What is Exchange TimeHi Everyone! Someone asked, "What is exchange time?" I hope I provided an explanation as to what "exchange time" is. It's basically whatever time zone the exchange is located. Yes, you could change the time zone in the chart settings to the time zone you are located. However, it's possible you and another person you are talking to might get confused as to when a particular candle begins and how much time remains in that candle.
In my opinion, it's important to have all your charts setup to "exchange time" within the chart settings so that there is no confusion when discussing analytics that involve how much time remains in a particular candle; or how much time has already passed within a particular candle.
I hope this was helpful. Please feel free to add to the conversation with any explanation you may want to add in the comments section.
Stay Aewsome!
David
Wave Analysis
How to never break your Trading Account?Follow We Trade Waves 4 Golden Trading Rules!
1) Do Not Over-Risk
Big Risk = big loss = potential big profit | Small Risk = small loss = potential big profit (Read this again)
2) Do Not Over-Trade
Successful trading is not about trading often, it's about being selective and trade correctly!
3) Do Not Trade Without Stop Loss
Check GBPAUD, CHFJPY, GBPJPY Daily chart and you will see market sometimes move thousand pips within minutes!
4) Never Ever Add To Losing Position
While you are thinking that you will break even faster which is true! you will be doubling, tripling your risk at the same time!
Print above rules and keep them in front of you while trading
DISCLAIMER: We Trade Waves is not a signal service. Instead, it involves sharing our perspective and detailed analysis based on our unique wave analysis concept. We cannot be held responsible for any financial gain or loss that may result from following our analysis.
Trade with care
WTW Team
🛠️ Trading Tools Cheat SheetFibonacci Levels, Pitchfork, Fibonacci Arcs, Gann Square, Gann Fan, and Elliot Wave are technical analysis tools used in trading to identify potential levels of support and resistance, anticipate future price movements, and make informed investment decisions. These tools are based on mathematical calculations and relationships between price, volume, and time. They are widely used by traders to gain insights into market trends and make investment decisions based on past market data. However, it's important to note that these tools are not a guarantee of future performance and can produce false signals, so they should be used in conjunction with other forms of analysis and with a solid understanding of market dynamics.
🔹 Fibonacci Levels
A technical analysis tool that uses horizontal lines to indicate areas of potential support or resistance based on the Fibonacci sequence.
🔹 Pitchfork
A technical analysis tool that uses three parallel lines to identify potential levels of support and resistance and to anticipate future price movements.
🔹 Fibonacci Arcs
A technical analysis tool that consists of several curved lines that originate from two extreme points (high and low) and converge at the fibonacci levels.
🔹 Gann Square
A technical analysis tool that uses a grid to identify potential support and resistance levels and to predict future price movements based on the relationship between time and price.
🔹 Gann Fan
A technical analysis tool that uses diagonal lines to identify potential levels of support and resistance and to anticipate future price movements.
🔹 Elliot Wave
A technical analysis tool that tries to identify patterns in financial market data, particularly in stock market prices, which in turn can be used to make investment decisions. It's based on the idea that market prices move in predictable waves.
👤 @AlgoBuddy
📅 Daily Ideas about market update, psychology & indicators
❤️ If you appreciate our work, please like, comment and follow ❤️
Market Cycles: What They Are and the Psychology Behind Them
All markets go through cycles of expansion and contraction.
📈When a market is in an expansion phase (an uptrend), there is a sentiment of optimism, belief, and greed. Typically, these are the main emotions that lead to a strong buying activity.
Sometimes, a strong sense of greed and belief overtakes the market in such a way that a financial bubble can form. In such a scenario, many investors become irrational, losing sight of the actual value and buying an asset only because they believe the market will continue to rise.
They get greedy and irrational by the impressive bullish movement, expecting to make huge profits. As the market gets heavily overbought, the local top is created. In general, this is considered to be the point of the highest risk.
In some cases, the market will start a sideways movement while smart money steadily sells the asset. This is also called the distribution stage. However, some markets don't present a clear distribution stage, and the downtrend starts sharply after the top is reached.
➖➖➖➖➖➖➖➖➖
📉 When the market starts reversing, the euphoric mood can quickly turn into complacency, as many traders refuse to admit that the uptrend came to an end. As prices continue to fall, the market sentiment quickly moves to the bearish side. It often includes feelings of anxiety, denial, and panic.
In this context, by the anxiety we mean the moment when bullish biased market participants start to question why the price is falling, which soon leads to the denial stage. The denial period is marked by a sense of unacceptance. Many investors keep holding their losing positions, either because "it's too late to sell" or because they want still believe that "the market will come back soon."
But as the prices drop even lower, the selling wave gets stronger. At this point, fear and panic often lead to what is called a market capitulation (when holders give up and sell their assets close to the local bottom).
