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J200 trade ideas

1 Sentence that will RUIN you as a traderWhat if I told you, it can take one sentence to blow it as a trader. Say it once and you’ll set a ripple effect. Before you know it, you’ve given up and leave the trading journey with pure frustration… Wanna know what this one sentence is? “I’ll take the next trade”. Yep that’s it! When you have a winning trading strategy, with strict entry, risk and exit levels – you are no longer the boss. You are a worker. And your job is to follow your job description or risk losing your job. Think about it… The system works with or without you. And if you follow it, you’ll generate a stable and consistent income. So, it is not your place to decide which trades you feel you want to take or not. Think about your back and forward tested statistics. Do you think there’s a robot that says… “Mmm let’s skip that trade my feelings tell me it’ll be wrong.” No, it records each and every trade one the criteria lines up. Here are some ridiculous examples of where traders don’t take trades. “It’s my birthday and I don’t want to lose money”. “I have banked 5 winning trades and I feel the next trade will be a loser’. “I’m on a losing streak and I don’t feel like taking another loser”. “Oooh I’m not going to take a trade, Elon Musk just tweeted ‘stock trading is over rated'”. And I can go on and on… So why will that one sentence ruin you as a trader? Here it is again: “I’ll take the next trade”. Reason #1: You’ll keep looking for the perfect trade Not only will you choose the trades you take, but you’ll also lose the confidence in the trading system and yourself whenever the next trade lines up. Reason #2: You’ll do it again and again You’ll set a precedent for not following your trading setups in the future. Reason #3: You won’t be able to keep a strong track record You won’t be able to jot down your trades with accuracy in your trading journal. Reason #4: Your emotions will get the better of you You’ll start thinking that you know better and refuse to accept the inevitable losses that come with trading. Remember, nothing in life that is rewarding comes without some degree of risk. By taking every trade your strategy yields, you’ll get to the point where you’ll enter into a long-term state of certainty and confidence with your trading.
JSE:J200Education
by Timonrosso
1
10,000 Hours to Master Trading?Welcome to another Trading Myth Buster’s episode. This is where I take the old adages and see if we can bust them or not. Today’s adage goes to… “You need 10,000 hours to master something”. Let’s first break this up into how many days this will take. If you practise an art of something for 30 minutes a day… 10,000 hours equates to 300,000 minutes. We then divide that by 30 minutes and of course we get 10,000 days. Divide that by 365, and here’s how long it will take you to master something… Drum roll… 27 years! However, most professionals practise 8 to 10 hours a day – hence them being able to master the art in a short time. This is definitely plausible if you want to be a professional ballet dancer, golfer, cricketer, rugby player and even a chess champion. But no ways in hell, should it take that long to learn how to trade. I am just the exception but it’s because of what was available when I started… So please bear with me, on this side note… In 2003, when I started, it took me 10s of thousands of hours and years and years, to learn how to be a successful trader. This is because of a number of reasons: I spent two years studying both technical and fundamental analysis Each year I learnt and adapted a new trading strategy I back-tested and forward tested countless systems I had no one to show me the way I made unnecessary and timely mistakes Charting platforms and education were extremely limited I traded from morning up until 4am trading different markets I went back to the drawing board trying to find what works, year in and year out I entered into limbo mode for three years living in doubt and thinking trading was a scam So as you can see, I wasted thousands of hours of finding out HOW NOT TO TRADE… Made countless mistakes and wasted a ton of money – without having someone to direct me. But I pushed through it all and eventually found my feet one day. And so, yes it took me a lot longer than what it should have. So how many hours do you need to learn HOW TO TRADE? If a trader follows a path of a successful trader and method, it should not take more than 10 months to get their feet off the ground. Here’s how I calculated this time for learning to trade: #: 1 Month – Learn the basics to advanced theory #: 1 Week – Adapt and learn a proven and trusted trading strategy #: 1 Week – Back-test and journal 20 trades with different markets #: 4 Months – Forward test 20 trades with the proven strategy using a demo-account #: 4 Months – Real test 20 trades using a proven trading strategy with a LIVE (real money) account Here’s how to follow the foot-steps of successful traders The above is how to master the art of trading on your own… But having said that, you’ll still most definitely need to learn the mechanics of: How to trade CFDs How to take a trade How to adapt money management rules How to develop the mind of a successful trader This is a subjective and introspection journey that you need to run your own marathon. Take your time, go with your own energy and day by day you'll get closer to achieving your trading goals. And the more you do it, the quicker and more effortless it will become.
