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Why the Quality of your trades matters more than the QuantityMost traders simply want to trade. They fear missing out on the next big move and they forget that the market is still going to be there tomorrow and the next day and 10, 20, 50 years into the future. Everything in the market repeats and that means there will be another opportunity right around the corner, so stop worrying. Today is not the last day you will have to trade and yet many people trade and think like it is! Over-trading is the number one reason that most traders don’t succeed; it’s a ‘cancer’ to your trading account and to your dreams. What would be considering "over-trading?" If you find you are almost always in a trade, you’re over-trading. If you find that you are preoccupied with the markets and your trades, you’re over-trading or you’re about to over-trade. If you are in more than one trade at a time you’re probably over-trading unless you have carefully divided up your overall 1R risk amongst all the trades. There are many other examples of over-trading, but the basic fact of the matter is that you know if you’re trading too much because you won’t be able to sleep at night and you will be hemorrhaging money. I personally only trade 1 to 6 times per month approximately, which all my students clearly know about that, and I very carefully select my trades and filter out the signals I don’t like. A. Here’s what over-trading does to your trading results and account… 1. Too many trades dilute your edges The more trades you take, the more diluted your trading edge becomes. A trading edge increases your chances of success, but the simple fact is, there are only going to be so many high-probability trade signals each week, month, year etc. no matter what your edge is. So, once you start breaking away from your trading edge and start taking lower-quality trades that don’t meet your criteria, you start lowering your chances of success. You are basically diluting your trading edge down to where eventually it will be no better than random or worse. basically diluting your trading edge down to where eventually it will be no better than random or worse. Market Noise vs Quality Trades – There is market noise, and then there are actual high-probability price events, you must know the difference. I wrote an article that touches on this titled how to trade sideways markets and I suggest you check it out to learn more and see some chart examples. The point here is that when you don’t know the difference between market noise and actual price action signals worth risking money on, you will naturally end up taking trades that are just noise and not actual signals, further diluting any edge you may have. The verdict is clear: Before you start risking your hard-earned money in the markets, make damn sure you know EXACTLY what your trading edge looks like and how to trade it so that you don’t ACCIDENTALLY end up over trading. 2. The spread and commission eats your profit How do you think casinos make sooooo much money? Frequency. The high-frequency of games played means that their edge is going to play out to their advantage over and over again. The house always wins. In trading, the broker is the house, and they always win because not only are there a lot of people trading but probably 90% of them are trading WAY TOO MUCH. Hence, your only REAL “edge” as a retail trader or investor is to simply TRADE LESS! Consider this : Every 100 trades you give back at least 100 to 150 pips equivalent in spread or commissions, so the more you trade the more you cost yourself simply due to the “churn” of your account.You want to avoid trading like you’re the casino player and premeditate, filter, and carefully select your trades. In a nutshell, to maintain your edge you want to avoid giving the market or broker the spread constantly. Doing too much of anything is a bad idea If you take a look at most endeavors, trading included, often times doing them too much or thinking too much / worrying too much about XYZ endeavor has a direct and negative relationship to how well you do at that thing. For example : Drinking too much coke, eating too much Mcdonald’s, even working out too much or drinking too much water – all of these things can be bad for you. Being too worried about your significant other will end up pushing them away as it becomes unattractive and “needy”. One thing is true – too much of anything can hurt or even kill you and too many trades WILL kill your trading account for sure! Your brain is wired to get addicted… Drugs, sugar, video games, gambling, blue light from your smartphone, trading, what do all of these things have in common? They can all become insanely, dangerously addictive. Our brains are wired and designed to become addicted to things, this is an evolutionary trait that served us well thousands of years ago as hunter-gatherers, but in modern-day society with all of its unhealthy vices and temptations, it tends to work against us and in certain cases, even kills us. Our brains work on a reward system; when something feels good we get a little “shot” of “feel-good chemicals” such as dopamine and others. Hence, we become addicted to whatever gave us that dopamine rush, whether it was bad or good for us. For example, drugs are obviously bad for you but they can make you feel really good and we can become addicted to that good feeling even though we know the dire consequences it brings. Certain drugs like heroin are extremely addictive and can kill