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Let's Talk About "Perspectives"Let's talk about the perspectives people often bring up in trading . . . Under various conditions, such as different market trends, timeframes, strategy logics, and technical analyses, everyone's view and perspective on the market varies. TV is filled with people's opinions and perspectives on market trends. Some people seek validation from others, while some wish to share what they believe to be profitable opportunities and be appreciated for it. Sharing perspectives sometimes tie down traders as well, limiting them to their own published analysis articles and ego, causing some people to be unwilling to admit their mistakes and seize the next trading opportunity. Regardless of the validation of these opinions and perspectives, we must admit that every profitable trade has an element of "Luck" involved. "NO ONE WINS EVERYTRADE". . "And what's more interesting Is that if you find two long-term, consistently profitable traders, they are very likely to have completely opposite views on the same trading product at the same time, but both of them still stay profit." . . . I believe that when a mature trader being asked about their opinions or perspectives, they should be able to clearly differentiate between their views and their trading plans. Possible question and responses include: 1. "Asked about the upcoming market trend" I currently have a positive outlook for a specific period of time, believing that the market may rise (or fall). However, I'm not certain if I'm correct. If things go wrong, I will cut my losses according to my trading plan. Admitting mistakes and respecting the market. Search for the next trading opportunity. 2. "Asked about positions and trading opportunities" I am temporarily trading "Target" in the direction of a rise (or fall), but I do not recommend anyone to follow my trade because I have no idea if my next trade will be profitable. What I do know is that I can achieve my deserved expected return through long-term trading. 3. "Asked about specific trading methods" I cannot give you specific advice, as I don't know how much capital you have or how much risk you're willing to take. Everyone's pursuit of returns and tolerance for losses are different, which will be reflected in the trading strategies they use. 4. "Asked about medium to long-term future trends" I am a trader, not a financial expert, and definitely not an economist. Predicting the future is too difficult, even for Nobel Prize-winning economists, who may not be able to forecast market trends right as well. So, what I can do is play the role of a good observer, watch price trends for potential trading opportunities, and make the most cost-effective trades or positive expected value trades. 5. "Asked about making money in short-term trading" In the short term, there is a high probability that my trades will incur losses, and speculative trading can also result in terrible consecutive losses. However, I am fully aware of the expected win rate and returns for each trade. Through each trade, I accumulate expected value and manage my funds with proper risk control. I believe that time and a large number of trades will realize this expected value. . . . This is also why I am not very willing to share trading opportunities directly. . . . I am very clear that my trading pattern has a win rate of less than 45%, and I am quite certain that following my trades is more likely to lead you to stop-loss. More scenario below: A. If I share an opportunity and make money by being right, there might still be people who lose money because they set different trading plan and can't tolerate fluctuations. B. If I share an opportunity and lose money by being wrong, you could find me to blame. However, everyone needs to take responsibility for their own profits and losses because it's your money and your decisions. C. If you follow my trading plan and gain profit. You learn nothing about it. Also one trade's win/loss most likely depands on "Luck". Not so much different from "Gamble". Of course, occasionally drawing some charts to remind everyone of the current general trend direction is not a problem! In the short term, "Luck" is essential for speculation, and I hope everyone can have good fortune. . . . I am Beta, If my articles are helpful, please leave a "like" or "comment", and "follow me" for more good stuff.

Education

25 Trading Rules for Guaranteed Success!Hi traders! Before we dive into the 25 trading rules that can lead you to success, let's take a moment to reflect on this three things that are key to successful trading: First, there's " content. " This is all the information that traders use to make decisions, both from the market and from their own gut. It's really important to have access to reliable and up-to-date info, so you can avoid making costly mistakes. The second thing is " mechanics. " This is all about how you actually trade: the tools you use, the strategies you employ, and so on. It's crucial to master these mechanics before you can hope to make any money. Finally, there's " discipline. " This might be the most important of all. You need to be disciplined in your approach to trading, making smart decisions every time and sticking to your plan. It can be tough, but it's absolutely essential for long-term success. To help with this, you might consider reviewing a set of trading discipline rules every day to keep you on track. To improve your trading discipline, it's important to consistently reinforce good habits. Consider reviewing these 25 rules of trading discipline daily before beginning your trading session. It only takes three minutes, and it can help remind you how to conduct yourself throughout the day. Think of it as a helpful routine, like saying a prayer or setting intentions for the day ahead. #1 - DISCIPLINE PAYS OFF: MAXIMIZING PROFITS IN THE MARKET When it comes to trading, being disciplined pays off. If you can maintain discipline, you're more likely to make profits and avoid losses. The market rewards traders who can stay focused and make rational decisions. Remember, discipline equals increased profits. #2 - STAY DISCIPLINED EVERY DAY AND THE MARKET WILL REWARD YOU, BUT DON'T CLAIM TO BE DISCIPLINED IF YOU ARE NOT 100% OF THE TIME. It's crucial to be disciplined in trading, but it's not a part-time commitment, like saying you quit smoking but still sneaking a cigarette. If you're only disciplined in nine out of ten trades, you can't consider yourself a disciplined trader. It's the one undisciplined trade that can seriously harm your overall performance. Discipline must be practiced in every trade, every day, and only then will the market reward you. #3 - ADJUST YOUR TRADE SIZE WHEN TRADING POORLY Many successful traders abide by this rule. Instead of continuing to lose money on multiple contracts per trade, why not lower your trade size to just one contract on the next trade and save yourself some cash? Personally, I lower my trade size to one contract after two consecutive losing trades. Once I have two profitable trades, I increase my trade size back to its original amount. Think of it like a baseball player who has struck out twice. The next time at bat, he adjusts his grip on the bat and shortens his swing to make contact. Similarly, in trading, adjusting your trade size and aiming for just a small profit or a break-even trade can help turn your losing streak around. Once you've got two consecutive winning trades under your belt, you can increase your trade size again. #4 - NEVER TURN A WINNER TRADE INTO A LOSER ONE We've all been tempted to break this rule before, but we should aim to avoid it in the future. The root of the problem is greed. The market moved in our favor and gave us a profit, but we weren't satisfied with a small gain. Instead, we held onto the trade hoping for a bigger profit, only to watch the market turn against us. We hesitated and the trade turned into a significant loss. There's no need to be greedy. It's just one trade. You'll have many more opportunities throughout the day and in future trading sessions. The market always offers opportunities. Remember that one trade shouldn't make or break your performance for the day. Don't let greed ruin your trades. #5 - DON'T LET YOUR BIGGEST LOSS EXCEED YOUR BIGGEST WIN It's a good idea to keep track of all your trades during a session. By doing so, you'll have a better understanding of your performance and be able to make better decisions. Let's say your biggest win so far in the day is 30 Pips on EUR/USD. If you have a losing trade, make sure it doesn't exceed those 30 Pips. If you let a loss go beyond your biggest win, then when you calculate your total gains and losses, you'll end up with a net loss. That's definitely not what you want, so be careful and stick to your plan. #6 - DEVELOP A CONSISTENT METHODOLOGY AND STICK TO IT: AVOID CHANGING STRATEGIES DAILY To be a successful trader, it's important to have a solid game plan. This means writing down the specific market setups or prerequisites that need to happen for you to enter a trade. Your methodology doesn't have to be anything fancy, but you should have a clear set of rules or price action that you follow in order to make trades. If you're using a proven methodology and it doesn't seem to be working in a particular trading session, don't try to come up with a completely new strategy overnight. Instead, stick with what works and has been successful for you in at least half of your trading sessions. Having a consistent methodology will help you make more informed and confident trading decisions. #7 - BE YOURSELF. DON’T TRY TO BE SOMEONE ELSE. In trading, it's important to be yourself and not try to be someone else. It can be tempting to try and emulate successful traders or follow their strategies, but ultimately, you need to find what works for you. Everyone has their own unique personality, risk tolerance, and trading style. Embrace your strengths and weaknesses and develop your own approach. Don't compare yourself to others or try to be someone you're not. The most successful traders are those who stay true to themselves and their own strategies. Remember, you are the only one who knows what's best for you and your trading journey. #8 - ALWAYS PRESERVE YOUR CAPITAL: PROTECT YOUR ABILITY TO TRADE ANOTHER DAY Always prioritize protecting your capital in trading. It's important to never risk more than you can afford to lose, as the consequences can be devastating. One of the worst feelings in trading is not being able to continue because your account equity has dipped too low. To avoid this, I suggest setting a daily loss limit that you stick to, such as $500. If you hit that limit, it's time to turn off your computer and call it a day. Remember, you can always come back tomorrow with a fresh mindset and a new opportunity to trade. #9 - EARN THE RIGHT TO TRADE WITH BIGGER SIZE To earn the right to trade with bigger size, it's important to prove that you can consistently generate profits with smaller trades. Traders who rush into larger trades without sufficient experience and success are putting themselves at risk of significant losses. By demonstrating discipline, patience, and a solid track record of profitable trades, traders can gradually increase their position size and take on more risk as their skills and confidence grow. Remember, trading with bigger size is a privilege that must be earned through diligent practice, hard work, and a commitment to continuous improvement. #10 - HOW TO CUT YOUR LOSSES IN TRADING It's important to remember that having a losing trade doesn't make you a "loser." However, if you don't exit the trade once you realize it's not working out, then you're not making smart decisions as a trader. Trust your gut - if you have a feeling the trade is no good, it probably isn't. It's better to exit the trade and cut your losses rather than risk losing even more money. Every trader experiences losing trades throughout the day, including myself. On average, I have about one-third of my trades as losers, one-third as break-even trades, and one-third as winners. But the key is to exit losing trades quickly so they don't end up costing you too much. By doing this, even though I have more losing and break-even trades than winners, I still end up going home with a profit. #11 - THE BENEFITS OF TAKING A SMALL LOSS EARLY IN TRADING Sometimes traders in the pit will joke around and say things like "You're not a loser until you get out" or "Not to worry, it'll come back." But in reality, these phrases are just affirmations that it's time to exit a trade when it's not working out. Once you recognize that a trade is no good, the best thing to do is to exit immediately. Don't wait and hope that it will turn around. It's never a good idea to let losses pile up - cutting your losses early is a smart move that can help protect your capital and keep you in the game for the long run. #12 - WHY HOPING AND PRAYING IN TRADING IS NOT A WINNING STRATEGY As a new and undisciplined trader, I used to pray to the "Bond god" whenever I found myself in a tough trade position. I hoped for some sort of divine intervention to save me, but it never came. I eventually learned that praying to any "futures god" was a waste of time. The best thing to do is to just get out of a bad trade and cut your losses. Trusting in your own trading plan and strategy is much more effective than relying on luck or divine intervention. #13 - WHY TRADERS SHOULDN'T WORRY TOO MUCH ABOUT NEWS IN THE MARKET. IT'S JUST HISTORY... As a trader, it can be tempting to constantly monitor news and events in the market. However, it's important to remember that news is just history. By the time it reaches the public, it has already been factored into the price of assets. So, worrying too much about news can actually be detrimental to your trading strategy. While it's important to be aware of major news events, such as economic reports or geopolitical developments, it's not necessary to react to every piece of news that comes out. Instead, focus on developing a solid trading plan based on technical analysis and risk management strategies. Stick to your plan and don't let emotions or external events dictate your trades. Ultimately, successful trading is about making informed decisions based on market data, not reacting impulsively to the latest news headline. So, don't worry too much about news in the market. Remember that it's just history, and focus on developing a disciplined and informed trading approach. #14 - DON'T SPECULATE , IF YOU DO, YOU WILL LOOSE Speculating in the financial markets can be tempting, especially when you see others making big profits. However, it's important to remember that speculation is risky and can often lead to losses. When you speculate, you are essentially making a bet on the future direction of a particular asset or market, without having a clear understanding of the underlying fundamentals. The problem with speculation is that it's based on assumptions and predictions, which are often influenced by emotions and biased opinions. This can lead to overconfidence and a false sense of security, which can quickly evaporate when the market turns against you. Instead of speculating, it's important to focus on sound trading principles such as risk management, discipline, and a solid trading plan. By following these principles, you can reduce your exposure to risk and increase your chances of success in the long run. So, if you want to avoid losses and build a sustainable trading career, avoid the temptation to speculate and focus on the fundamentals. #15 - EMBRACE LOSING TRADES: LOVE TO CUT YOUR LOSSES "What do you mean by love to lose money? Are you crazy?" Well, no, I'm not crazy. What I mean is that you should accept the fact that losing trades are part of the game in trading. The key is to get out of your losing trades quickly and love doing it. By doing so, you can save a lot of your trading capital and become a better trader in the long run. So, don't be afraid of losing, embrace it and learn from it. #16 - WHEN TO EXIT A TRADE: SIGNS IT'S NOT GOING ANYWHERE Have you ever noticed when the market is just not moving? It's like everyone is content with the current prices, and no one is really interested in buying or selling. Well, when this happens, it's time to take a step back and wait for the market to heat up again. There's no point in wasting your time, energy, and money in a stagnant market. It's better to wait for the right opportunity to place your trades and make some profit. Trust me, it'll be worth the wait. #17 - BIG LOSSES: THE DAY KILLER When you suffer big losses, they can ruin an entire day's worth of hard work in achieving small wins. Not only that, but they can also take a toll on your psyche and emotions, leaving you feeling defeated and demoralized. It can take a significant amount of time to regain the confidence that you once had before the big loss. It's important to keep this in mind and manage your risk appropriately to avoid such setbacks. #18 - THE POWER OF CONSISTENCY IN TRADING: DIGGING YOUR WAY TO SUCCESS Consistency is key when it comes to successful trading. Making a little bit every day and consistently digging your way towards success is much more effective than taking big risks and filling in your progress with losses. By focusing on consistency, traders can build a solid foundation for long-term success in the market. It takes discipline, patience, and a willingness to stick to a well-defined strategy, but the rewards can be significant. So dig your ditches and don't fill them in, and with time and effort, you'll see the power of consistency in action. #19 - CONSISTENCY BUILDS CONFIDENCE AND CONTROL And Again...Consistency is a key component in achieving success in any area of life, including trading. When you consistently follow a trading plan, execute your trades with discipline, and manage your risk effectively, you build confidence in your abilities and gain control over your emotions. This confidence and control can help you navigate the ups and downs of the market with a clear head, and ultimately lead to greater success in your trading endeavors. #20 - LEARN TO SCALE OUT YOUR WINNERS Scaling out winners means taking partial profits on a winning trade instead of closing the entire position at once. This approach helps traders lock in profits and reduce risk by allowing them to ride the remaining portion of the trade with less pressure. Learning to scale out your winners requires discipline and a solid understanding of your trading plan, but it can be an effective strategy for maximizing gains while minimizing losses. #21 - MAKE THE SAME TRADES OVER AND OVER AGAIN Making the same trades repeatedly might seem boring, but it's an essential strategy for successful trading. By mastering a few reliable setups, you can gain a deeper understanding of the market and become more confident in your decision-making. Remember, consistency is key, and repetition is the foundation of mastery. #22 - DON'T ANALYZE, PROCRASTINATE OR HESITATE Over-analyzing, procrastinating, and hesitating are common pitfalls that many traders fall into. However, these behaviors can lead to missed opportunities and ultimately, losses. It's important to have a clear plan and execute it without hesitation. Don't let analysis paralysis get in the way of taking action in the market. Remember, in trading, time is money, and every second counts. #23 - STARTING AT ZERO: THE BEHAVIORAL KEYS TO TRADING SUCCESS Every trading day is a fresh start for everyone, with each of us beginning at the same level playing field. But as soon as the market opens, it's our actions and mindset that determine our success or failure. Adhering to the 25 Rules can lead to profitability, while neglecting them can result in poor performance. So, it's up to us to approach each trading day with discipline and focus to achieve the desired outcome. #24 - THE MARKET: THE ULTIMATE JUDGE The market is the ultimate judge and jury in the world of trading. No matter how good a trader you think you are, it is the market itself that determines your success or failure. Respect the power of the market and learn to adapt your strategies accordingly. #25 - STICK TO YOUR PLAN: THE FINAL RULE OF TRADING The last and most important rule in trading is to repeat your trading process every day and focus solely on your own trading plan. Avoid following others' ideas and stick to your own strategy. Consistency is key, and by repeating your process every day, you will build discipline and increase your chances of success in the market. Thanks

