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RAILWAY TRACKS CHART PATTERN Railway Tracks Pattern is a secondary formation (unlike pinbars and inside bars) of Price Action, but no less frequent on the chart of price movement of a certain underlying asset. It occurs mainly during the correction of the main trend movement. That is, it is necessary to catch the pattern on a pullback from the main trend. ✴️ THERE ARE TWO TYPES OF PATTERN • Bullish pattern is formed in a downward movement and indicates a change from a bearish trend to a bullish trend; • Bearish pattern is formed in an upward movement and indicates a change from a bullish trend to a bearish trend. ✴️ THE SHAPE OF THE RAILWAY TRACKS PATTERN The pattern consists of only two candles (bars). The following conditions are necessary for the pattern formation. Each candlestick should be facing different directions. That is, there must be bearish and bullish candles. The bodies of the candles should be long and make up at least 70% of the entire length of the candle. By the way, if you switch to higher timeframe of the chart when the Railway Tracks Pattern is formed, you can find a pinbar, which is also a reversal pattern in the Price Action trading system. For example, on the 15-minute chart of the GOLD a bearish Railway Tracks Pattern was formed, which led to a trend reversal: And if you look at the 30-minute chart, you can see a pinbar: These are the nuances of the pattern that can play into the hands of a trader, especially beginners. ✴️ WHAT THE RAILWAY TRACKS PATTERN INDICATES If we look at the pattern itself, we can realize that the market has changed its mood sharply. At the same time, as a rule, this abrupt change of mood is short-term. The pattern indicates a reversal of the current trend, but that does not mean that it will be long-term. Most often, after the pattern in question, the price moves in the direction opposite to the previous trend, for a short distance, a relatively small range. After a sharp change of mood in the market, as a rule, a flat move follows. In the resulting sideways trend, you can usually recognize the next pattern of trend continuation or reversal. ✴️ HOW TO TRADE RAILWAY TRACKS PATTERN In order to apply Railway Tracks Pattern in trading, you need to consider only a high-quality pattern. In addition, the signal from the pattern should be confirmed by any of the following technical analysis tools: • support and resistance levels • Fibonacci levels • trend lines or trend channel • divergence In addition, the pattern is considered to be of higher quality the longer the bodies of its candlesticks are. It is most profitable to trade it at the end of the correction of the main trend. That is, trading will be conducted in the direction of the main trend. The formation of the pattern is a signal in itself. If there is a confirming factor, it is necessary to enter the trade. For the Forex market, the target price is the nearest potential support or resistance level. The order should be pending in the direction of the potential movement. Stop Loss should be at the level of the opposite extremum the highest point in a bearish setup and the lowest point in a bullish setup. ✴️ BOTTOM LINE The Railway Tracks Pattern is a reversal formation in indicator-free trading. It serves as a confirming factor about the trend reversal rather than a full-fledged trading signal. Therefore, the pattern must be confirmed by other tools of technical analysis of the chart.
Education
by DeGRAM
1
Mastering the 70/30 RSI Trading Strategy - Plus Divergences!Mastering the 70/30 RSI Trading Strategy: A Comprehensive Guide The 70/30 RSI technique stands out as a popular and effective method for making informed decisions in the financial markets. Leveraging the Relative Strength Index (RSI) indicator, this strategy empowers traders to navigate the complexities of buying and selling various financial instruments, from stocks to currencies. In this article, we delve into the intricacies of the 70/30 RSI trading strategy, exploring its fundamentals and practical application in forex trading. Understanding the 70/30 RSI Trading Strategy: Developed by renowned technical analyst J. Welles Wilder, the RSI indicator serves as a powerful tool for evaluating market strength and identifying overbought and oversold conditions. With a range from 0 to 100, the RSI provides traders with crucial insights into market dynamics, enabling them to make timely trading decisions. At the heart of the 70/30 RSI strategy lies the establishment of two key threshold levels on the RSI indicator: 70 for overbought conditions and 30 for oversold conditions. These thresholds serve as crucial markers for generating buy or sell signals, offering traders valuable guidance in navigating market trends. ⭐️ Adding and Setting Up the RSI Indicator on Your Chart: The RSI (Relative Strength Index) Indicator is a freely available tool accessible within your TradingView Platform, irrespective of your subscription plan. Whether you're using a Free membership or one of the Premium plans, you can easily find and add this indicator to your charts. Below, I'll guide you through the process of adding and customizing the RSI indicator on your platform with the help of the following images. To begin adding the RSI indicator to your chart:👇 You can also customize the colors to your preference, just like I did by selecting your favorite ones.👇 Now, let's delve into what the RSI indicator is and how to interpret it. Interpreting RSI Signals: In essence, an RSI reading of 30 or lower signals an oversold market, suggesting that the prevailing downtrend may be ripe for reversal, presenting an opportunity to buy. Conversely, a reading of 70 or higher indicates overbought conditions, implying that the ongoing uptrend may be nearing exhaustion, presenting an opportunity to sell. The Relative Strength Index (RSI) Explained: As a momentum indicator, the RSI measures the speed and magnitude of recent price changes, providing traders with insights into whether a security is overvalued or undervalued. Displayed as an oscillator on a scale of zero to 100, the RSI not only identifies overbought and oversold conditions but also highlights potential trend reversals or corrective pullbacks in a security's price. Practical Application of the RSI Strategy: Traders employing the 70/30 RSI strategy must exercise caution, as sudden and sharp price movements can lead to false signals. While RSI readings of 70 or above indicate overbought conditions and readings of 30 or less indicate oversold conditions, traders must consider additional factors and use other technical indicators to validate signals and avoid premature trades. Let's examine a few examples. Example No. 1: EUR/USD Daily Timeframe On the EUR/USD daily timeframe, we observed an overbought condition indicated by the RSI rising above the 70 level. This signaled a potential reversal in price direction. Subsequently, the price indeed reversed, confirming the overbought scenario. It's crucial to emphasize that while scenarios above the 70 RSI level or below the 30 RSI level suggest potential reversals in price, it's essential to complement your analysis with additional filters. These may include consideration of the economic environment, effective risk management strategies, and identification of triggers or patterns before initiating a trade. Below, I'll illustrate a potential trigger that aligns with the RSI 70/30 strategy: the crossover of the RSI line with the RSI-based moving average (MA). Example No. 2: In this example, the RSI strategy proved effective as we observed the price falling below the 30 level, indicating potential oversold conditions and a forthcoming reversal from the market's potential bottom. Additionally, in the image below, you'll notice the introduction of white lines, known as "divergences." I'll provide a clearer explanation of divergences in the next example. Example No. 3: In this example, denoted as circle N.3, we encounter another instance of the RSI reaching the 70 level, indicating an overbought condition. Once again, the strategy proves effective, but this time, we notice a shallower reversal compared to the previous two examples. Following this reversal, the price experiences growth, presenting a new opportunity for traders with a subsequent higher high. However, unlike before, this high does not breach the 70 RSI level, resulting in a deeper reversal. This scenario exemplifies a "divergence." But what exactly is divergence trading? Divergence trading revolves around the concept of higher highs and lower lows. When the price achieves higher highs, you would expect the oscillator (in this case, the RSI) to also record higher highs. Conversely, if the price makes lower lows, you anticipate the oscillator to follow suit, registering lower lows as well. When they fail to synchronize, with the price and the oscillator moving in opposite directions, divergence occurs, hence the term "divergence trading." I'm confident that the previous three examples were well explained to help you understand the 70/30 RSI strategy, along with the MA moving average trigger and the relative divergence strategy. Please share your thoughts in the comment section below. Key Considerations and Limitations: While the 70/30 RSI strategy offers valuable insights into market dynamics, traders must remain mindful of its limitations. True reversal signals can be rare and challenging to identify, necessitating a comprehensive approach that incorporates other technical indicators and aligns with the long-term trend. In Conclusion: The 70/30 RSI trading strategy represents a powerful framework for navigating the complexities of the financial markets. By leveraging the insights provided by the RSI indicator, traders can make well-informed decisions, identify lucrative trading opportunities, and optimize their trading strategies for success in various market conditions.
