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Price Action: How to Trade ReversalsTrading on key levels is one of the basic principles of Price Action trading in the financial markets. There are two main ways to trade on levels: on the breakout and on the reversal. How to distinguish a correct signal to enter the market from a false one, how to set stop-losses and take-profits and what other nuances should be considered when trading in this style? 🔷 Specifics of trading from levels Key price levels are present in any financial market, including Forex. Often, these horizontal lines act as either support or resistance to further price movement, which is why traders are so interested in them. These key lines are formed due to the large accumulation of buy and sell orders. When the price reaches such a congestion, the current strength of the trend, as a rule, is not enough to close all these orders and move the price further. Therefore, if the movement does not get support, the price will turn in the opposite direction. If there are new volumes that are able to break through a great accumulation of orders, it is likely to happen that the trend strength is enough for the further movement, i.e. a strong breakout level will occur. Of course, events do not always develop only according to these scenarios, but these are the two most likely variants. There are big players at the market whose orders influence the price due to big volumes. Because of this, experienced traders only need to correctly identify such levels and signals that the price is most likely to reverse. The classic level is an area based on the opening or closing candlestick prices (not the high/low), which the chart has already touched before. That is, if the chart, having risen to a certain level, rolled back and then approached that level again, the price value at the extreme point will be that level. 🔷 Entering the market The main condition for entering the trade at the reversal from the level, it is necessary to make sure that it is exactly the reversal. If the price is just approaching the key level, it is too early to open a trade. The trader must form a reversal pattern of Price Action in order to be sure that the position opening is correct. It may be the following patterns: 1. A Pinbar (a candlestick with a long shadow, level breakout and a small body); 2. Engulfing (the next candlestick is directed in the opposite direction, its body and shadows are bigger than those of the previous candlestick); 3. Tweezer top/bottom pattern (alternation of bullish and bearish candlesticks with the same lows and highs); Once the pattern is formed, a trade can be opened. For example, the screenshot above shows a pin bar with a large upper shadow breaking through the resistance level, then rolls back down and the candle closes in bearish status. At the opening of the next candle you can enter the sell trade. 🔷 Setting Stop Losses and Take Profits Stop Loss should be set in such a way that a random movement against the direction of the trade, such as a level retest with a false breakout, does not knock the trader out of the market. It is impossible to set a specific value (e.g. 10 pips) for this trading style, the stop should be set based on the chart and "tails" of the candles in the visible proximity. As for take profit, there are no strict rules for its setting. You can use the standard technique, multiplying the value of the stop-loss by 3 or 4 and set a TP on the resulting distance. This is correct from the money management point of view. However, in each situation there may be conditions for greater profits than the standard stop-loss. For example, you can focus on the next key level in the direction of the trade. However, unlike a stop, a TP should be set so that the price is guaranteed to hit it when approaching the key level. 🔷 Important points 1. It is worth paying attention to the strength of the level and the likelihood that it will break or hold. There is a common misconception that the more price reversals from a level, the more likely it is that the level will remain intact. In fact, if the price keeps testing a certain level over and over again without going into the opposite trend, it means that it is likely to be broken. In practice this means that it is better to skip the third and the next attempts of a level bounce, trading on the second one only. 2. One should not draw a distinction between a classic reversal from a level and a retest of the level after it has been broken, when, for example, support becomes resistance. Such a retest is an even stronger signal than a simple reversal. The probability of a successful trade is even higher if we obtain a clear signal for reversal after an unsuccessful attempt to break through the level in the opposite direction. 3. The probability of a reversal or breakout of the level can be assessed based upon the movement towards the key level. If the previous candlesticks were small and differently directed, but the price has still reached the level, a breakout is quite probable. If the trend was strong and confident and the level was reached in just a few candles, but was not broken through, most likely, it won't be broken through. This phenomenon can be explained by the fact that market makers are trying to mislead small traders, playing on visual triggers. Seeing a strong movement, the trader unconsciously waits for a breakout and as a result suffers losses giving his money to the market maker. According to this logic, the conclusion can be made that if a big candle has reached a level, stopped in it, and closed without breaking through it, a breakout will probably never happen. But if a powerful candle has broken through the level, passed some more points (or tens of points), and closed on the other side, the breakout can be considered to have taken place. 4. When opening a trade, attention should be paid to the extrems of the nearest candlesticks. If the maximums (when testing the resistance) are approximately equal, or differ by 1-2 points, this supports the signal for the reversal and the pullback. The same is true for candlestick minimums when testing support. 🔵 Conclusion All other things being equal, a reversal of the level is more probable than its breakthrough. Such statistics gives a trader the reason to count on more signals and following the strategy rules will ensure profitable trading. However, one should keep in mind that trading from levels is a tactic that requires a trader's experience to be able to make decisions according to the situation. Despite the presence of rules, there is no clear algorithm that would regulate the actions in any situation. And due to this, a trader who uses the analysis of levels in his trading system, can count on the success of his trade. Most trading systems, allowing to open trades on an automatic basis, very quickly lose their validity, as well as trading robots based on these algorithms. The market is constantly changing, and only the ability to adjust to these changes and make decisions depending on the situation provides professional traders with a stable and high income.
Education
by DeGRAM
42
USA vs. ChinaA new and dangerous phase of relations between China and America can bring a lot of problems for the world economy and not only. After the removal of restrictions on the coronavirus, China opened up and became accessible to the world economy again. Everyone was waiting for this event and hopefully expected that the global crisis would end and new growth would begin, but China is not so simple. Tensions between China and the rest of the world are only growing , because China sees the weakness of America and Europe, in addition, China feels pressure from America, which does not want to put up with a new big rival and wants to destroy it. America is not ready to just give away the title of economy No. 1. President XI has won the election again and is hostile to America, which means a difficult future for the countries' economic relations. Xi is starting to establish contacts with neighbors and with political allies. Xi's recent meeting with Putin confirmed the strength and cohesion of China and other countries. In response, America is trying to restrain China by force, increasing military tension in the Asian region. America imposes strict restrictions on products from China, while not yet able to replace vital parts, America is trying to build new production in other countries. In turn, China is increasing military spending and is not going to give up power in Asia, demanding to take its hands off Taiwan. All this leads to possible conflicts and a downturn in the economy. A drop in global GDP to an alarming 7% is possible. Last year, America imposed a ban on the sale of some semiconductors and equipment that is manufactured in China. This event increases the gap in the economies of both countries, because now not only China will not receive money, but the United States will not receive important components. In the US Congress, a complete ban on TikTok is on the agenda. This platform generates billions of dollars and its complete closure will lead to big problems. As noted in a recent article by Alan Wolf, Robert Lawrence and Gary Hufbauer of the Peterson Institute for International Economics, the growing hostility to trade in the United States risks negating the achievements of the last nine decades of extremely successful policy. A new World Bank book highlights that the long-term prospects for global economic growth are deteriorating. One of the reasons is the slowdown in global trade growth after the global financial crisis of 2007-09, exacerbated by the turmoil after the Covid pandemic and the rise of protectionism. Among other things, as noted in the book, trade “is one of the main channels for the dissemination of new technologies.” In addition, it should be noted that a more protectionist world will have a lower elasticity of supply and, consequently, a greater propensity to inflationary shocks. From all sides, countries are trying to aggravate the situation. Chinese investment in the US economy is at a minimum, investments from the US are no longer directed to China. China, in turn, wants to make the yuan the number one currency and create a union within which all payments will not be made in dollars. All this can have a detrimental effect on the dollar. The future is foggy as never before. The US is printing more and more money, causing more and more problems. China is a dangerous rival that is gaining strength. What will happen next? What do you think? Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Short
by Lingrid
11
10 Common Technical Indicators Simply Explained for Easy TradingTrend Indicators: 1. Moving Average (MA): The Moving Average is a popular trend-following indicator that smooths out price data by creating a constantly updated average price. The MA is used to identify the general direction of a trend, as well as potential support and resistance levels. The most commonly used MA types are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). Short-term traders often use shorter MAs, such as the 10-day or 20-day MA, while longer-term traders may use the 50-day or 200-day MA. 2. Moving Average Convergence Divergence (MACD): The MACD is another trend-following momentum indicator that shows the relationship between two moving averages of a security's price. The MACD consists of a fast line (12-day EMA), a slow line (26-day EMA), and a signal line (9-day EMA). The MACD is used to identify trend reversals and momentum shifts. When the fast line crosses above the slow line, it is considered a bullish signal, and when the fast line crosses below the slow line, it is considered a bearish signal. Momentum Indicators: 3. Relative Strength Index (RSI): The RSI is a popular momentum oscillator that measures the velocity and magnitude of price movements. The RSI compares the average gains and losses over a specific period of time to determine whether a security is overbought or oversold. The RSI typically ranges from 0 to 100, with readings above 70 indicating overbought conditions and readings below 30 indicating oversold conditions. The RSI can be used to confirm price trends and to identify potential trend reversals. 4. Stochastic Oscillator: The Stochastic Oscillator is another momentum oscillator that compares the closing price of a security to its price range over a specific period of time. The Stochastic Oscillator consists of two lines: %K and %D. The %K line is the main line, and the %D line is a moving average of the %K line. The Stochastic Oscillator is used to identify overbought and oversold conditions and potential trend reversals. When the %K line crosses above the %D line, it is considered a buy signal, and when the %K line crosses below the %D line, it is considered a sell signal. Volatility Indicators: 5. Bollinger Bands: Bollinger Bands are a popular volatility indicator that consists of three lines: a moving average, an upper band, and a lower band. The upper and lower bands are typically set two standard deviations away from the moving average. The bands expand and contract as volatility increases and decreases. When the price is at the upper band, it is considered overbought, and when it is at the lower band, it is considered oversold. Bollinger Bands can be used to identify potential trend reversals and to confirm price trends. 6. Average True Range (ATR): The ATR is a volatility indicator that measures the average range of a security's price over a specific period of time. The ATR is typically used to identify potential breakout opportunities and to set stop-loss orders. High ATR readings indicate high volatility, while low ATR readings indicate low volatility. Oscillator Indicators: 7. Commodity Channel Index (CCI): The CCI is an oscillator indicator that measures the difference between a security's price and its average price over a specific period of time. The CCI typically ranges from -100 to +100, with readings below -100 indicating oversold conditions and readings above +100 indicating overbought conditions. The CCI can be used to identify potential trend reversals and to confirm price trends. 8. Relative Vigor Index (RVI): The RVI is another oscillator indicator that measures the strength of a security's price relative to its closing price range over a specific period of time. The RVI typically ranges from 0 to 100, with readings above 50 indicating bullish conditions and readings below 50 indicating bearish conditions. The RVI can be used to identify potential trend reversals and to confirm price trends. Volume Indicators: 9. On-Balance Volume (OBV): The OBV is a popular volume indicator that measures the buying and selling pressure of a security based on its volume. The OBV adds the total volume of a security when its price increases and subtracts the total volume when its price decreases. The OBV can be used to confirm price trends and to identify potential trend reversals. 10. Chaikin Money Flow (CMF): The CMF is another volume indicator that measures the buying and selling pressure of a security based on its volume. The CMF takes into account both the price and volume of a security to determine its overall buying and selling pressure. The CMF typically ranges from -1 to +1, with readings above 0 indicating buying pressure and readings below 0 indicating selling pressure. The CMF can be used to confirm price trends and to identify potential trend reversals. In conclusion, technical indicators are essential tools for traders to analyze securities and make informed decisions about buying and selling. Each indicator has its own strengths and weaknesses, and traders often use a combination of indicators to confirm their trading decisions. By understanding how these indicators work and what they measure, traders can gain a deeper insight into the behavior of the markets and potentially improve their trading performance.