you very quickly, so they are especially dangerous. On the contrary, exercise also releases “feel-good” chemicals and you can become addicted to that feeling and you will be more likely to continue working out, obviously that is not a bad thing. Knowing this basic information about how your brain works, it should be obvious that you need to be very careful and train yourself to get addicted to positive thoughts and processes so that you don’t become addicted to the negative ones. When it comes to trading, we have a laptop in front of us with flashing colors and prices moving up or down that we can use to enter trades at the push of a button. Once we do that and hit a few winners, the brain says “hey that feels pretty damn good, do it again”, and so the trading addiction begins, if we aren’t careful. If you do not create a trading plan where you plan out your trading edge and how you will behave in the market, you will naturally end up over-trading as you will get addicted to the feeling of “chasing” that winner. If you do not objectively plan our your trades in the beginning of your career, you will end up losing a lot of money due to trading addiction before you finally learn the lesson enough times that you either quit or have no money or desire left to trade with. B . A CURE FOR OVER-TRADING I’ve been trading the markets for about 2 years, teaching traders for over half that time, and without a doubt I have learned every lesson there is to learn in the markets many times over. So, the plan I am going to lay out for you below is born out of my experience and it is my opinion that if you follow it, you will be “cured” of the over-trading “cancer” that is probably destroying your trading account right now. 1. Set a max 10 to 12 trades a month, ideally less. You must have some rigid rules built into your trading plan. Think of it like this: some of your trading strategy is rigid and then within that rigid structure there is some flexibility such as how much you risk, how you enter, where you place your stop loss, etc. But, when it comes to trade frequency, it really is necessary to say, “I am not going to take more than 10 trades a month” or 5 trades or whatever. Ideally, I would not trade more than 5 – 7 times a month. If you’re trading more than 10 times a month you’re probably over-trading. 2. Wait for setups matching your plan and apply a filter When we talk about “applying a filter”, I am talking about a set of criteria that you use to check if a trade is worth taking or not. I like to use a T.L.S. filter wherein I am checking for a trade that has multiple pieces of confluence in its favor, at least 2 of 3: Trend, Level, Signal, etc. Your goal is to trade like a sniper and wait patiently like a crocodile hunting its prey. You are not going to go after “every” target or the prey that looks strong and difficult to “kill”. Instead, you want to improve your odds of success by saving your “ammo” (trading capital) for the weaker / easier to get prey / trades. You only have so much money to risk just like a sniper only has so many bullets and a crocodile only has so much energy. Use it wisely or you’ll run out / blow out your account. 3. Set and forget approach One of the big reasons traders trade too much is because they don’t give their trades enough time to play out and then they jump into another trade right away. Remember, good trades take time to play out and if you want to catch big market moves you have to be patient, this means you also have to not trade a lot. This is one reason why you need to set and forget your trades. Doing so not only improves your chances of making big gains but prevents you from trading too much and “chasing” trades. 4. Limit yourself to markets clearly moving in one direction with technical evidence Traders often make the mistake of trading in choppy market conditions, this causes them to get in a trade and it immediately starts going against them, then they want to enter another one. The dopamine chase is underway at that point. Jumping from trade to trade is very dangerous. If you stick to markets that are clearly trending and moving in one direction aggressively, you are much less likely to over-trade. CONCLUSION One of the hard truths of trading is that there simply are not a large amount of highprobability price events in the market each week, month or year. So, it goes to reason that the more you trade the less impactful your trading edge becomes. Despite these facts, most traders continuously trade far too frequently each week, and they end up losing money. My strategy is built on a low frequency trading approach so that I am basically trading as infrequently as possible whilst not passing up the most obvious trade setups. Obviously, there is some learning and skill required to know what constitutes the “best” and “obvious trade setups”, you aren’t going to just wake up one morning and magically know what to look for. With the help of my professional trading classes and the set and forget approach that I teach, you will begin to learn what a “high-quality” price action event looks like and you’ll learn to filter out the lower-quality ones from them. My end of day trading approach is inherently low-frequency FOR A REASON; it results in a selffulfilling type of function that works to systematically prevent over-trading which naturally increases your chances of long-term trading success. Which is what we all want, right? Happy trading, CryptoKings! Do well to follow for more lessons and trading analysis.... Love you all.
