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Trading-signals

Ascending & Descending Triangle Triangles are very often found on the chart, but not everyone knows how to trade them. Today we will try to learn how to trade triangles correctly. What does it look like? The ascending and descending triangle have two sides: one side is flat and horizontal, the second is inclined and moves towards the first. The ascending triangle has an upper flat horizontal side, and the lower one is inclined. When you see this figure, you have to wait for a bullish movement. The descending triangle is a mirror image of the ascending triangle. With a descending triangle, there is a flat lower line and an upper inclined one, which moves in the direction of a flat one. If you see this pattern, expect a bearish breakout. Opening a position There are three techniques for opening a position: 1. Stop order at the level. 2. Fixing the level. 3. Retest of the triangle trend line. Each method is good in its own way, but the logic is the same everywhere – a breakthrough of a flat line and further movement towards a breakthrough. Therefore, if the price starts moving against the breakout, most likely the figure did not work, and in order not to lose money in such situations, set a stop loss. Stop Loss You need to set a stop loss in a place where it will be clear for sure that the figure did not work. Usually this point is located behind the inclined line of the triangle. Profit taking There are two ways to fix profits: 1. Trailing stop. 2. Graphical projection of the price. The trailing stop is set according to your trading strategy and there shouldn't be many questions if you have a strategy. It is easy to calculate the fixation point from the graphical projection: it is enough to measure the width of the base of the triangle and put the resulting value below the punched flat line – this will be your goal. Conclusion These figures are quite common, so it is important to know how to trade them. Do not forget that nothing works in the market 100% of the time, so set a stop loss. Good luck!!
Education
by DeGRAM
8
PATTERNS "BAT" and "CAT".Strange as it may seem, but not only bulls and bears can be found on the market, but also a couple of cats and even a bat! But don't be afraid, these animals have come to help you get rich in the new year. Let's go! The Bat pattern. The bat is a 5-point pattern that can indicate a bullish or bearish breakout. What does it look like? The pattern consists of five points: X is the beginning, from this point the price makes a significant movement; A - here the price unfolds, forming the first vertex; B is a pullback, which can be from 38% to 50% of the X – A movement. C is the price movement, which can range from 38% to 88% of the A – B movement. It is worth noting that C should not go above the point A. D is the price reversal, after movement C. The shortest movement of all other points. At this point we are looking for an entry into the transaction, you can use the Fibonacci lines. The movement from point D can be 88% of the movement of X-A, and can go above point A. Risks The stop loss can be set below the D point, but not below the X point. The CAT JUMP pattern. This pattern is characterized by a strong downward movement and, with proper trading, can bring huge profits. How to find it? The pattern appears in situations of strong movement, usually caused by bad news. The following pattern will be observed on the graph: 1. A sharp drop in price, sometimes with a gap; 2. Rollback to the bottom line of the gap; 3. After which there is a long and strong fall. How to trade? To begin with, you need to find a strong drop with a gap, as correctly accompanied by a strong volume. After that, we are waiting for a pullback to the bottom line of the gap and a reversal – this is where you can enter into a deal. Risks The stop loss is placed above the lower gap line. It is worth noting that from time to time the price may go above the lower gap line. In rare cases, the price reaches the upper level of the gap, and then falls. It is important to note that the fall lasts from one month or more, which is why this pattern is used by long-term traders. Important It is worth recalling that there are alternative patterns: an INVERTED CAT JUMP and a BEARISH BAT PATTERN. Both models work the same way, only in the opposite direction. These figures are very profitable, with proper trading. For example, a fall after a gap and a rollback can be 50% or even 70%, in the CAT JUMP pattern. Whatever pattern you trade, I wish you good luck and a lot of profit in the new year! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
10
HOW TO TRADE A BREAKDOWNHello everyone. Today we will discuss a very important topic - trading after the breakdown of the level. As it turned out, not everyone knows how to trade correctly in such market situations, so let's start learning. Trend Trend is our friend! Everyone knows this expression, but do not forget that the trend will end sooner or later and the price will go in a different direction. Such situations can potentially be very profitable for a trader. Breakouts happen not only during a trend, but also in accumulation zones. Identification To find an opportunity to trade a level breakdown, you need at least two conditions: 1. There must be a trend or an accumulation zone. 2. You need to wait for the breakdown of the level. How to trade? There are a couple of principles of proper breakdown trading. First, we find a trend movement (or accumulation zone), draw a support/resistance line and wait for the moment when the price breaks through this line. However, one breakthrough is not enough. There are many situations in the market when the price makes a false breakout, so you need to wait for confirmation. After the breakdown of the level, the price should close below the level - this means that the balance of forces has changed in the market, the trend has dried up and now the bears are pushing the market. And only after that we have to wait for the most important condition - repeated testing of the level. Very often, beginners are in a hurry, without waiting for the level to be retested, which leads to large losses. After the breakdown, the price should return to the level again – this is the bulls again trying to rule the market, trying to bring the price back over the level. But the forces are no longer enough and the price, after repeated testing, turns around and follows a bearish scenario. It is after the reversal that it is worth opening a position, since it signals the weakness of the bulls, the market is no longer able to move up. It is worth noting that the price may not always return to the level of the broken level. From time to time, you will observe how a small incoming movement is made in the direction of the level, but there is not enough strength, after which the price reverses without retest. Conclusion This topic is very important, this pattern is very profitable, but without patience and proper entry, you can incur losses. Do not forget to put a stop loss, which is best set above the level. All these rules also work for breaking the bearish trend, only in the opposite direction. Trade wisely, good luck to everyone! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