Education
by Julien_Eche
2
How Much Time Do You Need For Trading?Hello trader! How much time do you usually need to spend studying charts and watching the currency markets? I'm sure many of you at the beginning of your trading career literally stuck to your computer screens for days on end, obsessing over charts, drinking large amounts of coffee and constantly placing orders throughout the day, but is this the only, realistic approach we have? In this post, I will show you an alternative way to track your charts, using various methods and tools to develop a much more nimble, calm and productive approach to trading. I will show you that you shouldn't be stuck at your computer screens all day, while still using your time rationally. ✳️ Timeframes and Currency Pairs The timeframes that you use when trading determine the frequency with which you check the charts. So, it goes without saying that if you trade on a 5-minute chart, you have to check the charts much more often than if you trade on a daily timeframe. Your workload is also affected by the number of currency pairs you trade, i.e. the more currency pairs you will use to trade, the more charts you have to analyze. This does not mean that you cannot trade on 20 currency pairs or more, it simply means that you have to have a ready-made system in which you can monitor each currency pair effectively. Say, when trading on M15 it is difficult to keep track of 20 currency pairs, but when you work on D1 it is quite convenient. ✳️ Analysis Over time, you will develop your own expertise and confidence in being able to analyze markets consistently and quickly. Knowing where and when to "hunt" for a trade and when to properly use lower timeframes will help you save a tremendous amount of time for looking at charts. Having a clear idea of where you will look for price signals to open positions will allow you to plan ahead and choose your desired positions, and will prevent you from having to constantly monitor the markets. On the other hand, traders who monitor the markets carefully and for long uninterrupted periods of time can fall prey to opening positions that they probably tend to find unreasonable, this may be due to the fact that traders feel pressure: because they HAVE to open a position to justify their time sitting behind the monitor. So, you need to know where and when to look for trading signals. For example, if you trade the cross of the 200th Average, of course, if the price is very far from this average, you understand that the next ten candles do not make sense to look into the terminal. And you do not waste your time and attention. ✳️ Price Alerts and Pending Orders Price alerts play a great role in saving the time needed for analyzing charts. The way they work is very simple: as soon as you have analysed every currency pair you wish to trade, you can set up an alert signal at a price level you think is good for opening a position in that particular pair. When the price reaches the desired level, a price alert is triggered and you are notified by email or text, after which you can check the pair for any price movement signals. Trading signals also play a role in position management: you can set alerts for stop loss level, entry level, profit taking, which means that you can leave your position and make changes to it only when the price reaches your targets. ✳️ Trading on the go Before the rise of smartphones and tablets, trading on the go was not an option, however, modern technology and communication tools make trading on the go very easy. The ability to open and close positions or reduce a stop loss wherever you are generally meaning that you don't have to stick to your computer screens to trade. As a result, this has led to traders being able to trade almost anywhere they like from now on. Getting all the latest information and staying up to date with current market movements, thanks to advances in technology and global access to the Internet, has freed traders from their screens and given them a degree of freedom that we all long for. Due to the fact that each broker offers its own application for trading, which you can download to your phone or tablet, trading has now become a fairly universal and accessible business, which can be engaged anywhere. ✳️ Have a trading routine If you treat trading like a real business, you'll find that an important and necessary issue is having a set routine and appropriate working hours, as well as understanding when to work and when to rest. It is very easy to get caught up in the markets and feel as if you have to monitor the charts 24/7 so that you don't miss a single trade. This is a dangerous habit to develop because getting too involved in the markets will burn you out and exhaust you very easily. If you find that the markets are starting to dictate your lifestyle (a classic example is when you stay up all night just to catch a good time to enter the market), then you've gotten too deep into trading. You should know when to turn off the trade, be able to turn off the charts, and get a good night's sleep. Be reasonable, set your own working hours and stick to them, even if trading is your main occupation, set aside a certain amount of time every day during which you would have worked in the markets and try to stick to it consistently. ✳️ Take a day off Once a week you should take a day off from trading. No reading on forums, no studying strategies, no browsing charts, no testing Expert Advisors. Nothing related to trading at all. The best thing would be to go to the nature, go for a walk in a strange place, read a fiction book, visit the theater, spend time with family or friends. Such "days of unloading" help our brain to rest, process the accumulated information and experience to work more productively in the future. ✳️ Do you spend too much time analyzing charts? The purpose of this post is to show you how flexible trading can be and that you don't have to be glued to your computer monitor working 24/7 to get results. Even if trading is your main occupation, it can be scheduled in parallel with your other activities. It shouldn't look like an all-or-nothing proposition, because the forex market allows us to choose when to trade, so you can appropriately structure your trading hours to suit your own needs. You can't get around the fact that you need to spend a tremendous amount of time constantly learning the aspects of forex trading in order to execute effective trading, but once you have accumulated the necessary skills and confidence in your own skills, you will actually need a much smaller amount of time needed to directly trade. Trading may even seem like something boring to you, but that's only because you just understand and accept what the markets really are, realizing that it's not a game, but just a business. The main goal that attract people to trading is the promise of financial freedom and an attractive lifestyle, but trading can have the opposite effect and can sometimes become an obsession that completely drains the trader. You must know when to work and when to play. Setting in place a set order/trading clock brings into your daily life the routines every trader needs to maintain a healthy and productive workload. Time is a very valuable commodity, in our modern lives the day is already filled to the brim with so many other commitments and activities, and managing it wisely is key to success. So, if you find yourself spending too much time on charts, there are things you can do to reduce your trading load, it will give you the freedom to step away from your screens. These include the following: 1. Using price alerts and pending orders, which are probably the biggest time-saving factor. 2. Focusing on higher timeframes while carefully using lower timeframes as well. 3. Having a fixed schedule of trading hours which you should stick to. 4. Using trading applications that allow you to stay connected when you are away from your computer. Applying these recommendations to trading will allow you to stay in contact with the markets without physically sitting in front of charts for days on end. What is the point of looking at charts if currency pair prices are not in a zone where you are not waiting for a signal? Why waste your time watching the price movements, if you are not going to trade any time soon anyway? Instead, let price do its thing, and on occasion enter the market in the area where you are waiting for a signal, that would be exactly the time when you should switch to the charts and hunt for pips. Remember, you are the main figure (not the markets!) and you are the one who keeps the trading procedure consistent and tight, be patient.