Eventually, the downtrend stops as the volatility decreases and the market stabilizes. Typically, the market experiences sideways movements before feelings of hope and optimism start arising again. Such a sideways period is called the accumulation stage.
Let me know, traders, what do you want to learn in the next educational post?
🎲 Elliott Wave Pattern: Combination 🌊●● Combination ( CMB ): "Double Three"
❗❗ Rules:
● A “double three” combination comprise two corrective patterns separated by one corrective patternin the opposite direction, labeled Ⓧ . The first corrective pattern is labeled Ⓦ , the second Ⓨ .
● A "double three" combination comprises (in order) a single zigzag and a flat, a flat and a single zigzag , a flat and a flat, a single zigzag and a triangle or a flat and a triangle .
● Wave Ⓧ appears as a zigzag or flat. (TWEWA)
● Wave Ⓧ always retraces at least 90 percent of wave Ⓦ .
● Combinations have a sideways look. With respect to waves Ⓦ and Ⓨ in a double three, only one of those waves in each type of combination appears as a single zigzag .
● Combinations can occur in the same wave positions as flats and triangles (except for the triangle subwave) but cannot occur in waves Ⓦ and Ⓨ .
❗ Guidelines:
● Wave Ⓧ is often 123.6-138.2% the Ⓦ wavelength, less often wave Ⓧ retraces 161.8% or more. Don't expect wave Ⓧ to be more than 261.8% of wave Ⓦ . (TWEWA)
● Wave Ⓧ is usually a single or multiple zigzag.
● When a zigzag or flat appears too small to be the entire wave with respect to the preceding wave (or, if it is to be wave ④ , the preceding wave ② ), a combination is likely.
☝ Notes:
● An expanding triangle has yet to be observed as a component of a combination.
__________________________
🔗References:
Elliott Wave Principal 2005
Trade Waves / Elliott Waves Analysis (TWEWA)
📚 Elliott Wave Guide & Ellott Wave Archive ⬇️⬇️
The Nature of Diagonals and TriangleI love trading these patterns. They are my favorites when I trade. Sometime it's difficult to spot because they need to complete the formation.
Diagonals aka wedges, usually people are confused with continuation triangle and get squeezed. Has 2 types: leading and ending. Leading has 2 entry points. If it breaks the first entry, wait for second one to enter an entry. Ending is where the trend is ended and nature going back to where it started.
Continuation triangle is a consolidate pattern where it moves in a range smaller and smaller until it bursts a final move to complete a trend. Triangle can take quite some times to finish the formation.
Diagonals can happen a lots but triangle is very rare.
Our Trading ManifestoHello everyone! In this post we will present and explain our trading system.
Our trading system condensates everything we have learned from hard work, study and even harder lessons received in these years of trading. It is constantly evolving and updating, we are always ready to question some aspects of our system and research tools and strategies that can improve it.
We will distinguish and explain three different aspects of which the system is composed: Analysis, Execution and Research.
Analysis
The analytical part concerns all the tools and the strategies that we use to formulate an hypothesis on the direction of the market, and consequently develop a trading strategy.
A trading strategy is composed by:
-an Invalidation Level: a price level that, if crossed, proves our hypothesis wrong. This is the limit level at which stop losses can be set.
-a set of Entry Points/Levels: composed by price levels of chart points that according to our analysis can trigger the move that we are hypothesizing.
-a set of Target Points/Levels: composed by price levels of chart points where the move that we are hypothesizing can end.
Once a trading strategy is determined, it will be implemented in the executive part.
But on what is our analysis based?
Elliott Wave Theory, Pattern Trading and Sentiment Analysis.
We believe that the chart encodes all the information available. News and events are priced in the market instantaneously. The fundamentals are revealed simultaneously with the price action.
Any news or fundamental consideration is just one piece of the puzzle. Price is the synthesis of the result.
Price moves because of mass psychological dynamics inducing people to buy and sell. These dynamics are observable in the sentiment and in the fundamentals, and manifest themselves in chart patterns. The composition of chart patterns forms Elliott Waves structures.
We don't use this approach as a mix of independent tools, but in a holistic and comprehensive approach. We analyze the wave structure of the market starting from higher timeframes, assessing probabilities of different scenarios by analyzing chart patterns and using different tools related to the sentiment, such as Smart Money Indicator, Volume Profiles, Order Blocks, etc. We use the same approach in smaller timeframes to set the trading strategy (Entries, Targets and Invalidation Level).
Execution
The executive part of our trading system involves risk management, placing orders in the market, and managing active trades.
Once we have developed a trading strategy, we have a set of entries, a set of targets and an invalidation level. We have to use them to define a Trading Plan.
Here is the first rule of risk management: we can not lose more than 1.5% of the trading capital for each trading plan.
You don't have to depend on one trade. One trade should not be decisive. Trading must not be funny. This is the only way to decrease your biases and your emotional involvement.