Education

Building Your First Trading Plan | Step By Step Guide 📖What is a trading plan? A trading plan is a comprehensive decision-making tool for your trading activity. It helps you decide what, when and how much to trade. A trading plan should be your own, personal plan – you could use someone else’s plan as an outline but remember that someone else’s attitude towards risk and available capital could be vastly different to yours. 📚Why do you need a trading plan? You need a trading plan because it can help you make logical trading decisions and define the parameters of your ideal trade. A good trading plan will help you to avoid making emotional decisions in the heat of the moment. ✳️TRADING PLAN CREATION STEPS: 1️⃣Outline your motivation Figuring out your motivation for trading and the time you’re willing to commit is an important step in creating your trading plan. Ask yourself why you want to become a trader and then write down what you want to achieve from trading. 2️⃣Decide how much time you can commit to trading Work out how much time you can commit to your trading activities. Can you trade while you’re at work, or do you have to manage your trades early in the mornings or late at night? If you want to make a lot of trades a day, you’ll need more time. If you’re going long on assets that will mature over a significant period of time – and plan to use stops, limits and alerts to manage your risk – you may not need many hours a day. It's also important to spend enough time preparing yourself for trading, which includes education, practising your strategies and analysing the markets. 3️⃣Define your goals Any trading goal shouldn’t just be a simple statement, it should be specific, measurable, attainable, relevant and time-bound (SMART). For example, ‘I want to increase the value of my entire portfolio by 15% in the next 12 months’. This goal is SMART because the figures are specific, you can measure your success, it’s attainable, it’s about trading, and there’s a time-frame attached to it.You should also decide what type of trader you are. Your trading style should be based on your personality, your attitude to risk, as well as the amount of time you’re willing to commit to trading. 4️⃣Choose a risk-reward ratio Before you start trading, work out how much risk you're prepared to take on – both for individual trades and your trading strategy as a whole. Deciding your risk limit is very important. Market prices are always changing and even the safest financial instruments carry some degree of risk. Some new traders prefer to take on a lower risk to test the waters, while some take on more risk in the hopes of making larger profits – this is completely up to you. It is possible to lose more times than you win and still be consistently profitable. It's all down to risk vs reward. 5️⃣Decide how much capital you have for trading Look at how much money you can afford to dedicate to trading. You should never risk more than you can afford to lose. Trading involves plenty of risk, and you could end up losing all your trading capital (or more, if you are a professional trader). Do the maths before you start and make sure you can afford the maximum potential loss on every trade. If you don't have enough trading capital to start right now, practise trading on a demo account until you do. 6️⃣Start a trading diary For a trading plan to work it needs to be backed up by a trading diary. You should use your trading diary to document your trades as this can help you find out what’s working and what isn’t.You don’t only have to include the technical details, such as the entry and exit points of the trade, but also the rationale behind your trading decisions and emotions. If you deviate from your plan, write down why you did it and what the outcome was. The more detail in your diary, the better. ❤️Please, support our work with like & comment!❤️ What do you want to learn in the next post?

