we see, again leads to increased turbulence in US tech stocks and talk of imminent monetary easing by the Fed. Final Thoughts 1) It is important to note that round number syndrome and increased seismic activity near rounds number is a short-term phenomenon. Once the selling pressure is absorbed, the market resumes its movement based on other factors and develops independently of these already passed milestones. 2) Understanding the market behavior at round numbers can provide valuable information to investors. These round numbers act as psychological triggers for investors, driving their decision-making processes. 3) Understanding this phenomenon allows investors to make more informed choices and understand the short-term fluctuations that occur during these stages.

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Updated

Evening Star pattern The Evening Star pattern is a technical analysis tool that signals an upward price momentum's reversal to bearish momentum. The pattern rarely appears, but it is considered a reliable bearish indicator. The Morning Star pattern is also a trend-reversal pattern, which is bullish and gives a buying signal.

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by CTA_tradesmart

The "Head and Shoulders": Real success rates.Inverted Head and Shoulders: WATCH volumes when the neckline breaks!! Here is what we can say about the success rate of the inverted head and shoulders pattern in trading: -The inverted head and shoulders pattern is considered one of the most reliable chart patterns to anticipate a bullish reversal. -According to some sources, the success rate of this pattern would be very high, with around 98% of cases resulting in a bullish exit. -More precisely, in 63% of cases, the price would reach the price target calculated from the pattern when the neckline is broken. -A pull-back (return to the neckline after the break) would occur in 45% of cases. -However, it should be noted that these very optimistic figures must be qualified. Other sources indicate more modest success rates, around 60%. -The reliability of the pattern depends on several factors such as respect for proportions, neckline breakout, volumes, etc. A rigorous analysis is necessary. -It is recommended to use this pattern in addition to other indicators and analyses, rather than relying on it blindly. In conclusion, although the inverse head and shoulders pattern is considered a very reliable pattern, its actual success rate is probably closer to 60-70% than the 98% sometimes claimed. It remains a useful tool but must be used with caution and in addition to other analyses. __________________________________________________________________ Head and Shoulders: Here is what we can say about the success rate of the head and shoulders pattern in trading: -The head and shoulders pattern is considered one of the most reliable chart patterns, but its exact success rate is debated among technical analysts. Here are the key takeaways: - Some sources claim very high success rates, up to 93% or 96%. However, these figures are likely exaggerated and do not reflect the reality of trading. - In reality, the success rate is likely more modest. One cited study indicates that the price target is reached in about 60% of cases for a classic head and shoulders pattern. - It is important to note that the head and shoulders pattern is not an infallible pattern. Its presence alone is not enough to guarantee a trend reversal. - The reliability of the pattern depends on several factors such as respect for proportions, the breakout of the neckline, volumes, etc. Rigorous analysis is necessary. - Many experienced traders recommend using this pattern in addition to other indicators and analyses, rather than relying on it blindly. In conclusion, while the head and shoulders pattern is considered a reliable pattern, its actual success rate is probably closer to 60% than the 90%+ sometimes claimed. It remains a useful tool but should be used with caution and in conjunction with other analyses. _____________________________________________________________________________ NB: In comparison, the classic (bearish) head and shoulders pattern would have a slightly lower success rate, with around 60% of cases where the price target is reached.

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by Le-Loup-de-Zurich

Understanding Candlestick Patterns Understanding Candlestick Patterns Candlestick patterns are one of the most fundamental tools in technical analysis. They provide valuable insight into market sentiment, showing how buyers and sellers are interacting at any given time. By understanding candlestick patterns, traders can make more informed decisions about potential price movements. In this chapter, we’ll explore the basics of candlesticks, including bullish, bearish, and neutral candles, and dive deeper into specific patterns like wickless candles, engulfing patterns, and how to interpret the open and close of a candle. --- What is a Candlestick? A candlestick represents the price action of a security within a specific time frame, such as one minute, one hour, or one day. Each candlestick provides four critical pieces of information: Open: The price at which the asset began trading during the time frame. Close: The price at which the asset finished trading during the time frame. High: The highest price reached during the time frame. Low: The lowest price reached during the time frame. The body of the candlestick represents the distance between the open and close prices, while the “wicks” or “shadows” represent the highs and lows. Bullish Candles A bullish candle forms when the closing price is higher than the opening price, signaling that buyers have control during that period. The body of the candle is typically green or white (depending on charting software), and it indicates upward momentum. Bullish Candle Characteristics: Open price is lower than the close. Buyers have pushed the price higher during the session. Longer bodies suggest stronger bullish sentiment. Example of Bullish Candle: Hammer: A bullish reversal pattern found at the bottom of a downtrend. It has a small body and a long lower wick, showing that sellers tried to push the price lower, but buyers took control by the close, driving the price higher. Bearish Candles A bearish candle forms when the closing price is lower than the opening price, signaling that sellers have control during that period. The body of the candle is typically red or black, indicating downward momentum. Bearish Candle Characteristics: Open price is higher than the close. Sellers dominated the session. Longer bodies suggest stronger bearish sentiment. Example of Bearish Candle: Shooting Star: A bearish reversal pattern found at the top of an uptrend. It has a small body and a long upper wick, indicating that buyers attempted to push the price higher, but sellers gained control, pushing the price down by the close. Neutral Candles A neutral candle forms when there is little difference between the opening and closing prices. This type of candle suggests indecision in the market, where neither buyers nor sellers are fully in control. The candle can have long wicks, showing volatility, but a small body reflects indecisiveness. Example of Neutral Candle: Doji: A Doji candle forms when the opening and closing prices are virtually identical. This pattern often indicates a potential reversal or pause in trend because of the market’s indecision. Wickless Candles A wickless candle is a candlestick that has no upper or lower shadows (wicks), which means the highest and lowest prices during the time frame are exactly at the open or close. These candles signify strong directional moves, as the price doesn’t fluctuate significantly beyond the open and close. Bullish Wickless Candle: The price opens at its low and closes at its high, indicating strong buying pressure throughout the period. Bearish Wickless Candle: The price opens at its high and closes at its low, suggesting strong selling pressure. Interpretation of Wickless Candles: Wickless candles are rare but powerful. They show clear control by one side (buyers or sellers) with little resistance from the other. Traders should watch for these candles during strong trending markets, as they can signal momentum. Wickless Candles and Liquidity In trading, liquidity refers to how easily an asset can be bought or sold without affecting its price. Liquidity is often concentrated at certain price levels, where orders from both buyers and sellers are waiting to be executed. When a wickless candle forms, it can create a liquidity void or gap, since the price hasn’t retraced or tested areas around the open or close of the candle. In simple terms, the lack of a wick suggests the market has skipped over certain price levels without sufficient trading activity. Market participants often believe that price tends to return to these levels in the future, as the market seeks out liquidity to fill these gaps. Why Price Often "Comes Back" to Create a Wick: Liquidity Pools: At untested price levels (around where wicks would normally form), large buy or sell orders may be resting. Market makers and institutional traders are incentivized to revisit these areas to fill unexecuted orders, making it likely that the price will return to this range. Market Efficiency: The market tends to move back to areas of liquidity to balance out price action. Wickless candles show where a rapid price move might have skipped over significant trading interest. Correction or Reversal: In some cases, price retracement occurs when the market "corrects" overextended moves. If a strong bullish or bearish candle lacks wicks, traders may expect a temporary pullback to balance the market. Trading Wickless Candles: Watching for Retracement When you see a wickless candle, it's a potential signal that the price may retrace to "fill" the liquidity void and form a wick. Here's how to trade these setups: 1. Monitor the Wickless Candle: After a strong bullish or bearish candle without wicks, observe the price action in the following periods. Pay attention to areas that the price didn’t test. 2. Wait for Price to Return to the Liquidity Zone: If the market retraces toward the opening or closing price of the wickless candle, it often indicates that the market is filling the liquidity gap. This retracement could provide a trading opportunity. For bullish wickless candles, watch for a retracement to the opening price (the lower end of the candle), where buyers may step in again. For bearish wickless candles, watch for a return to the closing price (the upper end of the candle), where sellers may resume control. 3. Look for Confirmation: Don’t rely solely on the wickless candle. Combine it with other signals, such as support and resistance levels or volume analysis, to confirm if the market is likely to revisit those untested areas. Wickless Candles in Context Wickless candles are not standalone signals; they should be interpreted within the context of the broader market environment. Traders should consider the following: Trend Context: Is the wickless candle part of a strong, established trend? In a powerful trend, price may push ahead without a significant retracement. However, even in trending markets, prices tend to come back and test previous levels eventually. Time Frame: The time frame of the candle matters. A wickless candle on a lower time frame (e.g., 5-minute chart) may quickly retrace, whereas a wickless candle on a higher time frame (e.g., daily or weekly chart) could take much longer to come back to its liquidity zone. Volume: Check for high volume during the wickless candle formation. If there’s a liquidity gap and low volume, it’s more likely that price will retrace to fill those levels.Wickless candles provide important clues about market momentum and liquidity gaps. While they often suggest strong directional movement in the short term, these candles can also indicate areas where price may return in the future to fill untested liquidity. Understanding how to read wickless candles in combination with other technical analysis tools can enhance your ability to identify potential retracement opportunities and anticipate future price movements. Engulfing Candles Engulfing patterns are strong reversal signals that occur when one candle completely engulfs the body of the previous candle. These patterns come in two types: bullish engulfing and bearish engulfing. Bullish Engulfing Pattern Description: A bullish engulfing candle forms when a larger bullish candle fully engulfs the body of the previous bearish candle. This pattern indicates a potential reversal from a downtrend to an uptrend, showing that buyers have overwhelmed sellers. What to Look For: The second candle (bullish) must fully cover the body of the first (bearish) candle. It’s more powerful when it occurs after a prolonged downtrend or near a support level. Bearish Engulfing Pattern Description: A bearish engulfing candle forms when a larger bearish candle fully engulfs the body of the previous bullish candle. This pattern signals a potential reversal from an uptrend to a downtrend, indicating that sellers have taken control. What to Look For: The second candle (bearish) must completely cover the body of the first (bullish) candle. This pattern is stronger when it appears after an extended uptrend or near a resistance level. How to Trade Engulfing Patterns: Entry: For bullish engulfing patterns, enter long trades when the price moves above the high of the bullish candle. For bearish engulfing patterns, enter short trades when the price moves below the low of the bearish candle. Confirmation: Engulfing patterns should be confirmed with increased volume, signaling stronger conviction by buyers or sellers. Engulfing Candles as Demand and Supply Zones Engulfing candles, especially bullish ones, often mark demand zones—areas where buying pressure overwhelmed selling pressure and caused a significant shift in price direction. These zones represent areas where traders and institutions found value and stepped in to buy aggressively, making them key areas for future price reactions. Bullish Engulfing Candles Create Demand Zones: When a bullish engulfing candle forms, the area around the candle's low and close becomes a potential demand zone. When price revisits this area in the future, it’s likely that buyers will step in again, causing the price to bounce. Bearish Engulfing Candles as Supply Zones: While bearish engulfing candles represent supply zones (where sellers dominate), the concept is similar. However, for this discussion, we'll focus on the bullish engulfing candles and their role in creating demand zones.How Engulfing Candles Become Demand Zones Engulfing candles signal strong shifts in market dynamics. Here’s why they often become areas of high demand: 1. Imbalance Between Buyers and Sellers: The large body of the engulfing candle shows that buyers stepped in strongly at that price level, overwhelming sellers. This imbalance creates a "memory" in the market, where participants remember the strength of the move. When the price retraces to this level, there’s a strong likelihood that buyers will re-enter the market, viewing it as an area of value. 2. Institutional Orders: Engulfing candles often indicate areas where institutional traders placed large buy orders. These areas tend to hold significance because institutions may place additional orders at these levels when price returns, reinforcing the demand zone. 3. Market Sentiment Shift: The price action leading to an engulfing candle reflects a sharp change in sentiment. For example, in a bullish engulfing pattern, sellers controlled the market initially, but buyers took over and drove prices up. This sharp reversal marks an area where demand is likely to outpace supply again in the future. Understanding candlesticks and their patterns is a foundational skill in technical analysis. By paying attention to key details such as the open, close, wicks, and the relationship between candles, you can better anticipate price movements and make more informed trading decisions. Candlesticks like bullish, bearish, and neutral patterns, along with specific signals like wickless and engulfing candles, provide valuable insights into the psychology of the market, helping you identify entry and exit points more effectively. In live trading, combining candlestick analysis with other technical indicators, such as moving averages or support and resistance levels, can increase your chances of success. Always remember, though, that no pattern is foolproof, and it’s crucial to use risk management techniques to protect your capital.

