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Reversaltrading

Stacey Burke ID Setup taken on WTI, and Silver reversal shortIn this video, I walk you through my entire thought process during today's trading session. You'll learn how I selected the pairs and executed three key trades: - Silver Reversal Short - WTI inside day , first red day, short Inside days are a key best trade setup of Stacey Burke. Don't miss out on these valuable insights and tips! For details on the Stacey Burke style trading approach see his site and playbook: https://stacey-burke-trading.thinkifi...
OANDA:XAUUSDEducation
by TC888
SPY: Don’t “Guess” the Top.We can learn a very interesting lesson by looking at the SPY chart. Anyone who tries to guess the next top or bottom is a gambler, not a trader, and as someone who has gambled a lot in the past, this rally brings back some memories. It's very easy for someone to see such an explosive movement and think: "It's already gone up a lot, it's going to have to come down soon". It's very easy to look for clues in other indicators, for example, and get excited when you see the RSI exploding close to 70. Looking for clues that reinforce a pre-existing belief is common among individuals corrupted by the "confirmation bias", which is something else, and would be content for a future article. Still talking about the RSI, it's important to mention that the RSI was already at 70 when the price was at $450. Since then it has risen by more than $20 (approximately 5%), and there is no sign of a top yet. Far from being a criticism of such an efficient indicator, this is just evidence that the use of indicators should be aligned with what we see on the chart. Top or bottom signals are confirmed when we see a clear breakout from a notorious reversal pattern. As we can see from the SPY chart below, just one or two bearish patterns, even when appears close to clear resistance, is not enough. There needs to be confirmation of a good breakout. Perhaps this is one of the reasons why so many are rushing to sell a possible top, even without confirmation. By waiting for confirmation, you sacrifice part of your profits, and amateurs hate that. To feel like a pro, you have to feel the satisfaction of buying the bottom and selling the top, all the time. Which is ironic, because that's not the focus of a professional. A real trader seeks long-term consistency. Speaking for myself, as far as I can see it's a strong rally in the SPY, and the next resistance is the all-time high at $479.98. So far, there is no clear reversal pattern for me, although I personally would like to see a correction to a support point. What if the SPY made a bearish candlestick pattern today? Just as we see on November 9, 15 and 29, and on December 6, a top signal is plausible, but we need to wait for confirmation via a breakout. Otherwise, it would just be another bear trap. Another thing I like to do is wait for a clear bearish reversal structure to appear on shorter time frames, such as the hourly chart. Uptrends are characterized by rising tops and bottoms, and the reverse applies to downtrends. When a stock is in a clear uptrend, but the hourly chart suddenly makes a lower top and bottom, it's a warning sign. If such a reversal occurs near a resistance area, all the better, as was the case with NVDA at the end of last month. One of the most overlooked principles of Dow Theory is the number 6: "Trends Persist Until a Clear Reversal Occurs". When Charles Dow, founder of the Dow Jones index and the Wall Street Journal, began working on the principles more than a century ago, he never imagined that in the 21st century there would still be traders who anticipate and don't wait for confirmation (again, I was among these gamblers in the past). Therefore, trading reversals is interesting and can be very profitable, but you need to base your decisions on technical reasons. I shared how I like to trade reversals, but there are more strategies that you can use. Feel free to share yours. That's the difference between a gambler and a trader. Moreover, remember to follow me for more content like this, and support this idea if you liked it! All the best, Nathan.
