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Learn 4 Classic Trade Confirmations "Look for a confirmation!" "Wait for a confirmation!" When I was learning how to trade and when I was watching and reading different trading educators, these words naturally pissed me off. What the hell are you talking about? What confirmation? It was a full-blown mystery...🤯 Then, once I started to mature in trading and trade full-time, I became an author on TradingView. Posting my forecasts and trading setups, I frequently mentioned the confirmation. And now the newbies that are reading me and learning from me are pissed off...🤬 That is so funny I guess. But the truth is that the confirmation must become a fundamental part of your trading strategy. It is your key to successful trading. What exactly is the confirmation? It depends on many many different things, in this article I will discuss with you the 4 main types of confirmation and give you detailed examples. 1️⃣ - PRICE ACTION CONFIRMATION That is actually what I prefer. Analyzing different markets and searching for decent trading opportunities often times we find some peculiar instruments to watch. Identifying the market trend and key levels we find the potential spots to trade from. But do we just open the trade once the "ZONE" is spotted? I wish it could be that simple... Trading just the zone, without additional clues brings very negative figures. We definitely need something else. Price action & candlestick patterns can be those clues. Accurate reflection of the current local market sentiment makes the patterns a very reliable confirmation. Dodji's, pin bars, double tops/bottoms ... Proven by history, the skill of identification & reading the patterns will pay off quickly. Being in some sense the language of the market, the patterns are the fundamental part of my trading strategy. 2️⃣ - FIBONACCI LEVELS Fibonacci levels are a very popular technical tool. Being applied properly it helps the trader to confirm or, alternatively, disqualify the identified "ZONE". With multiple different methods like confluence trading, fibs are applied in hedge funds and various banking institutions. The main problem with the fibs, however, is complexity and a high degree of subjectivity. Meeting different traders and watching different posts on TradingView I noticed that all traders tend to have their own vision. There is no universal system to apply here, a proper fib.confirmation technique can be built only with long-lasting backtesting and practicing. 3️⃣ - FUNDAMENTAL NEWS The figures in the economic calendar, news, tweets. Actual fundamental news can become your best confirmation tool. However, the main obstacle right here is the promptness, validity and reliability of the data that you get. The information shouldn't be delayed and it must be objectively true. The search for such a source is by itself is a very time-consuming and labor-intensive business not even mentioning its potential costs. And that is not all. Knowing how to make sense of that data, its proper perception, and understanding requires a solid economical and financial background and experience. At the end of the day, becoming an expert in fundamental analysis , the trader can easily sort the trading zones and trade only the ones that are confirmed by a decent fundamental trigger. 4️⃣ - TECHNICAL INDICATORS I believe all the traders apply some indicators. From a simple moving average to some complex composite algorithms, indicators play a very important role in trading. Being 100% objective and providing up-to-date real numbers and figures, they are our allies in a battle against subjectivity. For many traders, the various signals from indicators are considered to be accurate and reliable confirmations. Many algotrading solutions are operating simply relying on such signals and being able to bring consistent profits proves the power of technical indicators. What confirmation type should you rely on?🧐 I guess the main rule right here is that the confirmation must MAKE SENSE to you. You should feel the logic behind that. It must make you confident in your action, even in case of the occasional losses, it must keep you calm and humble. Let me know in a comment section what confirmation do you prefer! 💝Please, support my work with like and comment! Thank you for reading. Let me know, traders, what do you want to learn in the next educational post?