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Trading Near the Bells Part 2: The Close In this second part of our series, we shift focus from the market open to the close—the final hour of the trading session. The dynamics of the close are different from the open because the time to act is much shorter. Unlike the open, where you have the whole trading day ahead of you, the close compresses decisions into a much tighter window. This makes the strategies and the mindset for trading the close unique. In this section, we'll cover two core strategies for trading the close—one momentum-based and one focused on mean reversion. Whether you're riding the final burst of a trend or capitalising on an overextended market move, these setups can help you navigate this high-stakes period effectively. The Significance of the Close The final hour of trading—the "Power Hour" —is dominated by institutional traders and large funds rebalancing their portfolios, closing positions, or placing large end-of-day orders. Retail traders often close out positions as well, creating an environment where liquidity spikes and volatility increases. This surge in activity can lead to significant price swings, especially in individual stocks with strong intraday trends or overextended moves. What happens during this period can set the stage for the next day’s market action. If the close is strong, closing at or near the high of the day, it suggests that buyers were in control and may continue pushing prices higher the following day. Conversely, a weak close at the low could signal selling pressure carrying over into the next session. Two Key Strategies for Trading the Close We’ll explore two strategies tailored for this critical time frame. These setups are designed to take advantage of the distinct characteristics of the close: heightened volatility, fast price action, and end-of-day positioning. Strategy 1: Run into the Close (Momentum) The "Run into the Close" strategy tends to work well on days where the market has been trending strongly. This strategy takes advantage of the final surge in momentum as large traders and funds push prices even further in the direction of the trend. This is particularly effective if the market is breaking out from several days of price compression. The idea is to enter on a pullback in the final hour and ride the momentum into the close. Setup: • Look for an established trend during the trading session, with price ideally breaking out of multi-day consolidation. • Watch for a small pullback in the last hour, ideally to the 9-EMA on the 5-minute chart. • Wait for price to break back above the 9-EMA after the pullback. Entry: • Enter following the break back above the 9-EMA on the 5-minute candle chart. Stop-Loss: • Place your stop below the low of the pullback. Trade Management: • Use the 9-EMA for dynamic risk management—if price closes below it, consider exiting early. Target: • Hold the position until just before the close, capturing the final push of momentum. Example: The S&P 500 had been trending up all day, breaking out from a tight multi-day consolidation. During the last hour of trading, the market pulls back briefly, touches the 9-EMA, and then breaks back above it. This is your entry signal, allowing you to ride the trend into the final minutes of the session. S&P 500 5min Candle Chart Past performance is not a reliable indicator of future results Strategy 2: Revert to VWAP (Mean Reversion) The "Revert to VWAP" strategy is a mean-reversion play that tends to work well when the market is overextended going into the last hour of trading. Often, prices can move too far from the day's volume-weighted average price (VWAP), and late in the session, there is a tendency for price to revert back toward it. This strategy uses the Relative Strength Index (RSI) to identify overbought or oversold conditions and then waits for a break of recent swing highs or lows on a 5-minute chart to trigger the entry. Setup: • Look for an overextended market going into the final hour of trading. The price should be far away from VWAP. • Check RSI on a 5-minute chart for overbought (above 70) or oversold (below 30) conditions. • Wait for price to break above a recent swing high (for a reversal from oversold) or below a swing low (for a reversal from overbought). Entry: • Enter a long position if the price breaks above a swing high (from oversold conditions). • Enter a short position if the price breaks below a swing low (from overbought conditions). Stop-Loss: • Place your stop just below the recent swing low (for long positions) or above the recent swing high (for short positions). Target: • Target VWAP as the price reverts back toward the average. Example: As we approached the final hour of the day, the S&P 500 index had moved into an oversold position on the RSI when it tested a key level of swing support. This was followed by a break above a small swing high – triggering a move back towards the true average price for the day – VWAP. S&P 500 5min Candle Chart Past performance is not a reliable indicator of future results Conclusion Whether you’re aiming to ride the trend with a "Run into the Close" or seeking to capitalise on an overextended market with a "Revert to VWAP" strategy, trading the final hour requires sharp execution and discipline. Even if you don’t trade the close directly, understanding how the market finishes the day can provide valuable insights for the next session. Watch how the price closes in relation to the day’s range, as this can set the tone for the following day’s market sentiment. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83.51% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

