Trading BTC : Dunning Kruger Effect 🐸Hi Traders, Investors and Speculators 📈📉
Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. Daytime job - Math Teacher. 👩🏫
Have you ever wondered what it takes to be a good and profitable trader? Have you wondered how long it will take before you would have mastered the art f trading? Myself and Dunning Kruger will let you in on a little secret - the journey of pretty much every person that has ever started trading is explained in the chart above.
The Dunning-Kruger effect, in psychology, is a cognitive bias whereby people with limited knowledge (in a given intellectual or social domain) greatly overestimate their own knowledge or competence in that domain relative to objective criteria or to the performance of their peers or of people in general. This happens in trading all the time. In fact, we probably all started there if we're being honest .
So - What causes the Dunning-Kruger effect? Confidence is so highly prized that many people would rather pretend to be smart or skilled than risk looking inadequate and losing face. Even smart people can be affected by the Dunning-Kruger effect because having intelligence isn’t the same thing as learning and developing a specific skill. Many individuals mistakenly believe that their experience and skills in one particular area are transferable to another. Many people would describe themselves as above average in intelligence, humor, and a variety of skills. They can’t accurately judge their own competence, because they lack metacognition, or the ability to step back and examine oneself objectively. In fact, those who are the least skilled are also the most likely to overestimate their abilities. This also relates to their ability to judge how well they are doing their work, hobbies, etc.
The Dunning-Kruger effect results in what’s known as a double curse : Not only do people perform poorly, but they are not self-aware enough to judge themselves accurately—and are thus unlikely to learn and grow. So how can we prevent ourselves from falling into this trap? Here's a few things to keep in mind: To avoid falling prey to the Dunning-Kruger effect, you should honestly and routinely question your knowledge base and the conclusions you draw, rather than blindly accepting them. As David Dunning proposes, people can be their own devil’s advocates, by challenging themselves to probe how they might possibly be wrong. Individuals could also escape the trap by seeking others whose expertise can help cover their own blind spots, such as turning to a colleague or friend for advice or constructive criticism. Continuing to study a specific subject will also bring one’s capacity into a clearer focus.
💭Practice these habits to ultimately escape the double curse:
- Continuous learning. This will keep your mindset open to new possibilities, whilst increasing your knowledge over time.
- Pay attention to who's talking about what. Is the accountant talking about bodybuilding?
- Don't be overconfident. This is self explanatory.
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Educacion
10 LESSONS EVERY TRADER SHOULD LEARN!Embarking on the thrilling journey of trading? Gear up with these invaluable lessons to empower your trading expertise:
1. Knowledge Empowers: Embark on your trading journey equipped with knowledge as your most powerful weapon. Delve deep into the intricacies of the markets, understanding their nuances with precision. Grasp the ever-changing trends, and recognize that information is your ultimate asset in navigating the complex world of trading. Let your commitment to continuous learning be the cornerstone of your success in the dynamic realm of financial markets.
2. Rule Crafting Mastery: In the intricate landscape of trading, sculpting your trading rules with finesse is akin to crafting a masterpiece. These rules serve as more than just guidelines; they become your reliable compass, expertly navigating you away from the tumultuous journey of emotional roller coasters.
Precision in Craftsmanship:
Much like a skilled artisan meticulously shapes every detail of their creation, take the time to precision-craft your trading rules. Define each element with clarity, from entry and exit criteria to risk management parameters. The more precise and well-defined your rules, the more effectively they guide your trading decisions.
Guardians of Discipline:
Your trading rules stand as stalwart guardians of discipline in the chaotic realm of markets. They stand firm against impulsive decisions, emotional reactions, and the siren call of market noise. Embrace the discipline instilled by your rules, providing a structured framework for your trading activities.
Stability in Turbulent Waters:
In times of market turbulence, your well-defined rules act as pillars of stability. While market conditions may fluctuate, your rules remain steadfast, offering a reliable foundation for decision-making. This stability becomes particularly crucial when external factors attempt to sway your judgment.
Emotional Resilience:
Trading is a journey filled with emotional highs and lows. Your rules act as a buffer, shielding you from succumbing to the emotional roller coaster that often accompanies market fluctuations. By adhering to your carefully crafted rules, you cultivate emotional resilience, ensuring that your decisions are rooted in strategy rather than sentiment.
Adaptability and Evolution:
Just as a sculpture adapts to its surroundings, your trading rules should possess the flexibility to evolve with changing market conditions. Regularly review and refine your rules to ensure they remain aligned with your trading objectives. This adaptability allows you to navigate diverse market scenarios while maintaining the core principles that guide your trading journey.
Empowerment through Structure:
Sculpting your trading rules empowers you with a sense of structure and purpose. They provide a roadmap for your trading activities, reducing uncertainty and fostering confidence in your decision-making. This structured approach enables you to navigate the complexities of the market with greater clarity and purpose.
In essence, the art of sculpting your trading rules is an ongoing process of refinement and adaptation. As you hone this craft, your rules become a dynamic force, propelling you towards consistency and success in the ever-evolving world of trading.
3. Consistency Reigns: Consistency is the silent architect of success in the dynamic realm of trading. It is the steady hand that shapes your journey, ensuring that each step aligns with your plan and strategy. To harness the true power of consistency, one must commit to the principles of unwavering dedication and disciplined execution.
Foundation of Trust:
Consistency forms the bedrock of trust in trading. When you stick to your meticulously crafted plan, you build a foundation of reliability that both you and the market can depend on. Trust in your strategy, trust in your decisions, and trust in the cumulative impact of your consistent efforts.
Ripple Effects of Diligence:
Success in trading is not a sprint but a marathon. It is the cumulative result of diligent and consistent efforts over time. Each trade executed in alignment with your strategy sends ripples into the vast pool of market dynamics, contributing to the overall success you aim to achieve.
Guard Against Impulsivity:
In the face of market volatility and unpredictability, consistency acts as a shield against impulsive decision-making. When emotions run high and external pressures mount, the consistent trader remains anchored to their plan, immune to the erratic waves of market sentiment.
Compound Your Efforts:
Much like compound interest in the financial world, consistency in trading leads to the compounding of your efforts. Every trade executed according to plan contributes to the growth of your trading prowess. Over time, this compounding effect manifests as a formidable force, propelling you toward sustained success.
Cultivate Discipline:
Consistency and discipline are inseparable companions in the trader's journey. Staying true to your plan requires discipline in the face of temptations and distractions. The disciplined execution of your strategy reinforces the habit of consistency, creating a powerful synergy that defines your trading approach.
Resilience Amid Challenges:
Trading is a landscape peppered with challenges and uncertainties. Consistency serves as your resilient armor, helping you weather the storms of market fluctuations. When faced with setbacks or unexpected events, the consistent trader remains steadfast, ready to navigate challenges with poise.
Long-Term Vision:
Consistency encourages a long-term perspective in trading. It shifts the focus from short-term gains to the enduring impact of sustained efforts. By keeping your eyes on the long-term vision, you cultivate a patient and calculated approach that is less susceptible to the whims of momentary market fluctuations.
In essence, consistency is the thread that weaves the fabric of success in trading. It is the daily commitment, the unwavering adherence to principles, and the patient accumulation of experiences that ultimately lead to a prosperous and enduring trading journey.