OANDA:XAUUSDEducation
by VasilyTrader
7
Top Technical Indicators PairingsWhile there is no single definitive answer to which specific combinations of technical indicators is the most profitable, I can try to provide some popular combinations and their application in trading strategies. The success of these strategies depends on various factors such as the trader's skill, market conditions, and risk management techniques. 1. Moving Averages and MACD (Moving Average Convergence Divergence): Moving averages smooth out price data to help traders identify trends. Two commonly used types are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). A popular strategy is to use two moving averages with different timeframes, such as the 50-day and 200-day SMAs. When the shorter timeframe moving average (e.g., 50-day SMA) crosses above the longer timeframe moving average (e.g., 200-day SMA), it generates a bullish signal. Conversely, when the shorter timeframe moving average crosses below the longer one, it generates a bearish signal. The MACD is a trend-following momentum indicator that calculates the difference between two EMAs of the price and then smooths it with another EMA. A common configuration is the 12-day EMA, the 26-day EMA, and the 9-day signal EMA. When the MACD line crosses above the signal line, it generates a bullish signal, while a bearish signal occurs when the MACD line crosses below the signal line. Combining moving averages with MACD can provide stronger signals, as the moving averages identify trends and the MACD helps confirm them. 2. RSI (Relative Strength Index) and Bollinger Bands: The RSI is a momentum oscillator that measures the speed and change of price movements. The RSI ranges from 0 to 100 and is typically used to identify overbought or oversold conditions. An RSI above 70 is considered overbought, suggesting that the asset may be overvalued and due for a pullback. An RSI below 30 indicates oversold conditions, suggesting that the asset may be undervalued and due for a rebound. Bollinger Bands consist of a moving average (usually the 20-day SMA) and two standard deviations above and below it. The bands expand and contract based on an asset's volatility. When the price touches the upper Bollinger Band, it could be a sign of overextension and an impending reversal to the downside. Conversely, when the price touches the lower Bollinger Band, it could indicate that the asset is oversold and due for a rebound. By combining the RSI and Bollinger Bands, traders can identify potential reversal points with greater confidence. For instance, if the RSI indicates an overbought condition and the price touches the upper Bollinger Band, it could provide a stronger signal to exit long positions or enter short positions. 3. Stochastic Oscillator and ADX (Average Directional Index): The Stochastic Oscillator is a momentum indicator that compares an asset's closing price to its price range over a specific period. The indicator consists of two lines: %K and %D. When %K crosses above %D, it generates a bullish signal, while a bearish signal occurs when %K crosses below %D. Traders often look for overbought or oversold conditions, similar to the RSI. The ADX is a non-directional indicator that measures the strength of a trend. A rising ADX indicates a strengthening trend, while a falling ADX suggests a weakening trend. The ADX does not provide information on the direction of the trend; it merely indicates the trend's strength. By combining the Stochastic Oscillator and ADX, traders can identify potential entry and exit points with greater confidence. For instance, if the Stochastic Oscillator signals a bullish crossover and the ADX is rising, it could indicate that the uptrend is strong, and a long position may be warranted. Conversely, if the Stochastic Oscillator signals a bearish crossover and the ADX is rising, it could suggest that the downtrend is strong, and a short position may be appropriate. 4. Support and Resistance with Volume Indicators: Support and resistance levels are critical price points where buying or selling pressure tends to push the price back in the opposite direction. Support is a price level where buying pressure is strong enough to prevent the price from falling further, while resistance is a level where selling pressure is strong enough to stop the price from rising further. Volume indicators, such as OBV (On-Balance Volume) or VPVR (Volume Profile Visible Range), can provide insights into the strength of price movements. The OBV is a cumulative indicator that adds volume on up days and subtracts volume on down days, reflecting buying and selling pressure. The VPVR displays the volume traded at different price levels, helping traders identify areas of high buying or selling interest. By combining support and resistance levels with volume indicators, traders can better identify potential entry and exit points. For example, if the price is approaching a support level and the OBV is rising, it could suggest that buying pressure is increasing, and the price may bounce off the support level. Similarly, if the price is nearing a resistance level and the OBV is falling, it could indicate that selling pressure is increasing, and the price may reverse at the resistance level. 