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Control of EmotionsTrading in the cryptocurrency market often resembles a marathon where everyone aims to be the first. Unlike running, where there's only one winner, multiple traders can succeed in the crypto marathon. However, success in trading involves serious psychological work, which we'll discuss today. Everyone aspires to achieve their goals and be successful. Beginners in any field need to go through a learning curve, gradually honing their skills. The crypto market is not about luck; it requires constant self-improvement, learning from mistakes, and analyzing actions. The psychology of crypto trading involves a set of rules, methods, and actions to ensure successful trading, profit-making, and minimizing unavoidable failures. A professional trader approaches trading with a focus on results and a realistic assessment of risky situations. Financial success, in the form of net profit, is the ultimate goal. Let's explore the basic psychological tools used by professionals for successful trading: Always at Hand The whole world of cryptocurrencies is in your pocket. Don't Think About Defeat When starting a trade, don't focus on potential losses. Such thoughts set you up for failure from the outset. Be confident and avoid dwelling on the fear of making mistakes. While mistakes will happen, treat them as valuable lessons and continue improving your trading skills. Visualize Although not a scientific method, psychologists emphasize the importance of visualization. By visualizing success, you can block out fears of making mistakes and focus on achieving your goals effectively. Visualize yourself executing your strategy professionally and accurately, then act accordingly. Be a Recluse Cryptocurrency trading is a solitary activity. Ignore other people's opinions and avoid external interference. Your forecast accuracy will improve when you analyze market situations independently, without relying on others' advice. Self-Realization Comes First While trading in the crypto market is finance-related, view it as a creative process that should bring you satisfaction. Be confident in yourself and your success, and see trading as a means of self-fulfillment. This mindset will help you navigate the chaotic and unpredictable market as a tool for success. Think About the Risks Never risk funds you aren't prepared to lose. Consider potential losses when creating your strategy. Stick to your loss limits, even if the temptation for larger trades is high. Sometimes, multiple small trades can be more profitable than one big trade. Discipline Avoid reacting to sudden emotions or news. Trade according to your pre-developed plan without deviation. In trading, discipline is synonymous with success. This is particularly crucial for novice traders, as the volatile market often puts psychological pressure on them. Control of Emotions Monitor your emotional state and avoid trading when influenced by certain news or events. Emotional trading leads to losses. If you notice impulsive decision-making, take a break to calm down. Vacation Everyone needs breaks. If emotions and feelings drive you, take a break and avoid thinking about trading, assets, or cryptocurrencies. Engage in activities you enjoy and spend time with loved ones to recharge. Statistics Keep detailed statistics. This advice is valuable for both beginners and experienced traders. Record the number of transactions per day, profit and loss balance, positions, and other indicators. Analyze this information weekly. Statistics are a great way to create an effective strategy. By incorporating these psychological tools, traders can navigate the cryptocurrency market more effectively, enhancing their chances of success and minimizing losses. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
Why Traders Should Learn From Cristiano RonaldoCristiano Ronaldo is a soccer legend. He has won the Ballon d'Or five times, which is an award for the best player in the world. He's scored more than 700 career goals, and he's won league titles in England, Spain, and Italy. Not to mention, he's also won the Champions League, Europe's top club competition, five times. Ronaldo is known for his incredible work ethic, athleticism, and his drive to win. He's one of the greatest soccer players ever. Traders can learn greatly from Cristiano Ronaldo. How? Let's go back to his past. When Ronaldo was getting ready to make a big jump in his career to join Manchester United, he had to make a huge choice. Top teams like Barcelona and Inter Milan also wanted him. But Manchester United's coach, Sir Alex Ferguson, promised him something special: he'd get to play in lots of games, at least 50% of total matches in the season. An offer which he agreed to take. Even when Ronaldo was still young he wasn't oriented about getting rich or famous fast. Ronaldo picked Ferguson's team because he wanted to get better at soccer by having more opportunities to play. He believed in process. This decision helped him become the star we all know now. This is a good story to think about for