25
PRINCIPLES OF TRADING FIGURES CUP WITH HANDLEOne of the most popular figures of technical analysis among day traders is a cup with a handle. This figure is so popular due to its fairly clear and specific rules, in addition, the figure gives an excellent risk/profit ratio. How to identify the model? The formation of the model is divided into 4 stages: 1. The price has been rising for some time; 2. After the correction begins to about half of the previous growth – this is how the bottom of the cup is formed; 3. Then the price starts to rise to the previous maximum and turns down, failing to break through the resistance – this is the handle; 4. Then the price goes to break the maximum again, after which it goes even higher, approximately to the height of the cup depth. How long does the model take to form? A cup with a handle is formed from a few weeks to six months – that is why it is suitable for a long-term trader. It is very important to form a handle, which should be completed within a month, otherwise it may mean that the upward movement is weak and there may not be a breakdown. Characteristics of the cup and handle A round cup indicates consolidation, whereas a V-shaped cup indicates a too sharp reversal, which is not good. The depth of the cup should be equal to one-third to one-half of the previous upward growth. The handle should not fall more than one-third of the cup gain. In addition, a short and weak drop in the handle signals that a breakout may be very bullish. How to trade? Entrance The best entry point is the handle. At the moment, the price is falling and forming a downtrend, the trader should enter the transaction when the price breaks through this downtrend. Profit goals To determine the goal, you need to measure the distance from the bottom of the cup to the beginning of the handle – this distance is above the breakdown of the maximum and will be our goal. In addition to the main method of determining the goal, you can use Fibonacci lines – the 100 percent line is considered a conservative goal, and the 162 percent is considered an aggressive one. Stop Loss No matter how well the figure is formed, do not forget about the risks and the fact that the price can turn against you at any moment. Set the stop loss is set below the minimum of the handle, then you will protect yourself from large losses. Conclusions This figure is not in vain so popular, it is very profitable and has clear rules, which makes it easier to work. Be patient, because the figure is formed for several weeks, or even months. Do not go too early, without waiting for the formation of the cup and handle. Premature entry promises losses. Who knows how to wait - gets everything! Good luck!
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Education
by DeGRAM
36
BEST REVERSAL PATTERNSDuring the existence of the market, a large number of technical analysis figures have been found. They all work with varying degrees of accuracy. Such a large number of patterns can confuse anyone, especially a beginner. Today we will look at just two models that are quite common and, with proper trading, can bring you big profits. Both models are united by one idea – breakouts. Beginning. First, the price goes down, creating new lows below the previous ones and new highs below the previous ones. At some point, the sellers' strength ends and the market turns around almost immediately, or it stops before accelerating upwards. For profitable trading, a trader must learn to catch this moment when the strength of the trend is extinguished and the price is preparing for a reversal. Confirmation. Stopping the previous trend is not a reason to enter a trade, you need to wait for confirmation. Confirmation will be a new maximum, higher than the previous one, after which the price will try to start moving down again, making a pullback down, but there will not be enough forces for further fall and the price goes up. The entry point will be the moment when the price returns to the breakout line, bounces off it and goes up. Stop loss. Very often, such formations will give you a lot of movement and big profits. But do not forget about the stop loss, which can be set below the breakout line (risky, since there may be an earlier close) or below the previous minimum. You can find a lot of trading opportunities on the market every day, but beginners are advised to study a couple of patterns and learn how to trade them correctly. Take your time and luck will definitely find you! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
12
BIG SHORT STRUCTUREToday we will consider a frequently occurring formation that can bring you big profits. Beginning It all starts after breaking through the resistance line of the lateral movement. Lateral movement is nothing but the accumulation of force for subsequent takeoff. Upward movement After the breakdown, the price goes up, creating new highs, correcting from time to time. All this continues until the last peak is formed – the head. Head The head is characterized by a large price rise in the beginning, after which there is a sharp drop. The fall is characterized by large volumes that grow until the breakdown of the left shoulder line. Right shoulder. After that, the formation of the right shoulder begins. In this situation, the price may break through the line of the 50-day moving average several times. The ray point of entry. After several breakthroughs of the moving average, the price will make a dash down. The ideal entry point will be the last breakout of the moving average. It is very difficult to determine and enter the position at the ideal point, so you can try to enter after breaking the neck line or a little higher. Conclusion Such situations are common in all markets, giving a huge opportunity to make a profit if everything is done correctly. Sometimes the price can fall even below the sideways movement that started it all. Don't forget about the risks, good luck! ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