Education
by FOREXN1
15
DECODING GANN FAN: HOW TO USE IT IN TRADING👋 Hello, Forex traders! In this post we are going to talk about Gann angles, which many of you know as the Gann Fan. Essentially, they are the same thing. We will learn how to build these angles, what are their essence, and most importantly - how we can apply Gann's Fan in practice in our trading. What Are Gunn Angles ? 📢 Gann Angles, or Gann Fan, is one of the standard tools present by default in TradingView. The Gann fan indicator includes a sequence of straight lines drawn at different angles with the base at the pivot point. The resulting picture resembles a fan, from which the name of the tool was derived. Each of these lines indicates possible support or resistance levels as the price approaches it. William Gunn notes that his indicator cannot 100% predict and that the market always will change the trend direction. It only shows the moments when there is the highest probability of market reversal or consolidation. Widespread use of Gann angles as part of analytical work in the market is one of the most popular and, at the same time, complex methods of technical analysis. Nevertheless, the skills of structural assessment and forecasting of currency market dynamics, based on the theory of William Gunn's angles are in demand in the tools in the arsenal of every professional trader. It is worth mentioning that Gann angles are often confused with trend lines, which is not true, despite the characteristic similarity. The key difference between the Gann line and the trend line is that the Gann line is characterized by dynamic features that allow it to move both along the x-axis (vertical axis) and y-axis (horizontal axis), which opens up wider functionality for the trader. For example, it is possible to analyze an asset by plotting it in charts, which makes it possible to determine the angles of fluctuations of a market instrument and, subsequently, to mark the limits of its dynamics. The key assumptions of market dynamics, within the framework of the Gann theory, are the following: • Price, time and range of market fluctuations; • Geometric structure of the currency market, the analysis of which allows to predict the factors of further formation of its dynamics; • The fundamentally cyclical nature of market dynamics. Gann compared the nature of the market with the nature of human beings, analyzing the past and present of which, one can make a series of essential conclusions regarding its future. Gann Fan In Forex Trading 📊 Now it's time to tell you how Gann angles are applied in practice. The peculiarity of applying Gann's theory in practice is to focus on two, classic for his theory, models, designed to help the trader in predicting market movements: • The research time model, which implies fixing cyclically repeating dates; • The price range model, which includes support and resistance lines, as well as pivot points. Since such techniques require deep knowledge and experience from a trader, let us note the most essential technical aspects that should be kept in mind first of all. A trader should decide on the models that she/he will use when analyzing the market with the help of Gann fan. The most common of them are models 1, 1×2 and 2x1, each of which implies a certain slope of the lines. However, there are many more among these models and, accordingly, angles: 1 × 1 - 45 degrees 1 × 2 - 63.75 degrees 1 × 3 - 71.25 degrees 1 × 4 - 75 degrees 1 × 8 - 82.5 degrees 2 × 1 - 26.25 degrees 4 × 1 - 15 degrees 8 × 1 - 1.5 degrees There is nothing complicated about these parameters: the first one corresponds to a unit of time, the second one to a unit of price, and the formula, accordingly, shows the relation between price and time interval. Of particular note is the 45 degree model, also known as 1×1. According to Gann, the 1×1 line represents the long-term trend line: up or down. In this model, the disposition of price above the ascending line indicates a bullish trend and below the descending line a bearish trend respectively. The disposition of the price crossing the line indicates an anticipated trend reversal. It is important to emphasize that the 1:1 line represents the balance between price and time ranges. It is not uncommon in the market that when price approaches the line, time and price are balanced. How To Draw Gann Angles On A Chart? 📈📉 Let's try to apply the Gann Fan in practice. Gann angles are drawn from the top of the trend. In this case, it is the lowest point. We draw a line 1x1 at an angle of 45 degrees. How to determine the angle of 45 degrees? Very simple. You can use the Trend Angle insturment to calculate 45 degrees. Under this line you will immediately begin to touch the trend. It is almost impossible to make a mistake with the construction of the angle. All other lines are pulled up automatically. Note! Once built, this fan has a large number of points of touch and points of touch with the trend in the future. In other words, these angles can be used as an additional tool for technical analysis in the form of support and resistance levels. We strongly do not recommend trading using only one of these tools. Also, the Gann theory has a number of similarities with fan lines based on Fibo coefficients. In light of the market moving up or down, the angles transform within the existing trend, forming resistance and support levels. As you may have already realized, this tool is not associated with any specific trading strategies, but it can serve as a good additional tool to identify support/resistance levels as well as trend reversal points. Another key is to look for time and price discrepancies. Price will always tend towards the mean line. In summary, Gann angles, also known as the Gann Fan, can be found on TradingView and are a standard tool frequently utilized by Forex traders. They are comprised of a sequence of straight lines that derive from a pivot point and form a shape resembling a fan. Each line indicates potential support or resistance levels as the price approaches them. Gann angles are not deterministic, and their purpose is to show when there's a high probability of market reversal or consolidation. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
12
TYPES OF ORDER BLOCKThis educational post is great for beginners who are just starting to grasp the concept of SMC. We've already talked about what an order block is. This time we'll talk about other types of blocks in trading. ✴️ Mitigation Block Mitigation Block is a sell or buy zone, which is formed when the market structure (BOS) continues. In other words, it is a broken order block and tested, but from the other side. We all know that when the price is moving along a trend, it is better to open trades in the direction of this trend. The most optimal points for buying and selling are the price pullback. By this logic a mitigation block is formed. Mitigation Block Sell Scheme Mitigation Block Buy Scheme Those who trade classical technical patterns will notice that it is anything but: a support zone becomes a resistance zone, and a resistance zone becomes a support zone. Institutional level traders understand the skills and knowledge of classical technical analysis traders, so they manipulate the price to generate and collect additional liquidity. In this zone we have our block, an ordinary block, which becomes a mitigated block after an impulse breakout. Schematically, the Mitigation Block in sell looks like this: Schematically, Mitigation Block in buy looks like this: ✴️ Breaker Block Smart Money Breaker Block is a sell or buy zone that is formed when the market structure (BOS) continues. In other words, it is a broken order block and tested, but from the other side. An important difference from a broken Block is that there is a change in market character (CHoCH). As you have understood, the essence of sell zones and blocks remains the same as in Mitigation Block, but first there is a liquidity grab, and then there is a change in market character (change in market structure). It looks schematically as follows: Breaker Block Sell Scheme Breaker Block Buy Scheme ✴️ Rejection Block Smart Money A Rejection Block is a selling or buying zone that appears on the chart as long candlestick tails at a market high or low. As in all other cases, the block is formed only after liquidity is grabbed from the previous high/minimum or equal highs/minimums. This is classically referred to as a false breakout or sweep. Bullish and Bearish Rejection Block The logic of building and searching for a Rejection Block is very simple: Bearish Rejection Block: Swing High, find the highest candle whose high and close are higher than the high and close of the neighbouring candles respectively. The tail (wick) of the candle will be the bearish order block. Bullish Rejection Block: Swing Low, we find the lowest candle, the minimum and close of which are lower than the minimum and close of the neighbouring candles respectively. The tail (wick) of the candle will be a bullish order block. It does not matter what colour the candle is. At the maximum it can be not only bullish but also bearish, and at the minimum it can be not only bearish but also bullish. This is worth paying attention to. Look for the highest candle, with the highest open or close and with the highest wick (same in the opposite direction). ✴️ Vacuum Block Smart Money A block stands out as a regular gap - from the high of the first candle to the low of the second candle in an up gap and vice versa, from the low of the first candle to the high of the second candle in a down gap. We can expect 2 variants of price movement: in continuation, return to the gap zone to fill it partially or completely. This is based on the presence and size of the block order. Complete gap filling Complete gap filling of the price void can be expected if there is an order block that is above or below the Vacuum Block. The price can bounce from the beginning of Vacuum Block, but in order to reduce the risk it is better to wait until the block is fully closed and touched. Partial filling of the gap A partial filling of the price void can be expected if the order block is below or above the Vacuum Block, but they overlap. The price can rebound from the beginning of the Vacuum Block, as well as overlap it completely. This is shown schematically in the figure above. ✴️ Conclusion You should realize that you don't need to click the "buy" or "sell" buttons where you see one of the block options. An order block is simply a price range where you can consider buying or selling, depending on your preliminary analysis and determining the context of the price movement. You will trade from every block a capital loss is guaranteed. Price moves for liquidity. This is the main analysis, and only then we look for the place (blocks) where we can jump from a less risky place.