Education

by UnitedSignals

(For beginners) Investing/Speculation -Developing Trading Plans Investing/Speculating for Beginners First, let me talk about my views on the difference between investing and speculating, as well as some trading plans and ideas I have compiled from reading books. I hope that after reading this article, you can save some time on reading other books XD. The purpose of investing should be to achieve "stable asset growth", and good investments should accumulate assets in almost risk-free situations, bringing stable returns of 10% or less per year. "As the recent bond investment return rate is considerable, wealthy people are all doing it." The purpose of speculation is to seek higher returns in the short term based on specific events, market conditions, and analysis. However, it also requires bearing corresponding risks, with returns and risks ranging from 10% to any percentage. (The so-called almost risk-free depends on the individual, and having insider information is also risk-free. The above definition is my own. I believe that over 90% of my trades are speculation, not investment.) Since I have said that investing is almost risk-free, the main topic of discussion will be speculation. I will consider some details before, during, and after trading. ----------------------------------------------------------------- "Before Speculative Trading" Some details I will consider: 1.Risk assessment of the trade. In extreme cases, how much money will be lost? Good fund management ensures that you will never fail. 2. Assessment of expected returns and the maximum percentage of potential losses. Make cost-effective trades and trade when there is a good chance of winning. 3. Analysis of the entry price. If there is no good position, abandon the trade and look for the next opportunity. 4. Planning for the start of trading, the basis for the target price and stop-loss price, whether to move the stop-profit and stop-loss in specific circumstances, and whether to exit directly if the original trading basis is lost. 5. The impact on life. Will the psychological pressure after the trade affect life and work? Is there time to cope with unexpected situations during trading? ----------------------------------------------------------------- "Start Trading" Prepare well before trading and execute according to the original plan. ----------------------------------------------------------------- "After Trading" 1. Reflect on where the trade went wrong, whether the plan was not followed, and whether the pre-trade assessment was misjudged. 2. Do not be overly pleased or upset because of the result of a single trade. With a 50% chance of success even when tossing a coin with closed eyes, what needs to be done is to accumulate a trading strategy with a long-term positive expected value. With the logic of making big profits and small losses, one can have the Holy Grail of trading. If you can't win, review your strategy and conduct backtesting. 3. Speculation requires accumulating long-term trading records to determine whether the trading strategy is successful. At least 1,000 trades are needed to have some reference value, and short-term success or failure does not necessarily represent right or wrong. 4. When making money, take it out and feel its weight to avoid getting lost in the world of money and decreasing the quality of risk management.

Education

Higher Rewards For Less Risk I've changed my reward-to-risk ratio from 1:1 to 2:1. You heard me right! They have changed. I wasn't a stickler about my ratios, but I am now. I want to make more money and do less trading. How is this possible, you may be asking? It's simple when you look into the details. So let's take a look at the losses first. What do my losses look like? Each time I lose a trade, I recently exited a previous winner or wasn't in a trade on that currency pair before I lost. Let me explain because these are two different things. When I win a trade, I give back my profits on losing trades and may not enter the next trade due to my emotions being everywhere. I noticed that I was stopped out, and the price flowed my way. But, honestly, I can do nothing to prevent this from happening. You may say, "well, can't you change your stop loss?" I could, but to what? I never know when I'll be stopped out or how big the wicks will be to get me out of the trade. This means every trade is unique, and I'm making a mistake if I don't follow my rules. Being stopped out isn't the problem. Trading my system too much with almost the same reward to risk is the problem. Question to myself, what if you could hold the trade longer(I'm a swing trader, so this fits) and increase your reward significantly, so you don't have to keep entering multiple trades unless the reward was worth it? So now, if I am stopped, my winning trades will make up for my losses and more. What do my winning trades look like? My winning trades look more significant than my losses. My focus is and will always be higher timeframes. I like to trade when markets are trending. So per the daily, weekly, or monthly timeframe, I'm trading if my currency pairs are trending. My goal is to get the best entry that fits my rules and hold to my long-term targets, and any trade under a 2:1 reward-to-risk ratio will not be traded. I'm also ok with not being triggered into trades set by my pending orders. I'm also ok with losing trades. That's part of the business. In Summary I seek to hold trades longer to receive bigger rewards and let the small losses be small. I've not changed my trading strategy. It works, and I am working on it. We go well together. My belief is as long as the market is trending, I can hold my trade. I pray this blessed you, Shaquan Remember, you don't trade the markets. You trade what you believe about the markets. "Van Tharp"

Education

by ShaquanLopez

How to become a master trader? First:Making Plans Before trading every day, make a trading plan, so how to make a good plan? Take XAUUSD for example,If you mainly focus on short-term operations, focus on the key support and key resistance within the day, buy up at the support level, buy down at the resistance level, sell high and buy low, if you cannot accurately determine where the support and resistance are , you can see my daily analysis articles. In addition, when making a plan, you must set the stop profit and stop loss points. The stop profit must be greater than the stop loss. The reason for this is that even if your accuracy rate does not reach 50%, you can still make profits in the long run. Second:Implement After making a trading plan, what you have to do is to strictly implement it. You need to have confidence in your plan and don’t doubt your judgment because of the turmoil in the market. You need to know that the truth is often in the hands of a few people. Third:review Regardless of whether you are making a profit or a loss in today's transaction, you need to review the market. When you make a profit, you need to consider whether the take-profit position set this time is reasonable, and whether the profit can be enlarged next time. Of course, you also need to learn how to stop in moderation. Of course, we can’t avoid the situation where we misjudged the direction. At this time, we need to consider whether we have strictly implemented the stop loss operation. In many cases, small losses are out, and keeping the principal is also a very correct operation. More people They will stop profit, but they can’t accept the loss, which leads to a mistake and loses the whole game. Therefore, it is said that those who can buy are apprentices, and those who can sell are masters. Fourth:Summarize Making a trading plan is a good habit, and it will accompany you throughout your life. Don’t think it’s a good habit just because you’ve made money for several days in a row, and you’ll feel that making a plan is useless because you’ve lost money for a few days in a row. The meaning, a simple summary is to make a good plan, strictly implement it, review it many times, and believe in yourself. I will formulate my trading plan every day, and then share it with you, hoping to make progress together with you. At any time, we are in awe of the market and let ourselves go further through planning. This market will always eliminate some people. Don’t believe it Luck, that kind of thing will run out sooner or later, friends are welcome to discuss with me. ❤️Please, support my work with like, thank you!❤️