JSE:J200Education
by Timonrosso
How to be a LASER Trader!Rinse and repeat. That’s it… It’s one simple little acronym you’ll never forget… Ready? LASER your TRADES 1: Look The first thing you’ll need to do, is to go through your watchlist very quickly. A watch list is a list of markets you’ll LOOK through when finding trades. These markets can range from anything including shares, indices, commodities, currencies and crypto-currencies. When you have your watch list, you’ll go through the list and get a feel for how the markets have moved for the day. Example: Before I trade anything, I LOOK at the JSE All Share 40 stocks that are in my watch list. I then run through them briefly to see how the markets are performing. 2: Analyse The second round of going through your watch list, is where you’ll look for specific trading setups. Whether you trade using price action, patterns, indicators, volume etc… This is where you’ll ANALYSE the charts individually. Also with this step you’ll write down potential trades that are lining up. 3: Setup The third step is to go back to the markets that you’ve written down – which you’re looking to trade. You’ll then do your simple trading calculations and place your chart SETUPS so you can see where your trading levels are. EXAMPLE: If I see a trade that’s lined up, I’ll draw horizontal levels showing where my entry, Stop loss (risk) and take profit (reward) levels are… I like to use: Blue for entry Red for stop loss Green for take profit 4: Execute You’re ready to JUST TAKE THE TRADE! And then you’ll place your entry, stop loss and take profit levels. You’ll choose how many CFDs you’ll need to buy according to your money management rules. And then hit trade! 5: Record As soon as you’ve successfully taken the trade, head over to your journal (excel document) and record your trade transaction. That’s how to be a LASER Trader… And on a daily or weekly basis, you’ll repeat those steps…
JSE:J200Education
by Timonrosso
Investing and Trading Should be Easy!My Background I was a young man working for an Insurance company and being a quiet trouble-maker with a healthy affinity for analysis of numbers, I was thrust into a position that fed this desire to the max. My boss then told me, "Runya in this job you must have a sixth sense, insurance agents earn commission and if they get a chance to falsify numbers to get paid they will do it, you are the gate keeper". Those days insurance agents would put fake business through, get paid and the claw back (recouping paid commission) would be few months later. Some would then abscond starting a lengthy process or using current commission to recover the monies. It was at this point that I also became interested in representing workers, Zimbabwe at the time was going through hyper-inflation so salary increases were a seriously contested area, the employees needed me for my analytical skills, to corner the employer and show why they could afford the 100-200% salary increase. It is in the debates with company executives that we always ended up scrutinizing what money was invested and where. The bulk was in the Zimbabwe Stock Exchange, those days shares were moving hundreds of percent. With our meagre salaries we jumped into the money making machine, everyone was trying to beat inflation and beat the exchange rate. Buy today, sell a week later with 2000% profit and hope by time funds cleared you would be able to buy the US dollar making a gain. I remember the adrenalin rush, it was insane. Often we lost the battle waiting for funds to clear forcing us to buy again. The Money Lesson See as a child my father died, I could tell at his funeral that he was a notable employee at the national airline, pilots, general managers all came to pay last respects. Later I learnt he had worked hard, to each child he left a sizable amount of money. We all had bank accounts where funds were put, the bank was called Post Office Savings Bank (POSB). In today's money it would have been several thousands. We let that money sit in a savings account and at that time the economy was undergoing structural adjustment guided by IMF, inflation was ravaging this money so much that within 2 years it was all gone. What followed was substantial suffering to near destitution. Though I was young, the experience from plenty to nothing was rather intriguing. Trauma leaves a mark on all of us, with me being introverted meant I digested things long after they had reason to be at the back of my mind. Back to insurance, I was now able to piece together how money worked. The confusion of childhood was now finding answers. It was like the universe conspired to put me in a place where my confusion would be solved. I