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Fundamental Analysis

ORDER FLOW SIMPLIFIED✴️ What is Order flow in trading? In brief, it is the flow of trades of a major player. Order flow is searched for after liquidity has been captured or if the price enters the area of interest. Price is fractal and therefore the same areas of interest can be applied to different timeframes. The Order Flow trading method allows you to enter a trade even if you missed the original entry into the position. ✴️ How order flow is applied in trading A large market participant is able to create a zone of interest in any market, and when the price goes to this zone - it places a large flow of buy and sell orders to move the price in one or another desired direction. When the price reaches the area of interest, the large participant will start putting pressure with orders. For example, if the price comes to the sell zone of interest, a large player may start spamming sell orders, which will rebalance the orders and force the price to move in the desired direction. A trader who takes order flow into account is able to determine the direction in which the large player is pouring orders. This will allow you to enter trades in the direction of the current pressure of the large market participant, and reduce your risks. When the bearish order flow is working, the minimums are being reprinted. The situation is the opposite with a bullish order flow. ✴️ How the order flow works - So, the order flow is a manipulation of a large market participant for a position set and price movement in the desired direction. That is, we distinguish the entire momentum without pullbacks as order flow. - Very often a large player holds two trades simultaneously, one of which is a deceptive position in order to gather liquidity from the crowd. - It is difficult to enter from Order Flow point by point; it is much more effective to find an order block. - Price most often tests the Order Flow zone. - The Order Flow zone works only for one touch, you should remember that! You should not trade Order Flow when re-entering it, the efficiency will be much lower. - On higher timeframes, Order Flow looks like an order block. ✴️ How the order flow is formed To find a sell order flow, you need to check the following signs: - A structure has broken down, or there has been a liquidity grab - Liquidity has been taken - A new low has been formed, below the previous low. Confirmation of bearish order flow comes when the price touches the sell zone of interest, confirming the interest of a major market participant. Here's what to look out for to find bullish order flow: - The downward structure has been broken - Liquidity has been taken - A higher price high has been formed. In the case of a bearish confirmation, everything is exactly the same as with a bullish confirmation, only it is the other way around. When the price starts to come back after an unclosed trade of a big player and touches the bullish interest zone, leaving the order flow zone, this is the entry point. ✴️ Bearish Order Flow When a bearish order flow of a major market participant is functioning the price falls below the previous lows. During the correction we will be able to catch the entry point to buy, at the moment of liquidity refresh, when the price will recover to the orders of a large player. The price follows liquidity. Of course, it is possible that the structure will break and there will be no new lows, but statistically most often we will see movement in the past direction of the downtrend. Our goal with bearish order flow is to open smart short positions. Ideally, we should wait for a liquidity update and a test of the zone of interest. Just don't put stops too close, because close stops are often a delicious target for large market players. It is more reasonable to put a stop where the whole downtrend pattern will be broken for sure. A stop that is too close is likely to be hit by the price and you will take a loss. ✴️ Bullish Order Flow Bullish order flow occurs when asset prices rise and exceed previous highs. During correction periods, price will take liquidity off sellers. Our objective here is to catch the correction to the zone of interest to enter long positions as carefully as possible. Our priority is long trades after the test of the zone of interest and taking out the sellers' liquidity. The main thing, as in the previous case, is not to put a stop too close. Remember that stops right behind the zone will be a target for big players. According to market mechanics, large market participants need liquidity to fill their positions to one side or the other. If you want to enter a trade very precisely - it is worth paying attention to the zone of interest itself, for example, an imbalance or a order block. ✴️ Conclusions Order Flow is the traces of a major player on the price charts. When we retest from the money flow zone, we are waiting for a pullback from it in the direction of the major trend. It is more reasonable to enter pointwise from the order blocks because it is very difficult to put a short stop on the Order Flow zone and a long stop is not so favorable for us in the long term. Also, a good entry point can be an imbalance to buy or sell in imbalance points concentrated large aggregate demand or supply. The order flow in this situation will act as the main complementary indicator for entering a position.
Education
by DeGRAM
9
6 Quantifiable Trading Goals to KnowThere is one thing that will separate the winners from the losers. Knowing your numerical trading goals. When you have a back-tested and solid strategy, everything else becomes easier. You have the past and the potential future in your vision. And all you need to do is follow the rules and then keep them in check. To do this, you need to have written down your goals, drawn from your trading statistics and back-tested journals. This will give you the spine of your trading strategy and ultimately guide you on the path to sustainable profitability. There are many numbers to take in but I’m going to kickstart you with probably six of the most critical trading goals. This will help you set your own milestones for success. Number of Trades to Take in a Year (e.g., 120) You need to have some type of idea of the number of trades, you’ll execute in a year. This number can be derived from your trading strategy, time frame choice, risk tolerance, and market analysis. For instance, if you’re a swing trader focusing on weekly chart patterns and SMC, you might aim for 120 trades in a year. This equates to 10 trades per month. Maybe you want to take 60 trades with stocks, indices and commodities. Maybe you want to take another 60 trades between Forex and crypto. Make sure you have a rough number according to your stats, so you can keep on track. Number of Winners Winners and losers come with the game. So you need to identify the number of winning trades you intend to achieve in a year. Let’s say you’re aiming for a win rate of 62.5%. With the earlier goal of 120 trades in a year, you’re targeting approximately 75 winning trades (120 * 0.625). Number of Losers Losing trades are an inherent part of trading. You need to have an acceptable number of losing trades in mind. This will help you to manage risk effectively and maintain emotional equilibrium. In our example, if you’re aiming for 120 trades a year, you should look at taking around 45 losing trades. If 62.5% is your win rate then 37.5% is your losing rate (100% – 62.5%). Win Rate Your win rate represents the percentage of trades that yield profits. With a target win rate of 62.5%, this means you aim to close over half of your trades with a profit. Sure, you’re not going to bank 62.5% every week, month and year. You might have a 70% win rate one year. You might have a 55% win rate the next year. Remember, consistency is key here. But with consistency, you’ll find it’ll balance to around 62.5% win rate per year. Percentage Return Trading is relative. Doesn’t matter if you have a $10,000 (R200,000) or a $300,000 (R6,000,000) account. You need to think in percentages and not dollars. For example, if your starting capital is $10,000 and your goal is a 32% annual return, you’re targeting a profit of $3,200 (R64,000) by year-end (0.32 * $10,000). Expected Drawdown % Then we need to prepare for the drops. Drawdown refers to the reduction in your trading capital after a series of losing trades. When your portfolio goes from an all time high and takes a dip, that’s a drawdown. An expected drawdown of 20% means that you should be prepared for a decrease of up to $2,000 (R40,000) in your starting capital of $10,000 (R200,000) during the course of the year. It might come in May. It might last ‘till August. This will enable you to track your performance, manage risk effectively, and maintain focus on what truly matters. Remember consistency leads to long-term profitability.