Education
by Skuchies_CryptoKing
86
The Importance of Understanding the Commodities MarketIn this educational post, I'll be explaining the reason why both investors and traders need to understand the commodities market. The commodities market is a market in which raw, hard, and soft commodities are traded. Examples of commodity assets include gold, oil, wheat, grain, copper, and even livestock. While these aren't commonly traded markets among retail investors, understanding assets within the realm of commodities can provide an edge in trading and investing. Benefits to Investors - The primary reason that investors needs to understand the commodity market is because it helps provide an overall picture of the entire financial market. - For instance, in the case of Nickel, Copper, Zinc, and other industrial metals, the price action differs depending on the market cycle, and certain metals are sensitive to, and heavily affected by specific industries. - Popular commodities like Gold and Oil’s price action reflects the overall market trend and sentiment. - As such, a retail investor with a deep understanding in commodities is capable of looking at the stock market from a different angle. - Secondly, understanding commodities provides a huge advantage in terms of portfolio management. - How 'well' you have invested, isn't simply determined by your annual return. - Your sharpe ratio (your return divided by the volatility) tells a more accurate story. - In order to succeed as a retail investor, you need to focus on increasing your sharpe ratio, or your risk adjusted return. - And the best way to do so, is to diversify, specifically by looking at the correlation between certain assets. - There are a plethora of assets in the commodities market that provide a great hedge / means of diversification against the stock market. - Leveraging this knowledge will help investors design a portfolio that provides them great risk-adjusted-returns. Benefits to Traders - The commodities market can be a great opportunity for traders, as long as they spend their time getting used to the market. - Normally, when the stock market is overbought, or when it demonstrates sideways action, traders often make the mistake of overtrading. - Traders enter positions at suboptimal levels, because they have no option but to trade at the stock market. - However, understanding the commodity market gives them an edge. The best analogy to explain this, is like playing online poker. - When playing poker, the player waits for good hands to appear, so he can make a bet in his favor. - When he plays online poker, he can have multiple games going on at once, and play the game where he gets the upper hand. - In the same vein, when a trader knows how to trade commodities, instead of waiting for a good entry in the stock market, he can simply trade assets within the commodities market. - If you think stocks are overvalued, there’s a chance for you to move onto gold, silver, oil, or even industrial metals. - You can take a look at multiple assets, and find one that has a good risk/reward ratio right now. Conclusion The commodity market is a market that is huge in size, yet often overlooked my many, if not most retail traders and investors. However, understanding which assets are traded, their price action (in relation to other assets), can help both investors and traders acquire an edge.
TVC:USOILEducation
by Michael_Wang_Official
7
The 2% Rule? (Never Break It)What Is the 2% Rule? The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any single trade. To implement the 2% rule, the investor first must calculate what 2% of their available trading account is: Example: $5,000.00 account equals $100.00 risk per trade. Key Takeaways: The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any single trade. To apply the 2% rule, an investor must first determine their available capital. Stop-loss orders can be implemented to maintain the 2% rule risk threshold as market conditions change. How the 2% Rule Works The 2% rule is a restriction that investors impose on their trading activities in order to stay within specified risk management parameters. For example, an investor who uses the 2% rule and has a $100,000 trading account, risks no more than $2,000–or 2% of the value of the account–on a particular investment. By knowing what percentage of investment capital may be risked, the investor can work backward to determine the total number of lot size to purchase. The trader can also use stop-loss orders to limit downside risk. In the event that market conditions change, an investor may implement a stop order to limit their downside exposure to a loss that only represents 2% of their total trading capital. Even if a trader experiences ten consecutive losses, using this investment strategy, they will only draw their account down by 20%. The 2% rule can be used in combination with other risk management strategies to help preserve a trader’s capital. For instance, an investor may stop trading for the month if the maximum permissible amount of capital they are willing to risk has been met.