So in a Trading Plan we decide how many trades to open, how much risk to allocate on each trade (NOT MORE THAN 1.5% TOTAL), at what price execute the trade, and where to set stop losses.
No stop loss can be set above the invalidation level. If prices reaches the invalidation level we are OUT. No matter if prices then follows the hypothesized direction, market will always provide other opportunities.
We also plan where to take profits at the pre-determined Target Levels.
Research
The research part of our system is our constantly updating and challenging our knowledge studying new tools, approaches, strategies. Knowledge is dynamic and always updating. You never stop learning.
We will post all our analysis and trades. Stay tuned and happy trading! :)
TRADING ACRONYMS YOU MUST KNOW
Hey traders,
Here is the list of trading acronyms, every trader must know.
TA - technical analysis
FA - fundamental analysis
HOD - high of the day
LOD - low of the day
O/N - over night
52s - new 52 week high
B/O - breakout
BOS - break of structure
E/R - earning report
Pre - pre-market trades
AH - after hours trades
R/R - risk / reward
S/R - support and resistance
TP - take profit
SL - stop loss
YTD - year to date
ATH - all time high
HH - higher high
HL - higher low
LH - lower high
TF - time frame
MS - market structure
HTF - higher time frame
LTF - lower time frame
BE - break even
DD - drawdown
Be - bearish
Bu - bullish
HNS - head and shoulder
These acronyms are frequently applied but the proffessionals.
Do you know all these acronyms?
Please, like this post and subscribe to our tradingview page!👍
bullish and bearish cup and handle pattern hello dear traders,
Here are some educational chart patterns that you must know in 2022 and 2025.
I hope you find this information educational and informative.
We are new here so we ask you to support our views with your likes and comments,
Feel free to ask any questions in the comments, and we'll try to answer them all, folks.
What are the Cup and Handle chart patterns?
A cup and handle pattern is a pattern of price movement on a trading chart that resembles a cup with a handle, from which it derives its name. The cup section of the pattern is formed from a U-shaped price movement, while the handle is a short price channel from the edge of the cup. The handle is actually a pullback after the right Swing of the cup.
As is the case with other chart patterns, the cup and handle pattern shows you how the price has moved in the immediate past, which can help you predict future price movements. The time it takes for pattern formation varies: pattern formation can be as short as seven weeks or as long as 65 weeks or more.
There are two types of patterns: the more popular bullish cup and handle pattern that you can see in bull markets and the inverted cup and handle pattern, also known as the bearish cup and handle pattern, that you can see in bear markets.
In the bullish variant, which occurs in an uptrend, the pattern is formed by a downswing (pullback) that gradually turns into an upswing (in the trend direction) followed by a small pullback (a slight downward drift that creates a handle )
The reversal/bearish type, which appears in a downtrend, is formed by an upswing (pullback) that gradually turns into a downswing to continue the downtrend, but then pulls back (handle) a bit.
Understanding the structure and inversion of the cup and handle pattern
The cup and handle pattern can form in any time frame, but as a swing trader, you should focus on the daily time frame. To identify the cup and handle pattern or reversal type, you need to understand the price movements that form its structure. For example, to be a continuation pattern, there must be a prior trend before a cup and handle pattern can form. Let us look at both patterns one by one.
The bullish Cup and Handle pattern:-
An uptrend: For a bullish cup and handle pattern to form, there must be an established uptrend, but the trend must not be too mature because the more mature the trend, the less likely it is to continue. A trend on the daily time frame that is a few months old is fine.
Cup: The cup is formed from a normal bust that gradually curves upward, creating a "U" shape. It should have a bowl or round bottom and not a sharp "V" shaped bottom. The round bottom ensures that there is a consolidation pattern with valid support at the bottom of the "U" cup. In addition, the pattern on both sides of the cup should be of equal height, but this may not always be the case.
Cup depth: The cup should not be too deep. Generally, the cup depth should be around the 38.2% Fibonacci retracement of the previous advance. However, with overreaction in more volatile markets, retracements can range from 38.3% to 50% Fibonacci. In extreme cases, the retracement can reach 61.8% Fibonacci, which is in line with Dow Theory.
Handle: This is a pullback that forms after the higher forms on the right side of the cup. This is a minor pullback or consolidation that sometimes resembles a downward-sloping flag or pennant. This is just a small, final consolidation/pullback before a bigger breakout, but could lead to a retracement to the 38.2% Fibonacci retracement of the swing high of the cup. The smaller the retracement, the more bullish the formation and the more significant the breakout.
Duration: While the cup can last from 1 to 6 months (or several years on a weekly chart), the handle can take about 1-4 weeks to form.
The bearish/inverse Cup and Handle pattern:-
A downtrend (bear market): There must be an established downtrend for the inverted Cup and Handle pattern to be meaningful. However, the trend should be relatively young as downtrends don’t last that much. On the daily timeframe, the trend should be from a few weeks to a few months.