Education
by DeGRAM
6
How are you, Twitter?On April 25, 2022, Elon Musk bought Twitter for an incredible 43 million dollars. Musk immediately promised to make Twitter better for humanity and has already managed to do a lot. How did Ilon's actions affect and what to expect in the future? Let's try to figure it out. Buying Twitter is a grand bargain, but the impact of Twitter on people is even grander. Musk knew this and his main goal was to make Twitter better. Innovations From the very beginning, Musk voiced the idea of making Twitter more open and less dependent on politics. Musk managed to restore some blocked users, for example, Trump and Kanye West. In addition, Max began to disclose documents confirming the influence of political forces on Twitter. According to these documents, many people were blocked whose statements were not liked by the US government. A large number of bots have been removed and now to confirm that the account is real, you need to buy a verification tick. The biggest change was the mass dismissal of Twitter employees. Elon Musk informed the employees that there will be an inspection of everyone's work and mass layoffs of those who do not meet the company's standards. As promised, Musk bought all the shares of the company and now it is not traded on the stock market. The reason for the purchase, experts say, was the desire to avoid market manipulation of the company's value and thereby avoid panic. Problems Not all innovations were liked by people, which had a bad effect on the company's profit and popularity. The biggest problem was the refusal of cooperation from a number of companies that did not like the new policy introduced by Elon Musk. These companies brought big profits, because they bought advertising on Twitter, but now there is no money. According to the WSJ, Twitter's revenue and net profit in December 2022 fell by 40% compared to the same period in 2021. And according to CNN, from October 2022 to January 25, 2023, Twitter's advertising revenue fell by more than 60%. The platform started to malfunction. Innovations require code changes, which inevitably leads to disruptions of some functions. These problems are usually solved quickly, but users don't like this. Due to a paid subscription, a new policy and disruptions, users began to leave Twitter. This is a serious problem for the social network, leading to a loss of funds. All these losses do not help the work of Twitter and rumors have already spread that Elon Musk is looking for new investors and trying to attract new funds. Musk's fortune is estimated by various sources at more than $200 billion, but this does not mean that Elon has this money on hand now, that is, even the richest person on earth sometimes needs investors' money. Elon Musk became famous for creating several truly grandiose companies. All of these companies were doing poorly at the beginning, but Musk was able to make a profitable business out of them, which is only growing every year. This is Musk's first year at the head of a new company, which still has a lot of problems from the old owners, but Elon does not give up and promises to make Twitter the number one platform. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
TLong
by Lingrid
9
PULLBACK TRADINGTrading on a pullback is one of the options for trading in Price Action patterns. Like trading on a breakout, this style implies the use of pending orders. Trading on a pullback is more popular than on a chart breakout. If Price Action signals are used correctly, it can bring more profit with less risks. 🔵 Characteristics of the strategy of trading on a pullback This strategy, as well as all other trading strategies based on Price Action, is considered universal and multicurrency, suitable for any asset and timeframe. However, it is recommended to trade on liquid currency pairs, such as EURUSD or GBPUSD on hourly or four-hour charts. The daily D1 is also suitable for trading. When trading on a pullback, traders place limit orders (as opposed to a breakout, where stop orders are used). 🔵 The principle of trading on a pullback and the algorithm of placing orders The basic idea of the strategy is that the price, before it goes in the necessary direction after the formation of the pattern, usually pulls back, and if you catch the moment trend continuation, you can enter the same trade on more favorable conditions, with a smaller stop-loss and larger take-profit. Trading on a pullback is performed as follows: 1. A Price Action pattern appears on the chart. This can be a pattern of engulfing, a doji candle on a trend reversal, etc.; 2. At the opening of the next candle, a Limit pending order is placed (to buy, if an uptrend is expected, and to sell, if a downtrend is in progress). The order is placed approximately in the middle of the signal candle; 3. Stop Loss is set a few points beyond the extremum of the signal candlestick (below the minimum if trading to buy, above the maximum if trading to sell); Take Profit is set at trader's discretion. As an alternative, you can multiply the value of a stop-loss by 3 or 4, or set the take profit at the next key level, so that the price is guaranteed to catch it when it reaches this level. 🔵 Example of pullback trading As an example, we will consider trading on a pullback on the hourly chart of the EURUSD in detail. As an alternative, we will also consider the variant of opening a breakout order in this situation and compare the results. Events have developed as follows: 1. After a bullish move, a bearish doji candle was formed, signaling at least a correction; 2. At the opening of the next candle a Sell Limit order was placed (in this case the order was opened at the market, since the price at that moment was at the level of the supposed pending order); 3. Stop Loss is set above the maximum of the signal candle, Take Profit - in the area of the nearest support level; 4. The stop loss ratio is approximately 1:2.5, which provides a positive mathematical expectation of the trade; 5. After 6 hours the deal closed in profit. In this case both trades would be profitable, but profit on breakout of the support level would be almost twice less, and the stop/stop profit ratio would be 1,5:1 not in favor of take profit, which is considered inappropriate from the money management viewpoint. 🔵 Additional details of pullback trading Despite the fact that, in the example above, trading on a pullback was more profitable than trading on a breakout, it cannot be argued that this style is absolutely better. There are drawbacks to trading on a pullback as well. Unlike trading on a breakout which can be applied to all possible Price Action patterns, limit trading is not possible in every situation. Due to this the number of signals and possible transactions is reduced, and therefore the potential profit will also be less. In spite of the fact that as a rule the take profit at breakthrough trading is less than at limit trading. As we have more trades during the same test period, trading on the breakout can bring more profit. For example, the screenshot above shows the trend continuation pattern of an inside bar. When trading on the breakout, a pending order is placed above the maximum of the parent bullish candle which opens after several hours and the trend goes upwards, bringing profit to the trader. There are no reasons for the limit trade in this situation. It is impossible to place a pending order in the middle of the inside bar, and there is no logical reason to place it in the middle of the mother candle. It happens that the signal not to open a trade on a pullback on the limit order does not work, even when there are all the conditions for it. For example, during the formation of an engulfing pattern on the screen above placing a limit order in the middle of this pattern was quite logical. However, the signal candle turned out to be too strong, the pullback movement has not reached the pending order placed and the trade was not opened. In the same situation when trading on the breakout the trade would have been opened on the next candle, and in a few hours the trader would have fixed the profit. 🔵 Conclusion Trading by Price Action on a pullback has both advantages and disadvantages. On the one hand, this style allows you to make more profits with less risk in the same situation, when trading on the pullback shows less attractive dynamics. On the other hand, not all price action patterns are suitable for this style, in addition even suitable signals sometimes do not work, leaving the trader without profit. The choice of trading style largely depends on the trader's temperament. The pullback method suits the patient and conservative traders who are willing to wait for the signal for days and even weeks. As a result, such waiting will be rewarded with high profits on each of trades. More aggressive traders would be better suited to trading on the breakout which allows them to enter the market more often compensating the small profit and probable losses with the number of profitable trades.
Education
by DeGRAM
13
Banks are falling, what will happen to EUR/USD?The American economy is currently in a state of financial turmoil, with the banking system on the brink of bankruptcy. This has had a major impact on the US dollar and its value against other currencies, such as EURUSD. In this blog post, we will explore the causes and effects of the US financial crisis on EURUSD, identify strategies for trading during a bankruptcy, and analyze what potential long-term impacts may arise. We will also discuss how current economic conditions in the US have affected currency pairs such as EURUSD, so that investors can make more informed decisions when investing in foreign currencies. Overview of the Financial Crisis in the United States The 2008 financial crisis in the United States has had a profound effect on global markets, with far-reaching implications for investors worldwide. To gain insight into this crisis, it is essential to understand how the US banking system works and its connection to major bankruptcies. The country’s banking system consists of two tiers – commercial banks and investment banks. Commercial banks provide customers with services such as loans, mortgages, checking accounts, and saving accounts whereas investment banks specialize in underwriting stocks and bonds for companies who need capital or advice on mergers and acquisitions. Unfortunately, many of these investment banks were forced into bankruptcy due to their risky investments in mortgage-backed securities. This left US-based investors exposed to great losses resulting from stock market declines while global investors endured unfavourable currency exchange rate fluctuations due to the weakened value of the US dollar compared to other currencies like the euro. As a result of this financial crisis, traders should be cognizant of potential long-term effects when trading EURUSD during times when bankruptcy is imminent. Strategies must be put in place to minimize risk throughout this process. The current state of the US economy continues to be precarious following the 2008 financial crisis with ongoing issues that have not been resolved yet. With this being said, understanding how America’s banking system operates and its connection to large bankruptcy cases can help investors make informed decisions when facing these scenarios so they can protect themselves financially going forward. The Impact of Bankruptcy on the US Dollar The US banking system plays a critical role in the US economy, and when banks fail it can cause ripples of disruption throughout society. The recent bankruptcies of some large US banks have had an especially noticeable effect on the American dollar, causing its value to fall sharply against other major currencies. The Federal Reserve has taken action to restore confidence in the currency by lowering interest rates and pumping money into the economy. However, this may not be enough to prevent further devaluation if additional financial institutions go under; furthermore, the size of a particular bank's bankruptcy could influence how hard or soft its impact is on exchange rates. A lack of liquidity can also follow a bankruptcy as lending falls off due to decreased competition among lenders. This makes it more difficult for businesses and individuals alike to find sources of financing which can stifle economic activity and lead to further devaluation of currencies like the US dollar. Moreover, higher interest rates are likely when there are fewer banks around competing for customers; this means credit becomes more expensive or harder to access, leading people away from borrowing and towards saving instead - thus slowing down economic growth even further. Overall, it is essential that investors understand how an event such as a US bank failure would affect their investments in currency pairs such as EURUSD before they consider trading during turbulent times like these. What EURUSD Traders Need to Know The current economic situation in the United States is volatile and can have a dramatic impact on the EURUSD exchange rate. Bankruptcy proceedings could lead to tighter borrowing restrictions, slower economic growth and increases in tariffs or other regulations related to international trade. These factors can cause fluctuations in currency values, meaning investors must be aware of potential changes when trading during times of financial instability or bankruptcy proceedings. At the same time, there are potential opportunities for savvy traders to capitalise on when investing in EURUSD during periods of bank failure due to increased consumer spending that could result from positive changes following bankruptcy proceedings. In order to take advantage of these chances, investors must carefully analyse market conditions and put effective risk management strategies into place. In conclusion, trading EURUSD requires an understanding of how US financial developments may affect exchange rates as well as the ability to identify investment opportunities arising from bankruptcies or other economic downturns. Risk management is essential for success when trading currencies at times like this, so investors should ensure they have appropriate strategies in place before entering any trades. Analyzing the Impact of Bankruptcy on EURUSD As the US economy faces challenges, investors must consider the impact of a potential bankruptcy of a major bank on their investments in currency pairs such as EURUSD. Short-term effects may include a fluctuating exchange rate and resulting risk-aversion among investors, while longer-term impacts can be mitigated by Federal Reserve action, or balanced by other countries' economic downturns. It is thus essential for traders to assess possible outcomes before entering into any trades, alongside having an appropriate risk management strategy in place. Strategies for Trading EURUSD During a Bankruptcy As the US banking system continues to face bankruptcy risk, investors must be mindful of how their investments will be affected. The EURUSD currency pair is particularly vulnerable to instability in the US economy, as it is directly linked to the value of two currencies. In this section, we’ll explore strategies for trading EURUSD during a bankruptcy. First and foremost, it’s important to understand the relationship between bankruptcy and currency devaluation. When a country is facing financial difficulties, its currency can become weaker relative to other major currencies as investors lose confidence in it. This can have an impact on EURUSD exchange rate, so it’s important to monitor news updates related to the financial crisis before trading. It’s also essential that investors diversify their portfolios in order to manage risk during a bank bankruptcy. By investing in multiple asset classes such as stocks and bonds, you can reduce your exposure should one particular asset class decline significantly in value. You may also want to consider investing in non-currency assets such as gold or commodities that are not as affected by currency devaluation associated with bank failures. In addition, automated trading strategies may provide an additional layer of protection from volatility associated with a US financial crisis. Automated trading relies on predetermined algorithms rather than human judgment when making decisions about what trades to make; this reduces potential losses due to human error or emotion-driven decision-making which can lead to poor investment decisions. Finally, monitoring news updates related to the US economy and any potential changes that could affect EURUSD exchange rate is key for staying ahead of market developments and protecting your investments during times of uncertainty. While no one knows exactly how events may unfold following a US bank failure, being informed about changes in interest rates or government policies can help you make better decisions about when and where you invest your money. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