JSE:J200Education
by Timonrosso
DOUBLE BOTTOM FORMATIONThis model is a W-shaped pattern. It is formed at the "bottom" of the market. It serves as a reversal model. When identifying a double bottom formation, look for price patterns that occur when a price has reached a support level twice and failed to break through it. For example, consider a chart with two distinct lows, with a trough in between. The price may then make a sudden upward movement, which would be followed by two more lows. More on this below: Set entry and exit points: Once the double bottom pattern has been identified, it's important to set entry and exit points. The entry point should be when the market breaks above the high between the two bottoms. The stop loss should be placed below the lower bottom and the take profit should be placed a few pips above the high between the two bottoms. There are 3 methods of entry on it. 1. On the breakout of the neck level. - The breaking candle should not be a candle of indecision, even if it closes above/below the neckline. The breakout candle should be without big spikes. 2. On a pullback to the broken neckline. - Signals from price action like (Pinbar, Inside Bar, PPR, etc.) should appear. Without them, in fact, just on the bounce from the level, you should not enter, there is a big risk. 3. On the 2nd peak level (the riskiest method). - Candlestick patterns or built-in price action formations should be formed. Built-in formations are the pattern that formed inside some more significant pattern. That is, we have a W-shaped pattern. The price makes the second peak and another pattern can be formed on this second peak. It can be 1-2-3 formation or Head and Shoulders, etc. Monitor the trade carefully. Monitor the trade closely and adjust the stop loss and take profits as necessary. If the double bottom pattern fails and the price breaks below the lower bottom, close the trade and re-evaluate the market. If the double bottom pattern fails, it is important to re-evaluate the market, because this could mean the end of the current trend.
Education
by UnknownUnicorn15614419
8
Timing Triumph:Unraveling the Art of the Straddle Forex StrategyIntroduction In the dynamic realm of forex trading, where market movements can be as unpredictable as they are enticing, traders often seek innovative strategies to capitalize on volatility. One such strategy that has garnered attention for its ability to thrive in uncertain market conditions is the Straddle Forex Strategy. This article delves into the intricacies of the Straddle Strategy, exploring its core principles, execution, benefits, and potential drawbacks. So...Sit back, relax, and enjoy this enlightening article about the incredible Straddle Strategy. Remember to show your support by hitting the LIKE button and subscribing! Your journey into the world of the FOREXN1 Strategy is about to begin. The Essence of the Straddle Strategy The Straddle Forex Strategy is a versatile approach designed to exploit significant price movements, regardless of their direction, during times of heightened market uncertainty. It operates on the foundation that major news releases, economic data announcements, or geopolitical events can trigger substantial market fluctuations. The strategy aims to capture the potential gains from these abrupt price swings by simultaneously opening two opposing positions: a long (buy) position and a short (sell) position on the same currency pair. Execution of the Straddle Strategy Preparation: Traders must identify upcoming high-impact events or news releases that are likely to cause substantial market volatility. These events could include central bank interest rate decisions, employment reports, GDP releases, or geopolitical developments. Positioning: Just before the event, the trader places both a buy and a sell pending order above and below the current market price, effectively creating a "straddle." These orders are executed if the price moves significantly in either direction due to the news event. Activation: Once the market reacts to the news and triggers one of the pending orders, the corresponding position is opened, while the other order is canceled. This ensures that the trader is positioned to profit from the price movement in either direction. Risk Management: To safeguard against potential losses, traders often implement stop-loss and take-profit orders for both positions. The stop-loss limits potential losses, while the take-profit locks in gains if the price moves significantly. Here is an example of an advanced straddle strategy with a real-life illustration.Remember that you can customize and modify this idea and approach of your strategy, such as determining where to place pending orders, setting take profits, and establishing stop-loss levels based on your discretionary judgment or the results of your backtesting. Suppose we are nearing the announcement of a significant "Red Flag" news item concerning the US Dollar, specifically the Unemployment Claims report. This news is expected to exert a strong influence on the EUR/USD currency pair, resulting in pronounced volatility due to its nature of reflecting the count of individuals who have applied for initial unemployment benefits in the previous week. Given that such data releases strongly affect currency pairs involving the US Dollar, the EUR/USD pair is likely to experience heightened volatility, thus magnifying the significance of this news release due to its anticipated impact. One of the most effective approaches to employing the Straddle Strategy prior to a news release is by placing two pending orders in both directions of the market. This entails setting a buy stop order and a sell stop order, both positioned a few pips above a price structure. In the ideal scenario, these orders would be strategically placed just above and below key support and resistance levels. Once we have determined the optimal placement for the pending orders, it is equally crucial to establish both the stop loss and take profit levels. While leaving the take profit open to allow the news to drive the price movement is a viable option, setting a stop loss is essential for risk management, not only within the context of this strategy but also as a fundamental practice across various market tools, helping to mitigate potential significant losses. In this scenario, the news had a negative impact on the USD Dollar and subsequently positively influenced the EUR, resulting in a robust upward surge that breaches the resistance level. This development triggers the activation of the pending BUY STOP order, leading to a rapid attainment of our take profit target. Before delving further into the details of this remarkable Forex strategy, it's important to grasp certain key points: 1 ) FOREX is never as easy and straightforward as it might appear in books and articles, including ours. It's a complex endeavor that demands careful consideration. 