The dome (inverted cup): The dome of this pattern is formed by a normal price rally in a downtrend (pullback), which gradually turns to a downward swing, thereby forming a dome shape. It should have a rounding top and not a sharp pyramid top. A rounding top ensures that the inverted cup is a consolidation pattern with valid resistance at the top of the structure. Both sides of the dome may or may not have equal lows.
Dome height: The dome should not be too high. Usually, the height should be about 38.2% Fibonacci retracement of the preceding downswing, but the retracement could range from 38.3% to 50% Fibonacci in more volatile markets with over-reactions. In extreme situations, it could be up to 61.8% Fibonacci.
The handle: This is a slight pullback that follows the downswing that forms the right side of the dome. It is a small consolidation that often looks like a bearish flag or pennant that slopes upward. The handle can retrace up to 38.2% Fibonacci of the dome’s swing down, but the smaller the retracement, the more bearish the formation and the more significant the breakout.
Duration: The dome may take about 4 to 6 weeks or more to form, while the handle may take about a week or two.
How to trade the Cup and Handle chart pattern:-
The Cup and Handle pattern and the inverse type are potent trend continuation signals. When you see any of them, you have to trade in the direction of the trend. While you can trade these price action chart patterns on their own, it may be wise to confirm the trend with some tools, like trend lines and moving averages.
Trading the bullish Cup and Handle pattern:-
The bullish Cup and Handle pattern forms an uptrend and gives a bullish breakout signal. You might have to fix an uptrend line or a moving average to confirm the trend. Here is how you trade the pattern:
Entry:-
With this pattern, a buy signal occurs when the price breaks out of the upper trend line of the price channel that forms the handle. There should be a substantial increase in volume on the breakout above the handle’s resistance. Go long at the close of the breakout candlestick. Alternatively, you place a stop-buy order slightly above that upper trend line. Sometimes, it is prudent to wait for a breakout above the resistance line established by the highs of the cup.
Stop loss:-
You need a stop-loss order to get you out of the trade if after buying the breakout, the price drops, instead of rising. Your stop loss should be at a level that invalidates the pattern’s signal, and that level is below the lowest point of the handle.
Profit target:-
There are two potential profit target levels for this pattern. The first profit target is estimated by measuring a distance equivalent to the size of the handle, starting from the breakout point. The second profit target is estimated by measuring a distance equal to the depth of the cup, again, starting from the point of the breakout.
Trading the bearish Cup and Handle pattern:-
The bearish Cup and Handle pattern forms a downtrend and is traded as a bearish breakdown signal. So, you can use it to go short on the market if you want. This is how you trade the pattern:
Entry:-
You have a sell signal when the price breaks below the lower trend line of the price channel that forms the handle. There should be a spike in volume when this breakdown happens. You may go short at the close of the breakdown candlestick, or you place a stop-sell order slightly below that lower trend line. It might be wise to wait for a break below the support line established by the lows of the inverted cup.
Stop loss:-
When you are trading the inverse Cup and Handle pattern, you should place your stop loss order above the highest point of the handle.
Profit target:-
Two potential levels are good for your profit target: the first profit level is estimated by measuring a distance equal to the size of the handle, starting from the breakdown point, while the second profit level is estimated by measuring a distance equal to the height of the dome (inverted cup), starting from the point of the breakdown.
Trade with care
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📉📈 ZigZag IndicatorZigZag's primary goal is to focus on significant swings and trends by removing insignificant and misleading price changes.
ZigZag connects the price's highest and lowest points using straight lines while ignoring minor swings.
ZigZag just aims to make sense of the market's previous movements; it makes no attempt to predict the price of an item.
It is only based on hindsight and is not predictive in any way. It is based on the past prices of securities and cannot forecast the next swing highs and swing lows.
🟢Advantages
It eliminates market noise and displays the most significant price fluctuations.
It operates in several timeframes.
When utilized in cooperation with other technical indicators, it gives positive results.
🔴Disadvantages
It will mark the latest high or low of the price with a time lag.
The last stretch of the indicator (the one that involves the current price) may be redrawn.
Not predictive in any way, has to be used in combination of other strategies to be effective.
👤 @AlgoBuddy
📅 Daily Ideas about market update, psychology & indicators
❤️ If you appreciate our work , Please like, comment and follow
NASDAQ: TRADE RESULTS | 3000 POINTS PROFIT FLOATING 💸Trade Results: Went up a decent 3000 Points worth of profits during the bullish run as expected with our analysis.
Analysis: Breakout and pullback on the key level highlighted. Expecting a bullish reversal here to revisit the pinned price levels on the chart.
Thanks for visiting my tradingview profile. Hope the chart update helps you out. If you like the content do hit the thumbs up and follow me for future updates. 🙌🏻😎
📌For more details regarding this chart update, please message me on tradingview chat. Thank you!
