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MATH - This is how you REALLY use Elliott WaveThis is a great example of a beautiful setup and how to lay out a low risk, high reward trade, especially for those that are still learning and wondering how to apply Elliott Wave. Or maybe you are unfamiliar with Elliott Wave or someone who thinks it's nonsense. Well let me show you how I do it and hopefully help you learn the best technical strategy. These are the setups I salivate on. And I don't care if I lose 8 out of 10, because the 2 that hit will more than pay off the losers. Support box is clear. Below the September low and I'd be out as we'd be below the reliable 61.8% retracement. Breaking that fib retracement level means that it can do anything from bullish, to diagonal, to sideways, to bearish moves. And we don't want to waste our time with stocks that aren't trending. Nothing is reliable anymore - therefore, we don't want to trade it below that. Toss it away. Move on to the next one. For this play, you could accumulate shares under $2.25 which is the previous high. I have it labeled as a Wave (1) but it could easily just be an (A) wave. As a quick refresher, trending impulsive moves happen in 5-wave moves. Since we don't know for 100% certainty that this will become that, we have to prepare for the other likely scenarios. We are already protected from significant downside with our stop below the 61.8% retracement, so I just don't care what might happen in a bearish count. So for bullish, I want to accumulate under the last high and catch the breakout. Once broken out, minimum target is $4.25. That's the 100% extension of (1) from the bottom of (2), the first resistance. If this ends up being a 3-wave (A)(B)(C), it would top out there at the 100%, so we want to make sure we have all of our money back by then. A full bullish follow through could take it anywhere between $12 (161.8% fib) and $22.50 (200% fib, which is where a standard impulsive 5-wave rally is expected to end with no extensions). If you buy a stock like this with stop below the 61.8%, you can go net free (return of original equity) by selling however many shares are needed to get your original money back at the previous high around $2.25 which should reject at first try (as it is the most likely landing spot for Wave 1 inside of Wave (3). Once a higher low forms from there (Wave 2 of (3)) between $1.20 and $1.75, you could go in even harder, buying more shares, and moving your stop on all shares to that higher low, providing a very low risk scenario. By the time $4.25 is hit, you should be completely net free with plenty of shares left and maybe even take some good profits. Remember, this is an outline NOT A PREDICTION. That's why we have a stop, a plan, and multiple targets. As it plays out, we gain more clarity and update our outline. Probably even find a trend channel. This is Elliott Wave. This is Fibonacci Pinball (the creation of Avi Gilburt at elliottwavetrader,net). It's not telling you what's going to happen. It's telling you what could happen, laying out the most probable path, limiting your risk, and telling you when it might be wrong and how to pivot. And don't go thinking this will happen all at once. Keep good notes of your entry and all sales. This likely takes 1-3 years. Standard disclosures: 1. This is 100% my idea. It was not sourced from any other avenue. 2. I am not invested in this company, though I am likely buying shares soon. 3. I am not paid to post content nor do I receive any contributions of any kind. 4. While this is outlining a potential profitable setup, this article is not investment advice. You should do your own due diligence on any company you invest in and apply your own trading strategies. 5. I know nothing about the fundamentals of this company. I suggest doing your due diligence if fundamentals are important to you. 6. Readers should always remember that markets are their own creature made up of millions of individuals and institutions each following some combo of inherent bullishness, inherent bearishness, fundamentals, technicals, stupidity, and pure emotion. Elliott Wave, and specifically Fibonacci Pinball (developed by Avi Gilburt at elliottwavetrader.net and prominent Seeking Alpha author), merely provide a framework based on the observed price action to date. 7. I know that while my wave outline is based on years and years of data and application from not only me, but some of the best in the game, I also know that markets do not follow a set path and that sentiment can remain irrational far longer than I can remain rational. That is why you MUST consider the alternatives and manage risk appropriately. Know the pivot zones that could lead to the primary path failing. I warrant that the information created and published by me on TradingView is not prohibited, doesn't constitute investment advice, and isn't created solely for qualified investors. My analysis is not a recommendation for a specific trade. My analysis outlines a potential scenario and provides risk assessments for multiple alternate scenarios. My analysis is purely educational.
NASDAQ:MATHEducation
by mazag08
1
What Is a Falling Knife in Trading? What Is a Falling Knife in Trading? It’s often repeated that traders should ‘never catch a falling knife.’ This phrase highlights the risks of buying into a rapidly declining asset. Understanding what a falling knife is, its causes, and strategies for trading it may help traders navigate these sharp declines more effectively. This article delves into the intricacies of falling knives and offers insights on how to approach them with caution. Understanding the Falling Knife Pattern A falling knife consists of candlesticks that depict a significant rapid drop in an asset’s price, including stocks, commodities, forex pairs, indices, cryptocurrencies*, and more. This situation is often driven by negative news, poor earnings reports, or broader market sell-offs. Identifying a falling knife involves recognising several key characteristics. Firstly, the decline is steep and sudden, typically marked by large red candlesticks on a price chart. The volume often increases as the price falls, indicating panic selling. Technical indicators such as the Relative Strength Index (RSI) might show oversold conditions, suggesting the asset is undervalued in the short term. Common tools used to identify falling knives include: - Moving Averages: When short-term moving averages cross below long-term moving averages, it signals bearish market sentiment. - Bollinger Bands: Prices breaking below the lower band can indicate a falling knife. - Volume Analysis: Spikes in trading volume often accompany these sharp declines, confirming the intensity of the sell-off. In terms of candlesticks, a falling knife typically produces several bearish candles with long bodies and small wicks. They may appear as a large engulfing candle on a higher timeframe. Recognising these patterns is crucial for traders. Misinterpreting a falling knife can lead to significant losses, as attempting to catch a falling knife—buying during the steep decline—without proper analysis can be risky. Instead, many traders wait for signs of stabilisation or reversal before considering an entry point. Causes of Falling Knives A falling knife generally occurs due to several specific catalysts, each capable of triggering a rapid and substantial decline in an asset's price. Understanding these causes, including technical factors, is essential for traders aiming to navigate such volatile situations effectively. Economic Events and News Releases One primary cause of falling knives is significant economic news. For instance, announcements of interest rate hikes by central banks can lead to widespread stock market sell-offs. Similarly, unexpected changes in economic indicators like unemployment rates, inflation, or GDP growth can trigger sharp declines. Traders react swiftly to such news, often leading to panic selling and steep price drops. Earnings Reports and Company-Specific Issues A falling knife stock pattern can be triggered by poor earnings reports or disappointing financial results from a company. When a company misses earnings expectations or issues negative guidance, investors may lose confidence, resulting in a rapidly falling stock. Additionally, company-specific problems such as legal issues, management scandals, or product recalls can lead to rapid price declines as investors reassess the company's prospects. Broader Market Conditions and Trends Broader market trends and conditions play a significant role in causing a falling knife in stocks and other assets. During periods of market volatility or bear markets, negative sentiment can spread quickly, leading to sharp declines in asset prices. For example, during the financial crisis of 2008, widespread fear and uncertainty led to massive sell-offs across various sectors. Similarly, market corrections or crashes can create environments where falling knife patterns are more likely to occur. Geopolitical Events Geopolitical events such as wars, political instability, or trade tensions can cause abrupt market reactions. For instance, escalating trade disputes between major economies can lead to uncertainty and fear, causing investors and traders to exit positions rapidly. Technical Factors Technical analysis also plays a crucial role in falling knife patterns. Key technical factors include: - Breaking Support Levels: When an asset's price falls below critical support levels, it can trigger further selling as traders perceive a lack of price stability. - Overbought/Oversold Conditions: Oscillators like the Relative Strength Index (RSI) showing overbought conditions can precede a falling knife as prices correct sharply. At the same time, the RSI may enter the oversold area during the falling knife pattern. - Bearish Chart Patterns: Patterns such as head and shoulders, double tops, or descending triangles can signal potential sharp declines, leading to falling knife scenarios. Risks Associated with Falling Knife Trading falling knives carries significant risks, primarily due to the rapid nature of the price declines. Understanding these risks is crucial for traders aiming to navigate such volatile situations. Potential for Significant Losses The most apparent risk is the potential for substantial financial losses. When an asset's price plummets, catching the falling knife can result in buying at prices that continue to drop, leading to immediate and severe losses. False Bottoms and Dead Cat Bounces Traders may mistakenly interpret temporary price stabilisations or minor recoveries as the end of the decline, only to face further drops. These false bottoms and dead cat bounces can trap traders in losing positions. Increased Volatility Falling knives are often accompanied by heightened market volatility, making it challenging to analyse short-term price movements. This volatility can result in rapid and unexpected changes in asset prices, complicating risk management. Psychological Challenges The psychological impact of trading falling knives should not be underestimated. The stress and emotional strain of dealing with sharp losses can lead to irrational decision-making, such as holding onto losing positions for too long or making impulsive trades. Technical Analysis Limitations While technical indicators can help identify potential entry points, they are not foolproof. The rapid and severe nature of falling knives can render technical analysis less reliable, as price movements may not follow traditional patterns. Liquidity Issues During sharp declines, liquidity can dry up, leading to wider spreads and slippage. This makes it harder to execute trades at desired prices, potentially exacerbating