NSE:NIFTYEducation
by DeGRAM
3
FOREX TRADING SESSIONSThe forex market operates 24 hours from Monday to Friday and is divided into three trading sessions: Tokyo Session ( Asian ) London Session ( European ) New York Session ( American ) Each session has its own characteristics and its own time, in addition, at certain times the sessions overlap each other. Let's take a closer look at the sessions. Asian session. This session is characterized by a small trading volume, compared to other sessions. At this time, there are few major players on the market, so the price may move sideways for a long time. There are many other countries present during the Asian session, such as Russia, China, New Zealand, and Australia. Due to such a large number of countries and different opening hours, it is considered that the Asian session lasts from 11 p.m. to 8 a.m. GMT. This session is suitable for those who do not like sudden movements. The session is characterized by smooth and slow movement, without strong bursts and without unexpected jumps. With the right direction, your stop loss will rarely be affected by market noise. European session. The London session is the most important. Most of the financial world turns on at this time. This trading session is considered the largest in terms of trade volume, accounting for 34% of trade. In addition to London, other major markets participate in the European session – the markets of Germany and France, because of this, it is considered that the working time of the European session starts from 7 a.m. to 4 p.m. GMT. Large trading volumes are due to the fact that three sessions intersect at this time: the Asian one, which will close soon, the American one, which is about to open, and the European one itself. This session is suitable for people who are not afraid of big movements and huge volatility. At this time, the market is as active as possible, there are many opportunities to earn, but do not forget about the risks, strong price movements can deprive you of all the capital in an instant. At this time, there is a frequent knocking out of stop-losses of retail players, after which the price often accelerates in the opposite direction. American session. At this point in time, New York is included, with a market share of 16%, the second largest trading market. The American and European sessions overlap each other, creating a large amount of liquidity. The US dollar and the Pound are the most traded currencies, occupying a huge part of all transactions on the market, because of this, volumes are increasing. At this time, important economic news often comes out, which adds strength to currency movements. New York opens at 1:00 pm and runs until 10:00 pm. What time is considered the most active? The most active moments in the market are the moments when two sessions overlap each other: New York and London: from 1:00 pm to 5:00 pm Sydney and Tokyo: from 12:00 am to 7:00 am London and Tokyo: 8:00 am to 9:00 am When two sessions overlap, it is profitable to trade the main currencies of these sessions. For example, trading in EUR/USD, GBP/USD currency pairs will give good results when the European and American sessions intersect from 1:00 pm to 5:00 pm. Conclusion Markets can move very fast, making big jumps, knocking out your stop losses, on the other hand, there may be a market situation in which the market moves very slowly and if you don't know how to wait, you won't be able to earn in such situations. Choosing the right time that suits your style is an important component of a trader's work.
NSE:NIFTYEducation
by DeGRAM
METHODS FOR SETTING STOP LOSS. PART 1.The market is volatile and very unpredictable, it is impossible to constantly correctly guess the future direction of the market, and in order not to lose everything in one transaction, a stop loss was invented. Stop loss, like the trend, is our friend. Without a stop-loss strategy, there can be no profitable trading strategy. The ability to correctly find the stop loss zones will help each trader to avoid unnecessary losses and not to exit the position ahead of time. Let's look at these strategies. Methods for setting Stop Loss PERCENTAGE METHOD The interest method is a method in which the stop will be equal to a percentage of the capital, depending on your risk management. At the same time, a large number of professionals recommend not to risk 1-2% of the capital in one transaction. And this method is very popular because of its simplicity and ease of calculations. For example, if your capital is $ 10,000, and the risk management in each transaction is 1%, then the stop loss will be $ 100, everything is very simple. CHART STOP This method is based on placing a stop loss behind the support and resistance levels. After several bounces from the levels, you can set a stop loss above the resistance or below the support, because if the price breaks through these levels, then potentially the deal can go strongly against you. Such levels will be our protection, because it will be very difficult for the price to break through strong levels, but even if there is a breakout, we will be protected by a stop loss. TIME STOP Another method of setting a stop loss is a method based on time parameters. This method will be of interest to those who do not want to leave their deals overnight or want deals to close at the end of the week and not remain open on weekends. Everyone knows about the uncertainty that arises on weekends. At this time, it is impossible to close a position, and the news can be dangerous and you can suffer big losses at the opening of a new trading week, in order to avoid all this, this method was invented. VOLATILITY STOP Each currency pair has its own volatility value. Some couples walk fast and a lot, some walk less. If a trader knows the average daily range of a particular pair, then he can set his stop loss slightly above this value so that the position is not closed prematurely due to market noise. For example, if we imagine that GBP/USD has an average daily movement range of 100 points, then setting a stop loss by 20 points is likely to lead to premature closing of the position. But, if a trader puts a stop above the daily range, you can thereby protect yourself from accidental price spikes. This method forces you to place large stop-losses, thereby giving you space to work so that the price is not closed prematurely. Conclusion Setting a stop loss is a vital condition for any trading strategy. Without a stop loss, you will inevitably lose capital. In the next part, we will look at other methods of setting a stop loss. Good luck to everyone! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