anyone starting to trade. Trading isn't just about making fast cash. It's about learning how the market works and making smart choices. Think like Ronaldo did: focus on practicing and getting better, not on the money you could make today or tomorrow. Now, let's go to another field. Let's look at example from a doctor who is about to perform surgery. The doctor was faced with a critical decision: A 55-year-old man with a serious heart condition needs surgery to continue working and living without pain. The operation has clear benefits, potentially extending the patient's life from age 65 to 70. However, there's an 8% risk associated with the surgery, meaning that there's a chance the patient may not survive the operation itself. The doctor, knowing these odds, decides to go ahead with the surgery, and thankfully, it's a success. This situation parallels the decisions traders make. They analyze market conditions, evaluate potential risks and rewards, and make their best judgment call on whether to buy or sell an asset. Much like the doctor who bases their decision on medical knowledge and the patient's condition, a trader relies on economic data, company performance, and market trends. But even with the best analysis, the outcome is not guaranteed. The doctor's decision should not be judged solely on the outcome—the patient's survival—because it was made with the best information available at the time. Similarly, in trading, a decision should not be judged only by the profit or loss that results. A trade made on sound analysis can still lose money if the market goes the other way, just as a profitable trade could result from an ill-informed decision that happens to get lucky. It’s like running past a dynamite factory with a lit torch. If you make it past and nothing blows up, it might seem like a good decision because you’re okay. But was it smart to run with that torch in the first place? Not really. That's what traders have to watch out for: not tricking themselves into thinking a risky bet was smart just because they didn't lose money this time. For new traders, the best thing to do is make a trading plan and stick to it. Write down why you're making each trade. Later, you can look back and learn from what you did right or wrong. It’s not about quick wins; it’s about getting better over time. Another example is if you're learning to cook. You don’t expect to be a great chef right away. You start with simple recipes and get better with practice. And if a dish doesn’t turn out perfect, it doesn’t mean you're a bad cook. It's part of learning. In trading, remember the idea of outcome bias. This is when you think a decision was good just because things ended up okay. This can really mess with your head, making you overconfident or too scared to make your next move. So, traders should be like athletes or chefs, caring more about how they do their work than just the win or the perfect meal. Believe in the process because in the long run, it's how much you learn and get better that really matters.
SP:SPXEducation
by WayanEko
Focusing on winning trades is your setback as a beginnerEvery individual begins their trading journey with the idea that trading is all about winning trades and making money. Soon after their dreams are shattered when they realise it was not as easy as they had thought it would be. Now as we all know, the road to success to many is long and difficult, and that’s exactly what makes them successful. So why should the road to success in trading be any different? Look at top performing athletes, they trained for years before reaching any kind of success that definitely did not occur overnight. This bring me to my main point where many traders could be failing due to focusing on winning trades rather than the process it takes to become a good trader. Every trader beginning their journey needs to understand that trading the financial markets is no different than a top performing athlete. In order to achieve success, one needs to develop their skills over years. Instead of focusing on winning every single trade, one should be focusing on the process and the experience they are gaining over this time. Studying your mistakes, your losses, your psychological weaknesses, your analysis, and your understanding of the charts, are far more important at this stage than focusing on winning trades. Look at your trading journey like a student attending university, a student will learn over years different topics, where some will seem worthless at the time, but will however develop their skills in the necessary fields to succeed in the future. Every beginner should deeply focus on the process. Winning trades are a by-product of a developed successful strategy which also requires a developed individual. The trader needs to be developed in their psychology above all in order to trust their strategy and apply it correctly without deviating from the plan. Take the time to focus on all aspects of your trading, and let the winning trades come as a result of that in the future. Trading is a marathon, not a sprint, always remember that.