Education

Top 15 mistakes and solutions in trading TOP 15 Trader's Mistakes 1 - Lack of knowledge of market operation, technical and fundamental analysis, mass psychology and market cycles In the boom period, when a large number of new participants enter the market, many people believe themselves to be the "god of trading" and the "master of the markets." Beginners are satisfied with a 10-20% profit during the expansion phase, whereas quotes for liquid cryptocurrencies show a gain of 30/50/150%. Everything is contrary to the logic of the majority, which is how markets function. Sadly or luckily, the majority of individuals make common errors and are unable, due to a lack of understanding, to differentiate the fine line when an uptrend is replaced by a downturn and the distribution phase is replaced by a prolonged decline. At the moment of trend reversal, a psychological trap and a sequence of catastrophic events are established for the majority of participants, and a number of concomitant circumstances and lack of experience make it impossible to see the situation objectively. When the market is at its "bottom," the majority loses faith in growth: some sell out and abandon the market, while others wait even lower, do not purchase, and begin shopping only when everything has increased by hundreds of percent. Solution Study theory. Dow Jones theory, the fundamentals of technical and fundamental analysis, and any information regarding market cycles will be of great use. Examining the graph using large timescales, such as days, weeks, and months. You may find a wealth of material about the fundamentals of trading in the public domain or in the trading part of our website. 2 - Covetousness resembles a psychological trap Trading greed presents itself in numerous ways. Many are attracted to the cryptocurrency market by the idea of quick money, but the majority's problem is a lack of understanding of the mechanisms that move the market and how it functions. In order to arouse greed, pampas are constructed with a single "stick to the sky." Everyone sees a growth of 1000%, and as a result, earnings of 20/40/50 and even 200% no longer appear so promising, people do not sell, they are waiting for more, and the price falls into the red. Purchasing a full deposit's worth of cryptocurrencies in a single transaction is also greedy. The typical justification for such a "tactic" is that 10% of the overall deposit is greater than 10% of the portion of the deposit. Yet, when the price declines, the trader incurs losses and cannot cut the average entry price at lower values. Another example is missed opportunity syndrome, or FOMO. The price of the item has climbed by an inadequate amount over the course of one or more candles. Seeing this process, a novice decides to purchase the asset because he believes the price will continue to rise, resulting in losses. Many make the mistake of wanting to gain a lot of money quickly, but this is impossible. Fear and greed are particularly harmful emotions for traders. Solution The market requires a sensible strategy. Greed stems from inexperience and the fear of being late. Refrain from making decisions based on emotions and haste. It is essential to recognize that chances arise and disappear regularly on the market. Before initiating a trade, you should assess and justify your motives for doing so. 3 - Trading in emotional instability and excitement Any emotion in trading is detrimental. The decision to enter or exit a transaction must be calculated beforehand, devoid of emotion and haste. Emotions make it difficult to appraise the situation accurately, and you run the danger of making a mistake that may result in losses. Yet, since emotions are innate, it is impossible to eradicate them entirely; however, they can be managed. If emotions prevail, it is time to close the trading terminal and go on to other tasks. If you wake up at night to check bitcoin prices or are unable to fall asleep, this indicates that you have already made key errors in your risk management system, or that you do not have one. And this requires immediate action and, as much as possible, a "cool" head. Solution Take a break from the trading terminal, spend time with loved ones, or go for a stroll; you need emotional relief and rest from time to time. Sports are effective stress reducers. If you have already reached the point of insomnia and emotional breakdowns, you must conduct a thorough analysis of your risk management strategy and take sometimes difficult measures. If you have executed a number of unproductive transactions or one with an insufficient loss and you have the impression of "winning back," close the trading terminal immediately and do not trade on this day. Do not treat trading as a game of chance; in this emotional condition, you have no chance of success. 4 - leveraged trading Margin instruments can be effective in the hands of a competent trader, though not always and only under certain conditions. This is simply an unmanageable machine for liquidating a deposit in the hands of a novice. Futures and margin are verboten for rookie traders, since you face the risk of not having time to develop experience, but losing your deposit instantly. The average daily volatility of liquid instruments in a sideways movement can reach 3 to 10%, which indicates that squeezes may exceed adequacy when utilizing the 10th leverage - movements by 30 to 100% - on low-liquid pairs. When utilizing such leverage, setting a stop-loss is already problematic, as a stop-loss that is too far away would result in enormous losses in the event that it is triggered, and in nine out of ten situations it will be eliminated by an acceptable percentage. In addition, you will pay a commission for financing, taking into account leverage and transaction commissions. Exchanges will gladly offer you with as much leverage as you like, but this is no longer trading; with this strategy, you have a greater chance of winning money at a casino. Solution Study the fundamentals of trading, master numerous techniques, develop your own trading strategy, and gain real-world trading experience on the spot market by physically purchasing and selling various assets. You will eventually comprehend how the market operates. Under certain circumstances, success on the spot market can be enhanced with margin. 5 - Uselessness of stops Stops in trading are a substantial issue; stop-loss orders are covered in a different article. Stop-loss orders are frequently used irrationally or ignored by novice traders. Traders can be roughly divided into two groups: those who always use stops and those who prefer to operate without them. However, these are extremes. A stop positioned too closely is liable to be obliterated, while the absence of a stop under certain conditions can result in enormous losses. It is irrational to use stops during the accumulation phase because, in about eight out of ten instances, stops are eliminated precisely at those levels when there is a substantial accumulation of them, following which the price reverses and moves in the opposite direction. And when a significant upswing is established after a period of accumulation, a knockout almost always comes; it would be a shame to watch the price rise without participating. Yet there is a tight line here; you must be certain for a large percentage that this is the accumulation period, and you need also have a plan for price averaging, i.e. fiat in reserve. It is irrational to work in the distribution phase without stopping, just as it is crazy to labor in the accumulation phase with a pause. This is significant because many people lose in these situations due to lack of expertise. Eventually, the distribution is finished and a decline occurs, frequently abruptly and by a substantial percentage. Stopping dramatically minimizes the loss. If you have already opened a position and the price moves significantly in your favor, it becomes sense to place a stop-loss to safeguard profits so that if the price reverses, you will still make a profit and not a loss. While dealing with margin instruments, stops are required! Solution If you have no trading experience, we recommend that you constantly utilize stops until you understand how they operate. If the fundamentals are understood, they should be applied sensibly to the circumstance. Similarly, if you were stopped out by a stop, you do not need to re-enter the trade, pause trading, identify what went wrong, and then determine the next entry point. 6 - Non-fixing losses incurred when the price moves against you but you do not close your position If a trader becomes an investor owing to circumstances rather than his own volition, he is a poor trader. The "HODL strategy" is an explanation for a trader's insolvency and their own faults. Long-term asset freezing is the worst thing that can happen to a trader - "I'll wait out the crypto winter and still sell for a profit" is not a trader's behavior model. It does not matter to a trader what the current trend is; he must have effective strategies for any scenario. Waiting out losses is a waste of resources since there is volatility at every price level, and volatility is an opportunity to make money. Trading on financial markets necessitates the presence of lost deals; it's just the nature of the business. No trader has 100 percent profitable trades, and this is typical. Profitable trades must cover bad trades, and losses must be contained. If you are unwilling to recover losses when the price moves against you, you lose control of the situation and become a victim of circumstances. Solution Before entering a trade, you should have a contingency plan in place in the event that the price moves against you. In certain circumstances, this may involve deliberate averaging, while in others, it may include fixing losses. Recognize that losing transactions are a normal part of the process. 7 - Transaction concluded too quickly We touched on this topic briefly at the beginning of the article. The scenario is typical: a trader enters a position and the price begins to move in his favor. The trader takes profit at the predetermined level, but the price continues to rise. In itoge, fixed profit represents a modest proportion of the whole movement. The circumstance is representative of a powerful trend. It would be a stretch to call this a mistake because the profit is fixed; however, in the case of a trading strategy with a limited number of assets, it can take a very long time to wait for the price to roll back below the exit point, in some cases an entire year, and in other instances, the quote may not return to its previous levels. Solution 8 - Depending on your trading approach, there are a variety of solutions, including: The gradual sale of a previously acquired asset at varying prices. Selling of a portion of the asset to remove the invested funds from the transaction and earn a little return, reserving the remaining position (conditionally free asset) for longer-term objectives. Profit protection with a stop-loss order and its progressive approach to the quote, but not too close so as not to be eliminated prematurely. Deviation from the strategy or vice versa - lack of action flexibility Confusion, agitation, and swinging between extremes are certain indicators of a lack of a trading strategy or an indication that it was constructed wrong. Planned action eliminates the possibility of unanticipated situations and makes risks manageable. The plan must account for both potential profits and losses. Frequent strategy adjustments during the trading process are typically detrimental. The contrary is also true: a trading strategy must be adaptable to the current market environment. For instance, you are in a position and the price is moving in your favor, everything is going as planned, you are almost at your goals, but then you learn that the project whose coin you are trading was hacked. In such a circumstance, you will have very little time to make a choice. In such a circumstance, blind adherence to the strategy will definitely result in losses. Solution Your activities must be automated, and you must have a well-thought-out trading plan that takes into consideration all possible eventualities. In the event of a force majeure, it is vital to make swift decisions and build market-specific flexibility. 9 - "Finding knives." Investing a major portion of the deposit in the purchase of an asset amid a severe price decline is a bad choice. It is known as "catching knives" in business parlance. No one can accurately predict where the price will stop fluctuating and begin to consolidate. Before making a decision based on a thorough analysis of the situation, it is vital to comprehend the core cause of such a decline. You cannot make purchases after the upcoming autumn without comprehending the market's overall condition. After distribution at the peaks, the value of altcoins can decrease by 70 to 99 percent. To clarify, an asset in a bear market can lose 50% in a day, 50% in price, another 50% in a day, and another 50% in a day dozens of times before reaching its ultimate bottom. In addition, it is not a certainty that he would recover after this, particularly if it is an illiquid asset, of which there are thousands. Solution If you continue to employ this technique in your trading strategy, you should limit your exposure by allocating a smaller portion of your entire deposit and bear in mind that this "bottom" may not be the last one. With this strategy, it is crucial to master the fundamentals of technical analysis and how to construct horizontal levels and trend lines. 10 - Absence of system, algorithm, and subjective opinion You must know beforehand where you are buying and selling, what portion of your deposit you are working on, the permissible losses, and the rationale for these activities at the same levels. All of this is a trading strategy. In acts, there should be no spontaneity, excessive self-assurance, or hesitancy. You should not take the subjective opinion of another as the truth. The more confident words and assertions sound, the more confidence they inspire on a psychological level, directly into the subconscious, and you begin to feel that these are your own thoughts. The bitcoin market is rife with numerous types of manipulation; therefore, every information must be double-checked. The situation is compounded by the fact that newcomers are frequently directed by their own expectations and desires rather than by objective data. For instance, a break in a trend or a breakdown of a horizontal level is objective evidence, whereas an item that is overbought or oversold is merely an opinion. Solution Incorporating risk management and financial management into your own trading strategy. Use objective knowledge, not the opinion of others, for analysis. If you consume a great deal of information regarding the crypto sector, you need carefully select your sources and listen to opposing viewpoints on the situation. 11 - Ineffective financial management Money management should be the default inclusion in your trading plan. This entails splitting both the deposit and the assigned amount to join the asset, as for different trading techniques. It is not suggested to purchase the entire anticipated quantity of cryptocurrencies in a single transaction, since it will be unable to equalize the entry price in the event of a price decline. Beginners frequently make this error while purchasing something with their entire deposit. In addition, money management covers the distribution of trading and storage locations for assets. We do not encourage trading on a single exchange; use many exchanges. If your bitcoin is sitting idle on an exchange, withdraw it to a cold wallet or hardware wallet. Solution 12 - Money management must be an important component of your trading plan Too slothful to retain records No professional trader would conduct business without keeping transactional statistics and records. It is impossible to comprehend one's own efficiency without this. Some exchanges provide account analytics at a high level, while others do not; however, all statistics are maintained for a specified time frame. After a while, you will forget the prices at which you acquired your own investment portfolio. It will be unusual to sell an item without knowing if you are making a profit or a loss. A trading journal will educate you more than a dozen trading books combined. Record the purchase price, date, exchange, reasons for entry, feelings during the transaction, and similar information. After a period of time, you will be able to study and comprehend the causes of past errors and successful transactions. Solution 13 - Notepad, pen, and a methodical approach. Overestimated dangers Regardless of the size of the deposit, restrict the allocated funds for high-risk strategies to a specific amount or percentage. In the event of a loss, continue trading with the current balance without replenishing it. If a profit is made and the balance increases, transfer a portion of the money to less risky methods or withdraw them to fiat. Elevated risks include x5+ leverage, starting a trade with the full deposit or a substantial portion, entering an asset with a single order without averaging, and trading illiquid assets. Solution 14 - A methodical approach to risk management. Do everything and you will fail There are various methods for constructing working portfolios. Someone trades many specific altcoins, someone trades simply bitcoin, and someone trades circumstances without reference to particular assets; however, success is the most important factor. The enormous number of active cryptocurrencies is one of the primary obstacles for newbies. To handle the situation, it is required to comprehend a variety of project-related aspects, including fundamental analysis, technical analysis, order book status, transaction history, project-related news, price, etc. It is physically impossible to control more than five assets simultaneously without the assistance of a team of analysts. By working with many cryptocurrencies, you run the danger of losing focus and overlooking crucial nuances that will effect the outcome. Solution Initially, do not trade more than three assets; if you can keep track of a larger number, you may gradually increase the quantity. 15 - Inability to withdraw from the market and await suitable conditions. Staying out of the market is one of the most difficult aspects of trading for most novices. There are times when the wisest course of action is to monitor the market. It is not true that the more transactions there are, the greater the profit. You can conduct dozens of transactions per day and incur a loss in a month, or you can conduct two or three transactions per month and earn a profit. It is easier to work during the growth phase, and without theory and experience, it is nearly difficult to earn a profit during the flat and downturn phases. If it were possible to make money during the growing phase, the ideal course of action during the turning point would be to take a vacation or limit the trading portion of the initial deposit in order to get expertise trading with little sums. The remaining 99% of a trader's time is spent on self-development, market analysis, hunting for opportunities, and waiting for advantageous entry points into trades. Solution Utilize the time while you are out of the market to your advantage. Instead of mimicking a monkey's actions, participate in self-education: read foundational literature on trading, discover new trading tactics, and study the assets you're interested in as thoroughly as possible. In this way, at the moment when a beneficial situation occurs on the market, you will be ready for it. 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"!