17
TYPES OF TRADING STRATEGIESHello to all! Throughout the history of the forex market, several types of strategies related to the trading interval have been invented. Strategies have differences in the time of holding a position, and each trader must choose the type of strategy that suits him. SCALPING Scalping is a well-known style of short-term trading, using technical analysis. Scalpers, as a rule, enter into impulse movement, on breaking through levels or rebounding from them, in areas where large volumes of orders have accumulated, and close positions immediately after the end of the first impulse. They do not sit out in a position and do not hold it for a long time. Positions are usually closed within a minute. Scalpers use tick or minute charts for analysis. Impulse movements can be born during the period of news release, so the trader should follow the news. Since scalpers take a small number of pips, their profit also depends heavily on the spread, so they trade liquid pairs. Day Trading Day traders open and close positions within the day. They do not transfer transactions to the next day. 5- 30 minute charts are used for analysis. Day trading differs from scalping by holding a position for a longer time, up to several hours, if the trend allows. Day traders profit only from intraday fluctuations, so they can afford to use higher leverage levels than long-term traders. SWING TRADING Swing trading is a method of trading with holding a position from several hours to several days, that is, positions can be left overnight. Swing traders use hourly and higher charts to analyze the chart. Much attention is paid to trading formations and levels, indicators are used. Swing traders can profit from both trends and corrections, because the profitability may be higher than that of trend traders. NEWS TRADING Such traders pay attention to the news more than anyone else. The opening of a position is made during the release of important news that can push the market against the trend or, conversely, disperse it. As a rule, such traders do not leave their positions overnight. The idea is that during the release of important news, market volatility increases and it is here that traders who trade on the news earn. They wait for this liquidity, open positions before the news comes out and hold them under any circumstances. TRADING ON TREND Trend trading is a very well-known type of trading and perhaps the most profitable. Everyone remembers the rule: Trend is our friend. And this friend can bring big profits, without serious emotional burden. This type of long-term trading implies the ability to identify a trend with the help of technical analysis and opening positions in the direction of the trend. The main indicator for trend traders is the trend itself, so holding a position can be from several days to several months until the trend stops. Often, in order not to lose profit, a treling stop is used. To analyze charts, traders of this type use daily and weekly charts. They often use long-term models and resort to using fundamental analysis to open and hold positions. The spread does not bother them, as positions are opened for a long time, so trend traders can afford to trade illiquid pairs. Conclusion It is not enough to know what types of trading strategies there are, it is very important that the strategy suits you. Maybe you like to take profits quickly and leave the market? Or do you like to hold positions for a long time and you don't like to follow sharp short-term price fluctuations? Every trader should understand himself first, and only then choose a strategy.
Education
by DeGRAM
2
CORRELATION COEFFICIENTS on FOREXHello everybody! Professionals have been aware of correlation for a long time and use it profitably. The essence of correlation is not difficult to understand and using it in trading can significantly increase your profit. Correlation coefficient of currency pairs – what is it? Correlation is a statistical relationship between two or more random variables. The correlation coefficient is an index of the interdependence of quotations of different currency pairs. Correlation of currency pairs is divided into two types: direct (positive) and inverse (mirror or negative). A positive correlation is a similar movement of quotations of different currency pairs. Inverse correlation is the reverse movement of the exchange rate of different currency pairs. For example , EUR/USD and USD/CHF are in a mirror correlation because both European currencies are against the dollar. Any change in the euro affects the franc exchange rate and vice versa, on the chart, the price of the euro and the pound moves the other way around because in the EUR/USD pair, the dollar is in second place, and in USD/CHF in the first. Method Analysts have come up with a method that makes it easier to understand the correlation, it is called the correlation coefficient. Using it, you can understand in which range each pair is relative to the other, where +1 is a complete correlation, and -1 is the opposite. The stronger the link between the economies, the stronger the value tends to unity. Let's consider the main ranges of coefficient values and their impact on the currency pair: • 1 - Denotes the same movement of currency pairs. * From 0.9 to 0.5 – High dependence of currency pairs among themselves. * From 0.5 to 0.1 – There is a decrease in correlation. * 0 – There is no correlation, the instruments do not depend on each other. * From 0.1 to -0.5 - Characterized by a decrease in correlation. * From 0.5 to -0.9 – An increase in correlation and a change in the direction of movement of currency pairs in the opposite