by Lingrid
21
Trend Channels, One of the best trading strategy 🤓The channel is a powerful chart pattern for trading. Channels combines several forms of technical analysis to provide traders with entry and exiting points as well as risk control. In this training, I will explain one of the simplest trading strategies called " Trend channel trading strategy ". Please note, this post is a summary of this strategy and I only mention its main points. 😏 Types of channels and best for this strategy A channel consists of at least four contact points because we need at least two low points to connect to each other and two high points to connect to each other. In general, there are three types: Channels that are angled up are called ascending channels. Channels that are angled down are descending channels. Channels in which the trendlines are horizontal are called horizontal channels, range channels, trading ranges, rectangle channels. The channels are also divided into three categories according to the time periods who make the price range : Macro channels , which are made with 12-Hour time frame, daily time frame and above. Mini channels , which are made with a time frame from 1-Hour to a maximum of 12-Hour. Micro channels , which are made with time frames of less than 1-Hour. **Tips: 1- Macro channels are made of Mini channels, and Mini channels are made of Micro channels, However, it is only an estimate and may not always be accurate, and they are Not the main rules and condition for Identifying channels or drawing them. 2- There is no special formula or law for naming the channels according to their time frames with these names (Macro, Mini and Micro) and you can use any time period for any type of channel. Trade Reliability Conformations represent the number of times the price has hits the channels trend lines and rebounded from the top or bottom of the channel. These are the important confirmation levels to remember: 1-2: Weak channel (not tradeable) 3-4: Adequate channel (tradeable) 5-6: Strong channel (reliable) 6+: Very strong channel (more reliable) **these numbers are just for each one of trend line (up line or down line of channel). I will write the continuation of this tutorial in the comments of this post. 😎
Education
by Arash-RK
WHAT ARE THE FIBONACCI LEVELS? 🔵 We are not going to focus on the Golden Ratio and the Fibonacci sequence in nature or around us. You can read about it in various books or on the Internet if you are interested. We will find out how these numbers can help in forex trading. Now, let's talk about Fibonacci retracement levels. Now let's get straight to the point. Fibonacci retracement levels look like this: 0.236, 0.382, 0.500, 0.618, 0.764 The Fibonacci extension levels are as follows: 0, 0.382, 0.618, 1.000, 1.382, 1.618 And these are the extension levels used in forex to set orders like "take profit". In other words, according to them, the price often reaches these levels, which should be taken into account in the analysis. Let us agree that Fibonacci levels are an instrument for trend analysis and are not suitable for consolidation. The point is that when the trend is upward, Similarly, for a down trend and support. We find the lower swing levels, then the upper swing levels, and draw a grid between them. 🔵 Fibonacci in a downward trend Let's act in the same way and draw the grid between the two candlestick patterns-swings, but downwards. The chart of EUR/USD, 4-hour timeframe. The assumption is that as the price rebounds upwards, it will hit one of the Fibonacci resistance levels, since the general trend is very strong downwards. Let's see what happened next. The pullback really came and the market slowed down below 0.382, an early hint of exhaustion of the bulls' forces. Finally, at 0.500 the bulls ran out of steam and the level worked as a resistance. And these two levels, 0.382 and 0.500, interact with each other. Their main purpose is as temporary support and resistance. We all know about the resistance and support, so do not expect the price to bounce from these levels. No. These are, first of all, the zones of trader's interest. Therefore, the price at these levels likes to consolidate into micro-channels before it moves on. As you well know, price can break both support and resistance. That means it will similarly break through Fibonacci levels. So, these levels are a guideline, but not an absolute guarantee of pullbacks and reversals. Sometimes levels are broken through, sometimes instead of 0.500 a bounce occurs from 0.618 and lots of other examples. Sometimes the price doesn't care about these levels. The price, as such, moves between levels, and some levels are more significant for it at a certain moment in time, and some are less significant for it. So, in using Fibonacci levels, you will benefit from all the tools in your arsenal that we already know about. The tools we use to filter inputs from support and resistance levels, whether it's Fibonacci or conventional. Say, oscillators with their divergences, price action patterns and more. In fact, let's combine Fibonacci levels with support and resistance. 🔵 Fibonacci retracement with support and resistance levels We have already learned that Fibonacci retracement levels are quite subjective. Like everything in technical analysis, we shouldn't just use them. In this case, we need a level enhancer. This is when ordinary support or resistance is well combined with Fibonacci retracement levels. An uptrend, so many green candles. it's all very nice, but where to enter? Especially since the price clearly went with low volatility. We use the Fibo and let's add a mirror level, where resistance has become support. It can be seen very well. Notice how it combines with the 0.5 level. Now we have to wait for the price to interact with this level. As you can see, the price really respected that level, it worked as support and did not let the price go further up. As you understand, support and resistance are, first of all, the zones of interest. The area that triggers the maximum reaction of the price. Not the least of the reasons is that everyone uses these levels. And, consequently, the more institutional traders apply Fibonacci levels, the more these levels influence price behavior. There is a direct correlation. This is why simple support and resistance levels also work. Of course, there's no guarantee that these levels will bounce the price, but we don't need guarantees, because we don't know that they don't exist in trading, do we? We know very well. But here is the zone where the price should be watched closely Fibonacci levels are quite suitable for that. 🔵 Fibonacci levels and trendlines Another way to apply Fibonacci levels is with another basic technical analysis tool. And what tool comes after support and resistance? That's right trendlines. Many traders use Fibonacci retracement levels exactly in an uptrend or downtrend, so combining them with trendlines makes confluence. Let's take a look at the next chart. We should take a trade, if such a situation arises, let's say, when the price touches the trendline. However, let's add Fibonacci retracement levels and see what happens. And we will get a more accurate entry zone. Let's use two swing values and watch what happens. We are especially interested in the levels of 0.500 and 0.618. Here we have it, the level 0.618 (61.8%) worked out as support, and it is right on the trendline. It's time to enter to further increase the trend. Two simple tools sometimes give equally simple results. Similarly, you can use the Fibonacci levels with horizontal support and resistance. In this case, Fibonacci will act as another way to filter entries at support and resistance levels. ✅ Conclusion Keep in mind that Fibonacci levels should not be used alone, you will lose everything. They should be combined with other elements of technical analysis, such as indicators, trend lines, Price Action patterns, etc. They are auxiliary tools and you should always remember about it.
Education
by DeGRAM
1
banks are on fire again...The banking system is bursting at the seams again. It all started with the recent series of bankruptcies of several American banks at once and it happened in just a week, which was an echo of the problems of the 2007 crisis, which, as people hoped, we were able to solve. The main signal of the disaster was a sudden failure in the Silicon Valley bank. On March 9, people's deposits disappeared, losses totaled an incredible $42 billion, which brought out an underestimated risk in the system. The problem was hidden in long-term bonds, in which the bank invested during a period of low interest rates and high asset prices, and when the Federal Reserve System sharply raised rates, the bank began to have problems. As a result, the bank was left with huge losses that were not previously recognized due to the fact that American capital rules do not require most banks to report a drop in the price of bonds that they plan to hold to maturity. 620 billion dollars – that's how many unrecognized losses were in the entire banking system of America at the end of 2022. To understand how much it is: this amount is equal to about a third of the total capital stock of American banks. The pandemic has brought even more problems to the economy, and the banking system has become even more shaky. A large volume of new deposits poured into banks, and the Federal Reserve's stimulus measures pumped cash into the system. These deposits were directed by banks to purchase long-term bonds and government-guaranteed mortgage-backed securities, and all this increased the risk of ruin in the event of an increase in interest rates. Having bought bonds with depositors' funds, the bank essentially used other people's funds, but the problem was not that, but that holding bonds to maturity requires matching them with deposits, and as rates rise, competition for deposits increases. At large banks, such as JPMorgan Chase or Bank of America, rising rates tend to increase their earnings thanks to floating-rate loans. However, in about 4,700 small and medium-sized banks with total assets of $10.5 trillion, rising rates tend to reduce their margins, which helps explain why stock prices of some banks have fallen. Another problem for banks is the risk that depositors will start withdrawing their deposits during the crisis, which will force the bank to cover the outflow of deposits by selling assets. If this happens, the bank's losses loom, and its capital stock may look comforting today, but most of its filling will suddenly become an accounting fiction. That is why the Federal Reserve System acted this way last weekend, being ready to provide loans secured by bank bonds. By providing loans with good collateral to stop the flight, the Fed is right, but such easy conditions come with certain costs. By creating the expectation that the Fed will take on the risks of interest rate changes in a crisis, they encourage banks to behave recklessly. The coming year requires regulators to make the system safer and less risky for the people. It is necessary to abolish some strange rules that do not require reporting and answers for increased risks that relate to small and medium-sized banks, Now the government has announced its intention to rescue depositors of the Silicon Valley Bank, which indicates that such banks carry a systemic risk and they need to be rescued in order not to destroy the entire economy of the country. But saving depositors is only half the job, in order to eliminate the repetition of today's and past problems, it is necessary to introduce the same accounting and liquidity rules that big banks follow, as is the case in Europe, and will have to submit plans to the Fed for their orderly resolution if they fail. These decisions and actions concern not only the United States, these rules should require the entire banking sector to recognize the risks associated with an increase in interest rates. Unrealized losses carry the risk of bankruptcy and banks with such losses should be confirmed by more thorough control and verification than those who do not have such losses. Timely testing will help to avoid bankruptcy, which would simulate a situation in which the bank's bond portfolio is released to the market, while rates rise even more. After that, it would be possible to determine whether the system has sufficient capital to avoid bankruptcy or not. Banks, of course, will resist additional control, increasing capital reserves, but all this will help to improve the quality of system security. Depositors and taxpayers around the world face intense fear, and they should not live with the fear and fragility that they thought had gone down in history many years ago.
SEducation
by Lingrid
7
BTC/USD Just comparing % with the fall in 2013-2015I just compared the % with the fall in 2013-2015. A structure that is currently being formed on a large time frame in a secondary trend. Logarithmic graph. Percentages are retained for clarity, as in 2014-2015. Earn money in the market does not allow banal greed. Almost everyone suffers from this disease. Therefore, your freedom from greed gives an unthinkable superiority over the patients of the “devil”. Secondary downtrend. 2013 – 2015 Percentage price reduction from key areas. "Removal of Passengers" Secondary downtrend of 2013-2015 and super “takeaways” in it. Then the pedestrian goes sideways (accumulation)—with similar “discharges of extra passengers." Pay attention to the % reduction and zone. The “terrible prices” of which after the cycle were the price of dreaming of "more than one stream of hamsters." The market shapes people's behavior. What is displayed on the price chart. Never try to catch highs or lows, work in parts. Disconnect from the majority controlled mindset of society. Main trend. Line chart. Logarithm. Term 1 month BTC/USD Secondary trend cycles and BTC halvings. The same, but on a candlestick chart. BTC/USD Main trend. % Secondary Trend Highs Secondary trend (part). Work zone. BTC/USD Secondary trend (part). Local work. The basis of profit/loss is who you are here and now. Your knowledge and experience are projected onto the graph. The symbiosis of these two parameters, implemented in practice, will earn or lose money.