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Chart Patterns and Key Signals in Live Trading Chart Patterns and Key Signals in Live Trading Chart patterns are powerful tools used by traders to predict future price movements. These patterns emerge from the price action on a chart and provide visual signals that help traders make informed decisions. Understanding and recognizing these patterns in live trading can significantly improve your ability to forecast potential price trends and execute successful trades. What are Chart Patterns? Chart patterns form when price movements of a security, such as a stock or currency pair, follow a recognizable formation or trend on a price chart. These patterns represent the collective sentiment of buyers and sellers, indicating periods of consolidation, continuation, or reversal. Traders use these patterns to anticipate where prices may move next and to identify high-probability trading opportunities. Key Types of Chart Patterns Chart patterns can be categorized into two main types: 1. Reversal Patterns: These indicate that the current trend is likely to reverse. 2. Continuation Patterns: These suggest that the current trend will continue after a brief pause. Common Reversal Patterns Head and Shoulders Description: The head and shoulders pattern signals a trend reversal. It has three peaks: a higher peak (the head) between two lower peaks (the shoulders). The neckline connects the lows between the two shoulders. What to Look For: Uptrend before formation: This pattern is more reliable if it follows a strong uptrend. Break of the neckline: The trend reversal is confirmed when the price breaks below the neckline, indicating a bearish move. Live Trading Tip: Wait for the price to break the neckline and retest it before entering a short position to reduce false signals. Double Top: Description: A bearish reversal pattern that forms after an uptrend, consisting of two peaks at roughly the same level. What to Look For: Resistance level: The two peaks touch a resistance level but fail to break through. Neckline break: The trend reversal is confirmed when the price breaks below the support level (neckline) between the two peaks. Live Trading Tip: Enter a short trade after the price breaks below the neckline and possibly retests the support as resistance. Double Bottom: Description: A bullish reversal pattern that forms after a downtrend, consisting of two troughs at roughly the same level. What to Look For: Support level: The two bottoms touch a support level but fail to break below. Neckline break: The reversal is confirmed when the price breaks above the resistance level (neckline) between the two troughs. Live Trading Tip: Enter a long trade after the price breaks above the neckline and retests it as support. Common Continuation Patterns Triangles Symmetrical Triangle: Description: A continuation pattern characterized by converging trendlines, where the highs and lows converge toward each other. What to Look For: Breakout: The pattern is confirmed when the price breaks out of the triangle, either upward or downward, signaling a continuation of the previous trend. Live Trading Tip: Watch for increased volume during the breakout to confirm its validity. Enter the trade in the direction of the breakout. Ascending Triangle: Description: A bullish continuation pattern with a horizontal resistance line and an upward-sloping support line. What to Look For: Resistance breakout: The pattern is confirmed when the price breaks above the resistance level, signaling a continuation of the upward trend. Live Trading Tip: Enter a long trade once the price breaks the resistance and volume spikes, indicating strong buying interest. Flags and Pennants Flag: Description: A continuation pattern that looks like a small rectangular consolidation phase after a strong price movement. What to Look For: Strong trend: The flag forms after a sharp price move, followed by a consolidation phase. Breakout: A breakout from the flag pattern confirms the continuation of the previous trend. Live Trading Tip: Enter the trade in the direction of the breakout, especially if accompanied by an increase in volume. Pennant: Description: Similar to the flag, but the consolidation phase forms a small symmetrical triangle instead of a rectangle. What to Look For: Strong trend: A pennant forms after a sharp move, followed by price consolidation. Breakout: The breakout signals a continuation of the previous trend. Live Trading Tip: Trade in the direction of the breakout and ensure there’s an uptick in volume for confirmation. Wedges Rising Wedge: Description: A bearish continuation or reversal pattern where the price forms higher highs and higher lows, but the slope of the highs is steeper than the slope of the lows. What to Look For: Trendlines converging: The wedge narrows as the highs and lows converge. Breakdown: The pattern is confirmed when the price breaks below the lower trendline, signaling a bearish move. Live Trading Tip: Short the trade once the price breaks below the wedge, especially if volume increases. Key Signals to Look for in Live Trading 1. Volume Confirmation Description: Volume plays a critical role in confirming the validity of chart patterns. A breakout or breakdown on low volume can be a false signal, whereas high volume supports the strength of the price movement. What to Look For: Volume Spike on Breakout: Look for a significant increase in volume during breakouts from chart patterns. This indicates that more traders are participating in the move and that it has momentum. Divergence between Price and Volume: If price is moving in one direction but volume is decreasing, it may indicate a weakening trend. 2. False Breakouts Description: A false breakout occurs when the price appears to break out of a pattern but quickly reverses, trapping traders who acted on the breakout. What to Look For: Lack of Follow-Through: After the breakout, if the price doesn’t continue in the breakout direction and instead reverses quickly, this could be a false breakout. Live Trading Tip: To avoid false breakouts, wait for a retest of the breakout level or look for confirmation in volume before entering a trade. 3. Divergence with Indicators Description: Divergence occurs when the price of an asset moves in one direction while an indicator (such as the RSI or MACD) moves in the opposite direction. What to Look For: Bullish Divergence: When price makes lower lows, but the indicator forms higher lows, signaling a potential reversal to the upside. Bearish Divergence: When price makes higher highs, but the indicator forms lower highs, indicating a potential reversal to the downside. Live Trading Tip: Use divergence as a signal to prepare for a trend reversal, especially when combined with chart patterns like double tops or bottoms. Chart patterns are essential for predicting price movements, but they work best when combined with other tools like volume analysis and indicators. As you gain experience in live trading, you'll develop the ability to spot these patterns more easily and understand how to trade them effectively. Always remain patient and look for confirmation signals before entering trades based on chart patterns.

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Triple Your Trade Accuracy with This Simple Trick Like a PRO Good Morning Tradingview, Apologies for the delay in my recent posts over the past two days. Unfortunately, this was due to an oversight on my part. I missed a key detail in the trading platform's rules and mistakenly included my watermark on the charts. As a result, several of my posts were removed, and I was temporarily unable to post for 24 hours. I completely understand and respect the platform's guidelines, but I wanted to keep you informed and ensure you're not left wondering about my absence. Here’s a breakdown of potential entry points and trade management based on the chart I've shared, aligned with multi-touch confirmation and The Trinity Rule. We'll focus on how to approach both the bullish and bearish scenarios with structured decision-making: 1. Bullish Scenario (Green Path): The price currently appears to be testing a weekly trendline (third touch), which often signals a potential bullish continuation after the third touch confirms a reversal or trend continuation. Here's how to structure the trade: Entry Point: Wait for a Breakout: If the price breaks and closes above the upper consolidation zone, look for a confirmed breakout with momentum. Avoid entering prematurely, as false breakouts can occur. Confirm with Retest (Higher Probability Entry): After the breakout, wait for a potential retest of the consolidation zone or the top of the ascending wedge. A retest that holds (with rejection wicks or bullish engulfing patterns) adds confirmation for a long position. Reduced Risk Entry: You can enter with a smaller position on the breakout and add to the position on the retest, increasing exposure as the price confirms your bias. Stop-Loss Placement: Place the stop-loss just below the consolidation zone or below the retested area. This level serves as your risk threshold, accounting for potential fakeouts. If you are entering after the third touch of the trendline, the stop-loss can be placed below this key level to minimize risk. Take-Profit Targets: First Target: Aim for the next key resistance zone at around 2,576 based on historical price action. Second Target: If momentum is strong, hold a portion of the trade for a larger move toward 2,592 (upper resistance). Trail the stop as price continues to move upward. 2. Bearish Scenario (Yellow Path): If the price fails to break above the current consolidation and rejects the trendline, it indicates a potential bearish reversal. The descending path might target the 1-hour liquidity zone around 2,541, where you can expect the price to react. Entry Point: Breakout of Consolidation: If the price breaks below the consolidation, this signals a bearish continuation. Enter on a confirmed breakout, with a strong bearish candle close below support. Aggressive Entry: You may consider entering on the third rejection at the top of the consolidation, especially if there's a clear bearish reversal pattern (e.g., shooting star or bearish engulfing). Reduced Risk Entry: Wait for the price to break below the consolidation and enter on a retest of the broken support, confirming the bearish momentum. This provides a lower-risk entry with better confirmation. Stop-Loss Placement: Above the consolidation or the most recent swing high where rejection occurred, giving enough room for market fluctuations. Ensure that the stop isn’t too tight, as you could get caught in price noise. Take-Profit Targets: First Target: The 15-minute liquidity zone around 2,560 is a reasonable first target, where you may partially close your position. Final Target: The key 1-hour liquidity zone at 2,541 is the more substantial target for a full bearish continuation. Be mindful of how price reacts near this zone; you may want to take profits before a reversal happens. Management Tips: Scaling In and Out: Whether bullish or bearish, consider splitting your position into smaller entries. This allows you to enter part of the trade with confirmation and add more as price action continues in your favor. Use of Flags for Re-entries: After the initial breakout in either direction, look for flags or continuation patterns to re-enter the trade or add to an existing position. For example, after a bullish breakout, wait for a flag and enter on the next wave up. Regular Monitoring and Adjustments: As the price moves in your favor, trail your stop-loss to lock in profits. This is especially important during strong momentum moves to avoid giving back profits to the market. Psychological Considerations: Avoid FOMO: Don’t rush into trades if you're unsure about the breakout or failure of a level. Let the price action confirm your bias. Avoid Overtrading: Stick to your Rule of Three guidelines. Ensure at least three confirming factors align with your analysis before entering.

