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Commodities

Understanding Range TrapsAfter an impulsive move, the market tends to enter into a consolidation. This is the zone where buys and sellers fight to win the next move. Of course, whenever sellers and buyers are fighting - liquidity is built. In this example, sellers attempted to sell from the structure only to be stop hunted before the true move to the downside. Likewise, buyers would have got activated in buy stops from the structure break to the upside. Their stop losses would have been placed below the support which again got tackled after the sellers got dealt with. Once the buyers and sellers liquidity had been wiped the true move could continue which was to the downside.
OANDA:XAUUSDEducation
by AlkalineFX
4
Self confidenceAlways believe that you are part of the market.. market is being moved by your combined effort, People themselves. We are trading in an environment where we've been brainwashed with alot of negative ideas about forex market and trading. People telling us ooh retail traders don't make money, ooh 95% lose money, there are money makers etc. I say f that. Trade your way, beleive in yourself, watch charts and don't listen to noises.. remember to protect your a** because everyone makes mistakes
BYBIT:BTCUSD.PEducation
by Ygideon
Trading - Expectations VS RealityHey Traders, In this post we will aim to clear some of common misconceptions of trading and how we can help you go further in your trading career by giving you all the tools you need to better understand the market and kill the game. ____________________________________________________________ 1. Trading is easy. Trading is relatively easy IF you know the rules of the market and use certain analytical techniques. Once you have a full arsenal of technical tools, you can easily understand the market and figure out where it may go next. 2. Market moves in one direction. That can be true to a certain extent where we have trending markets. However, within that trend there are various types of pullbacks. Once you understand the different market phases, you can make money whether it's a trending or ranging market. Opportunities are endless! 3. Buy when low. Sell when high. If only things were that straight forward, right? Sometimes the lows aren't really the lows and the highs push higher and higher. This is when you need to understand the different patterns and structure of the market to help you figure out where the best possible place is to buy or sell. Once we understand the market, we need a trading plan. How do we enter? Where do we enter? Where is the stop loss? This is where having rigid checklist really helps! You can tick things off the list and grade the trade setup from good to bad and then enter accordingly using various entry methods. It may sound like a lot of but once broken down into little bits, you can learn this EASILY and know exactly how to analyse and enter trades! ____________________________________________________________ What we will be covering: - Market structure: Impulse & Corrections - Using Index charts to correlate your trades (Very important Topic!) - Drawing a trendline and levels correctly – There’s a hack to it! - Using Moving Averages Correctly - Combining higher timeframe & lower timeframe - Different patterns and how to trade them - More topics to come! Comment below on what other topics you would like to see! I hope this post help clarify some of the misconceptions of trading and the different elements involved. See the links below for information on how we can help you!
Editors' picks
OANDA:XAUUSDEducation
by WicktatorFX
30
Predicting the Time-window for Turns, in all MarketsInexplicably, upon publishing this post, the Title Chart becomes distorted beyond recognition thus, all references are to this Original Chart - below Do markets trend on the medium term (months) and mean-revert on the long run (years)? Does Black's intuition bear out that prices tend to be off approximately by a factor of 2? (Taking years to equilibrate.) How does Technical Analysis , as a whole, act as a trend following system while Fundamental Analysis matters only once prices get way out of line? Is mean-reversion a sufficient self-correcting mechanism to temper irrational exuberance in financial markets? We examine these questions in the proceeding; In his 1986 piece Fisher Black wrote: "An efficient market is one in which price is within a factor 2 of value, i.e. the price is more than half of value and less than twice value. He went on