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U.S. Dollar / Polish Zloty

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USDPLN trade ideas

usdpln is bearishUSDPLN is an exotic currency pair that consists of the US dollar and the Polish zloty. This trading instrument is attractive mainly for traders and investors from Poland. Besides high volatility, the pair’s movement is hard to predict. When performing fundamental analysis of the movement of USDPLN quotes, one should pay attention to important political events in Europe and, in particular, in Poland, as well as monitor changes in the two countries’ main macroeconomic indicators. In the Polish economy, international trade and services occupy the first place, while the second place is given to the mining, manufacturing, and shipbuilding industries. The country’s exports go to Russia, Germany, and Great Britain. The US economy is more developed than the Polish one and is focused on the service sector and trade. The USDPLN pair reaches the peak of activity in the European sessional period - during the operation time of the exchanges located in Poland.
Short
by MtICHI
Trade Like A Sniper - Episode 46 - USDPLN - (17th June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis using ICT's Concepts in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing USDPLN, starting from the 3-Month chart. If you want to learn more, check out my TradingView profile.
Education
by Road_2_Funded
2
USD/PLN: Triple Confirmation Sparks Bullish MomentumUSD/PLN is pretty interesting from a technical point of view, it has held over its 10-year uptrend at 3.85, held over support on a weekly closing basis from January 2022 on the weekly chart AND completed an inverse head and shoulders pattern on the daily chart, with an approx. upside measured target to 4.14. Each of these indicators individually would suggest a bullish outlook, but collectively they reinforce a compelling case for optimism. Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
Long
by The_STA
AI in trading - 6 hottest topics (part 1/2)In this article, you'll learn about six of the most critical and "hottest" elements that make up or are associated with AI today. In addition, you'll learn the basics of the tools that will shape the future of trading. First in the biggest and wealthiest funds and then in smaller ones as well. I invite you to take a journey into this near and far future of trading. NLP Natural Language Processing is the common name for many tools to analyze written and spoken text: company documents, press articles, news, analysis, web pages, social media posts, company’s product reviews. Advanced NLP software recognizes context up to about a thousand words. That's a lot, and soon, there will be more. NLP allows you to analyze many features of text, such as: - whether the text about a particular company is positive or negative, - whether it is clear and transparent or obscure and convoluted, - whether the authors express themselves positively or negatively about the future. When we analyze texts of reports and press statements, it turns out that all of the above elements can be a good indicator of future financial performance. Social media texts Already now, the analysis of posts in social media and online shops allows determining the sentiment - the opinion about the company and its products, which usually precedes the financial results. Sometimes it is also possible to find and analyze the sentiment of different investor groups about the company and its future which also affects the share price. "The stripper that will change our World" The next gigantic step in the evolution of NLP come from extracting written knowledge from millions of books, academic articles and other texts and help create coherent theories of how the economy, or supply chains, works. This development will give theoretical and practical insights into the factors that affect the financial performance of companies, industries and all relevant economic processes. Already today, we see the first signs of the creation of such tools. Spoken text NLP also covers spoken word analysis: statements from TV news, films, other video material, or telephone conversations are automatically transcribed and subject to the same analysis as written content. Thanks to this, we now have access to knowledge about the level of Forex volume. The systems analyze the volume at major banks and brokers and traders' volume over the phone. Until last year, data on this was not available in real-time. I will find out if anything has changed yet and write about it in future issues. I know that there were plans to provide this volume in real-time as well. Machine Learning Machine learning is dozens of tools for machine problem-solving. But today is different than you might think. We are in the first phase of the evolution of these tools. To understand this and to understand their potential, I will give a practical example: how does solving a problem using machine learning tools look like... In simple terms: 1. the process consists of problem formulation and preparation of a mathematical model (specialist), 2. further collection and preparation of data (specialist), 3. selection of one of the ML solutions (specialist), 4. feeding the software with data (specialist), 5. data processing (software), 6. finally, we have the interpretation of the obtained result (specialist) - someone has to explain the result in non-mathematical terms. Only one element of this sequence is automated - the fifth. All the rest requires the use of specialists' knowledge and experience. Today, the real driving engine of AI is... the specialists. And it will remain so for a long time to come. "Real AI" is still very, very scarce. Over time, each step will be done automatically. Only then will we see the true power of machine learning and AI. We are at the beginning of this journey, the first stage of evolution (and I believe there will be five). I didn't want to start this thematic series by describing ML tools. I preferred to show their current place in general. In the future, I will describe some Machine Learning solutions and how they are used to create trading systems. I will also give examples of such systems so that you can form your own opinion about them. What is worth knowing is that despite the impressive achievements of AI-related technology, this is just the beginning of this revolution. It will change everything we know. We are only at the beginning of the AI revolution. It will change everything we know. XAI or Explainable AI It is currently probably the hottest topic in AI. Some ML tools are so complex that we don't know how the machine got the result, how it made the decision or the recommendation. We call them "black box" for short - it's dark inside, and we don't know what's happening there. Nevertheless, the math behind it is excellent, and the results are often astounding. So, we have a result, but we don't know how it was achieved. We don't know because the process leading to the development is very complex and has many steps. And if we don't understand "how it works", then several problems arise. I will describe them for the case where we have a black-box that gives input and output signals: - beyond simply allocating a small % of capital to the position, risk management becomes problematic; - we have little or no control over the position (except for the exit); - we don't get the most out of a tool we don't trust. And this is a problem when we have spent several million in its creation; - we don't know if a given series of losses is temporary because the market has changed, or maybe the system has stopped working for a given market. So it will only lose from now on. And since the results are good, we will try to explain how it works in one way or another. The problem of finding an explanation and education for exploiting the potential of AI will also run through the following issues. For a fund that employs traders, this problem is as practical as it gets. A trader in his seventies would like to know how much money can be made on a "black box." For example, let's take a trader who is 75 years old, active and, on top of that, a co-owner of a fund. And he would like to find out how "this new thing" works because it may be worth increasing the capital that this "new toy" has to use. But how, without knowing what's going on inside, define the trading framework? What risks to assume, a reasonable capital commitment, when difficulties arise, and what to do when they do? Moreover, after all, we have to adapt to the boss's scope of knowledge and experience. Thus, for example, we cannot start the lecture with the geometry of differentiable manifolds and Kullback - Leibler divergence for probability distributions (such mathematics can be used there) if he has no idea about it. It is a fascinating problem. Important enough that we are preparing for publication a broader article on this topic: how to explain and help traders understand new tools, in particular black-boxes. How to estimate risk, build confidence, define a framework in which they will feel safe with the new device. Someone who has an easygoing boss already thinks they can relax and not bother explaining the operating principle of their wonderful black box. But, unfortunately, this is not the case because other people on the horizon would like to know how it works. There are several groups of such people. Those who want or need to know what's going on inside The first would be the law regulators and the courts. The Financial Supervisory Commission may want to know if, by any chance, the recent large positions, as claimed by us placed by a "black box", are not an instance of insider trading. If you have a similar idea