also got a front row view of the monster called inflation and the unfairness of the pension and retirement management companies. While we argued to be paid fairly, management would tell us the money sitting on the balance sheet was for policy holders. On the other hand the same policy holders who had put hundreds of dollars, some from as far back as 1980s, were being told their policy value was not enough to afford a loaf of bread. Many would not travel to claim the matured policies for they would spend more in transport charges that the payout. So it happened that insurers saw the paper obligation go to zero, while the assets purchased by premiums from those paper contracts multiplied to match inflation. Long story short, policies got wiped out, insurers gained assets with no obligations tied to them, it was a sad situation. Into the Markets I started doing analysis, the very basic, buy low and hold, sell at a profit. I have analyzed some great opportunities where I could have turned $200 into $20,000. But I saw them and said I would act on them later, later I never got the change but serious regret as that money would have saved me a recession. I lost my job abruptly during the Great Financial Crisis. By 2017 I went back to the markets, I knew my greatness was in there, I strongly believed I could teach people to be careful, to think of their pensions and manage them differently especially in Africa. I put a lot of time into studying, listened to many hours of Anton Kriel, he sounded convincing being an ex-Goldman Sachs employee. I listened to the likes of Lance Beggs who traded by the minute and the likes of Rayner Teo whose ways were an adrenalin rush. I thought I was ready, read the candle patterns and bed on them. It didn't turn out so well, I lost something close to $10,000. Being an introvert, adrenalin was not doing me good, blood pressure spiked. I was losing more than I was gaining, everything was complicated on the right side of the chart, history is easy to read, telling the future was a wild animal, untamable. The world of trading is complicated, one must find where their personality fit, some prefer to be glued to many screens constantly. I was not cut out for that clearly. I wanted some certainty so I can relax and not bother what price was going, if ever I did I would look quickly and finding a convincing reason why things were so. I started learning cycle analysis, I began solving for time rather than price. The things I learnt through earlier traders were great, I credit Lance Beggs for his comprehensive tutorial and candlestick patterns. But I felt I arrived when I came across Malcolm the cycle analyst. It was hard learning cycle analysis, having had many failed attempts, I was skeptical. The more I dug into it, the more it made sense. Today I use mostly cycle counts to determine price direction. In my trading ideas, I simplify it leaving out technical jargon so that the man on the street or just starting can follow, confirm and profit from the ideas. Conclusion The goal is to build a trading and investing system that anyone can use especially the financially illiterate. The misfortunes I suffered, I am certain I can save many from that kind of calamity. I have spent the past 3 years building data into Google Sheets, some semi-automated updates here and there. I like what I am building and by end of 2023 I want to be covering JSE, NYSE, ASX & LSE (FTSE). I believe what big corporates have made a complicated process, we must make it simple and if possible make money from there. In Africa money must not be dormant, it must not be subjected to buy and hold where one does Dollar Cost Averaging (DCA) & pray after 10 years it will be twice or more. In Africa one must ensure money is always on a voyage, moving from profit in one market and into cheaper alternatives but ready to move towards profit. This is because the challenges in Africa tend towards economic bust, if one can use the limited time to build a war chest spread across major bourses, they can save themselves and many from poverty. I believe in innovation and that it can lift Africa somewhat from poverty, however only when we can turn our dollar into ten dollars can we think of putting five dollars into innovation. It begins with getting good returns relative to time. Slow but sure can work for others, we need speed to catch up. The ideas I share, I usually go over them and ensure I share where confidence levels are high. I used to share ideas before I was good, I saw many were not going as planned, I quit. It is great discomfort to share something that can lose a person money. So stay tuned as we try to disrupt the markets for Africa's sake. It's possible!