Education

by Crypto4light

🧠 The Mind Of A Smart Trader Trading psychology is influenced by emotions like greed and fear, which can drive irrational behavior in markets. Greed causes excessive risk-taking and speculation, while fear causes traders to exit positions prematurely or avoid risk. Regret can also cause traders to violate discipline and make trades at peak prices, leading to losses. These emotions can be particularly prominent in bull or bear markets and can have a significant impact on market outcomes. Trading psychology is a crucial factor in determining success in trading securities. It includes aspects of an individual's character and behavior that affect their trading decisions. Discipline and risk-taking are critical components of trading psychology, as is the impact of emotions like fear, greed, hope, and regret. It can be as important as knowledge, experience, and skill in determining trading success. 🧠10 Trading mindset tips: 🔹 Stay informed: Stay updated with the latest market news, trends, and developments, as well as your preferred assets. 🔹 Create a trading plan: This should include a clear set of rules for entry, exit, and risk management. Stick to your plan. 🔹 Manage your emotions: Avoid making impulsive decisions, especially during volatile market conditions. Keep a clear head and stick to your plan. 🔹 Continuously educate yourself: Enhance your knowledge and skills by reading books, attending seminars, and practicing with demo accounts. 🔹 Diversify your portfolio: Spread your risk across different assets and markets to reduce your exposure to any one particular market. 🔹 Stay disciplined: Follow your plan and stick to your rules, even if your emotions are telling you otherwise. 🔹 Set realistic expectations: Be mindful of your limitations and don’t overreach. Accept small losses and focus on long-term success. 🔹 Stay focused: Avoid distractions and keep your mind on your trading activities. 🔹 Keep a trading journal: Record your trades, track your progress, and reflect on what you could have done differently. 🔹 Take breaks: Avoid overtrading, which can lead to burnout. Take time to recharge and come back fresh. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️

Education

Best advice for achieving success in trading!✅Here's the deal, guys. If you want to make this year a successful year in trading, you got to have an edge. It doesn't have to be rocket science, just a solid strategy. There are plenty of resources out there, so don't be shy to do your research. Once you got a strategy, test it out with a small account or paper money before committing fully. And when you commit, commit fully. Don't be that person that changes their mind after one loss. Ignore the noise on social media and focus on your own system and 'PnL. It's none of your concern how other people are trading. Don't buy the hype. You're not going to turn chump change into a fortune overnight. Trading has its ups and downs. So, don't be caught off guard and expect the unexpected. And always be ready for the ride. And here's the truth, not every trade will be a winner. But there will be a select few that'll make up for the majority of your 'PnL increase. Just make sure you have enough capital to cover 'bills, taxes, and other boring stuff. And don't be dumb and emotional. Risk management and trading psychology are crucial. If you're having panic attacks before executing a trade, it's a sign you're either not suitable for trading or you're taking excessive risks. Take a step back and assess your current financial situation and the amount of money you're putting in. Embrace failure as fuel. It's not a setback, but a lesson in disguise. Realize that success is not a straight path, but a journey full of ups and downs. And lastly, come prepared. Write down a plan for each day, whether it's a simple excel sheet or a written plan. It'll help you stay focused and aware of what's happening in the markets. And remember, trading is hard. Don't fall for the social media hype that makes it seem easy. Happy trading!

Education

by TradingEdgeHQ

Heads or Tails?What does TRADE have in common with heads and tails? Well, many use simple randomness to define whether they should buy or sell and this is directly linked to heads or tails, but the point I want to address is the following: a coin with two sides has a 50% chance of falling either on one side or on the other, either heads or tails, but if you decide to toss the coin 10 times up, it could land 10 times heads or even 7 times, and at that moment you might wonder, but the probability is not 50%, shouldn't we have 5 times heads and 5 times tails? Yes, but the short-term randomness makes the low probability happen! Now if you toss that coin 10,000 times, the law of large numbers is likely to make the 50% probability dominate the outcome! But where does this fit into TRADE? Basically in all operating models, if you operate you have a hit rate allied with a ratio between risk and return, these two things are directly linked, many seek a higher hit rate, others seek more PayOff, but regardless of your profile, from your approach you have to know that a model in the short term does not become a winner or a loser, you need a historical basis of how your approach behaves and then, yes, decide to operate using this strategy. Many say that with a strategy with 2x your risk and a hit of 50% you will be profitable, statistically this is true, but are you willing to faithfully follow this model even taking CONSECUTIVE STOPS? We should be, but those who trade know that a sequence of Stops does not generate a pleasant feeling! And it's precisely that feeling that can leave you in the middle of the way! See below the SHARP index many do not know, but I will present here, what is the SHARP index? The Sharpe Ratio is used to show to what extent the return on an investment compensates the investor for taking risks on his investment. (I recommend using it in your models or in your performance reports). When using the formula you find a result called SQN See the example of heads or tails in practice, with a positive risk/return ratio See that only with time you will be able to validate a winning strategy, and in the middle of the way it is possible that you will have some Stops, and this should refine your way of operating, in order to find points to be adjusted, many books define that time takes you are the excellence, but the biggest illusion that the market generates is that of getting rich fast, contradictory isn't it, this makes the journey of a trader with frustrations and disbelief difficult. But few are willing to go through this journey, as if that were not enough, you will find that there are no facilities, many preach that you must choose between Access Fee or PayOff most of the time, these they are opposite characteristics in objective models, but the secret is simple! You need to find balance See this great example, most people who operate the market have already learned about the EMA 9 or MA 9 anyway, it's an easy model to learn that promises good profits, but when it hits, but what few told you is that it rarely hits ! Even so, it can be a profitable model in several assets. In my tests, the model has an average success rate of 31%, unfortunately few people have the emotional energy to use this, since they give up even before the model reverses the capital curve to the positive side. See this model in the same example of the difference between few trades vs many trades Here it is clear the importance of time and consistency in defining a model and faithfully executing it! So what do we learn from this? First: The law of large numbers rules the market. Second: As much as the PayOff is high, you may not have your emotions trained enough to withstand a losing streak, many will say "But in this model I'm losing with a spoon and winning with a bucket", that seems to make sense, but in reality practice, it's more painful than it looks. Third: Be willing to operate your way, know that your emotional profile is unique, so use techniques and refine your market reading, beware of false simplicity or the highest degree of complexity to operate the market, be willing to see the that makes sense to you and metric it to use with confidence. Fourth: Trading the market is like learning to walk, you need help at first, but then you need to fall over your falls and gain balance, it's the same here, you'll make mistakes, but that's the only way you'll learn. I hope I helped you with this topic, if you liked it, leave your BOOST to support this idea, and also leave it here in the comments if you are from the PayOff team or the Hit Rate.

Education

by leandrosander_

How to become a trader? (Part 1)How to become a trader? (Part 1) 1. What is trading? We all know what trading is. Almost all of us had someone around us who was trading, or maybe we heard the names of people like Warren Buffett or Elon Musk. But what we don't know is that trading is not just opening a chart and drawing a line and finally buying a stock or something. Trust me, It is more complicated than that. In this market, for 95% of people, there will be nothing but financial loss. But those 5% are the ones who get the secret of trading. You probably won't recognize those 5%, and they won't want to introduce themselves either. But if you persevere and put in enough effort and a lot of time, and then you go through more persistence and difficulty and loss of capital and disappointment, it is possible, just possible, that you will become one of those 5%. Come with me to find out what we should do. 2. Where do we start? An important question will arise for all people who are new to trading. "Where to start?" In the first few days, you will see a lot of stuff. And for sure, you will be confused like me. There are many things to learn. YouTube, books, even private training. But what do you get in the end? Well, you find a trading method and trade with it for some time. Then you start losing money. Then you go to another method and you lose again. And this cycle continues like this (this is the first hard part that I mentioned above). Later, you will learn about capital management and the psychology of trading. And by combining these three things and, of course, enough time, you will move towards becoming a trader. Therefore, becoming a trader is not something that can be achieved overnight and more importantly, it is not something that can be given to you. You have to achive it. 3. Strategy The first place you should start is formulating a strategy. Some people think that everything boils down to strategy. So when they can't make money, they try to find a more sophisticated strategy. But this is wrong. Strategy is just the beginning. I will talk more about this later. But before that, let's talk about the components of strategy. We can divide each strategy into 5 parts: Trend, Area of Value (AOV), Trigger, Stop loss (SL) and Target point (TP). A. Trend: The first and most important part. Trend means the next move will be up or down. Your tool to find the trend can be your eyes, trend line and different indicators. The most important thing to learn here is that no one knows which way the price will move. All we know and get through our tools is which direction the price is "more probable". The second point is that the trend is not about the past movement, but it's representative of the next movement! So don't mix them up. B. Area of Value (AOV): Let's assume that the price of a stock is going to increase, and in other words, it wants to find an up trend. Where will your entry area be? There are useful tools such as trend line, moving, Fibonacci, candlestick, support and resistance areas and etc. for this. C. Trigger: You will need a confirmation to enter when the price is in the value zone. I recommend you to use multi-time frame and look for entry in lower time-frames. The tools are the same as before. D. Stop loss: Your entire strategy depends on this component. Most people do not use the limit because they do not know how to use it. And they are also afraid of losing. The best traders also make mistakes and control their mistakes by limiting their losses. The limit of loss is your friend. Learn how to make the most of it. E. Target point: We humans have a good tolerance in the face of difficulties. But can we stop ourselves from seeing profit? The second stage is difficulty, patience and tolerance to achieve your desired profit. At the same time, knowing that the conditions may change, and you may not even get the profit you have now. There are more complex strategies that combine all of the above. Like Elliot, Ichimoku and etc. The important thing about the strategy is that a super complex strategy is not necessarily better than a simple strategy. Sometimes a simple trend line can give you a profit that dozens of complicated indicators cannot give you. I am not saying that complexity is worse. In fact, the more complicated it is, the more accurate your position and understanding of the subject will be. But the problem is that our mind does not have the ability to analyze all the possibilities. That's why, don't look for a super-complicated method produced by company X. Choose the simplest method that works for you, and you can communicate with it more easily. Each of those 5% people choose a method and become a master in it. So it doesn't matter what the method is. It is important that it is profitable. It matters how you implement it. In the next part, I will talk about capital management and market psychology. Good luck.