Education

Unveiling Market Sentiment in Trading Unveiling Market Sentiment in Trading Understanding the market's pulse can offer traders a significant edge. The market is driven by human psychology, and by grasping the prevailing mood, traders can position themselves more effectively. This article will delve into various methods and indicators that offer insights into market sentiment analysis trading, from media scanning and expert opinions to economic and market-specific indicators. What Is Market Sentiment? Market sentiment refers to the prevailing mood or emotional tone that traders and investors exhibit toward a specific financial asset or the market as a whole. It serves as a qualitative measure that captures collective attitudes toward market conditions — optimistic, pessimistic, or neutral. This sentiment is often influenced by various factors such as economic indicators, news, and trader psychology. Understanding market sentiment is crucial because it can help anticipate market trends, offering insights that purely quantitative indicators sometimes overlook. Of course, traders can’t just rely on sentiment analysis; price charts and trading tools are also key. FXOpen’s native TickTrader platform offers just that and more. Head over there to get started in minutes. Media Scanning In forex, commodity, crypto*, and stock market sentiment analysis, media scanning is one of the most straightforward techniques. News reports from reputable financial news outlets like Bloomberg, Reuters, and the Financial Times often provide timely updates on market conditions, geopolitical events, and economic data releases. These reports offer a snapshot of the current market health. Expert opinions offer another layer of depth to understanding market sentiment. Analyst statements from established financial firms (banks, hedge funds, venture capital firms, etc.), expert blogs, and whitepapers can deliver nuanced viewpoints. For example, if multiple analysts from various firms are consistently bullish about a specific asset, it can indicate positive sentiment surrounding it. While these shouldn't be your sole resource, they often provide valuable insights that quantitative metrics may overlook. Remember to consider the source and its reliability, as not all opinions carry the same weight in influencing market sentiment. Market Sentiment Indicators Moving beyond the qualitative aspects of media, there are several quantitative indicators that can measure market sentiment directly. The Commitment of Traders Report (COT), particularly relevant in commodity markets, reveals large traders' positions. A skew toward long positions among these traders often indicates bullish sentiment for a commodity, while a skew toward short positions suggests a bearish sentiment. The Fear & Greed Index is another essential tool, often associated with stock markets but also applicable to other asset classes like cryptocurrencies* and even some commodities. For stocks, CNN’s Fear & Greed Index is commonly cited, while Alternative.me’s version is often used for crypto*. This market sentiment index uses multiple factors, including market momentum and safe-haven demand, to calculate a score ranging from zero to 100. Lower scores signify fear, suggesting a bearish outlook, whereas higher scores indicate greed, signalling a bullish market environment. Consumer Surveys Consumer surveys offer another valuable avenue for determining market sentiment, particularly in sectors like retail, real estate, and commodities. One widely used metric is the Consumer Confidence Index. This index is based on household survey data and measures their optimism or pessimism about current and future economic conditions. A high Consumer Confidence Index typically suggests that people are willing to spend, often driving up asset values in the retail and real estate sectors. Manufacturing surveys also provide useful data, especially for forex and commodity markets. These surveys, such as the Purchasing Managers' Index (PMI), gauge the health of a country's manufacturing sector. Positive manufacturing data often strengthens a country's currency and can also be an indicator of rising commodity prices. Social Media & Forums In the age of digital communication, social media platforms and online forums have become indispensable tools for assessing market sentiment. Trending topics like Twitter can offer a quick pulse on what assets or market events garner attention. Specialised analytical tools can even quantify this chatter into actionable data, highlighting potential market moves. Online forums are another rich source of sentiment indicators. Places like Reddit and niche trading forums often host passionate discussions where traders share opinions, strategies, and forecasts. While the quality of this information can vary, a consensus view often emerges that can be invaluable in gauging sentiment. For example, an uptick in positive posts about a specific cryptocurrency* on a forum could indicate bullish sentiment, whereas an increase in sceptical posts would suggest the opposite. Economic Indicators Economic indicators like interest rates and Gross Domestic Product (GDP) reports provide a macro-level view of market sentiment, affecting everything from currencies to commodities. Interest rates, set by central banks, can indicate the market's sentiment toward a country’s economic prospects. A rise in interest rates often boosts the country's currency as higher yields attract foreign investment. Conversely, a rate cut can indicate economic caution, potentially weakening the currency. Quarterly GDP reports are another crucial metric, offering a comprehensive picture of a country's economic health. Strong GDP growth is generally seen as a positive indicator affecting multiple asset classes, from equities to currencies, that relate to that country. If a country reports better-than-expected GDP figures, it's often interpreted as bullish, leading to increased investor confidence and higher asset prices. While these indicators aren’t direct measures of sentiment, they both influence market sentiment and reflect current sentiment. For instance, rising interest rates may send the Consumer Confidence Index lower, resulting in reduced spending and a lower GDP reading. Lower GDP might damage sentiment further, and so on. Market Indicators In sentiment analysis for the stock market, the Volatility Index, or the VIX, is particularly informative. Often referred to as the "fear gauge," the VIX measures the market's expectation of 30-day forward-looking volatility based on S&P 500 index options. When the VIX rises, it indicates that traders expect increased volatility, often corresponding to bearish market conditions. Conversely, a low VIX suggests a more stable, often bullish market sentiment. Trading volume is another key metric that provides clues about market sentiment in a specific asset. High trading volumes often point to strong sentiment, be it bullish or bearish, as it represents active participation and conviction among traders. In contrast, low trading volumes might suggest indecision or lack of interest, signalling a market that could move sideways or reverse. The Bottom Line In the ever-changing world of trading, understanding market sentiment is invaluable. From economic indicators to social media trends, these tools provide a multi-dimensional view of market moods. To put these insights into practice and gain a competitive edge in your trading endeavours, consider opening an FXOpen account. Once you do, you’ll gain access to hundreds of assets to deploy your sentiment analysis skills. Happy trading! *At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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A+ Trade Set ups All From Respecting Simple Levels! We identify high-quality trade opportunities by focusing on key support and resistance levels. By respecting these fundamental price points, traders can enhance their decision-making process. Support levels act as a floor where buying interest tends to emerge, while resistance levels serve as a ceiling where selling pressure usually mounts. Recognizing and adhering to these simple levels helps traders pinpoint entry and exit points more effectively, increasing the probability of successful trades and improving overall trading performance. AMEX:SPY

Education

01:45

by ThePrintingRoom

Why is Macro driving the markets ? The attached chart shows just how important macro analysis is on the financial markets, and just how much it can move prices. It is important to understand that the markets are nothing more than a huge game of anticipation, which is why macro analysis is so important. In particular, it is important to understand the phenomenon of pricing: the market incorporates all the information available to it into prices at a given moment. For example, if a new regulation is announced that will restrict the automotive sector in 2 years‘ time, the market will react immediately and shares will fall immediately, not in two years’ time, because the market will immediately take this information into account and pass it on. This is where macro analysis comes in: it is used to construct and understand the market narrative. What are the current issues and constraints, what element could act as a catalyst for a further rise, what element is likely to lead to a fall, what is the market sensitive to, where is the focus? It is by building this context that we can make the right trading decisions. Simply following a technical indicator will not be enough in the long term. An indicator doesn't give you any real anticipation, any understanding of the movement in front of you, or any rationalisation of the levels to exploit (you avoid certain Supports/Resistances, for example, depending on the macro flow, because you know that it is too likely that you will break through these levels). The whole market, all the assets, all the prices are simply a reflection of market expectations (pricing) on the outlook for the asset. You've probably already heard that the markets are out of touch with reality, that they're too expensive, that fund managers are 🌰 idiots who buy overpriced stocks (this analysis is often based on the price/earnings ratio). It's a misleading reading that doesn't look far enough ahead to provide a true understanding of the market... The market never buys the asset at time T, it buys the asset's perspectives! Let's take the GLT share at a given moment Taking into account its current price and earnings, it is trading at a P/E of 26, which may seem expensive. But if I look at the longer-term outlook : Over a 3-year horizon, if the company achieves the results it expects to do, the P/E will actually be 14.97, a much more acceptable and bearable figure than the 26.04 we saw earlier. That's what the market will pay! Not the share price at the moment, but its growth potential. The market is counting on these expectations. If they deteriorate, this will lead to sell-offs, and vice versa. And macro events drive the market because they can upset these expectations and market scenarios. Many market players are looking to invest in what will yield the highest returns. Once again, macro is the key to finding what will yield the highest returns. We know that certain companies/sectors react better to certain parts of the economic cycle, to a context of inflation, high growth, low growth, rising rates, an environment of long rates over an extended period, etc... So when the macro outlook changes, or is disrupted by recent data, market players will review their positioning and seek to allocate to new assets that are likely to benefit most from the current/forecasted contex & environment. What sectors are players pulling out of, what do they seem to be reallocating to? This is incredible information and a good barometer of the market's perception of its current macro environment and its appetite for risk. And unsurprisingly, these flows only come into play when new macro/economic data upsets, downgrades or improves the outlook for certain assets, upsetting market expectations. MANAGING means forecasting TRADING: means anticipating REACTING: means losing If you want to do what great traders, fund managers and trading desk operators do, macro-reading is essential to understand your trading environment and what the market will be sensitive to. Being a trader is not about reacting, because we need to limit surprises as much as possible through our macro reading, which is a prerequisite for anticipating and forecasting 😉