JSE:J200Education
by runyamhere
5 Reasons why others trade VS why I tradeIn the last 20 years, I always love asking this one question. “Why do you want to trade?” Have you ever written down the reasons why you want to become a trader and what your true motivations are? When you answer this question, only then you’ll become more clear with the goals you wish to achieve and how to achieve them. Here’s one clichéd answer, I don’t want you to write down… “I want to make money”. This answer is lazy, impersonal and it tells you and me nothing about who you are truly, deeply and emotionally. If you think trading only teaches you one aspect of your life… I believe your eyes are still yet to be opened with the incredible possibilities that trading will bring you. And so, in this article I’m going to share a few reasons for why people want to trade. And then, I’ll share a few reasons why I trade… Here are 5 reasons why people want to trade… Reason #1: Diversification “I want to diverse my portfolio with different asset classes. This way I can produce a stream of income through long-term investing via stocks and property, short term trading with Premium MATI Trader and medium term investing through index ETFs.” Reason #2: Hobby “I have spare time and money. And what better way than to spend my time trading and making an extra income while doing something I love?” Reason #3: Monetizing my ‘down-time’ “I’ve earned the same income for the last seven years and now I want to earn an extra income during my off-hours too. For the first time in my life, trading has helped me make money while I’m watching Netflix and spending time with my wife”. Reason #4: Invest for my family and kids “Most people depend on portfolio managers and hedge funds to invest their money for their family. I’ve decided to trade the funds I have for my kids instead and take control of the growth of their inheritance through trading.” Reason #5: Keeps me sharp and well-informed “Trading might not be making me super rich yet, but I got to tell you this. It is keeping my brain sharp, well-informed and helps with my skills with decision making.” These are some of the reasons I’ve heard, which have stuck. Now I want to share with you five extra reasons why I trade… 5 Reasons why I trade! My reason #1: FREEDOM – Earn your own income when you want I want the freedom to trade and build an income stream on my own terms, times and conditions. My reason #2: Independence – Be your own boss Trading gives me the platform where I am responsible for my own trading results. This gives me full independence where I take pride with my own financial decisions. It gives me the place where I can grow my portfolio in a way that suits my personality and risk profile to a T. My reason #3: Extremely fun – New career Trading is not a job… This means, you don’t have to do it… But rather it’s an extremely productive and fun hobby to make your free time work for you. This hobby is not like sports or gym where your reward is more on the physical side. Trading is where you gain many different mental skills and bank a consistent income once you get it right. My reason #4: Mind control – Control your emotions Trading well means you have to lose at times. and when you do, you need to be able to cut out the ego and ‘baby tantrum throwing side’ away. You learn to grow up, develop a thicker skin and become a mature trader. This is one of the greatest benefits to learning to trade. It gets to the point where, after you’ve taken hundreds of trades, whether you take a loss or bank a profit, you’ll stay content. You embrace failure with open arms, because you know that it’s one step towards winning. My reason #5: Life skills – You learn risk, rewards and probabilities Once you have mastered the four elements to trading success (Markets, Methods, Money and Mind) you develop a very strong understanding of concepts like: Risk & reward management and probabilities. This won’t only apply to trading but to almost every aspect in your life. You start taking accountability of events into your life. Predictions turn into probabilities. Risk evolves into calculated acceptance. And you start to see things as they are, rather than what you want them to be… SO WHY DO YOU WANT TO TRADE?
JSE:J200Education
by Timonrosso
1
20 Checklist Items in 2023 for YOUR TradingI wish you all the health and happiness, this year has to offer. To kick you off this year on a strong note, I’ve prepared a quick 20 item checklist which you can use for your trading. Save this as a guide for 2023. Let’s go… 1. Save and deposit a portion of your money every month, into your trading account to grow it faster. 2. Cut down on social media and save 15 minutes of no distractions a day to trade. 3. Re-look and evaluate your watchlist, which fits your strategy. 4. Don’t let the news, your friends or anyone interfere with your trading signals. 5. Never extend your stop loss in a trade where you can lose more money. 6. Be more mindful and accept when market trends change. 7. Never miss a trading idea that lines up according to your strategy 8. Celebrate taking each trade that lines up according to your proven strategy. 9. Ask trading questions so you’re never left in wonder. 10. Journal and jot down every trade that comes your way to build your trading track record. 11. Screenshot and save every trading setup, to remind you on how your strategy works live. 12. Find the best time that suits your trading personality and system. 13. Stop overthinking everything, once you’re in your trade. Let it be. 14. Watch every reputable trading stream and lesson on TradingView you can, to boost your knowledge. 15. Don’t fall for scams, get-rich-quick schemes and sensationalised marketing copy or posts on social media. 16. Trust and enjoy the process, week by week. 17. Persist and persevere through your own trading time-line and don’t compare yourself to others. 18. Only take trades when your trading strategy gives you signals 19. Only do what you love and love what you do – don’t waste your time on anything else. 20. Remember to say this when you’re feeling down. “YOU CAN ONLY GET BETTER”. I trust these resolutions will help you through the year.