Education

by DarkPhoenixTrader

Our Trading Manifesto Hello everyone! In this post we will present and explain our trading system. Our trading system condensates everything we have learned from hard work, study and even harder lessons received in these years of trading. It is constantly evolving and updating, we are always ready to question some aspects of our system and research tools and strategies that can improve it. We will distinguish and explain three different aspects of which the system is composed: Analysis, Execution and Research. Analysis The analytical part concerns all the tools and the strategies that we use to formulate an hypothesis on the direction of the market, and consequently develop a trading strategy. A trading strategy is composed by: -an Invalidation Level: a price level that, if crossed, proves our hypothesis wrong. This is the limit level at which stop losses can be set. -a set of Entry Points/Levels: composed by price levels of chart points that according to our analysis can trigger the move that we are hypothesizing. -a set of Target Points/Levels: composed by price levels of chart points where the move that we are hypothesizing can end. Once a trading strategy is determined, it will be implemented in the executive part. But on what is our analysis based? Elliott Wave Theory, Pattern Trading and Sentiment Analysis. We believe that the chart encodes all the information available. News and events are priced in the market instantaneously. The fundamentals are revealed simultaneously with the price action. Any news or fundamental consideration is just one piece of the puzzle. Price is the synthesis of the result. Price moves because of mass psychological dynamics inducing people to buy and sell. These dynamics are observable in the sentiment and in the fundamentals, and manifest themselves in chart patterns. The composition of chart patterns forms Elliott Waves structures. We don't use this approach as a mix of independent tools, but in a holistic and comprehensive approach. We analyze the wave structure of the market starting from higher timeframes, assessing probabilities of different scenarios by analyzing chart patterns and using different tools related to the sentiment, such as Smart Money Indicator, Volume Profiles, Order Blocks, etc. We use the same approach in smaller timeframes to set the trading strategy (Entries, Targets and Invalidation Level). Execution The executive part of our trading system involves risk management, placing orders in the market, and managing active trades. Once we have developed a trading strategy, we have a set of entries, a set of targets and an invalidation level. We have to use them to define a Trading Plan. Here is the first rule of risk management: we can not lose more than 1.5% of the trading capital for each trading plan. You don't have to depend on one trade. One trade should not be decisive. Trading must not be funny. This is the only way to decrease your biases and your emotional involvement. So in a Trading Plan we decide how many trades to open, how much risk to allocate on each trade (NOT MORE THAN 1.5% TOTAL), at what price execute the trade, and where to set stop losses. No stop loss can be set above the invalidation level. If prices reaches the invalidation level we are OUT. No matter if prices then follows the hypothesized direction, market will always provide other opportunities. We also plan where to take profits at the pre-determined Target Levels. Research The research part of our system is our constantly updating and challenging our knowledge studying new tools, approaches, strategies. Knowledge is dynamic and always updating. You never stop learning. We will post all our analysis and trades. Stay tuned and happy trading! :)

Education

DAY TRADING 101: How to Get Started Hello guys! Day trading is a popular way for traders to make money by buying and selling assets within the same trading day. However, before you begin day trading, it's important to understand the basics and develop a solid trading strategy. In this post, we'll cover the basics of day trading and provide some tips on how to get started. First, it's important to understand the different types of securities that you can day trade. Some popular options include stocks, options, futures, and currencies. Each of these securities has its own unique characteristics and requires different strategies, so it's important to choose the one that best fits your goals and risk tolerance. Next, you need to develop a trading plan . Your plan should include your trading strategy, the securities you plan to trade, and your risk management techniques. It's also important to set realistic goals and be prepared to stick to them. Once you have a trading plan in place, you need to practice . You can do this by using a simulation or paper trading account. This will allow you to test your trading strategy and learn from your mistakes before you start risking real money. Another important thing to consider is your risk management . This means understanding the level of risk you're willing to take and setting stop-losses and profit-taking orders to protect your capital. It's also important to maintain a proper risk-reward ratio, which means that the potential profit should be larger than the potential loss. In addition to the above, it's crucial to keep an eye on the market and news , as they can greatly impact your trades, so it's essential to stay updated with the latest news and trends. Finally, keep in mind that day trading requires discipline and patience, so be prepared to put in the time and effort to become a successful trader. To sum it up, day trading can be a great way to make money, but it's important to understand the basics and develop a solid trading strategy. Additionally, you should practice with a simulation or paper trading account, have a proper risk management, stay informed and be prepared to put in the time and effort. Which type of trading do you prefer?

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HOW TO MANAGE YOUR EMOTIONS Hello everyone! One of the most important , and in the same time, one of the hardest aspects of trading is the ability to manage correctly your emotions and leave them aside while trading. So how can we manage our emotions in stressful situations? Here are some tips that every trader should consider when starting trading: 1. DO NOT ACT ON ANGER: every time you feel strong emotions, hold back and revisit your trading plan, is your move aligned with your initial plan or are you acting on irrational emotions? One of the worst things is to take a position based on anger after a loss in order to recover the losses. Take a deep breath and rethink your decision! 2. DO NOT FALL IN LOVE WITH YOUR POSITIONS: we all want to always be right, but sometimes we have to accept a bad position and close it. It is common to fall in love with our positions and hold it out of hope that the market will switch, but involving emotions just blow the account, stick to your plan! 3. ESTABLISH SOME TRADING RULES AND KEEP A TRADING JOURNAL: setting your own rules of trading and risk management is crucial for a profitable account. No matter what you hear from others and how good a position may look, if it is not aligned with your rules, do not take it! Moreover, do not change a strategy after some losses, stick to what you have learnt and planned, keep the information in a trading journal and plan your next moves based on you learnt from it. 4. TAKE A BREAK AFTER 3 LOSSES IN A ROW: it is natural to have a bad day, but when this happen do not become over emotional and over trade, but rather take a break and wait for a new and fresh trading day. Strong emotions will ruin any important decision, no matter the context, so try to avoid them. 5. SET TP AND SL AND TRUST YOUR JUDGEMENT: after establishing your trading plan and risk management plan, in order to stick to your risk to reward strategy, you have to use Take Profit and Stop Loss orders, and trust your judgment and the market. No matter what happens, this helps you have a clear forecast of your account, without blowing it. Also, avoid getting greedy and secure your profits with take profit order. 6. LOWER THE TRADE SIZE: if you feel overwhelmed by the risk on each trade, and out of fear you make irrational decisions, try to lower the trade size to what feels comfortable with you. After doing this, always update your trading strategy! 7. DO NOT GIVE UP! : there is a point when every trader feels like giving up, losing all his faith, but you should understand that this is the normal journey, with ups and downs, and if you do not let yourself intimidated by the downs, the ups are limitless!

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Correlating Pairs Find correlating forex pairs when you've decided on a trading strategy. You'll have to do less work deciding on your week's trades. EURUSD and GBPUSD are great pairs, for example.

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Dealing with losses...before they happen Losses are part of this business. People do not react well to losses. Badly handled losses in trading can trigger bigger losses. Furthermore, these have the dangerous potential of wiping out entire accounts. If you want to make it as a trader you need to have a solid psychological approach to accept and handle losses. Lots of internet articles are suggesting that the way to prevent debilitating losses in trading is to follow risk management rules. What are those rules about? Basically, they are simple thresholds indicating the maximum $ /percentage you should risk per trade, day, month, etc. Having such rules is a must but it’s not enough. You can still lose much if your mind is not actually prepared to implement them. That’s why many traders set rules only to break them in the most inappropriate moments. People do not follow their own risk management rules because they are not psychologically prepared to accept losses. They are not prepared for the pain caused by a loss or a series of losses. The single most efficient way to handle losses is to accept them consciously and unconsciously. One of the most dangerous ways to react to losses is “revenge” or “on tilt” trading. This happens when the pain caused by a loss is so high that the trader loses his / her rationality and only wants his / her money back, disregarding most of the things he/she actually knows about the market. The brain cannot accept the emotional discomfort and the fastest solution is to quickly find a trade to make the money back. Most of the time, the quickest trade is in the same instrument (FX pair, stock, etc) that generated the initial loss, by averaging down/up or flipping. Some of the most experienced traders can work their way out but the vast majority will only make things worse. In order to prevent this kind of psychological slippage, you need to prepare your mind to consciously and unconsciously accept losses BEFORE they occur. With the help of a psychotherapist or by yourself you can perform visual exercises where you will imagine yourself being in a losing position and reacting the right way. This would desensitize you if done right. The technique I always use each time I open a position is to do that desensitization process “on the fly”. I watch the market and I see an opportunity. BEFORE opening the position, I imagine myself in the posture of facing that trade ending in a loss. After that, I imagine that trade going the way I want. I might even go back and forth (in my mind) a few times between losing and winning. This way, I prepare my unconscious mind. If I cannot imagine myself easily handling the loss (or the win) I will simply reduce size. Pay attention though, I am not recommending here to imagine yourself constantly losing because this would do more harm than good. This would be a separate topic about the power of visualization exercises.