saying: The factor of 2 is arbitrary, of course. Intuitively, though, it seems reasonable to me, in the light of sources of uncertainty about value and the strength of the forces tending to cause price to return to value. By this definition, I think almost all markets are efficient almost all of the time." The myth that “informed traders" step in and arbitrage away any small discrepancies between value and prices never made much sense. If for no other reason but the wisdom of crowds is too easily distracted by trends and panic. Humans are pretty much clueless about the “fundamental value" of anything traded in markets, save perhaps a few instruments in terms of some relative value. Prices regularly evolve pretty much unbridled in response to uninformed supply and demand flows, until the difference with value becomes so strong that some mean-reversion forces prices back to more reasonable levels. Black imagined, Efficient Market Theory would only make sense on time scales longer than the mean-reversion time (TMR), the order of magnitude of which is set by S√TMR∼d. For stock indices wit hS∼20%/year, makes TMR = ∼6 years. The dynamics of prices within Black’s uncertainty band is in fact not random but exhibits trends: in the absence of strong fundamental anchoring forces, investors tend to under-react to news or take cues from past price changes themselves. In fact, the notorious and unbridled reliance and un-anchored, speculative extrapolation is the mainstay of most investors, as well as Wall Street's itself, as it is the regular course of everyday "investing" across most asset classes. In the following a picture emerges (and we test it), whether market returns are positively correlated on time scales TMR and negatively correlated on long time scales ∼TMR, before eventually following the (very) long term fate of fundamental value - in what looks like a biased geometric random walk with a non-stationary drift. We have looked at a very large set of financial instruments, drawing on data sets from 1800 - 2020 (i.e. 220 years). We applied the same method to all available data in Stocks, Bonds, FX, Commodity Futures and Spot Prices, the shortest data set going back 1955. As it turns out that, in particular, mean-reversion forces start cancelling trend following forces after a period of around 2 years, and mean-reversion seems to peak for channel widths on the order of 50-100%, which corresponds to Black’s “factor 2”. Mean-reversion appears as a mitigating force against trend following that allows markets to become efficient on the very long run, as anticipated previously by many authors. Regarding the data we used for this study; Commodity Data sets - Starting date Natural Gas 1986 Corn 1858 Wheat 1841 Sugar 1784 Live Cattle 1858 Copper 1800 Equity Price data sets - Starting date USA 1791 Australia 1875 Canada 1914 Germany 1870 Switzerlan 1914 Japan 1914 United Kingdom 1693 From trends to mean-reversion The relation between past de-trended returns on scale t'< and future de-trended returns on scale t'>. Defining p(t) as the price level of any asset (stock index, bond,commodity, etc.) at time t. The long term trend over some ti scale T is defined as: mt:=1Tlog . For each contract and time t, we associate a point(x,y) where x is the de-trended past return on scale t'< and y the de-trended future return on scale t>:x:= logp(t)−logp(t−t'<)−mtt'<;y:= logp(t+t'>)−logp(t)−mtm't'. Note that the future return is de-trended in a causal way, i.e. no future information is used here (otherwise mean-reversion would be trivial). For convenience, both x and y are normalized such that their variance is unity. Remarkably, all data,including futures and spot data lead to the same overall conclusions. See in chart; As the function of the past (time) horizon t'< (log scale) for Red & White Bars, the futures daily data and spot monthly data. To compare the behaviour of the regression slope shown in the chart with a simple model, assume that the de-trended log-price pi(t) evolves as a mean-reverting Ornstein-Uhlenbeck process driven by a positively correlated trending noise m. It is immediately apparent from the dashed line in the chart that the prediction of such a model with g= 0.22, k−1= 16 years and y'−1= 33 days, chosen to fit the futures data and g= 0.33, k'−1= 8 years and gh'−1= 200 days, chosen to fit the spot data. In the short term volatility of prices is simply given by S'2k's'. Non-linear effects A closer look at the plot(x,y )however reveals significant departure from a simple linear behaviour. One