Education
by DeGRAM
16
THREE DRIVES PATTERNThree Drives Pattern is a price pattern that consists of three consecutive changes in the market. The first and third are strong moves in one direction, while the second is weaker and in the opposite direction. The pattern can be used in trading to determine direction and predict optimal entry-exit points. Below we take a closer look at what this tool is, how it is formed and how to trade it correctly. What is the Three Drive Pattern? • Three Drives Pattern in trading is a reversal pattern formed from three consecutive price movements in the market: • First is an up or down swing that creates a trend; • The second is a correction of the trend, which is usually about 50% - 61.8% of the first impulse leg; • Third resumption of the trend, which is usually in the opposite direction of the correction. In the case of a bullish trend, the Three Drive Pattern often indicates that the trend is about to end. This is the case because a second downward movement indicates high selling pressure on the market. If the second momentum is strong enough, it can lead to a reversal in the trend. In a bearish trend, the Three Drives Pattern often indicates that a bearish trend may end in a reversal. This is because the second upward movement indicates the following: buyers are starting to put pressure on the market. If the second momentum is strong enough, a trend-reversal scenario is possible. The harmonic reversal pattern requires a competent approach on the part of the trader. It is important to use it in combination with other technical indicators, not to trade against the trend, and not to enter the market before the completion of the pattern. This means that the second movement is completed, and the market returns to the previous version in the direction of the first movement. The Three Drive Pattern is a useful tool that can be used in trading to determine the direction of the trend and forecast the optimal entry and exit points. How the Three Drives Pattern is Formed? Bullish Pattern The bullish pattern of three movements consists of three consecutive downward impulses. It is formed when market makers place shorts and is formed as follows: • A strong downward movement, which is usually the beginning of a trend. • An upward correction in the form of a weaker impulse. Indicates attempts to stop the downtrend by market participants. • A strong downward movement that exceeds the level of the first move. Ratios of impulse legs: First is 1.13 or 1.27; Second is 0,786; Third is 1,618. In the case of a bullish pattern, it is worth considering selling after the completion of the third movement. Additional signals could be a change in indicators, a decrease in trading volume, a break of support, or a resistance level. As in the case discussed above, it is not recommended to use such a tool on its own, trade against the trend, or act early. As you can see above, the market started the trend with the first downward impulse. Then it experienced an upward correction and resumed the trend with the third downward impulse. We always place a stop loss to protect against losses. After opening a position, wait for a pullback towards the first impulse to close the trade or add another position to it. Take into account that the price may be at the right point, but the pattern still may not work. Bearish Pattern A bearish pattern of three movements is a price pattern formed from three impulses showing growth. It is used by traders to find the best point to open a position against the market changes. • A strong upward movement, which is usually the beginning of a bearish trend. • A downward correction and a small market reversal that does not reach the level of the first impulse. This may be preceded by the fact that sellers show resistance and try to stop the trend. • A powerful upward movement that exceeds the level of the first impulse. This indicates that the trend is continuing and that the end of the trend is not imminent. Impulse legs have the following level: First move is 1.13 or 1.27; Second move is 0,786; Third move is 1,618. The ratios mentioned are not strict. The pattern is more reliable if it is accompanied by other signals, such as: A change in trend direction indicators; an increase in trading volume; divergence with an oscillator; the presence of support below or resistance above. Always use the tool in combination with other technical indicators to get an accurate prediction. Also, do not trade against the trend. As you can see on the chart, the market started a bearish trend from the first impulse upwards. After it experienced a downward correction, it did not reach the minimum or level of the first impulse. Finally, the market resumed the trend with the third upward impulse. How To Trade Using The Three Drives Pattern? 1. Find three consecutive movements on the chart that meet the criteria of the pattern. 2. Do not enter the market until the pattern is complete. 3. Make an entry at the initial point of the third move after it reaches the fibonichci extension level of 127.2% - 161.8%. 4. Place a stop above the 161.8% expansion level to protect losses in case the pattern doesn't work and goes lower or higher. 5. Close the trade when the market reaches the target profit at the 50% - 61.8% retracement of the whole pattern or you can at the level of the start of the first impulse. As you can see in the chart below, the market started bullish - the first impulse. Then there was a correction, which did not reach the level of the first impulse. Finally, the market resumed the trend and finished with the third impulse, in which the price went down and completed the pattern. Note that the price was at a strong co-contraction level. You can draw a trend line from above. The last element that hinted at a change of trend was the divergence. Use other technical indicators. The three-move pattern is a valuable tool, but it is not an accurate one. Using other tools, such as trend direction and volume indicators, can help improve the accuracy of your forecasts. Do not trade against the trend. A three-move pattern can be more reliable if it is used to confirm a trend. Be prepared for the pattern not to work like any other technical pattern. Bottom line The Three Drive Pattern is a reversal pattern. It can be used to determine the trend direction, as well as to predict potential entry and exit points. The optimal place to open a position is the level of the first impulse, and the exit point is reaching the target profit calculated using the Fibonacci ratio. Trading against the trend is riskier than trading in the direction of original market movement. This is because the price can continue to move in a given direction even if you see a reversal signal. This is why you need to proceed with caution and use other tools to back you up. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
12
SIMPLE RULE BASED Structure FOR BEGINNERS☝️The main purpose of my resources is free, actionable education for anyone who wants to learn trading and improve mental and technical trading skills. Learn from hundreds of videos and the real story of a particular trader, with all the mistakes and pain on the way to consistency. I'm always glad to discuss and answer questions. 🙌 ☝️ALL videos here are for sharing my experience purposes only, not financial advice, NOT A SIGNAL. YOUR TRADES ARE YOUR COMPLETE RESPONSIBILITY. Everything here should be treated as a simulated, educational environment.
Education
by Yelli_trades
1
Mastering Trend Analysis in Crypto Trading: Tutorial !Unveiling the Art of Trend Analysis in Bitcoin Trading Welcome to a comprehensive guide that will empower you with the skills to master trend analysis in Bitcoin trading. In this extensive tutorial, we'll explore every nuance of identifying trendlines, understanding structural points, and navigating the complexities of different market scenarios. Illustrated with practical examples and annotated charts, you'll gain insights into distinguishing between ranging markets and trending channels, and how significant breakouts and confirmations signal trend changes. Deciphering Trendlines and Structural Points 1.1 Defining Trendlines: Delve into the essence of trendlines and their crucial role in technical analysis. Understand the significance of structural points: higher lows, higher highs, lower highs, and lower lows. 1.2 Identifying Trends in Bitcoin: Analyze Bitcoin price charts to identify structural points that signify the emergence of upward or downward trends. Explore examples of higher highs and higher lows in bullish trends and lower highs and lower lows in bearish trends. Ranging Markets - When Trading Takes a Pause 2.1 Recognizing Ranging Conditions: Differentiate between trending and ranging markets, highlighting the characteristics of sideways price action. Emphasize the challenges and importance of patience during range-bound periods. 2.2 Analyzing Range-Bound Bitcoin: Illustrate Bitcoin charts during ranging conditions, showcasing the absence of defined higher highs or lower lows. Discuss strategies for navigating range-bound markets and waiting for clear trend signals. Section 3: Trading Channels - Dynamic Play of Bulls and Bears 3.1 Understanding Channel Dynamics: Introduce channels as a distinct form of trending, encompassing upward (ascending) and downward (descending) trends. Explore how channels create dynamic opportunities for traders. 3.2 Decoding Channel Breakouts: Explore Bitcoin charts in ascending and descending channels, emphasizing the significance of breakout points. Discuss how trend changes are confirmed only after a sustained breakout and closure beyond a trendline. Section 4: Putting Knowledge into Action - Real-Life Examples 4.1 Example 1: Trading Higher Highs in a Bullish Trend: Dive into a specific Bitcoin chart showcasing a clear upward trend with higher highs and higher lows. Discuss potential trading strategies aligned with the bullish trend structure. 4.2 Example 2: Navigating Lower Lows in a Bearish Downtrend: Analyze a bearish trend scenario with lower highs and lower lows, emphasizing risk management strategies. Discuss the psychological aspects of trading during downtrends. 4.3 Example 3: Channel Trading and Spotting Breakouts: Examine a Bitcoin chart illustrating a channel, showcasing the dynamics of trading within the channel. Discuss breakout scenarios and how to discern a genuine trend reversal. Conclusion: Mastering the Art and Science of Bitcoin Trend Analysis As you conclude this comprehensive journey through Bitcoin trend analysis, remember that expertise in this domain is a continual process. Regularly reassess your technical skills, stay attuned to market dynamics, and apply these principles with flexibility. Whether you're navigating ranging markets or identifying breakout points within channels, understanding trendlines is your compass in the vast landscape of cryptocurrency trading. 💡 Building a Solid Foundation | 📈 Trendlines Unveiled | 🔄 Navigating Ranges | 🚀 Channel Breakouts Decoded 💬 Join the conversation: Share your experiences in trend analysis, ask questions, and connect with a community dedicated to honing their Bitcoin trading skills. 🌐✨
Education
by Yaroslav_Krasko
3
BOOM AND BUST CYCLE IN TRADINGThe "boom and bust" cycle in trading is a period in a trader's journey when significant gains are followed by periods of significant losses, which can lead to financial consequences and emotional burnout for traders. Breaking out of this cycle is not easy but very important for long-term trading success. When a trader doesn't know what he or she is doing, but is trying to break out of this cycle, the right direction is needed to find a way out of this difficult trading journey. Here are some tips that will help you stabilize your trading when you are not earning yet but also not losing all the capital as it was before. 1. Develop a solid trading plan. This sounds like a cliché. But if you don't have a trading plan you shouldn't be trading real money. Make a trading plan. A solid trading plan should describe your trading strategy. With a clear trading plan, you will be better able to anticipate market movements, avoid impulsive decisions, and stay focused on your goals. Start your trading day with a trading plan and end it with a trading plan. 2. Everyone talks about risk. The first job of a trader is to protect capital. You learn to defend first and only then attack. Apply strict risk management rules to protect your capital from day one. Because if you don't follow risk management it will become a habit that is hard to get rid of. What to consider about risks? This includes always setting stop loss orders, using the right position size to limit risk. Not trading everything. Less is more can never be applied to trading. 3. Sticking trading strategy. Consistency is the key to getting out of the boom and bust cycle. Stick to your proven trading strategy even in difficult market conditions or during losing streaks. Abandoning a strategy due to impatience or frustration can lead to inconsistency and poor performance. When you don't follow a trading strategy you don't give it a chance to show results. Deviation from a trading strategy kills any strategy. Stick to your trading strategy, give it a chance. 4. Discipline in trading. Discipline is the key to avoiding impulsive decisions. Avoid the temptation to recover losses or over-trade. If you are constantly losing money, just look at your trades for the past week. You will say to yourself, "if I had stopped trading, I wouldn't have lost so much". Why? Because the next day or week market always presents A+ setups that would have easily covered past losing trades. So, stick to your trading plan, manage your emotions and focus on making trades according to your strategy. 5 .Everyone says manage your emotions. Practice emotional discipline and keep your mind clear while trading. But how to do that? Emotions such as greed and fear can have serious consequences on trading results. One of the surest methods of dealing with emotions in trading is backtesting your strategy. You are afraid because you don’t know what to expect from the strategy. If you know all the numbers, for example which days are unprofitable, which session is more suitable for you, etc. then you won't panic and be afraid. You know what to expect. And all these techniques, like meditation, mindfulness or other methods of dealing with stress, will not help you in the beginning. After losing your capital, will you really sit and meditate? These methods work later when you have achieved stability. 6. Last but not least: journaling. Markets are constantly evolving, and pro traders adapt their strategies to changing conditions. How do you know the markets are changing? Or how do you know if you are trading better than last month? How do you identify the trading mistakes that are dragging you down? By logging what you trade, you have to regularly analyze your trading results and be prepared to try new ideas or adjust existing strategies to improve your consistency. Collect the data. If you can't measure it, you won't be able to improve it. Conclusion Avoiding the boom and bust cycle in trading requires a lot of work. You will need discipline, the right approach and 100% focus. Success in trading is not your golden goose strategy or some kind of secret money management. It is a combination of several things that bring success. Constant work on yourself, patience and consistency are your allies in overcoming the boom and bust cycle.