COINBASE:BTCUSDEducation
by opes_trading_group
2
Four trading fears you will have to overcome 😱The stats for retail traders are not pretty. It's no secret around 80% of all retails traders lose money. The reason most fail is the four fears not being overcome. Fear of being wrong! We are emotional creatures and lets be honest none of us like being wrong. This trait shows in some more than others but there is no place in trading for this trait. It's impossible to 100% right all the time it's not even possible being 90% or 80% right all the time. Once the reality sets in your not going to be right all the time we then as traders have fear of being wrong when seeking our trades or strategies. Fear of losing money We all suffer this fear at some point. What we need to understand is all accounts suffer periods of drawdown. I firmly believe the 80% of all retail traders stat is so high due to people losing money and quitting. The reason money is lost is due to poor strategy or no strategy. Once in a whole the fear of losing more will push people away from trading. Fear of missing out It's probably the fear of missing out that led you here in the first place. You see all the lambo's on social media and the life style and fear of missing out is already in play. Then comes seeing what everyone else has profit wise. Then comes paying attention to everyone else and full blown FOMO instead of sticking to your own game. Fear of leaving money on the table. No better feeling than seeing your trades run in profit. The screen is lit up blue and your loving it. But now comes the fear of letting them trades play out. Your leaving money on the table and it's now a fear you'll lose that money. It's one of the biggest mistakes a trader makes! Cutting winning trades to soon and letting losers run for to long. So how to overcome these fears? There's many elements to overcoming the four fears . There's so may and then even sub elements of those. Hence why this idea had the two brainstorm bubbles on the chart of what fears haunt us as traders. Followed by the bubble of all the thoughts you need to take in to consideration as a trader. It's imperative as traders we build a robust tested plan. Sticking to your own plan and lane is crucial. Just avoid others that blur your plan. Losses are a part of trading quicker you accept this as a cost of business quicker that fear of losing money disappears. There is many more on the chart drawing but quicker these behaviours are followed as a trader the quicker the four fears will disappear. Here's to a good rest of the week🥂 Thanks for looking at my Idea Darren 👍
Education
by pow_removetheguesswork
7
5 Fundamental aspects of day trading successHere's a quick video on a few vital skills every trader needs to acquire before he/she can actually achieve success in day trading. This is 100% from our experience, we've worked hard to achieve success in day trading so these tips come from our direct experience. Hope they help you guys: HARD WORK: hard work in trading doesn't come from actual trading, hard work in trading comes down to the preparation aspect. PATIENCE: Patience enables an excellent entry point, which allows a trader to enter a bigger position and increase the profitability factor. DISCIPLINE: Discipline is following the process day in day out without altering it because of a few red trades. Discipline is executing the process every day and on every trade. REPLAYING TRADES: Reviewing your biggest loses and your biggest winners is literally the quickest way to become a primed trader.
CBOT_MINI:YM1!Education
by PrimedGroup
MY MORNING TRADING ROUTINE - Steps I take before I tradeComplete Routine: 06:30: Wake up – My Morning Routine Starts I just get right up and start my day. Don’t hit the snooze button! 06:40: What’s My Daily Report Card Goal? Each day my trading journal includes a specific goal that particular trading session, concrete actions that I’ll take to achieve that goal, and self-evaluation at the end of trading to gauge my success in reaching that goal. The idea is to never trade without consciously working on some aspect of my trading. 06:50: Risk Control Process I define the risk for the day : Position sizing guidelines Per-trade loss limits Per-trade price targets Daily loss limits 07:00: Frame The Context I do a quick scan of my markets, and I frame the context by doing my analysis and establishing potential directional biases. This doesn’t take me a long time since I build upon yesterday’s analysis. 07:20: Define Market Conditions Here I start by asking myself two questions: Should I or shouldn’t I trade? If I do trade, whether to do so cautiously or aggressively? And then, I go through some variables to understand the market environment 07:30: Identify/Look For Setups Now I understand what I want to improve on, my risk profile, market context, and how the market moves (the environment; fast, slow, etc.?) I have specific setups and plays that I love to trade; I wait patiently for these setups to develop. Usually, they develop during London Open, but if there’s a setup at this very moment, I take it and immediately go into my breathing and meditation. 07:50: Deep Breathing + Meditation (Mental rehearsals) This is where I get my mindset right. Breathing and meditation help me be and sustain a state of calmness and staying focused. 08:40: Cold Shower Cold showers are amazing; they fill me with energy and the concentration to stay fully immersed in the present moment while I trade the markets. 09:00: Trade The London Open I’m fully ready and confident to start my trading day. I’m focused, calm, and immersed in front of the screen. Why We Need Routines: As traders having routines in our life that encompasses all our desired best practices and habits is key to sustain consistent performance day in and day out in the markets. Trading is hard, and having to maneuver the world of trading without any routines or systems in place, is really doing yourself a disservice. Routines make your life easier. They reduce stress because you don’t have to think about what to do; your brain and body already know what to do because of the patterns you’ve set in place! This is quite amazing and really powerful; therefore, seek to build a routine to facilitate your trading performance.