expects trend effects to weaken as the absolute value of past returns increases, as indeed reported previously. We have therefore attempted a cubic polynomial regression, devised to capture both potential asymmetries between positive and negative returns, and saturation or even inversion effects for large returns. The conclusion on the change of sign of the slope around yt'<= 2 years is therefore robust. The quadratic term, on the other hand, is positive for short lags but becomes negative at longer lags, for both data sets. The cubic term appears to be negative for all time scales in the case of futures, but this conclusion is less clear-cut for spot data. The behaviour of the quadratic term is interesting, as it indicates that positive trends are stronger than negative trends on short time scales, while negative trends are stronger than positive trends on long time scales. A negative cubic term, on the other hand, suggests that large moves (in absolute value) tend to mean-revert, as expected, even on short time scales where trend is dominant for small moves. Taking these non-linearities into account however does not affect much the time scale for which the linear coefficient vanishes, i.e. roughly 2 years Conclusion Here we have provided some further evidence that markets trend on the medium term (months) and mean-revert on the long term (several years). This coincides with Black’s intuition that prices tend to be off by a factor of 2. It takes roughly 6 years for the price of an asset with 20 % annual volatility to vary by 50 %. We further postulate the presence of two types of agents in financial markets: Technical Analysts , who act as trend followers, and Fundamental Analysts , whose effects set in when the price is clearly out of whack. Mean-reversion is a self-correcting mechanism, tempering (albeit only weakly) the exuberance in financial markets. From a practical point of view, these results suggest that universal trend following strategies should be supplemented by universal price-based “value strategies" that mean-revert on long term returns. As it's been observed before, trend-following strategies offer a hedge against market draw-downs while value strategies offer a hedge against over-exploited trends.
TVC:DJIEducation
by Nemo_Confidat
8
Trading - Expectations VS RealityHey Traders, In this post we will aim to clear some of common misconceptions of trading and how we can help you go further in your trading career by giving you all the tools you need to better understand the market and kill the game. ____________________________________________________________ 1. Trading is easy. Trading is relatively easy IF you know the rules of the market and use certain analytical techniques. Once you have a full arsenal of technical tools, you can easily understand the market and figure out where it may go next. 2. Market moves in one direction. That can be true to a certain extent where we have trending markets. However, within that trend there are various types of pullbacks. Once you understand the different market phases, you can make money whether it's a trending or ranging market. Opportunities are endless! 3. Buy when low. Sell when high. If only things were that straight forward, right? Sometimes the lows aren't really the lows and the highs push higher and higher. This is when you need to understand the different patterns and structure of the market to help you figure out where the best possible place is to buy or sell. Once we understand the market, we need a trading plan. How do we enter? Where do we enter? Where is the stop loss? This is where having rigid checklist really helps! You can tick things off the list and grade the trade setup from good to bad and then enter accordingly using various entry methods. It may sound like a lot of but once broken down into little bits, you can learn this EASILY and know exactly how to analyse and enter trades! ____________________________________________________________ What we will be covering: - Market structure: Impulse & Corrections - Using Index charts to correlate your trades (Very important Topic!) - Drawing a trendline and levels correctly – There’s a hack to it! - Using Moving Averages Correctly - Combining higher timeframe & lower timeframe - Different patterns and how to trade them - More topics to come! Comment below on what other topics you would like to see! I hope this post help clarify some of the misconceptions of trading and the different elements involved. See the links below for information on how we can help you!