Education

by Gold-Lion-Trading

Understanding risk to reward and risk management Risk Management In trading, understanding how to manage risk is just as important as understanding how to identify profitable opportunities. Regardless of your skill level or strategy, no trader can predict the market with 100% certainty. Therefore, managing risk is essential to protect your capital and ensure long-term success. In this chapter, we will explore the fundamentals of risk management, including the importance of setting stop-loss and take-profit levels, and how to determine appropriate position sizing. Importance of Risk Management The first rule of trading is to protect your capital. Without proper risk management, even a string of profitable trades can be wiped out by a few bad decisions. Traders who neglect risk management often find themselves caught in emotional trading, leading to unnecessary losses. Here’s why risk management is critical: Minimizes Losses: Every trade carries a risk. By managing risk properly, you can limit the size of your losses and protect your capital from large drawdowns. Consistency: Effective risk management allows you to trade consistently over the long term, even if you encounter a few losing trades. Successful traders understand that losing trades are inevitable, but with sound risk management, they ensure that losses are small and manageable. Preserves Psychological Capital: Emotional decision-making often leads to overtrading, panic, and revenge trading. By following a risk management plan, you reduce the emotional impact of losing trades and maintain the discipline needed to follow your strategy. Setting Stop-Loss and Take-Profit Levels One of the most practical ways to manage risk is by setting stop-loss and take-profit levels for every trade. These levels help automate your exit strategy, ensuring that you stick to your plan and avoid emotional reactions to price fluctuations. Stop-Loss Levels A stop-loss order is an instruction to exit a trade if the price moves against you by a certain amount. This ensures that you do not hold onto a losing trade for too long, minimizing potential losses. How to Set a Stop-Loss: Based on Technical Levels: Identify support and resistance levels on the chart. For example, if you are buying a stock, place the stop-loss below a significant support level. If the price breaks this level, it signals that the market is likely to continue downward. Percentage-Based: Many traders set their stop-loss at a fixed percentage of the entry price (e.g., 1% or 2%). This method ensures that you risk only a small portion of your capital on each trade. Volatility-Based: Some traders adjust their stop-loss levels based on market volatility. In a more volatile market, you might set a wider stop-loss to avoid being prematurely stopped out by normal price swings. Example: You enter a long position in a stock at £50 per share and identify strong support at £48. You set a stop-loss at £47.50 to limit your downside risk. If the price drops to £47.50, the stop-loss order is triggered, and you exit the trade automatically. Take-Profit Levels A take-profit order is used to lock in gains by exiting the trade once the price reaches a predefined profit target. This helps you avoid the temptation to hold onto a winning trade for too long and risk losing the profits you've already made. How to Set a Take-Profit: Risk-to-Reward Ratio: A common approach is to set a take-profit level that provides a favorable risk-to-reward ratio. For instance, if you risk $1 per trade, you might aim to make £2 or £3 in profit (a 2:1 or 3:1 risk-to-reward ratio). This ensures that your winners are larger than your losers. Technical Targets: Take-profit levels can be based on technical factors such as resistance levels, Fibonacci retracement levels, or trendline projections. For example, if a stock is trading within a channel, you might set your take-profit near the upper boundary of the channel. Example: You enter a trade with a risk-to-reward ratio of 1:2, meaning you’re risking £100 to potentially make £200. If your stop-loss is set 2% below your entry price, you’ll place your take-profit order at a level where the price is 4% higher. Trailing Stop-Loss A trailing stop-loss is a dynamic stop that moves with the price as it moves in your favor, locking in profits while allowing the trade to continue if the trend is strong. If the price reverses by a specified amount, the trailing stop will close the trade. Example: You enter a long position in a stock at £100 with a trailing stop set at £5. As the price rises to £110, your stop-loss moves to £105, locking in at least £5 in profit. If the price drops to £105, the trailing stop closes the trade. Position Sizing Position sizing is the process of determining how much capital to allocate to each trade. Proper position sizing ensures that you do not overexpose your account to a single trade, helping to protect your portfolio from excessive losses. Calculating Position Size To calculate the appropriate position size, follow these steps: 1. Determine Your Risk per Trade: Decide how much of your total trading capital you are willing to risk on any single trade. A common rule is to risk no more than 1% to 2% of your total account balance on each trade. Example: If you have a $10,000 trading account and you are comfortable risking 1%, you should only risk $100 per trade. 2. Identify Your Stop-Loss Level: Determine where you will place your stop-loss, as this defines how much you could potentially lose on the trade. For instance, if your stop-loss is 2% below your entry price, you will risk 2% of the position’s value. Risk-to-Reward Ratio Every time you enter a trade, you should consider the risk-to-reward ratio, which compares the potential loss (risk) to the potential gain (reward). A favorable risk-to-reward ratio helps ensure that even if you lose more trades than you win, you can still be profitable. Ideal Ratios: Most traders aim for a minimum risk-to-reward ratio of 1:2 or 1:3. This means that for every $1 risked, you aim to gain $2 or $3. A higher ratio increases your chances of maintaining profitability even with some losing trades. Example: If you set a stop-loss that limits your potential loss to £50, and your take-profit level is set to gain £150, your risk-to-reward ratio is 1:3. Even if you only win one out of every three trades, you will still break even or potentially make a profit. Risk management is the foundation of successful trading. By setting proper stop-loss and take-profit levels, using appropriate position sizing, and maintaining a favorable risk-to-reward ratio, you can protect your capital while maximizing your chances for long-term profitability. Remember, successful trading is not about winning every trade—it’s about managing risk effectively so that your winners outweigh your losers.

Education

Riding The Wave - The Importance of Top-Down Analysis In this video I explain why a top-down analysis is important when it comes to increasing the odds of price moving in your favour. I know it is extra work, but it isn't much, especially in terms of being a part of the most lucrative industry in the world. Trading from the higher timeframe simply allows you to "ride the wave" by going down to trade on the lower timeframe. Now, this is all relative to the timeframes you are on and not based on what is considered high or low timeframes. But simply put, if the higher timeframe is trending or being drawn to a specific price or level, then the displacements in price towards that direction will outweigh any displacements via retracements in the opposite direction. So, I hope this video gives some insight into this topic if you were wondering if it is really something you should do. If you desire higher win-rates, then the answer is yes. - R2F

Education

18:12

by Road_2_Funded

Market Analysis Techniques for Traders Market Analysis Techniques for Traders Navigating the financial markets demands a strong toolkit of analysis techniques. This comprehensive article introduces traders to key market analysis methods, ranging from fundamental and technical analysis to more specialised approaches like price action and quantitative methods. You can pair your learning with FXOpen’s free TickTrader platform to gain the deepest understanding of these techniques. There, you will find the price charts, drawing tools, and indicators necessary for many of these market analysis methods. Fundamental Analysis Fundamental analysis involves the scrutiny of economic indicators, company financials, and geopolitical factors to assess an asset's intrinsic value. Economic indicators like GDP, employment rates, and interest rates offer a macroeconomic view, while company financials such as earnings, debt ratios, and future projections are microeconomic factors. Fundamental analysts also pay close attention to geopolitical events, like elections or trade wars, which can shift market sentiment. The strength of this approach lies in its thorough, long-term outlook, making it particularly useful for investors in equities and commodities. However, it is time-consuming and often requires a deep understanding of economic theory. For example, Warren Buffet's value-based approach leans heavily on fundamental analysis, emphasising the importance of understanding the intrinsic value of stocks. Technical Analysis Technical analysis diverges from the fundamental approach by focusing solely on past and current price movements and trading volumes. Traders employ various indicators, such as moving averages, Relative Strength Index (RSI), and Moving Average Convergence Divergence (MACD), to predict future price behaviour. Trend lines and support and resistance levels further supplement these indicators, offering visual aids for decision-making. A famous case is Paul Tudor Jones, who successfully predicted the 1987 market crash using technical indicators. He compared the market’s top in 1987 with the previous peak of 1929 and found notable similarities, demonstrating the power of learning technical analysis. The advantage of technical analysis in trading is its applicability across different time frames, from intraday to multi-year trends. However, it can sometimes give false signals, known as "whipsaws," leading to potential losses. Price Action Analysis Price action analysis, while related to technical analysis, is a more focused method that relies on the interpretation of raw price movements instead of using additional indicators. Traders primarily use chart patterns like head and shoulders, double tops and bottoms, and candlestick patterns such as bullish or bearish engulfing to make trading decisions. Like technical analysis, support and resistance levels are also crucial here. One of the advantages of price action analysis is its simplicity: no need for dozens of indicators. On the flip side, it can be subjective and open to interpretation, making it less straightforward for some traders. Munehisa Homma, a 17th-century Japanese rice trader, is often cited as an early pioneer of price action analysis. Utilising candlestick charts, he achieved great success and laid the foundation for modern technical analysis. Quantitative Methods Quantitative analysis employs mathematical and statistical models to evaluate financial assets and markets. Algorithmic trading, a method that automatically executes trades based on pre-set criteria, is a prime example of the use of quantitative techniques. Traders also use backtesting to validate the effectiveness of a trading strategy by applying it to historical data. The quantitative approach offers the benefit of speed and precision, but it also carries risks such as model overfitting, where a strategy works well on past data but fails in real-time trading. One notable firm that has achieved exceptional success through quantitative methods is Renaissance Technologies, a hedge fund that’s achieved annual returns of 30%+ through its sophisticated mathematical models. Sentiment Analysis Sentiment analysis focuses on gauging market psychology by monitoring news, social media, and sentiment indicators. It seeks to understand how collective emotions are driving market trends. Methods for sentiment analysis include text mining of news articles and tweets, as well as tracking investor sentiment indexes like the Fear & Greed Index. While sentiment analysis offers a real-time pulse of market psychology, it is also prone to rapid changes, making it less reliable for long-term trading decisions. Notably, traders during the GameStop short squeeze phenomenon in early 2021 relied on sentiment analysis from online forums, turning what seemed like an undervalued stock into a trading frenzy. Intermarket Analysis Intermarket analysis extends the analytical lens to the relationships between different asset classes, such as equities, commodities, currencies, and bonds. By identifying these correlations, traders can gain insights into how a movement in one market could influence another. The advantage of intermarket analysis is its holistic view of market dynamics, but it also requires a strong grasp of global economics. For instance, in the chart above, we can see the price of crude oil with the price of Exxon Mobil (XOM) and BP (BP) overlaid. There is a strong correlation between crude oil’s trend and the trend of these companies’ share prices. Traders could evaluate the bullishness or bearishness of crude oil to set a bias for XOM and BP’s future direction. Seasonal Analysis Seasonal analysis examines recurring patterns in markets, often influenced by factors like weather, holidays, and fiscal calendars. For example, retail stocks often rise before the holiday shopping season, and energy commodities can be influenced by demand for transport fuel in summer and heating fuel in winter. Tools like seasonal charts help traders identify these trends. However, a major challenge lies in the changing dynamics of markets, which may render some seasonal patterns less reliable over time. Investors who had historically profited from buying stock in winter and selling in summer found this strategy less effective in recent years due to evolving market conditions. The Bottom Line In summary, a well-rounded understanding of diverse market analysis techniques is key to trading success. Whether focused on long-term investments or intraday trades, incorporating these methods can substantially enhance your trading strategy. For those ready to apply these insights in a live trading environment, opening an FXOpen account can serve as the next logical step in your trading journey. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Education