direction. * -1 – Inverse dependence of currency pairs. One price is going down, the other is going up. Trading options Novice traders often think that they reduce risks when they invest in different currency pairs, but at the same time they do not understand that a large number of pairs correlate with each other. Forgetting about the correlation, you can start getting double losses. Correlations can be used to confirm signals. For example , the analysis of the EUR/USD chart showed growth. To make sure that the forecast is correct, you need to get a reverse confirmation for USD/CHF. Sometimes, to confirm trading signals, a comparison of three assets that are minimally related to each other is used. Take for example EUR/USD, USD/JPY and EUR/JPY. • If EUR/USD is predicted to go up, then the forecast for the reverse currency pair USD/JPY should signal a fall. In the event that there is no signal for USD/JPY, then it is necessary to carefully study the behavior of EUR/JPY. No matter what tactics a trader uses, you always need to remember about correlation and use several pairs with positive and negative correlation in the analysis to increase the accuracy of the forecast. In addition, correlation helps to hedge transactions. Having decided to invest in one currency pair, you can divide the investment amount into two parts and invest the second part in a currency pair with Time interval in correlation analysis The correlation has the ability to change depending on time. It may be that the daily correlation = 0.6, but when switching to a monthly interval, this value increases and shows a strong correlation. There may be an inverse situation, when the correlation drops relative to the selected interval. Pay attention to this when analyzing. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
16
ACCOUNT DRAWDOWN – HOW TO AVOID IT?Today I want to touch on a very important topic - account drawdown. Every trader will face this problem sooner or later, because losses in the forex market are inevitable. And if a professional knows what to do and has experience dealing with such a problem, then beginners often get lost when faced with a drawdown, which leads to even greater losses. What is a Margin Call? Margin Call - is a "call"-notification of the broker with a requirement to deposit additional funds to guarantee open transactions. If no additional funds have been received to the trading account after the Margin Call, and losses continue to grow, then when the price reaches a certain value, the Stop Out procedure will be launched, and the brokerage company will automatically close part, and possibly all transactions on the trading account. Causes of drawdown. There are two possible reasons. The first reason for the drawdown is a bad trading strategy. Each strategy needs to be checked and only then use it. No risk management will help if the strategy is unprofitable. The second reason is psychology. Even if you have a proven strategy, you can still lose money because you lose control of the situation. Discipline is the key to profitable trading. To act according to the strategy and even after a series of losses to adhere to the plan and not exceed the value of risk management - that's what a professional does and a beginner misses. Newcomers try to regain what they have lost by opening deals with a large volume, risking even more money, driving themselves into an even greater minus. First of all, you need to put up with losses, it is impossible to avoid them! Accept losses, do not lose your head, trade further according to the rules and then you will not only return, but also earn even more money. An important thought! Every beginner should remember that the more he loses, the more he will need to make profits in the future in order to reach zero. It is very difficult to make 50% of the profit to the capital in one transaction. It is almost impossible to make 100%, but beginners do not understand this and invest a lot of money, open positions with a large volume and lose even more. Losing 1% is not so scary, losing 10% you need to do 11% already to get to zero. Having lost 50% in the future, you will need to make 100% to go to zero! Don't bring your account to this. Remember: it's better to move up slowly than to fall down quickly and crash. Decide on the drawdown level. Professionals do not let their account fall below reasonable values. A beginner brings his account to exhaustion in two or three transactions. For a beginner, a drawdown of -50% or -70% occurs easily and quickly, a professional cannot afford this. Each trader must decide for himself how much percent of the capital he can lose and still remain calm. For each person, these values are different, someone cannot survive a 20% drop in the bill, and someone lives quietly with -50%. Drawdown levels up to 15% – normal working drawdown. 16-30% is not a reason to panic, but the time is coming to reduce the risks and intensity of trading. And it is also worth reviewing the state, dynamics of the market and the trading instrument. 31 - 60% is the beginning of the end. If the account is down by more than 30%, trading should be stopped and a break should be taken. After that, come back with a modified strategy for making trading decisions. Drawdown is an unpleasant thing, but the main thing is not to start it and not to delay the time after exiting it. If you have already fallen into a drawdown, then you need to follow the following rules: If you use a proven trading strategy that has repeatedly made a profit, then you just need to fix losses and continue trading using the same strategy, but with a more gentle money management system. If the trading strategy used is no longer effective, then you should fix the losses and look for a new working trading system. Due to the fact that there are no exceptionally accurate methods to exit the drawdown, your further actions will be reduced to the same trade. In this situation, the trader should identify weaknesses in his strategy and try to eliminate them. The revision of approaches to risk management and funds will also allow you to balance trading and avoid deep drawdowns in the future. Be disciplined, follow the money management, trade systematically, and the drawdown on the deposit will not bother you. ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
Education
by DeGRAM
6