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🌱Weekly quote: We know what we're doing wrong🌱🟢For many of us, our trading accounts are our cluttered homes. What we desperately need is to find our inner quiet; review our trades and trading statistics in detail and truly experience the horror of betraying our potential; and fully appreciate what we do well and embrace it with gratitude. Out of that energized awareness, we can replace the clutter with what is meaningful. Our great enemy is routine. Many times, we know what we're doing wrong, but we keep making the same mistakes. Indeed, that is the way of life's curriculum. If we fail to learn from the first lesson, we get a second and a third and a fourth: one painful opportunity after another to commit to a different path. Is that failure, or is that something to be grateful for: a curriculum that is trying, trying, trying to teach us the lessons we need to learn to be successful? 🟢We've seen that gratitude is an essential component of psychological well-being. The grateful trader is not self-focused, absorbed in how much money they could/should make. The grateful trader is thankful for the opportunities coming their way. When we look heavenward with thanks for what we've accomplished, there is an essential humility to our perspective. It's not just about us. It's not just about profits and losses. A great metric in evaluating your trading journal is to count the number of frustrated statements versus the number of grateful ones. A great metric in evaluating other traders is to count the number of self-aggrandizing statements with the number of humble, grateful ones. 🟢If losses are opportunities to learn and improve, we can sustain a grateful mindset even in times of adversity. A humble mindset is one looking to learn. A grateful mindset appreciates every opportunity to grow. A life perspective that instills and strengthens humility grounds us in the awareness that there is always something more important than me. There is always something more significant than what is simply happening here and now. We cannot succeed in trading--or any life endeavor--if it becomes our end-all and be-all. Once trading and P/L are placed on a pedestal, they control us and our experience. And that is precisely what interferes with profitability! It's great to correct your mistakes, but it's in your shining successes that you can find your path to fulfillment--and your future in markets. Hidden in your winning trades may be the key to your development as a trader. 🟢 So many developing traders look for one edge after another, one market after another, one trading style after another--all in a frantic search for success. The reality is that our best trading is hiding in plain sight, when we explore what we're trading and how we're trading it when we're most fulfilled and successful. Brett Steenbarger, Trading Psychology

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by Yelli_trades

How To Set Trading Goals!Hey Traders, Setting trading goals is always a fun discussion and something I actually really enjoy talking about. It is possibly one of the most simple tasks with getting started in investing or day trading, yet it is a task that so many get wrong. It's like starting a Sprint race, only you're starting the race facing the other direction. So, today we're going to dive into how to set goals, what they should look like and how we can start getting you running on that race, or even if you started the race, to give you that little speed boost so you can get back on track be sprinting for that finish line, which is where you want to be. It is very common, especially with beginners in trading, that when asked what are their trading goals, they're going to leave you with some kind of percentage or dollar amount and what they're trying to achieve per week or per month. It's easy and it's their aspirations is why they are in the game. They want to make X amount of money and they've been able to divide it down to figure out what they need to make each day in order to reach that goal. Now, most people will sit back and judge that goal on whether or not they think it's achievable and then they'll say well done and give the trader a pat on the back. Only what that person is done by telling this trader that it is good feedback is re firmed that there facing the wrong way at the start of the race and telling him to still Sprint that direction. We trade an unpredictable market. That means no matter who you are or where you are, unless you have some kind of insider information, you have no idea which way a stock, currency or any type of asset is going to move. We base our decisions off of probability. We play on whether or not we have an edge over the market and as long as we win enough we will make profit in the long term and that is how trading works. What that means is we are never sure on how much money we will make or whether or not we will make money. Which means it is unreliable to set money based goals because we have no idea what the market is going to deliver for us. We can have expectations over the long term, but short term. As long as we are trading true to our strategy, it is honestly up to the market whether or not we take home profit or whether we cop losses. Now we understand this because it's trading, right? We got into this market knowing that. So why do we attempt to set money related goals when we know it's just unrealistic and really hard to achieve such consistency when you're looking at short term goals? Baffling right? Now, for some of you may just woke up to this fact, "oh yeah, that is very unrealistic." For others, you may have already known this. Either way, what we're going to do is dive into where you should be setting your goals and what should they look like. My favorite goal to set and to see other people set is consistency within myself. It's to track your own decisions, marking your own movements. When actually trading, if you can become consistent within yourself, you will see consistency in your results, because you'll be able to trade that strategy without having to worry about your own decisions or emotions affecting your decisions. So, what I always did is obviously have a trading plan, have this trading plan and have set guidelines in what you have to do. Post trading as well. When it comes to filling out worksheets, maybe Excel spreadsheets you're trading, log your data, fill it all out. Get yourself a spare calendar, put it on your wall and every day that you do everything to your plan, win or loss on the charts, everything you were supposed to according your strategy, your plan, and filling out all of your Excel spreadsheets, give yourself star. Then every single trading day you get a little star on that calendar and your goals should be set around that. If you find you're being consistent within yourself and consistent in your decision making, then you will be able to determine whether or not your strategy is good or bad, and you'll be able to achieve consistent results long term. Do not base your goals on dollar figures base your goals off of performance. It is the only thing you can actually control. Stop playing around with the idea of setting goals outside of the market or outside of your results. Yes, it is fun to set dollar amount goals. Yes, it is fun to Daydream, but you get stuck in that Daydream Cloud and there may be times where you have a perfectly good trading strategy. You're able to trade it perfectly as well, but you're not hitting your goals. And the reason that might be is because your strategy may not be able to hit those dollar value goals even on perfect days. It happens. So set goals on what you can control, not on what you want the market to deliver. How did you go about setting your goals? How do you do it now? Let me know in the comments. I hope you enjoyed this little post and I'll see you next time. -Jordon Mellor

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by TradeThePool

✍️WEEKLY QUOTE: How to be rigid and flexible at the same time?✍️ In what way does a trader have to learn how to be rigid and flexible at the same time? The answer is: We have to be rigid in our rules and flexible in our expectations 🟢We need to be rigid in our rules so that we gain a sense of self-trust that can, and will always, protect us in an environment that has few, if any, boundaries. We need to be flexible in our expectations so we can perceive, with the greatest degree of clarity and objectivity, what the market is communicating to us from its perspective. At this point, it probably goes without saying that the typical trader does just the opposite: He is flexible in his rules and rigid in his expectations. Interestingly enough, the more rigid the expectation, the more he has to either bend, violate, or break his rules in order to accommodate his unwillingness to give up what he wants in favor of what the market is offering. 🟢To eliminate the emotional risk of trading, you have to neutralize your expectations about what the market will or will not do at any given moment or in any given situation. You can do this by being willing to think from the market's perspective. Remember, the market is always communicating in probabilities. At the collective level, your edge may look perfect in every respect; but at the individual level, every trader who has the potential to act as a force on price movement can negate the positive outcome of that edge. To think in probabilities, you have to create a mental framework or mindset that is consistent with the underlying principles of a probabilistic environment. 💡 A probabilistic mindset consists of five fundamental truths.💡 1. Anything can happen. 2. You don't need to know what is going to happen next in order to make money. 3. There is a random distribution between wins and losses for any given set of variables that define an edge. 4. An edge is nothing more than an indication of a higher probability of one thing happening over another. 5. Every moment in the market is unique. From Trading in the Zone, by M. Douglas ❤️Please, support this post with like and comments!❤️

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by Yelli_trades

Build a Trading System in 6 Steps ✅ Step 1: Time Frame The first thing you need to decide when creating your system is what kind of trader you are. Are you a day trader or a swing trader? Do you like looking at charts every day, every week, every month, or even every year? How long do you want to hold on to your positions? This will help determine which time frame you will use to trade. Even though you will still look at multiple time frames, this will be the main time frame you will use when looking for a trade signal. ✅ Step 2: Find indicators that help identify a new trend. Since one of our goals is to identify trends as early as possible, we should use indicators that can accomplish this. Moving averages are one of the most popular indicators that traders use to help them identify a trend. Specifically, they will use two moving averages (one slow and one fast) and wait until the fast one crosses over or under the slow one. This is the basis for what’s known as a “moving average crossover” system. In its simplest form, moving average crossovers are the fastest ways to identify new trends. It is also the easiest way to spot a new trend. Of course, there are many other ways traders spot trends, but moving averages are one of the easiest to use. ✅ Step 3: Find indicators that help CONFIRM the trend. Our second goal for our system is to have the ability to avoid whipsaws, meaning that we don’t want to be caught in a “false” trend. The way we do this is by making sure that when we see a signal for a new trend, we can confirm it by using other indicators. There are many good technical indicators for confirming trends like MACD, Stochastic, and RSI. As you become more familiar with various indicators, you will find ones that you prefer over others and can incorporate those into your system. ✅ Step 4: Define Your Risk When developing your trading system, it is very important that you define how much you are willing to lose on each trade. Not many people like to talk about losing, but in actuality, a good trader thinks about what she or he could potentially lose BEFORE thinking about how much she or he can win. The amount you are willing to lose will be different than everyone else. You have to decide how much room is enough to give your trade some breathing space, but at the same time, not risk too much on one trade. Money management plays a big role in how much you should risk in a single trade. ✅ Step 5: Define Entries & Exits Once you define how much you are willing to lose on a trade, your next step is to find out where you will enter and exit a trade in order to get the most profit. ☀️ Entries Some people like to enter as soon as all of their indicators match up and give a good signal, even if the candle hasn’t closed. Others like to wait until the close of the candle. For example, in the chart below, entry was when the candle closed above the resistance line. ☀️ Exits For exits, you have a few different options. One way is to trail your stop, meaning that if the price moves in your favor by ‘X’ amount, you move your stop by ‘X’ amount. Another way to exit is to have a set target, and exit when the price hits that target. How you calculate your target is up to you. For example, some traders choose support and resistance levels as their targets. In the chart above, the exit is set at a specific price that is below the resistance zone. However you decide to calculate your target, just make sure you stick with it. Never exit early no matter what happens. Stick to your trading system! After all, YOU developed it! One more way you can exit is to have a set of criteria that, when met, would signal you to exit. For example, you could make it a rule that if your indicators happen to reverse to a certain level, you would then exit out of the trade. ✅ Step 6: Write down your system rules and FOLLOW IT! This is the most important step in creating your trading system. You MUST write your trading system rules down and ALWAYS follow them. Discipline is one of the most important characteristics a trader must have, so you must always remember to stick to your system! No system will ever work for you if you don’t stick to the rules, so remember to be disciplined. Oh yeah, did I mention you should ALWAYS stick to your rules? ✅ How to Test Your Trading System The fastest way to test your system is to find a charting software package where you can go back in time and move the chart forward one candle at a time. When you move your chart forward one candle at a time, you can follow your trading system rules and take your trades accordingly. Record your trading record, and BE HONEST with yourself! Record your wins, losses, average win, and average loss. If you are happy with your results then you can go on to the next stage of testing: trading live on a demo account. Trade your new system live on a demo account for at least two months. This will give you a feel for how you can trade your system when the market is moving. Trust us, it is very different trading live than when you’re backtesting. After two months of trading live on a demo account, you will see if your system can truly stand its ground in the market. If you are still getting good results, then you can choose to trade your system live on a REAL account. At this point, you should feel very confident with your trading system and feel comfortable taking trades with no hesitation. If you like this content help me grow ❤️🌱 GOOD LUCK ❤️🌹