4. Unique Style, Unique Triumph: The journey to mastery involves cultivating a unique trading style—one that harmonizes with your individual strengths and aligns seamlessly with your preferences. Embracing the philosophy that no one-size-fits-all, traders can unleash their full potential by crafting a distinctive approach tailored to their own characteristics.
Individuality in Approach:
Every trader is a unique amalgamation of skills, temperament, and experiences. Recognizing this individuality is the first step toward developing a personalized trading style. Instead of adhering rigidly to predefined strategies, traders can embrace the freedom to experiment and discover what resonates most with their personality.
Strengths as Guideposts:
Your strengths are valuable guideposts in shaping your trading style. If you excel at analyzing macroeconomic trends, a fundamental approach might be your forte. Alternatively, if technical analysis is your stronghold, a chart-centric strategy could be your chosen path. By aligning your style with your strengths, you enhance your ability to make informed decisions.
Preferences as Pillars:
Understanding your preferences is crucial in designing a trading style that stands the test of time. Whether it's the time of day you prefer to trade, the types of assets that resonate with you, or the risk tolerance you are comfortable with, incorporating these preferences into your style ensures a more sustainable and enjoyable trading experience.
Adaptability for Growth:
A distinctive trading style is not static; it evolves over time. Cultivating adaptability is a key component of successful trading. Markets change, circumstances shift, and embracing a style that can flex and adapt ensures resilience in the face of evolving market dynamics.
Risk Management Tailored to You:
Risk management is a cornerstone of trading success, and tailoring it to your individual circumstances is paramount. Your risk tolerance, financial goals, and overall portfolio strategy should seamlessly integrate with your trading style. This personalized approach ensures that risk is managed in a way that aligns with your unique situation.
Psychological Harmony:
Trading is as much a psychological endeavor as it is a technical one. Your trading style should foster psychological harmony rather than induce stress. By aligning your approach with your psychological makeup, you create an environment where you can navigate the emotional highs and lows of trading more effectively.
Continuous Refinement:
A distinctive trading style is a work in progress. Continuous refinement based on self-reflection, performance analysis, and market feedback is essential. Traders should view their style as a living entity that grows, adapts, and refines itself over time, always in pursuit of optimal performance.
5. Safeguard Your Capital: Your capital is the lifeblood of your trading journey—a precious treasure that demands vigilant protection. Just as a skilled captain safeguards their ship in tumultuous waters, you, as a trader, must ensure your accounts sail close to highs and navigate storms judiciously. Here's a deeper exploration of the significance of treating your capital with utmost care in the world of trading:
Capital as the Bedrock:
Think of your capital as the bedrock of your trading endeavors. It is the foundation upon which your success is built. Every decision you make, every trade you execute, has a direct impact on the health and growth of your capital. Recognizing its value is the first step towards responsible and sustainable trading.
Guardian of Financial Well-being:
Your capital is not merely a numerical figure on your trading platform; it represents your financial well-being. Guarding it vigilantly is akin to safeguarding your financial future. By adopting a vigilant stance, you protect yourself from significant setbacks and position your accounts for long-term growth.
Strategic Risk Management:
Protection begins with strategic risk management. Define your risk tolerance, set stop-loss orders, and establish a risk-reward ratio that aligns with your overall trading strategy. These measures act as the shields that safeguard your capital from the inherent uncertainties of the market.
Weathering the Storms:
In the dynamic world of trading, storms are inevitable. Market fluctuations, unexpected news events, and sudden shifts in sentiment can create turbulent conditions. Your ability to navigate these storms judiciously—without exposing your capital to unnecessary risks—determines your resilience as a trader.
Learning from Losses:
Losses are an inherent part of trading, but treating them as valuable lessons rather than insurmountable failures is key. When a trade results in a loss, view it as an opportunity to learn and refine your approach. Analyze what went wrong, adjust your strategy if needed, and use these experiences to fortify your capital against future challenges.
Conservative Position Sizing:
The size of your positions plays a crucial role in capital protection. Adopt a conservative approach to position sizing, ensuring that no single trade has the potential to significantly erode your capital. Diversification and prudence in allocating your funds contribute to a robust defense mechanism.
Long-Term Sustainability:
Guarding your capital is not just about preserving it in the short term; it's about ensuring its long-term sustainability. A disciplined and vigilant approach to risk management, combined with a strategic outlook, contributes to the enduring health of your trading capital.
Psychological Well-being:
Beyond the numerical value, your capital has a profound impact on your psychological well-being as a trader. A well-protected capital fosters a sense of confidence, allowing you to approach the markets with a clear and focused mindset. Conversely, recklessness with capital can lead to stress and emotional turmoil.
6. Self-Sufficiency Leadership: Rely on your analysis, trust your instincts, and make decisions in harmony with your trading objectives. Stepping into the role of captain in the vast sea of financial markets requires a unique blend of skills, confidence, and strategic thinking. Here's a deeper exploration of what it means to assume the captaincy of your trading ship:
Navigation through Analysis:
As the captain of your trading ship, navigating the markets begins with thorough analysis. Equip yourself with the necessary tools and knowledge to read the market winds and currents. Technical analysis, fundamental analysis, and market sentiment become your navigational instruments, guiding you through the complexities of financial waters.
Instincts as the Compass:
While analysis provides a structured approach, your instincts act as the compass that helps you navigate uncharted territories. Trusting your gut feelings, honed through experience and observation, is an essential aspect of effective decision-making. The interplay between analysis and instincts forms the basis of a well-rounded captaincy.
Decision-Making Aligned with Objectives:
Every decision you make as a captain should be in harmony with your trading objectives. Define your goals, risk tolerance, and overarching strategy. This clarity becomes your navigational chart, ensuring that each course correction and strategic move contributes to the fulfillment of your trading mission.
Risk Management as Sails:
Just as sails harness the wind's energy to propel a ship forward, risk management harnesses market dynamics to drive your trading journey. Implementing effective risk management strategies, setting appropriate stop-loss orders, and diversifying your portfolio act as sails that propel your trading ship while safeguarding it from potential storms.
Adaptability in Changing Conditions:
Successful captains are adept at adapting to changing conditions, and the same holds true in trading. Markets are dynamic, and conditions can shift rapidly. As the captain of your ship, embrace adaptability. Be ready to adjust your sails, change course, or even anchor in turbulent times—all in pursuit of your trading objectives.
Leadership in the Face of Challenges:
Leadership is a hallmark of effective captains. In trading, this translates to maintaining composure in the face of challenges. Whether it's a series of losing trades, unexpected market events, or periods of heightened volatility, your leadership as a trader involves navigating challenges with resilience and a clear-headed approach.
Continuous Learning as Nautical Charts:
Nautical charts guide captains through unfamiliar waters, and continuous learning serves the same purpose in trading. Stay abreast of market trends, explore new strategies, and learn from both successes and setbacks. This ongoing learning process becomes your set of nautical charts, helping you navigate the ever-evolving landscape of financial markets.
Self-Reliance and Independence:
Captains are known for their self-reliance and independence, and these qualities are equally vital for traders. While seeking insights from others can be valuable, the ultimate responsibility for your trading decisions rests with you. Be self-reliant in your analysis, decisions, and overall approach to trading.
Charting Your Course with Discipline:
Discipline is the compass that ensures you stay on course. As the captain of your trading ship, maintain discipline in adhering to your trading plan, following risk management principles, and executing strategies with consistency. This disciplined approach helps you weather storms and stay on track toward your objectives.