THE SILENT EXODUS: EXPLORING WHY TRADERS ABANDON THE MARKETS Marketing serves as a powerful catalyst, attracting millions of newcomers to trading each year, many of whom quickly incur losses, much to the delight of brokers. In most instances, these losses can be attributed to the traders themselves. Regulators make efforts to warn those seeking quick profits, often highlighting disclaimers on the home pages of nearly every broker's website. However, this doesn’t deter many individuals from entering the market. While it is true that after a few weeks or months, many traders abandon trading entirely, only a small percentage of those who leave ever return. Many are familiar with the statistic that suggests 90% of traders lose 90% of their money within just 90 days. This striking figure underscores the challenges and risks associated with trading. 📍 TRADING OR EMPLOYMENT "Start working for yourself" This rallying cry echoes through countless videos, books, and articles focused on financial independence, self-motivation, and personal development. The benefits of self-employment are numerous: You’re free from the pressures of management, which often comes with constant demands and can dampen your spirit with their dissatisfaction. You’re not bound by a rigid work schedule, allowing you to take breaks whenever you need without the hassle of requesting time off. There’s no obligation to adhere to corporate dress codes or behavioral standards. You can prioritize your health by taking breaks as needed, rather than pushing yourself to the limit. You save precious time by eliminating lengthy commutes, rather than spending two hours traveling to and from work. You can enjoy peace of mind without the constant worry of being fired at any moment. You have the freedom to manage your own time and control your income. A self-employed individual tends to be optimistic about the future, believing that they can shape it to perfection. Trading is one pathway to achieving financial independence, and one of its main advantages is that you can start with just $1000 and a few hours of dedicated practice after work. However, in reality, many experience disappointment as the challenges of trading become apparent. 📍 1. FREEDOM COMES WITH RESPONSIBILITY After experiencing initial setbacks, a trader soon realizes: 🔹 There is no guarantee of a consistent income in trading; instead, there's a significant risk of loss. In a traditional job, a paycheck is typically guaranteed. 🔹 Achieving a stable income through trading requires hard work and dedication—it relies entirely on your own efforts. Contrast this with a job where you could occasionally slack off or take smoke breaks without any impact on your salary. 🔹 The cost of a mistake in trading is your own money. In a job, salary cuts are rare, and while management might voice their frustrations, you can often tolerate the pressure. 🔹 Financial discipline becomes paramount. While it’s possible to ask for time off, arrive late, or take it easy in a corporate job and still receive your salary, in trading, laziness directly correlates with diminished returns. The more you slack off, the less you earn. 📍 2. SELF-MOTIVATION One of the greatest challenges of being self-employed, particularly in trading, is the imperative to motivate oneself consistently. It requires discipline to wake up at a set time instead of indulging in the comfort of staying in bed until late morning. The allure of self-employment often leads to a false sense of freedom, allowing procrastination to seep in with thoughts like, “I’ll sleep just one more day and start fresh tomorrow.” This mentality can be tempting, especially when there are no immediate consequences to breaking your own schedule. In a traditional job, the structure is clear—if you fail to adhere to a timetable, you risk disciplinary action or even losing your job. In contrast, self-employment can foster a more relaxed approach, where late starts and distractions like binge-watching TV shows can take precedence over important tasks. However, this path can lead the self-employed individual back to where they started—feeling subdued by the very freedom they sought. Without external accountability, the trader might find themselves floundering, lacking the motivation to push through challenging days. Ultimately, the responsibility falls solely on them to create a routine, set goals, and maintain the drive necessary to succeed. In this realm, it becomes essential to cultivate self-discipline, transforming the vibrant freedom of self-employment into a powerful engine for productivity rather than a pathway back to the constraints of traditional employment. 📍 3. FAILURE TO STOP IN TIME Another extreme in self-employment occurs when individuals become so absorbed in their work that they risk burnout. The overwhelming workload can render the structured environment of a previous job seem like a utopia, where the stress was lower and work hours were clearly defined. In this state, income becomes the sole motivation to continue. If the financial rewards from trading are only slightly above a previous salary—especially when weighed against the stress and exhaustion—many traders may find themselves reconsidering a return to traditional employment. This highlights the necessity of establishing boundaries and prioritizing self-care. Striking a balance between professional ambitions and personal well-being is critical for sustained success and happiness in self-employment. 📍 4. EMOTIONAL BREAKDOWNS Emotional breakdowns can arise as a consequence of stress, heavily influenced by an individual’s previous work experiences. For someone coming from a job filled with constant stress and pressure, trading may initially feel like a liberating and fulfilling pursuit. However, if their prior role was calm and unchallenging, the high-stakes nature of trading—marked by significant risks and rapid decision-making—can lead to overwhelming emotional strain. The stark contrast between their past work environment and the volatility of trading may trigger anxiety and emotional instability. This highlights the importance of understanding one's emotional resilience and stress tolerance before diving into a high-pressure endeavor like trading. Acknowledging these differences is crucial to managing stress and preventing emotional breakdowns in the pursuit of success. 📍 IS THERE A WAY OUT? Many traders leave the field due to their inability to acknowledge mistakes, manage time effectively, and take personal accountability. The pressure of sole responsibility can be overwhelming, causing their trading endeavors to falter. In a traditional job, it’s easy to attribute failures to external factors such as a boss, colleagues, or economic conditions. Similarly, in trading, one might blame brokers or market fluctuations. However, losses are inevitable, and without self-reflection, traders often label the profession a “scam” and revert to their previous roles. The core issue lies in the perception of comfort. In trading, comfort is subjective and often equates to a personal sense of responsibility. If you are willing to own your decisions and embrace the challenges, then trading can be rewarding. Conversely, if comfort for you means avoiding responsibility and sticking to a structured environment, trading may not be the right choice. Ultimately, understanding your own expectations and readiness for accountability is crucial for success in trading. 📍 CONCLUSION Many insights seem self-evident, yet traders often overlook them until they face these realities firsthand. The information presented in this post may appear straightforward, but beginners frequently dismiss these truths, clinging to the hope that the challenges of trading will somehow lessen over time. If you are embarking on your trading journey, it's essential to recognize that trading is hard work. Be prepared to invest significant time and effort into learning and gaining experience. It is crucial to set realistic expectations and understand that, especially in the initial stages, your focus should be on education and skill development rather than seeking immediate profits. Allow yourself at least the first six months of intensive study before considering trading with real money. Embracing this approach will not only equip you with the necessary knowledge but also help build a sustainable foundation for your trading career. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣

Education

Forex Portfolio Selection Using Currency Strength Index (CSI)Hello Traders, Today, I’ll share my portfolio selection approach in forex trading. This method helps identify the best forex pairs to trade based on their relative strength. The simplest and most effective strategy is to use the Currency Strength Index (CSI), combining the H4, Daily (D1), and Weekly (W1) cumulative strength. By analyzing this data, we can identify the strongest and weakest currencies at any given time. Once we have this information, the next step is to pair the strongest currencies with the weakest. Here are today’s portfolio selections: BUY Pairs: GBPUSD, GBPCAD, GBPNZD SELL Pairs: USDJPY, CADJPY, NZDJPY, USDCHF, CADCHF, NZDCHF The key benefits of this portfolio selection process are: A focused view on the most profitable currency pairs An objective approach to trading decisions Clear direction on which way to trade (buy or sell) Like, comment by letting me know what you think and follow me for more trading education. Happy trading!