Education
by DeGRAM
5
🔜RULE FOLLOWING CHALLENGE, join to improve your trading 💪Did you know that most beginner traders can't follow their rules for 7 days in a row? Unfortunately, they start overtrading or changing the rules of the system, entering random trades, overrisk, etc. I've been there many many times myself, but then slowly started focusing on this part and made my first 7, then 10 days of rules following, broke with another tilt, started again, reached 17, 30 days, and failed again. Each time it became better and better, and now I'm on my way to 50 days of rule-following. I developed a routine and system that allows me to keep doing it, day after day. It includes mental technics, as well as simple EAs for Metatrader to help with over-risking and overtrading issues. If you want to step out of your comfort zone and improve your trading, join this 7-day rule-following challenge by leaving a comment below. It will be hosted here on TradingView, probably using the Stream feature, but I'll let you know later when we will gather up.
OANDA:XAUUSDEducation
by Yelli_trades
3
WHAT IS NONFARM PAYROLLS?Let's talk about trading on Nonfarm payrolls news. What is this news, why traders always expect it, when it comes out, where to look for it and most importantly why the market fluctuates like crazy when NonFarm Payrolls are released? What is Nonfarm Payrolls? Nonfarm Payrolls (NFP) is the number of new jobs in nonfarm sectors of the economy over the past month. The released figures show the dynamics of changes (increase, decrease) relative to the previous period. This statistic covers about 500 sectors of the economy: construction, trade, business services, transportation, logistics, financial sector, health care, tourism and so on. The calculations do not take into account workers in the agricultural sector, non-profit organizations and self-employed citizens. A change in the NFP value of 100-200 thousand jobs will lead to strong volatility in prices of world currencies in pairs with the U.S. dollar, gold and stock markets. When Is This Data Released? NFP is calculated and published by the U.S. Bureau of Labor Statistics (BLS), releasing preliminary data on the first Friday of each month. Given the significance and impact of the event on the global economy, a repost of these statistics can be seen on any economic calendar, the primary source is on the BLS website. You can also view upcoming economic events on the popular Forex Factory service. The time of news release depends on the U.S. Bureau of Statistics. A trader should check the exact time and date of release every time, as it depends on the readiness of calculations of the Bureau of Labor Statistics. Any calendar indicates the format of data in the form of three figures: previous, actual value and forecast. How Does The Market React? Traders evaluate the released data by several criteria: • Matching with the forecast or with the previous value. With such figures, a spike in volatility can take place without a strong and directional short-term movement; • Strong changes cause global shifts such as reversals or strengthening of long-term trends, changes in historical volatility values. Job growth is a leading indicator of growth in the U.S. economy. New hands in an office or manufacturing facility is the last stage of preliminary work done by a company to expand its business. By this time, it has: 1. Attracted investment 2. Expanded production capacity or sales departments for already purchased products 3. Growing employment leads to US GDP growth, low nonfarm payrolls data is a sign of a coming crisis This is clearly seen in the graph of all employees, built on the dynamics of changes in NFP since the beginning of the calculation, where the areas of global economic crises are marked. Why Does The Market "Fly" On Nonfarm Payrolls ? Significant price changes occurring in the Forex market when macroeconomic indicators are released are due to the lack of support for prices by market makers. During the release of important news, there is no need to support market liquidity, as the attention and funds of large players are attracted. As it was said above - the value of the indicator is a signal for revision of long-term trends, so huge amounts of funds are put in motion. The absence of a market-maker leads: • Spread widening (distance between buying and selling prices); • Low volumes of nearby orders in the stack. Therefore, the inputs of large players literally "collect the stack" at the moment of dismantling orders at all price levels, the same applies to the exit from positions. The market moves by 50-150 points, which is an acceptable error for long-term positions, but it is killer for stops, which limit losses of intraday traders. Roughly speaking, the market "flies" during the NFP release because it is relatively easy to move the price at this time. And not because all traders of the world are panic selling/buying currencies. What Should You Do If Nonfarm Payrolls Are On The Calendar Today? There's only one 100% profitable way to trade the nonfarm payrolls! So how do we trade them? YOU DON'T. Yeah, that's right. If you see the NFP coming out today, then: - When trading intraday, close all positions half an hour before the news comes out - When trading long term, remember that the average price movement is 50-60 pips and the maximum is 150-200 pips. This should be taken into account, it is possible to change the stop loss - Remember that after an average of 6 hours the price often returns to the same level as before the news An interesting point: if you study many strategies, you will see that on bigger timeframes (H4, D1), news carrying changes can serve as a trigger. The market plays back the data in a "second wave", after the volatility calms down, market makers will start accumulating positions on the flat movement. The tactic is called "step" at the end of fluctuations in a narrow channel there is a strong impulse and directional trend, actively shifting the markets to new price levels. Conclusion Let's summarize the rules of 100% profitable strategy of trading on Nonfarm Payrolls. Half an hour to an hour before a major news release, simply clsoe all positions. Even if there is a small loss, it is probably better to close them. Two hours after the Nonfarm Payrolls release you can trade again in a normal mode. But since it is already Friday and evening, there is no sense to trade. So, an hour or half an hour before the nonfarm close all positions and go to rest.
Education
by Lingrid
1
HOW TO TRADE THE EURJPYToday we will talk about how to trade EURJPY; one of the most volatile, but also the most popular cross-currency pairs on the forex market. Quite a large percentage of profitable traders include it in their trading arsenal. We will tell you about the differences of this pair, which is sometimes called "the beast". THE ECONOMIES OF JAPAN AND THE EUROZONE Japan has the 3rd largest GDP, behind only China and the USA. The country is a producer and exporter of automobiles and high technology and is therefore very sensitive to energy prices. The central bank, the Bank of Japan, is a publicly traded company with 45% of shares owned by private and institutional shareholders. Interest rates are interspersed between negative and very low, ranging from -0.1% to 0.1%, which makes borrowing in yen extremely popular. The government has traditionally struggled with a high yen and low inflation rates to make Japanese exports more competitive. Earlier it was achieved through so-called currency interventions, and many traders had an opportunity to earn good money by anticipating the moment of the next sales by the Japanese Central Bank, but today the increase in inflation is achieved through stimulus programs - purchases of long-term government bonds and other financial assets by the Central Bank. The Euro is the official currency of the Eurozone, which consists of 27 EU member. Between them, these 27 countries of the Union form a single market with an economy that accounts for 14% of the world's output in 2021, making it the third largest economy in terms of nominal GDP, the largest exporter and the largest importer of goods and services. The main governing bank, the European Central Bank, regulates the monetary policy of the eurozone's constituent countries, maintaining overall price stability. In the long term, the ECB's policy pursues similar goals to the Bank of Japan of growing the economy through stimulus programs. GLOBAL TREND There has been an uptrend since the beginning of 2020. This is when the Eurozone consumer price index went into negative territory (from 0.3% at the beginning of 2020 to -0.3% by the end of 2020), due to the aftermath of the pandemic. No significant recovery has followed since then, and the situation was only exacerbated by the escalation of Eurosceptic sentiment in certain countries of the Union, which ultimately led to Brexit. At a greater distance EURUSD shows that this was not always the case, and the strongest uptrend in the post-crisis 2012 is proof of that, followed by a decline. And if we consider EURJPY, we should assume that the uptrend will continue in the coming time, which means that when trading on daily charts, the advantage remains for the upward signals. Of course, the situation may change, but based on the currently available data and the dynamics of recent years, the global trend indicates an upward trend. EURJPY VOLATILITY The average daily volatility of EURJPY is approximately 88 pips. The most volatile days are Wednesday and Thursday. The highest intraday volatility is observed at the American session and at the European and Pacific sessions. But it should be noted that there is no such a strong dependence on the sessions as for EUR and GBP, and therefore activity can be expected at any time of the day. CORRELATIONS The most stable correlation is observed with USDJPY on the 4-hour charts. Therefore, if you have detected some signal on this pair that has not yet played out on EURJPY, it may be worth getting ready to enter a position. USDJPY is well correlated with the Japanese stock market, namely the Nikkei 225 index. And accordingly, EURJPY will have similar correlations with the Nikkei 225 due to its close correlation with USDJPY, which is observed below: ECONOMIC CALENDAR When working with the economic calendar, it is important to follow the news related to the European currency and Japan, as well as the US dollar, paying attention to the most volatile ones, which are marked with three red bars. Speaking about the news background, it will also be important to note that cross pairs, such as EURJPY or GBPJPY, react more smoothly to USD news, as they are less popular among traders and investors who prefer to take risks during such hours on EURUSD or, say, USDCAD trading. There are noticeably fewer spikes. TRADING EURJPY The pair is universal and is perfect for both scalpers and trend traders both on higher timeframes and lower timeframes. But reasoning from the point of view of practical popularity, let's say that intraday trading certainly prevails over trading on daily charts. Strong trends are perfectly visible on daily charts, which opens up acceptable conditions for long-term trading. On 4 hourly and even 1 hourly timeframes you can easily observe steady trends with pullbacks. In addition, due to the relatively higher volatility of the pair compared to the same EURUSD, and with exactly the same characteristic sharp movements, EURJPY trends are more clean and prolonged. It is worth considering that for this pair you may also need to increase the stop loss because of the spikes, where on low timeframes it is simply necessary to put it farther away, otherwise there are risks that they will be knocked out. Breakout strategies also work well on the same strategies of consolidation exit, allowing to take good profits. Boxes (consolidations) are visible to the naked eye, but even here it is worth setting the indicators properly so that they take into account these candle wicks. TO SUMMARIZE • The EURJPY pair trades perfectly and universally both intraday and on daily timeframes. • It is worth taking into account spikes and tails, which can easily knock out your stop loss. And therefore, calculate the stop loss with the appropriate correction for higher volatility. • The same candlestick wicks can be used for your benefit by opening opposite small-target positions after long wicks. • Breakout strategies work well, in particular, bull flag and bear flag patterns. • More clearly defined trends than classic pairs such as EURUSD. • There are correlations with USDJPY, as well as the Nikkei 225 stock market.