OANDA:XAUUSDEducation
by WicktatorFX
15
Importance of diversification across asset classesAny feedback and suggestions would help in further improving the analysis! If you find the analysis useful, please like and share our ideas with the community. Keep supporting :) In this post, we have attempted to cover the importance of portfolio diversification. To drive our point home, we have taken a 2-year reference and divided it into 3 parts: Pre-pandemic : January 2019 to 10th Feb 2020 Height of the pandemic : Feb 2020 to 23rd March 2020 Post pandemic : 30th March 2020 till present The 3 classes of asset that we included in this analysis are: Cryptocurrency- ETH Stocks- S&P 500 Commodity- Gold Pre-pandemic period: ETH was on a bull run as were other major crypto currencies. It shot up more than 125% during that period. The S&P 500 index was up by 38.5% during the same period, while the precious commodity, Gold, rose by 24.15%. At the height of the pandemic: It was a testing time for the diversification of portfolio. Holding any particular asset class and not diversifying at all, proved to be a disaster for many naive investors. ETH dropped by approximately 65%. The S&P 500 index tanked almost 33%, while Gold, considered to be the safest asset, lost 12%. Post-pandemic period: It was one of the massive bull-runs in the history of bull runs. Patient investors who entered into the markets at the height of the pandemic saw their wealth growing multiple times. Moreover, with the Central banks around the world printing currencies at a furious pace, the only way to beat inflation was to invest in high alpha generating assets. ETH shot up almost 1800% during this period, which is a 18x return. The S&P 500 shot up over 94%, while Gold went up by a meagre 21%. Considering the returns and the risk over these 3 periods, it can be stated with absolute conviction that the need for diversification is supreme. ---------------------------------------------------------------------------------------- Any feedback and suggestions would help in further improving the analysis! If you find the analysis useful, please like and share our ideas with the community. Keep supporting :)
BITSTAMP:ETHUSDEducation
by Mudrex
2
EURCHF - How To Trade This BreakoutEURCHF is within a descending channel of an ascending channel... pretty confusing I know but have a look at the chart and you can see which way price will be heading. What we need to do now is find the best entry which is safe and clean. From the diagram in the chart, you can see that our entry will only be after the break of the descending channel and after a bullish correction such as a bull flag. We need to make sure that price has the momentum to move up so we will be waiting for a breakout of the bullflag before entering with stops below the correction. Goodluck and trade safe!
Education
by WicktatorFX
2
EURCHF - How To Trade This BreakoutEURCHF is within a descending channel of an ascending channel... pretty confusing I know but have a look at the chart and you can see which way price will be heading. What we need to do now is find the best entry which is safe and clean. From the diagram in the chart, you can see that our entry will only be after the break of the descending channel and after a bullish correction such as a bull flag. We need to make sure that price has the momentum to move up so we will be waiting for a breakout of the bullflag before entering with stops below the correction. Goodluck and trade safe!
Education
by WicktatorFX
1
A "Welcome to" Pinescript codingThis simple idea is an intro to @TradingView & @PineCoders Nothing fancy or complex, if you are already coding - you can skip this. simple MA build walk through & adding a second MA. If you want to get into coding, then here's the basic introduction. FYI - I am not a coder, 21 years trading experience and know a bit about the instruments - but new to actual coding, especially in Pine. Hope it helps someone! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Editors' picks
COINBASE:BTCUSDEducation
by Mayfair_Ventures
49
If you don't know what DXY is and you are a trader, then read..Let's talk about DXY. TLDR: DXY is important and you should keep your trading eye on it. For those that don't know, DXY is the US Dollar Index. It measures the performance of the USD compared with a basket of six other currencies that are major trading partners of the United States. By far the largest component is the EUR, followed by JPY, GBP, CAD, SEK and CHF. We use DXY to track the relative strength of the world's biggest currency. The health of the USD drives so many things. Yesterday's stream covered the probability of the FOMC (the body in the US that determines interest rates) changing their language regarding their Quantitative Easing (QE) program. You can watch the stream here (warning there is a slight echo at first): www.tradingview.com I wanted to add some explanation to some of the topics I covered. I predicted that their language in the statement would change, and that it would point more towards them ending QE faster than expected. What this means is that they are hinting at tightening interest rate policy. Higher US Interest rates = stronger USD, because you can get more interest depositing your cash in a US bank in USD than you could get yesterday. I also pointed out some Technical Analysis we had done here at Mayfair, showing the timing was perfect for a USD rally. So far so good, and the FOMC did more or less as I expected, and the DXY rallied strongly: Now here's the idea I posted on May 28th showing the same thing: THIS IS ALL WELL AND GOOD BUT........... DXY (USD) strength has ramifications across loads of other markets. This is the point some people may not realise, so i thought I would explain it. If you buy Gold, you pay (usually) in USD. If the USD is stronger, you need fewer USD's to buy the same amount of Gold. so the Gold price goes down: The same is true of US500 Index: While BTC is also priced against the USD, 1-2% moves in the USD aren't going to have too much of an effect on something that can move 5% a day for a long time! DXY's behaviour is something to keep your trading eye on.