Education

19:38

by Charts247TradingAcademy

The key to starting a trade is support and resistance points Hello, traders. If you "Follow", you can always get new information quickly. Please also click "Boost". Have a nice day today. ------------------------------------- As you study candles, you will learn about trend reversal sections. Therefore, rather than learning the shapes or patterns of candles, when you study them, you will be able to see the support and resistance points and sections made up of the selling area and trend reversal sections in a big picture. Therefore, rather than trying to memorize the shapes or arrangements of candles, it is important to see whether support and resistance points and sections are formed when such shapes, arrangements, and patterns appear. The same goes for other studies related to charts. - As you study candles, you will find that what you have studied appears in the sections where candles are gathered. These areas are drawn as horizontal lines to indicate support and resistance points. However, objective information is needed to conduct trading on the horizontal lines drawn like this. Otherwise, even the support and resistance points you drew will likely become useless lines if you conduct barrack trading because you don't trust them. Be careful because your psychological state will interfere with analyzing the chart. - The easiest way to obtain this objective information is the Heikin Ashi chart and the Renko chart. The Heikin Ashi chart and the Renko chart help you check the trend because they show fewer fakes and sweeps. (Heikin Ashi chart) (Renko chart) Among these, you can immediately see that the Renko chart is a bit easier to find support and resistance points. - You can think of the points near the end of the blocks on the Renko chart as having strong support and resistance points. Therefore, among the horizontal lines drawn on the chart above, the 2800.0 and 4000.0 points are the end points of three blocks, so they can be seen as strong support and resistance points. If you change the Renko chart to a regular candle chart, you can clearly see that it will form support and resistance points or sections. However, since the Renko chart changes the price in blocks, it is difficult to trade at this point. Therefore, the Heikin Ashi chart or Renko chart is good to use when analyzing the chart, but it is difficult to trade. - To compensate for this, we created a horizontal line at the price position using indicators (StochRSI, OBV, CCI, RSI) that have been used for a long time. The horizontal line connected to the current candle position plays the role of the current support and resistance point. And, since the longer the horizontal line, the stronger the support and resistance role, you can see that it plays the role of support and resistance even if it is not connected to the current candle. - The support and resistance points drawn on the Heikin Ashi chart or Renko chart are difficult to use for trading, but you can easily check the support and resistance section by looking at only the 1D chart. However, in order to display support and resistance points with a general candle chart, support and resistance points must be displayed on the 1M, 1W, and 1D charts. And, the order of charts with strong support and resistance is 1M > 1W > 1D charts. - When you look at the 1M, 1W, and 1D charts using the HA-MS indicator, horizontal lines like the above are displayed. You can display them by changing the line type or line thickness to make them easier to see and then proceed with trading. ---------------------------------------------------------------- The above content corresponds to the method of finding support and resistance points included in general chart-related books. Of course, it is different from the explanation in the chart-related book, but I explained how to use indicators to more clearly indicate support and resistance points. - Even if you trade with the support and resistance points above, it will not work well when you actually trade. This is because you are not familiar with the most important trading strategy in trading. In conclusion, the most important thing is to create a trading strategy, rather than finding the support and resistance points explained above, looking at the trend line, or looking at indicators. However, it is very difficult to create a trading strategy that fits your investment style from the beginning. So, you should practice creating a trading strategy that suits you while trading based on the information of the objective chart. In order to trade, you need to decide on the following three things: 1. Investment period 2. Investment size 3. Trading method and profit realization method The above three things must be determined. No. 1 and 2 are determined according to your investment style. Therefore, it is recommended not to change No. 1 and 2 after you start trading. 3. Based on the information of the actual chart, the buy section, sell section, and stop loss point are determined. In addition, the profit realization method can be determined according to the investment period. The profit realization method is: 1. How to get cash profit 2. How to increase the coin (token) corresponding to the profit There are methods 1 and 2 above. - In order to create a trading strategy, it is important to display all the information you want on the chart before starting the transaction. If you do not, and then display lines on the chart after starting the transaction, psychological factors will be added and displayed, so the possibility of not trusting the lines drawn after starting the transaction increases. To prevent this, it does not matter if you use the indicator added to the HA-MS indicator. The reason is because it is objective information. You should increase profits or reduce losses by adjusting the investment ratio while conducting the transaction using this objective information. - Have a good time. Thank you. --------------------------------------------------

Education

Building a Trading Plan Building a Trading Plan When it comes to the dynamic world of finance, a well-developed plan is the cornerstone of effective trading. Although it may seem that building trading plans is useful only for traders with little experience, a plan empowers any trader to make informed decisions. This FXOpen article will delve into how to make a trading plan that aligns with your unique goals and risk tolerance. Setting Your Trading Goals A personalised business plan for traders serves as a bridge between your aspirations and reality. Therefore, having a strategy that aligns with your financial goals is a must. Whether you are aiming for short- or long-term targets, your strategy will be the roadmap that guides you to them. Set clear and attainable trading goals so you don’t have to jump in over your head and worry about every little detail. Analysing and Researching the Market Gaining an advantage in the market starts with a comprehensive analysis. You may learn all the tools available to perform a thorough analysis to decipher market trends and patterns. You can find many useful tools on the TickTrader platform. Along with this, traders learn about the fundamental factors that potentially affect the assets they will trade. By accurately identifying opportunities, traders can move forward with confidence. Defining Your Trading Style Selecting a trading style that complements your goals is an important step. The first step is to reflect on your personality. Are you a risk-taker who thrives on short-term gains, or do you prefer a more measured approach? Self-awareness forms the foundation of your style. It’s also a good idea to assess how much time you can commit to trading on a daily or weekly basis. You may start with a style that matches your initial assessment. But remember that finding the right style may require trial and error. You can trade with virtual funds on demo accounts to get a practical idea of how your chosen style works for you. Learning Risk Management Techniques You will need to identify the level of risk you’re comfortable with. If you align your trading approach with your risk appetite, trading will become much more comfortable. Moreover, reducing risk is a trader’s mantra. Consider setting stop-losses and take-profits. Try to find optimal position sizing techniques, ensuring that each trade matches your risk tolerance. Diversification, a time-tested strategy, further strengthens your trading portfolio against unforeseen market fluctuations. Testing and Optimisation of Your Plan Practice makes perfect. At FXOpen, you can use a demo account, which allows you to practise and refine your strategy in a risk-free manner. This lets you adjust your trading plan based on actual results. Then, a great way to go is to evaluate your trading performance regularly. Through this iterative process, the strategy becomes a powerful tool that helps build traders’ most effective methods. Trading Plan Examples Here are two simplified examples of trading plans for different trading styles. Analyse them carefully before drawing up your own. Example 1: Day Trading Plan — Intraday 1. Goals and Objectives - Aim to achieve consistent daily profits. - Maintain a win rate of at least 60%. - Limit maximum daily loss to 2% of capital. 2. Market Analysis Focus on technical analysis using candlestick patterns, support and resistance levels, and indicators like Moving Averages and Relative Strength Index (RSI). 3. Risk Management - Set stop-loss at a maximum of 1% of trading capital per trade. - Use position sizing to ensure trades are within risk tolerance. - Avoid revenge trading after hitting the daily loss limit. 4. Trading Routine - Start with pre-market analysis and identify potential trading opportunities. - Trade during peak market hours to catch maximum liquidity. - Keep a trading journal to track trades, results, and areas for improvement. Example 2: Swing Trading Plan — Daily to Weekly 1. Goals and Objectives - Target larger price moves and trends over several days to weeks. - Achieve an average of 15-20% annual return. - Limit drawdowns to no more than 10% of capital. 2. Market Analysis - Combine technical and fundamental analysis. - Consider macroeconomic factors and news events for a broader market context. 3. Risk Management - Set stop-loss orders at levels that align with technical support or resistance. - Risk no more than 2-3% of capital per trade. - Diversify by trading different assets or industries to reduce correlation risk. 4. Trading Routine - Conduct analysis and review trades in the evenings or over weekends. - Monitor positions periodically but avoid over-trading. - Keep a trading journal to assess the effectiveness of your strategy and make adjustments. Remember that these examples are simplified and don’t cover every aspect of a comprehensive plan. You need to tailor your plan to your risk tolerance, your style, and your personal circumstances. Additionally, trading carries inherent risks, and it’s essential to understand the markets, strategies, and risk management tools before executing trades. Final Thoughts In this article, we discussed the steps applicable for trading with different assets, including forex, crypto*, stocks, and commodities. With the right guidance, tools and knowledge, you can create a stock trading business plan that enhances your strengths and fulfils your needs and desires. By building a plan according to your aspirations and risk tolerance, you will have a strategy that is sustainable in the face of market volatility. And then our tools, low commissions, tight spreads and our huge variety of assets will make trading easy. Open an FXOpen account and discover a world where informed decisions determine success. *At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Education

Fibonacci: The importance of knowing how to use it properly The way the market moves is a fascinating Fibonacci puzzle. Whether the trend is down or up, there is a Fibonacci level waiting to be hit as a reversal and/or target. USDJPY is shown here: This is a monthly chart. Using the Fibonacci extension from Dec 1, 1975, I've modified it to record the actually Fibonacci number past the old "1.618" to include 5, 8, 13, 21, 34. As you can see how the market respects 8, 13, especially 21 as USDJPY heads in a down trend. As of recent price action toward the right of the chart, You'll see another a Fibonacci retracement tool used between the 13 and 21 levels of the Fibonacci extension tool. Yes, even using Fibonacci between another Fibonacci works. More importantly how Dec 1, 2023 found support at the 50% mark between 13 and 21 Fibs. The way I use the Fibonacci extension tool is different than anyone else I've seen. I take the first impulse as the first wave. In my interpretation of a wave is all consecutive candles are the same color. The next wave is the retracement where all consecutive candles are the opposite color. Works on all timeframes and the smaller the time frame the more accurate; IE candles or wicks hit or stop on the exact Fib level. I hope this encourages you to try Fibonacci in a way no one else has used Fibs and it gives you an edge in your trading/investing objective.