Weathering the Storms with Resilience:
Every captain faces storms, and traders are no exception. Resilience in the face of adversity is a defining characteristic of successful captains. Understand that losses are part of the journey, and your resilience will determine how effectively you navigate through challenging periods.
7. Confidence: Confidence is not arrogance; it's the unwavering belief in your meticulously crafted plan. As a trader, staying the course is a testament to your commitment, especially when the markets throw unexpected challenges your way. Let's delve deeper into the significance of confidence and steadfastness in the world of trading:
Crafting a Meticulous Plan:
The foundation of confidence lies in the creation of a meticulous trading plan. This plan is not hastily put together but is a result of careful consideration, analysis, and strategic thinking. It encompasses your trading goals, risk tolerance, preferred strategies, and a well-defined approach to various market scenarios.
Belief in Well-Thought-Out Strategies:
Confidence is rooted in the belief that your strategies are well-thought-out and backed by a thorough understanding of the markets. Whether you're engaged in technical analysis, fundamental analysis, or a combination of both, the confidence in your chosen methodologies becomes the driving force behind your trading decisions.
Staying the Course Amid Challenges:
Markets are dynamic, and unexpected challenges are inevitable. It's during these challenging times that the thin line between confidence and arrogance becomes evident. Confidence allows you to stay the course, sticking to your plan even when faced with adversity. It's a measured and composed response to market fluctuations, rather than a reckless insistence on a predetermined path.
Learning from Setbacks:
Confidence doesn't mean immunity to setbacks; instead, it involves the resilience to learn from them. Every trade, whether successful or not, is a lesson. Confident traders view setbacks as opportunities to refine their strategies, enhance their skills, and adapt to changing market conditions. This continuous learning process is an integral part of maintaining confidence over the long term.
Adapting to Market Dynamics:
Confidence should coexist with adaptability. Markets evolve, and successful traders are those who can adapt to changing dynamics. This doesn't imply a wavering commitment to your plan but a strategic adjustment when market conditions necessitate it. The ability to adapt showcases a confident, yet pragmatic, approach to trading.
Avoiding Complacency:
Confidence should not be mistaken for complacency. Complacency can lead to overlooking market nuances or becoming resistant to adjusting strategies. Confident traders remain vigilant, continuously reassessing market conditions and ensuring that their trading plan is aligned with the current landscape.
Respecting Risk Management Principles:
One of the hallmarks of a confident trader is the adherence to risk management principles. Confidence doesn't translate to reckless risk-taking; instead, it involves a disciplined approach to managing risk. This includes setting appropriate stop-loss orders, diversifying portfolios, and ensuring that each trade aligns with overall risk tolerance.
Balancing Conviction and Open-mindedness:
Confident traders balance conviction with open-mindedness. While you may have strong convictions based on your analysis and plan, remaining open to alternative viewpoints and adjusting your approach when necessary is a sign of adaptability and intellectual humility.
Building Confidence Over Time:
Confidence is not an overnight achievement but a trait built over time through experience, learning, and consistent application of sound trading principles. As you witness the positive outcomes of your well-executed plan, your confidence naturally grows, reinforcing your ability to navigate the complexities of the financial markets.
In conclusion, confidence in trading is a delicate equilibrium between self-assurance and a humble acknowledgment of the dynamic nature of markets. It's about crafting a meticulous plan, staying the course amid challenges, learning from setbacks, and adapting to market dynamics. True confidence in trading is a journey, and each successful trade becomes a milestone, contributing to the development of a seasoned and confident trader.
8. Record Wins and Losses: Every trade is a valuable lesson in the journey of a trader. Maintaining a meticulous record, analyzing both wins and losses, and extracting insights from each experience are crucial aspects of the continuous evolution of your trading skills. Let's delve into the significance of treating every trade as a learning opportunity:
Lesson in Every Trade:
Approaching every trade with a mindset of learning transforms each transaction into a potential lesson. Whether a trade results in a profit or a loss, there are insights to be gained. Successful traders view their trades as part of an ongoing learning process rather than isolated events.
Meticulous Record-Keeping:
Keeping a detailed record of each trade is akin to creating a trader's journal. This journal becomes a repository of crucial information, including entry and exit points, the rationale behind each trade, market conditions, and any unexpected developments. This historical record serves as a guide for future decision-making.
Insights from Wins:
Analyzing winning trades provides insights into the effectiveness of your strategies. What worked well? Was it the result of technical analysis, a keen understanding of market fundamentals, or a combination of factors? Understanding the components of successful trades allows you to replicate positive outcomes.
Learning from Losses:
Losses, while inevitable in trading, offer some of the most valuable lessons. Analyzing losing trades helps identify areas for improvement. Was there a flaw in the analysis, a misjudgment of market conditions, or a deviation from the trading plan? Learning from losses is essential for refining strategies and minimizing future errors.
Evolving Trading Skills:
The cumulative effect of learning from each trade is the evolution of your trading skills. As you glean insights from both successes and failures, you become a more seasoned and resilient trader. Continuous learning ensures that you adapt to changing market dynamics and refine your approach over time.
Identifying Patterns and Trends:
By maintaining a comprehensive record, you can identify patterns and trends in your trading behavior. Recognizing recurrent themes, whether positive or negative, allows you to consciously reinforce successful strategies and address areas that may need improvement. This self-awareness contributes to long-term success.
Improving Risk Management:
Analyzing past trades aids in refining your risk management approach. Understanding how different risk levels impact overall portfolio performance helps in setting appropriate stop-loss orders, position sizes, and overall risk tolerance. Effective risk management is a cornerstone of successful trading.
Enhancing Decision-Making:
The insights gained from analyzing past trades enhance your decision-making process. This is particularly crucial in moments of uncertainty or when faced with similar market conditions. A well-documented trading history serves as a reference point, providing guidance and confidence in decision-making.
Adapting to Market Changes:
Markets are dynamic, and strategies that were effective in the past may need adjustments over time. Learning from each trade allows you to adapt to changing market conditions, ensuring that your trading approach remains relevant and effective in different scenarios.
Cultivating a Growth Mindset:
Approaching trading with a mindset of continuous improvement fosters a growth-oriented perspective. Embracing the learning opportunities presented by each trade contributes to personal and professional growth as a trader.
In conclusion, every trade is a chapter in the story of a trader's journey. Keeping a detailed record, extracting insights from wins and losses, and consciously applying these lessons contribute to the continuous evolution of trading skills. By treating each trade as a valuable learning opportunity, you lay the foundation for long-term success in the dynamic and challenging world of financial markets.
9. Defend Your Success: Embrace a defensive trading stance, strategically executing trades only when market conditions align seamlessly with your established strategy. Safeguard your gains like a fortress, adopting a protective approach to secure your financial interests. Let's delve into the significance of adopting a defensive trading stance:
Strategic Decision-Making:
A defensive trading stance involves strategic decision-making based on a thorough analysis of market conditions. Rather than entering trades impulsively, traders assess various factors, including technical indicators, fundamental data, and overall market sentiment. This methodical approach helps in making well-informed decisions aligned with the trading strategy.
Risk Mitigation:
One of the primary goals of a defensive trading stance is risk mitigation. Traders carefully evaluate potential risks associated with each trade and implement risk management techniques to minimize adverse impacts. Setting appropriate stop-loss orders, diversifying portfolios, and managing position sizes are integral components of this risk mitigation strategy.