losses. Examples of Falling Knife Events Now, let’s take a look at a couple of falling knife examples. To start identifying your own falling knives, head over to FXOpen’s free TickTrader platform to explore real-time charts across different asset classes. Onset of the Coronavirus Pandemic and the Nasdaq 100 In early 2020, the onset of the coronavirus pandemic triggered a dramatic fall in global financial markets. The Nasdaq 100, heavily weighted with speculative tech stocks, experienced a sharp decline as investors reacted to the uncertainty and potential economic impact of the pandemic. From mid-February to late March 2020, the Nasdaq 100 dropped by over 30%. This steep decline represented a classic falling knife pattern, characterised by rapid sell-offs and increased market volatility over the course of several weeks. Traders who attempted to buy into the market too early faced significant losses as the market continued to fall before eventually stabilising and recovering later in the year. EUR/USD After Strong US Inflation Data On April 10, 2024, the release of March US inflation data led to a falling knife event in the EUR/USD currency pair. Traders had been closely monitoring the Consumer Price Index (CPI) report, anticipating that a lower-than-forecast reading would prompt the Federal Reserve to lower interest rates later in the year. The forecast was set at 3.4%, with a lower or at-forecast figure expected to weaken the dollar. Instead, the headline CPI YoY reading came in exactly at 3.5%, defying expectations. This unexpected data triggered a rally in the dollar and a sharp sell-off in EUR/USD. The pair plummeted rapidly, and the decline persisted until the end of the trading week, illustrating how sudden economic data releases can lead to sharp and sustained price drops. Strategies for Trading Falling Knives Understanding the catalyst behind a falling knife is crucial for determining whether it’s likely to rebound soon or persist as a trend. Events that cause fundamental repricing, such as poor earnings data, significant or unexpected news/economic releases, or unique risk events like currency intervention or financial crises, often lead to prolonged falling knives. In contrast, temporary sharp corrections might be due to overreactions to already priced-in news or transient market fears. Recognising these catalysts helps traders decide whether to take a position or wait for volatility to subside. Additionally, the timeframe of the falling knife provides valuable context. A falling knife on a 5-minute chart could indicate a sharp intraday decline, potentially recovering before the trading day ends. Conversely, on a 4-hour or daily chart, a sharp decline may suggest a continued downtrend over several days or weeks. Traders can use this information to look for short opportunities on lower timeframes or prepare for longer-term moves. Common Strategies Traders Use The insights gained from analysing market conditions can help traders to decide whether to short the falling knife or stay out of the market and wait for a bottom. Shorting the Falling Knife Traders looking to short a falling knife should exercise caution. Increased volatility during sharp declines can make it difficult to set appropriate stop-loss levels without a sub-par risk/reward ratio. The best entry can potentially be found during a pullback. As some traders think the price is bottoming out, their stop losses being triggered as the price continues to decline can fuel another leg lower. Traders can look for breakouts from bearish chart patterns like rising wedges, bear flags, or bear pennants. Alternatively, waiting for the bullish structure of the pullback (higher highs and higher lows) to break down into a lower low and lower high can indicate the next leg lower is underway. This approach offers traders confirmation that the knife is continuing to fall and an appropriate place to set a stop loss above the pullback’s high. Buying After a Falling Knife For those looking to catch the bottom, confirmation is essential. Using a pair of moving averages, such as 20-period and 50-period EMAs, can help. When the 20-period EMA crosses above the 50-period EMA, and the price closes above both, it suggests the downtrend might be over. However, momentum indicators like RSI and MACD can falsely signal market turns during steep declines, but they may have some value on higher timeframes. Generally speaking, one of the potentially effective strategies for catching a falling knife is to wait for the price to break above the previous lower high of the downtrend. This would demonstrate that the market has been able to break above a point at which it previously found resistance, allowing traders to potentially switch their bias to bullish and seek entry points. The Role of Patience and Discipline in Trading Falling Knives Patience and discipline are paramount when trading falling knives. Impulsive trades driven by the fear of missing out can lead to significant losses. Traders are required to wait for clear signs of trend reversal or continuation before entering a trade. This involves adhering to predefined strategies and not deviating due to emotional reactions to volatile market movements. Likewise, maintaining discipline in setting and following stop-loss levels, adhering to risk management principles, and avoiding premature entries can potentially enhance trading effectiveness. The Bottom Line Navigating falling knives requires careful analysis and disciplined trading strategies. By understanding the causes and employing effective techniques, traders can potentially better manage these volatile situations. To explore these strategies further and enhance your trading skills, consider opening an FXOpen account. With the right tools and knowledge, you can approach falling knives with greater confidence and precision. FAQ What Is a Falling Knife in Trading? A falling knife in trading refers to a rapid and significant decline in an asset's price, often triggered by negative news, poor earnings reports, or broader market sell-offs. This sharp drop can be volatile and difficult to analyse, making it challenging for traders to time their entries and exits. Should You Ever Try to Catch a Falling Knife? Catching a falling knife is highly risky. Therefore, the theory states it’s not recommended for most traders. The rapid decline in price can continue further than anticipated, leading to significant losses. To minimise risk, traders wait for signs of stabilisation or reversal before considering an entry. How to Catch a Falling Knife? Catching a falling knife involves identifying potential reversal points through technical analysis. Traders often wait for confirmation, such as a break above previous resistance levels or a moving average crossover. Patience and strict risk management, including setting tight stop-loss orders, are essential when attempting this strategy. What Is a Falling Knife in Crypto*? In the crypto* market, a falling knife refers to a sudden and steep decline in the price of a cryptocurrency*. This can be triggered by regulatory news, security breaches, or market sentiment shifts. Due to cryptocurrencies*' high volatility, falling knives can be particularly severe and difficult to analyse. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rule. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
7
Options Blueprint Series [Basic]: H&S amid Surging Wheat Supply1. Introduction: Bearish Opportunity in Wheat amid Rising Supply With the U.S. Grain Stocks Wheat (USGSW) report showing a notable rise in wheat stock levels, a bearish scenario is unfolding for wheat futures. This increase in supply, which could drive prices downward, aligns with a technical setup showing potential for a bearish breakout. From a technical perspective, Wheat futures exhibit a Complex Head and Shoulders formation, signaling a possible breakdown as prices approach a critical support level. By combining the supply dynamics and technical formation, this article outlines a Bear Put Spread strategy, ideal for capitalizing on this bearish outlook with limited risk. 2. Fundamental Analysis: Rising Wheat Stock Levels The most recent USGSW report has recorded wheat stock levels breaking upward to 1.98 billion bushels, up from the previous level of 1.779 billion bushels. This shift indicates a higher supply of wheat available in the market, which, in the absence of proportional demand, typically should result in price pressure to the downside. Higher wheat stock levels often dampen demand sentiment, as markets anticipate reduced scarcity and increased availability. Such fundamentals offer a conducive backdrop for a bearish approach, supporting the downside breakout anticipated in the technical setup. 3. Technical Analysis: Complex Head and Shoulders Formation The technical landscape for Wheat futures supports the bearish case, with a Complex Head and Shoulders pattern forming on the chart. This pattern is characterized by multiple peaks (heads) flanked by smaller peaks (shoulders), indicating a potential reversal from recent highs. The critical neckline for this formation sits at 585'6. A break below this level would signal the likelihood of further downside movement. The target for this setup aligns with a UFO support zone at 552'4, which serves as an optimal price point to close the trade if the breakout confirms. 4. Trade Setup: Bear Put Spread on Wheat Futures (Ticker: ZWH2025) To capitalize on the bearish setup, a Bear Put Spread is employed. This strategy allows for limited downside risk while still offering attractive profit potential. Here are the specifics: o Contract Details for ZWH2025 (Wheat Futures): Contract Size: 5,000 bushels Tick Size: 1/4 of one cent (0.0025) per bushel (equivalent to $12.50 per tick) Point value of 1 future unit: $50 Point value of 1 option unit: $50 Expiration: December 27, 2024 Margin Requirement: While the exact margin depends on the broker, the requirement typically ranges between $1,500 and $2,000 per futures contract. The margin for a Bear Put Spread in Wheat futures options is limited to the debit paid (15.2 points *$50 = $760). o Options Strategy: Bear Put Spread Buy the 585 put option at 25.84 and Sell the 550 put option at 10.64, both expiring on December 27, 2024. The net debit paid is 25.84 – 10.64 = 15.2 points = $760 This spread provides a capped-risk opportunity for profiting from a downside move in Wheat futures. o Risk Management: While stop loss orders can be used, no stop loss is required given the limited-risk nature of the Bear Put Spread. The maximum potential loss is predefined by the cost of the spread. 5. Options Risk Profile Analysis The Bear Put Spread strategy involves buying a put option at a higher strike price (585) and selling a put option at a lower strike price (550). This configuration: Maximizes potential profit if Wheat futures drop to or below the 550 level by expiration. Caps maximum loss at the initial cost of the spread, regardless of how the underlying Wheat futures move. For this setup, the maximum potential profit is the difference between the strikes (585 - 550) minus the premium paid = 19.80 ($990). The maximum potential loss is the cost of the spread, making it a controlled-risk strategy suited to volatile or downward-trending markets. 6. Trade Execution Plan Entry: Initiate the Bear Put Spread as Wheat futures break below the 585'6 neckline, confirming the downside breakout. Target: Close the trade at 552'4, which aligns with a nearby UFO support zone, marking a logical exit point. 7. Risk Management Considerations Effective risk management is essential in any options strategy, and the Bear Put Spread inherently offers several risk control advantages: Limited Risk: By buying a put and selling a lower-strike put, the Bear Put Spread creates a defined risk position, capping potential losses at the initial premium paid for the spread. No Stop Loss Required: With maximum risk predetermined by the cost of the spread, there's no need for a stop loss, which could otherwise be triggered prematurely in a volatile market. Predefined Entry and Exit: This strategy's effectiveness hinges on precise entry (below the 585'6 neckline) and a clear target at 552'4. By maintaining these predefined parameters, the trade maximizes its alignment with both technical and fundamental setups. This trade setup offers a balanced approach, allowing for downside exposure with risk under control, making it well-suited for periods of volatility or substantial downward moves. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. Also, some of the calculations and analytics used in this article have been derived using the QuikStrike® tool available on the CME Group website. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CBOT:ZWH2025Education