JSE:J200Education
by Timonrosso
Why Trend Lines are Powerful with Trading The closest predictor indicators when it comes to trading are: Price action and volume. I’m going to talk a bit about Price action today as Volume is a whole different cattle of fish. With TradingView charting platform there are a few indicators to identify a trend: Trend lines, Bollinger Bands, Moving Averages, Candlesticks and other bands and channels too numerous to mention. #1: Trend Lines – Trend detector Trend lines are perfect for pointing out the direction of the market. Trend lines are a useful tool for identifying the direction of a market. They are a straight line that is plotted through a series of data points. You can either plot a straight diagonal line to determine whether the market is going up or down. Or you can plot horizontal lines to identify ranges, sideways consolidation areas. That’s because trend lines plot through a series of data points on the charts to help point out whether the trends are moving up down or sideways. There are a number of benefits with using trend lines including: • Trend directions To help identify the overall direction of the market, whether it is trending up, down, or sideways. • S&R levels Point out key support (floor levels) and resistance (ceiling levels) These are great for points of entry. • Chart patterns and breakout levels Chart patterns are also used with trend lines. Especially neck lines, brim levels, box formations etc… • Points of reversals We also use trend lines to wait for a break in structure. Once this happens, we can see if the market is about to change direction and reverse. • Convert chaos into order End of the day all technical analysis and price action is used for confirmation bias. To apply to a strategy and to make calculated and informed decisions on what to do if something happens. Almost like a If this then That! I’ve used trend lines and price action since 2003 and they remain an important element to trading analyses. End of the day, the market can only move up, down and sideways. And you know why? Because the famous psychology of demand and supply will always work. And so they are here to stay and we might as well take advantage of it.
JSE:J200Education
by Timonrosso
3 Awkward Stages for a Trader!There are three awkward stages that every successful trader will go through. You can’t escape them. And let me warn you. The more successful you become the more awkward the stages get. Let’s get to them. AWKWARD STAGE 1: You are ridiculed First when you start out as a trader, you get nothing but doubt from everyone around you. You hear things like “It’s a scam” “You’ll blow your account” “You won’t last long” “Get a real career” This stage is purely based on one reason. Those who doubt you are either not traders and are clueless or they failed themselves and are now basing their failure on others. This can be quite demoralizing for you when you just get started. Also this is the starting stage where you’re trying to find your feet. I’d suggest you go where you are appreciated, rather than tolerated and ridiculed. Find a community of members that are starting out and a group that have been through the trial and error and are now succeeding. Once you’ve passed the ridicule stage, it doesn’t get any better just yet. AWKWARD STAGE 2: You are attacked This to me is the worst stage. Because as you’re finding your trading personality and risk profile, other traders get all up in your business. They tell you how wrong you are. They tell you how you’re not making any money and worse they gang up on you. I remember in 2009, I was doing ok as a trader. I joined a couple of groups on Skype and Facebook. And when I were to buy a trade (based on my strategy), the rest of the members attacked me by saying how wrong I was and that I’m going to lose all my money. And I just felt out of place by being called the contrarian of the group. I never attacked their analyses, I never tried to bring them down and I never interfered with their trading. I was then kicked out of many of these groups and was referred to as an emotionless robot. This once again left me as the loner trader with no community to relate to. Don’t worry about these people. Most of them have blown their accounts by now and still don’t know how to trade. Keep going and just keep trading. You’re doing well and don’t need this negativity. And then you’ll enter another awkward stage once you’ve progressed as a trader. AWKWARD STAGE 3: You are ignored Yep… You can make a living as a trader for over a decade. You can be at the maturity phase of your trading. You can be a multi-millionaire. But you’re still going to be ignored, by a number of groups. First, you’ll be ignored by pretty much all of the people who attacked you in the second stage. Second, you’ll be ignored by the egotistical traders just starting out and think they know better. Third, you’ll be ignored by nearly ALL of the trading companies that sell the false dream of making millions as a Forex trader. I’ve learnt that everyone wants you to do well, but not better than them. And I feel very sad for humanity, who think like this. I celebrate all traders who mean well, whether they are new to trading without any money saved up or are multi-millionaires. I even celebrate those who are much wealthier than I am... Because we are all on our own trading journey to success and time. Don’t worry about others, just focus on you!