Preservation of Gains:
A defensive trading stance prioritizes the preservation of gains achieved through successful trades. Traders are cautious not to jeopardize accumulated profits by exposing themselves to unnecessary risks. Implementing effective exit strategies and securing profits at opportune moments contribute to the overall goal of wealth preservation.
Discipline and Patience:
Defensive trading requires discipline and patience. Traders resist the urge to chase trends impulsively or engage in speculative activities. Instead, they patiently wait for market conditions that align with their predefined criteria, fostering a disciplined approach to trading.
Adaptation to Market Conditions:
Markets are dynamic, and a defensive trading stance acknowledges the need to adapt to changing conditions. Traders are flexible and adjust their strategies based on evolving market trends, economic developments, and geopolitical events. This adaptability is crucial for long-term success.
Avoidance of Emotional Reactions:
Emotions can be a significant factor in trading decisions. A defensive stance involves avoiding emotional reactions to market fluctuations. Traders remain objective and stick to their predetermined strategies, mitigating the impact of fear, greed, or impulsivity on their decision-making process.
Focus on Consistency:
Consistency is a key element of a defensive trading approach. Traders aim for a steady and sustainable performance over time rather than seeking high-risk, high-reward scenarios. By focusing on consistency, traders reduce the likelihood of significant losses and contribute to long-term financial stability.
Risk-Reward Ratio:
A defensive trading stance emphasizes maintaining a favorable risk-reward ratio in each trade. Traders assess the potential rewards against the associated risks, ensuring that potential losses are proportionate to the anticipated gains. This meticulous evaluation enhances overall risk management.
Prevent Overtrading:
Overtrading can erode profits and expose traders to unnecessary risks. A defensive trading stance involves refraining from excessive trading, especially during periods of heightened market volatility. Traders carefully select trades that align with their strategy, preventing the negative consequences of overtrading.
Continuous Learning and Improvement:
A defensive trading stance fosters a mindset of continuous learning and improvement. Traders regularly assess their strategies, analyze past trades, and identify areas for enhancement. This commitment to ongoing improvement contributes to the refinement of trading skills over time.
In conclusion, adopting a defensive trading stance is a strategic and disciplined approach that prioritizes risk mitigation, wealth preservation, and long-term consistency. Traders embracing this mindset navigate the dynamic financial markets with a focus on making informed, prudent decisions that contribute to sustained success in the complex world of trading.
10: Lifelong Learning: The market is a dynamic force. Stay hungry for knowledge, embrace change, and perpetually evolve. Staying ahead in the market is intertwined with personal and professional growth. Continuous learning contributes to the development of a growth mindset, where challenges are viewed as opportunities to learn and improve. This mindset enables individuals to adapt, innovate, and excel in the dynamic landscape of financial markets.
In conclusion, the mantra of staying hungry for knowledge, embracing change, and perpetually evolving is foundational for success in the dynamic realm of financial markets. Continuous learning is not merely a strategy; it is a mindset that positions individuals to thrive amidst market complexities, seize opportunities, and navigate challenges with resilience and expertise.Continuous learning is the key to staying ahead!
#PATIENCEHello traders, today we will talk about patience
Patience is the key to the best trades.
#Plan your trade.
#Do your research.
#Wait for the perfect entry
And many more but only patience will allow this process to unfold.
It's crucial to develop patience as a crypto trader. It's simple to fall for the hype surrounding quick earnings and instant delight. However, making snap judgments can result in losses.
By exercising patience, traders can track market patterns, examine the market's behavior, and come to wise conclusions. The long-term advantages of this strategy may be substantial.
Patience also enables traders to avoid emotional choices that could be harmful to the health of their portfolios, such as panic purchasing or selling.
Additionally, the volatility of the cryptocurrency market is well-known. Prices can change quickly, and crypto assets can lose or gain more than 50% of their value in a matter of days or even hours. Having patience allows traders to weather the market's ups and downs without making snap decisions.
Finally, traders can choose superior risk management strategies by exercising patience. Before making a choice, it enables them to conduct their due diligence and reduce their exposure to any damages.
Conclusion: Having patience can help traders succeed when trading cryptocurrencies. They are able to make wise choices and steer clear of costly errors thanks to it. The saying "slow and steady wins the race" is true.
It’s okay to wait… and wait… and wait for the exact moment to make your move.
Play the long game.
Never stop learning
I would also love to know your charts and views in the comment section.
Thank you
Eduusdt Expecting This Eduusdt
Eduusdt faced faced rejection here on first attempt price is going to retest the resistance level again I am expecting again rejection
Personal opinion not financial advice
Dyor
📈 What Are the 10 Fatal Mistakes Traders Make 📉Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. It is important to know that no matter how experienced you are, mistakes will be part of the trading process. That’s why you should be prepared to expect them and if possible not make them. Easier said than done you would say and you will be completely right. That is why I have compiled a list of trading mistakes that you should be trying to avoid. Real-life trading will show you how “easy” that could be.
1) Trading without having a predefined trading plan
The first fatal trading mistake that traders make is trading with no plan. Having a written predefined trading plan will help you for two reasons. Trading depends on several aspects, which include the situation in the markets around the world, the status of overseas markets, the status of index futures such as Nasdaq 100 exchange-traded funds. Considering index futures is a wise option for evaluating the overall market conditions.
Make a to-do list and build a habit of researching the market before calling your shots. This will not only keep you from taking unnecessary risks, but it will also minimize your chances of losing money.
2) Over-leveraging
Over-leveraging is the second mistake of “what are the 10 fatal mistakes traders make”. Over-leveraging is a two-edged sword. In a winning streak, it could be your best friend, but when the trend changes, it becomes the greatest enemy. Recent talks about banning leverage higher than 1:50 for experienced and 1:25 for new traders in the UK have been a result of a lot of traders losing their money too fast. Whether it will happen next year or not is a matter of time for us to see. This is good news for most inexperienced traders because it will somehow limit their exposure. It will allow them to follow their money management rules easier. For greedier and more impatient traders, this is terrible news. Fortunately, this might lead to a better result in their performance in the long term, as well.
Over-leveraging is a dangerous way to believe you can make more money quicker. A lot of traders are misled into this way of thinking and end up losing all their money in a short period of time. Some brokers are offering insane amounts of leverage (like 1:2000) that can lead to nothing more than oblivion. Therefore, one needs to be extremely careful when selecting those levels and the brokers that represent them. That’s why diversification among different brokers is probably the best strategy.
3) Staying glued to the screen
a) Set entry rules
Computer systems are more effective for the purpose of trading because they don’t have feelings about the things that go into the trading environment and they are neither emotionally attached to the factors that are in one way or the other related to trading. Moreover, computers are capable of doing more at a time as compared to mechanical traders. This is one of the several reasons that more than 50% of all trades that occur on the New York Stock Exchange are computer-program generated.
A typical entry rule could be put in a sentence like this: “If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here.” Computers are more rational when it comes to taking quick decisions following a set of rules. No matter how experienced traders are, sometimes they tend to be hesitating in taking a decision no matter what their rules state.
b) Set exit rules
Normally, traders put 90% of their efforts into looking for buy signals, but they never pay attention to when to exit. At times, it is difficult to close a losing trade, but it is definitely wiser to take a small loss and continue looking for a new opportunity.
Professional traders lose a lot of trades each day, but they manage their money and limit their losses, which leads to a profitable trading statement for them.