PRINCIPLES OF DRAWING UP A TRADING PLANHello traders! Today we will talk about WHAT should be in the trading plan of any self-respecting trader. Many, as it turned out, do not know the basic principles of building a trading plan. This article will help beginners understand WHAT should be added to their trading arsenal. 1. Timeframe. The first stage of drawing up a trading plan is to determine the timeframe. Every trader should know in what time interval he is going to look for entry opportunities and build a trading strategy accordingly. As a rule, timeframes are divided into three types: 2. Risk management. Risk control is probably the most important issue in any trading plan. The ability to control risks and follow principles distinguishes a professional from a beginner. In this section, the best rule is rule 1-3% 3. Market structure. Every trader should have a trading strategy even before opening a position during periods when the market is trending or in a sideways movement and, of course, be able to correctly determine when the market is moving from one phase to another. 4. Markets. Each market has its own characteristics. Not every trader, for example, can approach the forex market. You need to know where you are trading and use the appropriate tools. It may be worth trying all the markets to understand what is right for you. Study the markets, gain experience. 5. Entry conditions. The entry point must be chosen by the trader according to the rules prescribed in the strategy. A trader should know when and under what conditions to enter a position. Strategies can be different: based on a pullback or a breakout of the level, or maybe you want to trade according to the intersection of the indicator lines. And, yes, no one forbids using all strategies at once, the main thing is not to get confused. 6. Stops. Placing stops is an important part of the strategy. A properly placed stop can protect you from premature closing of the transaction. Failure to place a stop order may result in the loss of all capital. In any case, the strategy of placing stops should be in every trading plan. You can set a stop according to some percentage you have chosen, or you can set a stop for the maximum or minimum, it's up to you, but you need to decide before entering the position. 7. Target. A correctly set goal and a set take profit helps a trader to take profit and not stay in a position until it turns from profitable to unprofitable. There are different ways to fix profits: fixed - the value you have chosen according to your trading strategy. Trailing stop is a slightly advanced method, the essence of which is that the stop will move along with the price at the distance you choose and will close when the price goes against you too much. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
37
Principles Of Risk Management One of the main topics, and perhaps the most important, is the topic of risk management and risk reward. Beginners often do not take this topic seriously, trying to hit the jackpot in every transaction, risking all or almost all of the capital and not realizing what the consequences of such actions may be. Whatever trading style you use, whether it's day trading or scalping, the way you manage risk will still be decisive in the question of whether you will be profitable at a distance or not. Margin trading gives a lot of advantages, but most often it ruins newcomers who open deals with a large volume and quickly lose money when the price goes against them. The ability to manage risks correctly will help you stay in the game for a long time and be profitable at a distance. Focus on protecting what you have. In the pursuit of profit, traders forget about risks, forget about capital protection. It is important to remember that after each loss, the percentage of profit that needs to be returned to breakeven increases exponentially, depending on how much you lose. Fundamentals of Risk Management The market is changing every second and at any moment there may be news that will make the price go against you. The desire to risk everything in one transaction leads to the closure of novice accounts, instead, it is better to manage risks and stay in the game for a long time, making a profit. Anything can happen in the markets and it is simply unwise to risk everything in one transaction. You must remember: 1. You should not risk more than you can afford to lose. 2. Each trade must be opened with the correct risk reward ratio. (RRR) The Risk Reward Ratio (RRR) is how much you are willing to lose, compared to the expected profit in each trade. You should strive for a ratio of less risk / more profit. One of the best ways to manage risk is the 1% method. This method of risk control means that in each transaction a trader risks 1% of his capital. This is correctly used even by managers of large hedge funds and they do it for a reason. Do not think that only 1% of the capital can be traded. You can use at least all your capital for trading, but your stop loss should be no more than 1% - this is your risk. You can use leverage if you need to, but don't lose more than 1% in one trade if you want to become a professional. The Best Risk-Reward Ratio For Trading Before opening a position, you should know how much you can lose and how much you expect to win, and the ratio should not be lower than 1:1. A ratio below 1:1 means that you lose more than you can win, and this is an extremely dangerous activity that can eventually lead to the loss of the entire account. If the ratio is 1:1, you will be at breakeven, even if 50% of your trades are unprofitable. If the ratio is higher than 1:1, then you will be in the black, even if more than half of your trades are closed in the negative. Do not forget that it is impossible to win in every transaction and without proper risk management, such a game will lead to big losses. Do not forget about the rules of risk management, use a profitable strategy and act according to the rules, do not give in to emotions and then success awaits you. ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
Education
by DeGRAM
1