Education
by DeGRAM
1
HOW TO IDENTIFY STOPLOSS HUNTER AND TAKE PART ON IT - SETUP - HI BIG PLAYERS! Today I want give you smart WAY to take part on stoploss hunters. I know everyone of us hate it to be stopped out. But to be honest, stoploss levels means a huge volume level, that institutions use for cheap entries. This is why I want explain how I take part on stoploss hunting. I look on 4h chart for high demand and supply zones. On touching these area we all can expect more trade exchange and more volume. If the price bounce of this zone and break with CHOCH (change of character ) the last trend, a lot of trader try to trade early as they can and the stoploss becomes calculatable . As soon as the old trend is resumed, but in a narrow form, so that it is almost a sideways phase, then I identify stoploss hunter. The setup looks similar like this structure: The good news: the stoploss to the last local point is very close and Risk-Return-Ratios of 1:3 are possible. Comments are welcome! Best regards NXT2017
Education
by NXT2017
1
PORTO Basic Trend. Psychology. Volatility or super ticker?Logarithm. The time interval is 3 days. Cryptocurrency as an example. Cryptocurrency with high volatility (low liquidity) for dump/pump strategy. Primary trend — horizontal channel. Secondary trend — descending wedge. Local trend — consolidation after a wedge breakout. Line chart without “market noise” (volatility, squeezes). Immediately want to note that low-liquid cryptocurrencies better still trade on liquid exchanges, otherwise you are already your deposit succumb to a huge risk trading on exchanges with a small total turnover of funds (survivability, competition). Psychology. Volatility and market cycles are your friend, not the ticker name! . Notice what % the price slippage was. This was leaked to the market by the creators of the phantik (just in case), everything can be tracked on the blockchain, any sale at any price is profit. Everyone does it, but with such low liquidity, it's very visible on the chart as well as on the blockchain. It's not something "scary", it's normal behavior of smart people who "don't believe in crypto wrappers", not just someone else's, but even their own. Unlike stupid market participants who determine the value of a particular cryptocurrency, with the help of a particular cryptocurrency ticker (legend of usefulness to the industry). Because of this, there are thousands of phantoms and such market participants make up whole herd sects (they are entertained by selling "nothing" and making real money on the belief in crypto projects). I think every market participant has their own set of phonies in their portfolio. I'm sure a larger percentage of cryptocurrencies are the ones that "youtube and telegram bloggers are talking about" and not through their own independent analysis. But you have to realize that everyone's cryptocurrency combinations are different..... because there are more than 13,000 alts...... Generally, cryptocurrencies rise behind the general trend of the market, and some will occasionally "overtake the market" and then deflate to the general trend..... You can play around with this and "wait for the overtake". It is very important not to get attached to the ticker name (real or not real scam). The desire to get rich with a "special cryptocurrency" clouds the mind....
Education
by SpartaBTC
2
ORDER BLOCK trading strategyThe order block trading strategy is based on the concept of smart money, focusing on identifying specific zones where institutional traders previously executed their orders. Once we have successfully identified these zones, we patiently wait for the price to revisit these levels. By using a suitable strategy, we then enter our trades in the anticipated direction. -What is an Order Block in Forex: Order blocks are special zones within the market where significant buy or sell orders from major market participants, like institutional traders, have been previously executed. These order clusters, situated in specific price regions, hold considerable influence over price action, market sentiment, and liquidity. Order blocks serve as a specialized methodology to determine crucial support and resistance levels, derived from the trading behavior of institutional traders. These levels are subsequently employed as strategic points for initiating or concluding trades. -Understanding Order Block in Trading: In Forex or any other market, ict order block represent crucial price levels where we observe significant and aggressive price movements. These levels are characterized by large firms strategically placing their orders, which often results in the market moving forcefully from those points. To influence the market in a specific direction, smart money or hedge funds execute orders worth billions of dollars at particular price levels. However, not all of their orders are immediately filled. As a result, smart money revisits these levels to execute the pending orders, leading to further movement in the desired direction. -ICT Order Blocks Definition: Order blocks can indeed be identified on any time frame, ranging from small time frame like 15m,30 m and m5 to larger time frames like daily or weekly charts. Order blocks can be classified into two main types: Bullish Order Blocks and Bearish Order Blocks. 1. Bullish Order Block: A Bullish Order Block is recognized as the last downward candle before the price experiences a significant and aggressive upward movement. It represents a key level where institutional traders placed substantial buy orders, causing the market to rally strongly from that point. 2. Bearish Order Block: On the other hand, a Bearish Order Block is characterized by the last upward closing candle before the price undergoes a sharp and forceful downward movement. It signifies a critical level where large market participants, such as institutional traders, positioned significant sell orders, resulting in a significant decline in the market. By identifying and analyzing these Bullish and Bearish Blocks, traders can gain insights into a potential reversal or continuation patterns and utilize them as entry or exit points for their trades. Trading order blocks go beyond solely identifying the last up or down closing candle. To effectively trade order blocks, it is essential to consider several contextual factors, including: 1. Liquidity Hunt: Market participants, especially institutional traders, may strategically place their orders to trigger stop losses or create a liquidity imbalance. Understanding liquidity patterns and how they can influence price action is crucial. 2. Daily Bias: Evaluating the overall market sentiment and bias for the day is important. This involves considering factors such as news events, economic releases, and geopolitical developments that may impact the market and influence order-block behavior. 3. Interest Rates and Fundamentals: Fundamental factors, including interest rates, economic indicators, and central bank policies, can significantly influence market conditions. Understanding how these factors interact with order blocks can provide valuable insights for trading decisions. By taking these contextual factors into account, traders can enhance their understanding of order blocks and make more informed trading decisions. To identify order blocks, price action traders typically examine historical price movements on the chart to locate areas where the market has shown strong reactions. -How to identifying order blocks: 1. Look for strong price reactions: Analyze the chart to identify areas where the price has displayed significant and notable reactions, such as sharp reversals, extended consolidations, or breakouts. 2. Mark potential order block levels: Once you identify these areas of strong price reactions, mark them as potential order block levels on your chart. These levels represent key price zones where institutional traders may have executed large orders. 3. Assess support and resistance characteristics: Consider how the price behaves with the marked order block levels. If the price bounces off a specific level multiple times, it indicates a robust level of support or resistance, depending on whether the price approached the level from above or below. 4. Watch for role reversal: When an order block level is breached, its role as support or resistance can reverse. For instance, a broken resistance level may transform into a support level, and vice versa. In such cases, traders often wait for a retest of the broken level before entering trades in the direction of the breakout. By following these steps and considering the principles of support and resistance, traders can effectively identify and utilize order blocks in their trading strategies. However, it’s important to note that order block analysis is just one tool among many in a comprehensive trading approach. -How To Trade Order Blocks: The steps you’ve mentioned provide a general guideline for trading order blocks in forex. Here’s a breakdown of each step: 1. Point of Interest (POI): Start by identifying potential order blocks on higher time frames, such as daily and 4-hour charts. These could be areas of consolidation or strong price reactions. Once you’ve marked these POIs, move to the next step. 2. Optimization: Switch to lower time frames like 1-hour, 15-minute, or 5-minute charts to refine and optimize your POIs. By zooming in on these lower time frames, you can better analyze the price action within the identified areas. 3. Price Observation: Keep an eye on the price action in the higher time frame. Monitor how the price behaves as it approaches your POI. This observation helps you determine the strength of the order block and potential trading opportunities. 4. Rejection Analysis: When the price reaches your POI, switch to the lower time frame to examine how the order block reacts to the price. Look for signs of rejection, like fair value gap 5. Entry on Lower Time Frame: Once you’ve observed a rejection or a significant reaction at the order block on the lower time frame, you can plan your entry. Look for suitable entry signals, such as a breakout, pullback, FVG price Imbalance, and more 6. Stop Loss Placement: To manage risk, it’s important to place a stop loss order. Consider setting your stop loss 1 to 5 pips below the order block ict to allow for potential market noise and fluctuations. This helps protect your trading capital in case the trade doesn’t go as planned. Remember, these steps provide a general framework for trading ict order blocks, but it’s crucial to develop a trading strategy that suits your risk tolerance, trading style, and market conditions. It’s recommended to thoroughly back test and practice your strategy before applying it with real money. Additionally, staying updated with market news and having proper risk management practices are essential for successful trading.