Prior to entering a trade, you should be aware of your exits. There are at least two for every trade. First, where is your stop loss if the trade goes against you? This level must be written down. Mental stops don’t count. The second level is your profit target. Once you reach there, sell a portion of your trade and you can move your stop loss on the rest of your position to break even if you wish. As discussed above, never risk more than a set percentage of your portfolio on any trade.
4) Trying to get even or being too impatient
What are the 10 fatal mistakes traders make? Rule number 4 is patience. Patience in FOREX trading eventually pays off as it allows you to sit back a bit and wait for the right trading setup. Most traders are too eager to jump in and trade whenever any opportunity arises. This is probably due to our human nature and the eagerness to make a “quick buck”. But if there is one thing that ensures a high probability of winning, it is having the patience to grasp all the necessary information before you trade. This apparently will take time as there are many factors involved in it, such as the forming of trends, trend corrections, highs, and lows. Impatience to look at these matters could result in loss of money. It could be helpful sometimes to take a break and allow oneself to have the time to look at the bigger picture, instead of focusing too much on one aspect. Remember that a single transaction might resonate in a series of future losses if executed at the wrong moment. It takes time and patience to wait for the market correction before you commit to a trade.
BUT IT TAKES TIME…Some traders fail to realize that being successful will take time. They often fall prey to their own impatience in the hope of earning fast money. It could be a rough environment, and charts might be hard to read, so it is wise at times to step back in order to avoid costly mistakes. Don’t rush things out, or try to enter a trade at all costs by just following your gut. The market could be quite tricky and often does send out the wrong signals. Wait patiently for the best opportunities to align themselves and then act mercilessly.
5) Ignoring the trend
“The trend is my friend“- another cliche sentence, which has helped me stay on the right side of the market for as long as I am a trader. If you think about trading the way I do, it could be a boring business, but at least one that makes money. I am not really interested in quick returns. I am not interested in penny stocks. I am not interested in the most popular trades that everyone is talking about. I like to do my own analysis. The more boring a trade looks, the better for me the trade is. Always consider the trend before placing the trade!
6) Having a bullish/bearish bias
Folk wisdom says that if you throw a frog in boiling water, it will promptly jump out of it. But if you put the frog in lukewarm water and then slowly heat the water, by the time the frog realizes that the water has become boiling, it will already be too late. Studies of decision-making have proven that people are more likely to accept ethical lapses when they occur in several small steps than when they occur in one large leap. This statement also explains nicely the unfortunate process of unprofitable trading. Once you are in a losing position, you don’t realize if it slowly accumulates into a big loss. You have your own bias and it might lead you into obscurity. That is why one of the most important elements of successful trading is objectivity. It is also one of the hardest elements of mastering the field of trading. Inattentional blindness is definitely not helpful to human psychology and when it comes to trading, it could be detrimental.
7) Little preparation or lack of strategy
Make sure that you close any unnecessary programs on your computer and reboot your computer before the day begins, this refreshes the cache and resident memory (RAM). Several trading systems allow you to set up the environment according to your needs, set it up in a way that allows for minimal distractions and helps you keep an eye on each in and out, alongside.
Keep in mind that a flaw in the trading system can be costly. Make sure you have valid proof that your trading strategy does return positive results on a consistent basis. Do not rush into trading before that.
8) Being too emotional
Trading the markets is like stepping into a battlefield- you need to be emotionally and psychologically prepared before entering the field, otherwise, you are stepping into a war zone without a sword in your hand. Make sure you have checked three things before you start trading: 1)you are calm, 2)you had a good night’s sleep, and 3) you are up for a challenge.
Having a positive attitude towards trading is extremely crucial. If you are angry, preoccupied, or hung over then you are at a bigger risk of losing. Make sure you are completely relaxed before you step into the market, even if you have to take yoga classes, it is totally worth it.
9) Lacking money management skills
Rule number 9 of the “What are the 10 fatal mistakes traders make” list is money management. Risking between 1% to 2% of your portfolio on a single trade is the best way to go. Even if you lose while betting on that amount you will be capable enough to trade some other day and make up for your losses.
The amount of risk a trader can take is the amount he thinks he will be able to get back the next day. It is a wise option to start with a smaller amount and slowly and gradually increase the percentage. You can come back to point number 2 “Over-leveraging” and read it again. Having the right money management skills is probably one of the most important traits of a profitable trader. And of course- it is one of the most common mistakes among the losing traders.
10) Lack of record keeping
Keeping records is key to being successful at trading. If you win a trade, you should note down the efforts and the reasons that pulled you towards the trade. If you lose a trade, you should keep a record of why that happened in order to avoid making the same mistakes in the future.
Note down details such as targets, the exit, and entry of each trade, the time, support and resistance levels, daily opening range, market open and close for the day, and record comments about why you made the trade and lessons learned.
You should save your trading records so that you can go back and analyze the profit or loss for a particular system, draw-downs (which are amounts lost per trade using a trading system), average time per trade (in order to calculate trade efficiency), and other important factors. Remember, this is a serious business and you are the accountant.
CONCLUSION:
What are the 10 fatal mistakes traders make?? Successful paper trading does not ensure that you will have success when you start trading real money and emotions come into play. Successful paper trading does give the trader confidence that the system they are going to use actually works. Deciding on a system is less important than gaining enough skills so that you are able to make trades without second-guessing or doubting the decision.
There is no way to guarantee that a trade will return profits. This is the actual beauty of trading and being consistent is based on a trader’s skill set and his/her eagerness to improve. Keep in mind winning without losing does not exist in the world of trading. Professional traders know that the odds are in their favor before entering a trade. It is a continuous process of making more profits and cutting down losses which might not ensure a win every time, but it wins the war. Traders or investors who don’t believe in this adage are more viable to making losses.
Traders who win consistently treat trading as a business. While it’s not a guarantee that you will make money, having a plan is crucial if you want to become consistently successful and survive in the trading battle.
5 LESSONS from the Bear MarketHi Traders, Investors and Speculators 📈📉
Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. Daytime job - Math Teacher. 👩🏫
Bearish markets are a normal part of the economic cycle, but even after years and years of repeating processes and patterns, it can still be hard to embrace.
The real value of a bear market may be that it gives investors the opportunity to gear up for the next cycle, in other words to accumulate and buy in cheap. It also helps you see the importance of managing your risk and diversification. For example - let's say you've invested 100% of your free cash into Bitcoin. IF Bitcoin were to trade sideways or lower for a longer period, lets say months, you have no capital left to invest in other potential opportunities. You are also missing out on rallies that may be happening across other markets. Your portion of diversification is definitely dependent on your initial capital investment, but try to diversify as far as your capital allows.
For savvy investors, a bear market also creates a period for looking beyond emotional headlines and studying the hard facts — facts that can ultimately place them in a position to take advantage of coming opportunities. Periods of falling prices are a natural part of investing in the stock market. Bear markets follow bull markets, and vice versa. They are considered the “ebb and flow” of wealth accumulation.
Now, let's take a look at 5 Things YOU should remember during the Bear Market :
❗ Periods of falling prices are a common part of investing / speculating
❗ An investment’s value will be greatly influenced by fundamental factors, and sometimes fundamental factors is enough to create a bullish or bearish market for that assets and related assets
❗ Diversification , (even though it does not protect anyone against losses), often provides the safest haven against the ebb and flow of fluctuating markets
❗ Invest over time, rather than make single lump-sum purchases. In other words, falling prices are the friends of dollar cost averaging investors
❗ Take a long-term view when investing in the stock market. Short-term fluctuations are natural. Try to invest in projects that are undervalued , rather than jumping in whilst a coin is in the middle of a parabolic rally.
