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Stock Markets Uncovered Charles Dow the Co-Founder of DOWJONES Index. Introduced technical analysis to the public in the late 1800's, You really think his gonna show you how to beat his own market ??? I don't... That's why I see masses of people trade and fail. We are Thought How to trade the markets their way , Not giving us the chance to innovate our own strategy to beat the system with a much Higher edge than what they are trying to give us... Before the stock market crash, Brokers and Merchants were under an agreement under the Button Wood Agreement in 1972. A private Club were the insiders had to follow Common rules and boundaries. This closed the system against outside agents and auctioneers. But Margin buying during the 1920's was not controlled by the government. It was controlled by brokers interested in their own well-being. The Securities Exchange Act was signed on June 6, 1934, After the Stock Market Crash of 1929. The SEC used their power to change how Wall Street operated. Meaning they control the markets and Manipulate it how ever they want. See the markets with a new perspective, Study the markets itself, Not the material others try to give you. #SMU#WakeUp#Freedom>Security

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Developing Success With PineScript : Building Trigger Mechanisms In my ongoing quest to build better tools for traders, I continue to develop new quantitative trigger logic to improve the working versions I have already created. Trigger logic is complicated for most people because they fail to take the time to "focus on failure." Everyone builds trading systems focused on where the triggers work perfectly (trust me - I've seen/built a few hundred of them). But the most important thing to focus on is where it fails to generate a decent trigger and how you are going to filter it out or protect capital when that failed trigger hits. In this example, I highlight my new "Gun-Slinger" triggers and how my continued development is creating more advanced trading tools for skilled traders. I hope you enjoy it. #trading #research #investing #tradingalgos #tradingsignals #cycles #fibonacci #elliotwave #modelingsystems #stocks #bitcoin #btcusd #cryptos #spy #es #nq #gold

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False Or Real? How To Determine If A Move Is Real or False!Bitcoin recently produced a major bearish move, the continuation of a bearish trend that started to develop earlier this year. As we arrived at the current market situation, many people are wondering, is this a real or false breakdown? 👉 How to determine if a move is false or real? There are many ways to do so... Let's have a look. 1) Levels of importance. We can determine if a move is false or real, if it cuts through major support or resistance levels. Here we can see Bitcoin moving below the 0.382 and 0.5 Fib. retracement levels after almost five months of bearish consolidation. This would indicate this move being real. 2) Moving averages. If a major move wicks in one direction but ends up closing without conquering/breaking a major moving average, then the move is false. If the major move ends up by closing above (bullish) or below (bearish) a major moving average after the event, it is then considered a real move. Here we can see Bitcoin closing below several major moving averages after a strong bearish move. Indicating that this is a real breakdown. 3) Volume. If a major move is supported by high volume, it indicates the move is real. Really high volume leaves no doubt as to the validity of the move in question. Here we are using TradingView's index and it shows the highest volume since 5-March. 4) Continuation. If the move in question is the continuation of an already developing situation, the move can be considered real. Here we can see a lower highs and lower lows pattern (downtrend) developing, making the last drop a continuation of this pattern. This indicates that this is a real move. These are just some of the ways to determine if a market move is real or false. Thank you for reading. Namaste.