TVC:USOILEducation
by INotFancy
2
Here are a few tips every one should knowHere's a couple of tips from me that might help in your trading. Those are just my opinions and all are belong to me. Practice think practice think review old ones repeat repeat repeat. It takes a whole lot of thinking and a whole lot of practicing to be good. Give your brain practice all the time like a muscle, and just repeat over and over. Look at examples, past trades, re-read what to do and what not to, re-read all your rules over and over, not until you know them, until forever or they'll just fade away. The more you hammer it in the better you get. Be logical DO NOT FOMO AND INSIST (or enjoy lose lose lose and then miss the final move that is a winner). Mistakes are really expensive. Best to miss out and not force and go look at something else, possibly analyse that one you missed and understand why you missed it, and how to fix, maybe by simplifying the way you detect those. Spend a whole lot of time analysing markets... Try really hard to really think every trade through... do not waste time on "meh" setups. Missing out is not that big of a deal imagine you get 10 of those a month, that's 120/year, now imagine you miss out 2/month you still get to 96/year and you had more time to spend on the 96. And you can still learn something from what you missed out on. Better than losing sanity from looking at charts hunting for setups all the time (and ending up forcing trades and bleeding capital). Price action is not physics. A "weak uptrend" is really what they call a long bull market that ran over countless bears that are all underwater in much pain, and often it ends up with bears giving up and a massive green candle up. And same, a "strong uptrend" is what they call price action with no bears. They did not vanish into another dimension, they just are not present in the market right now. But they are around. Which means they could be just around the corner and all jump in at the same time and reverse the price. In general I think the best is to not go against a "weak" trend ever. What is weak and what is strong enough? That's for you to find out. If you want to go against a pullback it is generally better to enter on vertical price action. People when they see violent price action get scared and remove their orders. The opposite is the right thing to do. Slow price => remove order. Violent price => GOOD, bring it on. Of course you will get run over from time to time. This is your job as a speculator. Speaking of weak trends, do not just use a price stop, but also a time stop: Price just goes nowhere for a long while => Get out. There is no reason for risk ever to be over 2% , and those are reserved for top stuff. Usually around half a percent is good especially when starting, then it can be scaled as the acc grows and even increased progressively to 1% to get a decent sized account. If you really are very certain of your strategy and want to go fast and cannot contain yourself then it is perfectly fine ok I understand you can risk more than a small 2% that barely will make you any money who wants to be spending hundreds of hours to make $50 :) Go for it. Make sure you can not lose more than all of your money, such as with using options or stocks that can only go to zero. At that point the strategy does not even matter. Also make sure you use alot of money, that you spent years to save up. And then keep taking trades until you lose everything. You really have to make sure it is very painful and you go into despair and lose all hope. Trust me when I say with 99% certainty you will really learn your lesson and won't require to learn it again. You will then not ever want to "go quick" again. 99% efficiency guarenteed. You won't have these stupid urges to risk big. If your spouse leaves you it is even better. Leaves a scar that won't heal as a permanent reminder. And consider yourself lucky that you only lost everything.