BITFINEX:BTCUSD
by SpartaBTC
39
Timeline for an ideal trading dayEvery day, traders around the world wake up and begin their day with the same goal: to make money. But how do they go about doing that? What is the ideal timeline for a trading day? In this blog post, we'll outline the perfect day for a trader, from start to finish. Wake up It's no secret that successful traders need to be up bright and early to get a jump on the day's market action. But what many people don't realize is that there's more to it than just setting an alarm clock and getting out of bed. To start the day off right, it's important to do some light exercises to get the body moving and the blood flowing. A quick jog or some simple calisthenics can make a big difference in terms of energy levels and mental acuity. Just as important as physical activity is eating a healthy breakfast and drinking plenty of coffee. Breakfast provides the body with much-needed nutrients after a long night's sleep, while coffee helps wake up the mind and get those creative juices flowing. So there you have it: the perfect way to start your day as a trader. By following these simple tips, you'll be well on your way to making money in the markets. Check the news As a trader, it's important to start your day by checking the news for any major announcements or news stories that could affect the market. You should find a reputable source for business news and look for any breaking news stories that could impact the stocks on your watchlist. This will help you be more informed and prepared when making trades throughout the day. Make a watchlist When making a watchlist of stocks to trade, there are a few key things to look for. First, you want to find stocks that are trading at new 52-week highs or lows. This can be a good indicator of a stock that is starting to move in a particular direction and could be worth watching. Another thing to look for is stocks that have unusual volume. This could be an indication that something is happening with the stock and it is worth keeping an eye on. Additionally, you want to look for stocks that are making large percentage moves. This could be an indication that there is some momentum behind the stock and it could be worth taking a closer look at. Finally, you want to identify stocks that are breaking out of chart patterns. This could be an indication that the stock is about to make a move and it would be wise to keep an eye on it. Plan your trades When planning your trades, the first thing you will need to do is take a look at your watchlist and identify which stocks look like they are ready to make a move. You can use a variety of indicators to help you with this, such as 52-week high/low, unusual volume, large percentage moves, or breakouts from chart patterns. Once you have identified which stocks look promising, you will then need to review your charts for those stocks and identify potential entry and exit points. Once you have found potential entry and exit points, you will then need to calculate the risk/reward ratio for each trade. This will help you determine whether the trade is worth taking. To calculate the risk/reward ratio, you will need to find out how much you are willing to lose on the trade and how much you think you can gain. For example, if you are willing to lose $100 on a trade but think you could gain $200, then the risk/reward ratio would be 1:2. After calculating the risk/reward ratio, you will then need to decide which trades you are going to make. You should always consider your risk tolerance when making trading decisions. Once you have decided which trades to make, you will then need to place your orders. Execute your trades When it comes time to execute your trades, there are a few things you need to keep in mind. First, you need to find a stock that you want to buy or sell. You can do this by researching the stock and watching for market trends. Once you have found a stock that you want to trade, you need to place an order with your broker. Your broker will then execute the trade on your behalf. Once the trade is executed, you will have a position in that stock. You can then exit your position by placing another order with your broker. It is important to remember that you should only trade with money that you can afford to lose. Trading is a risky investment and there is always the potential for loss. Before making any trades, be sure to do your research and understand the risks involved. Review your trades As a trader, it is important to review your trades at the end of the day. This will help you learn from your successes and failures, and make better trades in the future. When reviewing your trades, there are a few things you should keep in mind. First, consider whether you made the right decision in entering the trade. If not, what could you have done differently? Second, think about whether you exited the trade at the right time. Did you give the trade enough time to play out? Were there any warning signs that you missed? Finally, reflect on what you learned from the experience. What went well? What could have been done better? Taking the time to review your trades at the end of each day is an important part of becoming a successful trader. By learning from your mistakes and celebrating your successes, you will be able to make more informed and profitable trades in the future. End of day As the end of the day approaches, it is important for traders to take some time to review their trades and assess their performance. This process allows traders to determine what they did well and what they can improve on. It also helps traders organize their thoughts and trading strategies for the next day. Taking the time to review your trades at the end of each day is an important part of becoming a successful trader. When reviewing your trades, you should consider factors such as whether you made the right decision in entering the trade, whether you exited the trade at the right time, and what you learned from the experience. By taking the time to review your trades on a daily basis, you will be able to learn from your successes and failures and become a better trader. After you have reviewed your trades, it is also important to take some time to relax before going to bed. This will help you be fresh and ready to start trading when the markets open. Trading is a demanding activity that requires focus and concentration. If you are not well-rested, you will not be able to perform at your best. So make sure to take some time to wind down before bed so that you can be ready to start fresh tomorrow. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
11
WHAT YOU NEED TO KNOW ABOUT TRADING FOREX ON FRIDAY🔵 Friday is a relaxed day with the weekend ahead, followed by a working Monday. How does this affect the market? How do the big players behave on this day? Who holds positions over the weekend, taking risks? Today we will figure out what to keep in mind when trading Forex on Friday, why this day's candle is important, what tips can be extracted from the price direction on this day, and consider a few more important nuances that you are unlikely to think about. ▶️ The Friday news and the NonFarm. Also, newbies should remember that Friday in America on the dollar there are often significant news releases, such as non-farms, which can really shake the market. So, on Friday, don't forget to check the economic calendar. Notice if there are any significant news marked with three red dashes on the calendar. So, there is no point in trading or following the market today. You can calmly leave it and go have a rest. ▶️ The direction of the movement in the second half of the day is the key to the momentum on Monday. The next thing you need to pay attention to is the movement in the second half of Friday and up to the market close. If the price is steadily moving up in that period, we should expect it to continue on Monday. Correspondingly, if the price is steadily going down, we can expect this impulse to go on at least during the first half of Monday. And we are interested in a clear and directed movement. Why it happens, I think, is clear: the big players are buying without fear that something will happen over the weekend. In other words, they are confident in the absence of news, they confidently buy or confidently sell and this means that on Monday we can expect the momentum to continue. ▶️ Weekly candlestick formation In general, the market does not like to change the shape of the weekly candlestick on Friday. Therefore, looking at the chart on the W1 timeframe, and looking at the practically formed weekly candlestick, we can assume what the movement will be at the end of the day. For example, this Friday, at noon on the EURUSD chart, the weekly candlestick has a rather long tail, which indicates that the bulls have already been taken out. Plus, a pretty deliberate downward price move. Even if you take into account the non-farms, often they only take out the stops and then the price recovers in just a couple of hours. So, most likely, the downside movement will continue till the end of the day or the price will stay at the same level. But we should not expect any appreciable rise. Or the weekly candlestick by 12:00-14:00 GMT on Friday is full-body bullish, or full-body (large body, small shadows) bearish, you should not expect a significant price movement in the opposite direction till the end of the day. Accordingly, in this case, if you trade within the day, it makes no sense to look for sell trades, if the weekly candlestick is obviously bullish. Of course, if the weekly candlestick is indistinct, for example something like a doji, the price may go in any direction, and it is difficult to predict anything reliable by such a candlestick. But a solid weekly candlestick allows to rather accurately predict the market behavior on Friday afternoon: a bearish one is down, and a bullish one is up. Or almost no change, which happens more often than we'd like. ▶️ Why is Friday so significant? A huge amount of forex trading is intraday trading. High-frequency and intraday traders account for up to 80% of transactions in the market. And they all get out of the market before Monday. So, who are they those people who open positions on Friday and leave them for the weekend? After all, anything can happen over the weekend. They are the big traders, various serious institutions who have more information than us or the media. At the same time, they agree to the risk of transferring trades through the weekend, they pay swaps. That is, these are very significant traders and the direction of their positions is worth watching, at the very least. Therefore, what happens on Friday often has a significant impact on the further price movement, and can give an impulse for Monday and the whole next week. In addition, according to statistics, Friday is often the minimum or maximum point of the weekly candle. For this reason, we should expect the continuation of the directional movement of the price, if it is present in the weekly candlestick. If you take a single Friday candlestick of D1, in the case if it has any of the signals by your trading system, or by Price Action in general, it is worth paying close attention to it. ▶️ When to open a position with a signal on D1, on Friday or Monday? When it is better to open a position in the presence of a signal on D1 at market closing on Friday evening or at market opening on Monday? The answer is simple: we open positions at market opening on Monday. If there is a gap, we trade it, and if there is no gap, we trade our set-up. Because if you open a position on Friday night, a huge gap can simply take your stops out on Monday and you will make a loss (plus your order may slip). Therefore, if you see any signal on Friday night, you better open positions on Monday. ✅ Conclusion. In addition to the above, we should not forget that many traders close trades and fix profits on Fridays, not wanting to roll over positions through the weekend. This can be due to a possible gap, as well as with the desire to exit the position and quietly go to the weekend. So at the very end of the day if there was a clear bullish trend, price rolls back a bit (bulls fix profit), if there was clearly a bearish trend - price moves a bit higher (bears close positions).
Education
by DeGRAM
2
Gongmyeong's Knowledge Sharing - Step 5 < Let's just watch it for three minutes! Zhuge Gongmyeong's Knowledge Sharing > Step 5. Types of bearish candles Let's talk about the types of bullish candles yesterday and the types of bearish candles today. Likewise, let's classify the types based on the shape. First, the hanging candle. It's a candle that went down to a low price and then went up a little. It's a bearish candle with a tail at the bottom. The shorter the torso and longer the tail, the more likely the next movement is to rise. Next is 'meteoric candle'. It's a candle that goes up once and then rolls down all the gains and then goes down further. Because both the torso and tail contain the drop, the longer the torso and tail, the greater the influence. If these cans appear at the high point, they are likely to turn downward. Lastly, "long stick - bearish candle". The properties are similar except for the pole bullish candle and the bearish/bullish. It's a light stick candle with only the body without a tail up and down. In general, there is a very strong downward trend in the process of these cans appearing, and the longer the torso, the more the amount of decline, so it exerts a greater influence. Today, we've looked at the typical types of bearish candles. Likewise, when you look at the shape of the candle on the actual chart, let's review it so that the characteristics of the candle come to mind!