JSE:J200Education
by Timonrosso
Money you can get back as a trader - Time you can't!When you're YOUNG you have time and energy but no money. when you're an ADULT you have energy and money but no time. When you're RETIRED and old you have money but less time and little energy. So, yes you can make mistakes, yes you can learn to trade, and practice for a bit. But DON'T do the following: Make BIG financial mistakes - Because that time to recoup it may be too late. Procrastinate with when to trade and why to trade - every day is an opportunity lost and an opportunity cost. Bite the bullet and do it well and risk aversely. Jump from winning strategy to winning strategy because of drawdowns. All trading strategies come with drawdowns and trading in the financial markets can be a highly profitable endeavor, but it can also be a time-consuming and stressful one. If you approach your trading with ONE strategy that suits you with a clear mind, a solid strategy, and a disciplined approach, you can maximize your chances of success. As I like to say. It is better to have 9 years of experience trading 1 strategy than 1 year of trading experience for 9 systems. It makes sense in my head. Let's focus on the power of 1 and your time will be worth the wait for when you achieve your trading success. Trade well, live free. Timon (Financial trader since 2003)
JSE:J200Education
by Timonrosso
HOW IT WORKS: RSI (Relative Strength Index) IndicatorThe RSI is a popular momentum indicator used in technical analysis. It was originally developed by a mechanical engineer turned technical analyst J. Welles Wilder Jr. It was first published in a 1978 book, “New Concepts in Technical Trading Systems” and in Commodities Magazine (Futures magazine) in June’s 1978 issue. Today the RSI is one of the most popular indicators used to measure the speed and change of price movements. In other words, it measures the strength of its trend direction (up, down and sideways) on any market by monitoring the changes in its closing price. THE MAKE UP The RSI is a line graph that moves between two extremes… On the vertical axis (Y-Axis) the RSI line moves up and down in a range between 0 and 100. NOTE: As the indicator is between a range, it is considered a closed indicator. On the horizontal axis (X-Axis), the RSI line moves to the right which is plotted as time. NOTE: You can choose your own time frame i.e. days, hours, minutes etc… For all you technical boffins… If you want to know how the RSI is calculated, I’ve saved this at the end of the article. As a trader you won’t need to worry about the maths at all. Three trading signals you’ll use with the RSI 1. Overbought and Oversold levels 2. Patterns and Trend lines 3. Bullish and Bearish Divergences Trading signal 1: Overbought and Oversold levels When we see the market’s price move up, this means the buyers are outweighing the sellers. And the more higher closing prices we see, on a market, the higher the RSI line moves… When we see the market’s price drop, this means the sellers outweigh the buyers. And the more lower closing prices we see, on a given market, the lower the RSI line moves… However… If the buying continues at an unsustainable rate, the RSI will reach a point that traders call OVERBOUGHT (top heavy). This is where we could start to expect the price to drop from these levels and for the market to enter into a correction (dip). If the selling volume continues at an unsustainable rate, the RSI will reach a point that traders call OVERSOLD (undervalued). This is where we could start to expect the price to turn up from these levels and for the market to enter into a recovery (upside). Now that you understand overbought and oversold terms, let’s explain what I mean with the RSI chart. Overbought RSI: 70 (Sell opportunity) When you see the RSI line touch or cross above 70 (Red horizontal line), this is considered an overbought situation. At this point, traders may start to anticipate that the rising trend is about to end. Traders may then start to prepare to sell and short their positions, as they believe the market’s price has run up too much. If the market then turns down and starts to drop in price, the RSI line will drop below 70 and head back to equilibrium at 50 (Black horizontal line). Oversold RSI: 30 (Buy opportunity) When you see the RSI line touch or cross below 30 (Green horizontal line), this is considered an oversold situation. At this point, traders may start to anticipate that the falling trend is about to end. Traders may then start to buy (go long) their positions, as they believe the market’s price has dropped too much. If the market