TVC:DXYEducation
by Paul_Varcoe
7
The Basics - Trend LinesTrend lines are used in technical analysis to define an uptrend or downtrend. Traditionally, uptrend lines are made by drawing a straight line through a series of ascending higher troughs (lows). ... With downtrends, trend lines are formed by drawing a straight line through a series of descending lower highs. In an uptrend, the “imaginary line” acts as support and in a downtrend, the line connecting the points at swing highs become the resistance. Although we can go into what and why – the logic for trend line, is to keep it simple. It’s another subjective area and people like to spot patterns. It’s human nature. This shows in it's most basic form the concept of a trend line. In an uptrend we want to see, higher highs as well as higher lows as shown below; And in a down trend, the opposite is true - Lower highs & lower lows to create the pattern as per main image of this post. Many other techniques and indicators use this concept, and perhaps the most famous being Elliott waves. Here's a post on Elliott basics; This then all points back to Dow Theory - where markets have 3 cycles and 3 waves (another lesson for another time) in short; Here's also a post covering the Dow basics; You can also use Moving averages as part of "working out the trend" And her is another simple guide to MA's (moving Averages) We thought it would be interesting to post, more of a beginners post that our usual stuff. Hope this helps some of the newer traders. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
FX:XAUUSDEducation
by Mayfair_Ventures
8
Are you a champion hopper? 😬🙈Morning traders. I started yesterday morning by posting an idea with the phrase below. 'Lets start the morning with everyone's favourite! Gold' Well I'm kinda doing the same again this morning but this time it so we can all have some more food for thought at the breakfast table instead! Now here me out, I have drawn the two graphs in this mornings idea on the same gold H1 strategy chart I shared yesterdays idea from. The comment section was a good mix of feedback, some miffed at the stop out possibly and others very realistic in the reality that stop losses occur in trading. For this strategy yesterdays stop loss means we now have 5 losses in a row. But I wont be hopping off to another method or style either. 90% of traders get spooked at the first sign of a losing run and jump to the next strategy. Why will I stick with this strategy for gold on H1? Because of probability being factored in from the back tested data available. Hand on heart how many people out there actually back test a strategy? You can't plan for probability in your risk management if you have no data for your strategy. Transparency when sharing ideas has always been key for me and strategy test data is always included in my ideas just as the H1 gold data is at the bottom of this idea. This leads me back on to the graph drawings in this idea. The one on the left is the last two weeks of data for this strategy the one on the right is the last two years! Growing capital takes time. Losing runs are part of trading the growing capital part comes from trading a strategy with a proven edge. If you have a proven system why hop on to another one? I'll end this idea with a great quote from Steve Burns. '10% of successful trading is creating a system with an edge. The other 90% is following it' Enjoy your day traders. ------------------------------------------ Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. Thank you. Darren
Editors' picks
OANDA:XAUUSDEducation
by pow_removetheguesswork
7
Missed gold opportunity. Good time for educating.This was an ideal occasion for order blocks. This one would have netted some good profit and limited risk. This isn't how I trade ordinarily. I don't often take trades off the 240 or higher just because I almost never see an order block within my risk parameters. I usually only use the higher time frames to chart the landscape, however, the idea of successfully trading this way is ultimately enticing enough for me to keep at it.