5. Fibonacci Retracements and Moving Averages: Fibonacci Retracements are a popular tool used to identify potential support and resistance levels based on the Fibonacci sequence. By measuring the distance between a significant high and low in a price trend, traders can identify key retracement levels, typically at 23.6%, 38.2%, 50%, 61.8%, and 78.6%. These levels often act as support or resistance, where price reversals might occur. Combining Fibonacci Retracements with moving averages can offer additional confirmation for potential reversal points. For instance, if a 50-day moving average aligns with a 61.8% Fibonacci retracement level, it could strengthen the case for a potential reversal at that price point. 6. Ichimoku Cloud and RSI: The Ichimoku Cloud is a comprehensive technical analysis tool that provides information on trend direction, momentum, and support and resistance levels. It consists of five lines: Tenkan-sen, Kijun-sen, Senkou Span A, Senkou Span B, and Chikou Span. A bullish signal is generated when the price moves above the cloud, while a bearish signal occurs when the price moves below the cloud. By combining the Ichimoku Cloud with the RSI, traders can obtain more robust signals for potential trend reversals or continuations. For example, if the price breaks above the Ichimoku Cloud and the RSI moves above 50, it could indicate a strong bullish momentum, suggesting a long position. Conversely, if the price falls below the Ichimoku Cloud and the RSI drops below 50, it could signal a strong bearish momentum, suggesting a short position. While these combinations of technical indicators have been popular and potentially profitable for predicting the performance of SPY up to September 2021, it's crucial to remember that no strategy is foolproof. The success of a trading strategy depends on various factors, such as the trader's skill, market conditions, and risk management techniques. 7. Chart Patterns and Volume Indicators: Chart patterns are visual representations of market psychology and can help traders identify potential trend reversals or continuations. Some common chart patterns include Head and Shoulders, Double Tops and Bottoms, Triangles, and Flags. These patterns often suggest impending price movements based on historical performance. By combining chart patterns with volume indicators like OBV (On-Balance Volume) or VPVR (Volume Profile Visible Range), traders can gain insights into the strength of price movements and validate potential breakouts or reversals. For example, a bullish breakout from a chart pattern accompanied by increasing OBV could indicate strong buying pressure, supporting the likelihood of a sustained upward move. Conversely, a bearish breakdown from a chart pattern accompanied by decreasing OBV could suggest strong selling pressure, supporting the likelihood of a continued downward move. 8. Candlestick Patterns and Moving Averages: Candlestick patterns are another form of visual analysis that can provide insights into market sentiment and potential price direction. Common candlestick patterns include the Hammer, Shooting Star, Engulfing Pattern, and Doji. These patterns can offer short-term signals for potential reversals or trend continuations. Combining candlestick patterns with moving averages can help traders confirm potential trend changes or continuations. For example, a bullish candlestick pattern occurring near a rising moving average could suggest that the uptrend is likely to continue. Similarly, a bearish candlestick pattern near a falling moving average could indicate that the downtrend may persist. 9. Multi-timeframe Analysis: Using multiple timeframes in technical analysis allows traders to gain a more comprehensive understanding of market trends and price action. By examining different timeframes, such as daily, weekly, and monthly charts, traders can identify the primary trend, intermediate trend, and short-term fluctuations. By applying technical indicators and chart patterns across various timeframes, traders can obtain more robust trading signals and improve their decision-making process. For example, a moving average crossover on a daily chart may provide a more significant signal if it aligns with a key support or resistance level on a weekly chart. 10. Divergence Analysis with Oscillators: Divergence analysis involves comparing the price action of an asset with an oscillator, such as the MACD, RSI, or Stochastic Oscillator. A divergence occurs when the price makes a new high or low, but the oscillator fails to follow suit, suggesting a potential reversal or weakening of the current trend. For instance, if an asset's price reaches a new high but the RSI fails to make a new high, it could signal a bearish divergence, indicating that the uptrend may be losing momentum. Conversely, if the price makes a new low and the RSI fails to make a new low, it could signal a bullish divergence, suggesting that the downtrend may be losing steam. By incorporating divergence analysis with other technical indicators or chart patterns, traders can enhance their decision-making process and identify potential trend reversals with greater confidence. In conclusion, while various combinations of technical indicators, chart patterns, and analytical techniques have been popular and potentially profitable for predicting the performance, the success of a trading strategy depends on various factors, such as the trader's skill, market conditions, and risk management techniques. Traders must continuously evaluate and adjust their strategies based on changing market conditions and consider other factors such as fundamentals, economic news, and global events. It's also essential to practice proper risk management techniques, such as setting stop-loss orders and position sizing, to minimize potential losses and enhance the overall success of a trading strategy.