2 ) Every strategy must undergo extensive testing in a demo account to ascertain its compatibility with our individual personality, available time, money management approach, and other relevant factors. 3 ) Backtesting is unequivocally the most accurate means of developing a suitable strategy for future use. The Straddle Strategy is undeniably intriguing and holds the potential to be an excellent approach under specific circumstances. However, it's imperative that you tailor it to your unique requirements and preferences. Benefits of the Straddle Strategy Volatility Advantage: The Straddle Strategy thrives in volatile markets, allowing traders to benefit from significant price movements resulting from news releases or unexpected events. Directional Neutrality: Unlike traditional trading approaches that require predicting price direction, the Straddle Strategy focuses on capturing market movement without bias, making it particularly appealing in uncertain times. Potential for Large Gains: When executed correctly, the strategy can lead to substantial profits in a short period, especially during high-impact news events. Drawbacks and Considerations Cost of Implementation: Straddle trades often require tighter spreads and lower trading costs due to the need for frequent entry and exit points. High transaction costs can eat into potential profits. False Breakouts: In some cases, market reactions to news events might be short-lived, leading to false breakouts that trigger positions but result in limited price movement. Timing and Liquidity: Precise timing is crucial in executing the Straddle Strategy. Entering the market too early or too late could lead to missed opportunities or unfavorable price movements. Additionally, liquidity fluctuations during news releases can affect order execution. Conclusion The Straddle Forex Strategy stands as a powerful tool in a trader's arsenal, providing a way to harness the potential of volatile markets without the need to predict price direction. By capitalizing on significant price movements triggered by high-impact news events, traders can aim to secure profits irrespective of market turbulence. However, like any trading approach, the Straddle Strategy requires a thorough understanding of market dynamics, meticulous planning, and effective risk management to maximize its benefits and minimize potential drawbacks. As with any trading strategy, it is essential for traders to practice on demo accounts and gain hands-on experience before implementing the Straddle Strategy in live trading scenarios.
Education
by FOREXN1
11
Fundamental vs Technical Analysis📊🔍 Fundamental vs Technical Analysis: Unveiling the Differences and Advantages 🔍📊 In the exciting world of trading, two distinct yet equally important methodologies dominate the landscape: Fundamental Analysis and Technical Analysis. Both approaches provide valuable insights, but they stem from different philosophies and offer unique advantages. Let's dive into the heart of this debate to explore the contrasting attributes of these two analytical powerhouses. Fundamental Analysis: Delving into the Essence Fundamental analysis revolves around the study of a company's intrinsic value by assessing its financial statements, economic indicators, and market trends. This approach examines the broader economic context that influences the asset's price, making it a staple for long-term investors. By scrutinizing earnings reports, balance sheets, and macroeconomic factors, fundamental analysis seeks to identify whether an asset is overvalued, undervalued, or fairly priced. 🔍 Advantages of Fundamental Analysis: • Provides a holistic view of the asset's health and potential future growth. • Useful for long-term investment decisions. • Helps investors understand market trends driven by economic events. Technical Analysis: Unveiling Price Patterns Technical analysis, on the other hand, is all about decoding price patterns and historical data. It relies on charts, indicators, and patterns to predict future price movements. The emphasis is on understanding market sentiment, trends, and psychological factors that impact buying and selling decisions. Technical analysts believe that historical price data can indicate potential future price direction. 🔍 Advantages of Technical Analysis: • Well-suited for short-term trading decisions. • Helps traders identify entry and exit points more precisely. • Focuses on price action, which reflects market sentiment and behavior. The Synergy of Both Approaches: A Balanced Strategy While fundamental and technical analysis may seem to belong to separate worlds, combining both can yield powerful insights. Successful traders often utilize a hybrid approach, leveraging fundamental analysis to understand the broader context and technical analysis to fine-tune entry and exit points. This combined approach can enhance decision-making and help traders navigate the complexities of the market more effectively. 🌟 Conclusion: The Path to Informed Trading Fundamental analysis and technical analysis are like two sides of the same coin, each offering distinct benefits. The choice between them often depends on your trading style, time horizon, and risk tolerance. As you delve deeper into the world of trading, consider incorporating elements of both approaches to develop a more comprehensive understanding of the market dynamics and make more informed trading decisions. Remember, understanding the nuances of both fundamental and technical analysis can be a valuable asset on your trading journey. Stay curious, stay informed, and keep refining your analytical toolkit. Happy trading! 💙💛 Feel free to share your thoughts and experiences in the comments below. Let's support and inspire each other on this exciting trading path. Your Kateryna💙💛
BITSTAMP:BTCUSDEducation
by RocketBomb