COMEX:GCQ2021Education
by emehoke
Emotional Analysis I have posted recently on Wyckoff, Elliott cycled, Gann education and covered psychology. The Thing is - as a long time trader, you often see new comers and the assumption is more indicators, more stuff = better results. Take a step back and view this from 30,000 feet. You looking at finding an edge, an edge can be as simple as risk management and positioning yourself with a great risk to reward system. The problem is, if there was an algo or one indicator that could make you rich. The world would quickly run out of doctors and postmen. What Elliott, W.D.Gann, Wyckoff, Dow and others clearly understood - was not the technical count on the chart, or if this is a UTAD or a spring event. What they appreciated was human nature - psychology. I wrote this post to show how the mindset fits into the chart - When everyone started posting the "Wall Street, cheat sheet" and asking - Where are we? I would respond, depending on where you bought or sold. It's not a group thing. Unless you refer to sentiment - which is another topic again. The issue is - everyone is looking to have their hand held. Indicators can be useful of course. But you cannot depend, rely or only take buy and sell signals. Make yourself sheep and the wolves will eat you. Benjamin Franklin ================================================================================================================================== So whilst people assume The Elliott's and the Gann's where the titans of technical. There's a deeper skill they tapped into. Emotional analysis. When studying Elliott, you can walk through a certain journey of why the price moves up & pulls back. Why it rapidly grows in wave 3 and why the 4th becomes messy. Elliott knew what drove these moves & how the retail traders follow on like sheep. click link for full article ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Wyckoff and Dow - this is not a lesson on the technical side. It's an eye opener. Wyckoff could make a schematic of the logic and emotions inside the chart and simply plotted it. Dow, simplified it into 6 market tenets. But either way they knew more about the market psychology than they did the chart. If you are looking to trade alt coins - you need to understand the project, the team & just like investing in a stock. Get a feel for the company. This last week, I have seen social media posts about "this guy lost this, that or the other" All blaming and pointing fingers at Musk - the truth is if you need to follow a celebrity for stock picking. Chose another sport. Doctors, lawyers, accountants and many professions take many years just to qualify - why is crypto trading any different? Professional traders know this - and currently it's like having penguins in the water for the first time, the pro's are the sharks. PSYCHOLOGY This is all it boils down to. We assume big brother is watching, we assume stocks, crypto etc all being manipulated. There's often talk about FOMO & FUD. Wyckoff knew this as the "Composite man" Truth is - retail do it to themselves 90% of the time, trying to catch tops and bottoms. Not learning market phases or cycles and then blaming everyone else for their mistakes. Everyone wants to strike it rich, one trade and millions. Seems to be the mentality. It needs time & proper risk management. ==================================================================================================================================== If you can take a step back and see the market with "emotional vision" switched on, you will see why Elliott & Wyckoff are applicable today - Humans don't change, the psychology and mindset is still the same. Market manipulation is strong and real - it's just not what you think. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
COINBASE:BTCUSDEducation
by Mayfair_Ventures
19
Wyckoff basics explainedGoing back to the 18th of March where we called the Buyers Climax top for Bitcoin's "Wyckoff" Distribution phase. We have had a lot of questions regarding the technique. It's a very difficult one to put into only one post - but to understand Wyckoff methodology you need to first APPRECIATE what Wyckoff is about. History Richard Demille Wyckoff (November 2, 1873 – March 7, 1934) was an American stock market investor, and the founder and onetime editor of the Magazine of Wall Street. Wyckoff implemented his methods of technical analysis of the financial markets (the study of charts showing movements of stock-prices and other data). He grew his wealth such that he eventually owned nine and a half acres and a mansion next door to the Hamptons estate of General Motors president Alfred Sloan in Great Neck, New York. As Wyckoff became wealthier, he also became altruistic about the public's Wall Street experience. He turned his attention and passion to education, teaching, and in publishing exposes such as “Bucket Shops and How to Avoid Them”, which were run in New York's The Saturday Evening Post starting in 1922. Jump forward - too much detail for one post to cover. Wyckoff's research claimed many common characteristics among the greatest winning stocks and market campaigners of the time. He believed he had analyzed and determined where risk and reward were optimal for trading. He emphasized the placement of stop-losses at all times, the importance of controlling