💨 Elliott Wave Pattern: Single Zigzag 🌊
❗❗ 𝙍𝙪𝙡𝙚𝙨
● A zigzag always subdivides into three waves.
● Wave Ⓐ always subdivides into an impulse or leading diagonal.
● Wave Ⓒ always subdivides into an impulse or ending diagonal.
● Wave Ⓑ always subdivides into a zigzag, flat, triangle or combination thereof.
● Wave Ⓑ never moves beyond the start of wave Ⓐ .
● Wave Ⓑ always ends within the price territory of wave Ⓐ .
● Wave Ⓒ almost always ends beyond the end of wave Ⓐ . (failure to comply with this requirement is called «truncation»)*
*guideline, but should be followed as a rule
❗ 𝙂𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨
● Wave Ⓒ should not fail to reach the end of wave Ⓐ by more than 10% of the length of wave Ⓐ . (Q&A EWI)
● In a zigzag, the length of wave Ⓒ is usually equal to that of wave Ⓐ , although it is not uncommonly 1.618 or .618 times the length of wave Ⓐ (rarely 2.618).
● Wave Ⓑ typically retraces 38 to 79 percent of wave Ⓐ .
● If wave Ⓑ is a contracting triangle, it will typically retrace 38 to 50 percent of wave Ⓐ .
● If wave Ⓑ is a running contracting triangle, it will typically retrace between 10 and 40 percent of wave Ⓐ .
● If wave Ⓑ is a zigzag, it will typically retrace 50 to 79 percent of wave Ⓐ .
● In a zigzag, if wave Ⓐ is a leading diagonal, then we would not expect to see an ending diagonal for wave Ⓒ .
● A line connecting the ends of waves Ⓐ and Ⓒ is often parallel to a line connecting the end of wave Ⓑ and the start of wave Ⓐ . (Forecasting guideline: Wave Ⓒ often ends upon reaching a line drawn from the end of wave Ⓐ that is parallel to a line connecting the start of wave Ⓐ and the end of wave Ⓑ .)
● Waves Ⓐ and Ⓒ within the zigzag often appear in the form of impulses, but more often alternate according to the type of motive waves: if wave Ⓐ is an impulse, expect wave Ⓒ in the form of a diagonal, and vice versa. It is much less common to find waves Ⓐ and Ⓒ in the form of diagonals, but in this case they will alternate in form: contracting / expanding, and vice versa. (TWEWA)
● If a similar amplitude and duration of waves Ⓐ and Ⓒ within a single zigzag is expected, the line passing through the top of Ⓐ , which is parallel to the line connecting the beginning of wave Ⓐ and the end of wave Ⓑ , often turns out to be the level of completion of wave Ⓒ . In case of a extended wave Ⓐ within a single zigzag, expect the wave Ⓒ to reach the middle line of the channel, and in case of signals in favor of a extended wave Ⓒ , it is worth resorting to the technique of doubling the channel to determine potential support or resistance. (TWEWA)
__________________________
🔗References:
Elliott Wave Principal 2005
Trade Waves / Elliott Waves Analysis (TWEWA)
📚 Elliott Wave Guide & Ellott Wave Archive ⬇️⬇️
Neo Wave Learner doubtWhat is the difference between projection overlapping and "obviously different in price and/or time" in NEO Wave? In Pre-Constructive Rules of Logic, Rule#1, Condition_b, Paraghraph_4, it states "If part of m2's price range is shared by m0 and m3 is longer and more vertical than ml during a time span equal to (or less than) ml and m(-1) is shorter than ml and m0 and m2 are obviously different in price or time or both and m4 (or m4 through m6) returns to the beginning of ml in a time period 50% of that consumed by ml through m3, a 5th Extension Terminal pattern may have completed with m3; add ":c3" to ml's Structure list."
Here, m0 and m2 should share price range, which means projection overlapping, at the same time, it is mentioned, m0 and m2 should be obviously different in price&/time.
Experts please help..
Also, Mr. Neely mentioned, "m1 is longer than m3" in few other places, does the length means, by means of distance between 2 price points or by means of time distance or should i consider a multiple..
Apple. World largest stock looking for new “host?” 4/Jan/23AAPL, apple as world largest market cap stock in the world benefiting from “low rate” for past 40 years. Howard Marks have “ warned” the end of 40...Probably capitalist might take few years ( consolidation in most equities market) looking for “new boss”.?
Wave Auction Theory & WHY it worksSup, this is the 30th & the last post that concludes all the previous ones, and finally reveals the name how I've called all this - wave auction theory. Well, me as a creator of all this (or more like a mixer, a DJ lol) I think about it more as a theorem, but that's for nerds and geeks to work it out, me I just wanna flexx.