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5 Strategies for Traders in 2024 5 Strategies for Traders in 2024 Trading strategies are essential tools for navigating financial markets. They provide a structured approach to trading decisions, leveraging technical indicators and patterns to identify opportunities. This article explores various potentially effective trading strategies, offering insights into how traders can apply them to improve their performance and achieve their trading goals. Understanding Different Types of Trading Strategies Trading strategies are essential for traders aiming to navigate the financial markets with precision and discipline. These strategies provide a structured approach for varying trading styles, helping traders make informed decisions based on specific criteria and market conditions. Here are some key types of trading strategies: - Trend Following: Traders aim to identify and get involved in trends, exploiting the trending nature of markets. Common indicators include moving averages and trendlines. - Mean Reversion: Based on the idea that prices will revert to their mean or average level over time. Traders use indicators like Bollinger Bands and RSI to identify overbought or oversold conditions. - Momentum: Focuses on assets that are moving strongly in one direction with high volume. Momentum traders use indicators such as the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI). - Breakout: Involves entering positions when the price breaks through a predefined level of support or resistance. Breakouts can be confirmed using volume data. - Scalping: Aims to take advantage of small price changes over short periods. Scalpers typically rely on technical indicators like order flow data. Types of Indicators and Patterns Used in Traders’ Strategies In trading, various indicators and patterns are utilised to analyse market conditions and identify potential trading opportunities. These tools can be broadly categorised into several groups, each serving a specific purpose across different trading strategies. 1. Trend Indicators Trend indicators offer a way for traders to identify a trend’s direction and strength. Some popular trend indicators include: - Moving Averages (Simple, Exponential) - Moving Average Convergence Divergence (MACD) - Average Directional Index (ADX) - Parabolic SAR 2. Momentum Indicators Momentum indicators measure the speed or strength of price movements. They are crucial for identifying overbought or oversold conditions. Common momentum indicators include: - Relative Strength Index (RSI) - Stochastic Oscillator - Rate of Change (ROC) - Commodity Channel Index (CCI) 3. Volatility Indicators Volatility indicators gauge the degree of price variation over time, providing insights into market turbulence. Key volatility indicators are: - Bollinger Bands - Average True Range (ATR) - Keltner Channels - Standard Deviation 4. Volume Indicators Volume indicators analyse the trading volume to confirm the strength of a price movement or trend. Notable volume indicators include: - On-Balance Volume (OBV) - Chaikin Money Flow (CMF) - Volume Weighted Average Price (VWAP) - Accumulation/Distribution Line 5. Reversal Patterns Reversal patterns signal potential changes in market direction, allowing traders to anticipate trend reversals. Some reversal patterns are: - Sushi Roll Reversal - Megaphone - Diamond - Three Drives 6. Continuation Patterns Continuation patterns help traders understand whether a current trend is likely to continue. Popular continuation patterns include: - Flags and Pennants - Cup and Handle/Inverted Cup and Handle - Rectangles - Wedges 7. Candlestick Patterns Candlestick patterns are formed by one or more candlesticks on a chart and provide insights into market sentiment. Some candlestick patterns are: - Hook Reversal - Kicker - Belt Hold - Island Reversal These indicators and patterns form the foundation of many top trading strategies, enabling traders to analyse market behaviour and make entry decisions. Below, we’ll use some of these indicators and patterns in several different trading strategies. Five Strategies for Traders Now, let’s examine five trading strategies that may work if you modify them in accordance with your trading plan and common trading rules. While we’ve used the EUR/USD pair to demonstrate the examples, they can also be applied as commodity, crypto*, and stock market trading strategies. Head over to FXOpen’s free TickTrader platform to access the indicators discussed in these strategies and more than 1,200 trading tools. VWAP and RSI - Volume Weighted Average Price (VWAP): An indicator that shows the average price a security has traded at throughout the day, based on both volume and price. - Relative Strength Index (RSI): A well-known momentum indicator that gauges the magnitude and change of market movements. It also indicates overbought and oversold market conditions. The VWAP and RSI trading method leverages mean reversion, which assumes that prices will revert to their mean value over time. This strategy may be potentially effective because it combines VWAP’s price-volume insight with RSI’s momentum analysis, providing a clear picture of potential price reversals. According to theory, it’s best used on intraday charts, typically the 5m or 15m, given the VWAP resets between trading days. Entry - Traders often look for RSI values above 70 (overbought) or below 30 (oversold) to indicate potential reversals. - A short entry is typically considered when RSI crosses back below 70 and the price is above the VWAP. - Conversely, a long entry is common when RSI crosses back above 30 and the price is below the VWAP. - A divergence between RSI and the price can add confluence to the trade. Stop Loss - Stop losses are usually set beyond the recent swing high for short positions or swing low for long positions. Take Profit - This approach capitalises on the mean reversion principle, aiming for prices to return to their average level. Therefore, it is common for traders to take profits at the VWAP. - However, take profits might also be placed at a suitable support or resistance level. Breakout and Retest The Breakout and Retest trading technique focuses on identifying horizontal ranges or consolidation phases in the market. This strategy aims to capitalise on price movements that occur after the breakout of these ranges, leveraging the potential for substantial trend formation. Entry - Traders observe a horizontal range or consolidation period with a directional bias in mind. - A strong movement or candle closing beyond the range signals a breakout. - Traders typically set a limit order at the range's high (for a bullish breakout) or low (for a bearish breakout) after the breakout occurs. Stop Loss - Stop losses are generally placed below the range's low for bullish breakouts or above the range's high for bearish breakouts. This risk management approach potentially helps protect against false breakouts and reversals. - However, a trader can also place a stop loss above or below the nearest swing point, which may provide a more favourable risk/reward ratio. Take Profit Given that breakouts from consolidation ranges often lead to prolonged price moves, traders commonly set take-profit levels at key support or resistance levels. Fibonacci and Stochastic - Fibonacci Retracement: A tool used to identify potential support and resistance levels by measuring the distance between a significant high and low. - Stochastic Oscillator: A momentum indicator comparing a security’s closing price to its price range over a specified period, typically used to identify overbought or oversold conditions. The Fibonacci and Stochastic strategy combines Fibonacci retracement levels with the Stochastic Oscillator to identify potential price reversals in trending markets. This approach leverages key retracement levels and momentum signals, offering traders a precise method for timing entries and exits. Entry - Traders typically observe a new low in a bear trend or a new high in a bull trend. - A Fibonacci retracement is then applied between the prior high and low, focusing on the 0.382, 0.5, or 0.618 levels. - As the price approaches these levels, traders look for signs of rejection, such as candlestick patterns like a shooting star or hammer. - Additionally, traders watch for the Stochastic Oscillator to cross back below 80 (in a bear trend) or above 20 (in a bull trend). - When the Stochastic moves beyond these levels, an entry is sought. Stop Loss - Stop losses may be set just beyond the entry swing point or the next Fibonacci level. Take Profit - Profits might be taken at a valid support or resistance level. Bollinger Band Squeeze and MACD - Bollinger Bands: A volatility indicator consisting of a middle band (usually a simple moving average) and two outer bands set at standard deviations from the middle band. - Moving Average Convergence Divergence (MACD): A momentum indicator valuable in trending markets, designed to measure the relationship between two moving averages. The Bollinger Band Squeeze and MACD strategy combines Bollinger Bands' volatility analysis with MACD's momentum confirmation. This approach identifies potential breakouts above/below the Bollinger band following periods of low volatility, providing a robust framework for trading such events. The strategy is used in a solid trend and in the direction of the trend. Entry - Traders look for Bollinger Bands to constrict, indicating reduced volatility. - The MACD is used to confirm the breakout direction. Traders typically watch for the MACD signal line to cross above the MACD line for a bullish breakout or below for a bearish breakout. - The breakout is generally confirmed by a strong price movement in the direction of the MACD crossover. Stop Loss - Stop losses may be set beyond the opposite edge of the Bollinger Bands. Take Profit - Profits might be taken when the price closes near or beyond the opposite edge of the Bollinger Bands. This method allows traders to capitalise on the full extent of the breakout move. Keltner Channel and RSI Momentum - Keltner Channels (KC): A volatility-based indicator consisting of bands set around an exponential moving average, typically using a multiplier of 1.5 times the Average True Range (ATR). The Keltner Channel and RSI Momentum strategy leverages volatility and momentum to identify potential trade opportunities. This approach focuses on price movements outside the Keltner Channel, confirmed by RSI, to signal entry points. The strategy is applied within the strong trend. Entry - Traders observe RSI to be above 50 but below 80 for bullish setups, indicating upward momentum without being severely overbought. For bearish setups, RSI should be below 50 but above 20. - A decisive close outside the Keltner Channel signals a potential trade. For a bullish entry, the price should close above the upper channel, with RSI confirming by staying within the bullish range. Conversely, for a bearish entry, the price should close below the lower channel, with RSI confirming by staying within the bearish range. Stop Loss - Stop losses may be set beyond the midpoint of the Keltner Channel. - Alternatively, stop losses may be placed on the other side of the channel, depending on the trader's risk tolerance. Take Profit - Profits may be taken at key support or resistance levels, providing logical exit points based on market structure. - Additionally, traders might exit when the price closes beyond the opposite side of the Keltner Channel. - Another potential exit strategy is to take profits when RSI reaches overbought (above 80) or oversold (below 20) levels, indicating potential exhaustion of the current move. The Bottom Line Understanding and applying different trading strategies can potentially enhance your trading performance and help you achieve your financial goals. By leveraging tools like VWAP, RSI, and Fibonacci retracements, traders can make more informed decisions. Open an FXOpen account today to access these strategies and more with a broker that supports your trading journey. FAQs What Is the Most Basic Trading Strategy? The most basic trading strategy is the moving average golden and death cross strategy. This approach involves using two moving averages, typically 50-day and 200-day, to identify potential buy and sell signals. A golden cross occurs when the short-term 50-day moving average crosses above the long-term 200-day moving average, signalling a bullish market trend and a potential buying opportunity. Conversely, a death cross happens when the 50-day moving average crosses below the 200-day moving average, indicating a bearish trend and reflecting a potential selling opportunity. What Strategy Do Most Day Traders Use? Most day traders use momentum trading. This strategy involves identifying assets that are moving significantly in one direction on high volume. In a stock trading strategy, for instance, a day trader might buy a stock climbing strongly backed by higher-than-average volume. They might rely on technical indicators like Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) to make decisions. How to Backtest a Trading Strategy? To backtest a trading strategy, traders use historical data to simulate the performance of a strategy over a specified period. This involves applying the strategy's rules to past data to see how it would have performed. Traders typically use backtesting software or platforms that allow for detailed analysis and visualisation of results. How to Create My Own Trading Strategy? Creating a potentially successful trading strategy involves several steps. First, identify your trading goals and risk tolerance. Then, choose the market and timeframe you want to trade. Develop specific entry and exit rules using technical indicators and patterns. Finally, test your strategy using historical data to ensure its effectiveness before applying it to live trading. Also, ChatGPT provides numerous opportunities, including the creation of a trading strategy. Read our article ‘How to Use ChatGPT to Make Trading Strategies.’ *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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How to make someone else's chart your own Hello, traders. If you "Follow", you can always get new information quickly. Please also click "Boost". Have a nice day today. ------------------------------------- Sometimes, people ask how to use indicators displayed on the chart. You can add public indicators by clicking "Indicators" and searching for indicators. However, since not all indicators are public, you can use private indicators by sharing published ideas. I will take the time to explain how to share them. - In order to make someone else's chart your own, you need to share the chart from an idea published by someone else. To do this, you must be a paid member of TradingView. --------------------------------------- 1. Click on the idea of someone else whose chart you want to share and click "Share" near the bottom of the chart. 2. In the next window, click "Make it mine". You can do it as above. ---------------------------------------- However, the idea poster must have the layout of the chart "Sharing". - Since there is a limit to the number of indicators supported depending on the paid level, it is recommended to check your paid level to see if you can use all the indicators of the chart you want to share. I briefly looked into how to make someone else's chart mine. - Have a good time. Thank you. --------------------------------------------------

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8-5-24 Developing Pinescript Tools For Traders Part of my learning process with TradingView has been to delve a bit into Pinescript. I've been programming for a while now - more than 20 years. But I focus on developing modeling systems, adaptive AI types of solutions, and fully automated trading systems for clients. Pinescript has been fun. Overall, I believe there are many advanced capabilities achievable in Pinescript as long as one sticks to simple principles. _ a focus on core elements as separate script components _ remember to clean/document up your processes/arrays as you go _ develop core logic functions first, then go back and address display features _ remember to organize your code in a way you can clearly address version changes In this example, I started with the idea of building a tool based on Fibonacci Price Theory, then came up with an idea to measure price pressure differently than others had done. Once I started playing with the display features (plot) I was able to see how my initial scripts worked and how the calculated data represents price trends/changes. For me, seeing is the biggest part of the process. If I can't see how the data looks - then it is almost unusable for me to build more advanced logical features. That's why I suggest building each component of your system out as unique indicators. I want to see the data/indicator work before I try to build some additional trading logic with it. Overall, I'm very happy with what I've built. It has taken me about 2 weeks to build all of this (only really applying a few hours every other day or so). One last thing, use the newbar feature to control persistent variable features. Otherwise, you may end up creating something that processes every tick. More soon. #toolsfortraders #trading #spy #qqq #btcusd #strategy #systems #coding