Education
by MrRenev
1
Comprehensive Trading ProcessDisclaimer: If you are primarily interested in copying other people’s trades then this is not for you. However, if you are willing to put in the work that it takes to learn how to trade for yourself then you have found the right place! Nevertheless please be advised that you can give 10 people a profitable trading strategy and only 1-2 of them will be able to succeed long term. If you fall into the majority that tries and fails then I assume no responsibility for your losses. What you do with your $ is your business, what I do with my $ is my business. Consensio: (King) 5% when Price crosses Short Term MA | 10% when Price crosses Medum Term MA | 15% when Short Term MA crosses Medium Term MA | 20% when Medium MA turns over | 25% Price cross Long Term MA & Long MA flattens / turns over| 25% Golden Cross Patterns (Queen): Favorites: hyperwaves, parallel channels, descending triangle, head & shoulders, Wyckoff’s, double bottoms & tops, flags | Least favorite: symmetrical triangle Horizontals (Rook): Horizontals > trend lines Trendline (Bishop): Very powerful when used in combination with Consensio. One of my favorite setups is a trendline break alongside a reversal in Consensio. Parabolic SAR (knight): Best tool I have found for setting / adjusting stop losses. Can also be used as no trade zone. For ex: if wanting to go long and SAR is bearish (above price) then could / should wait for SAR to break before entering. BTCUSDSHORTS (pawn) : If shorts are at / near ATH’ levels then I do not want to be short and will actually have a bias for going long. Funding Rates (pawn): Helps me to understand supply / demand. When shorts are getting expensive then I expect a short squeeze to be around the corner. Contango / Backwardation (pawn): Not a timing indicator. Is used to determine bullish / bearish bias and can help to identify tops / bottoms / support and resistance. Watch the video series and Google “Ugly Old Goat Backwardation” to learn more. TD’ Sequential (pawn): “The trend is your friend until it’s about to end” -Tom Demark | Used to identify when a trend is becoming exhausted which can be very helpful to confirm or deny an entry. Ex: if wanting to go long on a green 7/8/9 then would strongly prefer to enter on correction that is expected to follow. Average Directional Index (pawn): Used to identify when trends are becoming exhausted. When ADX’ reaches resistance / ATH levels then it is likely that the trend is reaching a point of exhaustion Ichimoku Cloud (pawn): Starting to use traditional settings across the board. Crypto settings seem to make the cloud useless when markets are volatile, whereas the traditional settings seem to line up nicely with the MA’s I use for Consensio. Price Action (pawn): Helps me understand when markets are overbought / oversold in the short term. In my experience it is very rare for Bitcoin or Ethereum to move more than 10% in 24 hours. Therefore if I am wanting to enter long and the price is + > / = 7% in the past 24 hours then I will be very cautious and usually wait for a pullback / consolidation. Bollinger Bands (pawn): Very helpful for recognizing when a trading range is coming to an end, which can be very useful for spotting trends that are just starting / about to start. Also like the Bollinger Band % to help illustrate extremes. Relative Strength Index: Divergences can be very useful for understanding short term price movements and potentially full on reversals. When markets are moving I like to check the RSI on the 1h and 4h charts and pay close attention to divergences as indication that a trend could be exhausting. Stochastic Oscillator: Very useful in trending markets that have not gone parabolic. Can be helpful in ranging markets as well, but not nearly as much. Can get some very good signals on the 3d chart. If there is a buy / sell signal then I think it is best to wait for %K and %D to cross the boundary lines before considering it significant. Hierarchy of Indicators The best traders know which indicators are most important at which times. A trader is like a carpenter and the indicators are akin to his toolbelt. Through experience he or she knows which ones to reach for, exactly how they are used and what adjustments could be required for a specific circumstance. It is one thing to understand that an MA rolling over is an indication of a trend reversal. It is entirely another to fully believe it and be able to act on it. Next is understanding which indicators can be disregarded at which times and which should always be taken into account. Above lists my indicators by order of importance. However that is only a default and it will change based on market conditions. For example: if a hyperwave is present then patterns become more important than Consensio and trendlines become more important than horizontals. If market is parabolic then I find the Stochastic useless and will adjust the settings on the RSI to 30. If no trend is present then the Bollinger Band can go from a pawn to the King. It would take much too long to go into all of the different variables I can think of and how it can change the hierarchy of indicators. What is important is that you start to develop the feel for it yourself. The only way I know how to do that is through checking all of them on a regular basis, in all different types of markets (bull, bear, flat, parabolic). Learn -> Practice -> Fail -> Learn -> Practice -> Understand -> Apply -> Internalize -> Believe -> Achieve -> Fail -> Learn Monthly, Weekly & Daily Processes Daily Check daily close every day. If entry or exit was signaled then make sure to get filled within 30 minutes of close. If