of defending yourself in court (from being accused of insider trading), then know that it makes no sense. We may not know what is inside, but the signal must appear again after simulating the conditions created by the signal. Then we have the risk management department, which would also like to know how it works or at least what it resembles. All they have left is to allocate a small amount of capital to the signal. A black box position is like a plane without windows. We take off on command, fly with no way to tell where we are and land on command. The only assurance of safety is the statistic that, for example, a position is profitable six times out of ten. This value means that we have four hard landings per every ten take-offs. It is a moderately comfortable situation, although in some cases, it will suffice. Has the system already stopped working? Now, we have something even less pleasant: if we do not know the rules of decision making, we cannot be sure that a given series of losses is not the end of the system because the market has changed and the previous rules no longer work. Exaggerated? Maybe, but only a little. The use of various AI tools will only grow, including black-boxes, and this has to be dealt with one way or another. The major funds already have some prescriptions for what to do. In future articles, I will describe them. The topic is even more important because, for the vast majority of non-mathematicians, i.e. traders, portfolio managers, C-level managers, practically every AI/ML tool is a black box. For some reason, explanations such as dealing with a multidimensional, differentiable manifold immersed in a vector space do not help. Explainable AI fits into a broader trend - most people and traders have no idea what new tools do. There is a great need to explain to users how AI/ML tools work, what they provide, their limits of use and when they stop working. Education is vital because a fund's competitive advantage will soon be created at the interface between the team and the tools, AI systems. Competitive advantage in the future will depend on the so-called structural intelligence of the company. The largest funds are already working in this direction, although they can not name it so cleverly. We will also devote quite a few articles to this in the future, which is one of this magazine's goals. If you liked this post, give it a boost 🚀 and drop a comment so we know to publish more for you. Cheers!
Education
by drSwierk
Improve your decision-making process in tradingThe trader's decision-making process is one of the most important concepts in trading for me. Why? Results depend on a good process. So what is a trader's decision-making process? Generally speaking, these are all the thought processes, analytical processes and decisions you make from the initial analysis ("idea") to the closing and analysis of a position. The entire thought process that goes on in your head. This approach came to my mind, even imposed itself when I thought about how AI in trading would make decisions - the best possible ones. Then the same principles were already obvious in application to traders. And still later it turned out that the best traders have specific elements of the decision-making process, practically absent in other traders. That's enough history, now what came out of it... What is a trader's decision-making process? A trader's decision-making process (or the decision-making process in trading) consists of two components: rational (analytical) and emotional. The more experienced the trader, the more importance he attaches to the emotional component - but in a specific sense. This does not mean that emotions dictate to the trader what to do. Very experienced traders treat their emotional state as an additional source of information, and are able to "stand by" and hear the voice of intuition above and beyond the emotional noise. To quote one experienced trader: "If I feel pressure in this situation it means that others in the market also feel it. The one who can withstand it better will win." What does a trader's decision-making process consist of? Let's break down your decision-making process into components. 1. It starts with analyzing the markets and choosing an instrument (specific stocks, specific currencies from the available pool - for example). What factors drive your choice, why did you choose this instrument and not another? Here we have the first decisions. On what basis do you make them? This is important, because if you start thinking about how to improve your decision-making process in order to have better results - you will understand that... perhaps it is possible to choose better. I'll state how the best do it: they learn to choose the best inputs from those available to them. In the sense that if they specialize in a certain sector of companies - they choose shorts or longs with the best views of profits. Of the many opportunities that are available, they try to choose the ones with the best prospects. The best traders try to choose only the best opportunities from among what is available in the markets they trade. They don't trade on everything. What does this mean for you? It means that you can, and even need (!) to work on your criteria for selecting an instrument, so that you choose the one on which you will find it easiest, on which you will earn the most (potentially). The selection criteria may be different for different Treders. In the case of AI systems, their development goes something like this: searching for the best opportunities from what is available. At the same time, it will take a fraction of a second to search, for example, five thousand companies in this regard. And from this vastness, the system will select, for example, 100 for further analysis and trade. I mention this to begin to slowly make you aware of what analytical and decision-making power you are dealing with, because you won't jump over it. But let's get back to the decision-making process. 2 We have selected for example, the best companies, what next? Let's assume that we want to enter the market, as long as the criteria are right. And here comes another question: where, among the selected companies, are the best situations? A simple example: we want to trade longs on companies with good fundamentals. Our selection factor at this stage of the decision-making process may be volume behavior. We are concerned with entering such movements, where volume is clearly increasing - which suggests that the interest of buyers is growing. At this stage we will rank the selected companies according to the best situations of increasing volume. Somewhere the volume is too low, somewhere it is too high, and the price is not rising much (which is not the best option). So we have several companies with the best situation at this stage. In this example we used volume, but we can analyze more elements: candlestick formations, Fibonacci levels, MACD, CCI and thousands of other indicators. We can also use confluence of indicators and situations, for example, the price reaches the average 200 from the top, is close to resistance and at the Fibonacci 62% level. Here several things meet at once, it can be an interesting decision-making place. With several combinations to choose from, ask yourself which indicators are best for your purposes? 3. Now it's time to decide how much capital you will invest. A trader's decision-making process is a series of analyses and decisions. Each distinct element of the decision-making process you can improve, address from different sides, analyze and improve according to different criteria. This gives you the opportunity to improve your results - improving one by one each element on which these results depend. How does the trader's decision-making process differ between experienced and novice traders? According to a study of institutional traders - less experienced traders use emotion avoidance strategies in the same situation. This makes a difference and a barrier for beginner and intermediate traders. The best traders are able to withstand a lot of long-term pressure by entering into it consciously, while less experienced traders at some point succumb and run away from the same position. Both groups of traders differ in experience, but not only - they differ in their strategies for dealing with emotions while trading. Because it turns out that not only experience matters. Studies show that traders with very high trading experience (e.g., more than 20 years) and not using strategies for working with emotions like the best traders - have poorer results. To give just one example: getting to the TP - due to the pressure of the markets, traders often run away from positions, emotions, the pressure on the psyche is too strong. The psyche is the filter through which all decisions pass. And it can disturb each decision and each step - from the initial analysis to the execution of the entry. The way you handle your emotions in trading allows you (or not) to survive chaos, volatility, uncertainty and panic, allows you to continue to enter the market when others have long given up, opens new doors to results. Proper handling of emotions is essential to a trader's correct decision-making process. A recipe for improving trading performance with the help of a trader's decision-making process In short: break down the way you make decisions into components. Learn as much as you can about how you can improve each of them. That's not everything, of course, but that's all you need to start with. In the future, I'll write more about the next steps and the best practices you can use there (click follow to get notified). If you liked this post, give it a boost 🚀 and drop a comment so we know to publish more for you. Cheers!