How Bearish Bitcoin Calendar Spread Trades WorkShort BTCUSDt September futures contracts + Long BTCUSDt perpetual swaps (OKX) This trade will work the best if prices go down or sideways between now and settlement, here are the possible outcomes for this spread trade: If prices go down slightly then the spread is likely to close faster and funding rates are likely to decrease. This could result in substantial profits. If prices go down substantially, then the spread could go negative and funding rates could also be substantially negative, leading to increased profit margins. If prices go sideways then the spread will close at or before settlement time, and funding rates are likely to remain near the average for the last 90-days. This could result in modest profits. If prices increase slightly then the spread will still close at the settlement date but could temporarily increase, and funding rates may be higher than the 90-day average. This could result in either a slight gain or loss, or breakeven profits. If prices increase substantially you may lose substantially on this trade because of increased funding rates and increased time for the spread to close. Example: Short 10 BTCUSDt Sept 29th futures contracts at 29,574 + Long 10 BTCUSDt perpetual swaps at 29,330 Initial Costs & Profits: Gross profit from the spread for 10 BTC = $244 x 10 = $2,440 Trading fees = 0.04% of $587,000 = $235 (actual fees paid when exiting will depend on market price) Net profit after trading fees = $2,440 - $235 = $2,205 Breakeven funding rates: If spread = 0 in 20 days f x 293,500 × 10 × 20 = 2,205 f = 2,205/(293,500 x 20) f = 0.0375% If spread = 0 in 30 days f x 293,500 × 10 × 30 = 2,205 f = 2,205/(293,500 x 30) f = 0.0248% If spread = 0 in 46 days f x 293,500 × 10 × 46 = 2,205 f = 2,205/(293,500 x 46) f = 0.0163% (Based on these calculations, as long as the average daily funding rate is below 0.0163%, then you will breakeven or earn a profit, assuming your maker fees are 0.02% per trade) Based on the 90-day average daily funding rate of 0.01204%, your net profit (x) would be as follows: If spread = 0 in 20 days: x = 2205 - 0.01204% x 293,500 x 20 x = $1,499 (+0.255%) If spread = 0 in 30 days: x = 2205 - 0.01204% x 293,500 x 30 x = $1,146 (+0.195%) If spread = 0 in 46 days: x = 2205 - 0.01204% x 293,500 x 46 x = $573 (+0.098%) (Assuming you use 100x leverage on these trade, you would multiply your percentage profits by 100, leading to a profit of 9.8% to 25.5%. When using leverage, You must ensure that your margin does not drop below the maintenance margin requirements if the spread temporarily increases or it will result in a forced liquidation. )
BEducation
by Intuit
Boom And Bust Cycle of BitcoinGreetings, esteemed members of the @TradingView community and all Vesties out there! The financial markets is a complex and dynamic arena where investors seek to capitalize on opportunities and generate profits. One recurring phenomenon in the financial world is the "boom and bust cycle", characterized by periods of rapid asset price escalation followed by sudden and often dramatic declines. Understanding this cycle is crucial for investors to make informed decisions and navigate market volatility effectively. In this article, we will delve into the life cycle of a bubble within the context of the financial markets, using the Bitcoin price chart as a compelling example. Additionally, we will explore how Bitcoin's circulating supply contributes to its perceived value. The Anatomy of a Bubble: A bubble refers to a speculative phase during which the prices of assets, such as stocks or cryptocurrencies, soar to unsustainable levels fueled by investor euphoria, media hype, and the fear of missing out (FOMO). These bubbles are often followed by a sharp correction or crash, resulting in significant losses for those caught up in the frenzy. The cycle typically consists of four key phases: a) Stealth Phase: Prices begin to rise slowly, driven by fundamental factors or innovative breakthroughs. Initial interest is limited, and only a few astute investors take notice. b) Awareness Phase: Media coverage and public attention increase as prices gain momentum. More investors start to notice the rising prices and may begin to invest, contributing to further price appreciation. c) Mania Phase: FOMO sets in as a growing number of investors rush to buy the asset, driving prices to astronomical heights. Speculative behavior dominates, and valuations become detached from underlying fundamentals. d) Blow-Off Phase: The bubble reaches its peak, and prices begin to plummet as profit-taking and panic selling ensue. The market experiences a rapid decline, erasing gains made during the boom phase. Bitcoin's Boom and Bust Cycle Example: Bitcoin, the pioneering cryptocurrency, has experienced multiple boom-bust cycles since its inception. One particularly notable example is the bubble of 2016-2017-2018 period: a) Stealth Phase: Bitcoin's price had been steadily increasing due to growing interest and adoption within the tech and financial communities. b) Awareness Phase: Media coverage intensified, drawing mainstream attention to the soaring Bitcoin prices. Retail investors started entering the market. c) Mania Phase: The price skyrocketed to nearly $20,000 per Bitcoin, fueled by widespread FOMO. New investors poured money into the market, believing the rally would continue indefinitely. d) Blow-Off Phase: The bubble burst, and Bitcoin's price tumbled, ultimately losing over 80% of its value. Many inexperienced investors who bought at the peak faced substantial losses. The Role of Bitcoin's Circulating Supply: Bitcoin's circulating supply, the total number of coins available for trading in the market, plays a crucial role in shaping its perceived value. The scarcity of Bitcoin is often cited as a driving factor behind its price appreciation. With a fixed supply of 21 million coins, the principle of supply and demand suggests that as demand for Bitcoin increases, its price should rise over time. a) Halving Events: Approximately every four years, Bitcoin undergoes a "halving" event, where the rate at which new Bitcoins are mined is cut in half. This scarcity-inducing mechanism further accentuates the notion of limited supply, potentially driving up prices. b) Investor Perception: Investors often view Bitcoin as a store of value and a hedge against traditional financial markets. As this perception grows, demand for Bitcoin increases, putting upward pressure on its price. Understanding the life cycle of a bubble is essential for investors to make informed decisions and mitigate the risks associated with market volatility. By examining the case of Bitcoin's boom and bust cycle and considering the impact of its circulating supply, we gain valuable insights into how market dynamics and human behavior can shape asset prices. As the financial world continues to evolve, these lessons remain relevant, serving as a reminder of the importance of rational investment strategies and a clear understanding of market fundamentals.