then turns up from the 30 mark and starts to rise in price, the RSI line will move back to equilibrium at 50 (Black horizontal line). Trading signal #2: Trend lines & Patterns The second way to spot buying and selling trade ideas is with trend lines and patterns. Uptrend confirmation To confirm the strength of the market’s uptrend, you should be able to draw a support (floor level) under the high low RSI prices. And when the RSI breaks below the support line, it could signal the end of the uptrend and a start to the next bear market. Downtrend confirmation To confirm the strength of the market’s downtrend, you should be able to draw a resistance (ceiling level) over the lower RSI high prices. And when the RSI breaks above the resistance line, it could signal the end of the downtrend and a start to the next bull market. These are great confirmation and reversal trading signals to use with your strategy. NOTE: You can also base your buy or sell ideas on trading chart patterns… Trading signal #3: Bullish & Bearish Divergence The third signal I use to spot trade opportunities with the RSI is looking at the market’s price VERSUS the RSI’s direction. In short… BEARISH DIVERGENCE – Warning for downside If the markets price makes higher lows, while the RSI makes lower highs – it’s a warning for DOWNSIDE to come. BULLISH DIVERGENCE – Sign for upside If the markets price makes lower highs, while the RSI makes higher lows – it’s a signal for UPSIDE to come. Either way with both bullish and bearish divergences, the RSI fails to accept the current market’s price movements. And so it is making a probability prediction that soon the market will make a reversal in its current trend. Ok so now you know how the RSI works. Let’s sum up what we learnt. RSI Summary in 3 Trading Signs: Trading signal #1: Overbought & Oversold levels Overbought zone X > 70 = Selling opportunity Neutral zone: X = 50 Oversold zone X < 30 = Buying opportunity Trading signal #2: Trend lines & Chart patterns Uptrend confirmation: RSI makes higher lows (draw support line) Downtrend confirmation: RSI makes lower highs (draw resistance line) Breakout confirmation: RSI breaks out of a chart pattern Trading signal #3: Bullish & Bearish Divergence Bullish divergence: Market’s price – lower highs RSI – higher lows Bearish divergence: Market’s price – higher lows RSI – lower highs Here’s how to calculate the RSI The most common (default) settings for the RSI is 14 (Which we’ll use)) There is a two-part calculation with the RSI. Part 1: Calculate the RSI (step 1) RS or Relative Strength is (Average Gain ÷ Average Loss) Average Gain = (Sum of gains over the past 14 periods) ÷ 14 Average Goss = (Sum of losses over the past 14 periods) ÷14 Calculate the RSI (Step 1) Part 2: Calculate the RSI (Step 2) Once you have this result, we then smoothen the RSI result with part 2… And so that’s how the RSI continues with each closing price of the time frame you choose. Trade well, live free. Timon (Financial trader since 2003)
JSE:J200Education
by Timonrosso
5 Signs You’re Doing GREAT As A TraderMoney should not tell you how well or bad you’re doing as a trader. Percentages should reveal that all. It’s all RELATIVE. And so, in this TradingView piece, you’re going to go through a five signs checklist to see how well you’re doing as a trader. Sign #1: You have a personal trading strategy Do you know what: System you’re going to use to enter and exit your trades? Markets you’re going to choose? and Risk management principles you’re going to follow? And have you found that system that matches your personality and time preferences? If so… AWESOME! Tick it off the list. Sign #2: You’ve developed realistic trading goals Once you’ve got your trading strategy in a bag, you should have all your goals written down. Have you jotted down your trading strategy, stats, goals and expectations? This is your game plan that you’ll need to follow when you trade. You need to see what kind of outcomes you’re going to have with your trading. • How many trades will you take per year? • How many winners can you expect? • How many losers will you take? • What is your win rate? • What % of your portfolio will you expect to achieve? Sign #3: You’ve experienced a bad trading patch I feel this is the initiation side to getting to a higher level as a trader. When you have the strategy and goals in a bag, you’ve got to then put it all into play. And during this time, there’ll be once or twice a year a couple of weeks where you’ll go through a bunch of losing trades. If you have the right money management principles, you should be able to EASILY weather