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BULLISH STRUCTURE SMC How to identify a bullish market structure according to SMC In a bullish structure, identify the top, the high after the bos is only confirmed as a top when the price scans idm (RECENT PULLBACK) When there are 2 confirmed highs, the lowest level between the 2 highs will be the bottom (the bottom does not need to be confirmed with an uptrend) Thanks

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Zero Spread Milestone: Strategic Trade in Micro Yield Futures Introduction The current market scenario presents a unique potential opportunity in the yield spread between Micro 10-Year Yield Futures (10Y1!) and Micro 2-Year Yield Futures (2YY1!). This spread is reaching a critical price point of zero, likely acting as a strong resistance. Such a rare situation opens the door for a strategic trading opportunity where traders can consider shorting the Micro 10-Year Yield Futures and buying the Micro 2-Year Yield Futures. In TradingView, this spread is visualized using the symbol 10Y1!-CBOT_MINI:2YY1!. The combination of technical indicators suggests a mean reversion trade setup, making this a compelling moment for traders to act on such a potential opportunity. The alignment of overbought signals from Bollinger Bands® and the RSI indicator further strengthens the case for a reversal, presenting an intriguing setup for informed traders. All of this is following last Wednesday, July 31, 2024, when the FED reported their decision related to interest rates where they left them unchanged, adding further context to the current market dynamics. Yield Futures Contract Specifications Micro 10-Year Yield Futures (10Y1!): Price Quotation: Quoted in yield with a minimum fluctuation of 0.001 Index points (1/10th basis point per annum). Tick Value: Each tick is worth $1. Margin Requirements: Approximately $320 per contract (subject to change based on market conditions). Micro 2-Year Yield Futures (2YY1!): Price Quotation: Quoted in yield with a minimum fluctuation of 0.001 Index points (1/10th basis point per annum). Tick Value: Each tick is worth $1. Margin Requirements: Approximately $330 per contract (subject to change based on market conditions). Margin Requirements: The margin requirements for these contracts are relatively low, making them accessible for retail traders. However, traders must ensure they maintain sufficient margin in their accounts to cover potential market movements and avoid margin calls. Understanding Futures Spreads What is a Futures Spread? A futures spread is a trading strategy that involves simultaneously buying and selling two different futures contracts with the aim of profiting from the difference in their prices. This difference, known as the spread, can fluctuate based on various market factors, including interest rates, economic data, and investor sentiment. Futures spreads are often used to hedge risks, speculate on price movements, or take advantage of relative value differences between related instruments. Advantages of Futures Spreads: Reduced Risk: Spreads generally have lower risk compared to outright futures positions because the two legs of the spread can offset each other. Lower Margin Requirements: Exchanges often set lower margin requirements for spread trades compared to single futures contracts because the risk is typically lower. Leverage Relative Value: Traders can take advantage of price discrepancies between related contracts, potentially profiting from their convergence or divergence. Yield Spread Example: In the context of Micro 10-Year Yield Futures and Micro 2-Year Yield Futures, a yield spread trade involves buying (or shorting) one contract (10Y1! Or 2YY1!) while shorting (or buying) the other. This trade is based on the expectation that the spread between these two yields will move in a specific direction, such as narrowing or widening. The current scenario (detailed below), where the spread is reaching zero, suggests a significant resistance level, providing a unique trading opportunity for mean reversion. Analysis Method Technical Indicators: Bollinger Bands® and RSI 1. Bollinger Bands®: The spread between the Micro 10-Year Yield Futures (10Y1!) and Micro 2-Year Yield Futures (2YY1!) is currently above the upper Bollinger Band on both the daily and weekly timeframes. This indicates potential overbought conditions, suggesting that a price reversal might be imminent. 2. RSI (Relative Strength Index): The RSI is clearly overbought on the daily timeframe, signaling a possible mean reversion trade. When the RSI reaches such elevated levels, it often indicates that the current trend may be losing momentum, opening the door for a reversal. Chart Analysis Daily Spread Chart of 10Y1! - 2YY1! The main article daily chart above displays the spread between 10Y1! and 2YY1!, highlighting the current position above the upper Bollinger Band. The RSI indicator also shows overbought conditions, reinforcing the potential for a mean reversion. Weekly Spread Chart of 10Y1! - 2YY1! The above weekly chart further confirms the spread's position above the upper Bollinger Band. This longer-term view provides additional context and supports the likelihood of a reversal. Conclusion: Combining the insights from both Bollinger Bands® and RSI provides a compelling rationale for the trading opportunity. The spread reaching the upper Bollinger Band on multiple timeframes, along with an overbought RSI, strongly suggests that the current overextended condition is potentially unsustainable. Additionally, all of this is occurring around the key price level of zero, which can act as a significant psychological and technical resistance. This convergence of technical indicators and the critical price level points to a high probability for a potential mean reversion, making it an opportune moment to analyze shorting the Micro 10-Year Yield Futures (10Y1!) and buying the Micro 2-Year Yield Futures (2YY1!) as the spread is expected to revert towards its mean. Trade Setup Entry: The strategic trade involves shorting the Micro 10-Year Yield Futures (10Y1!) and buying the Micro 2-Year Yield Futures (2YY1!) around the price point of 0. This is based on the analysis that the spread reaching zero can act as a strong resistance level. Target: As we expect the 20 SMA to move with each daily update, instead of targeting -0.188, we aim for a mean reversion to approximately -0.15. Stop Loss: Place a stop loss slightly above the recent highs of the spread. The daily ATR (Average True Range) value is 0.046, so adding this to the entry price could be a way to implement a volatility stop. This accounts for potential volatility and limits the downside risk of the trade. Reward-to-Risk Ratio: Calculate the reward-to-risk ratio based on the entry, target, and stop loss levels. For example, if the entry is at 0.04, the target is -0.15, and the stop loss is at 0.09, the reward-to-risk ratio can be calculated as follows: Reward: 0.19 points = $190 Risk: 0.05 = $50 Reward-to-Risk Ratio: 0.19 / 0.05 = 3.8 : 1 Importance of Risk Management Defining Risk Management: Risk management is crucial to limit potential losses and ensure long-term trading success. It involves identifying, analyzing, and taking proactive steps to mitigate risks associated with trading. Using Stop Loss Orders: Always use stop loss orders to prevent significant losses and protect capital. A stop loss order automatically exits a trade when the price reaches a predetermined level, limiting the trader's loss. Avoiding Undefined Risk Exposure: Clearly define your risk exposure to avoid unexpected large losses. This involves defining the right position size based on the trader’s risk management rules by setting maximum loss limits per trade and overall portfolio. Precise Entries and Exits: Accurate entry and exit points are essential for successful trading. Well-timed entries and exits can maximize profits and minimize losses. Other Important Considerations: Diversify your trades to spread risk across different assets. Regularly review and adjust your trading strategy based on market conditions. Stay informed about macroeconomic events and news that could impact the markets. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.