Education
by Gongmyeong
why DCA is the best strategy for trading?Today I’ll be talking about what is Dollar Cost Averaging (DCA) and how is it used in trading. i will also shine a light on what importance it holds What is dollar-cost averaging (DCA): It is an investment strategy in which you invest a fixed small amount of money at regular intervals. This allows you to take benefit of a market bearish without risking excess funds Allowing you to keep up with greater liquidity and take benefit of market bullish. let's show that with examle : Let's imagine that there is a person called Cecilion and he invests in filusdt with a fixed amount of $ 20 every month. let's imagine the price of that currency in March was $ 5 Then Cecilion will have 4 pieces of filusdt in March. And in April, the value of filusdt fell to $4, and Cecilion bought it for the same amount ($20) to have 4 + 5 = 9 pieces of filusdt in april. And in May, the value of filusdt fell again to $2, and Cecilion bought it for the same $20 , so that he owned 4+5+10 = 19 pieces of filusdt in May. And in the following month, the price of filusdt raise to $10, and Cecilion bought it for the same $20, so that he owned 4+5+10+2=21 pieces of filusdt in June. let's do some math to show the efficiency of this strategy: - Cecilion invested $80 in 4 months and owned 21 pieces of filusdt to be The average purchase price is 80/21 = $3.8 - Let's imagine that Cecilion did not use this strategy and bought filusdt for $80 at once in March when its price was $5 Then a cecilion would have 80/5 = only 16 pieces of filusdt instead of 21 pieces. hope this article was useful to you and appreciated ur support with likes , comment and follow for more.🎯
Education
by ceciliones
23
Gongmyeong's Knowledge Sharing - Step 4 < Let's just watch it for three minutes! Gongmyeong's Knowledge Sharing > Step 4. Types of bullish candles We've looked at the composition of the candles in the previous sections. Today, we're going to classify the types of bullish candles based on their shapes. First, it's a hammer-type candle. It's a candle that went down to low prices and then went up. The shape has a tail only on the bottom. If these candles came out of the low point, you can expect a trend shift to an upward trend. The shorter the body and the longer the tail, the more reliable the candle is. Next is the reverse hammer type candle. Although it is a bullish candle, it is a candle that is bent at the end and left the upper tail. The shorter the torso and longer the tail, the higher the probability that the next move will be a drop. Conversely, the longer the torso and shorter the tail, the stronger the upward force, so the next is the higher the probability of ascending. The length of the tail and body is important. Lastly, it's "a long-stick candle". The shape itself is simple, but it's a beekeeping candle with only the body without the top and bottom tails. In general, there's a very strong upward trend in the process of these cans appearing, and the longer the torso, the greater the amount of upward movement, so it exerts a greater influence. Today, we've looked at a typical type of bullish candle, and the shape of the candle is very important because it represents the power to move up and down. When you look at the shape of the candle on the actual chart, let's review it so that the characteristics of the candle come to mind!
Education
by Gongmyeong
How to trade trending markets?A trending market is defined as a market where prices are moving in a consistent direction over a period of time. There are many different ways to trade in trending markets, but some common methods include using moving averages, identifying areas of value, and recognizing chart patterns. This article will discuss different aspects of trading in trending markets and provide tips on how to trade in these conditions. Whether you're looking to take profits or cut losses, this article will give you the information you need to make informed trading decisions. Moving averages Moving averages are one of the most commonly used technical indicators by traders. A moving average is simply a line that is plotted on a chart that shows the average price of a security over a certain period of time. The most common time periods used are 10, 20, 50, and 200 days. There are different types of moving averages, but the two most popular are the simple moving average (SMA) and the exponential moving average (EMA). The SMA is calculated by taking the sum of all prices over the specified time period and dividing it by the number of prices in that period. The EMA, on the other hand, gives more weight to recent prices. Traders use moving averages to help identify trends in the market. When price is above a moving average, it is generally considered to be in an uptrend. Conversely, when price is below a moving average, it is typically considered to be in a downtrend. One way to use moving averages is to look for crossovers. A crossover occurs when two different moving averages cross each other on a chart. For example, if the 50-day SMA crosses above the 200-day SMA, it could be indicative of a new uptrend forming. Alternatively, if the 50-day SMA crosses below the 200-day SMA, it might be indicative of a new downtrend beginning. Crossovers can also be used to generate buy and sell signals. For instance, if price is trading above both the 50-day SMA and 200-day SMA, then traders might look for buy signals when price pulls back towards either of those Moving Averages. Similarly, if price is trading below both Moving Averages, then traders might look for sell signals when price rallies back up towards either MA. Moving averages can also be used to help traders identify areas of support and resistance. If price has been trending higher and keeps bouncing off of the 50-day MA, then that MA could be acting as support in an uptrending market. Likewise, if price has been trending lower and keeps bouncing off of the 200-day MA, then that MA could be acting as resistance in a downtrending market. Area of value An area of value is simply a point in the market where traders believe the price is either undervalued or overvalued. Traders use this concept to find potential entry and exit points in a market, as well as to manage risk when trading in a trending market. When looking for an area of value, traders should consider both the price action and the underlying fundamentals of the market. For example, in a bullish trend, an area of value may be found at a support level where the price has bounced off multiple times. Alternatively, in a bearish trend, an area of value may be found at a resistance level where the price has failed to break through multiple times. It is important to note that areas of value are not static; they can move up or down over time as market conditions change. As such, traders should regularly monitor both the price action and the fundamentals to ensure that their areas of value are still valid. Once an area of value is found, traders can then look to enter into a position. When doing so, they should consider both their risk appetite and their desired profit-to-loss ratio. For example, a trader with a higher risk appetite may choose to enter at a point closer to the current market price, while a trader with a lower risk appetite may wait for the price to reach their area of value before entering into a position. Once in a trade, it is important to monitor the market closely and have exit strategies in place should the market move against you. If the market does move against your position, you can either cut your losses or ride out the storm and hope that prices eventually rebound back in your favor. Remember, however, that past performance is not necessarily indicative of future results so always do your own research before making any trades. Chart pattern Chart patterns are a useful tool that traders can use to signal future price movements. There are three main types of chart patterns - reversal, continuation, and bilateral. Reversal chart patterns occur when the price trend reverses direction. The most common reversal chart pattern is the head and shoulders pattern, which is characterized by a peak followed by two lower highs with a trough in between. This pattern signals that the current uptrend is coming to an end and that prices are likely to head lower in the future. Continuation chart patterns occur when the price trend continues in the same direction. The most common continuation chart pattern is the flag pattern, which is characterized by a period of consolidation following a sharp price move. This pattern signals that the current trend is likely to continue and that prices are likely to move higher or lower in the future. Bilateral chart patterns are characterized by a period of consolidation with support and resistance levels that converge towards each other. The most common bilateral chart pattern is the Pennant Pattern, which is formed when there is a sharp price move followed by a period of consolidation. This pattern signals that there is indecision in the market and that prices could move either higher or lower in the future. Tips for identifying chart patterns: - Look for well-defined patterns with clear support and resistance levels - Pay attention to volume; there should be an increase in volume when the pattern forms - Use Fibonacci retracement levels to help you identify potential support and resistance levels. Support and resistance When trading in trending markets, it is important to be aware of support and resistance levels. Support and resistance levels are price points where the market has difficulty breaking through. In a bullish trend, the support level is the lowest point that the market has reached before bouncing back up. In a bearish trend, the resistance level is the highest point that the market has reached before falling back down. Support and resistance levels can be used to signal future price movements. For example, if the market is approaching a support level, this may be seen as a buying opportunity as the market is likely to bounce back up from this level. Similarly, if the market is approaching a resistance level, this may be seen as a selling opportunity as the market is likely to fall back down from this level. It is important to note that support and resistance levels are not static; they can move up or down over time as market conditions change. As such, traders should regularly monitor both the price action and the fundamentals to ensure that their levels are still valid. When trading in trending markets, it is also important to have exit strategies in place should the market move against you. If the market does move against your position, you can either cut your losses or ride out the storm and hope that prices eventually rebound back in your favor. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
9
Why every trader need money management?Almost every trader, at some point in their career, wonders if they need money management. The answer is a resounding yes! Having the proper business mindset is essential to success in trading. This includes having the right attitude, being disciplined, and knowing how to manage your emotions. Without these things, it is very difficult to be successful in the markets. In this article, we will discuss why every trader needs money management. We will talk about the importance of having the proper business mindset, and we will also discuss some of the key components of an effective money management plan. By the end of this article, you will have a better understanding of why money management is so important for traders, and you will be able to start implementing some of these concepts into your own trading strategy. Business mindset Trading is a difficult business. It requires long hours, dedication, and a lot of hard work. But even with all of that, most traders still fail. Why is that? The answer is simple: they don't have the proper mindset. In order to be a successful trader, it is important to have the proper mindset. This means having the right attitude, being disciplined, and knowing how to manage your emotions. If you can master these things, you will be well on your way to success in the markets. Attitude is everything in trading. You have to be positive and believe in yourself, even when things are tough. Discipline is also key. You need to be able to stick to your trading plan, even when you are losing money. And finally, you must be able to control your emotions. Fear and greed are two of the biggest enemies of traders, so you must learn how to control them. If you can develop the proper mindset, you will be well on your way to success in trading. So what are you waiting for? Start working on developing the right attitude today! Manage losses When trading, it is essential to have a well-defined money management plan in place. This plan should include setting stop-loss orders and taking profits at predetermined levels. By having a plan in place, you can help keep your emotions in check and make more informed decisions about when to enter and exit trades. Stop-loss orders are placed with a broker in order to limit losses on a trade. When the price of the security reaches the stop-loss price, the trade is automatically sold. This type of order can be very helpful in managing risk, as it takes the emotion out of the decision of when to sell. Taking profits at predetermined levels is also important in money management. By doing this, you can take some emotion out of the decision of when to sell and lock in profits. It is important to remember that no one knows where the market will go in the future, so it is important to take profits when they are available. It is also essential to have a risk management strategy in place. This strategy should define how much capital you are willing to risk on each trade. It is important to remember that even the best traders lose money on some trades, so it is important not to risk more than you are comfortable with losing. By having a well-defined money management plan, you can help keep your emotions in check and make more informed decisions about when to enter and exit trades. This can ultimately help you improve your overall success as a trader. Confidence and self-control Confidence is key for any successful trader. A clear understanding of the market and your personal trading strategy is essential to maintaining a level head and making sound decisions. Being mindful of your successes as well as your failures allows you to learn from your mistakes and build upon your strengths. Practicing in a simulated environment gives you the opportunity to become more comfortable with the decision-making process before putting real money on the line. Self-control is another important aspect of trading. Emotions such as fear and greed can cloud your judgement and lead to poor decision making if left unchecked. Having a plan in place and sticking to it can help you stay focused on your goals even when things get tough. Diversifying your portfolio is also crucial in managing risk and ensuring that you don't put all of your eggs in one basket. By developing confidence and self-control, traders can set themselves up for success. These qualities can help them make sound decisions, manage risk, and stay calm in the face of market volatility. Keeping emotions out of trading When it comes to trading, one of the most important things that you can do is keep your emotions in check. This can be difficult to do, but it is essential for success. One of the best ways to keep your emotions in check is to have a system or strategy in place that you stick to no matter what. This will help take the emotion out of the decision-making process. Additionally, it is important to know when to walk away from a trade. If you are feeling emotional about a trade, it is often best to just step away and take a break. It is also important to have the discipline to stick to your system or strategy even when it might not seem like the best thing to do in the moment. By keeping your emotions out of trading, you will be more likely to make sound decisions and be successful in the long run. Decision making Traders need to be aware of their goals if they want to be successful. This means having a clear understanding of the risks and rewards involved in each decision. It is also important to have a plan for how to execute each decision, as well as being prepared to accept the consequences of those decisions. Making sound decisions is crucial for traders. What are your goals? Are you looking to make a quick profit or build your portfolio over the long term? Once you know, you can develop a plan that takes into account the potential risks and rewards involved in each decision. For example, if you are looking to make a quick profit, you might be more willing to take on more risk. On the other hand, if you want to build your portfolio over the long term, you might be more conservative with your trades. It is also important for traders to identify when they are making an emotionally-based decision. Emotions can cloud our judgment and lead us to make poor decisions. If you find yourself getting emotional about a trade, walk away and come back later with a clear head. Additionally, it is crucial to have the discipline stick to your system or strategy even when it might not seem like the best thing to do in the moment. Making sound decisions requires traders have a clear understanding of their goals, the risks and rewards involved in each decision, and how emotions can impact their ability make rational decisions. By having plan and sticking it, traders increase their chances success in the markets. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