Education
by drSwierk
What are the traits of the best traders?This article is hugely important, especially for traders outside the funds. The basis is to observe the best traders, specific behavior when they are successful. Interestingly, the same behavior is observed in the most outstanding athletes, businessmen, members of elite special units. The best of the best, when they are successful - they want to be even better. That's why - they don't stop educating themselves. They continue to learn about their strengths and weaknesses and work on them. They continue to train, research, develop technical skills - in our case, knowledge of markets, new analytical methods, new sources of advantage, new strategies, indicators and tools to facilitate their work. Professional development has become a lifestyle for them, something they do regardless of success or failure. The success they enjoy is certainly rewarding, but it is also contextual, an (inevitable) by-product. Interestingly, they often derive more satisfaction from this effort than from the success itself: in the market, in business, or from completing a very difficult mission. For them, learning, developing, overcoming themselves is a way of life, a passion that consumes them, a blessing that brings them success and a curse that consumes virtually all their time. In short - their secret is passion Passion enlightened, by that I mean that you know your strengths and weaknesses well and work with specifics. And if we're talking about specifics, we're also talking about measuring results, states, progress. But that's a story for a completely different article, which I'm sure will be written at some point. What are these qualities of the best traders? The trump card of the best trader consists of 2 parts, and in order to systematically make money you should have both. technical psychological Technical advantage - I understand it as all the skills and knowledge that make up your trading system. Do you know what exactly your advantage is? To show the extreme advantage I will use the example of the best traders. Everyone else has some kind of advantage "between" the best and the weakest (who do not have these qualities at all or at a very low level). What creates the advantage of the best traders? Access to unique knowledge, preferably before everyone else. Knowledge of companies' plans, new products (which is unavailable to others), especially in the case of stocks. The ability to reliably estimate the performance of companies before they are published Knowledge of political changes and their impact on markets Use of alternative data Taking advantage of market formations that pay well and that others don't know about. To this we can add: knowledge and ability to use technical analysis finding specific entry points and methods using formations that others have overlooked or using what is known, but in your own unique way How to build an edge in trading? The advantage of the best traders is usually built from several things at once. It can be a hybrid of several things, for example, they can use their knowledge of company movements, identify entry points through technical and volume analysis, and execute the entry itself through an automated system that makes great use of liquidity. The advantage of the best traders can come from better tools, e.g. to build positions, to maximize positions (there are some in the largest funds) improve performance and simplify life. You will find your advantage if you answer the question: on what basis do I make decisions about the choice of an instrument (company, commodity, currency...)? Some systems are based on fundamental analysis, macro analysis, company analysis, supply and demand analysis (e.g. commodities), then we have technical analysis, price and candlestick formations and a host of indicators. You will see your advantage (or lack thereof) when you ask yourself, what is unique about your system? You may answer that you are using, for example, well-known price formations, triangles, flags or similar. However, this may mean that you are doing the same thing as everyone else. There is nothing wrong with that if you are trading on a small scale, privately or as a hobby. However, if you are or want to be a professional trader this is not enough. Formations, elements of technical analysis sometimes work and sometimes not. If something is repeated over and over again, large traders will enter the market and use the accumulated orders for their own entries (stop hunting is an example) and your advantage will disappear sooner rather than later. A pattern that worked very well will suddenly cease to exist. The best traders not only know exactly what their advantage is, but also go to great lengths to improve it. This article is not intended to give you a ready answer of what to do and how to do it, but rather to point out a problem that could cost you a lot in the future. You should, like the best traders, know exactly what your trading advantage is and build on it. If you don't know that, I hope I patted you on the shoulder and told you that you fell asleep at the wheel. Nothing bad has happened yet, but you've already fallen asleep. So what is your advantage? Let us know in the comments! If you liked this post, give it a boost 🚀 and drop a comment so we know to publish more for you. Cheers!