passing on an entry signal then notate why. Never pass on exit signal. Update trading ledger to reflect any changes (I will be posting my results in the 2 > 20 Bitcoin Trading Challenge). Go through the TA Process listed above on a daily basis (I post my analysis in the Bitcoin' Daily Update). Make sure that you are highly focused during the candle close otherwise the mistakes will compound. I prefer to go to the gym on a daily basis and be disciplined about my diet in order to maintain a high level of focus. I have also committed to a daily hot springs meditation session that has proven extremely valuable over the past year. For anyone that watches Mr. Robot think of Tyrell Wellick chopping wood while confined by himself in the forest. Having a task that is repeatable on a daily basis provides balance, perspective and focus. I find a consistent sleep schedule to be vital in my performance as a trader. I make sure that I am in bed by a certain time so that I wake up feeling refreshed / energized and ready to trade. Weekly On Sunday I will analyze the weekly chart instead of the daily chart. Trading ledger that gets updated daily is used for weekly PnL statements which get done on Saturday morning instead of preparing for traditional markets to close. I keep an excel spreadsheet for each exchange I trade on and include sections for Date, Entry, USD Inventory, BTC Inventory, Withdrawals, Delta, PnL, Unrealized PnL, In position. When I first got into crypto I completely disconnected from my friends and family. To ensure the first doesn't happen again I commit to two social activities per week and for the latter I commit to calling my mother every Sunday. Monthly Review biggest trades from prior month. Dissect entries, exits and position sizes. Everything should be repeatable / explainable in hindsight. If it isn't that means I didn't stick to the guidelines and that is mistake. I cannot expect to be a perfect trader, however I can expect to learn from my mistakes. Monthly Best & Worst Dressed List. After reviewing the trades find the best and worst examples. Print out the charts, notate why they made the list and put them in a binder. In the short term, how I trade is exponentially more important than how much money I make or lose. Therefore if the monthly PnL was subpar but very few mistakes were made on the worst dressed trades then I consider that a huge success and will expect the variance to even out in the medium - long run. Weekly PnL statements is used for monthly PnL statements -It feels really good to make a lot of money and it can feel very frustrating when results do not meet expectations. This is why I believe that is it vital to focus on the process and improving instead of the results. A few good results could be the byproduct of luck. One good / great process will lead to sustainable results as long as you can remain disciplined / diligent. While some may prefer to be lucky rather than good I strongly prefer to put in the effort that it takes to be good. Furthermore luck seems to be attracted to those who put in the consistent effort. Nevertheless I still track short term results because I have bills to pay. Eventually I would like to only pay attention to annual results. “So you want to be a carpenter, do you? Well it takes more than a hammer, boy, you're gonna need blueprints and a will to build, and Straighten your cap! you look like you've been through a war. Wipe that grin off your mug, you got a sturdy frame? Sluggish posture just won't cut it. You're gonna need schooling, and, and, and take notes! And god if I catch you yawning again you're gonna regret ever asking for my help, And dammit you gotta hustle, this is a slacker-free zone And, where's my pencil? go get your hard-hat, here's a nickel, go get us a ruler and a saw and a drill and lots of graph paper!” -Aesop Rock
BITSTAMP:BTCUSDEducation
by Sawcruhteez
5
Comprehensive Trading ProcessBefore Entering Start the by writing down predictions for what I expect to happen before the end of the day. 1 day | 1 week | 1 month predictions: Make projections for what is expected to happen during the listed time frames Previous analysis/position: Review yesterday’s analysis to remember what your thought process was Patterns: Established patterns outweigh other indications Horizontal support and resistance: Horizontals are most important when no pattern or trend is present. Remember that prices range 70% - 80% of the time BTCUSDSHORTS: Analyze the trading view chart with patterns, support/resistance, trendlines and indicators. Do not short when short sellers are at or near ATH’ levels. This is when you are very likely to get squeezed out of the position. Then check the long:short ratio. 60% long:40% short indicates a good balance for a move to the upside. If it gets to 65%+ on either side then a squeeze is expected Funding Rates: If it gets too expensive to fund a long or short then the price is likely to react accordingly 12 & 26 EMA’s (calculate % difference): Check for crossovers and know how far away the price can get, historically speaking, from the EMA’s. This will help identify oversold/overbought conditions 50 & 128 MA’s: Same as above FIB’s: Very important for identifying major levels of support and resistance Candlestick analysis: Learn more here Ichimoku Cloud: Here is a great resource' if you would like to learn more TD’ Sequential: Here and here are great resources Visible Range: Volume = resistance or support. This indicates where the major volume has occurred and is very useful in identifying major s/r BTC’ Price Spreadsheet: Calculate price change over the following periods: 12h, 24h, 1w, 2w, 1m. This will help to identify being