12
WAVES/USD Main trend. Accumulation and distribution zones. Logarithm. Main trend. Time frame 1 month. Are you scared in the market right now? If yes, then rejoice and change your fear into a positive. After all, if you're scared, then other market participants are similarly scared, and this is an understanding of the surrender zone. Linear schedule . 1 month. Accumulation and distribution. The average price of recruitment and resetting. In this trading idea, I will describe how a big player works and manipulates the price of an asset. You need to understand the mechanism of market play according to cycles and the psychology of people's behavior in the market in different phases of the cycle. The big player in the asset accumulation zone "makes volatility," allowing you to earn locally (he buys into you). On pamp, you sell coins with a profit of +50%, +100% +200% is not particularly important. After all, the point is for you to sell coins at a profit or a loss. The less liquid the instrument, the wider the range, and vice versa. Then the same coin is sold to you or others like you in the next cycle, but at a profit of +10,000% or more. For a major player, the % monopoly on coins of the total market turnover is important. A large percentage of the total turnover gives an opportunity to influence the price in its favor, in other words, to control the price of the cryptocurrency. As a rule, most do not buy in accumulation, they are afraid. They wait for those who are supposed to sell to them to say, "Fools, it's time to buy in triple-dollars." Accumulation. You make a lot of money not on the pump but in the growth of the price in a strong trend. It takes time, sometimes a very long time, to accumulate a position in a certain range. On some liquid U.S. stocks, it takes a year or more to gain a position. On cryptocurrencies, this process is much faster, but sometimes this stage of the process is time-consuming. Most market participants, who are doomed to lose all the time, do the opposite. Projecting into trading what they are in real life. Anything that has to do with money reinforces this effect. Buy expensive (aimed at buying), sell cheap (aimed at selling). Do not inherit this tendency. Distribution of coins (sale of coins). Similarly, it takes a long time to reset a large position in an acceptable price range as well. This example of working on this cryptocurrency illustrates this creative process well. It is a creative process because it is work according to the plan, but from the situation that develops, you need to inspire the mice to willingly crawl into the mousetrap with a smile on their face. We need to keep the price (price level range) and let them earn +30%, +100% +200% is necessary to get everyone used to super-highs. Make a substitution in the concept of “super highs” and “bottom”. And simultaneously, you gradually unloaded your position. Believing hamsters will willingly buy "from the bottom" thereby you will not burn a lot of money to keep the “faith level”. You have to understand the mindset of the majority and their desires. Most people can't think for themselves, they pass off other people's insinuating thoughts as their own. Such is the psychology of the lower classes. Destructive desires, low intelligence and ideological significance. They do their thing. Intelligence in the crowd evaporates, herd cloning thinking is turned on. It's contagious... After about 60-70% of the position is sold out in an acceptable range, the dumping of the rest of the asset begins. By moving the price down to the desired new set of positions, you gradually "kill the faith" of the lazy hamster in a bright future. As a rule, the crowd is drained at the very bottom, when it was told to sell, or correctly said, instilled with the idea to get rid of the “unpromising”. You must know in advance where and at what % of the allocated sum you will fill the position and under what conditions. There should be discipline in everything, and you should determine in advance your future actions according to your trading algorithm, rather than an emotional component. Closer to the main position set zone-another price increase (optional) to unload another 10-20% of the position. In this coin this was done in the last cycle. Often you can see that this is done differently. Imitation of the accumulation channel, when the remaining extra part of the position is unloaded (not all of it). This method allows deceiving not completely stupid people, namely traders who analyze only price charts and understand the internal processes. People see an imitation of accumulation. This, by the way, is difficult to understand. After all, skillful work always hides "traces of the crime" in the buying/selling lane. And only experience allows you to determine that. For example, I once got into such a situation due to my inattention, but a timely exit upon confirmation of a breakdown of channel support partially leveled the situation. Unsuccessful experience is also extremely important, you need to make the right conclusions and continue to develop in this area as a player or even as an operator. In the next cycle of accumulation-pumping-dumping-accumulation, the process naturally repeats itself, if the organizers have enough rationality to support the project. A fool is not a mammoth, he will not go extinct. That's why this market makes super profits. It's very simple. I copied the entire text from my educational article 2020 , on the same coin. Profit over +500% since publication. Maximums as shown +12,300% or $60.66 WAVES/USD Main Trend. What "fuel" doesn't see. Process . Now there are problems with the USDN Stablecoin near the surrender zone Importantly, you have to understand that this is DEX WAVES Stablecoin, which is the point of "untethering." Amazingly, I haven't come across anywhere in the comments disgruntled and understanding why this is being done. Is the market to blame, as in LUNA-UST? All accidents of this magnitude are not. On the Internet, in the comments of victims encountered only negative (gave up, anger at losing money, “killed faith”) or conversely positive (the desire to save your money). Any trader understands the essence of cheating. Any stabelcoin is an altcoin whose stability depends on people's belief in its stability, and the willingness of its creators to maintain that belief in stability. WAVES/USD Secondary trend. Wedge. Capitulation. Locally. Time frame 1 day. Locally. Time frame 1 day.
W
by SpartaBTC
28
Simple ways to improve trading disciplineIn order to be successful in any market, it is essential to have trading discipline. This blog post will discuss what trading discipline is, why it is important, and how to improve it. Having self esteem and a positive outlook are crucial for any trader, as well as being able to stick to your trading plan. There are no shortcuts to success, so traders need to be patient and handle losses in order to achieve their goals. The importance of trading discipline Trading discipline is key to success in any market. This blog will explore what trading discipline is, why it is important, and some tips on how to improve it. What is trading discipline? Trading discipline is the ability to stick to a plan and not let emotions get in the way- one of the most important factors for success in any market. A lack of discipline is often one of the main reasons why traders fail. Why is trading discipline important? Having a trading plan that you can stick to is crucial, and this plan should be based on sound analysis. Once you have a plan, you need to be disciplined enough to follow it; however, this can be difficult as there are often temptations to enter trades that are not in line with your plan. Additionally, it is easy to let emotions get in the way of your decisions- which can lead to bad trades. How do I improve my trading discipline? To be successful, traders need to be patient and handle losses well in order to achieve their goals. Some tips on how to improve your trading discipline include being selective with your trades- only taking trades that meet your criteria, and waiting for the right opportunities rather than taking every trade that comes along. In conclusion, trading discipline is essential for success in any market and there are no shortcuts to success. By following these tips, you can improve your trading discipline and increase your chances of success. Why having self esteem is key to being a successful trader? Self esteem is incredibly important for traders, as it is key to success. Traders with high self esteem are more likely to take responsibility for their own success or failure, believe in their own ability to succeed, take risks, handle losses, and stick to their trading plan. Conversely, traders with low self esteem are more likely to second guess themselves, give up after a loss, take too much risk in an attempt to recoup losses, or abandon their trading plan. Self esteem is not something that can be faked – it’s either there or it isn’t. And it’s not something that can be built overnight. It takes time, effort and patience to develop self esteem. However, it is worth the investment, as traders with high self esteem are more likely to be successful in the long run. There are a few things that traders can do to build their self esteem. Firstly, they need to have realistic expectations. They need to understand that there will be ups and downs in the market and that they will make losses as well as profits. Secondly, they need to develop a positive mindset. This means looking at the positives even in tough times and believing in themselves even when things are tough. Lastly, they need to take small steps and celebrate each victory, no matter how small. Building self esteem takes time and effort but it is worth it for traders who want to be successful in the long term. How your personal life can affect your trading discipline? Your personal life can have a big impact on your trading discipline. For example, if you’re going through a divorce or have a sick family member, you may be more likely to take risks in your trading. That’s why it’s important to be aware of how your personal life can influence your trading. If you have any major life changes, it’s important to reassess your risk tolerance. And make sure that you stick to your rules and discipline. Don’t let emotions get in the way of making rational decisions. It can be helpful to keep a journal of your trades. This can help you track your progress and reflect on your successes and failures. By doing this, you can identify any patterns in your trading that may be influenced by your personal life. Making small tweaks to your trading strategy can also help you stay disciplined. For example, if you find that you tend to take more risks when you’re stressed, try setting stricter limits on how much risk you’re willing to take. Or if you find that you tend to impulsively buy or sell when the market is volatile, consider using stop-loss orders. The bottom line is that being aware of how your personal life can affect your trading is crucial to success. There are no shortcuts to success—traders need to be patient and handle losses as well as wins. But by sticking to your rules and being disciplined, you increase your chances of success in the long run. There are no shortcuts to success There are no shortcuts to success. You need to put in the work, be willing to sacrifice, and be persistent and consistent. Luck is also a factor in success. You need to be willing to put in the work if you want to be successful. This means being disciplined and sticking to your trading plan. It also means being patient and not giving up when things get tough. You need to be willing to sacrifice your time and energy if you want to be successful. This means making trading a priority and not letting other commitments get in the way. Luck is also a factor in success. While there are things that you can do to increase your chances of success, there is no guarantee that you will be successful. The markets are unpredictable and anything can happen. The bottom line is that there are no shortcuts to success. If you want to be successful, you need to put in the work and be willing to sacrifice. You also needto be persistent and consistent. Luck is also a factor, but there are things that you can do to increase your chances of success. Writing down your rules and being strict with yourself Many traders are not successful because they do not have well-defined rules, which are important because they help to keep you disciplined and focused. Without rules, it is easy to get sidetracked or to make impulsive decisions. Having a set of rules that you strictly adhere to can help you to avoid these pitfalls. It is also important to be flexible and adaptable in your application of the rules. The market is constantly changing and evolving, so your rules need to be able to change with it. Reviewing your rules on a regular basis will ensure that they are still relevant and effective. There are no shortcuts to success in trading; you need to be disciplined, put in the work, and be willing to sacrifice. Luck is also a factor but there are things you can do to increase your chances of success--writing down your rules and being strict with yourself is one of them. Being patient and handling losses Successful trading requires patience and the ability to handle losses. It is important to be patient when looking for the right opportunity to enter a trade. You also need to accept that losses are part of the process and not let them get to you emotionally. Finally, you must have realistic expectations about the market and understand that there are no guarantees you will make money.