Check out this idea on ETH that covers dollar-cost-averaging:
Remember that you’ll be bombarded with all kinds of economic information during both bear and bull markets. There will be reports, for example, about inflation, interest rates, and unemployment figures that may encourage you to either give up on the market or invest in it. To avoid being lured to either extreme, develop a financial strategy that accounts for risks you find comfortable. Then trust yourself and stick with the plan.
_______________________
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CryptoCheck
SMC Education - Trendline Liquidity..!This Content is for Education Purpose only.!
Smart Money Concept ( Trendline Liquidity ) as I mentioned in the Chart.!
Keep Supporting LIKE, COMMENT And FOLLOW.!
Thank You.!
Unstoppable TradersBeing a profitable distance trader is not easy. This requires discipline, a lot of patience and passion. In addition, you need to have certain habits that most people simply don't have.
All traders are different in some ways, everyone has their own trading strategy, but there is something that unites all successful traders.
Let's talk about these general features.
1. One deal is not the end
When the deal is already closed, you can start experiencing different feelings and emotions from happiness to grief and depression.
Newcomers drown in this wave of emotions and eventually lose control and money.
Professionals act differently. Each transaction is a common thing for them, while they do not experience a storm of emotions that can lead a beginner astray.
If you internalize the following ideas, it will be easier for you to deal with emotions:
• Success in trading is not one day, it is several months of trading and several hundred transactions. To understand how good you are, you have to trade following your strategy for a long enough time. Sometimes a year is not enough to understand that a trader is ready, and even more so one day is not enough. Therefore, prepare for a long journey and do not overreact to one losing trade.
• Risk management is very important. Before opening a deal, calculate how much you are willing to lose and not go crazy because of this loss. Losses should not lead you astray. You have to stay calm and follow the rules. Also, don't let profitable positions drive you crazy. In any situation, you should be calm and prudent.
2. They are confident, but not too irrational
Being confident in yourself is very important. A trader's confidence in himself and in his trading strategy comes with time. To do this, you need to learn how to clearly follow the rules of trading, be disciplined and eventually profit will come to you.
Confidence should manifest itself most of all in those moments when you have received a series of losing trades. This is inevitable and only the best are able to pass such tests with dignity. Professionals do not change the rules in the same situations, do not change the method of trading and coolly move on.
A confident trader does not give in to emotions, he knows exactly what he is looking for in the market and is ready to wait, ready to endure.
You should feel invulnerable, the market no longer has power over you.
3. Wait professionally
Professionals differ not only in the ability to trade, but also in the ability to wait. In the market, 80% of the time you will have to wait for your signal. The best traders are ready to wait for their highly profitable chance for several days, or even weeks. And even if they lose some money after a long wait, they are ready to wait again.
Newcomers suffer because they want to be in the market all the time. This is a big mistake. Most of the time, the market is unpredictable, especially for a beginner. Leave the sick desire to constantly be in the market, constantly open new positions. Learn to wait like the best traders.
In order to trade with a preponderance in your favor, you must patiently wait for obvious trading setups, and if they do not appear for several days, then you should not enter the market just like that. This time is worth spending on some other job or hobby. Unstoppable traders don't worry about not trading for days or even weeks, waiting for the next good setup to enter the market.
4. Good sleep is the key to success
Sleep is important not only for the trader, sleep is important for everyone. Without healthy sleep, you will not be able to be calm and calculating for a long time.
In addition, if you trade properly, namely:
• do not risk too much capital,
• do not open unnecessary positions,
• follow your trading plan,
• with respect to all of the above, observe discipline,
then you will not have any problems sleeping during real trading, since you will have nothing to worry about.
Well, if you sit in front of the monitor every day, anxiously watching the price movement, at a time when you should be sleeping, sooner or later this will lead to a complete loss of money.
Follow the strategy, don't chase the market, rest and come back full of energy.
5. Continuous training
All traders with experience know that it is difficult to trade because the market is volatile, and it is even more difficult to work on yourself, on your own discipline.
There is a good feature of trading – it helps you understand yourself. It's unpleasant, but it's definitely useful. This work is difficult, but the result is beautiful.
Thus, to become an unstoppable trader, you must know yourself and improve yourself in addition to your trading strategy. You will learn how to trade in the market and improve as long as you continue to trade. But you have to start doing it right now in order to start building your foundation for the right approach to your trading.
If you decide to go into battle, accept all of the above and your path will be much easier.
Good luck!
Bitcoin dominance BTC.D #TheCryptoCityI see BTC dominance decreasing in the daily timeframe it can take a little bounce from support and go further down to fil FVG (fair value gap), order block and there is also a POC.
You can see on the chart clearly RSI is oversold. It is possible after a retest at 44.46% BTC.D will move upwards to the next resistance at 45.72%. This will bleed BTC and ALTs prices.
I have marked the BTC dominance area at 41.90%, if BTC.D reaches this level this is good for BTC and ALTs.
This is my idea. I have tried my best to bring the best possible outcome to this chart, Do not consider it FINANCIAL ADVICE.
So let's see how the market reacts in the coming days.
This chart is likely to help you in making better trade decisions if it did consider upvoting this chart.
I would also love to know your charts and views in the comment section.
I am not a market maker I could be wrong.
Everything is on the chart.
Thank you
DXY DOLLAR INDEX #TheCryptoCity$DXY DOLLAR INDEX
Break down below the trendline on the 4 Hours time frame. It's getting ready to take a plunge
This is an extremely good sign for #Bitcoin and #Altcoins
EURUSD PLAY!In this chart we see EU setting up nicely for a short.
Again price only moves to fill #Imbalances and #Liquidity
I see Price continuing to fill that liquidity and continue for the short.
Happy Trading Family!
BTC/USDT Analysis #TheCryptoCityBTC/USDT Analysis
This Is My Idea I Could Be Wrong
I'm Not A market Maker
Everything Is On The Chart.
XZT/USDT Analysis #TheCryptoCityXZT/USDT
Since October XTZ is in a downtrend and making
the perfect channel. The market is very volatile and
unpredictable these days. But it is making good
support at 2.9 and if makes good support here and
breaks the channel resistance and structure then you can take
benefit from this coin.
Everything Is On The Chart.
Always Manage Your Risk
I am Not A Financial Advisor Do Your Own Research.
Every Thing Depends On BTC Movement
#TheCryptoCity #XZT
we are not market makers :)
FLAG and PENNANTHello everyone!
I want to tell you a little about such figures as Flag and Pennant.
These patterns are quite common on the chart, so every trader should know how to trade them.
What does the flag look like?
After a strong movement (flagpole), the price begins to correct in the form of a rectangle, which corrects against the previous trend (flag).
What does a pennant look like?
Just like a flag, a pennant appears after a strong trend.
After that, the correction begins in the form of a narrowing triangle.
How to trade the flag?
A bullish flag is a flag that has formed after a strong upward movement.
The entry point for a bullish flag will be a breakout and anchoring the resistance of the rectangle (flag).
The stop is placed at the low of the flag.
To calculate a possible profit target, it is worth measuring the flagpole of the flag - this value superimposed above the breakout will be the target for your profit.
How to trade a pennant?
A bullish pennant forms after a strong bullish move.