by traddictiv
2
trailblazing women who took Wall Street by storm these incredible women have paved a way for female investors and traders around the world showing great resilience and fearless mentality despite facing gender discrimination going on to achieve great things in the financial field, motivating the future generation of young women that they too can achieve the unthinkable. 1. HETTY GREEN the witch of wall street also referred to as "the woman who loved money" born November 21, 1834 and also believed to have been the richest woman in America before the time of her passing, Hetty Green started her financial/business journey from a young age through the influence of her father who was a successful agent, oil manufacturer, and Quaker, who encouraged her to read and study financial texts when she was a young girl, he believed that even women needed to understand the dealings of money, business and overall how the financial world operates. She is best known for turning an inheritance of between 3 - 7 million to 100 million U.S dollars approximately $2.5 billion in today's money. She did this by investing in U.S government bonds, stocks, real estate and railroads and providing financial support during crises, most especially the Panic of 1907, making her a reputable investor and financier, using a buy low, sell high strategy and impeccable psychology facing markets militantly and unafraid even in times of panic. 2. VICTORIA WOODHALL the first woman to run for presidency born September 23, 1838, Victoria came from a very poor background, with the influence of their father she and her sister sold herbs and potions posing as spiritualists and healers they caused them to live a on the run from one place to another due to unsatisfied customers/patients. Their nomadic lifestyle led them to Manhattan were they caught the attention of railroad magnate Cornelius Vanderbilt, who it was believed they helped him keep in contact with his dead wife he in return offered them financial advice and through this connection they were able to open the first female owned brokerage in wall street in 1870 called WOODHULL, CLAFLIN and CO with clients of high society women, rich widows and high value prostitutes, this become a success earning them over $700 000 about 2million today. She used this money to further her goals and fund her campaign to run for presidency. 3. ISABEL BENHAM madam railroad born 1909, in the 1920s Isabel enrolled at a women only college called Bryn Mawr in Pennsylvania, with a strong desire to study economics and work in wall street it has a great tragedy to find that the school offered no economics courses but Isabel insisted the college offer economics studies and made history by being 1 of 5 women to graduate from the college with a degree in economics. after graduation, living in times of the great depression also facing daily gender discrimination this did not stop her from pursuing her dreams to work in wall street, she started a side hustle by selling magazine subscriptions and later landed a job as a bond strategist on wall street bond house R.W Pressprich and Co. and due to her resilience and hard work providing accurate reports of the railroad industry became their first female partner and first woman as a partner of a wall street bond house and first woman to be appointed Board of Directors for a railroad. 4. MURIEL SIEBERT the first lady of finance born 1928 without graduating from any college her finance career started by being a finance research trainee and grew her expertise by working in various brokerages. through hard work and determination by year 1967, despite numerous failed attempts and rejection she became the first woman to have a seat on the BYSE being the only woman among 1,365 men which was a remarkable achievement. she went on to co-found Siebert and Co a broker- dealer in 1969 and when the the NYSE jettisoned it's 183 year old tradition allowing it's members to negotiate broker commissions her company became America's first discount brokerage also being owned by a woman. by year 1977 she hit another incredible career milestone by being appointed superintendent of Banks for New York state, overseeing all NEW YORK banks with no banks failing in her 5 year term. 5. GERALDINE WEISS grand dame of dividents considered one of the best female investors/ traders of the 20th century, learning about investing by reading investing texts like Security Analysis by BENJAMIN GRAHAM and studying business and finance earning a degree at the University Of California. with her advanced knowledge about investing she was still unable to get any job position higher than secretary due to gender discrimination in the male dominated industry but this did not put out her fuel and and undying desire to become be involved in the investment community and by age 40 she started her investment newsletter called "Investment Quality Trends" under a pseudonym "G. Weiss" to hide her gender as at the time many believed no woman can make successful investments and did this for a decade with her subscribers thinking she is a male it was only in 1977 when she appeared on TV program "wall street with Louis Rukeyser" that she revealed her gender this now with her newsletter being a success with accurate analysis asserting that dividend yield is a key valuation measure that how she got her nickname. hope this inspires more women to be more active in the trading world. Whatever women do they must do twice as well as men to be thought half their inferior. Luckily, this is not difficult. – Charlotte Whitton put together by : Pako Phutietsile as currencynerd
OANDA:XAUUSDEducation
by currencynerd
4
How to Read a Forex Quote: Bid, Ask, and Spread ExplainedSo, you’ve decided to jump into the forex markets and stumbled upon your first quote. Now you're staring at numbers like EUR/USD 1.0987/1.0990, wondering what these flashing digits mean. Don’t worry—we’ve all been there. Let’s break it down, TradingView style, and get you up to speed on forex quotes, bid-ask spreads, and why these tiny decimal points matter more than you might think. The Basics: What’s a Forex Quote? At its core, a forex quote tells you the exchange rate between two currencies. Think of it like a price tag for the money you want to buy or sell. In any quote, you’ve got two currencies: the base currency and the quote currency. For example, in EUR/USD , the euro (EUR) is the base currency, and the US dollar (USD) is the quote currency. This quote tells you how many US dollars it costs to buy one euro. Now the fun part: You’ll notice two prices next to that quote—the bid and the ask. Bid vs. Ask: What’s the Difference? When you see a forex quote like EUR/USD 1.0987/1.0990, you’re actually looking at two prices: Bid Price (1.0987): This is the price a buyer (broker or trader) is willing to pay for the base currency. In simpler terms, this is the price you sell at. Ask Price (1.0990): This is the price the seller (broker or trader) is willing to sell you the base currency for. In other words, this is the price you buy at. So, if you’re buying EUR/USD , you’ll pay the ask price (1.0990), and if you’re selling, you’ll receive the bid price (1.0987). Notice how the ask is always higher than the bid? That’s where brokers make their money. Which brings us to… The Spread: The Broker’s Cut The spread is the difference between the bid and the ask. In this case, it’s 1.0990 - 1.0987 = 0.0003 or 3 pips (percentage in points). Think of the spread as the broker’s fee for facilitating the trade, essentially acting as the middleman. The tighter the spread, the less you’re paying to execute a trade. For major currency pairs like EUR/USD , the spread is often pretty small (like 1-3 pips), but for exotic pairs (think USD/ZAR or USD/TRY ), spreads can get wider than your Uncle Bob’s waistband after Thanksgiving dinner. Why the Spread Matters for Traders Here’s the thing: spreads eat into your profits. Whether you’re a day trader or holding a longer-term position, the spread is something you need to bake into your strategy. Scalpers and day traders need tight spreads. If you’re making a bunch of small, quick trades throughout the day, every pip counts. Wide spreads can kill your profit margins faster than a rogue tweet from Elon Musk. Swing traders and position traders are less sensitive to spreads. If you’re in it for the long haul, a few pips won’t make or break your trade. But it’s still something to keep an eye on, especially when trading less liquid currency pairs. Market Conditions and Spreads Spreads aren’t fixed — ideally, they should be floating around in real-time dealmaking. They widen and tighten based on market conditions. During high volatility (like, say, a major economic announcement or a surprise central bank rate cut), spreads can widen. Conversely, during quiet market hours, spreads tend to tighten. To avoid getting fleeced by wide spreads, keep an eye on liquidity. Major pairs like EUR/USD , GBP/USD , or USD/JPY have higher liquidity, meaning tighter spreads. Exotic pairs? Not so much. You’ll pay more to play in the less popular markets. How to Use the Bid-Ask Spread to Your Advantage Here’s a pro tip: If you’re in a tight spread market, like EUR/USD during peak trading hours, you can place tighter stop-loss and take-profit orders, maximizing your profits with minimal slippage. In volatile markets with wider spreads, give yourself more breathing room, or wait until liquidity returns. How TradingView Does It On TradingView, forex pairs are displayed with a single price quote rather than separate bid and ask prices. This single price quote represents the midpoint between the bid and the ask. TradingView uses this midpoint, also called the last trade price , to better display price flow and make it simpler to analyze price trends without the fluctuation that would come from constantly updating bid and ask prices. For traders using TradingView to monitor forex prices, this single price quote allows them to focus more on price movements and technical analysis rather than factoring in the spread between bid and ask, which as we mentioned, is available with brokers since it's their bread and butter. So factor this in. The Bottom Line Going expert-level at bid, ask, and spread isn’t just forex surviving — it’s forex thriving. These tiny details can be the difference between making bank or watching your profits trickle away. Always factor in the spread when setting up trades, especially if you're trading lower-volume currency pairs or during off-hours. Ready to flex your new bid-ask spread skills? And win some prizes at the same time? Join our paper trading competition "The Leap" , starting November 1, and show everyone what you've got. $25,000 are up for grabs.