overbought or oversold Bollinger Bands: Very useful in ranging markets. Super squeezes indicate upcoming volatility Trendline: Very useful in identifying support and resistance as well as reversal when the trend breaks Daily Trend: Not necessary, but I like to know what the market is doing right now Fractals: Very useful in setting stop losses. Up fractals should not be broken in a bear market and down fractals should not be broken in a bull market On Balance Volume: Helps identify what the ‘big money’ is doing. Pay close attention to divergences ADX: Helps to identify if there is a trend and how strong it is. If -DI > +DI then bearish. If -DI < + DI then bullish. If ADX < 20 then ranging market. If ADX > 25 then trending market Chaikin Money Flow: Use it the same as the OBV RSI (30 setting): Used to identify tops in parabolic markets, according to parabolic burst theory Stoch: Can provide good signals, although I find it rare. Nevertheless the Stoch on the 3d has predicted price movements very well in the 2018 BTC' bear market End with reviewing predictions and making a summary. After entering Managing stop losses and avoided greed is all that remains. Stop Losses Are set slightly under the prior low (if long) and slightly above the prior high (if short). This will usually be illustrated by William's Fractals. For each open position go through the following process on a daily basis. SPX: New low established with down fractals at $2,800. Just broke up fractal and established new high. Adjust stop to $2,794 BTC: Has not established a new lower high or up fractal. Stop remains above prior high
Education
by Sawcruhteez
3
Case Study for Mismanaging a Disciplined Trade StrategyIn the most recent BTCUSD dip I made a series of mistakes that put me in a slightly nervous position overall, but still generally favorable. Over a series of trades I managed to find myself in a position with an average buy price of $7486.13. Trading profitably on the dips I reduced this average buy price to $7348.21. Throughout this series of trades I had multiple opportunities to take profit and this discussion will focus on trading psychology and process failure. Early in my trading session I had managed to identify successfully entry levels that were reasonably close to where I could make a "dip" profit. Generally my target is around 2%. Given the big dip from $9.2k to below $8k and given the duration and recovery of that dip from $10k I felt confident that the market was oversold and all of the order book charts indicated an overall strong buying to selling ratio. My price target was just below $8.5k and on the first move up it hit $8.4k and I felt like there would be an orderly move over time. What I learned with this recent price action was that trading bots and whales/funds that control them have disproportionate leverage over price action. Not being fully aware of their techniques, I decided against adjusting my price target and I was "too greedy" and completely missed my profit opportunity after being presented double my normal target over two periods. Now having missed that opportunity I was forced to double down knowing that the next price move would likely be much bigger and deeper. Trading for profit on the way down I was able to recoup some of poor positioning but again, I did not quite understand the techniques of these algo bots until near the end when I was able to make an adjustment to how I choose price targets to better compensate for whale/shark algo bots. Setting price targets for exiting my position and reducing my risk came down to three possible outcomes: 1) Sell ALL at a higher price that would make profit but also leave me no room for error if I missed at $7800. This price level would have still been poor risk/reward overall so this exit strategy seemed like a mistake. 2) Sell ~half (47%) of my position at a profit at $7400 and then sell the other half at $8000 for "break even" on that part of the trade. This seemed like a prudent risk management strategy as I would have funds to take additional profit if the market moved back down while leaving in place a position that could become profitable over a longer duration. 3) Sell ALL at the higher price target that would give me a much bigger target but leave me open to poor risk management again. This was definitely the worst option. So I chose 2) which worked ok in that the first trade target was hit as expected. Then, while watching the order book I started to worry because there were big sell walls below $7500. I thought about how stressful it would be to ride that position back through another big dip and because of fatigue also overly focused on this possibility rather than going back to my pre-defined strategy of hodling for $8k on half and trading with the other half. Clearly, stress causes one to adopt a risk averse mental state. And this kind of risk aversion usually leads to the panic selling and "weak hands" phenomenon of selling at exactly the WRONG time, i.e. when you should be thinking about buying. So when I saw the price being challenged at $7k to $7.1k with very clear algo bot action pushing the price in both directions with very light buy order positioning I became a pawn in this algo bot action and decided to exit early and go take a nap rather than have to sit through another big dip with half of my fund at risk. Rather than see any huge sell wall the sell-side volume relented and the price nearly hit my price target of $7.9k. If I had been more disciplined I could have set a contingency (less greedy) target below $8k but I changed my plan using no particular reasoning whatsoever other than fear of these algo bots.
COINBASE:BTCUSDEducation
by powderpc