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How to choose the best style of trading?First one style - Scalping Scalping between 1 second to 3-10 min is literally “scalping” every price movement. We opened a deal, get a profit and closed trade. Its a risky and nervous way of trading. Meanwhile, scalping remains potentially the most profitable type of trading. Hardcore scalpers love to fight the market, Their strategy consists in a large number of small trades. The main goal is to close with a positive result. Scalping is interesting for new traders because + quickly gain experience; intensively study the mechanics of the market and graphic patterns; train the psychology of a trader. you do not need a large initial deposit, for scalping multiple turnover of working capital gives the potential to increase the deposit; many trading signals during the day, even on the same trading pair - Sitting in front of monitors for hours, focusing on the course of trading in order to catch that very good moment to enter a deal is not an easy A lot of stress. If you trade with leverages to pump your deposit you can lose all deposit if you trade without stop loss Day trading or intraday 1 hour - 1 day Its simple - After trading day, all transactions should be closed. No matter what happen on a market, cuz crypto trade 24 hours you open position at 7 and closed all positions by end of your trading day. + • Less risk and emotional stress, trading several hours a day; • Greater leverage or margin; • You can not bother much with fundamental analysis; • Don't worry about bad news that comes out between trades. It is recommended for all beginners to start in day trading. You need to learn to control emotions, learn to see market movements, changes in the trend, the mood of the players, correctly place orders and limits. Swing trading (aka medium-term, from 1 week to a month). You can hold your position for a days,weeks, months; Ideally, while the trend continues. Anyone with ideas and investment capital can try swing trading. Because of the longer time frame (1 hour, 4 hours, 1 day), the swing trader doesn't need to be at their monitor all day. Holding an open position for days or weeks can result in higher returns than trading the same security multiple times a day. Less stress There is time for doing other things, keeping the nerves and energy in a healthy state. Swing trading can be done through a simple computer or smartphone. - But Because swing traders hold their positions longer than intraday traders, they also run the risk of higher losses. Especially the risk of losses increases by holding the position every other day. Swing traders rarely enter at the best prices. Checking the chart 1-2 times a day, they are content with what the market will offer at the time of opening a position. Increased waiting time for a signal to enter a position, you can wait for the setup day after day. Medium term trading. This method is for those traders who catch long swings. "Medium-term" holds positions for many weeks and months. Medium-term traders hold positions from several months to several years. + Less stress, Lots of free time. For example someone can trade during all week, but medium trader can buy Bitcoin now for example at 20k and sell it at 50K after few month. Its more about fundamental analysis; Holding a position for several months is not suitable for traders who are used to being active. Long term investment. This type of trading on the principle of "buy and hold" BENEFITS OF LONG-TERM INVESTING Less stress: no need to constantly monitor the market. Time Savings: Less hassle: You don't have to learn different trading strategies or platforms as you won't be an active intraday trader. Long-term trading, as the name suggests, requires you to have free capital. And it should be free for many years to come. You must be prepared that a certain part of your capital will be locked and you cannot use it to benefit from short-term speculation. Deep knowledge. Long term trading requires an advanced understanding of the assets you are investing in. You cannot simply make decisions based on certain news, tips, or rumors. It is also not enough to rely only on charts or indicator signals to buy or sell. You need to be a specialist in fundamental analysis. - Age limits. You must have a life horizon in order to reap the benefits of the investment. If you are 60 years old, then it is too late to start a career as an investor for obvious reasons. Guys thank you for reading. Write in a comments what style crypto trading do you use mostly? And why. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! * Look at my ideas about interesting altcoins in the related section down below ↓ * For more ideas please hit "Like" and "Follow"!

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by Crypto4light

Risk:Reward Ratio. What is it?Risk to reward ratio. What is it? What does it mean and how do we use it? Now, if you made it to the point where you're here on TradingView, there's a good chance that you have heard about Risk to Reward ratio. Today, I want to dive into what it really means and how to actually utilize it. I see so many beginners missing out on huge profits and opportunities because of their risk reward ratio and I want to share my knowledge of this tool and how to actually use it in the future. Firstly, let's dive into what is the risk/reward ratio? The RR ratio is a tool that can accurately predict by expected returns based off of previous results. This tool measures how much reward you are estimated to gain based off of the dollar amount you risk. For example, if you have a risk to reward ratio of 1:3, it means for every $1 you risk, you will gain a return of $3 in the event of a positive trade. Using the same example in the FX market, let's say you're risking 10 pips on EURUSD, your take profit is at 30 pips. This means you gain 30 pips in the event of a win, lose 10 pips in the event of a loss, giving you a 1:3 risk/reward ratio. This is a very powerful tool because compared with the win rate and in correlation, you can actually predict based off of your previous results, you're expected returns on investment. Being able to predict what you're expected returns are are great way of giving you milestone targets, but also when you're looking at getting funded with prop firms, you also know what you are actually able to achieve in what time frame. Now, it goes without saying, the higher your risk to reward ratio, the less you need to win in order to maintain profitability. The opposite, the lower your risk reward ratio, the higher win rate is required to maintain profitability. But this is where we get into where I find beginners struggle. A lot of people will base their strategies on their risk/reward ratios, which is understandable if you're building the strategy from scratch. If you're using a prebuilt strategy or something that doesn't really correlate with risk/reward ratio. Then it makes it obsolete and just confusing. Going back to my first point, risk to reward ratio is a tool that you can use to estimate future potential returns based off of previous results. Let's say you have 100 trades worth of data. You can accurately have a look at what is your risk to reward ratio is and compare that with your win rate. From there you can make a decision whether or not that is a profitable strategy. On top of that, you can then start to look to improve either your win rate and risk to reward ratio, knowing that that is an area that needs improvement. When it comes to improving your risk to reward ratio, one thing that always grinds my gears with traders, is when they enter a trade, they'll set their stop loss and take profits based on their risk to reward ratio not based on the actual analytics of the trade. While I understand this and with some strategies, this can work. For most, they end up setting those take profits in areas that is just realistically is going to be really hard for the price to get to. What professionals do when trying to improve the risks of reward ratio is only take those setups where a good take profit is viable around that level of risk to reward. For example, in this chart, we are looking at buying the USDCAD over the next couple of weeks. We like this setup. We've had our entry signal and we're going to place a stop loss below that recent low, which was created early last week. We are not happy with our risk to reward ratio. We think we're leaving too much profit on the table and want to increase our overall results. So I'm only taking trades that have close to a three to one risk to reward ratio. But as you can see by this chart that dotted lines are areas of resistance which we are going to have to break in order to achieve that level of profitability. There are 5 different zones we are going to have to get through in order for my take profit to be hit, it is fair to say the odds are not in my favor. Now a beginner Trader will still enter this trade with the same take profit and the same stop loss and just hold on. The reason they'll do that is because they want the 1:3 risk reward ratio. They don't care where the profit target is. What matters is it is 3 times worth what they're risking. On the other hand, A professional trader will actually either let this trade go and not enter it, or look for another entry point later on on smaller timeframes to where you can fit that risk to reward ratio and you're not going to hit the high levels of resistance. To sum up what my point is, risk to reward ratio is a very powerful tool to understand what you are capable of the trader and also where you can improve. It is not a valid take profit selection strategy. Yes, it can definitely help with guidelines on where to set your take profit, but it should not be the sole reason your take profit is set at a certain price just because it is X amount whatever you are risking. Have a look at what the chart is telling you and what your analysis is telling you. Then, only take the trades which coincide with the risk to reward ratio. You want to achieve. I hope you enjoyed this insight and I hope it was beneficial to you. I recommend highly diving into your previous trading data. Have a look at your win rate. Have a look at your risk reward ratio and understand what your profitability expectation really is and base your future decisions off of that data. Have a fantastic trading we can I look forward to seeing your comments. - Jordon

Education

by the5erstrading

How To Make Your Trading Plan In 7 Steps !How To Make Your Trading Plan In 7 Steps ! ➡️ Choose The Correct Time Frame All traders know what time frames are, but few know that each time frame has a specific way of working. Time frames from 15 minutes to 60 minutes fall under the name of day trading, meaning that all deals will be closed on the same day, whether with profit or loss, and traders call it the name "Scalping" On the other hand, there is a time frame from 4 hours to the daily frame, which are considered long deals and traders call them “swing” Time frames higher than the daily are considered investment centers and are not suitable for small capitals —————————————————— ➡️ Risk Management Most traders make a fatal mistake, which is not choosing a risk ratio for each trade, and this exposes the entire account to a loss. The best traders in the world believe that the reasonable risk ratio is between 1% to 3% for each trade. —————————————————— ➡️ Conditions You Must Choose Between " Ranging " Or " Trending " —————————————————— ➡️ Markets In Stock Markets We Have 4 Market ,, - First One Is Option Option or binary options is a currency, commodities and stock market that simulates the same conditions as the real markets, but you can set a time for the transaction and bet on the direction within a minute or two and you can win up to 90% of the bet amount, but in the event of a loss, you lose the entire bet amount and some believe that The option market has a lot of suspicions and scams - Second Type Is Equity - Third Type Is Futures - Forth Type Is Forex - Fifth Market Is Crypto Currency —————————————————— ➡️ Type Of Your Entries - Pull Back - Break Out - Cross Over —————————————————— ➡️ How To Put Your Stop And Targets ? —————————————————— Print It And Don't Forget Any One From The 7 Steps To Be Successful Trader ❤️❤️

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