Education
by TradingView
4
Example of creating a trading strategy chart Hello, traders. If you "Follow", you can always get new information quickly. Please click "Boost" as well. Have a nice day today. ------------------------------------- To interpret the chart from a trend perspective, you can use the MS-Signal indicator. The MS-Signal indicator consists of the M-Signal indicator and the S-Signal indicator. Therefore, you can analyze the chart by checking the arrangement of the M-Signal indicator and the movement around it. The most important thing in chart analysis is support and resistance points. Therefore, if you do not indicate support and resistance points, it can be said that the chart analysis cannot be used for trading. - So, Fibonacci retracement and trend-based Fibonacci extension are widely used in chart analysis. I used the Trend-Based Fib Extension tool. I selected and displayed the low and high points pointed by the fingers. The selection of the candles pointed by the fingers corresponds to the inflection points of the StochRSI indicator. - If you connect these, you get a trend line. The important thing when drawing a trend line is to connect the high points of the StochRSI indicator by connecting the opening prices of the falling candles. When connecting the low points, you can connect the low points regardless of whether it is a falling candle or an rising candle. This is because I think it best expresses the trend and volatility period based on my experience using it. When drawing the Fibonacci ratio and when drawing the trend line, the selection points are different, so you should draw it with this in mind. - If it is drawn as above, you can see that the chart is ready to be analyzed. Since the channeling most commonly used in chart analysis has been formed, I think chart analysis will not be difficult. However, the above method is a drawing for chart analysis, so it is not suitable for trading. This is an important point. If you are good at chart analysis, but wonder why you lose money when trading, you should change the drawing of support and resistance points. Do not trade with Fibonacci ratios, but mark support and resistance points according to the candle arrangement on the 1M, 1W, and 1D charts and create a trading strategy according to their importance. - The chart above shows the support and resistance points drawn on the 1M, 1W, and 1D charts. To display this, we used the HA-High, HA-Low, OBV 0, OBV Up, OBV Down, BW (100), Mid (50), BW (0) indicators. To display the exact volatility period, we also need to draw a trend line on the 1M, 1W chart. The indicators that are important for support and resistance points are HA-Low, HA-High, BW (100), BW (0). Therefore, the point where the trend line intersects this point is likely to correspond to the volatility period. It is not accurate because it is displayed only with the trend line that was created right away, but I think it explains well how to display the volatility period. - If you display the volatility period like this and hide all indicators, you will have a complete chart that can be used for trading. - Have a good time. Thank you. --------------------------------------------------
Education
by readCrypto
4
HOW And WHY The Markets MoveIn this video I explain HOW and WHY the markets move. At it's core, trading is a zero-sum game, meaning that nothing is created. There must always be a counter-party to any trade, after all it is called "trading". Because of this, liquidity is the lifeblood of the market and it is what is required by all participants, albeit more for the larger entities out there. In order for these larger entities to trade, they must do so in stages of buying and selling, and not all in one single position like we do as retail traders. They buy on the way down, and sell on the way up, throughout many different time horizons. Therefore, they require price to be delivered efficiently in order to sustain this working machine. I hope you find the video somewhat insightful. Regardless of your beliefs, I think it can be agreed that these two principles are what drives the marketplace and it's movements. - R2F
OANDA:WTICOUSDEducation
by Road_2_Funded
7
HFTs gaps: Learn how to enter a stock before a huge gap up.High Frequency Trading companies are market makers/takers that provide liquidity for the public exchanges, and they now use AI. HFTs have a huge impact on your profitability. You can make higher profits from trading ahead of the HFT gaps and riding the momentum upward or downward. In this short video, you'll learn some basics on how to identify the patterns that precede HFT gaps, which I call Pro Trader Nudges . Learn what to look for in Volume patterns and pre-gap price action. Make sure you are not chasing HFTs but riding the wave of momentum they create, just like professional traders do.
PEducation
by MarthaStokesCMT-TechniTrader
2
Stock Selection: How to Tip the Tailwinds in Your Favour Stock selection is a game of fine margins but understanding a few key factors can tilt the probability of success in your favour. By focusing on these crucial elements, you can ensure that when it comes to buying stocks, you’re sailing with the prevailing tailwinds rather than fighting against them. 1. Don’t Fight the Market Ever heard the saying, “a rising tide lifts all ships”? This holds true in the stock market. Favourable market conditions can make an average investor look like Warren Buffett. When the market is stable, it allows other factors to shine, while a risk-averse environment can dampen even the best stock’s performance. Don’t overthink this concept—use simple moving averages, such as the 50-day and 200-day, when analysing the index. Pair this with basic structure analysis to assess overall market conditions. Ask yourself: What is the long-term trend in the index? What is the current momentum? What does the price structure look like? The better the market conditions, the more aggressive you can be in your stock selection, as the broad tailwinds are stronger. Example: FTSE 100 The FTSE 100 index has been navigating a choppy sideways range since May, but there are still signs of optimism beneath the surface. While we’re not in a full-blown bull market, the 50-day moving average (50MA) remains comfortably above the 200-day moving average (200MA), and both are sloping upwards—indicating a long-term uptrend. Prices are currently hovering near the 50MA, suggesting the market’s tailwinds remain mildly favorable, even amidst some volatility. FTSE 100 Daily Candle Chart Past performance is not a reliable indicator of future results 2. Earnings Catalysts: The Power of Post-Earnings Drift Positive earnings surprises can work wonders for any stock. They often create price gaps that signal strong short-term momentum. Moreover, positive earnings surprises can take time to be fully ‘priced in’ because large institutional investors typically stagger their investments over time. This phenomenon, known as post-earnings announcement drift, can lead to continued price appreciation following an earnings beat. Look for stocks that have recent positive fundamental catalysts in their price history. This focus can give you a clearer path toward potential gains. Example: Barclays (BARC) In February, Barclays revealed a strategic plan that reignited investor confidence and sparked a sharp breakout in its share price. The bank announced a £10 billion buyback program, coupled with £2 billion in cost cuts, aiming to boost profitability and efficiency. Barclays also set its sights on delivering returns in excess of 12% by 2026, with a renewed focus on its higher-margin UK consumer and business lending divisions. This announcement acted as a major earnings catalyst, forming the foundation for a strong uptrend that followed. BARC Daily Candle Chart Past performance is not a reliable indicator of future results 3. The Buyback Bounce: Share Buybacks Companies that initiate share buybacks signal confidence in their stock and a commitment to returning value to shareholders. When a company buys back its shares, it reduces the total number of outstanding shares, often resulting in an increase in earnings per share (EPS) and potentially boosting the stock price. While this isn’t an exact science, a stock undergoing a share buyback that meets the other criteria on this list can provide a solid tailwind for your investment. Example: Mastercard Incorporated (MA.) In the second quarter of 2024, Mastercard repurchased approximately 5.8 million shares for $2.6 billion. Through the first half of 2024, the company bought back 10.2 million shares at a total cost of $4.6 billion. As of July 26, 2024, MA had repurchased an additional 1.9 million shares for $820 million, leaving $8.7 billion remaining under its approved share repurchase programs. These strategic buybacks not only reflect Mastercard's strong cash generation capabilities but also underline its commitment to enhancing shareholder value, making it an attractive consideration for investors seeking growth. MA. Daily Candle Chart Past performance is not a reliable indicator of future results 4. Focus on Financial Quality When hunting for stocks, there’s often a tendency to bargain hunt, looking for those poised for a bounce. However, we believe that, over the long term, high-quality companies are best positioned to outperform the market. You don’t have to be a Wall Street analyst to develop a robust quality filter. The following financial metrics can help ensure that the stock you’re buying is solid and less likely to face dilution: • Return on Equity (ROE): Most companies will claim they are high-quality businesses that prioritize investors, but checking this metric helps verify their claims. A high ROE of 15% or more indicates efficient use of equity and a commitment to shareholder value. • Free Cash Flow (FCF): Cash is king for a good reason. Strong free cash flow means the company generates ample cash after covering its operational expenses, allowing for reinvestment or returns to shareholders. A FCF yield of 5% or higher is typically desirable. • Debt-to-Equity Ratio: While balance sheet strength may sound boring, it’s crucial. A low debt-to-equity ratio, ideally below 1.0, suggests a company is not overly reliant on debt to fuel growth, making it less vulnerable in downturns. Example: Morgan Sindall (MGNS) With a Return on Equity (ROE) of 22.7%, Morgan Sindall significantly exceeds the 15% benchmark, showcasing effective management and strong profitability. Its Free Cash Flow yield is an impressive 10.81%, well above the desirable 5%, reflecting robust cash generation capabilities. Furthermore, the company boasts a negative Debt-to-Equity ratio of -0.49, highlighting a strong balance sheet with no net debt and low financial risk. These qualities are also evident in its strong price chart (see below). MGNS Daily Candle Chart Past performance is not a reliable indicator of future results 5. Long-Term Trend Structure Just as analysing the strength of the overall market can create headwinds and tailwinds, you should also be mindful of a stock's price history and calibrate your expectations accordingly. An old adage that has stood the test of time is, “trends take considerable time and effort to change.” This doesn’t mean you should buy stocks that have undergone prolonged underperformance, but it does mean you should be cautious and aware of a stock’s long-term trend when making decisions. Example: Marathon (MARA Holdings) A quick look at Marathon’s daily chart shows prices oscillating around the 200-day moving average, indicating a period of indecision. The trend lacks clear direction, with momentum appearing tepid at best. Given the uncertainty, investors should be cautious about taking trend continuation or momentum trades here until a clearer signal emerges. MAR Daily Candle Chart Past performance is not a reliable indicator of future results Conclusion When it comes to stock selection, leveraging favourable market conditions, earnings catalysts, share buybacks, financial quality, and trend structures can enhance your investment strategy. By aligning your selections with these key factors, you can tip the tailwinds in your favour and increase your chances of success in the ever-evolving stock market. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
LSE:BARCEducation
by Capitalcom
2