INDEX:BTCUSDEducation
by Vestinda
6
IMPULSE AND CORRECTIVE MOVEMENT What is an impulsive price movement? This is a situation when the market moves with great force in one or another direction, passing large distances in a short period of time. What is a corrective price movement? It is a price stop. After an impulsive movement, the price needs a rest. Unlike an impulsive movement, a corrective movement lasts long enough and is often just in consolidation (sideways movement). There are exceptions, when the price after a strong movement is not in a sideways, but rather in a microtrend against the main movement with a weak price impulse and goes a short distance up\down (depends on the trend direction). On the chart you can see the descending price channel, I have marked the important places. Next, I will describe everything in order. First, I will tell you how to determine a true or false breakout of a level in the trend and how to work from these levels using impulses (these levels are called mirror levels (swing) that change their level from resistance to support). A: there was a break of the support level with good momentum, up to this point there was a bullish movement and sideways movement. The break of level A broke the rising highs and we can already say that there was a trend reversal. Where we will proceed from the mirror levels of the trend. A mirror level is a level that from support became resistance and vice versa. After breaking the level, a corrective movement to the same broken level began. Do you remember what I was talking about in the beginning? About the fact that the price does not always go sideways after the breakout, it can also go against the general movement, but with less impulse. But in this case as you can see price went sideways after it broke through the level, then slowed down and started to roll back to the broken level, this is exactly the place where we can look for an entry into the trade. B : As I said, there was an impulsive break of the level and then a corrective movement against the main downward movement, after which the price approached the broken support level and broke it again. Most likely, the breakout was due to some news, most often the price makes a reversal without such sharp movements. This is the place where all candlesticks are filtered and decisions are made. Pay special attention to what candles are formed at such levels. Ideally, it should be like this: candles decrease in size and form dojis (i.e. candles of uncertainty). You can expect a pinbar or maribose in such places. Now remember the 2 types of corrective movements: - price moves against the main direction, but with less momentum - price is in consolidation after the breakout In this example the price is just in a sideways movement and does not make impulsive movements, it is simply resting after breaking another support level in place. In this case we also have 2 moments to enter. 1. When approaching the broken support level, which is now a resistance level. We have all the right conditions for entry: the price has no momentum, respectively, it will most likely bounce off the resistance level and continue moving downwards; uncertainty candlesticks have appeared (in this case they were dojis); and the last criterion is the appeared Outside bar setup (B point). 2. In the second case, the entry is made on the breakout of the support C Unlike the place where the price goes against the movement, in our case (sideways) the price after the breakout can go further without correction to the broken level, but there are also criteria for this: the candle that breaks through the C level should be without big spikes; the price must breakout with good momentum (notice how the price stopped out at the support level, so we should expect a true breakout with good momentum, as was the case in this example) Next example when the price rolled back immediately after breaking out of a level without sideways move at the D point. Pay attention to how the price gives signals that it has no strength to move further. These are small candles that were then engulfed by one big red candle and the price made an impulsive movement downward. Impulse and corrective moves: conclusions Impulse movement • Candlesticks have large bodies. • Price moves a long distance in a short period of time. • Each subsequent candle closes higher/below the previous one (a clear sign of a good impulse). • Candlesticks have the same color and sentiment (In a bullish trend is green/blue candlesticks. In a bearish trend is red/black. Well, or any other colors that you use). A corrective movement • Candlesticks have small bodies. • Candles of uncertainty are formed (dojis, haramis). • Price moves small distances over a long period of time. • Candlesticks have a combined color (different colors). When the price approaches the support and resistance levels or trend line borders, you should pay attention to these factors and, if they are met, you can enter the trade.
Education
by Lingrid
16
The Power of Trading Tunnel VisionAs humans. It’s tough. In this day and age, it feels impossible to just focus on one task at a time. You’re already shifting your attention. As you read this! You’re thinking about: What to eat, what you’re missing on Facebook, how boring this article is going to be, what’s on TV tonight, bills you have to pay, how else can you make bread for your financial future. Right? You can’t help it. It’s a disease. It’s affecting most people. It affected me for most of my life. And I think it’s one of these reasons why people are: NOT happy, NOT succeeding with their goals and NOT building their lives the way they want to. It needs to stop TODAY! Just do me one favour… Try and focus on one goal at a time. Get through this article first, move onto the next thing. Think of a racehorse. For them to be focused, avoid danger, remain undistracted and see the goal… They need to wear blinkers. So let’s put on our blinkers and let’s see why tunnel vision is the very skill you need to succeed. Not just with trading. But with every endeavour you embark to achieve and succeed. #1: Sharper Focus Tunnel vision allows you to concentrate and direct your attention to one thing at a time. Your analysis. Your setups. Your execution. Your modifications. Your reporting and reviewing. #2: Less distractions When you cut out your distractions, you will make more better decisions as a trader. It’s a skill. Put your phone away. Close your social media windows right now. Clear your desk and cupboards. Take the dog or cat out. Switch off the TV. Focus on your trading each day or when you do trade. #3: Better Risk Management When you are just about to take the trade. Make sure you double check your maths, volume trading size – according to what your portfolio is currently valued at. You don’t understand how many people make mistakes with: Wrong sizes, miscalculated levels and incorrect risk and reward. Protect and safeguard your trades with careful risk management consideration. #4: Speed up results and optimise your tasks: When you focus on one task at a time, this might be surprising but. You will finish sooner than you thought. When you put in your full – time, capital, and mental energy – you’ll be more efficient, productive and more laser focused. #5: Reduced Stress Of course when there are less distractions, less worry and less things to deal with at a time – this drops your stress. And I know you have stress right now. It’s the state of the world with the fast-paced connectivity and exponential developments. But when you narrow your life down to one thing at a time, I promise your stress will drop which will help with your trading decisions. #6: Superior strategy understanding By concentrating on a particular strategy or system, you will find that you’ll build a more profound understanding to where, why and how you’re putting your money. Master the strategy and only that one and you’ll see how far you’ll go. #7: Consistency and perseverance When you adopt tunnel vision in your life, you will begin to be more disciplined with your approach. This will lead to more consistency in your trading results. And you’ll find it will promote a stable growth of your portfolio. #8: Clearer Goals to achieve Like the horse sees the goal ahead. When you focus your attention on your goals and what you need to do to achieve them, one step at a time. You can track your progress more effectively. You can steer your trading in a better direction. You can take control of your trading with lightning focus. #9: Keeps you in the Now Time is fleeting. Before you know it, you’re in bed ready to wake up and repeat the routine. But what if, because you’re living so much in your head, that’s why time is going so quickly. I mean, right now I am only focusing on writing this article. And I’m putting in all my heart, energy and soul. And because there are no distractions, I FEEL the present. I feel time going slowly with each typing. So maybe you should to. Do everything in the present. Do it with full focus. Do it with heart. Do it with optimism and care. And this will have a positive effect on your trading.