Education
by drSwierk
Elliott waves - a tool to predict the most rapid ups and downsOn January 22, 2020, the rising cycle on the S&P ended and the declining cycle began. Apart from this one tool, there was no indication that we were about to experience historic declines and the biggest panic in the markets so far. On March 6, 2020, the correction ended and the oil market entered a downward cycle. Only one group of traders was not surprised by this, they were prepared for it and made money on the huge declines. The others were able to read about the reasons for the declines in the newspapers - but only after the fact. This is not a coincidence There is one group of traders who systematically discover market turning points, regardless of the news hype and expert opinions. While others panic, these ones are prepared... That tool is Elliott Waves. A large number of institutional traders use Elliott Waves, either as a main or companion tool. One way to do this is to analyze closed structures. If an upward structure closes then we know that we have declines ahead. In January, it was clear that we were facing declines at a minimum to the 2500 levels on the S&P (that is, by about ¼, we just didn't know how fast they would happen). But within a few days the real drama began and the market fell even lower. Elliott waves work on currencies, commodities, stocks and indices (there is some specificity here, due to the composite nature of indices). Waves also help predict the movements of cryptocurrencies. A personal note about Elliott waves I have been watching waves for about 10 years, accounting for more than 6. Like many people, I consider it the most advanced tool of Technical Analysis. It is more than 90 years old, and is used by many traders from large banks and mutual funds. An in-depth understanding of wave action will come, I believe, in a few years with the development of Artificial Intelligence. Then we will be able to understand the interaction of factors that affect the price. Our current model is only in the preliminary stages of construction. The biggest benefits of using Elliott Waves No matter what system you use Elliott analysis will show you the possible course of the market situation. Sometimes it is well predictable. You will avoid many unpleasant surprises that will surprise other traders. Many traders use Elliott analysis to forecast possible movements, and use their systems to enter when the expected movement has already materialized. In other words, they trade after confirmation. Combining Wave Analysis with other Technical Analysis tools increases the likelihood of good entries. Focusing on: 1. trading in the direction of the trend indicated by the waves, 2. and on the strongest movements allows you to improve your results. Elliott Analysis helps to indicate which entries are better or best in a given market situation. It allows you to approximate the ranges of movements - both impulses and corrections. It is a good way to look independently at the TP (take profit of a movement). Wave analysis helps identify situations preceding strong directional movements. In such a situation, if you use another system you may have several, a dozen or dozens of good signals in one direction. Such situations are rare, but... they allow you to systematically build capital with low-risk entries. I will describe these situations in a moment: how to recognize them, how to prepare, how to enter them. Elliott analysis helps determine whether the market is in an impulse or in a correction, and often helps determine when, or at what level, the correction will end and we can have another strong impulse. Elliott analysis often provides early signals of the end of trends and the ends of corrections. Why do Elliott waves work? In part, it is a selffulfilling prophecy. Since the 1970s, waves have been widely used in large companies at least, as a context to describe market behavior. There are also funds, or divisions of investment banks using waves as a primary tool. Knowing exactly why they work is a matter of research. We will have the right answer in a few years. It will include the impact of seasonal cycles on demand and supply, the impact of other types of cycles, statistical analyses of market behavior and anomalies, analyses of social moods, analyses of the impact of production processes and supply chains, the context of political events (in the case of commodities, gold and currencies). Elliott waves may be the missing piece of the puzzle to build, test and refine the highest form of Artificial Intelligence in trading - General AI. What tools do the greatest traders use, or how it all started? I have often wondered what tools are used by the greatest, those who move the markets. This is how my adventure with waves began. One day I picked up George Soros' book "The Alchemy of Finance". The foreword was written by prominent billionaire trader Paul Tudor Jones. In the second paragraph, he mentioned Elliott waves as a tool that captures the economic, social and political context into one. At this point I stopped reading further, my interest turned to waves, I thought it was worth learning more. Today (2020) the situation has changed somewhat. For a dozen years or so, there has been an increase in the use of mathematical strategies (quant strategies) based on the study of statistical relationships. It has reached the point that today already most orders are executed by algorithms (more than 50% of the volume). Algorithms are based on a few market observations (underpinned by strong mathematics) and virtually every major strategy supports... the natural behavior of the markets. That is, markets act the same as they used to only... more. Certain classes of movements are stronger because a lot of algorithms go into them. This means that Elliott waves (in general) work the same way, only some movements are amplified. What tools are the biggest traders using, that is, what will the future look like? Algorithms analyze many types of data and, based on this, type the size and location of entries. Among the data we have fundamental data, alternative data (very fashionable for about 3 years), statistical data, technical data (in the sense - using technical analysis, but for now quite simple). This will be the future - currently built algorithms will use dozens of sources, analyze signals, manage risk. I believe that Elliott waves are one of the most advanced tools of technical analysis, and sooner or later they will be included, as one of the decision-making factors. Perhaps one of the main ones, just as the big "manual" traders do today. And this means one thing - waves will work even better. If one has experience with waves then one knows that one can try to account for all impulses and corrections, but from a trading point of view it makes no sense - there is no money there, the movements are uncertain and short. It is best to focus on the best situations, the least risky, and build entry strategies based on them - manual and algorithmic. The best will certainly be the well-known: wave 3, wave C, setup for wave 3 in wave C, trade for a reversal after a wedge in wave 5. There are also several less well-known. What's the fastest way to learn the waves? There is not much choice. The topic came up again in a conversation with a bank trader a few months ago. His new job uses waves, while he had his first contact with them. His problem was that he wanted to learn them as soon as possible - at least enough to understand the analysis he gets from the Analysis Department. He asked about books, about training, and for the first time I began to wonder what to suggest to someone who wants to learn waves quickly? The problem with current books is that there are too many words in them and not enough examples. In particular, not enough examples of waves and situations that traders most often trade on. Learning Elliott waves requires having a very large number of good examples. This is the fastest way - reviewing how the price drew impulses and corrections in the past. After a while, you learn to intuitively recognize possible settlements and set-ups to trade. This also applies if you want to use external analysis, you need to have your own independent view. Many details come out only when analyzing a specific chart. In a few years, with the maturation of AI, having alternative data and mathematical statistics, we will be able to determine which settlement - basic or alternative - is more likely. What are both types of settlements - will also show with examples. This is a key thing when building larger positions. One of the best books for waves The best book I know for waves is the position written by trader and head of the Technical Analysis Department of Union Bank of Switzerland (today's UBS) Robert Balan - head of global technical research (London AND New York). The book "Elliott Wave Principle" was recognized by the London Society of Technical Analysts as "the best book ever written on the subject". Indeed, it is the best. Few words, lots of diagrams and explanations. Due to the time (it was written in 1988) and publishing limitations - it is also not able to quickly convey the essence and show it with a large number of examples. In the meantime, several "shortcuts" used by wave traders have also been created, and I think they are also worth showing. The idea is to systematically repeat market patterns that are fairly easy to identify. I will show a few of them, because they help to better understand the operation of waves and for beginners can be a great help. A few sentences about waves in the context of the upcoming Artificial Intelligence revolution in trading Waves can complete the picture of market behavior when we use machine learning techniques. I think this will allow us to create an early warning system - when the characteristics of the market can change dramatically in a few minutes, when the algorithm holds a position or builds it. The market can go from weak, corrective behavior with low volatility to huge volatility, or when a strong and violent movement suddenly changes direction. These are typical problems known, predicted and solved by Elliott waves. Typical wave behavior (sudden changes in volatility /volatility/ and direction) is critical to the selection of samples on which we build the model. And here an important note - in addition to other characteristics of sample selection, we must have a way to estimate these two factors, otherwise any model we create will produce systematic losses. Every single one, 100% of the time. Good use of FE can improve both the profitability of the models and speed up the calculations, because we will take into account the (dramatic) variability in the nature of the data (strong variance change). By good use here I mean understanding, finding the regularity that governs consecutive cycles of low and high variance. This is a rough mathematical description of the situations that Elliott waves describe. A short note for beginners and intermediate learners You do not need to be able to account for all waves and every situation, because in retail trading it is not necessary. Stick to the best situations. The simplest ones. Waves in a nutshell: Elliott waves are used, as a tool to show the context of movement by professional traders. Major algorithmic strategies (quantitative strategies) amplify the action of Elliott waves in the market, based on several typical strategies replicated statistically. Over the next few years, there will be a struggle to create better forecasting tools to get into movements faster and build larger positions ahead of other participants. Nowadays, Elliott waves can serve you as a source of additional strategies as markets become more crowded with algorithms. They can also be used to find even better timing of entries so that positions get in before others. If you liked this post, give it a boost 🚀 and drop a comment so we know to publish more for you. Cheers!