Education
by Golden_Star1994
21
WHAT IS A SWAP IN FOREX MARKET?All participants in forex trading sooner or later leave an open position overnight. Most often, beginners do not have access to impressive sums of money as initial capital, so they actively use leverage. Although it carries a lot of risk, it gives an opportunity to earn good money trading currency pairs in a relatively short period of time. Around midnight, changes occur in the client's account: a certain amount is debited or credited, which is called "swap." What is it, and is it worth being afraid of? What is a Swap? Traders whose position has not been closed overnight are sure to ask the question: What is swapping on Forex? Some believe that it is a guarantee of loss; others see it as an opportunity to earn. Each currency, whether it is the American dollar, Japanese yen, or euro, has its own central bank, which sets the interest rate. This rate is the determining value for granting loans to other financial institutions. For example, Japan's central bank sets the interest rate on the yen at which other banks in the country are lent. When trading begins in the market, a position is opened for a currency pair, one of the components of which is Japanese money. At the same time, the interest rate of the Bank of Japan will be valid for the yen on the exchange. The second currency in the pair, let's say the dollar, also has its own rate. The difference between these values will be called a forex swap. Since each country sets its own interest rate for loans, the value between them in a currency pair can be either positive or negative. For example, the Japanese yen is lending at 1% and the dollar at 0.5%. Then an open JPY/USD position can bring 0.5% profit from the deposit amount if it is held for a long time. If you swap the components of the currency pair, you will get the same value but with a negative sign. Swap accrual occurs at night, i.e., after the end of the trading session. This means that those who are engaged in scalping or intraday trading do not face this concept at all. Other traders see its impact on the account every day. What is a forex swap, in simple words? It is the difference in a currency pair between the interest rates that banks set. Traders often use it in trading and can sometimes make a significant amount of money in a short period of time. An important point: the use of leverage is a guarantee that a certain amount of money will be charged or debited to the account. Otherwise, trading is done without the use of loans and deposits, which, although it reduces risks, does not eliminate them altogether. Why Do Overnight Swaps Occur? An open position in the forex market is typically held for a few minutes, hours, or, in some cases, days. When a trader holds an open position beyond the end of the trading day, they need to roll it over to the next day. This process is called an overnight swap. The purpose of overnight swaps is to ensure that open positions are settled at the end of each trading day, allowing traders to continue holding their positions and making adjustments based on their trading strategies. How Does An Overnight Swap Work? Perhaps one of the main features of swaps is their occurrence when trading with leverage. That is, there is no such concept for ordinary investment accounts. As soon as leverage is used, swaps appear. Brokers increase their income not only from account commissions but also from the negative difference. Therefore, no one will warn a beginner about the need to close a position overnight so as not to make a loss. Islamic Account Without Swap At the same time, traders have the opportunity to trade with leverage without swap. The so-called Islamic account is used, which can be opened by anyone. According to religious canons, Muslims can not use interest in any activity. A special account was created for them, and not only those who use Islam can apply for it. It is important to realize that brokers do not work for free. If a trading account has a swap, it means that the commission or spread has been increased. Information about this should be found before opening to avoid unpleasant surprises over time. Time Of Swap Setting Traders are often interested in what time the swap is set on Forex. The difference is accrued or written off at night. The exact time of the swap is 0:05. Every night, the servers go to reboot at 24:59. After that, they start working again at 0:05, and at the same time, the swap is calculated. If a trader manages to close a position before midnight, her/his account will remain unchanged with a 100% guarantee. Triple Swap Financial market participants face one more peculiarity of the swap: its triple size. On the night from Wednesday to Thursday, the value multiplied by three is charged or withdrawn from the account. Why does it happen? Conversion on the Forex market takes place in three days. So, the swap value is available for calculation three days after opening a position. On weekends, the difference is calculated, but the forex exchange does not work on weekends. So, it turns out that for Friday, Saturday, and Sunday, i.e., three days, the commission should be set on Monday. And since the real commission is paid only after 3 days, the formal calculations fall on the night from Wednesday to Thursday. On different markets, the increased swap can be debited in different ways, but on Forex, the triple size is only on Wednesdays. It is important to take into account the time zone. For some traders, the triple commission is charged on Thursdays due to the time difference. In conclusion, overnight swaps are a critical component of the forex market, enabling traders to hold positions beyond a trading session. Understanding how overnight swaps work and the factors that influence swap rates can help traders make informed decisions when trading currency pairs. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
7
TRADER'S CREDOThe world of trading is filled with risks, challenges, and opportunities. As traders navigate the ups and downs of the markets, it's essential to have a strong set of principles and beliefs to guide their actions. The Trader's Credo serves as a useful reminder of these core values, helping traders stay focused, disciplined, and committed to continuous growth. The Trader's Credo 1. I am responsible for my actions : As a trader, I understand that my success or failure depends on my decisions and discipline. I will take full responsibility for my actions and their outcomes. 2. I respect the markets: The markets are my ultimate teacher. I will respect their wisdom, learn from my mistakes, and constantly improve my trading skills. 3. I am committed to continuous learning: The world of trading is ever-changing. I will stay up-to-date with the latest market trends, trading strategies, and technologies to enhance my knowledge and success. 4. I practice discipline and patience: Trading success requires discipline and patience. I will follow my trading plan, manage my emotions, and avoid impulsive decisions. 5. I prioritize risk management: The preservation of capital is paramount. I will never risk more than I can afford to lose and adhere to strict risk management protocols. 6. I embrace accountability: I will be accountable for my decisions and accept the consequences. I will learn from my mistakes and use them as valuable lessons for future success. 7. I focus on the process, not the outcome: Trading success is a journey, not a destination. I will focus on the process, enjoy the learning experience, and trust that my hard work will eventually lead to success. 8. I respect others' opinions: The trading community is filled with diverse perspectives. I will respect others' opinions, engage in constructive discussions, and learn from their insights. 9. I strive for continuous improvement: I will never be satisfied with my current level of knowledge and success. I will always aim to improve and grow as a trader. 10. I am committed to ethical trading: As a trader, I will act with integrity and honesty. I will never manipulate the markets or engage in unethical practices. Conclusion The Trader's Credo is a powerful tool for traders looking to develop a strong foundation of principles and values. By adhering to these guiding beliefs, traders can improve their skills, manage risk, and ultimately achieve long-term success in the trading aren
Education
by DeGRAM
4
VOLATILITY IN THE FOREX MARKETHello Forex traders. Today we are going to talk about the concept of Volatility in the Forex market. We will talk about what it is, what volatility depends on, and most importantly how we can use this data to build and improve our own trading strategies and, as a result, get more profit from trading. What Is Volatility? Volatility is the range of price changes from high to low during a trading day, week, or month. The higher the volatility, the higher the range during the trading time period. This is considered to be a higher risk for your positions, but it gives you more opportunities to earn money. Volatility can be measured over different time periods. If we open a daily chart and measure the distance from high to low, we will get the volatility of the day: It turns out that on the chart above, it was 121 pips. We can also measure on another timeframe, for example, weekly chart. The distance from the high point to the low point was 162 pips. The total volatility during the week was 162 points. Volatility can be measured within a trading session or within a trading hour. This allows us to conclude that it is a fractal value. As a rule, the average volatility for the last candles is taken into account. If we take daily charts, the average volatility is usually considered for the last 10 days. Roughly speaking, the last 10 candles are summarized and divided by 10. What Does Volatility Depend On? It depends on the number of trades in the market, players, trading sessions, the general state of the economy of a currency, and, of course, on speculation. It depends on how speculative the market is about a given currency. Note that volatility can be measured both in points and in percent. But it should be noted that most often, the volatility of stocks is measured in percent. In forex, it is more usual to measure in pips. If you are told that the average price change of EURUSD is 0.7%, you can easily convert it into pips. And vice versa, you can calculate percentages from points if you need them for any research. Now let's move on to the most important question. How To Apply Volatility Data For Profit? It's actually quite simple. As they say, everyone knows about it, but no one applies it. This is especially true for intraday trading. Nobody wants to apply the simplest rule. Suppose you know that the average volatility of GBPUSD is 120 pips. Question: if the price has moved up 100 pips from the beginning of the day, should you open a buy position? The answer is obvious, we should not. Because the probability that the price will go up another number of pips is too low. Therefore, we should not open a buy position and on the contrary, we should focus on bearish positions. But for some reason people forget about this simple technique and follow their system. I believe that it is absolutely necessary to include volatility, at least on intraday strategies, in your checklist for market entry. The same can be done with higher timeframes. Let's imagine that we know that GBPUSD has an average weekly volatility of 200 pips. If the pair has moved 50 pips since Monday, we can expect that if the price