UNSUCCESSFUL vs. SUCCESSFUL TRADERUnsuccessful Trader You are trading without a Specific Trading Strategy The main reason for opening positions for you is not clear strategy rules, but your own intuition. And even after several failures, you continue to repeat your mistakes due to the lack of discipline and the lack of a trader's trading journal. You often over-trade and get Margin Calls Your instincts make you trade too much, open new positions again and again, forgetting about the risk and thus getting frequent margin calls. Because of such disorderly market entries, you become very emotional, lose control and lose money quickly. You get attached to Open Positions Following your own emotions, you often hold on to an open position for too long, hoping that the profit will become even greater, while forgetting about the take profit that you set yourself. As a result, a profitable position becomes unprofitable, and you begin to believe and expect that it will become profitable again, overstaying the unprofitable position. You're Too Emotional Your mood changes with every price reversal. Forgetting about the analysis, you often open new positions and lose more than your risk management can afford. Successful Trader You have an Effective Trading Plan You have written on a piece of paper a strategy of actions for any market situation and always follow the rules prescribed in the strategy. You often analyze your trades in a trade journal and always remember your mistakes and hits. You Understand What Risk Is You have clear rules of risk management. Even before opening a position, you know how much you can lose in this trade and do not lose more than allowed by the rules of risk management. You don't move your stop loss and you don't act emotionally. You Control Your Emotions You clearly follow your strategy, leaving no room for emotions. Even before opening a deal, you have analyzed everything and know exactly what to do – you have a plan of action. You always fix a part of the profit You do not forget to protect your capital, so you close part of the position in plus or zero, and let the rest of the position grow further. Now you will not only not lose your money, but you can also earn. ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
Education
by DeGRAM
2
TRADING PRINCIPLES THAT EVERYONE SHOULD KNOW. PART 1.Hello traders! For a long time, the Forex market has created a large number of trading methods. Finding your strategy that suits you specifically is one of the main steps in achieving success in the Forex market. And it is worth remembering that successful traders do not use anything magical in their trading. Everything has been invented for a long time for both a novice trader and a successful trader. The main task of beginners is to choose a fairly easy strategy and strictly follow its principles and rules. So what does a beginner need to know in order to trade profitably? Price levels. It is difficult for a beginner to determine price levels and trade them correctly. There are no specific rules in this topic, since the price does not draw clear points, but forms zones. Many traders use support and resistance levels in their trading and for beginners, the main task at the beginning of the journey will be the concept of selling from resistance and buying from support. There are three types of trading systems based on price levels. 1. If the price moves within the framework of a sideways movement, the trader can sell from resistance and buy from support. 2. If there is a prevailing trend in the market, for example, bearish, a trader can sell from resistance and expect support to break through. 3. The same rules work in the bull market, only in a different direction. If the price breaks through the resistance, then this zone becomes a support from which you can buy. Consider the principles of trading from price levels. #1 Understanding the market context. The key to profitable trading from the levels is the ability to correctly understand the market context. Bearish pressure leads the market movement through an impulse movement that breaks through support and creates new lows – in this context, selling strategies will not work well. That is why it is so important to follow the concept of the market context: When the market falls, creating new highs and lows, we are talking about an impulsive bearish context. The correction is created by an impulse that is weaker than the main trend. A sideways movement occurs when both demand and supply are approximately equal and the price cannot move in a certain direction. As soon as the bulls or bears take over, the price will make an impulse in the direction of the strong side. #2 Top-Down Analysis The market is ruled by big money, which pays great importance to large timelines. And it is vital for an ordinary trader to know where smart money is pushing the market. To do this, it is worth noting strong levels on the monthly-weekly-daily timeframes in order to know exactly where the price is most likely to rebound. On the other hand, if the price is above the key levels, then the market is bullish. #3 Candlestick Patterns Almost every trader uses candlestick patterns in his analysis, which are a very strong analysis tool. Reversal candlestick patterns create an excellent opportunity to enter a trend reversal. The higher the timeframe on which the pattern was formed, the stronger its signal will be. Knowing candlestick formations is a very important part of a trader's professional growth. #4 Risk Management Any trader should be aware of the risks and be able to control them. Although this topic goes beyond the definition of the market context, it is still very important. There are many ways to control risks. An important rule is to set a stop loss and risk in each position, as recommended, no more than 2% percent. Hedge fund managers risk an even smaller percentage in each transaction, sometimes 1% or even lower. It is better to grow slowly than to fall quickly. If you lose 2% of the capital, in the next transaction, in order to get your money back, you will already need to make 4%, which in general is not difficult to do. But if you lose 50%, you will need to make 100% profit already, which is almost unrealistic. Conclusions Summarizing the above, you can make the following sequence of actions: Identify the key support and resistance levels. Wait for the candle to form in the desired direction. Stop loss above or below the candlestick pattern. Take profit is placed at the following support or resistance levels. Always make sure to use proper money management for each trade, and never take on a risk that exceeds the return. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Editors' picks
Education
by Lingrid
117