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What Is a Whipsaw, and How Can One Trade It?What Is a Whipsaw, and How Can One Trade It? A whipsaw occurs when a market exhibits sharp price movements in one direction, followed by a sudden reversal. This pattern can mislead traders and often leads to significant losses if not managed properly. This article explores the causes, identification, and approaches to navigating whipsaws. Understanding a Whipsaw in Trading A whipsaw pattern occurs when a market exhibits sharp price movements in one direction, followed by a sudden reversal. This pattern can be particularly challenging for traders, as it often leads to significant losses if not properly managed. In essence, a whipsaw is a series of rapid, unexpected price changes that can quickly lead to a loss. Whipsaws are common in volatile markets and can be triggered by a variety of factors, including sudden economic news, unexpected geopolitical events, or shifts in market sentiment. In a whipsaw example, the EUR/USD pair broke through a new high, attracting buyers who believed the uptrend would continue. However, the price then reversed sharply, causing those traders to incur losses. After, the price turned around and set a new high but turned down again. Understanding whipsaws is crucial for traders because these patterns can occur across various timeframes, from intraday charts to weekly or monthly ones. Still, those who trade on low timeframes are more susceptible to losses due to smaller capital and tighter stop-loss levels. Recognising the potential for a whipsaw helps traders remain cautious and avoid over-committing to a position based solely on initial price movements. Understanding Whipsaw Trading Recognising a whipsaw involves identifying its distinct characteristics and understanding the market conditions that typically accompany it. Characteristics of a Whipsaw A whipsaw is recognised by its sharp and rapid price movements in opposing directions, usually within a short timeframe. The key characteristics include: - Sudden Price Reversals: Prices often spike up or down, quickly followed by a reversal in the opposite direction. - High Volatility: Whipsaws occur in highly volatile markets where prices are sensitive to news and events. - False Breakouts: A common feature is a false breakout, where prices breach a support or resistance level briefly before reversing. - Stop-Loss Triggers: These patterns frequently hit traders' stop-loss levels due to abrupt reversals, causing unexpected exits from trades. Identifying a Whipsaw To spot a whipsaw, traders typically look for the following indicators and conditions: - Chart Patterns: Whipsaws are visually apparent on charts as sharp zigzag patterns. Traders often see a price move beyond a support or resistance level, followed by a swift reversal. - Momentum Indicators: For example, traders use RSI to gauge momentum. Whipsaws may be identified when the RSI shows overbought or oversold conditions followed by rapid corrections. - Candlestick Patterns: Specific candlestick formations, such as doji or spinning tops, can indicate indecision in the market, which is a precursor to a whipsaw. - Moving Averages: When short-term moving averages cross above or below long-term moving averages briefly before reversing, it may signal a whipsaw. To access these tools and identify patterns in real time, head over to FXOpen’s free TickTrader platform to get started with live charts. Examples and Timeframes Whipsaws can occur across different timeframes, from one-minute to daily or weekly charts. For instance, in intraday trading, a whipsawed stock might break out during the first hour of trading due to news, only to reverse sharply by midday. On hourly charts, earnings announcements can trigger whipsaws as initial investor reactions swing prices sharply before settling. Causes of Whipsaws A whipsaw, meaning a sharp and rapid price reversal, can occur due to several market events. Understanding these causes can help traders navigate and anticipate these volatile movements. Market Volatility High market volatility is a primary cause of whipsaws. When prices react intensely to news, economic data, or geopolitical events, the market becomes highly volatile. This rapid reaction can cause significant price swings in both directions, creating the whipsaw effect. Sudden News or Events Unexpected news or events, such as earnings reports, economic indicators, or geopolitical developments, can trigger whipsaws. For instance, a positive earnings report might initially drive prices up, only for a negative market sentiment or broader economic concern to quickly reverse this movement. Liquidity and Market Depth Low liquidity and shallow market depth often contribute to whipsaws. In markets with fewer participants or limited order sizes, large trades can disproportionately impact prices, causing sharp movements and subsequent reversals as the market absorbs these orders. Algorithmic Trading High-frequency trading and algorithmic trading can amplify whipsaws. These automated systems execute large volumes of trades at high speeds, often reacting to the same market signals simultaneously. This can lead to exaggerated price movements followed by rapid reversals. Trader Behaviour Emotional reactions from traders, such as panic selling or greedy buying, can cause whipsaws. When traders react impulsively to market movements, they contribute to the rapid up-and-down price swings characteristic of whipsaws. This behaviour is often driven by fear of missing out (FOMO) or fear of loss. How to Approach Whipsaws Navigating whipsaws requires a combination of strategic planning and disciplined execution. Traders can potentially mitigate risks and manage their positions by following several key principles. Higher Timeframe Bias Maintaining a higher timeframe (HFT) bias is crucial. By analysing longer-term charts, traders can identify the broader market trend, which can help maintain confidence during short-term whipsaws. This perspective may prevent knee-jerk reactions to minor fluctuations and align decisions with the overall market direction. Confluence of Factors When in a trade, seeking multiple factors of confluence is essential. This includes aligning technical indicators, chart patterns, and volume analysis with the HTF bias. A strong confluence of signals may provide greater confidence, reducing the likelihood of emotional reactions during volatile whipsaw events. Risk Management Strategies During a whipsaw, traders use three primary risk management options: Do Nothing Traders might choose to do nothing if they can justify that the whipsaw is a minor swing relative to their trade idea. If the price is already far from their stop loss, holding the position might be justified. This approach requires a solid rationale to avoid emotional decisions. Trim Position Size Reducing the position size, typically by half, decreases exposure to potential losses while remaining in the trade. This strategy allows the trade more time to work out without the full risk of a volatile market. Move the Stop Loss Moving the stop-loss level to a potentially safer, more distant level can potentially avoid being stopped out by volatility. However, this should be accompanied by reducing the position size to maintain consistent risk. For example, if a trader initially risks 1% with a 10-pip stop loss, moving the stop to 20 pips should be matched by closing half the position to continue risking only 1%. Exiting or Staying Flat In some cases, traders prefer to exit the position or stay flat until more confidence in the market direction is achieved. If a whipsaw is occurring, exiting around breakeven or at a slight loss might prevent the mental stress of watching a position swing back and forth. This approach can potentially preserve capital and emotional stability, enabling a clearer mindset for future trades. Common Mistakes to Avoid Navigating whipsaws can be challenging, and traders often make several avoidable mistakes. Understanding these pitfalls might help in managing trades more effectively. Overtrading in Volatile Markets Overtrading during high volatility is a common error. Traders often react impulsively to sharp price movements, entering and exiting positions too frequently. This can lead to increased transaction costs and reduced overall returns. Ignoring Fundamental Analysis Relying solely on technical analysis without considering fundamental factors can be detrimental. Economic data, news events, and geopolitical developments can drive whipsaws. Ignoring these elements can result in unexpected and adverse price movements. Misinterpreting Market Signals Traders sometimes misinterpret market signals, confusing a whipsaw with a genuine trend reversal. This misinterpretation can lead to premature exits from effective trades or entry into losing positions. Careful analysis and confirmation across multiple indicators can help potentially mitigate this risk. Neglecting Risk Management Failing to adjust risk management strategies during a whipsaw is a critical mistake. Traders might leave stop losses too tight, leading to unnecessary exits, or fail to reduce position sizes, increasing potential losses. Effective risk management, including appropriate stop-loss placement and position sizing, is crucial. Emotional Trading Emotional reactions to market volatility can cloud judgement. Panic selling or greedy buying often exacerbates losses. Maintaining discipline and sticking to a well-thought-out trading plan can help in avoiding decisions driven by fear or greed. The Bottom Line Whipsaws are challenging yet common patterns in volatile markets, characterised by sharp price movements and sudden reversals. Understanding their causes, identifying their characteristics, and employing strategic approaches can help traders navigate these turbulent conditions. Open an FXOpen account to access advanced trading tools and resources that might enhance your trading strategies and help you navigate market volatility with confidence. FAQs What Is a Whipsaw in Trading? In trading, a whipsaw refers to a scenario where the price of a security moves in one direction but then quickly reverses direction, resulting in rapid and often unexpected gains and losses. This phenomenon can be highly frustrating and costly for traders, particularly those who employ trend-following strategies, as it makes it difficult to analyse market trends. What Does Whipsawed Mean in Stocks? Being whipsawed in stocks means a trader experiences a sharp price movement in one direction followed by an immediate reversal. This often results in triggering stop-loss orders and causing traders to exit positions at a loss, only for the price to revert to its original trend shortly after. How to Avoid Whipsaws in Trading? To avoid whipsaws, traders typically maintain a higher timeframe bias, seek the confluence of multiple indicators, and employ robust risk management strategies. Reducing position size, carefully placing stop-loss orders, and avoiding impulsive trading decisions are essential techniques to mitigate the effects of whipsaws. 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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Trading Under Pressure: Building Stress Resistance For Success Stress in trading is a response of the nervous system triggered by high levels of uncertainty, risk, and the fear of losing money. It often begins with a sense of excitement but can gradually escalate into panic, leading to panic attacks and intense fear. Some individuals thrive under stress, viewing it as a stimulating emotion. They consciously understand that they are not necessarily losing anything, having already accepted the possibility of loss. For these traders, trading is an adventure filled with excitement, impressions, and adrenaline. However, many of them may not be psychologically prepared for the realities of stress, and when it strikes, they can easily lose self-control. 📍 HOW STRESS CAN AFFECT YOUR PERFORMANCE Traders frequently find themselves in situations where quick decision-making and emotional management are crucial for achieving positive outcomes. Stress can create a psychological state that often hampers a person's ability to make logical and sound decisions. ✦ Decreased Concentration and Attention. Elevated stress levels often lead to diminished concentration, resulting in errors caused by overlooking important details or additional factors. ✦ Deterioration of Memory. Under stress, it becomes challenging to recall similar past situations or remember key factors, which can negatively impact decision-making. ✦ Decreased Reaction Speed. Stress can hinder your ability to react swiftly to changing market conditions. This makes strategies like scalping, fundamental trading, and trading on M5-M15 timeframes particularly difficult. ✦ Changes in Emotional State. Stress can trigger a range of emotional reactions, including anxiety, nervousness, irritation, and panic. These feelings can cloud judgment and lead to impulsive decisions. ✦ Physical Manifestations. Stress may also result in physical symptoms such as back pain, headaches, and stomach issues. The nervous system is often the first to suffer, with its effects potentially reverberating throughout the entire body. While many individuals experience negative effects from stress, some people demonstrate a unique response in which stress acts as a "sobering" force. For these individuals, a relaxed state may be characterized by laziness, lack of coordination, and a leisurely pace. However, when faced with stressful situations, they often shift into a heightened state of activity. In this altered state, their brains become more agile, allowing them to think more quickly and algorithmically, improving their capacity to respond effectively to challenges. 📍 EFFECTS OF STRESS IN TRADING 🔹 Increased Risk-Taking. Under stress, traders often become more inclined to make high-risk decisions in an effort to recover losses. Unfortunately, this behavior can lead to even greater losses. 🔹 Lack of Self-Control. Stress can impair your self-control, making it challenging to make well-considered decisions. Consequently, you may find yourself taking impulsive actions that deviate from your established trading strategy. 🔹 Closing Profitable Trades Too Early. In a state of anxiety, you might prematurely lock in profits due to a fear of losing them, which can prevent you from maximizing potential gains. 🔹 Holding Losing Trades for Too Long. Stress can hinder your ability to recognize mistakes, leading you to hold onto losing trades longer than necessary instead of cutting your losses. 📍 HOW TO DEAL WITH STRESS IN TRADING ? 1. Planning and Preparation. Creating a detailed trading plan in advance can significantly alleviate stress levels. Having a well-thought-out course of action ready for unexpected situations provides a sense of calm and direction. 2. Risk Management. Establishing a robust risk management system is essential for reducing the anxiety associated with potential losses. Implementing stop-loss orders ensures that your position is at least partially protected, which helps contain the emotional rollercoaster associated with trading. 3. Adhere to Your Daily Regimen. It's crucial to prioritize self-care by getting enough sleep, eating a balanced diet, and engaging in regular exercise. This timeless advice applies universally to all stressful situations and can greatly enhance your resilience. 4. Take Breaks. Avoid the temptation to stay glued to your screen. Taking breaks allows you to relax and recharge. Additionally, it gives your eyes a much-needed rest. 5. Relaxation and Meditation Techniques. Incorporating relaxation and meditation practices into your routine can significantly lower stress levels while improving concentration and emotional well-being. Techniques such as breathing exercises, yoga, and deep relaxation may seem unconventional to some, but many find them effective in managing stress. 6. Support and Communication. Sharing your emotions and challenges with fellow traders can help diffuse tension and provide you with valuable insights and encouragement. Building a network of support is vital. 7. Positive Thinking. Cultivating a positive mindset and fostering confidence in your abilities can significantly reduce stress levels and enhance your trading performance. A constructive attitude can empower you to face challenges with resilience. 📍 CONCLUSION Remember, stress is a natural response of the body, but it can significantly hinder your ability to work effectively and make sound decisions. There are numerous strategies available to manage stress; however, their effectiveness largely depends on your personal perspective, the specific circumstances you face, and your willingness to address the issue. It’s essential to identify and adopt individualized methods that resonate with your unique psychological makeup. By doing so, you can cultivate emotional resilience in challenging situations, enabling you to cope without relying on medication or professional therapy. Taking proactive steps to manage stress is key to maintaining both your trading performance and well-being. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣

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Is TikTok FOMO the Canary in the Crypto Coal Mine? How Memes and Hype Signal a Risky Market The meteoric rise of Bitcoin and other cryptocurrencies has captured the imagination of investors and the public alike. But amidst the excitement, a crucial question lingers: how do we identify when the market might be overheating? Traditionally, analysts have relied on technical indicators and economic data. However, the rise of social media, particularly TikTok, presents a new wrinkle in gauging market sentiment, especially with the influx of worthless meme coins and potentially misleading influencer endorsements. The Allure of Crypto on TikTok TikTok's short-form video format is a breeding ground for viral trends, and cryptocurrencies are no exception. Endlessly scrolling users are bombarded with enthusiastic pronouncements about the "next big coin" and testimonials of life-changing gains, often featuring meme coins with dog or cat logos. These videos exploit the "fear of missing out" (FOMO) mentality, pressuring viewers to jump on the bandwagon before prices skyrocket. However, many of these meme coins have little to no underlying technology or real-world application, making them inherently risky investments. The Mania Indicator: While social media can be a valuable tool for connecting with communities and sharing information, the sheer volume of uncritical crypto hype on platforms like TikTok, especially surrounding meme coins, can be a strong warning sign. When complex financial instruments are reduced to catchy slogans and presented as a get-rich-quick scheme with cute animal mascots, it suggests a market driven by speculation rather than fundamentals. Paid Promotions and Influencer FOMO: Further complicating the issue are influencers who promote specific cryptocurrencies, often without disclosing that they're being paid to do so. These endorsements can mislead viewers into believing these meme coins or hyped projects are legitimate investments. This lack of transparency can create artificial demand and inflate prices in the short term, but can also lead to dramatic crashes when the hype bubble bursts. A Canary in the Coal Mine? Historically, periods of intense social media buzz surrounding specific stocks or asset classes have often coincided with market peaks. Social media trends are fleeting, and the frenzy surrounding meme coins on TikTok could be a sign that the crypto market is nearing a period of correction. Beyond the Hype: It's important to remember that social media trends are fleeting. While these platforms can provide a glimpse into popular sentiment, they shouldn't be the sole basis for investment decisions. Conducting thorough research, understanding the underlying technology of a project, and employing sound risk management strategies remain paramount for navigating the ever-evolving crypto landscape. The Takeaway: The proliferation of meme coin cheerleading and potentially misleading influencer endorsements on TikTok serves as a stark reminder of the importance of measured analysis in the face of market exuberance. While social media can be a tool, responsible investors should prioritize fundamental analysis, avoid meme coins with no real-world application, and be wary of paid influencer promotions. A long-term perspective is essential when navigating the exciting, yet volatile, world of cryptocurrencies.