TVC:SA40Education
by Timonrosso
U.S. Economy Less Interest Rate SensitiveDespite the fastest rise in interest rates since 1981, and an inverted yield curve where short-term rates are much higher than long-term bond yields, the United States has not (at least yet) experienced the recession forecast by the vast majority of market pundits and economists. Why not? The relatively few contrarians that did not forecast a recession, including myself, had many reasons for a more optimistic view. However, the most critical reason appears to have been an appreciation of how the U.S. economy has changed over decades and become much less sensitive to interest rates. In the 1950s, 1960s and 1970s, the U.S. economy was driven by housing and manufacturing. The only choice to finance a home was the 30-year fixed rate mortgage, provided by a savings and loan institution, that deliberately borrowed short-term from savers and lent long-term, taking considerable interest rate and yield curve risk. Further, there was no such thing as financial futures or interest rate swaps to allow for the efficient hedging of interest rate risk. Fast forward to the modern economy of the 2020s. The U.S. is an economy driven by the service sector, and services are considerably less sensitive to interest rate swings than housing and automobiles. Home mortgages come in every size and flavor, from floating rates to fixed rates. Mortgages are originated by specialists and then packaged and sold to pensions, endowments and investors willing to take the risk. There are no savings and loan institutions. Financial futures, swaps and options are available for efficient hedging and management of interest rate risk. In short, the U.S. economy does not dance to interest rates like it once did. Make no mistake, though; interest rate shifts have a profound impact on asset values, from equities to bonds, to housing. It is just that the impact on the real economy is much more subdued than it once was, and a rise in rates does not automatically mean a recession is around the corner. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By Bluford Putnam, Managing Director & Chief Economist, CME Group *Various CME Group affiliates are regulated entities with corresponding obligations and rights pursuant to financial services regulations in a number of jurisdictions. Further details of CME Group's regulatory status and full disclaimer of liability in accordance with applicable law are available here: www.cmegroup.com **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
CBOT:ZN1!Education
by CME_Group
EUR, GBP Rebound Against Dollar as Inflation Trends DivergeEuropean currencies have been rebounding strongly versus the U.S. dollar since hitting bottom in late September 2022 during the Gilt crisis when yields on U.K. government bonds surged. The rally in European currencies accelerated in July 2023 following the release of the U.S. inflation statistics (Figure 1). Figure 1: EUR and GBP have rebounded strongly in recent weeks and months Recent U.S. and European inflation data are highly divergent. U.K. core inflation has climbed to above 7%. Eurozone core inflation has risen towards 5.4% while the U.S. core consumer price index (CPI) has been falling towards 4.8%, down from a peak of 6.6% last year. What’s even more remarkable is that the divergence between U.S. and European inflation rates is much stronger when one measures it in a consistent fashion. The U.K. and European Union (EU) use a “harmonized” measure that is consistent across Europe. The harmonized measure includes rents of actual rental properties but, unlike the standard U.S. numbers, does not assume that homeowners rent properties from themselves. Excluding the so-called owners’ equivalent rent (OER) from the U.S. numbers makes a huge difference. At the moment, the assumption that homeowners rent properties from themselves has exaggerated U.S. core inflation to the tune of 2.5%. The U.S. Bureau of Labor Statistics produces what they term an “experimental” harmonized measure of core-CPI that gauges inflation the same way as in Europe and therefore excludes the OER component. This shows core inflation in the U.S. to be 2.3%, far below European levels and trending lower rather than higher (Figure 2). Figure 2: Measured consistently, U.S. core inflation is half to one-third European levels This suggests that the U.S. Federal Reserve (Fed), which appears to be preparing a 25-basis-point (bps) rate hike on July 26, could soon have its policy rate at more than 3% above the level of harmonized core inflation (Figure 3). Meanwhile, the Bank of England (BoE), which just raised rates to 5%, still has rates more than 2% below its rate of harmonized core inflation (Figure 4). The European Central Bank (ECB) has its main refinancing rate at 4%, 1.4% below the level of the eurozone’s harmonized core inflation (Figure 5). Figure 3: Fed Funds now exceed harmonized U.S. Core CPI by 3%, the most since 2007 Figure 4: The BoE’s policy rate is still 2% below inflation Figure 5: The ECB has its policy rate 1.4% below Eurozone core inflation The differences in the level of real rates (policy rates minus harmonized core inflation) suggests that the Fed may have overtightened policy and may need to reduce rates sooner than expected by market participants. By contrast, those same measures suggest that the European central banks may still be behind their inflation curve and may need to tighten policy even more substantially. Indeed, forward curves have moved significantly in the direction of this thinking in recent weeks and now price just 25 bps more in rate hikes for the Fed compared to 75 bps for the eurozone and 125-150 bps in the U.K. Elsewhere, the U.S. yield curve is much more sharply inverted than yield curves in the eurozone or the U.K. This may also lead currency traders to look past the Fed’s last expected rate hike and towards possible rate cuts if monetary overtightening produces a downturn in the U.S. sooner than it does in Europe. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By Erik Norland, Executive Director and Senior Economist, CME Group *Various CME Group affiliates are regulated entities with corresponding obligations and rights pursuant to financial services regulations in a number of jurisdictions. Further details of CME Group's regulatory status and full disclaimer of liability in accordance with applicable law are available here: www.cmegroup.com **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
Education
by CME_Group