Education
by drSwierk
Checklist: Challenges that even the best traders face (part 2/2)Challenge: Inner Strength - Uncertainty. Uncertainty is also a weakness that must be eliminated. It is the negation of "inner strength." An investor or trader who is uncertain about himself, his skills or his system is an investor who suffers systematic losses. Remember, however, that both overconfidence and overconfidence lead to losses. Mature traders are in an intermediate state, neither weak nor arrogant - they are attentive and alert, ready to react to the situation. Challenge: Inner Strength - Learning self-discipline. Any experienced trader you talk to will tell you that discipline is critical to their performance. I once read a study that traders who return from vacation have trouble disciplining themselves for a short time. This made me think that if self-discipline can be weakened by a vacation, perhaps it can be strengthened? From there it was only a step to looking for methods on how to do it. With help came modern brain research, neurophysiology and, again, special forces methods. How does a discipline learn the best? Most often through difficult experiences. Severe losses and mental transitions that force them to stick to rules and certain behaviors. A bank trader who started on his own account when asked how he learned discipline answered: Thru trial and error, I found whenever traders diverged from their routine they have the tendency to become sloppy and that usually is a sign of an impending losing streak and I have the scars to prove it. If you lose in three days the earnings you've worked six months for, you won't do certain things again. Meanwhile, difficult experiences are not the only way to learn discipline - just a rather arduous and risky way. I'm not just talking about the financial losses that are the inevitable consequence of a lack of discipline. I'm talking about something more serious - your psyche may not be able to withstand the strain. After a loss, you may want to trade back and, as a result, lose all your capital. I know traders who lost fortunes and left the markets. For some, the markets have damaged their psyche and they are unable to return. They would like to, but are unable to. That's why it's better to follow the right path, that is, not to expose the psyche to either too much loss or too much gain. Both can put a heavy strain on the psyche. Challenge: Inner Strength - Resistance to market pressure After learning self-discipline, we have building resilience to market pressure. The idea is that when entering the market with an order, traders feel different emotions and it is necessary to know what to do with them. For example - soldiers train shooting, but only on the battlefield it turns out whether they can act under pressure or not. That's when emotions and stress turn on, sometimes so great that it prevents action. I remember a story, probably from the Civil War, when it turned out that during a battle soldiers literally didn't know what they were doing. Back then, rifles were loaded with powder poured through the barrel. After the battle, many rifles were found loaded several times in a row. Soldiers loaded and did not fire. The record holder loaded the weapon more than 21 times! A trader needs mental toughness "in the heat of battle" in the market. Otherwise he won't get far. Challenge: the glass ceiling Let's go further. Another important element hitherto inaccurately known was the glass ceiling. This is the level of cash handling at which stress suddenly increases a lot. I have seen this in many traders, for example, one started with very small accounts and had this level at about $1,000. He was not able to break through, he was reaching and losing due to stress. The other, also a beginner had it at about 20 thousand. He felt severe stress, so he came up with his own way of managing cash. He started with a few thousand and when he got to 20 he would withdraw, leaving a few thousand. This gave him a comfortable trade and quite reasonable earnings. Challenge: Reacting to losses and... profits The next challenge is the reaction to losses and profits. This is actually one of the central themes in trading, along with stress, the glass ceiling and taming market uncertainty. This is where all the trader's skills come together. What we currently know: we have three areas of dealing with losses. Within them we have 23 methods, including basic and advanced methods, I will cover some of them in the future. Challenge: Zona For professional traders, a key element in their success is a state of mind, the so-called "zona." This is a state in which you are, on the one hand, focused and, on the other, fascinated by the subject of what you are doing. "Zona" is not specific to trading, it is specific to the human mind. Recall when you let yourself get caught up in a very interesting movie, book, something you were doing with distinct pleasure and satisfaction. Your senses are then sharpened, your concentration increases and everything goes as it should. It took us quite a while to understand two key things - where it comes from and what hinders it. We will address zonation in more detail later. Challenge: Correct decision-making process If you have it then your analytical skills harmonize with your decision-making skills, you make quality decisions. This is the most advanced level, where thoughts, feelings, emotions converge. Here the signal from the system should be made very and well, the execution must be of high quality and it is the product of high quality decisions. This may sound a bit esoteric, the topic originated as part of the management of quality policy in investment funds. An incentive system that does not burn out the best traders can later be based on HQT. If you liked this post, give it a boost 🚀 and drop a comment so we know to publish more for you. Cheers!