Education
by Anbat
267
📚EDUCATION: THE BASICS OF TRADING EXPLAINED📚 Hello, Traders! The basics of what it takes to be a successful trader are simple and obvious Yet daily, I see traders who fail at one or multiple KEY points that sink their performance and they keep losing accounts even though these people do have the understanding of the market that would have been sufficient enough for them to be profitable if they followed the basic rules. Trading is as much about pattern recognition and capacity for abstract thinking as it is about the personality type, self-discipline, and specific mindset. The lucky few are born fit for trading, but others might train themselves. Below, is the breakdown of the basics behind the day trading! ✅ TRADING IS A BUSINESS NOT GAMBLING 99% of the new traders have unrealistic expectations of the kind of returns trading might deliver. To make matters worse, they do not realize that it will take years of trial and error before they can make trading Their only source of income. These delusions make the newbies treat trading like gambling. To AVOID this, please follow these 4 easy steps: 🔥SET AND KEEP YOUR RISK-REWARD. I recommend risking no more than 1% of the deposit per each trade, which also implies using a variable lot size for every trade, so that no matter the SL size in pips, or the pair you are trading, the dollar value of the RIKS remains the same with each trade. That way, you are in full control of the risks you are taking. 🔥DO NOT GO ALL IN. Sounds obvious, but I’ve seen it so many times. New traders, who lost 70% of the account, GO ALL IN on one trade that they think might help them recover the balance. That is NEITHER a way to trade, nor a way to learn. Slowly losing your account while learning how to trade, is simply a fee that you are paying the market for your education. Accept it or fail. 🔥PROTECT CAPITAL=USE SL I can’t stress this enough and I BEG YOU to use SL. Do NOT enter the trade thinking that if the SL level that you had in mind is hit you will close manually. You will NOT close the position, and the longer you hold it the more is the temptation to wait a bit more because it seems that the reversal is coming soon. 🔥CUT LOSSES Set a daily loss limit. For example, you can Ban yourself from trading for the rest of the day if you lost more than 3 trades in a row. You will enter what is called a tilt most likely, and you will NOT be productive that day. The same goes for a week. Lost more than 10% of the account in a week? Next week NO TRADING for you. Watch the market passively, or trade on the demo! By the way, That can be helpful even for professional traders too! ✅KEEPING A COOL HEAD IS KEY The ideal trader is the one who can set all emotions aside as a robot would, while simultaneously keeping the versatility of the human mind and the intuition, that the machines lack(yet). It is of utmost importance for the new traders to understand that being right about the direction but entering too early or too late is the same as being WRONG because the result will be a LOSS. Here is how to keep cool: 🔥CONTROL YOUR EMOTIONS. Both euphoria and a panic attack are your enemies so the more detached you are, the better. Emotions are for the casino, and we are doing business here, remember? 🔥AVOID FOMO( FEAR OF MISSING OUT) That one applies mostly to the trades that you are not so sure about, but still want to take them, in fear of not making money. And the early entries are determined by FOMO too( what if the price does not reach my limit order, and the trade plays out well, but without ME?) FOMO is Incredibly counterproductive, don't let it control you! 🔥DON’T FOLLOW OTHERS Avoid herd mentality! 99% of traders lose money, so doing what everyone does inevitably lands you in the 99% category. 🔥BUILD A WATCH LIST A LOT of the beginners try to PREDICT behavior of the particular instrument that they decided to trade for some reason, instead of going through the pairs looking for a ready setup that you KNOW works. The former approach leads to finding patterns, key levels, and setups that just aren’t there. Naturally, the result of trading these is an inevitable LOSS.You should Build a watchlist big enough for your to have a choice, and go through it at regular intervals, looking for opportunities but NOT INVENTING them. ✅ CONSISTENCY OVER BOOM-BUST STYLE Consistent trading is the only way to make trading a reliable source of income. Slow but steady gains always beat leap-like boom-bust performance. The psychological pressure of the latter will most likely break you sooner or later, and who needs gray hair in their 30es anyway? That is how you achieve consistency: 🔥FIND A STRATEGY Do the research on multiple trading strategies and pick those that you understand and that are compatible with your personality. 🔥USE PAPER TRADING AND BACKTESTING To select which strategy is right for you, use backtesting to see how the strategy performed in the past. And use paper trading to see how the strategy works in real-time.Once you chose the strategy, go back to paper trading and backtesting to polish it. 🔥TRACK YOUR TRADES Keeping track of your trading! Working with that data is an invaluable tule for the trader, that helps identify your strengths and weaknesses, while also helping you notice patterns in your trading that would have been left unrecognized otherwise. 🔥FORMALIZE YOUR RULES Objectivity is KEY for consistent trading because during the rough patches of the market, being sure of your rules helps you stay in the market, waiting for the tailwind, instead of questioning your strategy or your implementation of it. Create a strict ALGORITHM and follow it step by step. In order to do that, you need to define every element of your strategy as precisely as possible. For example, a level for you is a daily horizontal level with at least 3 touchpoints, a breakout is valid only if the 4H candle closed above the level, etc... The less vague the terms, the fewer emotions will be involved in deciding whether to enter the trade or not. ❗️ IN CONCLUSION: If you want to become a trader, remember: 1- It will take YEARS to learn how to trade. 2- You will lose a TON of money in the process 3- You will FAIL with 95% probability. 4-Realistic returns from trading are WAY lower than you think 5-BUT when you succeed, you will set yourself free! Please SUPPORT This Idea By A LIKE and COMMENT!