Three Driving Forces Behind the Ether-Bitcoin Exchange RateAt a glance: Higher tech stocks tend to boost ETHBTC, while a higher USD tends to depress it Bitcoin supply is perfectly inelastic, which contributes to its high volatility Together, ether and bitcoin account for over 60% of the total value of the world’s cryptocurrencies, but the exchange rate between the two has varied widely over time. So, what drives the Ether-Bitcoin exchange rate? The ETHBTC cross rate responds to many factors, but here are three of them. Technology Stocks On days when the tech heavy Nasdaq 100 index rallies, ether tends to rise versus bitcoin. This may be because ether, which is the currency of the Ethereum smart contract network, has more practical applications in the technology space than bitcoin, which is mainly held as a store of value and a medium of exchange. U.S. Dollar On days when the U.S. dollar is higher, ether tends to underperform versus bitcoin. Bitcoin Supply While ether can be supplied up to 18 million coins per year, bitcoin supply is limited to a maximum of 21 million coins ever, of which about 19 million already exist. Every four years, the supply of new bitcoin drops in half. In the past, halvings have often been preceded by large runups in bitcoin prices and tremendous increases in the amount of revenue that bitcoin miners are paid for matching transactions. Ether is both more volatile than bitcoin and highly correlated to bitcoin. As such, when bitcoin rises or falls versus the U.S. dollar, ether often moves to an even greater degree. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By Erik Norland, Executive Director and Senior Economist, CME Group *Various CME Group affiliates are regulated entities with corresponding obligations and rights pursuant to financial services regulations in a number of jurisdictions. Further details of CME Group's regulatory status and full disclaimer of liability in accordance with applicable law are available here: www.cmegroup.com **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
CME:BTC1!Education
by CME_Group
HIGHEST OPEN / LOWEST OPEN TRADE✴️ Hello, ladies and gentlemen! Today we are going to talk about a popular strategy called Highest open Lowest open. This strategy was first published on forexfactory forum. The strategy is based on following the natural movements of the market, which you may consider unpredictable. Here, we will make money on those very movements. In this strategy, you will have to wait, you will have to be disciplined. The idea behind this strategy is as follows: There are two assumptions. First, during the day there are always seemingly chaotic zigzag movements of the price. Secondly, any candle, be it bearish/bullish, will have tails. Third, someone needs to be taken out of the market. As we remember, there are bulls, bears and there are pigs as described in many famous trading books. 1) So, let's mark the High/Low points of the current day and the previous day on the chart. 2) After that, on the current day, let's mark the highest and lowest points of the H1 candle opening. It is the opening price of the candle that is meant. These opening points can and will shift during the day, and this is normal. The entries of the strategy are quite short, and such a shift of the markup during the day can occur. This (for the moment) is the end of our markup. ✴️ Strategy Rules When do we buy or sell? So, we buy when the price goes below the lower line and comes back. That is, when the price is behind the line (for example, the lower line), we place a Buy Stop order on the line to enter on its breakout. To sell, we enter on the same principle: the price goes above the upper line, set an order on the border, inside the channel. It is not necessary to use a pending order for this, if you want, you can enter the market. But, how can we understand that the price has really been below the lower level or above the upper level? After all, it may well be that the price will break the level by only one pip, which, of course, will not be a signal to enter. But, for this reason, we have the concept of "entry timeframe", which can be M5, M15 or M1. So, when the M5 candle closes above the signal line and, accordingly, a new M5 candle opens we can enter to sell when the level is reached. The same is true for buying. M5 candle should close below the signal level, and at the opening of a new candle we set a pending order. Or, we wait until the level is reached and enter the market. At the same time, the opening price should not exceed the maximum and minimum of the day! ✴️ Trade details: TP and SL, Money Management The start time of trading is 8 am New York time. But in general, you can trade practically at any time. Since everyone has different time zones, you can choose a trading time that suits you, and the strategy will still work. We set the stop loss for the daily high, or for the daily low. The method of profit taking can be different. First, there is a basic rule: when the trade is in profit +5 pips, we move the stop to breakeven +1 pips of profit. Secondly, you can exit with a profit of 10 pips, or when a profit of 10 pips or more is reached, move the stop to breakeven +5 pips. Also, you can exit the position in partial portions, it is already from personal preferences. But it is better to follow the rule of putting the stop at breakeven. So, why did we mark the High-Low of the previous day? If the high or low of the previous day is broken, it means that there was a breakout and you should be careful here. It is quite possible that the price will run far beyond the marked level after the breakout. Also, the situation with several entries within one hour is quite possible. If the price on M5 constantly breaks the level and returns, you can enter at every suitable signal. Since the profit is small in most cases, it is better to use pairs with low spread in trading. This way you will be able to move the stop to breakeven faster. There can be a lot of entries on the strategy during the day. Especially if you use several pairs. Therefore, there is no sense to risk more than 1% of your capital per trade. Moreover, it is better to use 0.5%. ✴️ Examples Now let's look at a few examples. On the H1 chart, we mark the highest opening point, and move to the M5 chart. Here, we can see how the price closed beyond the level, below the high of the current day. On the breakout of the level, we enter to sell. We set the stop loss slightly above the maximum of the day. When the profit of 5 pips is reached, we turn on the trailing stop. In this trade we would have earned about 50 pips, with an initial stop of 10 pips. We move the level again to the opening of the next candle, and wait for the crossing on M5. This, in fact, is the process of trading. Once again, we are talking about the current daily highs and lows. Thus, if the highest or lowest opening price changes, we move the line accordingly. Also, when setting a stop, we take into account the current High and Low. If there is a breakout of the previous day's High or Low, enter with caution, as the price may well rush towards the breakout. ✴️ Conclusion This strategy requires attention, the ability to wait, discipline, calm and accurate calculation. Nevertheless, it is a powerful weapon in skillful hands. That proves the popularity of the strategy on the forexfactory forum. The strategy itself is quite simple.