To find an entry point, you need to wait until the resistance of the triangle is broken and the price fixes above the level.
Stop loss is usually placed below the nearest minimum.
To get an approximate profit target, you need to measure the length of the bullish move in front of the triangle - this value will be your target above the break.
Conclusion
These patterns are very common and give an excellent risk / reward ratio, usually greater than 1: 3.
With correct trading, the profit value will be even higher.
Do not forget that these shapes are continuation shapes.
And don't forget to set your stop loss.
Good luck to you!
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
✅ How to approach Trendline BreakoutsIt's a very simple strategy. It is more reliable the longer the timeframe.
1. Find a TREND LINE
2. Wait for the BREAKOUT
3. Buy while price is RETESTING the TrendLine
4. During LATERAL movements Keep in mind other indicatores such as RSI or other support lines.
5. Enjoy profits during the UPWARD movement (Take profits gradually during the upward move)
How to Use Fibonacci Retracement ? hello traders , today i'll talk abouut my favourite tools
the Fibonacci retracement tool is extremely useful and it help us to find the strong resistance and support area ( 0.618) .
How to use it :
Drawing Fibonacci retracement levels is a simple three-step process :
In an uptrend:
Step 1 – Identify the direction of the market: uptrend
Step 2 – Attach the Fibonacci retracement tool on the bottom and drag it to the right, all the way to the top
Step 3 – Monitor the three potential support levels: 0.236, 0.382 and 0.618
In a downtrend:
Step 1 - Identify the direction of the market: downtrend
Step 2 -Attach the Fibonacci retracement tool on the top and drag it to the right, all the way to the bottom
Step 3 Monitor the three potential resistance levels: 0.236, 0.382 and 0.618
In the next post, I will explain more about The golden ratio and how to use it in entering and exit .
for more educational ideas , signals and analysis follow us .
TYPES OF TRADING ORDERS AND HOW TO USE THEMPending orders
Somewhere you can find the term as "Deferred orders".
These are orders that will be filled in the future, once a certain condition is met.
Most often this condition is reaching a certain market price.
The most popular pending orders are Stop and Limit!
Both types of orders become market orders when the initially set price is reached.
The difference between them is that Stop Orders can be activated at a worse price than the set price, depending on market conditions.
Limit orders cannot be activated at a price lower than the set price, the price must be either equal to the set price or even more advantageous.
Depending on the purposes of the trade, different deferred orders are used.
A breakout of a level is traded with a Stop order
A pullback from a level is traded with Limit order.
The types of Pending Orders are:
Buy Limit;
Sell Limit;
Buy Stop;
Sell Stop;
OTO;
OCO;
and other.
Market order
This is an order where you enter a trade, regardless of buy or sell, which is executed at the current best price.
For example, if you want to buy GBP/USD, you click directly on the corresponding button and the trading platform automatically places the deal on the market.
When you click on the "Sell" or "Buy" button, you actually place a market order.
Keep in mind that depending on market conditions, there may be some difference between the price you see and the price at which the order will be executed.
Stop Forex orders - Buy Stop and Sell Stop
The Stop orders to enter a deal are different from the Stop Loss order to limit the loss!
Buy Stop order is used when you want to buy at a level higher than the current market price.
It is placed higher than the level at which the price is currently.
Sell Stop order is used when you want to sell at a level lower than the current market price.
It is set lower than the current price level.
For example, EUR/USD is currently trading at a price of 1.1860, you think that if it reaches a price of 1.1960 it will continue to move in an uptrend.
In this situation you have two options:
To sit in front of the screen waiting for price to reach 1,1960 so you can buy, or;
To place a Buy Stop order at the 1,1960 level.
However, if you think that the price will fall in the coming periods, instead of staying at the computer and wait for a convenient time to sell, you can place a Sell Stop order at a level lower than the current market price - on the chart 1.1760.
Limit Forex orders / Buy limit and Sell Limit
Buy Limit order is used when you want to buy at a level lower than the current market price.
It is set lower than the current price level.
Sell Limit order is used when you want to sell at a level higher than the current market price.
It is placed higher than the level at which the price is currently.
For example, EUR/USD is currently trading at a price of 1.1860, you think that if it reaches a price of 1.1960 it will bounce off the level and go into a downtrend.
In this situation you have two options:
To sit in front of the screen waiting for price to reach 1,1960 so you can sell, or;
To place a Sell Limit order at the 1,1960 level.
However, if you think that the price will fall in the following periods and then rise, instead of you sitting at the computer and wait for a convenient time to buy, you can place an order to buy a limit below the current market price - on chart 1,1760.
Above is a summary chart of the orders and where they are placed.
Let’s summarise:
Buy Limit - pending buy order placed at a price lower than the current one;
Buy Stop - pending buy order placed at a price higher than the current one;
Sell Limit - pending sell order placed at a price higher than the current one;
Sell Stop - pending sale order placed at a price higher than the current one;
OCO orders / One Cancels The Other
The OCO order is a combination of two orders to enter into a trade.
One order is placed above the current market price and the other below the current market price.
When one of the orders is reached, it is executed and the other one is automatically deleted from the trading platform.
For example, EUR/USD is currently trading at 1.1850.
You expect great volatility in the market and you do not want to miss the movement.
In this case you place an OCO Forex order at the level of 1.1880 (above the market price) in anticipation of an upside move and at the level of 1.1820 (below the market price) in case the price goes down.
When the market reaches 1.1880, you will buy EUR/USD at this level, and the order placed at 1.1820 will be deleted from the trading platform.
OTO orders / One Triggers The Other
OTO allows the trader to place two orders simultaneously, the second one being activated after the first one.
This type of order allows many different combinations.
For example, a buy order can be placed at a pre-set price, above the current one (Buy Stop) and a second order can be placed together with it to limit the loss from the buy order, in case the price goes in the opposite direction.
In this case, the loss limit order will only be activated if the buy order is activated.
The orders described so far are for entering into a trade, but you must also exit the trades.
This is done by using “Stop Loss” and “Take Profit”.
Trailing stop
Trailing stop is an order to limit the loss, which moves along with the market price.
It can be said that this is a moving Stop Loss.
And here is how to do it!
Suppose you want to buy GBP/USD at a price of 1.2820.
You place a trailing stop at a distance of 20 pips at a price of 1.2800.
When the price goes in your direction and reaches the level of 1.2840, then the trailing stop will move by 20 pips or at the level of the entrance to the transaction.
Then if the price reaches the level of 1.2860, then the trailing stop will move to the level of 1.2840.
Keep in mind that if the price returns from 1.2860 to 1.2850, the trailing stop will NOT go down to 1.2830, but it will remain at 1.2840.
If it was to move down back with the price, it makes no sense, because it will never be reached and will not be able to limit the loss of the deal.
And then you will find out first hand what Margin Call and Stop Out is!
Another important feature to keep in mind is that the trailing stop is only active if the trading platform is active.
If the platform is closed, then you do not have a Stop Loss order at all!
Conclusion
These are the most frequently used orders on the Forex market and they are totally enough, there is no need to complicate trading.
Before you start trading live, get familiar with the conditions of the broker regarding the orders.
Make sure that you understand them and that you can use them correctly.
The best teacher remains the practice, therefore, open a demo account and test the capabilities of the platform.
👍 Please support this tutorial with like and comment so we can help more people together.