Education
by drSwierk
Checklist: Challenges that even the best traders face (part 1/2)You are about to learn about the range of challenges and dangers that can make it difficult or even impossible for you to succeed in the market. Remember: it is believed that most traders do not make money! I want you to familiarize you with these challenges today. We will look at them in more detail later. Getting to know yourself and your "opponent" is the first step to overcoming them and achieving success. These are challenges that, if not addressed properly, lead to losses. If you are already investing then you have probably encountered some of these problems. If not - everything is still ahead of you… Challenge: the system In addition to finding a good system and testing it, the main challenge is to learn this system to the expert level as soon as possible, because only at this level you can not only systematically earn, but also increase your position. You can use here the methods which accelerate learning. The simplest are: make your setups simpler, make relevant study materials, setting right goals for the next stages of learning, post trade analysis. At further stages of development - at the near-expert level, it is also worth using the Japanese Kaizen improvement method adapted to your trading. Challenge: Systematic Analysis If you want to make money it is not enough to just trade. You need to conduct analysis of your trading in the right way. I've seen studies of traders that unequivocally show that long-term, only those who learn from their mistakes, make money. Post-trade analysis is just a more fancy name for learning from your mistakes. If you don't learn from your own and others' mistakes then you just keep making them. Challenge: Milestone - convincing yourself that you can… earn on the market This is part of one of the areas of every trader's challenge - "Mind Management". In our research, we found that you have to go through a period of convincing yourself that you actually can systematically make money with the system you have. If you don't spend enough time on this - you will usually look for another system. Your path to profits will lengthen or you may give up. Therefore, the next goal after mastering the basics of trading (system) is precisely to convince yourself that you can make money with what you have. Without this, you won't be able to increase your positions peacefully later. If this stage is not there - traders enter a turbulent period of struggling with themselves and with systems. They buy and try every now and then another system, another, another, ... , and so on endlessly. Challenge: Mind Management (managing states of mind). The idea here is to provide methods of working with the mind so that you know how to eliminate your weaknesses as a trader. Interesting fact: methods practiced by the most elite special forces like NAVY SEALS apply here. If you are serious about your work then you should know what to do when something bad happens around you, how to deal with difficult situations - after all, this is about your money, the result of your work, sometimes many years. Mind Management consists of 3 levels: 1) The first is the level of the novice trader, who experiences all or most of the problems mentioned earlier. For the sake of argument, let me remind you that we approach them as challenges. 2) The second level is STM (Stable Traders Mind Basics and Advanced). Here the trader should know techniques for dealing effectively with stress, losses, glass ceiling. The time comes for techniques to "turn off" stress, control the internal dialogue, control the emotional stream and control the imagination function. The goal is to stabilize the mind and learn to actively manage it. The idea is to ensure that various states do not interfere with our trading. 3) The third level is MTM (Mature Traders Mind). Here the trader learns how to effectively deal with the extreme states that the market can induce in the psyche, and learns what elements of traits are worth working on in order to look at the market and trading the way very mature traders - the best ones - do. At this level, one of the goals is to achieve mental comfort in the market. Challenge: Recognizing and responding appropriately to emotions Greed, fear, hope, desire for a rematch, hesitation and confusion. Familiar? Some are unfavorable some can be favorable. It is important to know how they work, what they lead to and how to "manage" them. Challenge: Stress management Stress is unfavorable because it weakens your memory and reduces, the quality of your trading decisions, and this is a path to losses. There is a number of methods at our disposal, which have been instigated by the best, on how to deal with e stress in trading. These include, for example, controlling your state of arousal, managing your internal dialogue, or techniques borrowed from Navy Seals training. I will cover some of them in the future. Challenge: Inner Strength - Weaknesses and Strengthening Confidence. Let's start with the fact that each of us has some weaknesses. This is very human, we are not robots. The problem arises when someone wants to use these weaknesses against us. And that's how markets work. The best traders are aware of this and most often have learned it by trial and mistakes. What is internal strength? What is internal strength in trading? We will define it by listing a few situations and qualities that are necessary at that time: - When you are waiting to trade you need patience. - When you are entering the market you need courage. - When you are in the market you need mental resistance to pressure. To coerce yourself if you need to act or not act you need a strong will. In the long run, a strong will gives you self-discipline. In the area of "inner strength", the trader faces several challenges. If you are not self-confident, internal weakness makes it 9 difficult for you to place orders and then make it to the end of the order. Internal strength is not a sure recipe for success, but the lack of it is a sure recipe for failure. If you liked this post, give it a boost 🚀 and drop a comment so we know to publish more for you. Cheers!
Education
by drSwierk
USDPLN is time to UP?!USDPLN reached the long-term growth base plotted since 2011 - there was the first important minimum in the white growth tunnel. Interestingly, each subsequent minimum every few years is practically exactly 30 polish "groszy" (polish cents) higher. Would this indicate that what we see here is the place to start? :) For a long-term purchase of the dollar on this instrument? We reached the bottom edge of the tunnel. However, this is a bit tenous, because if EURUSD still has growth potential, it is rather impossible for the USDPLN instrument to stand still (consolidation) and the zloty not to strengthen further. Movements on USDPLN are always inversely proportional to movements on EURUSD in 95%. If you buy EURUSD, sell USDPLN. CPI in Poland is still falling every month - 6,5% in November this year. I wonder how much level 3.75 is possible to achieve currently on sale? Several zones of demand (tf 1 Month) are also important here on the way down, they can brake this move ...and other TL's. Also check Fibo levels. On oscillators in long terms the instrument is practically sold out. The idea is interesting and the place is worth paying attention to now all the time. Because if the zloty starts to depreciate, it will automatically start to lose against the Euro, the Swiss Franc and probably also against the British Pound, as is usually the case. However, currently the GBP and EUR have little room to fall against the zloty.