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GAIL: This is why People lose money This is one important case study as to why investors lose money in the stock market. Now if you look at the chart, Here is what you see: 1. 32 Months of pure range-bound consolidation 2. Clearly defined support and resistance zones 3. Five months of consolidation at the resistance zone 4. A beautiful high-volume breakout followed by a retest. 5. This is one textbook setup for a long trade So, We should go long here, right? If I zoom out of the chart, Here is what you will see. - We have a strong resistance zone sitting just above the breakout level. - The price took a strong rejection from the exact resistance zone. Also, Observe the volatile consolidation zone that lasted almost 2 Years. That volatile zone may not be passed through in one instant. What we investors do is draw conclusions based on partial data and predict the price action that is yet to come. What we fail to do is observe the previous price action in its entirety. Does that mean that GAIL will not rise in value, Absolutely not. It just means that the uncertainty it has on the charts for a mere 10% gain ( breakout to ATH Distance) is super high. The market is full of opportunities. Why invest in something that already has a foreseeable red flag? If you liked the read, Would you give us a boost and a follow for our efforts? Have Requests, Questions, or Suggestions? Let us know in the comments below.👇 ⚠️Disclaimer: We are not registered advisors. The views expressed here are merely personal opinions. Irrespective of the language used, Nothing mentioned here should be considered as advice or recommendation. Please consult with your financial advisors before making any investment decisions. Like everybody else, we too can be wrong at times ✌🏻

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by TheChartereds

Updated

Asymmetric Risk Reward: The Secret to Success in Trading?Be as bold as you want yet protect your capital with the asymmetric risk reward strategy — an approach adopted by some of the greatest market wizards out there. In this Idea, we distill the concept of asymmetric bets and teach you how to risk little and earn big. Spoiler: legendary traders George Soros, Ray Dalio and Paul Tudor Jones love this trick. Every trade you open has only two possible outcomes: you either turn a profit or make a loss. Perhaps the greatest thing you can learn about these two outcomes is the balance between them. The fundamental difference between making money and losing money — the mighty risk-reward ratio . The risk-reward ratio is your trade’s upside relative to the downside you baked in (or realized). Let’s Break It Down 🤸‍♂️ Most traders believe that you have to take huge risks to be successful. But that’s not what the big guys in the industry do with the piles of cash they’ve got. Instead, they try to take the least amount of risk possible with the most upside. That’s what asymmetric risk-reward ratio means. Think of it this way: you invest $1 only if you believe you can ultimately make $5. Now your risk-reward ratio is set at 1:5, or a hit ratio of 20%. Safe to say that you’ll likely be wrong lots of times. But step by step, you can risk another dollar for that $5 reward and build up a good track record or more wins than losses. That way you can be wrong four times out of five and still make money. Let’s scale it up and pull these two further apart. Let’s say you want to chase a juicier profit with a small risk. You can pursue a risk-reward ratio of 1 to 15, meaning you risk $1 to make $15. The odds are very much in your favor — you can be wrong 14 times out of 15 and still break even. What Does This Look Like in Practice? 🧐 Suddenly, the EUR/USD is looking attractive and you’re convinced that it’s about to skyrocket after some big news shakes it up. You’re ready to ramp up your long position. Now comes decision time — what’s a safe level of risk relative to a handsome reward? You decide to use leverage of 1:100 and buy one lot (100,000 units) at the price of $1.10. That means your investment is worth €1,000 but in practice you are selling $100,000 (because of the leverage) to buy the equivalent in euro. In a trade of that size one pip, or the fourth figure after the decimal (0.0001), carries a value of €10 in either direction. If the exchange rate moves from $1.1000 to $1.1100, that’s 100 pips of profit worth a total of €1,000. But if the trade turns against you, you stand to lose the same amount per pip. Now, let’s go to the practical side of things. You choose to widen the gap between risk and reward and aim for profit that’s 15 times your potential loss. You set your stop loss at a level that, if taken out, won’t sink your account to the point of no return. Let’s say you run a €10,000 account and you’ve already jammed €1,000 into the trade. A safe place to set your stop loss would be a potential drawdown of 2%, or €200. In pip terms, that’s equal to 20 pips. To get to that 1:15 ratio, your desired profit level should be 300 pips, aiming for a reward of €3,000. If materialized, the €3,000 profit will bump your account by 30% (that’s your return on equity), while your return on investment will surge 200%. And if you take the loss, you’d lose 2% of your total balance. It’s How the Big Guys in the Industry Do It You’d be surprised to know that most of the Wall Street legends have made their fortunes riding asymmetric bets. Short-term currency speculator George Soros explains how he broke the Bank of England with a one-way bet that risked no more than 4% of his fund’s capital to make over $1 billion in profits. Ray Dalio talks about it when he says that one of the most important things in investing is to balance your aggressiveness and defensiveness. “In trading you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.” Paul Tudor Jones, another highly successful trader, spotlights the skewed risk-reward ratio as his path to big profits. “5:1 (risk /reward),” he says in an interview with motivational speaker Tony Robbins,” five to one means I’m risking one dollar to make five. What five to one does is allow you to have a hit ratio of 20%. I can actually be a complete imbecile. I can be wrong 80% of the time, and I’m still not going to lose.” What’s Your Risk-Reward Ratio? 🤑 Are you using the risk-reward ratio to get the most out of your trades? Do you cut the losses and let your profits run by using stop losses and take profits? Share your experience below and let’s spin up a nice discussion!

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Sectoral Analysis in the beginning of the month We use our Customised Indicator called ECG to mark the most important support and resistance zones for the price in the respective time frame. Here we have plotted the index charts on day time frame which gives us the levels for positional trades which are valid for the whole month of August 2024.. Now the yellow colour lines form a zone which makes the home of the price.. Upper yellow line is the breakout line and the lower yellow line is the breakdown line. So if the price gives a valid crossover above the breakout then it is a bullish indication and if the price closes below the breakdown then it is a bearish indication. Above the Breakout zone we have the Upper PRZ zone which is a potential reversal zone and similarly below the breakdown level there is Lower PRZ zone.. the PRZ zones marked in red colour act as a trend changer and major moves are expected from these zones.. the zones are small hence they create good value proposition for us. Beyond the PRZs both on upper and lower end we have the cycle targets depicted in green colour. So when the month starts we can refer to our Sector Analyser chart Setup and see which sector is looking good for the month and how they are progressing. We can also identify early change in trends from the PRZ zones. We usually refer to the chart once in a day or at EOD to make our analysis.

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by VineetJain_TradingSiksha

Unlocking the Power of Option Analysis for Forex Trading Filtering Options by Sentiment: A Key to Profitable Trading As traders, we're constantly on the lookout for ways to gain an edge in the markets. Option portfolios analysis is not a magic solution for success itself, but it can and should be a great tool to add to your trading strategy. Learning how to analyze the option portfolios of big and successful players on one of the world's biggest exchanges can really improve your market awareness and give you more confidence when reading the current market trends. The Power of Option Analysis Option analysis is not just about identifying bullish or bearish sentiment. It's about understanding the nuances of market psychology and identifying opportunities that others may be missing. By filtering options by sentiment, we can identify portfolios that are more likely to result in profitable trades. Key Factors to Consider When filtering options by sentiment, there are several key factors to consider: 1. Size and value of the option portfolio 2. Distance from the central strike (Delta) 3. Time to expiration 4.Appearance on the rise/fall of the underlying asset By considering these factors, we can identify option portfolios that are more likely to result in profitable trades. As mentioned above, option portfolios with names such as vertical spread, butterfly, and condor (in English - VERTICAL SPREAD, IRON FLY/FLY, CONDOR/IRON CONDOR) have predictive sentiment regarding the direction of the asset's price movement. However, it is critically important to be able to filter out such sentiment, since similar portfolios are widely used and appear almost daily in CME exchange reports, but only a small percentage of them have predictive value. Portfolios that are traded during a price movement with an obvious trend have low value. On the other hand, if a portfolio appears in a sideways market before the start of a trend and meets other conditions, which will be discussed later, it is reasonable to fix such a portfolio on the chart and subsequently track its correction (closure/partial closure/re-sale). If you "caught" such a portfolio that is already generating profit for its owner, i.e., the price is moving in the desired direction, you get an additional bonus: by tracking changes in this portfolio, you can understand whether the price movement will continue in the chosen direction or whether the movement is fading or has exhausted its potential and it's time to close your position. It is necessary to track changes daily using QuickStrike and GlobexTradeBrowser by CME GROUP. If you track less frequently, you can lose the thread of sentiment. I recommend performing analysis on a regular basis. Some examples: On July 17th, there was a really big beat on the Japanese yen in the options market for October. The bed was based on the idea that the yen futures would go up (or the dollar/yen forex rate would fall). As we saw, the bat started to pay off almost immediately, and the yen came really close to the target in just a few days! Could we have used this information for forex trading? Absolutely. The risk-reward ratio on this trade was about 1 : 3, but importantly , when we made this trade, we had real insider information. Insiders are required by the exchange to disclose their trades, just like other market participants. Not using this free information in your trades would be a big mistake for a serious trader who doesn't want to gamble in market. Another example: In April this year, we saw a strong bullish option sentiment for Silver prices rising between $32 and $35, based on a large options portfolio stated at around $27.5. We released our forecast for Silver, and you can find a copy of it with our reasoning at the link Cooper example: The forecast was made after analyzing option activity on the CME exchange on April 2. You can check the results yourself and see if the time we spent studying option sentiment and analyzing was worth it. In conclusion, as you can see, incorporating option analysis into your toolkit can really help you make more informed trading decisions. To all serious traders, I wish you patience and dedication on your journey to trading success. Remember that mastering the art of trading takes time, effort, and perseverance. Don't be discouraged by setbacks or losses, but instead, use them as opportunities to learn and improve. Stay focused, stay disciplined, and stay committed to your goals.