Psychology of the market circle Hello traders! Euphoria and Anxiety, Fear and Greed Psychology of the market cycle Any trader finds himself under the influence of changing market cycles. At favorable moments, investors feel joy and are overwhelmed with self-confidence. On dark days, the investor falls into despair and feels anxiety attacks. The only way not to succumb to such an emotional influence is to follow the clear rules of a properly compiled system. Unfortunately, most traders have no plan and no strategy. In order not to become a victim of emotions, a trader must have an idea of the emotional stages of the market cycle. Psychological stages of trading An uptrend is a trader's emotions. Optimism When the market is growing, the trader sees an opportunity to earn and invests money. The economy is growing, the price is rising, profits are growing. At such a moment, the trader feels confident, begins to open new positions after each pullback, which eventually turns into a kind of instinct. At this stage, the trader begins to forget about the risks. Enthusiasm and Abundance The market is starting to accelerate. Traders experience pleasant feelings of joy and enthusiasm. The trader begins to lose his head, confidence overwhelms him. Euphoria After that, the last stage of the upward trend comes - Euphoria. Money comes very easily, the trader is overwhelmed with confidence in his actions and decides to open positions using leverage. At some point, the trader begins to think that he is a professional analyst, and it is not he who is following the market, but the market is following him. This stage in the market helps large investors to discount their shares to self-confident traders who buy everything in a row, believing in the continuation of the upward trend. In fact, this phase is the most risky, after which the trend is reversed. Emotional stages of a Downtrend in the market Anxiety The price is starting to slow down, there are fewer and fewer sellers, bears are gaining momentum. For a trader blinded by luck, this phase looks like another correction. But the market can no longer create new highs and falls, forming new lows. Such a fall creates anxiety in the trader's soul, easy profits begin to melt. Denial and Fear Fear fills the market, traders are afraid to be wrong, because recently they ruled the market. At this stage, the trader denies that he is wrong and tries in every way to justify holding unprofitable positions. Like any beginner, a trader believes that sooner or later the price will not only return, but also go beyond the maximum. Denial brings the trader to a state of helplessness and inaction, from misunderstanding of the situation on the market. The trader gets lost, not knowing what to do and waits without knowing what, without closing unprofitable positions. Despair and Panic The price continues to fall, and the trader falls into despair, because the confidence in holding a losing position is already beginning to disappear. This phase is the most painful, because the severity of losses presses too hard to stay calm. Surrender The unprofitability of the position is increasing, traders can no longer tolerate this pain. In this phase, traders have to capitulate just to stop these torments. Traders are starting to close positions and it is here that large companies are included, for which this moment gives a new opportunity for large profits. Asset buying begins, because a reversal is possible soon. Despondency and Confusion As it often happens, as soon as a trader has closed a position, the market begins to grow. It looks like the law of meanness. This phase drives the trader into despondency, because the position was closed a moment before the rise. It is here that newcomers begin to think about whether it is worth investing further. Hope The market is starting to revive. The price shows new highs and the investor has hope. It seems that here it is, a new opportunity. The trader begins to enter the market, forgetting about the past, without drawing conclusions. A trader enters the market when the price has already accelerated, at points where the risk is again close to a critical value, the cycle begins again. Traders should keep this cycle in mind. Such emotional roller coasters can ruin anyone. A well-designed strategy can help avoid these painful blows. Remember the risks, remember the cycles, work on the mistakes, and victory will not take long to wait. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
40
History of Forex | From Ancient to the Modern Day TradingWe have come a long way from the previously practiced barter system to the modern-day system of trading currency. Following is a brief summary of the evolution of currency and how it gave rise to Forex Trading. Here are the main stages that are illustrated on the chart: 1️⃣The Ancient system of Trading - Trading with Gold As early as 6th century BC , the first gold coins were produced, and they acted as a currency because they had critical characteristics like portability, durability, divisibility, uniformity, limited supply and acceptability. 2️⃣Bank Notes Originated - Deposited Gold in banks in exchange for banknotes 3️⃣Role of Geography - Various banks of different regions printed different currencies Gold Standard - Currency pegged to gold In the 1800s countries adopted the gold standard. The gold standard guaranteed that the government would redeem any amount of paper money for its value in gold . This worked fine until World War I where European countries had to suspend the gold standard to print more money to pay for the war. 4️⃣Bretton Woods System - Currency pegged to USD The first major transformation of the foreign exchange market, the Bretton Woods System, occurred toward the end of World War II. The Bretton Woods Accord was established to create a stable environment by which global economies could restore themselves. It attempted this by creating an adjustable pegged foreign exchange market. An adjustable pegged exchange rate is an exchange rate policy whereby a currency is fixed to another currency. In this case, foreign countries would 'fix' their exchange rate to the US Dollar . 5️⃣Birth of Floating Currency - Currency that is not pegged to any assets or other currencies is known as a 'floating currency'. And what will be next? Very hard to say but blockchain technologies will make the system change again.
Education
by fxpremiere