OANDA:XAUUSDEducation
by Lingrid
8
WHAT DOES “TRADE WHAT YOU SEE” MEAN?🔵 As a forex trader, you've probably heard about how important it is to keep your emotions under control and follow reason and objective rather than acting on impulses fueled by greed, hope, or fear. But knowing not to trade emotionally is one thing; understanding HOW NOT to trade emotionally and putting that information into practice is quite another. Because of the prehistoric "fight or flight" reflexes that have guided our existence as a species for thousands of years, the human brain is designed to operate against us in the market. The majority of traders, regrettably, are unable to perform to their full capacity on the market due to the same causes. The more rational and objective frontal lobe of the brain, which is the newest section of the human brain and allows us to plan, reason, and make sense of complicated ideas, must thus be used to design a strategy if you want to become a consistently profitable trader. We may ensure that we act on reason and objectivity rather than emotion by learning to trade in what we see rather than what we think. The following information will help you to better understand why it is important to trade what you see rather than simply what you think as well as how to make sure you do so. 🔲 Stop trying to "outsmart" the market Trying to guess what the market will do next, with no real basis or trading setup, is like gambling on a slot machine or a roulette wheel. Yet every day, novice traders, as well as unsuccessful experienced traders, make exactly this emotional trading mistake. Instead of looking at the price chart and checking it against their forex trading plan to see if any price action setups are present, many traders simply "manifest" some idea of what price "should" be doing. When you are not trading on obvious and visible price events or according to a pre-designed trading strategy, you are simply acting on emotions and feelings rather than objective analysis of price movement. Many traders trade emotionally after a losing trade or after a winning trade because they succumb to the feelings of revenge that a losing trade causes, or the greed that a winning trade often causes. It is in these moments that traders stop trading based on what they see on the chart and start trading based on what they "think" or feel, and it is these moments that separate consistently profitable traders from unsuccessful amateurs. 🔲 Don't marry a trade It is important to understand that just because you "think" that something will happen in the market, it does not mean that it will. Similarly, even if you find a very obvious and "perfect" at first glance setup, you must always remember that the Forex market is a dynamic and constantly changing arena where anything can happen at any moment, so do not bet on the farm just because you think you have spotted the "right thing", because that does not happen in Forex, or in any market in general. Instead of allowing yourself to get emotionally attached to any trade or any idea of what the market might do, you need to learn to trade emotionally detached from your trades. Allow price action to light your way through the noise and confusion of the market, while remembering that you must constantly manage your risk even when trading setups look "perfect." Always make sure you are trading according to the concepts of your forex trading strategy and not just on a "whim", if you are trading on price action, then follow the tracks left by price, instead of going astray and succumbing to what you think the market "should" do or "might" do. 🔲 Learn to control yourself One obvious but often overlooked fact about Forex trading is that the market simply does not care whether you win or lose money, it is unaware of your existence and has no emotional reactions to you. However, most traders react emotionally to their trades and to the market, thereby allowing an inanimate being to control their behavior instead of controlling it itself. You won't be able to consistently make money in the market until you learn to control your emotions and reactions to the market. Once you learn to trade only what you see on the price chart and not what you think, you will be on your way to becoming a consistently profitable trader, because trading what you see and not only what you think means that you control yourself, not the market. The key is to consistently trade only what you see, not what you think or feel. This will help you avoid succumbing to the emotions of revenge or greed after a losing or winning trade. Traders who consistently trade only what they see on the price chart and not what they think "might happen," along with effective risk management, are the traders who make money in forex. When you learn how to trade with a high probability of price events while controlling your emotions and risk, you will find yourself in an even better position to make money in the forex market. 🔲 Ask questions before opening a trade Advice on how to ensure that you only trade what you can see, not what you can think. To truly make sure you only trade what you see and not what you think is quite another from simply understanding why you should. Here are some practical suggestions you may use to make sure you only trade what you can see and avoid giving in to emotion. Take the time to consider the following questions before entering into any trade: "Am I doing according to my plan?" "Where is my setup and does it meet the requirement?" "Is the market controlling me?" and "Am I acting logically or emotionally?" "Is it only my imagination, or do you have a bad attitude?". It's a good idea to ask yourself all of these questions before starting any trade. You'll be forced to think through your choices more carefully and decide whether your trade is reasonable or simply motivated by emotion. If you are trading a particular trading strategy, such as price action, make sure that every trade you make is consistent with the concepts you learned in the trading course or study material. Ask yourself any or all of the above questions before every trade you make, until trading only what you see becomes second nature. Eventually, you will develop a sophisticated discretionary trading perspective that allows you to look at the price chart almost instantly and identify price setups. Trading only obvious price action trading setups that are already formed and are not just "possible" setups provides us with a kind of "control and balance" to make sure we are not trading on emotion.
Education
by DeGRAM
10
ELEMENTS OF A TRADING JOURNALA trading journal is an important tool for any trader. It allows you to track your progress and learn from your mistakes. In this blog post, we will discuss the different elements that should be included in a trading journal. These elements include the date and time, the traded instrument, the entry and exit price levels, the position size, and the trade results. Date and Time The date and time when a trade is made is important for a number of reasons. Firstly, it allows you to track your progress as a trader. You can look back at your journal and see how your trades have changed over time. This information can be invaluable in helping you to improve your trading strategy. Secondly, the date and time can be used to help you learn from your mistakes. If you notice that you tend to make losing trades at a certain time of day, or on certain days of the week, you can adjust your strategy accordingly. Finally, the time zone in which the trade is made is important to consider if you are trading in multiple time zones. If you are not aware of the time zone differences, you could end up making trades at the wrong time and missing out on profitable opportunities. Traded Instrument Different types of instruments can be traded on the market, each with their own set of benefits and risks. It is important for traders to understand the instrument they are trading before making any trades. The most common type of instrument traded are stocks. A stock is a share in the ownership of a public company. When you buy a stock, you become a partial owner of the company. The value of stocks can go up or down, depending on a number of factors such as the company's performance, the overall health of the economy, and political factors. Another type of instrument that can be traded are options. An option is a contract that gives the holder the right to buy or sell an underlying asset at a specific price within a certain time period. Options are often used by investors as a way to hedge against losses in the stock market. ETFs, or exchange-traded funds, are another type of instrument that can be traded. ETFs are similar to mutual funds in that they offer diversification and professional management, but they trade like stocks on an exchange. ETFs can be made up of stocks, bonds, commodities, or other assets. Futures contracts are another type of instrument that can be traded. A futures contract is an agreement to buy or sell an underlying asset at a specific price at a specific time in the future. Futures contracts are often used by investors to speculate on the future price movements of an asset. Entry Exit Price Levels Entry and exit price levels are important to track in a trading journal for a number of reasons. Firstly, they allow you to see how well you timed your trades. Secondly, they can help you identify support and resistance levels in the market. Finally, they can be used to help you improve your trading strategy. When it comes to identifying entry and exit price levels, there are a few things that you need to keep in mind. Firstly, you need to make sure that you are using a reliable source of data. secondly, you need to take into account the time frame that you are looking at. And finally, you need to make sure that you are using the correct indicators. There are a few different ways that you can use entry and exit price levels to your advantage. One way is to use them to confirm your trades. Another way is to use them to set stop-loss and take-profit orders. And finally, you can use them to exited positions early if the market turns against you. In conclusion, entry and exit price levels are important elements of a trading journal. They can be used to track your progress as a trader, identify support and resistance levels, and improve your trading strategy. Position Size Position size is an important element of a trading journal. It can be used to track your progress as a trader, identify support and resistance levels, and improve your trading strategy. When identifying position size, it is important to use a reliable source of data, take into account the time frame, and use the correct indicators. Position size can be used to confirm trades, set stop-loss and take-profit orders, and exit positions early. There are a few different methods that can be used to calculate position size. The first method is to use a fixed percentage of your account balance. For example, you could risk 2% of your account balance on each trade. The second method is to use a fixed dollar amount. For example, you could risk $100 on each trade. The third method is to use a fixed number of shares or contracts. For example, you could risk 10 shares or contracts on each trade. The risk and reward potential of different position sizes should also be considered when making trades. A larger position size will have a higher potential profit, but it will also have a higher potential loss. A smaller position size will have a lower potential profit, but it will also have a lower potential loss. There is no right or wrong answer when it comes to position size. It all depends on your individual trading strategy and risk tolerance. Some traders may be willing to risk more money in order to make a larger profit, while others may only be willing to risk a small amount in order to limit their losses. Ultimately, it is up to each individual trader to decide what position size they are comfortable with. Trade Results When it comes to trading, the results of each trade are important. This is because they can show you how much money was made or lost, the percentage return on the trade, and what could have been done better. By looking at the results of your trades, you can learn lessons that will help you improve your trading strategy. One of the most important things to look at when evaluating the results of a trade is the percentage return. This is because it can show you how profitable the trade was. If you are only looking at the dollar amount made or lost, you may not be getting an accurate picture. For example, a trade that made $100 but had a 100% return is more profitable than a trade that made $200 but only had a 50% return. It is also important to look at what could have been done better in each trade. This includes things like entry and exit points, position size, and risk management. By looking at what went wrong in each trade, you can learn from your mistakes and make adjustments to your trading strategy. Finally, it is also important to take into account the lessons learned from each trade. These lessons can be used to improve your trading strategy and make more profitable trades in the future.
OANDA:XAUUSDEducation
by Lingrid
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