Education
by DeGRAM
7
Using the Research Method in TradingGreetings, fellow traders! Trading is both an art and a science, and the research method is your secret weapon to unraveling market intricacies. It's about adopting a systematic approach, making informed decisions, and refining your strategies based on solid data. Applying a analytic mindset in trading can offer a valuable edge. Let's explore the basics of the research method and how you can integrate it into your trading practices. Start with Observation: Just like scientists, traders begin by carefully observing the markets, noting patterns, and identifying repeat occurrences or random incidents. This process helps build a comprehensive understanding of market factors, that influence price action. Formulate Hypotheses: Based on your observations, create hypotheses or assumptions to explain market behavior. These hypotheses act as initial theories that can be tested for validity. Test Your Hypotheses: Conduct empirical tests by taking trades, that align with your hypotheses. Record the results and analyze how price action unfolds. Keep a detailed trade journal to document your observations. Embrace Open-Mindedness: Remain open to new data and market complexities. The markets are ever-changing, and no hypothesis is an absolute truth. Be prepared to adjust your trading strategies based on new information and shifts in market sentiment. Fine-Tune Your Trading Plan: Use the insights gained from testing your hypotheses to fine-tune your trading plan. Continuously refine your strategies based on new observations, and be flexible in adapting to changing market conditions. Treat Each Trade as a Learning Opportunity: View each trade as a source of valuable information, regardless of the outcome. Learn from both winning and losing trades to enhance your understanding of the markets and improve your trading approach. By integrating the research method into your trading routine, you can enhance your decision-making process, manage risks more effectively, and avoid overconfidence. Stay curious, keep learning. Happy trading!
INDEX:ETHUSDEducation
by Vestinda
Trading Lesson 👨‍💻#1 - Never buy At the peak high.Not worth it I tell you. Never buy at the peak high. Always buy at the peak low. When ever you see a peak in the day of trading and you had a major rise in price due to things such as rallies or market seasonal up trends, or 🐳 it's moving up and you don't want to miss it. However; you buy in on the rush up-word believing it's safe to assume things will be greater tomorrow, so you wait to see this awesome rally to the top to make it rich. The day closes and the reopens, with a rise and then sudden fall in the crypto market - all that hype only to be disappointed when you notice somethings off; your funds are 💸floating away in mere moments. So naturally you panic believing that you are in a complete crash - and assume it's the fault of the stock you purchased, but more over it was the fault of the bad call - with bad timing, so you panic sell thinking it will only get worse, and in some cases it does get worse but in others cases that sell you just made would be a mistake in judgement as the price goes back up from where you sold leaving you behind with the lost funds to ponder over. This is what I call "fools gold" Never buy at the peak on after a closing day. reason being you may on the next day after a rally up-word, you notice the price move up higher for like a moment prompting you to buy, thinking that the rally is still going, however; not realizing that was the last call before the fall. So the best thing to do in these type of situations is to: _______________________ Don't Buy In Safer to study your target market before you buy and wait for the closing day, so that it can either adjust the price to where it really is vs where it currently is. if it drops wait till the closing day again until you feel you have the best price to turn a profit. Note - pay attention for market trends it could be going up which is good or falling down which is still good for you because you didn't lose any money, so best to study before you buy on a hype. _______________________ Hold Wait until the next closing day to see where it might lead - this will keep your shares you already purchased and if you need to add more funds to regain what you lost when the price is lower than expected, it will likely turn what was a lost to a gain when the price returns to where you originally purchased. _______________________ Sell The worse thing you can do is Sell unless you can catch the drop in price before it takes too much profit to recover from, you will likely try again losing more money and again, and again, and again - creating what is known as panic buying and selling, if you had deep pockets it might cause the market to completely drop based off the factor of you panic selling, no need to do so you have a day to find out where the market for your crypto is headed before you sell, so best to work fast or lose more funds wasting time. Focus and don't risk what you are not willing to lose, and for your own sake if you are a panic seller, never day trade, you'll lose more money that way. _______________________ Best Tools to use Notice the market trends on the charts before you buy, was it going up throughout a one month process if so then it's a likelihood it's in a seasonal high, it's sometimes hard to tell if it's moving up or down just by looking at charts, so you will definitely need proper indicators to help identify your next move. Indicators like: Volume to price or trend activity Not chart savvy, then find a predictor of your current crypto you purchased. Look for people on places like trading view who have the tools and or knowledge to tell you the trading trends - note not all of them are accurate - not even some websites that offer predictions for your favorite stock or crypto are accurate either, they are usually 40% accurate 60% inaccurate and 99% bias. That's just my opinion - however; they can not predict Rallies - Whaling activity - or - the entire stock market fallout/rise - anything can happen so be prepared it can take months if not years to recover or it could take a few weeks if you know what the future may bring. But remember: Don't try to buy in at the tip of a peak. It's guaranteed to drop instantly the next trading day. Hope this helps. Happy trading. CRYPTOCAP:BTC BINANCE:BTCUSDT BITSTAMP:BTCUSD CRYPTOCAP:ETH BINANCE:ETHUSDT CRYPTOCAP:SHIB BINANCE:SHIBUSDT COINBASE:SHIBUSD #CRYPTO #ALTCOIN #EVERYCOIN #RALLIES-WE-LOVE-THEM #HELP-WITH-A-RALLY #NEED-WHALE-SUPPORT #STOP-THE-DIP
COINBASE:SHIBUSDEducation
by Grandmaster_Oz