If you take a look at all existing market theories their main thing is they all attempt to divide market activity into parts. Patterns, El waves, Wyckoff market states, then what Steidlmayer created (I call it Interval Auction Theory, since he divided market activity in parts by days, weeks, months etc). The main problem with is all these concepts (maybe except the last one) dem are not well defined, and they apply on the fractal market something that the highest resolution of this fractal (raw tick chart) doesn't have.
Wave auction theory ain't superimposing any exogenous structures on the market, such as "crowd behaviors", nah, it doesn't guess and predicts anything, it derives the principles and structures from the sequences of fundamental particles of the market - ticks, and it can be used fully on this fundamental resolution. This is the most fundamental principle how you can divide market activity without any subjectivity: waves and levels. Btw, indirectly, we also gain the interval size information by choosing the right resolutions, while interval auction theory disregards sequence of events (read my post about market & volume profiles).
Why it all works
It's a lil bit recursive kind of thing, you need to read all the statements below multiple times in different order, then your brain will start making the whole picture out of it, and finally things will come together, you'll feel that "snap" in your head. It's the best I can do.
* Market is fractal => all the principles propagate through all the resolutions;
* Market is a feedback loop, market is ALL of us together, that famous "composite operator" that Wyckoff tried to explain to people around him, that composite operator is All of us - the collective;
* Each individual entity in the collective has different voting power = better you operate = better the market = more revenues & capital you have = more voting power you have;
* We all have all the same data => we can gain as much information as there is in the data;
* Data on every resolution has information where it is, it was, or it will be cheap or expensive, every1 gains it with different degree of precision, but essentially every1 gains the same info because it's the same market & same data;
* The only thing that works all the time in all the cases is being an operator (a market maker) aka you buy cheap and sell expensive;
* Market making happens on all the resolutions, be it 1 minute or 1 week chart, on the former it might be one dude with 100 shares, on 1W it might be 100k dudes with 100 shares, the collective is always there, even on yearly charts;
* More data & information you have, the more question of "what's going to happen in the future" transforms into the question of "what IS happening NOW";
* market works on the principle I call "GTC Naive" (good till cancel Naive forecast), meaning that "the stuff's gonna continue the same way UNTIL there's an event/evidence that'll change it";
We all make the future, how can we not know what we're making ourselves if we have the info and exogenous factors are not numerous and secondary at best, and the system itself is quazi-closed? Still gonna try to analyze log returns? xD
Everything is already decided, we've decided all of that ourselves having the same data & same info xdddd
All the prophecies are self fulfilling prophecies by definition lmao, they are consequences of sequences of choices made by every1 through all the timeline. While loosing precision we gain generality => are able to understand what IS happening NOW. Not even contra intuitive aye?
The good side point of all this is that now you can rewatch Matrix movies (all of dem) and finally understand the dialogs between Neo and The Oracle (the parts her telling him the choice is already made).
Coming back to the theme, I share all this because I think that markets are sadly unhealthy, there's ENORMOUS room for liquidity provision for centuries to come on Ks of assets. Better we gonna operate, more clients = more volume will come to the markets => better for all of us.
The last several things I wanna share:
1) You can approach designing an automated agent (a bot) by following principle, smth I call "sMATEs framework";
- s: selection of assets that will end up in your masterlist;
- M: management - choosing between the most potent timeframes & assets within the assets in masterlist;
- A: analytics, seeing what's happening on your chosen data, choosing the signal generation method aka strategy accordingly;
- T: trading, generation the actual signals based on the strategy chosen before;
- E: execution, processing & fine tuning the actual executions based on the signals;
-s: sizing: choosing the quantities based on equity control and what the market can give.
The two small Ss are the only levels where you need to use ML. Reinforced learning for sizing based on order book & equity chart of a given agent. Then you can use ML & AI to form the masterlist, based on what you want. Generally you're interested in action or as I say in MEAT (ain't no vegan bruh sorry).
2) Each market has its own main cycle set: set of properly chosen optimal resolutions & time frames & rolling window lengths (no, there's nothing to optimize there & no need in dynamic lengths). I think you can figure it out reading all the posts & studies I've posted lately.
I can give a hint: if you want to divide smth, you always try to divide it by 5 first. If you can't by 5, then by 4. If you can't by 4, then by 6. If you can't by 6, then by 3. If you even can't by 3, then by 7. And omg if you can't by 7, then in theory it's by 2, but not on our planet with our modern time system. Look at the 2 centuries of S&P chart in this post and see what I see.
3) If you a coward, or an overconfident prick, or a cheater, or a lier, or a snitch, you wont't succeed. You'll succeed if you're real & legit, in this case it's only a matter of time.
From there it seems like my path goes somewhere else, but this is the way, all good TV, was fun.