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by ClashChartsTeam

Trade out of balance markets like a pro (simple TPO concept)Educational video explaining in simple terms how to identify out of balance markets and use that in your day trading. It simplifies the concepts of James Dalton from "Mind over Markets" using volume profile and TPO charts and breaks it down into actionable steps. It also covers the thinking of Stacey Burke, with price always "trading in a box". You learn the meaning of value area, point of control, other timeframe traders and out of balance markets. You learn how institutional traders act in the market and how to observe and identify what they are doing and how to follow them. This can lead to massively profitable setups and trades

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Prop Trading - All you need to know !!A proprietary trading firm, often abbreviated as "prop firm," is a financial institution that trades stocks, currencies, options, or other financial instruments with its own capital rather than on behalf of clients. Proprietary trading firms offer several advantages for traders who join their ranks: 1. Access to Capital: One of the most significant advantages of working with a prop firm is access to substantial capital. Prop firms typically provide traders with significant buying power, allowing them to take larger positions in the market than they could with their own funds. This access to capital enables traders to potentially earn higher profits and diversify their trading strategies. 2. Professional Support and Guidance: Many prop firms offer traders access to experienced mentors, coaches, and support staff who can provide guidance, feedback, and assistance. This professional support can be invaluable for traders looking to improve their skills, refine their trading strategies, and navigate volatile market conditions. 3. Risk Management Tools: Prop firms typically have sophisticated risk management systems and tools in place to help traders monitor and manage their exposure to market risks. These systems may include real-time risk analytics, position monitoring, and risk controls that help traders mitigate potential losses and preserve capital. 4. Profit Sharing: Some prop firms operate on a profit-sharing model, where traders receive a share of the profits generated from their trading activities. This arrangement aligns the interests of traders with those of the firm, incentivizing traders to perform well and contribute to the overall success of the firm. Overall, prop firms provide traders with access to capital, technology, support, and learning resources that can help them succeed in the competitive world of trading. By leveraging these advantages, traders can enhance their trading performance, grow their portfolios, and achieve their financial goals.

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What is Confluence ?✅ Confluence refers to any circumstance where you see multiple trade signals lining up on your charts and telling you to take a trade. Usually these are technical indicators, though sometimes they may be price patterns. It all depends on what you use to plan your trades. A lot of traders fill their charts with dozens of indicators for this reason. They want to find confluence — but oftentimes the result is conflicting signals. This can cause a lapse of confidence and a great deal of confusion. Some traders add more and more signals the less confident they get, and continue to make the problem worse for themselves. ✅ Confluence is very important to increase the chances of winning trades, a trader needs to have at least two factors of confluence to open a trade. When the confluence exists, the trader becomes more confident on his negotiations. ✅ The Factors Of Confluence Are: Higher Time Frame Analysis; Trade during London Open; Trade during New York Open; Refine Higher Time Frame key levels in Lower Time Frame entries; Combine setups; Trade during High Impact News Events. ✅ Refine HTF key levels in LTF entries or setups for confirmation that the HTF analysis will hold the price. HTF Key Levels Are: HTF Order Blocks; HTF Liquidity Pools; HTF Market Structure.

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Market Structure Identification !!Hello traders! I want to share with you some educational content. ✅ MARKET STRUCTURE . Today we will talk about market structure in the financial markets, market structure is basically the understading where the institutional traders/investors are positioned are they short or long on certain financial asset, it is very important to be positioned your trading opportunities with the trend as the saying says trend is your friend follow the trend when you are taking trades that are alligned with the strucutre you have a better probability of them closing in profit. ✅ Types of Market Structure Bearish Market Structure - institutions are positioned LONG, look only to enter long/buy trades, we are spotingt the bullish market strucutre if price is making higher highs (hh) and higher lows (hl) Bullish Market Structure - institutions are positioned SHORT, look only to enter short/sell trades, we are spoting the bearish market strucutre when price is making lower highs (lh) and lower lows (ll) Range Market Structure - the volumes on short/long trades are equall instiutions dont have a clear direction we are spoting this strucutre if we see price making equal highs and equal lows and is accumulating . I hope I was clear enough so you can understand this very important trading concept, remember its not in the number its in the quality of the trades and to have a better quality try to allign every trading idea with the actual structure

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Why a 30 to 50 Pips Fluctuation Means Little for XAU/USD Understanding Pips and Price Context In the world of forex trading, a pip (percentage in point) represents the smallest price movement in the market. For commodities like gold (XAU/USD), a pip is typically 0.01. Therefore, a fluctuation of 30 to 50 pips in gold translates to a movement of 3 to 5 USD in price. Currently, the price of gold (XAU/USD) hovers around 2400 USD per ounce. In this context, a movement of 30 to 50 pips, equating to 3 to 5 USD, is relatively minor. To put this into perspective, it’s akin to a stock priced at 100 USD experiencing a movement of only 0.13 to 0.20 USD. Gold's Historical Volatility Gold is renowned for its volatility, influenced by a myriad of factors including geopolitical tensions, economic data, inflation rates, and currency fluctuations. Historical data demonstrates that gold prices can swing dramatically within short periods. For instance, during times of economic uncertainty or geopolitical strife, gold prices can move by tens or even hundreds of dollars in a matter of days or even hours. Geopolitical Events: During geopolitical crises, such as wars or major political upheavals, gold prices often experience significant spikes as investors flock to safe-haven assets. Economic Indicators: Economic data releases, like non-farm payrolls, GDP figures, and interest rate decisions, can cause substantial and rapid fluctuations in gold prices. Market Sentiment: Changes in market sentiment, driven by news, investor behavior, and speculation, can also lead to large price movements. Why 30 to 50 Pips is Insignificant Given gold's price of 2400 USD per ounce and its historical volatility, a fluctuation of 30 to 50 pips is relatively insignificant. Here's why: Percentage Impact: A 50-pip movement at a price level of 2400 USD is just 0.21% of the total price. This is a minor change, especially in a market as volatile as gold. Daily Fluctuations: It's not uncommon for gold prices to fluctuate by more than 1% within a single trading day. This means price movements of 24 USD or more are typical, overshadowing a 3 to 5 USD change. Trading Noise: In the context of gold trading, small pip movements often represent normal market noise rather than meaningful trends. Professional traders focus on larger movements to make informed decisions, as these are more indicative of market direction. Practical Implications for Traders For traders and investors, understanding the relative insignificance of small pip fluctuations is crucial. Here are some practical takeaways: Risk Management: Traders should set their stop-loss and take-profit levels considering the high volatility of gold. Small pip fluctuations should not trigger premature exits from trades. Strategic Focus: Swing trends and significant price levels (like psychological barriers at round numbers or technical important zones) are more important than minor intraday movements. Market Analysis: Analyzing gold requires looking at broader economic and geopolitical factors rather than getting caught up in small pip changes. Conclusion: In summary, a 30 to 50 pip fluctuation in XAU/USD is relatively meaningless when considering the broader context of gold's price and inherent volatility. At a price level of 2400 USD per ounce, such movements are minor and often lost in the daily trading noise. Traders and investors should focus on larger price movements and underlying market factors to make informed decisions in the volatile gold market.