Education
by TopTradingSignals
110
Using Volume & Open Interest data as secondary indicatorsIf you find the analysis useful, please like and share our ideas with the community. Any feedback and suggestions would help in further improving the analysis! Several chartists use the approach of price-action to predict the market movements. Some include volume too. However, most professional traders prefer using a multidimensional approach to market analysis. Price, Volume and Open Interest are the 3 dimensions which are carefully evaluated by these traders. Open Interest The total number of outstanding or unliquidated contracts at the end of the day is referred to as Open Interest. It represents the total number of outstanding longs or shorts in the market. Please note: It is not the summation of both It is the number of contracts. Every contract needs 2 parties- a buyer and a seller. Hence, two parties agreeing on trade forms 1 contract. The open interest figures change every day. These changes such as increase or decrease in OI give the traders a clue as to how the market might behave next. Few days back, during the end of the weekend, you might have heard that BTC rallied such violently after a short squeeze, where a lot of the short positions got liquidated. That is nothing but an aspect of the Open Interest. With every trade that goes through, the OI might: Increase Decrease Stay unchanged These changes are discussed in Table 1. If both the buyer and seller are initiating a new position, a new contract gets established. If buyer is initiating a new long position, while the seller liquidates an old long, the number of contract remains unchanged. Similarly, if the buyer liquidates an old position, while the seller initiates a new position, OI doesn’t change. If both traders are liquidating old positions, the OI goes down. These changes in OI allow traders to predict the market momentum. Most traders use OI in conjunction with ‘Volume’ and ‘Price’. To understand, what these changes in OI, we take a look at table 2. Presently, we have seen the markets entering a long term consolidation. A build-up in open interest during consolidation periods intensifies the ensuing breakout. 95% of traders follow the same technical indicators. Hence, the bigger players tend to use this fact to their advantage. I would like to conclude the analysis by stating that: The markets can continue to be irrational as long it deems fit. No analysis is sacrosanct! "Technical Analysis of the Financial Markets" by John J. Murphy talks about different aspects in detail. The above analysis has been researched and referenced from different parts of the book. ---------------------------------------------------------------------------------------- Keep supporting:) -Mudrex
BINANCE:BTCUSDEducation
by Mudrex
70
History of Forex | From Ancient to the Modern Day We have come a long way from the previously practiced barter system to the modern-day system of trading currency. Following is a brief summary of the evolution of currency and how it gave rise to Forex Trading. Here are the main stages that are illustrated on the chart: 1️⃣The Ancient system of Trading - Trading with Gold As early as 6th century BC, the first gold coins were produced, and they acted as a currency because they had critical characteristics like portability, durability, divisibility, uniformity, limited supply and acceptability. 2️⃣Bank Notes Originated - Deposited Gold in banks in exchange for banknotes 3️⃣Role of Geography - Various banks of different regions printed different currencies Gold Standard - Currency pegged to gold In the 1800s countries adopted the gold standard. The gold standard guaranteed that the government would redeem any amount of paper money for its value in gold. This worked fine until World War I where European countries had to suspend the gold standard to print more money to pay for the war. 4️⃣Bretton Woods System - Currency pegged to USD The first major transformation of the foreign exchange market, the Bretton Woods System, occurred toward the end of World War II. The Bretton Woods Accord was established to create a stable environment by which global economies could restore themselves. It attempted this by creating an adjustable pegged foreign exchange market. An adjustable pegged exchange rate is an exchange rate policy whereby a currency is fixed to another currency. In this case, foreign countries would 'fix' their exchange rate to the US Dollar. 5️⃣Birth of Floating Currency - Currency that is not pegged to any assets or other currencies is known as a 'floating currency'. And what will be next? Very hard to say but blockchain technologies will make the system change again. ❤️Please, support this educational post with a like and lovely comment❤️
OANDA:XAUUSDEducation
by UnitedSignals
27