Remember, there's no noise, only the truth
Higher resolutionHigher resolutions aka lower timeframes have several uses:
HIgh res levels
1) For more precise entries past the positioned levels. You have a level on your current resolution, a level you want to use, let's call it "X". You turn in higher resolutions, and scale in around the levels there, past the X;
2) For precise entries during positioning. You have a level that you expect to be positioned 'that way', let's call it "Y". You turn in higher resolutions, and scale in around the levels there, past the Y. An example on the chart is exactly about that. Suppose we expected a 1M level (red line) to be positioned as support. We've opened 1W chart and scaled in at 1W levels below the level;
3) Overridden levels. Forgot to mention, just as overridden waves, overridden levels do exist. It really concerns an imaginary level called value aka fair price. Usually, when you have an overridden wave -> value level in the middle of this wave, the real levels around value exist only deep in higher resolutions, and are already cleared, long time ago. So, they kinda "reactivate" again inside an overridden wave, near the value;
4) For scaling out. When offloading risk, you don't want to do it at the levels that You, yourself, expect to be cleared xD. And that includes the levels from the high ress.
HIgh res waves
1) To fine tune the location of back levels. Positioning of a level on a given resolution is a so called pattern seen on higher resolutions. I can't say much about the predictive power of dem patterns, but can say for sure that fine tuning the back levels by finding boundaries of these patterns is a good idea;
2) Simply monitoring the action on higher resolutions gives information about what's happening around your levels of interest. Everything explained in "Current resolution" can be applied there.
You may come up with more uses. The main part is to understand what higher resolutions are: less data in greater detail. Now how would you leverage this info?
Lower resolutionMore data on lower resolutions, smth that others call higher timeframes.
Low res waves
While being on a given resolution, the lower resolutions are mostly used to understand the trends within the overall fractal. In general, you want to trade along with the strong low res wave, and don't trade against an exhausted low res wave. While being on given resolution, you're interested in all the lower resolutions, not only in the first adjacent one. So if you operate on 1H charts, you also need to consider 6H, 1D, 1W etc, not only 6H.
For example, imagine being in a strong up trend on 1W chart. It won't go 4 ever. There's no exhaustion in 1M wave. But here we go, and exhaustion on 1Q chart. And "suddenly", the levels on 1W chart start to position as resistances! Before that, the overall trend on 1Q surely showed some weaknesses, but there was no evident evidence. This kind of info could've been only gained from more data.
Low res levels
Now that's really interesting. As I mentioned somewhere before, while being on any resolution, ALL the levels from ALL the lower resolutions should be monitored. That's why people say that it's harder to trade on lower timeframes (higher resolutions), simply because they don't know that simple fact I just mentioned. They see a reversal "in the air", but, as you already know, there's always a level. So, a level from 1Y chart does matter on 1 minute chart. Yes, it does. How?
The action around low res levels are somewhat common with the action around option strikes. In a sense, it's a microstructural phenomena as well. Without further analysis, what you know 4 sure is that low res levels might produce reactions, even if a level is from 1Y chart and you are on 1 sec chart. In general, they allow rapid price moves to come through, and produce reactions when prices approach these levels in normal way.
Why? As you know, it becomes cheap/expensive PAST the level, never before. Now imagine price comes to a level in a usual manner, or even slower. Chances for a deep dive past the levels are low. What you do? You scale in closer to the level. And now imagine price flying fast. It'll make sense to scale in deeper with a bigger size, to get better prices, to reduce risks. Why not if the market activity allows it?
It's a 1H chart on the screen there, and the yellow level is a support from 1W chart. Take a look how the 1H action unfolds around that level.
Forget about chart patterns! Hello, my dear friends and happy New Year!
I wish you to be healthy and reach all your goals in trading and not only! Never give up on this difficult way which we are going to overcome together!
Today we have a very important topic. How to use Elliott waves instead of classical chart patterns. This is the natural exposure why the chart patterns are garbage. I remember my third year at university when we have the trading lessons. Our teacher gave us a lot of useless knowledges about support, resistance and chart patterns. I have not understood why it should working and it was not soo intereting subject for me. That’s why I returned back to trading much later using self-education. Now I have the clear understanding why Elliott waves is the best tool and why it’s working. Most of traders even don’t understand that chart patterns is just the special case of Elliott waves. That’s why today I decided to explain you how you can change the first one to the second one. Let’s go!
Double Top(Bottom)
On the chart above I drew the different types of double tops. Generally we have 3 types of this pattern
Double top with the second top higher than the first one. In this case we can interpret it in two ways. It could be the classical waves 3, 4, 5 and the corrective wave A at the ending stage. In this case we can anticipate waves B and C. Also it could be the irregular correcton ABC inside wave 4 (rarely in wave 2). In this case we should wait for the wave 5 after that. Traders usually execute short position on the neckline breakdown and suffer when the wave 5 smashed their stop-loss. They are wondering why double top does not working.
Double top with the equal highs has the same possible outcomes. The only one difference that correction called flat instead of irregular.