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Trading EURUSD | Judas Swing Strategy 30/07/2024 Risk management ought to be a trader's closest ally, as the previous week demonstrated the practical significance of incorporating risk management into every trader's toolkit. Last week, we executed four trades; despite having only one win and three losses, we concluded the week with a mere 1% loss on our trading account. This has heightened our excitement for the opportunities that this week may present. As is customary, at 8:25 AM EST, we commenced the day by reviewing the essential items on our Judas Swing strategy checklist, which comprises: - Setting the timezone to New York time - Confirming we're on the 5-minute timeframe - Marking the trading period from 00:00 - 08:30 - Identifying the high and low of the zone The next 5 minute candle swept liquidity resting at the low of the zone, which meant our focus would be on identifying potential buying opportunities for the trading session. To increase the likelihood of success of our trades, we wait for a break of structure (BOS) towards the buy side. Once the BOS occurs, we anticipate price to retrace to the initial Fair Value Gap (FVG) created during the formation of the leg that broke the structure. We patiently waited for price to retrace into the created Fair Value Gap (FVG), and executed our trade upon the closing of the first candle that entered the FVG, as all the conditions on our checklist for trade execution were satisfied. Please note that our stop loss is set at the low of the price leg that broke structure, and we implement a minimum stop loss of 10 pips. The minimum stop loss value was not chosen randomly; it was determined through extensive backtesting. This allows trades sufficient space to fluctuate, avoiding premature stop-outs and trades later moving in our anticipated direction. After 15 minutes, a large bearish marubozu candle formed, which could have exited us from the trade if we had set our stop loss solely based on the low of the price leg that broke structure, without including a minimal stop loss in our checklist. By using that price leg, our stop loss would have been around 6 pips, whereas a 10 pip stop loss provides the trade with sufficient breathing room. We are aware that our strategy does not guarantee a 100% win rate but rather hovers around 50% on EURUSD, indicating that some losses were inevitable. To avoid becoming emotional over the position, we used only 1% of our trading account with the goal of achieving a 2% gain. Upon checking our position later, we observed that the position was a few pips away from hitting SL. We remained calm despite the drawdown we were experiencing and were prepared for any outcome of the trade. All that was left was to wait for either our stop loss or take profit to be triggered to determine the result of our trade. A few hours later, the trade began to move in our favor. After 13 hours, our Take Profit was triggered, and our patience paid off as we hit our target on EURUSD, resulting in a 2% gain from a 1% risk on the trade.

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How to Use Artificial Intelligence for Stock Trading How to Use Artificial Intelligence for Stock Trading As you may know, AI can mimic human intelligence and make decisions based on data analysis. Artificial intelligence can be used in stock trading to analyse historical market and stock data, generate investment ideas, form portfolios, and automatically buy and sell stocks. AI is able to quickly process huge amounts of data and make informed trading decisions. AI-based trading strategies can be used to identify patterns and trends in real time. This FXOpen article explores the process of using artificial intelligence in stock trading and highlights the pros and cons of AI automated trading. How Does Trading with AI Work? Using AI for trading stocks is a relatively new practice. AI analyses markets with accuracy and efficiency and makes forecasts that help traders mitigate risks and provide higher potential returns. Here’s an overview of how AI stock trading works. The first stage needed for an AI model to function properly is robust data collection and preprocessing. This stage is akin to gathering raw materials to create a final product. During the second stage, specialists load historical data and algorithms into the model, which serve as the basis for identifying trends and price fluctuations that took place in the past. This way, the model obtains the information it will then analyse and learns how to analyse it. During the third stage, the model uses real-time data from various sources, such as financial news and economic indicators, to make forecasts. As new data becomes available, the models can be adjusted and refined. The best AI stock trading software can only be created using cleaned, structured, and prepared data. The final stage includes making trading decisions, such as when to buy or sell stocks, based on the processed data. AI systems can execute trades automatically. AI can also manage investment portfolios by adjusting the allocation of assets depending on market conditions. What to Look Out for When Using AI in Trading When creating an AI system for trading, choosing the most appropriate algorithm is of paramount importance. There’s a wide range of algorithms; for example, support vector machines (SVMs) are well suited for classification tasks and recurrent neural networks (RNNs) for sequence prediction. The choice of algorithms depends on trading goals and the type of data a trader will be working with. It’s a good idea to look at performance metrics such as accuracy, precision, recall, and F1 score to determine which algorithm is the best fit for your trading strategy. If you decide to implement AI in stock market trading, you’ll need to pay attention to a few things that will allow you to minimise risks. Risk Management and Control Although AI offers many benefits in trading, it creates a new set of risks, in particular, the risk of automated decision-making. It’s important to have human oversight to ensure that the AI is making informed decisions. Human expertise helps identify potential risks and adjust the AI model as needed. Traders can take precautions, such as setting stop-loss and take-profit levels, to make sure that AI algorithms do not cause excessive losses. Data Quality Poor-quality data can lead to inaccurate predictions and incorrect trades. It’s important that the data uploaded to the system is accurate, relevant, and up-to-date and that the AI stock market trading software provider is trustworthy and reliable. Ideally, an AI system will continuously analyse incoming data and adapt to changing market conditions. For example, if an unexpected economic event occurs, the AI model must be capable of adjusting its strategies in real time. Regulatory Compliance The adoption of AI in trading also brings forth regulatory challenges. When using AI, it is critical to comply with financial regulations to avoid legal issues. This includes ensuring that the AI model is transparent and explainable and that it does not engage in illegal activities such as insider trading. AI trading strategies should comply with all relevant laws. Case Studies and Examples One real-life example of successful AI adoption in trading is the case of the hedge fund Renaissance Technologies, which uses proprietary trading algorithms based on artificial intelligence. The New York-based hedge fund has a reputation as one of the most successful investment companies in the world using AI. Bridgewater Associates, also one of the world’s largest hedge funds, uses AI to analyse market data and make trading decisions. The fund has been successful in using AI to identify patterns and trends in market data. The third example is the use of AI in high-frequency trading. High-frequency trading involves using algorithms to execute trades at high speed. AI makes it possible to execute trades with speed and accuracy that exceeds human capabilities. Benefits and Challenges of AI Trading The new technology has both advantages and pitfalls. Here’s a table summarising the benefits and challenges of using AI algorithmic trading. Benefits - Increased efficiency - Improved accuracy - Effective risk management - Real-time analysis - Diversified trading strategies - Enhanced liquidity management and execution of large orders - Improved decision-making Challenges - Low-quality data - Overfitting - Limited human oversight - Compliance with financial regulations - Cost - Potential for increased complexity - Potential for reduced transparency Using AI can result in increased efficiency, improved accuracy, effective risk management, and much more. Of course, there are other ways to analyse the market. For example, on the TickTrader trading platform, you can trade using advanced tools for analysing and assessing risks. Data quality issues, model overfitting, and limited human oversight are the potential risks that can hinder the effectiveness of trading. To mitigate these challenges, consider validating data, testing the model, and adapting to evolving market conditions. Final Thoughts AI allows traders to analyse vast amounts of data, identify patterns, and make informed decisions quickly. However, it’s important to manage and control the risks associated with the use of AI in trading. Carefully consider the challenges and limitations and endeavour to take steps to mitigate them. You can open an FXOpen account to start trading, and as you gain experience, consider implementing advanced technologies, including AI. 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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Example of Divergence - USDJPY In a forex chart, one expect the price on the chart and the value of the indicator to move in same direction. Well, sometimes the price and the indicator may show different movements. For example : On This Chart : The price movement on the main chart is clearly falling as the price keeps forming lower lows. Indicator Window : The indicator window(RSI in this case, any oscillator may be used) is moving upwards as it keep having higher highs as compared to the main chart. This is known as DIVERGENCE and in many cases I have seen, the price corrects after it's occurance. It helps keeping any eye on such. Please do your own analysis before placing any trades. Cheers and happy trading !!!!

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