Avoiding the Pump and Dump: A Beginner's GuideAvoiding the Pump and Dump: A Beginner's Guide to Protecting Your Investments In the dynamic world of stock trading, new traders are constantly seeking ways to maximize profits and minimize risks. Unfortunately, one of the most deceptive and harmful schemes that can easily trap beginners is the infamous pump and dump scheme. This fraudulent practice has been around for decades, targeting unsuspecting traders by artificially inflating a stock's price and then swiftly cashing out, leaving the victims with significant losses. For traders on platforms like TradingView, especially those just starting, it’s crucial to understand how to spot these schemes and avoid falling prey to them. This guide will provide you with the knowledge you need to recognize pump and dump schemes by analyzing monthly, weekly, and daily charts, identifying repetitive patterns, and understanding market sentiment. By the end, you'll know exactly what to look for to safeguard your investments. What is a Pump and Dump? A pump and dump scheme occurs when a group of individuals, often coordinated through social media or private channels, artificially inflates the price of a stock. They "pump" up the stock by spreading misleading information or creating hype around the asset, leading to increased buying interest. Once the stock price has risen significantly, the perpetrators "dump" their shares at the elevated price, leaving uninformed buyers holding a stock that will soon plummet in value. The key elements to watch out for are: Unusual price spikes without any corresponding fundamental news. High trading volume during these spikes, suggesting that a group of individuals is actively manipulating the price. Aggressive promotion through emails, forums, or social media channels, often making exaggerated claims about a stock's potential. Understanding Timeframes: Monthly, Weekly, and Daily Charts One of the most effective ways to spot pump and dump schemes is by analyzing various timeframes—monthly, weekly, and daily charts. Each timeframe provides different insights into the stock's behavior, helping you detect irregular patterns and red flags. Monthly Charts: The Big Picture Monthly charts give you a broad overview of a stock's long-term trends. If you notice a stock that has been relatively inactive or stagnant for months, only to suddenly surge without any substantial news or developments, this could be a sign of manipulation . What to look for in monthly charts: Sudden spikes in price after a prolonged period of flat or declining movement. Sharp volume increases during the price rise, especially when the stock has previously shown little to no trading activity. Quick reversals following the price surge, indicating that the pump has occurred, and the dump is on its way. For example, if a stock shows consistent low trading volume and then experiences a sudden burst in both volume and price, this is a classic sign of a pump. Compare these periods with any news releases or market updates. If there’s no justifiable reason for the spike, be cautious . Weekly Charts: Spotting the Mid-Term Trend Weekly charts help you see the mid-term trends and can reveal the progression of a pump and dump scheme. Often, the "pump" phase will be drawn out over several days or weeks as the schemers build momentum and attract more buyers. What to look for in weekly charts: Gradual upward trends followed by a sharp, unsustainable rise in price. Repeated surges in volume that don’t correlate with any fundamental analysis or positive news. Recurrent patterns where a stock has previously been pumped, experienced a sharp decline, and is now showing the same pattern again. Stocks used in pump and dump schemes are often cycled through multiple rounds of pumping, so if you notice that a stock has undergone several similar spikes and drops over the weeks, it’s a strong indicator that the stock is being manipulated. Daily Charts: Catching the Pump Before the Dump Daily charts provide a more granular view of a stock's price movement, and they can help you detect the exact moments when a pump is taking place. Because pump and dump schemes can happen over just a few days, monitoring daily activity is critical. What to look for in daily charts: Intraday price spikes that happen suddenly and without any preceding buildup in momentum. A huge increase in volume followed by rapid price drops within the same or subsequent days. Exaggerated price gaps at market open or close, indicating manipulation during off-hours or lower-volume periods. On a daily chart, if a stock opens significantly higher than the previous day's close without any news or earnings report to back it up, this could be the start of the dump phase. The manipulators are looking to sell their shares to anyone who has bought into the hype, leaving retail traders holding the bag. Repeated Use of the Same Quote: A Telltale Sign of a Pump and Dump Scheme Another red flag is when the same stock or "hot tip" keeps resurfacing in social media, forums, or emails. If you notice that the same quote or recommendation is being promoted repeatedly over time, often using the same language, this is a strong sign of manipulation. The scammers are likely trying to pump the stock multiple times by reusing the same tactics on new, unsuspecting traders. Be cautious of stocks that: Have been heavily promoted in the past. Show a history of sudden spikes followed by rapid declines. Are promoted with vague, overhyped language like "the next big thing" or "guaranteed gains." If the same stock is mentioned multiple times in trading communities, check its historical chart. If the stock has undergone previous pumps, you will likely see sharp rises and falls that align with the promotional periods. How to Avoid Pump and Dump Schemes Now that you know how to spot the signs, here are actionable steps you can take to protect yourself from becoming a victim of a pump and dump scheme: Do Your Research: Always verify the information you receive about a stock. Check if there’s legitimate news, earnings reports, or significant company developments that justify the price movement. Avoid relying solely on social media or forums for your stock tips. Look at Fundamentals: Focus on stocks with solid fundamentals, such as earnings growth, revenue increases, and strong management. Stocks targeted for pump and dump schemes often have weak or non-existent fundamentals. Use Multiple Timeframes: As we've discussed, examining stocks across different timeframes—monthly, weekly, and daily—can help you spot abnormal price behavior early on. Monitor Volume and Price Movements: If you see large, unexplained surges in volume and price, be skeptical. Legitimate price increases are usually accompanied by news or fundamental changes in the company. Avoid Low-Volume Stocks: Pump and dump schemes often target low-volume, illiquid stocks that are easier to manipulate. Stick to stocks with healthy trading volumes and liquidity. Set Stop Losses: Always use stop losses to protect yourself from sudden price drops. Setting a stop loss at a reasonable level can help limit your losses if you accidentally invest in a stock being manipulated. Be Wary of Promotions: If a stock is being aggressively promoted, ask yourself why. More often than not, aggressive promotions are a sign that the stock is part of a pump and dump scheme. Conclusion Pump and dump schemes prey on traders’ fear of missing out ( FOMO ) and the allure of quick profits . However, by using a disciplined approach to trading, analyzing charts across multiple timeframes, and paying close attention to volume and price movements, you can avoid falling victim to these schemes. Remember: If something seems too good to be true, it probably is. Protect your investments by staying informed, doing thorough research, and trusting your analysis. By following these guidelines, you can navigate the markets with confidence and avoid the pitfalls of pump and dump schemes. Happy trading, and stay safe!
NASDAQ:EJHEducation
by TradeVizion
6
Swing Trading vs. Day Trading in Forex: Which Style Suits You?So, you’ve got a burning desire to trade forex and take over the world—or at least the markets—but there’s one major question still nagging you: How to get there? If you choose to do it with forex trading you’ve got two main ways — swing trading and day trading. Let’s break down what these two mean and which one is right for you. Spoiler alert: neither option involves overnight millionaire status, so let’s keep it real. Swing Trading: The Art of Patience (But Not Too Much) Swing trading — you’re not glued to your computer but you’re still in the game. Swing traders look to capture “swings” in the market. These are short- to medium-term price moves that typically last a few days to a few weeks. You’re riding the wave 🏄‍♂️ but getting off before it crashes on the shore. 🌴 ➕ Pros of Swing Trading: Less screen time : You don’t need to babysit your trades 24/7. Set it, slap a stop loss and chill. Fewer trades, more quality : You’re focusing on larger, more meaningful moves, meaning fewer opportunities for revenge trading or panic closing. Flexibility : You can have a life outside of trading. (Pro tip: Don’t quit that job yet!) Catch bigger price moves : Swing traders benefit from multi-day to multi-week trends, potentially leading to larger gains (or losses, if you’re not careful). ➖ Cons of Swing Trading: Overnight risk : The market doesn’t sleep, and neither do geopolitical events. Price gaps overnight can wreck your carefully laid plans. Patience required : If you’re someone who wants immediate action, waiting a few days for your trade to play out might feel like watching paint dry. FOMO : The market might move without you while you’re waiting for the “perfect” setup. Swing traders often miss smaller, quick gains. Day Trading: The All-In, High-Adrenaline Life Day trading — you’re jet skiing with a huge wave behind your back. And there’s a hurricane. It’s on fire. Well, not quite but kind of. You’re in and out of trades within minutes or hours, locking in gains (or losses) multiple times a day. It’s fast, furious, and not for the faint of heart. ➕ Pros of Day Trading: No overnight risk : You close all your positions by the end of the day, so nothing can blindside you while you sleep. Action-packed : If you love adrenaline, this is your jam. Every day offers multiple opportunities thanks to so many events happening. Tighter risk control : You’re constantly monitoring the markets, which means you can (most likely) react quickly to minimize losses. Quick profits (potentially) : You’re aiming for small, consistent wins. Compound them enough, and you could see some real returns. ➖ Cons of Day Trading: It’s stressful : Constant focus is draining. If you’re not sharp, it’s easy to make emotionally driven mistakes. More trades, more fees : Commissions and spreads can eat into your profits since you’re making multiple trades per day. Time-consuming : You’re glued to your screen for hours. Day traders don’t have the luxury of doing much else while waiting for trades to play out. Learning curve : It’s a steeper climb to become consistently profitable. Day trading requires mastering short-term price movements, and the odds are stacked against newbies. ❔ Which One Is for You? So, which trading style matches your life and personality? Let’s break it down: If you’ve got a day job or prefer some balance in your life, swing trading is your best bet. You can scan the charts in the evening, set your orders, and go about your business while Mr. Market does its thing. If you thrive in fast-paced environments and can dedicate full days to trading, then day trading could be your playground. But be warned: it’s not just about speed; it’s about being sharp, disciplined, and, well, not losing your focus after a bad day. If patience is your virtue , swing trading will test it, but the reward is potentially big, long-term moves with less stress. If you live for the rush , day trading might feed your need for action, but be prepared for the pressure cooker environment and razor-thin margins. Final Verdict There’s no one-size-fits-all in forex trading. The key is to match the trading style to your personality, goals, and lifestyle. Are you cool with being patient and letting trades develop, or do you want to be locking in profits on the daily? Whatever you choose, stick to your plan, manage your risk, and remember: the market doesn’t care about your feelings—only your strategy. If you’ve already tried one style and it didn’t work, don’t sweat it—there’s always another way to play the game. Share your experiences in the comments, and let’s keep the conversation going.