continues to move down, there is a potential of about 150 pips. Of course, there are days when some movements become bigger or smaller, but we try to rely on statistics. With its help we can calculate the sizes of stops and take-outs. If we decided to be guided by the volatility data and open a sale on the pound, then we would try not to put a large (relative to the weekly timeframe) take profit. Because our expectation within the week is 150 pips. If the average volatility of a pair is 200 pips, it is silly to expect 1000 pips move. At least within a week. Thus, volatility can also be used for risk calculations. If you have opened many positions on different pairs, you can calculate what will happen if all stop-losses are triggered. Of course, the market is not obliged to obey your calculations, but it gives some support for your convenience and trading. Volatility-based Indicator The first indicator is ATR Average True Range indicator invented in 1972. It shows the average volatility and it is used most often to set targets and stop losses. The value of the indicator is multiplied by a multiplier and thus calculate the stop loss or and/or take profit. The calculations will automatically change depending on the current volatility. Volatility is higher, take profit becomes higher. Volatility is smaller and take profit becomes smaller. The next indicator is the CCI It is based on average price and moving average data. It is used as an oscillator, that is, when it is in the oversold zone, it is recommended to buy. And when it is in the overbought zone, it is recommended to sell. Another indicator, which is known to everyone, is Bollinger Bands They consist of a standard moving average and a moving average plus and minus standard deviation, which is calculated based on price. These bands are used most often to determine the limits of movement from the standard average. We can draw conclusions based on this indicator about the end of the movement, correction, etc. Conclusion In this article I have tried to give you an understanding of what volatility is in the forex market and most importantly how we can apply it in our trading. I hope that it will help you in developing and adjusting your own trading systems. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
11
INTUITION IN TRADINGWhy is it that when you feel that you should buy and you buy, the price goes down, and when you feel that you should sell, but do not open an order, the price immediately and sharply goes down? Murphy's Law? What should I do with my inner voice? Should I tell it to shut up or listen to it? In various sources, one can often find completely opposite opinions about the role of intuition in trading. Some say that only a systematic approach can bring success, while others, on the contrary, claim that it is impossible to achieve significant results without a "sixth sense". Who is right? Many people are interested in this question and we can make the most adequate conclusion: "Intuition is worth using, but only after you have gained experience of more or less successful trading within a year or two". Let's think for a second. How can a person who has no experience as a construction worker take a look at a house and immediately realize that there is "something wrong" with it? You can't. The person simply does not have enough experience, he is too poorly informed about the subject to make any judgments. There is a wonderful book by Malcolm Gladwell called Blink: The Power of Thinking Without Thinking. It deals in great detail with the "Thin-slicing Theory", what we call Intuition. I suggest you read it. So how to apply intuition in trading? The answer is simple. At first, gain experience by trading according to a mechanical system, without using any judgments like "I feel it, we are about to fall" or something like that. And only then, when you have an insight, be sure to check it with the help of technical analysis. Having found confirmation of your intuitive guess, you can already take some actions. In fact, there is even a book written on this topic, it is called "Trading from Your Gut". It is written by one of the "Turtles", Curtis Faiths. There is not so much information in this book specifically on the use of intuition, but there are a couple of useful thoughts. The less fear, the better intuition works. Perhaps this is the reason why it is so easy to make thousands of dollars on a demo account and so difficult on a real one. When trading on a demo, we release the full potential of our brain, because nothing limits our freedom, because the money is virtual and there is no fear of losing it.
Education
by DeGRAM
1
Understanding Technical IndicatorsTrading indicators are essential tools for traders and investors to analyze and interpret financial market data. These indicators, derived from mathematical calculations based on price, volume, or open interest, etc, aid in visualizing market trends, momentum, and potential reversals. They serve as an additional layer of analysis, offering a structured and objective way to understand market dynamics. Understanding Trading Indicators 1.1 Definition : Trading indicators are graphical tools derived from price, volume, or open interest data. They help in identifying market trends, momentum, volatility, and possible trend reversals. 1.2 Types of Trading Indicators : Trend Indicators : These indicators, such as Moving Averages (MA), Moving Average Convergence Divergence (MACD), and Ichimoku Cloud, help in determining the direction and strength of market trends. Oscillators : Tools like the Relative Strength Index (RSI), Stochastic Oscillator, and Commodity Channel Index (CCI) measure overbought and oversold market conditions. Volume Indicators : Indicators such as On-Balance Volume (OBV) and Volume Weighted Average Price (VWAP) use trading volume data to confirm price movements. Volatility Indicators : These, including Bollinger Bands and Average True Range (ATR), assess the degree of price fluctuation in the market. Utilizing Trading Indicators 2.1 Trend Following Strategy : This approach involves capitalizing on the continuation of established market trends. Indicators like the Fourier Smoothed Stochastic (FSTOCH) help detect and follow these trends, providing smoother signals and filtering market noise for more accurate decision-making. 2.2 Mean Reversion Strategy : Contrary to trend following, mean reversion strategy focuses on price corrections when they deviate significantly from historical averages. The Bollinger Bands Percentile (BBPct) is a mean reversion indicator that uses Bollinger Bands to identify potential price reversals, indicating when an asset is overbought or oversold. Comparing Trend Following and Mean Reversion 3.1 Key Differences : Direction : Trend following identifies and exploits established trends, whereas mean reversion focuses on price reversals. Risk Profile : Trend following is typically higher risk due to the challenge of timing, while mean reversion is considered less risky as it banks on imminent price corrections. Market Conditions : Trend following excels in trending markets, while mean reversion is more effective in range-bound or sideways markets. 3.2 Combining Strategies : Using both strategies together can provide a more comprehensive market view and reduce reliance on a single approach. Mean reversion indicators can confirm trend reversals identified by trend-following indicators, while the latter can help avoid premature exits in mean reversion trades. Binary and Discrete Indicators 4.1 Binary Indicators : These indicators, like the Alpha Schaff, offer clear, binary (yes-or-no) signals. They are ideal for straightforward decision-making, indicating when to buy or sell. 4.2 Discrete Indicators : Unlike binary indicators, discrete indicators, such as the Average-True-Range, provide a range of values, offering more nuanced insights into market conditions. The Importance of Using Both Types of Indicators Combining binary and discrete indicators equips traders with a broader perspective on market conditions. While binary indicators provide clear entry and exit points, discrete indicators offer detailed insights into the strength of market trends and potential turning points. This combination enhances decision-making by enabling traders to cross-reference signals and identify high-probability trading opportunities. Conclusion : In the dynamic world of finance, trading indicators are invaluable for providing insights into market trends, momentum, and conditions. Utilizing a combination of trend following, mean reversion strategies, and both binary and discrete indicators, traders can develop a comprehensive and effective toolkit for navigating financial markets successfully.
BITSTAMP:BTCUSDEducation
by AlgoAlpha
HOW TO IDENTIFY AN ASCENDING WEDGE AND A DESCENDING WEDGEThe wedge pattern is a popular chart formation that traders use to identify potential reversals in the markets. This pattern is formed from a series of higher highs and higher lows in an ascending wedge or lower highs and lower lows in a descending wedge. As the pattern narrows, the price action becomes more compressed, eventually leading to a breakout that can result in a significant move in the opposite direction. In this article, we will look at how to identify and trade this pattern. How to identify an ascending wedge and a descending wedge Rising wedge An ascending wedge is a bullish pattern that forms when price is sandwiched between an uptrend line and a horizontal or slightly upward sloping resistance line. To identify an ascending wedge: a. Draw a trend line connecting the lower lows. b. Draw a resistance line connecting the upper highs. c. The wedge should look like a symmetrical or slightly expanding formation. Downward wedge A descending wedge is a bearish pattern that forms when price is sandwiched between a falling trend line and a horizontal or slightly downward sloping support line. To identify a descending wedge: a. Draw a trend line connecting the upper highs. b. Draw a support line connecting the lower lows. c. The wedge should look like a symmetrical or slightly expanding formation. How to trade a wedge Rising Wedge When trading a rising wedge pattern: a. Place a buy stop order above the upper resistance line, aiming for a return to or beyond the initial point of the wedge. b. Place a stop loss below the lower trend line to minimize potential losses. c. Exit the trade when price reaches the target or when the pattern does not move beyond it as expected. Downward wedge When trading a descending wedge: a. Place a sell stop order below the lower support line, aiming for a return to or beyond the initial point of the wedge. b. Place a stop loss above the upper trend line to minimize potential losses. c. Exit the trade when price reaches the target or when the pattern does not break as expected. Risk Management Trading wedge patterns can be profitable, but it is important to manage risk effectively. Consider using a fixed percentage of your account for each trade and set strict stop loss orders to protect your capital. Also, remember that no pattern is foolproof and the market can sometimes give false breakouts. Conclusion When properly identified and traded, wedge patterns can provide valuable trading opportunities. By following the steps outlined in this article, you can improve your ability to identify these patterns and capitalize on them. However, always remember that trading involves risk, and a thorough understanding of market dynamics and risk management is essential for success.