Long
by siZ
1
How to choose a trading system to fit you?Today I want to address the answer to a question that is asked very rarely but is critical to long-term performance. This question has the following form: What is the best system for me? Imagine that you have a system that is easy to understand and use. You spend no more than half of the month in the market, and during this time you earn enough to not only cover your monthly expenses, but you will also be able to allocate more capital to further trades and to increase your positions. You spend up to 2 weeks a month on trading. You can use the rest of the time for whatever you want, such as relaxing, visiting family and friends, whatever interests you! Most beginner traders I have met want to learn a system that will allow them to make money as quickly as possible. Preferably very fast and very much. BUT instead of achieving their goal, they become providers of capital to the market. This is the result of this very approach. I want you to realize that there is a whole industry: books, system providers, analysts, media - that knows how to lure a newcomer into the market and extract money from him. To do this, they use simple tricks - they target your greed: "you can make a lot of money, very quickly, here's the recipe, here's the magic indicator, here's the fantastic system that will make you rich very quickly, the Holy Grail"... and so on. I want you to realize that novice traders are lured into a trap by the fact that someone has used the way their mind sets goals to manipulate them. Today we will use a similar mind mechanism, but for a completely different purpose. Let's break it down... You work two weeks a month, which gives you 10 trading days, the rest is spent on other activities. Your total monthly costs are... (X) Let's assume that you want to "earn a living," i.e. cover your monthly costs, but also save some money and increase your trading capital (Y). So, by a simple calculation we find out that you should make a profit every month on the market (W): W = X + Y Now consider, how much is 'X' and 'Y' for you? The amount of money marked 'W' will be our benchmark: you need a system that will give you exactly that much or more per month. You need a system that will allow you to do it in 10 trading days or less (as we planned). 10 trading days you can do 20-30 trades, because 3 trades a day is really a lot! It's important that they are good, well-prepared - only then they have a chance to bring you the expected result. Regardless of the system, probably/average 10-12 of them will be profitable, the rest will be loss-making or will reach or close to breakeven. Most traders, after making these simple calculations, change the way they view their system, change their perspective, this means that they begin to see the system as what it should be: a good tool to achieve their own goals. They calm down, they know what they are looking for, and they know that they have the basis for a realistic plan to achieve their goals. They are less susceptible to primitive manipulations based on greed - to which we are susceptible until we become adults. The basis for changing our view of gains - as a necessary result of actions and losses - as an indelible effect of the system. And at the end of this part of the lesson, let's directly answer the question... So which system should you choose? - The one that will help you achieve your goals. Let's now go to the story... John likes to drive fast and participates in street racing. Adrenaline, risk, quick decisions, control over himself and the car in narrow streets is what he likes. Charles is a phlegmatic, he likes to think everything through, he doesn't like to make hasty (read quick) decisions. He prefers when events unfold calmly and he has time to think about how best to react to them. John and Charles are two different people with different temperaments. Let's consider what systems will work best for them and why? What trading systems are best and why? 1. Imagine now that we have a super great scalping system. It can produce excellent results as shown by the statements (account results) of people who play with it. It gives several signals a day, the position itself lasts from a few to several minutes. Such trading requires concentration, quick analysis of the situation, ability to make quick decisions. Who do you think is more likely to consistently make money with this system? The active John or the phlegmatic Charles The answer is John, the system is more suited to what is natural to him and what he likes. Karol will not find himself in situations of making dozens of quick decisions a day. That is, he can force himself very, very hard and even get results, but it will be hard for him because his mind and psyche function in a different mode. 2. Now we have a second great system: long-term, where we hold positions for weeks or even months. Here we have a very long time to decide on the entry, including what size we will enter. Here Charles, on the other hand, may have a definite advantage, this is the time scale he likes and is mentally prepared for such a mode of operation. For John, on the other hand, it can be an ordeal, not enough that nothing happens, in addition, when the system enters at a loss it sits there for two weeks and "you can go crazy." A colleague who made his money from scalping told me that once when he entered a long position (by accident, he entered a scalp but there was a big move so he left the position) the situation destroyed him mentally. From scalping he had a habit of constantly controlling the position so for nearly a month he slept only on weekends. He made excellent money on the position, but the experience so exhausted him mentally that he told himself never again, this money is not worth his damaged psyche. On the other hand, a long-term trader, after training in scalping, said that it's not for him, because "on the minutiae is pure chaos, nothing here gets to me." As you can see from these two examples - depending on what you are used to and what mode your brain is comfortable with - you will have the best results with a system that is tailored to your temperament, risk appetite and decision-making mode. By playing with other systems you can achieve success, but it will require you to work and change within yourself. I have seen situations where Charles, forced by life to change, was able to quickly mobilize and change his mode of work, thinking. He was able to learn new things quite quickly and did well in the new situation. Was it the discovery (out of necessity) of new talents far removed from what he knew, or was he simply malleable enough that he had to find himself, and tried for so long until he found himself? I don't know, many times working with people I have seen how they can mobilize incredibly when needed. Based on this, I can say that most of us have reserves, possibilities and abilities that we are completely unaware of. The rocks are changing. Systems that worked a year ago don't work today, systems we know today won't work tomorrow or a year from now. Trading requires following the changes. Take the example of Charles and John, two people who play with a scalping system. Of the two, John is likely to see changes sooner. Charles, struggling with himself and his natural inclinations will be more preoccupied with himself, it just won't reach him as quickly that something has changed. Our main brain mode will either help or hinder us from noticing market changes. Charles will adjust more slowly, that is, the same system in his hands will have more losses than John, who will adjust smoothly to the changing situation. Summary 1. We have some main mode of mind and psyche and some systems will suit us better and others will not. It's worth trying different approaches to see what we'll feel most comfortable with and where we'll get good results most easily. 2. It's worth trying different things, including extreme ones - from scalping to long-term trading. Also because short- and medium-term traders, when successful, usually move to longer terms, also because their systems don't work like they used to, as entering with larger positions starts to affect the markets (here Forex is an exception, due to the liquidity and depth of the markets). 3.When trying different things, be aware that it will require you to learn new habits and find your way into other ways of thinking. That is, work not only on learning the system, but also on yourself. As a result, you will become more flexible and responsive to change, expanding the number of your mental tools with which you perceive, analyze and understand markets. It's also a step toward being one of the top earners. Great Trader, if you liked this article give it a boost 🚀 and drop a comment! I read all of them. Have questions, let me know in a comment
Education
by drSwierk