How to manage & deal with consecutive losses in trading ? Trading Psychology: How to manage & deal with losses/consecutive losses in trading ? Hi everyone: Today I want to go over a very key trading psychology lesson on how to deal with losses, especially consecutive losses. This is bound to happen to any traders, whether you are new or experienced. ITs something all professional traders will have to deal with on a regular basis. Understand that, dealing with losses psychologically is the key factor in the success of a trader. This is because losses are inevitable, and trading is a probability, which trades that you take will end up both in wins and losses. However, traders usually can not accept losses, due to their ego, greed and other emotional factors. Aside from having a good risk management, trading plan, and trading strategies, traders can still experience the psychological emotions of losing. This is due to the fact that we are humans and we are an “emotional” animal. We don't want to be wrong, at all. Taking a loss is like getting slapped in the face by the market, which we have egos to fight against. What ends up after taking losses or consecutive losses, it puts traders at a disadvantage where their emotion is high, and likely to “revenage” trade to chase back losses, which end up in a deeper hole. To deal with such psychological phenomena, take a step back and observe your situation: First, did you follow your trading plan/strategy on how to enter, set SL/TP, and management ? Second, did you take an emotional trade due to greed or fear of missing out ? Third, have you journal down your losses and review them to make sure they are trades you really want to risk your capitals on ? By now you will see why we need to review these. Trading is a probability, not right or wrong. It's a random variable that you are putting your $ at risk. So if you understand the rules and plans that you follow and execute a trade accordingly, then there should NOT be any negative emotions towards the outcome of the trades, whether they are winners or losers. When I discuss the trades I entered every week in my trade recaps videos, I am always happy to enter a position, even if it goes to a loss. This is because I have done enough backtesting, chart work, and plan to enter a position. I understand strictly from a probability point of view, I could have a higher strike rate, and more often the trades will end up as a winner rather than a loser. However, I also understand and acknowledge that some trades will end up in a loss, disregard mine technical analysis or other’s fundamental analysis. It is what trading is all about. When I have consecutive losses, I will always review the 3 points I mentioned above and make sure they are all valid for me. Then I simply will take 1 day off from the market, chart, phone, and just get your mind clear. Come back strong after 1-2 days of rest, and have a positive mindset. What traders often do when they have consecutive losses is to right away re-enter back into the market and try to chase back their losses. This has always been the downfall of losing and it creates anxiety in traders’ minds. Such a negative experience is going to stay in the traders’ mind longer and deeper, compared to consecutive winners. So wise we understand that is the case how our brain is "programmed” into thinking, then it's up to us to do the opposite, and fight the urge to “revenge” our losses. At the end of the day, no one is trading your trading account, except yourself. Taking ownership of your account, learning to control our emotions, understanding the probability side of trading, and learning to let go, drop our ego will help us in the long run in this industry. I hope these pointers can help some traders who are still struggling with this concept. It's impossible not to take losses, but professional traders deal with it on a regular basis and still remain consistent in the long run. Thank you I will forward some Trading Psychology educational videos below on some of the topics explained today. Trading Psychology: Revenge Trading Trading Psychology: Fear Of Missing Out Trading Psychology: Over Leveraged Trading Trading Psychology: Is there Stop Loss Hunting in Trading ? How to deal with it ?
BITSTAMP:BTCUSDEducation
by jojofang0901
58
How to create a trading strategy?HOW TO CREATE A TRADING STRATEGY? WHAT IS A TRADING STRATEGY? Trading rules that systematize it, bring clarity, orderliness and predictability of the result. You can take a ready-made strategy and adapt it for yourself. And you can create your own The main idea of ​​the strategy, its rationale The idea should be rational, based on market patterns that you understand. For example, trading with a trend or pullbacks. On technical or fundamental analysis, with or without indicators A good trading strategy is not complicated, but simple. A large number of rules makes the strategy inconvenient and understandable for the trader himself. Timing of trading What timeframes do you want to trade on? How much time are you willing to devote to trading? What time will you trade? Selection of trading instruments Pick those tools. which you understand well The strategy can be both universal (for many tools), and sharpened for specific toolsChoice of tools for analysis 1) When the main idea of ​​the strategy emerged and it became clear how, when and what to trade, you need to decide on the tools of market analysis 2) If the strategy is indicator, then select indicators (from 2 to 5) 3) If the strategy is not indicator, then select patterns, figures of graphical analysis 4) If the strategy is based on fundamental analysis, then it is necessary to decide on which news to trade. Trade entry rules Under what conditions will you enter the market based on what signals? When will you not open a trade? What orders will you use market or pending? Exit rules Stop Loss and Take Profit Under what conditions do you close a position? How will you set stop loss and take profit? Risk Management Write down the risk per order, risk per day / week / month (in percent or in currency) Determine the maximum allowed number of losing trades per day / week / month Calculate the volume of a trading position (lot) When there is a strategy, what's next? Check the effectiveness of your strategy on the strategy tester or on a demo account Maintain trade statistics to identify weaknesses of the strategy and remove them