AMEX:SPYEducation
by Nathan_The_Finance_Hydra
9
❓What's Your Trading Style❓Which of these methods is your favorite trading method? Comment below 👇 🔹 Breakout trading Breakout trading involves identifying key levels of support and resistance and entering a trade when the price breaks through one of these levels. Traders using this strategy look for price patterns that suggest a breakout is likely to occur. For example, a trader might look for a currency pair that has been trading in a narrow range for an extended period and then enter a trade when the price breaks out of that range. Example: A trader might identify a resistance level on the EUR/USD currency pair at 1.2000. If the price breaks through that level, the trader might enter a long position, anticipating that the price will continue to rise. 🔹 Momentum trading Momentum trading involves entering a trade based on the strength of a trend. Traders using this strategy look for currency pairs that are trending strongly in one direction and then enter a trade in the same direction as the trend. This strategy is based on the assumption that the trend will continue. Example: A trader might notice that the USD/JPY currency pair has been trending higher for several weeks. The trader might then enter a long position, anticipating that the trend will continue. 🔹 Reversal trading Reversal trading involves entering a trade when a trend is about to reverse. Traders using this strategy look for signs that a trend is losing momentum or that a reversal is imminent. This strategy is based on the assumption that the trend will change direction. Example: A trader might notice that the GBP/USD currency pair has been trending higher for several weeks but is now showing signs of weakness. The trader might then enter a short position, anticipating that the trend will reverse. In summary, breakout trading involves entering a trade when the price breaks through a key level of support or resistance, momentum trading involves entering a trade based on the strength of a trend, and reversal trading involves entering a trade when a trend is about to reverse. Each strategy has its strengths and weaknesses, and traders should choose the strategy that best suits their trading style and risk tolerance. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
3
3 Things To Do After You Lose A TradeWe have all been there. You analyze a trade setup. You know how much you're going to risk on a trade. You enter the trade just to come back to your chart and find you've been stopped out. It's not fun. It sucks. You thought the setup would work because you followed you rules. The thing is, the market is the market. In my early stages of trading I hated being stopped out. My reasoning was because. I had no idea how to make up for my loss. I thought if I just plotted more lines and levels on my chart I could enter the trade again and make my money back. The problem I kept running into was I had no idea why I lost the trade or how to handle my feelings. I also had no real plan on how to adjust to the price change. I honestly thought my levels or trend lines didn't work. It was deeper than that. What changed? I had to change the way I viewed the market and my next steps to recover my loss. Not only that, I had to learn how to be "ok" with losing money. I created a 3 Step Process that would increase my probability of winning my next trade. Because we are a trading family, I thought I'd share it with you. Step 1: Access my previous trade You hear this all the time, "I made a mistake thats why I lost the trade." The true question is did you really make a mistake or did you follow your trading rules? When I follow my rules no mistakes are made. When I lose a trade that can mean 1 thing. The market reversed. This leads me to step 2. Step 2: Change my bias In the book The Unknown Market Wizards by Jack Schwager, I heard the most beautiful and profound statement by one of the wizard traders. He said, "I realized I have a right to change my mind about my trade at any time." I can't tell you how that made me feel. I've been doing that all along, but this market wizard summed up my actions in just one sentence. When I'm stopped out that means I have to change my mid about the direction of the trade. I made being stopped out so simple so I won't confuse the next action I should take. That leads me to step 3, update my chart and adapt to the new price movement. Step 3: Update and Adapt I have a no nonsense rule and that is to stop trading in 1 direction if I'm stopped out. Go opposite. I'm a true trend trader. I don't naturally trade against the trend. It gets me in trouble. So at the first sign of trouble, I adapt. See, USDCHF was in a downtrend. I sold the trade at 0.92835( sell limit) and overnight I was stopped out. It happened so fast and just as fast as I was stopped out, I knew I had to become the buyer. My Mental In the recent past, being stopped out would have spooked me. Now, its making me want to come back to the charts to face my fear. I used to have a fear of success and failure. Now I have a hunger to want to succeed and learn. Putting on trades is a bit more fun since I've began working with pending orders. They challenge me. Especially in situations when price reverses and I'm stopped out. I pray you gained new insight and a key takeaway on what you can do next after you lose a trade. Just remember, losing a trade doesn't make you a loser, it makes you a trader. Comment down below what your takeaway was. I'd appreciate it if you could like the post. It helps boost my Trading view reputation. Much love, Shaquan
Education
by ShaquanLopez