Education
by UnknownUnicorn15614419
2
SIX HABITS TO ADOPT IN 2024Trading in the financial markets can be both rewarding and challenging. However, it's essential to recognize and overcome certain bad habits that can hinder your success and well-being. In this article, we will discuss six common habits that traders should avoid and provide actionable steps to improve their mindset, performance, and overall happiness. 1. Quit Complaining – Embrace a Positive Attitude Successful traders do not wallow in self-pity or exaggerate their problems. If you find yourself complaining about your trading issues, seek help from a mentor or support group to resolve your concerns. A positive attitude will not only improve your trading results but also create a more positive atmosphere around you. 2. Monitor Your Vices and Indulgences Traders often resort to unhealthy habits, such as excessive alcohol consumption or overeating, as a way to cope with stress and disappointment. Be mindful of your weaknesses and replace harmful habits with healthier alternatives that promote well-being and mental clarity. 3. Focus on the Present Moment – Avoid Future-Tripping Fear often stems from worrying about the future. To avoid this trap, concentrate on the tasks and decisions at hand. Focusing on the present moment will give you a sense of calm, security, and fulfillment that will ultimately improve your trading performance. 4. Continue Learning and Growing Once you achieve success in trading, don't become complacent or stop learning. Continue developing your skills and exploring new trading strategies. Learning new techniques or refining existing ones will keep you engaged, motivated, and adaptable in an ever-changing market environment. 5. Cultivate Strong Social Connections As a full-time trader, it's easy to become isolated and withdrawn from social interactions. Make an effort to maintain and build meaningful relationships with family, friends, and colleagues. Strong social connections will provide emotional support, reduce stress, and contribute to your overall happiness and well-being. 6. Practice Gratitude and Kindness Traders who experience negative emotions, such as envy or resentment, can benefit from practicing gratitude and acts of kindness. By expressing gratitude, volunteering, or offering compliments, you will improve your own happiness while fostering a positive atmosphere around you. Conclusion By recognizing and overcoming these six common bad habits, traders can significantly improve their well-being, trading performance, and overall happiness. Embrace a positive mindset, maintain healthy habits, focus on the present moment, continue learning and growing, cultivate strong social connections, and practice gratitude and kindness. By doing so, you will be well on your way to achieving success in the financial markets and leading a fulfilling life. In 2024, may traders who have yet to find success in the market be blessed with the wisdom to learn from their mistakes and the courage to embrace new strategies. May they cultivate a growth mindset, forging strong connections, and practicing gratitude and kindness. As the year unfolds, let their resilience and determination guide them towards a prosperous and fulfilling future in the world of trading. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment
Education
by Lingrid
10
CAKE Basic trend. Working with reversal zones. Money management.Logarithm. Time frame 1 week. Major trend. Combined education and potential trade in ideas. Pivot zones from key liquidity zones. The main idea and meaning of this idea is to show the logic of working with reversal zones from key resistance support levels, which will determine the further development of the trend. I have shown all possible scenarios of secondary trend development from more probable and logical to less probable, but which have the right to be realized. You should always keep even unlikely scenarios in your mind, even if you do not believe in them. Few people calculate different variants of trend development ahead of time. In most, as a rule, there is one scenario of price movement, but it is built in most cases on the desire that it was exactly as profitable. This is how this trend looks like on a line chart. Exchanges and surprises. Money management. CAKE (PancakeSwap) is a decentralized exchange (DEX) token on the Binance Smart Chain, launched by anonymous developers The coin as an example of similar crypto of the third liquidity group, which lose capitalization, that is, people's faith in the project itself - "the faith of the community is killed". It is quite possible that at one moment the faith in anonymous developers will be "killed" and they will use the existing liquidity for the last time. I emphasize what blockchain the token is made on and how many bad triggers (FUD and not only) in the info space, not only with the designation “4”. The idea (long-term trend) is more educational than trading because of the degree of risk (liquidity, “ugly chart” for the future, large depreciation, breaking a long horizontal channel at a very large %). My desire is to trace on a live chart how the fate of two exchanges will be reflected on the price of this token in the future. Liquid, popular, reliable and conditionally decentralized with “anonymous developers”. Local trend. Work in it (only in it and nothing else). Risk Management. But, in the local trend at the moment, this coin is interesting to work, especially since the triangle is almost formed and soon the dénouement. Stops will be quite short in the direction of the breakout, that is work. I will post an idea for local-medium term work below. Take a local profit (maybe substantial) and forget once and for all about crypto fantasies and what will happen to the price next. No regrets if you took a relatively small profit and further development of the trend showed an order of magnitude more. In the end, it may be the other way around, you will be the lucky one who “made it” before the “sunset”. Learn to take profit from the market, it is better to take a little bit at a time, limiting risks, than to take a potentially large profit (which is what most “sectarians” are waiting for). In the long run, I highly recommend not getting involved with this or other similar cryptocurrencies. You will be playing casino, and not so much with risk management (risk/profit ratio in trading) but with money management (money management in general, places to store and trade). So stops can be useless in some not quite trading situations. Note how I've written a lot of information that doesn't really apply to this cryptocurrency directly, but only indirectly, as a potential consequence of more global yet equally potential events . Observe money management and risk management in trading, diversify where you trade and store crypto assets, this will guarantee a sound sleep in the future. . Secondary trend + local work. Time frame 3 days. 08 2023
by SpartaBTC
12
THE ESSENCE OF WYCKOFF'S METHODRichard Demille Wyckoff is a trader whose career coincided with the famous traders of the time: Jesse Livermore, Charles Dow and JP Morgan, W. Gann and others. All of these men are widely recognized for their terrific trading books. Wyckoff became famous for his insight, his trading method. Wyckoff has been involved with the financial markets since he was a teenager, and this is what gave him an understanding of how the market works. To become a successful trader, it is not enough to have good theoretical knowledge. Experience is the key to your success. That is why Wyckoff recommended to follow the tape for weeks to intuitively understand what is happening on the market. THE ESSENCE OF THE WYCKOFF METHOD The essence of Richard Wyckoff's idea is that in order to gain a large position in the market and not to move the price with large orders, a professional market maker needs to balance supply and demand. The equilibrium is observed when the price is in a narrow range of consolidation. After a position is gained, the price is pushed out of the trading range. WYCKOFF'S THREE LAWS The trading method is based on three laws: Supply and Demand. Wyckoff believed that the price of each asset goes up or down only by an overabundance of one thing. For example, the price goes up if demand exceeds supply. Simply put, if a whole city decides to buy 10 tons of apple, and the apple is in limited supply from the suppliers, they will start to raise the price because of the high demand. Cause and Effect. When an asset starts to rise in price - this is the consequence, and the previous news or a small price range this is the cause. When the price is between support and resistance zones for the X amount of time (cause), then a trend will start in the short term (effect). Effort vs. Result. A large volume traded, for example, during one day is an effort, while a price change is a result. Example: If a large player has spent a lot of money buying up most of the sell orders, and the price is still standing, it means that the effort spent did not bring the expected results. ACCUMULATION AND DISTRIBUTION The basic principle of trading is to see the equilibrium of supply and demand in time. Consolidation (also called range, zone, rectangle, sidewall, etc.) is a trading range of prices where accumulation or distribution takes place. Wyckoff's method is the use of accumulation and distribution phases. Accumulation is the formation of a trading zone where orders for further movement (price reversal) are accumulated within a certain time. Here "smart" money keeps the price at approximately the same level, where they buy up most of the market orders in order to sell (distribute) them at a higher price. Distribution is the formation of a trading zone where orders are distributed for further movement (price reversal) within a certain time. Similarly, to accumulation, smart money sells out all its previously accumulated assets in order to benefit from it. Consolidation is the place where the previous movement with the outweighing force of demand or supply stops and relative equilibrium finally occurs. This trading zone is a great time to make money, because it is the place where preparation for an explosive bull rally or bearish fall takes place. Consolidation can be considered as a place of refueling for a car, if not refueled, there will be nothing to drive on - it is the accumulated force, the reason that creates the subsequent movement. The longer the refueling takes place, the farther one can go. Therefore, after a long trading range, we should expect an equally long upward or downward movement. On the way to move from one zone to the opposite zone, the price does not fall in one go, it always makes pullbacks and stops, which are called accumulation. After his death, Wyckoff left trading methods for such zones. The principle is quite simple: Before the formation of a sideways trading range, sales peak and the accumulation phase begins. During the whole time the price is in this range, a large player buys up most of the sell orders. The price goes beyond the support and resistance zones, then reverses and the growth phase begins. At the end of the growth phase, the buying peaks. Then it is the same for the distribution phase. ACCUMULATION In the accumulation phase, professional traders buy up sell orders from uninformed traders. Usually it happens on the news, from all channels they say that shares of some company will fall, it is waiting for almost bankruptcy, everything is bad, etc. In Forex, various negative news on unemployment and similar. At this moment people start to get rid of long positions, and traders start to short the instrument. Wyckoff supporters realize that it is worth waiting for the price drop to stop and they should get ready to look for an entry point to buy the asset. Phase A and phase E are trend price movements, the phases between them are the trading range, which is analyzed by the Wyckoff trading method. Horizontal lines are support (at the bottom) and resistance (at the top) of the trading range. Do not consider them as exact lines, they are approximate ranges, in which the big one turns the price back to sideways. DISTRIBUTION Everything is similar to buying in the accumulation phase, only now those assets bought earlier should be sold off. This is just the basis, the main rules of trading according to the Wyckoff method in trading. Richard Wyckoff himself applied it on stocks and on daily charts (although he did not use charts, only tape). But nowadays, the time of algorithms, you can trade on any timeframe and any instruments. The method works well on the minute. It should be understood that there can be many phase patterns, the trading range can be different, the culmination with large candles and small, the volume is high and not very high, tests after the exit from the zone may or may not be. It all depends on who the big player is, when the accumulation or distribution occurs, what instrument you are watching and what timeframe is on the chart. Trading will be quite successful if you strictly follow your trading strategy according to the Wyckoff method, written on paper, competently determine the level of risk and position size. Observe the chart, find consolidations, see what happened inside and where the price went. You need to analyze every step, every movement. Big money thinks everything through, every price action on the chart is not accidental. And remember that whatever the big money does, it always leaves its traces. Good luck in trading!
Education
by DeGRAM
2