Education
by TradingView
8
Nailing Crypto Risk Management: 7 Ways to Protect Your PortfolioYou’re leveraged to the hilt and riding the crypto wave—eyeing those sweet gains, living for the adrenaline rush and peeking at your vision board where you’ve got the lambo cutout for inspo. But here’s the harsh truth: for every moonshot, there’s a black hole ready to reel in your portfolio. Welcome to the not-so-glamorous side of crypto: risk management. If you don’t have this locked down, you might as well be throwing darts in the dark. So, how do you stack the odds in your favor and avoid getting rekt ? Let’s break down 🤸‍♂️ the essentials of managing risk in the vast world of crypto like a pro. Grab your notepad, take one more look at the lambo and let’s roll. 1. Position Sizing: Don’t Go All In, Even If You Want To We get it—Bitcoin’s pumping, and FOMO is real. But listen: putting your entire stack on one trade is quite often a path to whipping up a not-so-great track record. Pro traders? They never bet the farm. They calculate position sizes based on the risk they’re willing to take—the golden rule is to bet no more than 1-3% of your capital per trade. 🔑 Pro tip : Use a risk calculator to figure out exactly how much of your portfolio should go into each trade. It’s the difference between surviving a bad move or calling it quits. 2. Stop-Losses: The Safety Net You Probably Ignore (but Shouldn’t) Here’s the thing: everyone will get it wrong every now and then. No matter how many YouTube gurus tell you otherwise or how some trading signals group churns out 100% success rate, every trader gets slapped by the market. That’s where the stop-loss comes in—a non-emotional tool that automatically closes your position before your losses become catastrophic. Set it, forget it, and avoid waking up to a disaster. 🔑 Pro tip : Don’t just dump your stop-loss under the last support level. Base it on your risk tolerance. If you’re losing sleep over your trade, you’ve placed it too far away. 3. Diversification: Don't Put All Your Eggs in One Crypto Basket Bitcoin BTC/USD is the OG token and dominates the crypto board —no question about it. This is why Bitcoin is the preferred crypto for institutional investors and why billions of dollars get sloshed around in spot Bitcoin exchange-traded funds (ETFs). Bitcoin, as odd as it may sound, is likely the crypto with the least amount of risk, given its size and investor base. So why not look elsewhere for tenbaggers? Small caps definitely look attractive with their relatively low valuations, compared with Bitcoin’s $1.3 trillion weight. In this light, try to make sure you’re not going to end up rug pulled. Spread out the risk. Diversify across different coins, sectors and use cases. The goal is to reduce your exposure to any one asset's mood swings. 🔑 Pro tip : Don’t over-diversify either. Owning 20 low-cap coins won’t save you if the whole market crashes. 4. Avoid Leverage Unless You Really, Really Know What You’re Doing Leverage is that spicy little tool that lets you borrow money to boost your gains—or sometimes, your losses. The more you leverage, the quicker you can get washed out if the market moves against you. 🔑 Pro tip : If you must use leverage, keep it low. 5. Have an Exit Strategy: Don’t Get Greedy Crypto loves to pump, and we all love to see it. But when it does, don’t just sit there watching your profits grow—have a plan to take them. Greed kills portfolios faster than bad trades. Know when to get out before the inevitable pullback has a chance to take a shot at your gains. 🔑 Pro tip : Set clear targets for both taking profits and cutting losers. Lock in some profits on the way up and have no shame in bailing when things head south. 6. Keep Your Emotions in Check: Your Worst Enemy Is… You Let’s face it, we all get caught up in the hype. Whether it’s panic selling at the bottom or FOMO buying at the top, emotions are portfolio killers. Detach yourself from the swings and trade based on your strategy, not your emotions. 🔑 Pro tip : If a trade has you looking at your portfolio while under the shower, it’s time to re-evaluate. Chill, stick to the plan, and let the market do its thing. 7. The Golden Rule: Only Invest What You Can Afford to Lose This should be obvious, but it’s worth repeating. If losing your investment would make you sell your car or move back with your parents, you’re overexposed. Crypto is volatile, and while the upside is exciting, the downside is real. Play it smart, and don’t gamble with money you can’t afford to lose. Wrapping Up: Trade Smart, Stay Sharp Risk management is what separates the survivors from the rest of the pack in crypto. Anyone can ride a bull market but only the disciplined make it through the bruising pullbacks without getting squashed. Stick to your trading plan and never assume you’re invincible just because the charts are green today. Oh, and if you’ve got your own tips for managing risk like a crypto boss, drop them in the comments. We’re all here for the gains—but surviving the swings? That’s what separates the real traders from the noobs.
BITSTAMP:BTCUSDEducation
by TradingView
6
How to Trade Crude Oil: Trading StrategiesHow to Trade Crude Oil: Trading Strategies Learning how to trade crude oil requires a nuanced understanding of its fundamental aspects, instruments, and trading strategies. This comprehensive article offers insights into the critical elements that affect crude oil prices, the range of instruments available for trading, and specific strategies traders use in this market. The Basics of Crude Oil Crude oil, often referred to as "black gold," is a fossil fuel derived from the remains of ancient organic matter. It serves as a crucial raw material for various industries, including transportation, chemicals, and manufacturing. Two primary types of crude oil traded on global markets are West Texas Intermediate (WTI) and Brent Crude. WTI is primarily sourced from the United States and is known for its high quality and low sulphur content. On the other hand, Brent Crude originates mainly from the North Sea and serves as an international pricing benchmark. The Organization of the Petroleum Exporting Countries (OPEC), which includes members like Saudi Arabia, Iran, and Venezuela, plays a pivotal role in determining global oil supply. By adjusting production levels, OPEC influences crude oil prices significantly. Additionally, other countries like Russia and the United States contribute to the world's oil supply, further affecting market dynamics. What Time Does the Oil Market Open? Like forex markets, crude oil trading hours are nearly 24/5. They’re typically highly liquid and offer traders multiple opportunities across a given day. For example, the New York Mercantile Exchange (NYMEX) opens for trading from Sunday evening to Friday afternoon, with a brief daily trading break. Activity is most intense during the US session, which runs from 9:00 AM to 17:00 PM EST, and the European session, from 2:00 AM to 11:00 AM EST. These periods coincide with peak market activity and are generally the most volatile, with the overlap between the US and European sessions (between 9:00 AM and 11:00 AM EST) offering the greatest volatility and trading activity. Factors Affecting Crude Oil Trading In oil trading, economics is a fundamental aspect that traders need to grasp to make educated decisions. Several factors drive the price of crude oil, and here are some of the most significant: - Supply and Demand: At its core, the price of crude oil is determined by how much of it is available (supply) versus how much is wanted (demand). An oversupply can depress prices, while high demand can cause prices to spike. - Geopolitical Events: Conflicts, wars, and diplomatic tensions in oil-producing regions can disrupt supply chains, affecting prices. For instance, sanctions on Iran or instability in Venezuela can push prices higher. - Currency Fluctuations: Oil prices are generally quoted in US dollars. A strong dollar can make oil more expensive for countries using other currencies, thereby affecting demand. - Seasonal Changes: During winter, demand for heating oil can rise, pushing crude oil prices up. Conversely, a mild winter might result in lower demand and prices. - Technological Advances: Innovations in extraction methods, such as fracking, can alter the supply landscape, making it easier to extract oil and thereby affecting prices. - OPEC Decisions: As previously mentioned, OPEC has a significant influence on oil prices. Their production quotas can tighten or flood the market, causing price swings. - Economic Indicators: Data like unemployment rates, manufacturing output, and interest rates can indicate the health of an economy, which in turn can affect oil consumption and prices. - Environmental Policies: Increasing regulations and policies aimed at reducing carbon emissions and promoting renewable energy sources can impact the demand and supply of crude oil, thereby influencing prices. - Natural Disasters: Events such as hurricanes, earthquakes, and other natural disasters can disrupt oil production and supply chains, leading to fluctuations in crude oil prices. - Global Economic Growth: The overall growth of the global economy plays a critical role in crude oil demand. Economic booms often lead to higher energy consumption, driving up oil prices, while economic slowdowns can reduce demand and lower prices. How Is Crude Oil Traded? When learning how to trade oil, traders have a variety of instruments to choose from. CFDs Contracts for Difference (CFDs) are popular instruments when trading crude. CFDs are used by traders to speculate on price movements without owning the underlying asset. Essentially, a CFD is a contract between a trader and a broker to exchange the difference in