the risk of any particular trade. Wyckoff also has techniques he believed offered advantages when markets were rising or falling (bullish and bearish). The Wyckoff technique may provide some insight as to how and why professional interests buy and sell securities, while evolving and scaling their market campaigns with concepts such as the "Composite Operator". Wyckoff offered a detailed analysis of the "trading range", a posited ideal price bracket for buying or selling a stock. One tool that Wyckoff provides is the concept of the composite operator. Simply, Wyckoff felt that an experienced judge of the market should regard larger market trends as the expression of a single mind. He felt that it was an important psychological and tactical advantage to stay in harmony with this omnipotent player. Wyckoff believed investors would be better prepared to grow their portfolios and net worth by following in his footsteps. The LOGIC Applying this concept in a chart you can identify market phases and cycles - here's the snapshot from a daily BTC move. This relates to one of 4 (master patterns)this particular known as distribution schematic 1. **For the others you can see in the PDF linked below;** Phases - Simplified In this distribution schematic example (literally from Wednesday's BTC exit of the range) you will be able to identify a Buyers Climax (BC) from here, the assumption is that the composite man (strong hand operators) are taking profits - Money flow leaving, this causes an Automatic Reaction (AR). Now many retail traders will assume, this is another pullback (failing to identify the BC) if their on a very small time frame (and many retail traders are operating on lower time frames) then the assumption would be "buy the dip" and for a little while they are correct, we often see this (ST) move up but, this usually fails to go higher than the (BC). Composite man is in control This game is what many retail traders refer to as "Market Manipulation" - whilst the reality is, there is an identifiable pattern. Human beings are greedy, fearful and outright stupid at times. This allows for the perfect schematic to play itself out as the composite man accumulated or in the Bitcoin move Distribute. Here's an example from an older post I did walking through the psychology on a chart. You will see how price action in inextricably linked with the moves caused by the players "you & me" in the market. Later phases of this structure The general idea is for the composite man to accumulate or distribute to obtain a better position for himself, taking the market one way and the other. Often at times, retail will do the last couple of steps among themselves. Although the strong hands are often hedging positions, it is not always required to have their participation as the phases move on inside the structure. As we see a Sign Of Weakness (SOW) - the retail traders would have now seen a lower high and a lower low (logic) However from the (SOW) we move almost impulsively to the Upthrust (UT) the "bulltrap" to many newer traders. At this stage of the post, you might be starting to see inside how the manipulation works? Next phase Range bound - in true Wyckoff terms this region inside the schematic is known as phase B. We chop up and down and eventually create a new higher high. Again in Bitcoin's case we see the ATH. Known as the (UTAD) to Wyckoffian's - Up Thrust After Distribution. This is the climax and from here we see the price breaking down until we anticipate the exit of the range. On @TradingView We have also developed a pretty cool indicator to use one buy and one sell for Wyckoff schematics in particular. You can see how it fits inside the schematic. The logic can easily be assessed and broken down into small parts, step by step. And therefore, if it's something we can program. It is something you can learn. Here is the free link to the other Wyckoff Schematics - drive.google.com Hope you enjoyed this short intro to Wyckoff - see the previous video posts for live Wyckoff overlay examples. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Editors' picks
FX:XAUUSDEducation
by Mayfair_Ventures
290
XAUUSD - How I caught 580 pips on Gold almost zero Drawdown💰💰Hello Traders😃 I have decided to make this educational post on a trade I took on the 5th of may which took profit after NFP✅ I believe there is a struggling trader who may be having difficulties putting it all together and creating a simple trading plan. The first thing to remember is that trading is probabilities so we try to get as many reasons as possible in our favor before placing any single trade If you see most of my ideas I highlight if a trade is medium probability or high probability and it’s mostly backed by these factors, The more factors in my favor, the higher the probability ⚜️ In this trade I simply used these 5 reasons to get on this trade and all criteria was met perfectly.✊🏽 You don’t need a magic indicator or a lot of lines on your chart to be profitable Remember simplicity is the key 🔑 Just these 5 factors helped me to secure 580 pips on a single trade with a healthy risk to reward too.😊 I caught a similar trade on the 15th of April which I’ve linked below and you can see the factors above Keep things simple and repeatable♻️ God bless you😊 I wish you all a profitable trading career Slick⚜️
FX:XAUUSDEducation
by Slickpapi
9