Top traders' methods: A scenario-based view of the marketsThe best traders think in scenarios of market events. They know from experience that the market can do "anything," so it is better to be prepared for any eventuality. This approach is part of mental flexibility. It can take several forms. Flexibility in approaching the market reduces stress Flexibility in our approach to the market reduces stress - if we are prepared for different scenarios of events it is certainly hard to surprise us isn't it? A lot of stress comes from the fact that we like to attach ourselves to our analysis and our rationale, and we feel annoyed when the market acts differently. If you take several options for the development of events and prepare for each of them - you are already taking into account that, for example, one or even several orders will go to cost. With this approach, you are already prepared for the matter. You also don't succumb to the illusion of your own infallibility and need to be right. Experienced traders know that being right is useless and even harmful, what matters is making money, not being right. Flexibility can promote better profits. Flexibility can promote better profits when you think through several possible scenarios and prepare to... make money on each of them. - If the market falls, I'll do this, enter here and the TP will be here, and if it rises I'll enter at that place and set the TP like this. You prepare your psyche to act according to what the market will do - just like a hunter waits for the game to come out in one place or another. The market's subsequent denial of being "right" can take a toll on your self-esteem, and as you already know, this is an unfavorable phenomenon. Therefore, think in open-ended terms - that the market can rise or fall in different scenarios. Think how you will make money on each of them, and don't be attached to any direction, any behavior and any "right." Think how you will make money on possible ups and possible downs, and don't be tied to any direction, any behavior and any "rationale." Flexibility over the long term In the long run, you can simulate for yourself many different profit and loss scenarios. Especially simulating, recalculating a series of losses works positively. It is sobering. If you are prepared for the worst that can happen, and you are able to survive it and come out on top - you are on your way to professionalism. Be prepared for a series of battles and for the fact that even though you will lose some of them, in the end you must win the war. Tip: When preparing to enter the market, think about where you will enter, where you will put SL and where you will put TP. Think about the different ways you can manage an open order: what are your choices? Exit because the system gives a signal in the opposite direction? Exit because the market froze instead of moving in your direction? Exit because the indications of the indicators are changing? Think through the different possibilities of market behavior. Together with them, think through your reactions and your decisions. If you prepare in advance - the management of the order itself will no longer require thinking, but only the execution of the strategy adopted earlier. Such a situation is more advantageous, because the decision-making process in conditions when there is no pressure is better. If you think through your reactions and decisions earlier order management will no longer require thinking, but the execution of the strategy adopted earlier. Such a situation is more advantageous because the decision-making process in conditions when there is no mental pressure is better. Also think about what can knock you out, pull you away from your plan? What kind of distractions? Pets at home, family, phones? Think about how to eliminate these distractions or how to prepare for them when they occur. Traits of master traders Trading, systems, psyche is something unique. That is, every trader is different. At a certain level, traders participate in competitions, struggles with other traders. At the next level they are left alone, especially the best. And the best of the best start struggling with themselves. They are themselves yesterday's benchmark for what they want to achieve today. Thus, they enter the struggle with themselves, with this most important opponent. Therefore, think about it and imitate them. Be better today than who you were yesterday. And tomorrow be better than who you are today. Your new goal, which will lead you to the level of Master: "I will be the best trader I can be."
Editors' picks
Education
by drSwierk
9
An component of every success story: Mental TaughnessIn whatever way you define your success - satisfying money, a good job, a happy relationship, financial security, the freedom to do what you feel like doing, we will always mention inner strength and discipline as factors that contribute to "someone succeeding." What is mental toughness in trading? We will define it by listing several situations and qualities that are then necessary. To begin with, I will just point out that at the root of each of them we have discipline and willpower. When you are waiting to play you need patience. When you are entering the market you need courage. When you are in the market you need mental resilience to pressure. When you are waiting to play and "something happens" you need resistance to temptation. To compel yourself, if necessary, to act or not act you need a strong will. In the long run, a strong will gives you self-discipline. Willpower is also another line of defense against toxic emotions. You need willpower when you are possessed by feelings of greed, fear, or a desire to get back at yourself. You need willpower so that when emotions arise, you can tame them so that they don't interfere with your ability to make good trading decisions. In addition to the above, you need motivation and its long-term, stronger relative - determination - to achieve success. Another element that we include in "internal strength" is resistance to failure. This is the ability to return to action after unfavorable events. Self-discipline is the ability to adapt over a long period of time to established (or imposed) rules, restrictions, plans of action. "Long term" is the key meaning here. This is important, because it is from the perspective of long-term earnings that we must now look at self-discipline. A good trader needs it over the long term, for many years. In fact, this is good news, as I will explain in a moment. This is because I am assuming that your level of self-discipline is not high, or even if it is to some extent - it is not fully conscious. And if it is - you will have enough time to raise and maintain your level of discipline. This is possible because the source of self-discipline, which is willpower can be trained, just like human muscles. The most important conclusion from modern research: discipline depends on willpower, willpower is an acquired trait, just like muscle strength, and it can be trained. What are discipline AND self-discipline? Self-discipline is the ability to adapt over a long period of time to set (or imposed) rules, restrictions, plans of action. It is assumed that their source is willpower. Willpower is similar to muscle strength. Willpower is your trait or skill that you acquire in the course of your upbringing and life. By doing systematic physical exercise, such as lifting weights, you will be able to, for example, double the weight you are able to lift after a certain period of time (assuming you haven't exercised before). The key here is a proper exercise program prepared on the basis of your knowledge of muscle structure and muscle strength building. Think of self-discipline as an opportunity to apply, to use willpower whenever you need it. And whenever you want it. Willpower is The ability to overcome your internal resistances, the ability to resist impulses, thoughts and desires. In trading it is important because: you must be able to accurately enter the market at the moment the system signals it - regardless of what is going on in your psyche, you must be able to resist the urge to enter the market when there is no signal from the system and the market has "just moved." you must be able to resist the impulse to increase the size of the order beyond what is reasonable (eliminate the danger of overtrading), you must be able to resist pressure and fear, both when you enter the market and when you are in it, you must be able to walk away from the market when you see that you are tired, broken internally, distracted, even when a signal is just coming in, you must be able to force yourself to analyze, to keep a trading journal - if you understand that it matters to your results. How do you accomplish all this? By using educated willpower (mental toughness). It has the advantage that you can train it in one field and transfer it to another (trading). If you have willpower "in life" then you can easily transfer it to actions in the market. It's the same as with muscle strength: if you have it in the gym you also have it when you want to move furniture at home. This is one of the most important discoveries of the last few years that we rely on. There are no different kinds of discipline, another in life and another in trading, so trained in one field it works in all.
Education
by drSwierk