How to Trade Bullish DivergenceAt some point in your trading career, you will hear the term "Divergence Trading". Divergence simply means when the price and indicator are telling the trader two different things. It can be an effective addition to your trading strategy, especially if already using indicators like RSI or MACD to find overbought and oversold levels but should not be replied on by itself and requires practice to get it right. There are two types of Divergence you want to be familiar with: Regular bullish and bearish divergence and Hidden bullish and bearish divergence. In this educational tutorial, I will cover Bullish Divergence. You should note that the appearance of divergence doesn't happen 100% of the time, but when it does, you can use it for additional confluence (extra confirmation) for entering trades. Bullish Divergence Overview: A bullish divergence occurs when prices fall to a new low while an oscillator fails to reach a new low. This situation demonstrates that bears are losing power, and that bulls are ready to control the market again—often a bullish divergence marks the end of a downtrend. Notice in this example of GBPCAD, the price was in a downtrend and eventually came to a low at 5494 and rejected the area. The price shows a decline, while the RSI shows the oscillator moving higher. This is an example of regular bullish divergence, as it signaled a potential trend reversal. How to Draw Bullish Divergence You want to draw lines on successive tops and bottoms. Connect the tops and bottoms only, and keep your eyes on the price. If you draw a line connecting two lows on price, you MUST draw a line connecting two lows on the indicator. They have to match! Divergence only exists if the SLOPE of the line connecting the indicator tops/bottoms DIFFERS from the SLOPE of the line connecting the price tops/bottoms. Popular Indicators to Use When Identifying Divergence You can use indicators such as RSI, MACD, CCI, or Stochastic to trade divergence. Your selection in one of these indicators will depend on personal preference. I personally prefer the RSI at a 7 period. If you spot divergence but the price has already reversed and moved in one direction for some time, the divergence should be considered played out. You missed the boat this time. All you can do now is wait for another swing high/low to form and start your divergence search over. What is your favorite way to trade Divergence? Let me know in the comments! Happy Trading! :) - Brian & Kenya, BK FOREX ACADEMY
Education
by BKTradingAcademy
9
USDCHF 4H DOUBLE TOPStep #1: Identify the Phase of the Market. The Double Top reversal needs a uptrend. Just because you can spot the reversal it doesn’t mean you have to jump in willy-nilly. Remember, we need the right context and everything needs to line up for a trade-able setup. So, the first step is to identify the phase or market condition. At any given moment the market can be trading either up, or down, or it can go sideways. Establishing the phase of the market aka identifying the trend is probably the biggest ingredient that can determine the success rate of double bottom pattern technical analysis. Step #2: The historical precedent. An A++ Double Top Reversal is composed of 2 Rounded Tops The second step of the Double Top is to find what we call the historical precedent or a chart pattern. We don’t want to make a trading decision without price confirmation, and in our case, we use the reversal pattern. You need to identify two rounded tops in order for the pattern to be considered trade-able. But, what is a rounded top? In technical analysis, a rounded top is simply a price formation that typically occurs after an uptrend, prices move upwards and then quickly rallies creating a rounded top. Now, of course, that depending on the structure the rounded top will vary in size and magnitude. But the idea is that we need a quick move up followed by a quick move down to define a rounded top Note* A valid double top reversal has two rounded tops. Step #3: Allow a maximum of 10 pips variation between the two tops. Don’t seek perfection, because in trading you need to get rid of your idealistic mindset as the pattern will not look perfect all the time, so be flexible. This is the reason why we need to allow a maximum of 10 pips variation between the two tops. The probability of two tops happening at the same exact price level is almost impossible. Now, we to determine an entry technique for our chart pattern strategy. Step #4: Sell when Double Top breakout candle closes below the neckline. After we identify the phase of the market and the characteristics of a good reversal we need to wait for confirmation that momentum is shifting. The breakout candle is our signal that the momentum has shifted and it’s what it confirms and validates the double top pattern. You’ll see the double top breakdown happen over and over again, but it’s important to analyze them within the context of the market trend. The next logical thing we need to establish for the strategy is where to take profits. Step #5: Take Profit at the same price distance as measured from the highest peak to the Neckline The minimum profit target for this type of trade is approximately equal to the same price distance as measured from the double top to the neckline. If we project the same price distance to the downside we obtain our first take-profit zone for the strategy. The double top pattern can produce a major reversal so we advise you to be very flexible with your profit target not to miss any big profit opportunity. Step #6: Place the protective stop-loss slightly above the resistance created by the Double Top reversal The Double Top chart pattern strategy gives you a simple way to quantify risk because you can place your protective stop-loss slightly above the double top pattern. The double top pattern really gives you the opportunity to also trade with a tight stop loss, which is great as we always want to keep losses at a minimum. Note*** The above was an example of a SELL trade… Use the same rules – but in reverse – for a BUY trade, but this time we’re going to use the double bottom pattern. Conclusion There is no other chart pattern that illustrates the trend reversal. However, despite the high success rate you still need to use a protective stop loss and to wait for the breakout when trading with the double top chart pattern strategy. You can also trade with the breakout triangle strategy. The bottom line is that you still need a plan to successfully trade the double top breakout. Our double top chart pattern strategy should answer all your questions in regard to how to make money with this simple pattern.
Education
by Tradingstrategyguides
2