Education
by DeGRAM
41
Indicators For A Volume Profile Based Trading StrategyVolume Profile has been popular among futures traders since the beginning of electronic trading and the introduction of TPO charts. I use several scripts from the TradingView Volume Profile Suite for a trading strategy I'll teach in a upcoming video. For now, here are the scripts and indicators applied to the charts I show in this, and past, recordings. Indicators on the 30m Chart: Volume Profile > Session Volume HD PriorDayOHLC (Available in the Public Library) 233 EMA (Built-ins) Indicators on the 5m Chart Volume Profile > Visible Range VWAP Stdev Bands v@ Mod (Available in the Public Library)
CBOT_MINI:YMU2021Education
by RodCasilli
54
The 3 Types of Traders. Who Do You Belong To? 🤔 There are thousands of different ways to trade the market. During the last 100 years, various trading strategies and techniques were invented. One of the ways to categorize them is to split them by types of traders. Such a category type will lean on 2 main elements: trading frequency and time frame selection. 1️⃣ - Scalper I guess 99% of newbie traders start from scalping. Trying to catch quick market moves and become rich quick, newbies are practicing different scalping strategies. What is funny about scalping is the fact that such a trading style is considered to be the easiest by the majority while remaining one of the hardest in the view of pros. The main obstacle with scalping is a constant focus and rapid decision-making. Scalpers usually open dozens of trading positions during the trading session, most of the time being in front of the screen constantly. Paying huge commissions to the broker and dealing with complete chaos on lower time frames, the majority simply can't survive the pressure and drop, leaving the pie to true gurus. 2️⃣ - Day Trader Day trading or intraday trading is the most appealing to me. Staying relatively active, the market gives some time for the trader for reflection & thinking. Opening and managing on average 1-2 trades per trading session, the intraday trader is granted a certain degree of freedom. However, with declining volatility, quite ofter intraday traders get a relatively low risk/reward ratio for their trades, 3️⃣ - Swing Trader Swing trading is the best choice for traders having a full-time job. Primarily being focused on daily/weekly time frames, swing trading is not demanding for a daily routine and aims at catching mid-term/long-term market moves. With an average holding period being around 2 weeks and opening 1-2 trading positions per week, swing trading is considered to be the least emotional and involves low risk. The main problem with swing trading is patience. Correctly identifying the market trend and opening a trading position, the majority tends to close their positions preliminary not being patient enough to let the price reach their target. Which trading type do you prefer?
COINBASE:BTCUSDEducation
by VasilyTrader
63
What is impulse and how to make money on it?What is momentum and how to make money on it? Momentum is a sharp paranormal price movement in one direction or another, unusual for average daily fluctuations of an asset How to build zones from which impulse movement is most likely to occur? 1) The price is pushed back from the previously built level 2) There is an impulse movement in the other direction 3) Correction to the level, from which the price pushed a little 4) consolidation, consolidation below the level, from which there will be an impulse movement How it works? 1) the level above which the price consolidates and repels 2) Rollback from the price level at the moment 3) Impulse that breaks the level 4) We need to extend the level to understand where the key point will be 5) Fixing the price below the level 6) In anticipation of an impulse movement, at the very beginning of the movement, after fixing, we open an order *** Works in the same way in long What do you need to do, what to earn on this? 1) If you use impulses not all in a row, but the very first one after a trend reversal, then we have a chance to pick up all the movements, it all depends on your benchmarks, where you exit the market, according to your strategies. 2) Not every impulse level is the first, we estimate the situation from strong levels, from which the price can reverse 3) We focus on the opening of the session, the chance that the market will reverse at the end of the working day and give you less profit if it is at the beginning. It is important to understand: Price moves from level to level The price does not always fix directly below / above the level You can work both on the younger (m5, m15, m30, h1, ch4) and on the higher timeframes (d1, b1, m1) The older the timeframe, the stronger the level from which an impulse can follow During an impulse, funds are injected, a large player enters the market or a major player exits the market, stops-losses are collected, i.e. removal of market participants. Our goal is to follow a major player who leads the price and get profit from it
Education
by DeGRAM
12