Education

Basic example of starting a trade Hello, traders. If you "Follow", you can always get new information quickly. Please click "Boost" as well. Have a nice day today. ------------------------------------- This is an example of starting a trade, explaining that you should objectively define the basics that are right for you. Therefore, I hope that this will be an opportunity to reexamine your trading judgment criteria rather than judging it as right or wrong. ----------------------------------------- It is showing a downward trend without breaking through the sell line of the superTrend indicator. Accordingly, the key is whether it can receive support near the M-Signal indicator (approximately 59953.52) on the 1W chart and rise above 60672.0-61099.25. If not, you should check whether it is supported near the MS-Signal (M-Signal on the 1D chart). Therefore, 1st: 59053.55 2nd: 57889.10 You should check whether it is supported near the 1st and 2nd above. - Usually, there are many cases where you trade impulsively based on your psychological state. To prevent this, it is good to have an objective trading method according to your investment style. This objectification is best done at the support and resistance points drawn on the 1M, 1W, and 1D charts. Therefore, it is good to trade based on whether it is supported near 59053.55 or 60720.0-61099.25. However, judging whether it is supported only by sight can lead to an incorrect judgment depending on psychological factors that occur during trading, so it is good to have objective information as the basis for judgment. It refers to indicators added to the chart as objective information. The MS-Signal indicator is used as a trend-related indicator, which is the M-Signal indicator of the 1M, 1W, and 1D charts. As a trading-related indicator, the HA-Low, HA-High indicators and their corresponding box sections, superTend, and volume profile are used. As a trading-related reference auxiliary indicator, the BW indicator and StochRSI indicator are used. - If we explain the current movement by referring to these indicators, - The superTrend indicator, which is passing around 60672.0-61099.25, has failed to rise above the sell line, - It is showing a downward trend below the M-Signal indicator of the 1W chart, - The StochRSI indicator is showing a trend of changing from an upward to a downward slope in the overbought section. However, since the StochRSI indicator has not yet fallen from the overbought zone and is not in a state where StochRSI < StochRSI EMA, it is difficult to see it as a downward turn. Therefore, an aggressive sell (SHORT) is possible between the M-Signal indicator of the 1W chart and the 60672.0-61099.25 range. Afterwards, when the StochRSI indicator falls from the overbought zone and becomes a state where StochRSI < StochRSI EMA, if it shows resistance near 59053.55 or the MS-Signal (M-Signal on the 1D chart) indicator, you can sell (SHORT). If it is supported at the point mentioned above, you can buy (LONG). However, it is recommended to check whether the state has been changed to StochRSI > StochRSI EMA. If not, it can pretend to rise and fall right away. - Have a good time. Thank you. -------------------------------------------------- - Big picture It is expected that the real uptrend will start after rising above 29K. The section expected to be touched in the next bull market is 81K-95K. #BTCUSD 12M 1st: 44234.54 2nd: 61383.23 3rd: 89126.41 101875.70-106275.10 (overshooting) 4th: 134018.28 151166.97-157451.83 (overshooting) 5th: 178910.15 These are the points where resistance is likely to be encountered in the future. We need to see if we can break through these points. We need to see the movement when we touch this section because I think we can create a new trend in the overshooting section. #BTCUSD 1M If the major uptrend continues until 2025, it is expected to start by creating a pull back pattern after rising to around 57014.33. 1st: 43833.05 2nd: 32992.55 -----------------

Education

DreamAnalysis | Technical Analysis Dow Theory EP01 📚 Welcome to the Educational Content Section of Our Channel: Technical Analysis Training We aim to produce educational content in playlist format that will teach you technical analysis from A to Z. We will cover topics such as risk and capital management, Dow Theory, support and resistance, trends, market cycles, and more. These lessons are based on our experiences and the book The Handbook of Technical Analysis, as well as our learning and insights from the Trade City Pro channel. 🎨 What is Technical Analysis? Let’s talk a bit about technical analysis and patterns in life. Technical analysis is not a science; rather, it is an art. Therefore, there is no right or wrong in art. Instead, we apply rules we have created through experience in this lawless market. 📊 Introduction to Dow Theory : Today, for the first part of our lessons, we will begin with Dow Theory, which was developed by American journalist Charles Dow. Many traders still use this method for analysis and trading. 📑 Principles of Dow Theory : 1 - The Averages Discount Everything (Not applicable to crypto) 2 - The Market Has Three Trends 3 - Trends Have Three Phases 4 - Trend Continues Until a Reversal is Confirmed 5 - The Averages Must Confirm Each Other 6 - Volume Confirms the Trend 💵 Principle 1: Price is All You Need Dow's theory operates based on the "Efficient Market Hypothesis," which assumes that the price of assets reflects all available information. In other words, this approach contrasts with behavioral economics. Factors like earning potential, competitive advantage, management competence—all are accounted for in the price, even if individuals do not know all the details. In more precise readings of this theory, even future events might be reflected in the current market price. 📊 Principle 2: The Market Has Three Types of Trends According to Dow Theory, price movements in the market are trend-based, and these trends can be divided into three types: 1 - Primary Trend: This is the main movement of the market, dictating the long-term direction, and can last for years. 2 - Secondary Trends: These are corrective movements that run opposite to the primary trend. For instance, if the primary trend is bullish, the corrective trend will be bearish. These trends can last from weeks to months. 3- Minor Trends: These are the daily price fluctuations in the asset. Although minor trends can last for weeks, their direction will always align with the primary trend, even if they contradict the secondary trend. 💡 Final Thoughts for Today : This is the end of this part, and I must say we have a long journey ahead. We will continually strive to produce better content every day, steering clear of sensationalized content that promises unrealistic profits, and instead, focusing on the proper learning path of technical analysis. ⚠️ Please remember that these lessons represent our personal view of the market and should not be considered financial advice for investment.

Education

by DreamAnalysis

What are you missing if you only measure time and price?In this video, I am explaing why besides the price and time we need to measure another factor on the chart which is called Sapce. Please comment and let me know if you want to know more about it.

Education

03:16

by SpaceIchimoku

Is your ETH and SOL working for you !?The crypto market never sleeps which means leaving your holdings stagnant could mean missing out on significant opportunities. So it’s time to ask yourself: Are your assets maximizing their potential, or are they just gathering virtual dust? You wouldn’t leave all your money in a low interest savings account, so why do it with your crypto? The idea is to put your investments to work, so they keep earning returns without you lifting a finger. I’ll walk you through exactly how to read it and use it to your advantage. But that’s just the beginning, we’ll also be covering: -Yield strategies: A breakdown of the strategies we use to generate yield. -Pros and cons: The advantages and drawbacks of each strategy. Not sure what options are best for you? Are you letting your capital sit idle? Worried about security risks? This analysis is about to change that .I’ll show you how to maximize your returns and crush those security fears, so you can confidently put your assets to work Let's dive right in and kick things off with the ‘crowd favorite’ of yield strategies: staking Staking is exclusive to Proof of Stake (PoS) blockchains and their associated tokens. Meaning you cannot gain staking yield from Bitcoin, for example, because it is a Proof of Work (PoW) blockchain. by staking your tokens like CRYPTOCAP:ETH or CRYPTOCAP:SOL , you receive a portion of newly minted tokens, effectively earning yield while playing a vital role in securing the network. If you’re not staking, you could be missing out on significant gains, with potential returns ranging from 3% to 18% APY. that’s why many investors choose to stake their assets rather than let them sit idle Staking has become a widely adopted strategy, with staking ratios (amount staked vs. unstaked) sitting between 20% and 80% on most POS blockchains In fact, a staggering $520 billion is currently staked across the top PoS blockchains, underscoring its popularity as a method for generating additional income. Assuming an average 5% reward rate, that equates to $25 billion in staking rewards. That’s massive. Despite the appeal of earning extra income through staking, becoming a solo staker can be technically challenging which is why staking providers like Lido, Rocket Pool, and Jito have emerged. They handle network validation for the rest of us, while maximizing our staking yield. Let’s break down the pros and cons of using a staking provider: Pros: ✅ Security and efficiency: Our tokens are put to work securely and efficiently, contributing to the network’s security without us having to manage it all ourselves. ✅ Maximized rewards: We earn the majority of staking rewards without needing to handle the technical complexities, making it a hassle-free way to generate income. ✅ Liquidity retention: We receive liquid tokens as proof of our staked assets, allowing us to stay flexible and use them in other DeFi opportunities. Cons: ❌ Fees: These providers typically charge a fee ranging from 8% to 25% for their validation services, which can slightly reduce your overall yield. ❌ Smart contract risks: There are inherent risks associated with smart contracts, such as bugs and/or vulnerabilities, that could potentially impact your staked assets. By weighing these pros and cons, you can decide whether outsourcing your staking through liquid staking providers is the right strategy for you. Ok, so if that’s the case how do we go about choosing the right liquid staking provider? Here are some key factors to consider when selecting a provider: 1/ Reputation and security Track record: Look for providers with a solid track record and a strong reputation in the DeFi space. Security measures: Ensure the provider employs robust security measures, such as smart contract audits. 2/ Total volume locked TVL: Check how much liquidity your chosen provider has attracted. TVL is a quick and effective measure of the broader market's trust in a provider, as it reflects the total amount of assets currently staked or locked in their protocol, valued in dollars. Feel free to use DefiLlama, which ranks all liquid staking providers by TVL. Simply select the blockchain you’re interested in, and you’ll see the top players in the space, giving you a clear view of where the most assets are being staked and which providers are leading the market. 3/ Yield rates Competitive yields: Compare the staking yields offered by different providers. While higher yields are attractive, they should not come at the expense of security or reliability. Fee structure: Be aware of the fee structure. Liquid staking providers typically charge a small fee for their services, which can impact your overall returns. 4/ Liquidity and flexibility Liquid staking tokens (LSTs): Check if the liquid tokens issued by the provider are widely accepted across DeFi platforms and have enough liquidity. The more integration and liquidity these tokens have, the better. Redemption options: Some providers offer instant or flexible redemption options for your staked tokens, which can be crucial if you need quick access to your assets. 5/ Decentralization and governance Decentralization: Providers that are more decentralized tend to be more resilient to risks such as regulatory actions or central points of failure. Governance participation: Some providers offer governance rights with their tokens, allowing you to have a say in the protocol’s future direction. This can be an added benefit for those interested in being more involved in the ecosystem. 6/ Community and support Active Community: A strong, active community can be a good indicator of a provider’s health and future prospects. Engage with the community to gauge the level of transparency and support. so while you trading and trying to maximize your gains Its good to stake some of your HODL bag as well

Education

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