through this time. The markets move up and down and sideways… And during one of these periods, it will NOT fit well with your system. But let me tell you this, once you’ve gone through your drawdown period, and the markets become more favourable. It is the most exhilarating feeling, for your portfolio to make new highs once again. Go through this my friend, and you’ve ticked off another sign you’re doing GREAT. Sign #4: You continue to EVOLVE Sure, the trading strategy might not change. The risk management side won’t change. But there are a few things that will change, that you’ll need to adapt into your trading. First, markets, stocks and currencies are unlisting and listing ALL the time. And your trading strategy requires a watch list that works best with your system. So, you have to evolve to dump and add markets into your watch list that complement your trading strategy. You might also find a technique to increase your win rate and ride your winners up. If you can evolve as a trader, TICK it off the list. Sign #5: You are INDEPENDENT Do you care about your family, friends, pets and strangers opinions on the trades you take or have taken? No? GOOD! Tick it off the list. Nobody in this world, can tell you what to is right to buy or sell according to the strategy you use. You have the stats, you have the goals and you have your game plan. So how did you do? Trade well, live free... Timon (Financial trader since 2003)
JSE:J200Education
by Timonrosso
53 Important Trading Acronyms and AbbreviationsHere are 53 trading acronyms and abbreviations to remember and apply to your trading. I’ve also listed them in alphabetical order to make it easier to spot! ATH - All Time High ATM – At the Money ATR – Average True Range BB – Bollinger Bands B/O - Breakout Be - Bearish BE - Break even BOS - Break of Structure Bu - Bullish CFD – Contract for Difference DD – Drawdown DMA – Direct Market Access EMA – Exponential Moving Average E/R - Earnings Report ETF – Exchange Traded Fund FA - Fundamental Analysis FOMC – Federal Open Market Committee FOK – Fill Or Kill FX – Foreign Exchange (Forex) GTC – Good ‘Til Cancelled HH - Higher High HL - Higher Low HOD - High of Day HFT – High Frequency Trading HTF - Higher Time Frame ICO – Initial Coin Offering IPO – Initial Public Offering ITM – In the Money JBTD – Just Buy the Dip LH - Lower High LL - Lower Low LOD - Low of Day L/S – Long or Short LTF - Lower Time Frame MA – Moving Average MACD – Moving Average Convergence Divergence MS - Market Structure OI – Open Interest O/N - Overnight OTC – Over the Counter OTM – Out The Money NFP - Non Farm Payrolls P&L – Profit and Loss PIP – Percentage In Point PRE - Pre Market R/R - Risk / Reward RSI – Relative Strength Index S/R - Support and Resistance SL - Stop loss TA - Technical analysis TF - Time Frame TP - Take profit YTD - Year To Date Can you think of anymore? Let me know in the comments. Trade well, live free. Timon (Financial trader since 2003)
JSE:J200Education
by Timonrosso
1
Don't lose a part of yourself when taking a lossLosing a part of yourself with a loss is a common experience for many traders. When you're in a trade it's easy to get caught up with emotions. When it's going your way, you almost feel like you've banked a winner. When it's going against you it feels like you're a failure and have lost already. You got to work on it and stop both feelings from taking over your trading. There is financial loss but more important emotional loss. Take the financial loss as a simple cost of running a business. But NEVER get caught up with the emotional cost of failure. Rather drop your risk per trade even more, until the point of losing or gaining has no significance to your emotions. Achieve that and you'll know your risk profile and where you are right now as a trader. Work on it and it gets easier over time. Trade well, live free. Timon (Financial trader since 2003)
JSE:J200Education
by Timonrosso
1
JSE ALSI showing strong upside thanks to China & January EffectJSE has been forming a fantastic Cup & Handle since March 2022. The price broke up and out of the brim level and I want long and bought it. 7>21 (Bullish) Price >200SMA (Bullish) RSI >50 (Green back) Bullish The first target is 83,209 It seems like despite the economic crisis with load shedding, water outages - The rand has gone up a bit since inflation slowed at 7.2%. Naspers and Prosus are also helping the JSE head on up with the run up on China since the Covid restrictions. I guess the January Effect is still strong and we should continue seeing upside to come - touch wood. Trade well, live free... Timon
JSE:J200Long
by Timonrosso