Double top with the second top lower than the first one. Here is the most common variant is the end of the ABC correction. In this case we have the low potential for shorting the market becuase the new impulsive wave to the upside can hit all stop losses.
Head & Shoulders
This is the easiest pattern for analysis. The right sholder usually is the wave 4, the head, obviously is the wave 5 and the right shoulder is the wave B. On the neckline breakdown we have the shorting potential only in the rest part of the wave C. You could correctly count waves and short that the bearish reversal bar of the wave 5 or, as a last resort, at wave B potential top. Shorting at the neckline has sence only if you are sure that the wave B was the the wave 1 of the impulsive wave to the downside if higher degree and now the market is in wave 3. We have to learn how to count waves in a correct way. I would recommend you to read the Trading Chaos book by Bill Williams because it has the best explanation how do waves work.
Triangles and Wedges
This part is common for all types of triangles (ascending, descending, symmetrical) and wedges (falling and rising). This patterns have the similar structure. If we faced with one of these patterns we have 4 possible scenarios.
Triangle in the downtrend after the wave 3. In this case triangle is the wave 4, which is represented as the triangle correction. This correction type consists of 5 waves A, B, C, D and E. When the wave E is finished market will continue it’s move in the direction of a trend, printing the wave 5.
The same, but in the uptrend.
When the market showed us the 5 waves cycle to the upside and the correction is in progress. Triangle can appears in the wave B. In this case the price will continue the corrective move in the wave C after it’s finished.
The same with the downtrend.
Guys, of course there are much more types of chart patterns. For example, tripple tops and bottoms and so on. The purpose of this article is giving you another view of the market structure and to motivate you studying the Elliott waves theory. Believe me, it has much more potential than it seems on the first glimplse.
Best regards, Ivan
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Number of Sunspots and Inflation CYCLESHi friends
Today im going to explain about the relationship between Sunspot Numbers and Inflation rate from 1960 to now.
so lets start with inventor of this theory : William Stanley Jevons's
In 1875 and 1878 Jevons read two papers before the British Association which expounded his famous "sunspot theory" of the business cycle.
Digging through mountains of statistics of economic and meteorological data,
Jevons argued that there was a connection between the timing of commercial crises and the solar cycle.
it called 5.31-Year Cycle too.
In the stock market and in the economy, there are both natural frequencies and artificial excitation frequencies.
The four-year presidential election cycle is a great example of an excitation frequency, and it has demonstrable effects on stock prices.
The schedule of FOMC meetings 8x per year is another possible example of an artificial excitation frequency.
When a demonstrable cycle period appears that one cannot tie to some manmade excitation frequency,
then the supposition is that it is a "natural" frequency of the economic system.
Something about the economy or the market results in an oscillation on a certain frequency which may not have a good outside explanation.
Perhaps it is in how money flows. Perhaps it is in how human brains make decisions about surplus and scarcity. It is hard to know.
This 5.31-year frequency in the CPIs cycle seems to fall into that category as a natural cycle,
because the 5.31-year period does not match any known excitation frequency related to human activity nor the economic calendar.
So that makes it probably a natural frequency.
In above chart , there does seem to be a relationship between sunspots and the inflation rate.
We see lots of instances when the peak of the sunspot cycle coincided with the peak of the inflation rate.
There have been spikes in the inflation rate not tied to the sunspot cycle, such as the spike during the Arab Oil Embargo of 1973-74.
this examples did, interestingly, come at the halfway point of the sunspot cycle, fitting the half-period harmonic principle(5.31 year cycle).
The current rise in inflation fits both the longstanding 5.31-year cycle and the upswing in the sunspot cycle.
Solar researchers expect the current sunspot cycle rise to end in July 2025, which is 3 years from now.
But the 5.31-year cycle says a top in the inflation rate is expected right now.
That would mean seeing the inflation rate bottoming around 2025 just as the sunspot cycle is peaking.
Sometimes cycles present us with conflicts that are hard to reconcile.
The point of the 5.31-year cycle that we can take away for right now is that the inflation rate should be falling for the next ~2.2 years.
But that does not mean we get to zero percent inflation right away.
The drops take a while to unfold. Inflation is likely with us for a while, and we have to get used to that idea.
HOW-TO: Wolfe Strategy [Trendoscope]Just made this short video to explain the concepts of Wolfe Strategy which I recently published.
Wolfe wave is popular concept among option traders. However, I have made some tweaks in this strategy to standard wolfe pattern trade rules.
Entry price based on breakout
No moving target - using flat target.
Entry is done based on risk reward
Not time bound
Intelligently decides whether to place stop order or limit order
Few possible future improvements
Make bidirectional trades possible
Better filters to chose long and short trades or when to trade
Lot can be improved on Wolfe scanner to identify more patterns
Exit strategy - can introduce optional trailing
Thanks for listening. Hope you enjoyed and learnt something from this :)