price from the point the position is opened to when it is closed. One of the key benefits is the use of leverage, which means traders can control a larger position with a smaller initial investment, amplifying both potential returns and losses. Margin requirements vary by broker but are typically lower for CFDs on oil compared to some other instruments. This makes it appealing for crude oil day trading strategies, where traders aim to capitalise on short-term price movements. However, managing risk effectively is crucial, as the leveraged nature of CFDs can result in significant losses if the market moves against you. At FXOpen, we offer both CFDs on WTI Crude oil and Brent Crude. Head over there to explore a world of trading tools and other assets beyond crude oil. Futures Futures contracts are another well-established avenue for trading crude oil. Unlike CFDs, futures are standardised agreements to buy or sell a specific quantity of oil at a predetermined price at a set date in the future. They are traded on regulated exchanges, providing an added layer of transparency and security. Spot Market In spot trading, one buys or sells crude oil and takes immediate delivery and ownership. Unlike futures and CFDs, there's no leverage in spot trading, making it a less risky option. However, the absence of leverage requires a higher initial investment. While retail traders often avoid spot trading due to storage and transportation challenges, it's commonly used by entities directly involved in production or consumption. This method is more straightforward but demands the logistical capabilities that individual traders usually lack. ETFs Exchange-traded funds (ETFs) offer an alternative for those interested in the crude oil market without dealing with futures contracts or physical ownership. Crude oil ETFs typically track the price of oil or related indices by holding futures contracts or a blend of oil company stocks. This allows investors to indirectly gain exposure to oil price movements with less complexity. Investing in a crude oil ETF can provide a degree of diversification, as these funds may also include assets like bonds or other commodities in their portfolio. However, it's essential to be aware of the management fees and potential tracking errors in the ETF's performance compared to the actual commodity. Stocks Another route to gain exposure to the crude oil market is by investing in the stocks of companies involved in the industry. This includes major producers, refineries, and even transportation companies. By owning shares in these businesses, investors are indirectly influenced by crude oil prices. To use an example, a rise in oil prices often boosts the profitability of oil-producing companies, potentially leading to stock price appreciation. Unlike trading futures or CFDs, investing in stocks means actually owning a piece of the company, often with the added benefits of dividends. However, conducting thorough research is crucial, as these stocks can be affected by company-specific risks in addition to oil price movements. Crude Oil Trading Strategies Given the volatile nature of crude oil prices, traders employ specific strategies to capitalise on price fluctuations. Here are some strategies that may be useful for crude oil trading: Trend Following with Moving Averages The trend is your friend, especially in commodities like crude oil. This is a well-known technique but it may be very useful for commodity trading. One effective way to follow the trend is by using moving averages, such as the 50-day (blue) and 200-day (orange). When the 50-day crosses above the 200-day, it's generally a bullish signal, and vice versa for a bearish trend. However, as with all technical analysis tools, moving averages can sometimes trigger false signals. Range Trading Due to supply-demand dynamics and geopolitical factors, crude oil prices often fluctuate within a specific range. Identifying these ranges can be useful for short-term trading. Traders buy at the lower end of the range and sell at the higher end, applying technical indicators like RSI or Stochastic Oscillator for entry and exit signals. News-Based Trading In crude oil markets, news about OPEC decisions, US oil inventory data, geopolitical tensions, and technological advancements can dramatically impact prices. Traders keeping an eye on oil news can take advantage of sudden announcements or an economic release likely to push prices in a particular direction. Given the high leverage commonly available in CFD trading, this strategy can be effective but also comes with significant risk. Trade Crude Oil at FXOpen Trade WTI and Brent Crude oil CFDs at FXOpen to take advantage of our competitive spreads, high liquidity, and lightning-fast execution speeds. We offer four different trading platforms, MetaTrader 4, MetaTrader 5, TickTrader, and TradingView, each with desktop, web-based and mobile versions for access anytime and anywhere. Take advantage of advanced technical analysis tools, including many trading tools and expert advisors for automated trading. Traders can rest easy knowing that FXOpen is also regulated by the FCA in the UK, CySEC in Cyprus, and is licensed to provide financial services in Australia: AFSL 412871 – ABN 61 143 678 719. Start trading oil and gas commodity CFDs with confidence at FXOpen and explore a world of trading opportunities across more than 600 markets. To access Crude Oil markets with competitive spreads and rapid execution speeds, consider opening an FXOpen account today and step confidently into the world of crude oil trading. The Bottom Line In crude oil trading, having the right strategies and tools is essential. By understanding the fundamentals, market dynamics, and utilising specific trading techniques, you are now equipped with the knowledge you need to get started! FAQ How to Trade Brent Crude Oil? To trade Brent Crude oil, you can use various instruments such as futures contracts, CFDs, ETFs, or stocks of oil companies. Most retail traders use CFDs, which provide a way to speculate on price movements without owning the asset. CFDs also allow for leverage, which can amplify both potential gains and losses. What Is the Brent Oil Trading Strategy? A common Brent oil trading strategy involves trend following using moving averages. For instance, traders use the 50-day and 200-day moving averages to identify bullish or bearish trends. Range trading and news-based trading are also popular strategies. What Hours Does Crude Oil Trade? Crude oil trades nearly 24/5. The New York Mercantile Exchange (NYMEX) operates from Sunday evening to Friday afternoon with a daily break. The most active trading occurs during the US session (9:00 AM to 2:30 PM EST) and the European session (6:00 AM to 11:00 AM EST). What Is the Best Time to Trade Brent Crude Oil? According to theory, the best time to trade Brent Crude oil is during the overlap of the US and European sessions, from 9:00 AM to 11:00 AM EST, when market liquidity and volatility are highest. However, you should consider fundamental factors as they can lead to unexpected price movements. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:XBRUSDEducation
by FXOpen
6
Beware of Symmetrical Triangles. And yes, they occur oftenWhy Beware? Ambiguous Direction: Symmetrical triangles don't inherently indicate whether the breakout will be upward or downward. Without additional confirmation from volume or other technical indicators, predicting the direction can be challenging. Market Noise: In volatile markets, price movements within the triangle can be erratic, making it difficult to identify clear breakout signals amidst the noise. False Breakouts: Not every symmetrical triangle leads to a significant price movement. Sometimes, the breakout fails, resulting in a false signal that can trap traders in losing positions.
Education
by Blayno_MTOPS
2
XAUUSD GOLD: Understanding Trend Shifts for Precision Entries👀👉 In this video, we explore the inner workings of market trends and, more importantly, how smart money manipulates price action to sweep liquidity, allowing them to place their orders and sustain the trend. We also showcase a powerful, free indicator from TradingView’s extensive toolset. Here's what we cover: 📊 Understanding Trends: How trends truly operate in the market.
 💰 Smart Money Tactics: How institutional traders manipulate price action to sweep liquidity and execute large orders.
 🔑 Key Levels: Identifying crucial accumulation and distribution zones to approach potential trade setups effectively.
 🛠 TradingView Indicators: Learn how to access tools that help spot when price is overextended.
 🔎 Market Structure: Discover how to locate resting liquidity and anticipate price reactions, understanding the role of liquidity in market movement.
 📈 Trade Setups: Using a practical approach, we examine price interactions with liquidity, blending Wyckoff theory and ICT concepts for sharper trade decisions. Disclaimer: This video is for educational purposes only and is not financial advice. Trading involves significant risks. Be sure to conduct your own research before making any decisions. Trade responsibly.
FX:XAUUSDEducation
by fxtraderanthony
9
THE TREND IS YOUR FRIEND...UNTIL THE END...EURUSD EXAMPLEHey everyone! Hope you are having an AMAZING weekend and beautiful Sunday so far! I just wanted to get on here and post a quick educational video for my Trading View community and share some nuggets I have learned over the last 14 years of being in the markets that hopefully can help you guys reach consistency and ultimately profitability. The subject in this video is "THE TREND IS YOUR FRIEND..UNTIL THE END" hope you guys enjoy get a notepad and paper or iPhone out lol and take some notes! You won't want to miss this! Cheers!