Thank you in advance! 🙏
FLAG PATTERNS & PSYCHOLOGY BEHIND BULL AND BEAR FLAG FORMATIONSHi everyone and Good morning. Welcoming you back (after 18-week break)
Thanks for your like and supports.
This is Part 3 of my Technical Analysis series of CHART PATTERNS
BULL AND BEAR FLAGS
Now, for those meeting the words BULLS and BEARS for the first time, these are terms used to describe the buying and selling action of traders
BULLS generally refer to the price action of buyers as they drive Stock PRICES UP, while BEARS refer to the selling action of sellers as they drive stock PRICES DOWN.
For starters, let’s define what a Flag pattern is:
A flag pattern is a TREND CONTINUATION PATTERN . It is named a flag pattern because its formation resembles a flag on a flagpole.
The pole is usually the result of an almost VERTICAL RISE IN PRICE, and the flag part results from a PERIOD OF CONSOLIDATION
When the price breaks out of the consolidation range, it triggers the next move higher.
Flag patterns can either be BULLISH or BEARISH.
Follow me closely, as We will now look at BULL and BEAR Flags in turn:
BULL FLAGS
Bullish flag formations are found in stocks with STRONG UPTRENDS.
They look something like (sketch 1 on chart)
As can be seen on the sketch 1 chart above, the pattern starts with a STRONG, ALMOST VERTICAL price spike, that eventually start losing steam forming an orderly pullback where the highs and lows are parallel to each other forming the FLAG in the form of a tilted rectangle.
The tilted rectangle (flag) usually breaks to the upside resulting in another powerful move higher, usually measuring the length of the prior flag pole (Let’s consider the sketch 2 chart)
Now let’s look at BEAR FLAGS :
The bear flag is an upside-down version of the bull flag. It has the same structure as the bull flag but inverted. looks like sketch 3
As can be seen above, the flagpole forms from an ALMOST VERTICAL price drop, which is followed by a period of consolidation, with parallel upper and lower trendlines forming the flag.
A break of the support structure of the flag, results in another move lower, with the same length as the prior pole.
Just as with any Chart pattern, there is usually psychology behind its formation.
Let us look at the
PSYCHOLOGY BEHIND BULL AND BEAR FLAG FORMATIONS:
On bull flags, the bears (short sellers) get blindsided due to complacency as bulls (buyers) charge ahead with a strong breakout causing bears (short sellers) to either panic and cover their ‘shorts’; or add to their ‘short’ positions.
Once the stock is in the consolidation stage, the bears (short sellers) regain some confidence and they add to their ‘short’ positions with the expectation of a price drop; only to get trapped again when the price break to the upside causing short sellers to cover their ‘Shorts’ thereby driving prices even higher
Since some short-sellers from the initial flagpole run up may still be trapped, the second breakout forming through the flag can be even more extreme in terms of the angle and severity of price move.
That is precisely the psychology behind BULL FLAGS; and that same psychology applies on BEAR FLAGS, just in reverse.
Now let’s consider the sketch 4 on how we can make money from bull and bear flags:
On a bull flag, you typically want to enter a Long trade on a breakout to the upside. Take profit target should be the same length as the prior flagpole. Stop loss should be placed just below the broken resistance line, which will now be acting as support.
I will leave it here for this week, that’s all I had in store for you. Follow me And JOIN me again next week as we will be talking about another Chart Pattern that works.
Until then, here is to Profitable trading!
Most common mistakes in tradingHello my friends today i want to talk with you about most common mistakes in trading from my experience (any market but specially in crypto)
And after reading this i hope you will avoid them
1- Not Patient Enough :
I think this is one of top major reasons for failure in cryptomarket
Most newbies in this Field are thinking they will be rich in few days thats completely wrong ...Any old trader here will tell you how the patience will paid off
2- More Than You Can Afford To Lose :
only risk what you can afford to lose ...
more than that will lead to alot of mistakes and you may close your position after any small drop before reaching stoploss point and thats wrong my friends
3- Not Using Stoploss :
Stoploss is important but i recommend manual stoploss by candles closing not automatic one to avoid manipulation in market.. if you dont know difference between manual and automatic read my previous idea about it
4- Over Trading :
Alot of trades every day wont make more money ...instead, it will make you more stressful and staring at charts all day resulting in more mistakes
👉Fewer in numbers and higher in quality trades per week or even month are enough
sometimes best thing you can do is not trading at all when market is uncertain
5- Emotional Trading :
Both fear and greed play big role in the market movement
When you see most of people are greedy you should start taking profits partially ..and also try to avoid selling during panic sells
6- Revenge Trading :
Like using all wallet to buy one coin (all in) or doing high leverage postion to recover losses fast usually end in liqudation or big lose and leaving market completely
This market need you to be flexible
7- Ignoring Your First Plan
alot of very good plans and managements from start but you continusoly change it by listening to other random people opinions
trust in your self and trust in chart
no problem from taking advices from more experience people but you should trust in yourself first by have your own view and own plan
How many mistakes you find yourself doing it ...choose the number from above and tell us in comments
Reversal candles ( Basic)!Reversal candles ( Basic)!
1. Double Bar Low Higher Close ( DBLHC)
The DBLHC pattern consists of two candles.
The Lows of both candles need to be very close (within few pips).
The Close of the 2nd bar need to be Higher than the previous bar's high.
2. Double High Lower Close (DBHLC)
The DBHLC pattern consists of two candles.
The Highs of both candles need to be very close (within few pips).
The Close of the 2nd bar need to be lower than the previous bar's low.
3. Bearish Outside Vertical Bar (BEOVB)
The Bearish Outside Vertical Bar pattern consists of two candles.
The second candlestick is a bearish candlestick.
The second candlestick has a Higher High and a Lower Low than the first candlestick.
The Close of the second candle should be in the last third of the bar.
4. Bullish Outside Vertical Bar (BUOVB)
The Bullish Outside Vertical Bar pattern consists of two candles.
The second candlestick is a bullish candlestick.
The second candlestick has a Higher High and a Lower Low than the first candlestick.
The Close of the second candle should be in the last third of the bar
5. Pinbar
The significant Pin Bar pattern consists of one candlestick.
Unlike standard pin bar, the tail of the candlestick is bigger than its body and at least 3 times bigger than its nose.
Reversal candles ( Basic)!Reversal candles ( Basic)!
1. Double Bar Low Higher Close ( DBLHC)
The DBLHC pattern consists of two candles.
The Lows of both candles need to be very close (within few pips).
The Close of the 2nd bar need to be Higher than the previous bar's high.
2. Double High Lower Close (DBHLC)
The DBHLC pattern consists of two candles.
The Highs of both candles need to be very close (within few pips).
The Close of the 2nd bar need to be lower than the previous bar's low.
3. Bearish Outside Vertical Bar (BEOVB)
The Bearish Outside Vertical Bar pattern consists of two candles.
The second candlestick is a bearish candlestick.
The second candlestick has a Higher High and a Lower Low than the first candlestick.
The Close of the second candle should be in the last third of the bar.
4. Bullish Outside Vertical Bar (BUOVB)
The Bullish Outside Vertical Bar pattern consists of two candles.
The second candlestick is a bullish candlestick.
The second candlestick has a Higher High and a Lower Low than the first candlestick.
The Close of the second candle should be in the last third of the bar
5. Pinbar
The significant Pin Bar pattern consists of one candlestick.
Unlike standard pin bar, the tail of the candlestick is bigger than its body and at least 3 times bigger than its nose.