Option Greeks and Implied VolatilityThere are many reasons why an investor or trader trades options. The main reasons, as with other derivatives markets, is to hedge another position or to speculate on the performance of the underlying security. 1) Hedging: A hedge is like an insurance policy in that it can help mitigate risk for a small fee. For example, a portfolio manager buys a large position in Company A stock for its long-term price appreciation potential but is worried that the next earnings report will show short-term issues. He or she can buy put options on that stock that will increase in value if the price of the stock falls on its earnings news. 2) Speculation: Options allow both buyers and sellers to capitalize on their market forecasts, whether they are bullish, bearish, or neutral. However, because options prices depend on many factors, including market volatility, traders can profit from increases or decreases in those factors as well. While traders can look at individual options data, a very widely used display called an “options chain” lists all options, or a subset, available for a given expiration month. Options traders also look at derivatives of the price that measure how fast their prices decay over time, how fast their prices change with a given change in the price of the underlying, and more. These derivatives are designates with Greek letters such as delta and gamma, so traders call them “the Greeks” . I. Delta – measures how much an option price changes for a one-point move in the underlying. Its value ranges between 0 and 1 for calls and between -1 and 0 for puts. II. Gamma – measures the rate of change in delta. It is essentially the second derivative of price. III. Vega – measures the risk from changes in implied volatility. Higher vol makes options more expensive since there is a greater change than the underlying security price will move above the strike price for a call. IV. Theta – measures the rate of time-value decay and is always a negative number as time moves in only one direction. V. Rho – measures the impact of changes in interest rates on an option’s price. Implied volatility (IV) is the estimated volatility of a security’s price and is critical in the pricing of options. Although not a guarantee, implied volatility tends to increase while the market in the underlying security is bearish. Conversely, when the underlying security is bullish, implied volatility tends to decrease. This is due to the common belief that bear markets are riskier than bull markets. The most important is that implied volatility is an estimate of the future volatility, or fluctuations, of a security’s price. While levels of implied volatility are associated with bullish and bearish markets in the underlying security, it really does not predict market direction. It only forecasts the sizes of potential price swings. Implied volatility is not the same as historical volatility, also known as realized volatility or actual volatility. Historical volatility measures past market changes in the price of the underlying asset. Trade with care. If you like our content, please feel free to support our page with a like, comment & subscribe for future educational ideas and trading setups.
FX_IDC:XAUUSDEducation
by financialflagship
54
Free climber Alex Honnold talks about riskAs you may have seen, TradingView’s got a new look and feel. As part of this rebrand, we’ve partnered with top athletes in the fields of climbing, skiing and adventuring, including legendary free soloing rock climber Alex Honnold. Alex knows a thing or two about risk – being the first person in the world to have ever free solo-climbed El Capitan in Yosemite Valley – so we thought we’d pick his brains and see if there’s anything we can learn from him about the topic. Alex, what does the word ‘risk’ mean to you? To me, risk means uncertainty. An unknown outcome. Or a chance that an unwanted outcome might occur. I guess "risk" feels like rolling the dice and seeing what happens. Which is something I try to avoid as much as possible in climbing. What was the first ‘big risk’ you remember taking in your climbing career? I grew up climbing in a climbing gym, so my first real "risks" were probably my first free solos outside, at a place called Lovers Leap. At the time it felt very exciting (scary) just because the whole experience was so new. I hadn't climbed outside much at that point so it felt like a huge adventure. What do you do to de-risk your climbing? One way to de-risk my climbing is to practice on similar climbs until I have a high degree of confidence that I can successfully do whatever I've set out for. If I have a proven track record on very similar climbs then I know that the risk can't be too high. I guess the other way to say that is just to practice until a climb feels easy. If it's well within my comfort zone then it's no longer very risky. How did you formulate what’s a comfortable level of risk for you? With climbing I normally just have a gut feeling – some things just feel really scary or make me feel uncomfortable. It's pretty unscientific, but it's the simplest way. If something makes me feel sick to think about then it's almost certainly too risky... How do you push that boundary safely (well, as safely as possible)? Oftentimes, if something feels too risky it can still get worked on further. I can minimize the risk through preparation or training. So for example, if a specific climb just feels really scary, I can break it down rationally and figure out which specific sections seem the scariest and then work on them specifically. By breaking a big climb down into pieces and working on each section in turn it can eventually start to feel more comfortable. Thanks Alex --- We have more mini-interviews with Alex and others heading down the pipe soon, so make sure to keep an eye on Editors’ Picks in the coming weeks.
NYSE:GMEEducation
by AlexHonnold
132