Education
by JosePips
24
Rules of Motive WavesMotive Waves are the components of Elliot Wave structure. Motive Waves consists of 5 sub-waves of which 3 are impulse (In the direction of trend) and 2 corrective waves. The Motive Wave in the upward direction will start with Swing High, Ends with Swing High and consists of 3 Higher Highs and 2 Higher Lows representing strong upward trend. Motive Wave in the downward direction will start with Swing Low, Ends with Swing low and consists of 3 Lower Lows and 2 Lower Highs representing strong downward trend. 🎲 Types of Motive Waves Motive Waves are broadly classified by two types: Impulse Waves Diagonal Waves Diagonal Waves are further classified into Contracting and Expanding Diagonals. These can fall into the category of either leading diagonal and ending diagonal. 🎲 Rules of Motive Waves 🎯 Generic Rule of any motive waves are as follows Should consist of 5 alternating waves. (Swing High followed by Swing low and vice versa) This can start from Swing High and end in Swing High or start from Swing Low and end in Swing Low. Wave-2 should not move beyond Wave-1. This means, the Wave-2 is always shorter than Wave-1 with respect to distance between the price of start and end. Wave-3 always moves beyond Wave-1. This means, the Wave-3 is always longer than Wave-2 in terms of price Among Wave-1, Wave-3, and Wave-5, Wave-3 is never the shortest one. This means, either Wave-1 or Wave-5 can be longer than Wave-3 but not both. Wave-3 can also be longest among the three. Here is the pictorial representation of the rules of the Motive Waves For a wave to be considered as motive wave, it also needs to follow the rules of either impulse or diagonal waves. 🎯 Rules for a 5 wave pattern to be considered as Impulse Wave are: Wave-4 never overlaps with Wave-1 price range Wave-1, Wave-3 and Wave-5 should not be either expanding or contracting. Meaning, we cannot have Wave-1 > Wave-3 > Wave-5 , and we cannot have Wave-1 < Wave-3 < Wave-5 Pictorial representation of the impulse wave rules are as below: 🎯 Rules for the Diagonal Waves are as follows Contrary to the first rule of impulse wave, in case of diagonal wave, Wave-4 always overlaps with Wave-1 price range. Wave-1, Wave-3 and Wave-5 are either in expanding formation or contracting formation. That means, we need to have either Wave-1 > Wave-3 > Wave-5 OR Wave-1 < Wave-3 < Wave-5 Pictorial representation of the Contracting Diagonal Wave is as below. Here, the Wave-1, Wave-3 and Wave-5 are in contracting formation. Pictorial representation of the Expanding Diagonal Wave is as below. Here, the Wave-1, Wave-3 and Wave-5 are in expanding formation.
Education
by Trendoscope
5
Bullish rates reversal signals US dollar downside riskIf you want clues on directional risks for the US dollar, there are worse places to look than US 2-year Treasury note futures, shown in the left-hand pane of the chart. As one of the most liquid futures contracts globally, the price signals it provides can be very informative for broader markets, especially in the FX universe. Having tumbled most of October, implying higher US yields given the inverse relationship between the two, the price action this week looks potentially important. We saw the price take out long-running uptrend support on Wednesday before staging a dramatic bullish reversal on Thursday despite another hot US inflation report. The bounce off the 200-day moving average on the back of big volumes delivered not only a hammer candle but also took the price back above former uptrend support, delivering a bullish signal that suggests directional risks for yields may be skewing lower. You can see that in the right-hand pane with US 2-year bond yields hitting multi month highs on Thursday before reversing lower. But it’s the correlation analysis beneath the chart that I want you to focus on, looking at the strength of the relationship US 2-year yields have had with a variety of FX pairs over the past fortnight. USD/JPY has a score of 0.9 with USD/CNH not far behind at 0.89, signalling that where US 2-year yields have moved over the past two weeks, these pairs have almost always followed. EUR/USD, GBP/USD and AUD/USD have experienced similarly strong relationships over the same period with scores ranging from -0.88 to -0.96, the only difference being where yields have moved, they’ve usually done the opposite. The broader readthrough is that shorter-dated US yields have been driving US dollar direction recently, with rising rates fuelling dollar strength. But given the bullish signal from US 2-year Treasury note futures on Thursday, if we just saw the lows, it implies we may have seen the highs for US yields and the US dollar. Good luck! DS
TVC:US02YEducation
by FOREXcom
Mastering Support and Resistance: An Essential Tools for SuccessSupport and resistance are cornerstone principles in trading, offering crucial insights into price dynamics and market behavior. These levels act as key indicators, signaling points where an asset's price is likely to either pause or reverse direction. Support refers to the price level where strong demand prevents further declines, while resistance marks the point where selling pressure halts a price rise. Understanding and effectively utilizing these concepts can make a significant difference in trading success. In the realm of technical analysis, which focuses on using historical market data to predict future price movements, understanding support and resistance is essential. Traders rely on these levels to pinpoint optimal trade entry and exit points while also managing risk effectively. By recognizing where the market may reverse or maintain its trajectory, traders can craft more robust strategies. Decoding Support and Resistance Levels Support and resistance levels are vital price points on a chart that traders use to forecast future market behavior. Support represents a level where a downtrend is likely to pause, driven by a concentration of buying interest. In other words, it's the price point where demand is strong enough to stop further declines. For instance, if a stock repeatedly drops to $100 and then bounces back, $100 becomes a recognized support level. On the flip side, resistance is the price level where an uptrend often halts due to a high volume of sellers. Unlike support, resistance is where selling pressure overpowers buying interest, preventing prices from climbing further. If a stock consistently hits $150 and then retreats, $150 serves as a resistance level. Example Support and Resistance on Silver These levels are significant because they represent psychological thresholds for market participants. When prices approach support, buyers may step in, seeing it as a good entry point. Conversely, when prices near resistance, sellers might take action, expecting the price to struggle moving higher. Understanding how these levels work helps traders refine their timing and make more informed decisions. The Impact of Support and Resistance in Technical Analysis Support and resistance are pivotal in technical analysis, guiding traders in interpreting market movements and predicting future price trends. These levels act as psychological barriers that help determine whether a price trend will persist or reverse. For example, if a stock repeatedly approaches a resistance level but fails to break through, traders may interpret this as strong selling pressure and consider selling or shorting the asset. Conversely, if a price consistently rebounds off a support level, traders might see it as a buying opportunity. Example Resistance and Support on Apple Stock Visual tools like charts and diagrams are indispensable for identifying support and resistance levels. By drawing horizontal lines at points where the price has historically reversed, traders can easily spot critical levels and predict potential market movements. These visual aids enhance decision-making by providing a clear picture of where key price barriers lie. The Crucial Role of Support and Resistance Levels in Trading Strategies Support and resistance levels are the foundation of successful trading strategies, offering traders the tools to optimize entry and exit points, maximize profits, and manage risks effectively. For example, when a price hovers near a support level, a trader might take a long position, anticipating a rise in value. Simultaneously, they could place a Stop Loss just below the support level to limit potential losses if the price unexpectedly drops. Similarly, resistance levels provide invaluable insights for deciding when to exit trades or set profit targets. If a price approaches resistance, it might be wise to close a position to secure gains or prepare for a possible reversal. Understanding and identifying support and resistance levels also play a vital role in risk management. Setting Stop Loss orders near these levels helps traders protect their capital from significant losses if the market turns against them. This disciplined approach not only enhances profitability but also promotes long-term success in trading. Different Forms of Support and Resistance Support and resistance levels come in various forms, each providing unique perspectives on market behavior. The most common types include horizontal levels, trendlines, and moving averages. --Horizontal Support and Resistance: These levels are drawn at points where the price has consistently reversed in the past, making them straightforward and widely recognized. Horizontal Resistance on Tesla Stock --Trendline Support and Resistance: Trendlines connect a series of higher lows in an uptrend or lower highs in a downtrend, acting as dynamic support and resistance. In an uptrend, the trendline can signal buying opportunities, while in a downtrend, it might serve as resistance. Trendline Support on EUR/USD --Moving Averages: Moving averages, such as the 50-day or 200-day average, often act as support or resistance. For instance, during an uptrend, a pullback to the 50-day moving average can indicate a buying opportunity. Moving Averages Used as Support and Resistance on USD/CAD How to Identify Key Support and Resistance Levels To identify strong support and resistance levels, traders use several strategies: --Spot Price Clusters: Look for areas where the price consistently reverses direction, signaling strong support or resistance zones. --Use Technical Indicators: Tools like Fibonacci retracements help identify potential reversal levels during pullbacks by dividing a price move into key percentages (38.2%, 50%, and 61.8%). Fibonacci Tool used as Support and Resistance areas on DXY Common Pitfalls When Using Support and Resistance in Trading While support and resistance are essential, there are common mistakes traders should avoid: --Over-Reliance on Exact Numbers: Support and resistance are better viewed as zones rather than exact values. Prices may fluctuate slightly above or below these levels before reversing. --Ignoring Confirmation Signals: Jumping into trades without confirmation can lead to losses. Always look for signs like candlestick patterns or increased volume to confirm that the level will hold. --Chasing Breakouts Too Hastily: Not all breakouts result in sustained trends. Waiting for confirmation, such as increased volume, helps avoid being caught in a false breakout. --Impatience: Many traders act prematurely at support or resistance levels. Patience is key—stick to your trading plan and wait for the right setup. Advanced Strategies for Support and Resistance Trading For more experienced traders, support and resistance levels can serve as the basis for advanced strategies: --Breakouts: A breakout occurs when the price moves above resistance or below support, often signaling the start of a new trend. Confirming breakouts with increased volume helps reduce the risk of false signals. Breakout Confirmation on BTC --Fakeouts: Prices may temporarily breach support or resistance before reversing direction. Advanced traders capitalize on these by waiting for the price to return within the range and then taking positions in the opposite direction. Fakeouts on BTC --Reversals: Traders use reversal strategies when the price changes direction after hitting support or resistance, often signaling the start of a new trend. Area $72000 resistance used as reversal on BTC Conclusion Mastering support and resistance levels is vital for any trader aiming for long-term success. These concepts are the backbone of technical analysis, guiding traders in making informed decisions about when to enter, exit, and manage risks. By understanding and identifying key support and resistance zones, traders can predict price movements, spot opportunities, and refine their strategies. Incorporating technical analysis into your trading routine will boost your confidence in navigating the market. Whether you’re a beginner or a seasoned trader, honing your skills with support and resistance can lead to more disciplined and profitable trading.
Education
by FOREXN1
14