Education
by Julien_Eche
32
AMZN Short Position- Price below the 200 MA, confirming the general downtrend. - Possible formation of descending triangle. - Demand for the asset is weakening (see volume, RSI and OBV indicators). When the price cuts below the 50 MA, the RSI is well below 50% and the OBV is red and well below the mid level, enter short. I prefer to enter my positions with confirmations of indicators, rather formations of patterns. WARNING: THIS IS NOT A INVESTMENT ADVICE. I'M JUST POSTING MY IDEAS AND IT IS FOR EXCHANGE OPINIONS.
NASDAQ:AMZNShort
by mariohidalgo
Price action vs Indicators =, Another lie in trading ? I did not go into the details of "lagging" as it relates to indicators. Which is a true statement but its a misunderstood statement in the trading industry because most people don't truly understand what that means and also there are a lot of indicators that are leading. However in this video when I say "lagging" I am referring to the general idea in fx that indicators are useless because they are using past data.
PEPPERSTONE:ETHUSDEducation
by ChristopherDownie
Winning Combinations of Technical and Fundamental IndicatorsHere are some combinations of technical and fundamental indicators that investors often use to analyze stocks. 1. Moving Average, MACD , RSI + Valuation Ratios (P/E, P/B, P/S) This combination of technical and fundamental indicators is commonly used by investors to analyze the short-term price trends of a stock and its long-term valuation. Moving averages, MACD , and RSI are technical indicators that can help investors identify short-term buy or sell signals, overbought or oversold conditions, and follow the trend. On the other hand, valuation ratios like P/E, P/B, and P/S can provide insights into the company's long-term valuation and potential for growth. For example, if a stock's P/E ratio is significantly lower than its industry average, it may indicate that the stock is undervalued and could present a buying opportunity. 2. Bollinger Bands , Ichimoku Cloud , Stochastic + Financial Statement Analysis, Interest Rates This combination of technical and fundamental indicators is commonly used by investors to analyze a stock's price volatility and trend as well as its financial health and economic factors. Bollinger Bands , Ichimoku Cloud , and Stochastic are technical indicators that can help investors measure price volatility , identify overbought or oversold levels, and follow the trend. Financial statement analysis can provide insights into a company's financial health, including its revenue, earnings , and debt levels. Interest rates can also provide insights into the broader economic trends that may impact the stock's performance. For example, if interest rates are rising, it may indicate a stronger economy, which could positively impact the stock's performance. 3. Fibonacci Retracement , Support and Resistance , MACD + Economic and Political News, Key Economic Indicators ( Inflation Rate, GDP, Unemployment Rate) This combination of technical and fundamental indicators is commonly used by investors to analyze a stock's short-term price trends, volatility , and support and resistance levels, as well as the overall economic performance and market trends. Fibonacci retracement , Support and Resistance , and MACD are technical indicators that can help investors identify short-term buy or sell signals, measure volatility , and identify support and resistance levels. Economic and political news, as well as key economic indicators like inflation rate, GDP, and unemployment rate, can provide insights into the overall economic performance and market trends that may impact the stock's performance. For example, if there is positive economic news or if key economic indicators like GDP and inflation rate are improving, it may indicate a growing economy and positively impact the stock's performance. It is important to note that these combinations are just examples and their effectiveness may vary depending on market conditions and the trading strategy used. Investors should always exercise due diligence and research before using indicators in their trading strategy. Feel free to share your own combinations of indicators and opinions in the comments section below.
Education
by Julien_Eche
Learn 7 Classic Free Indicators For Technical Traders ◻️MACD(Moving Average Convergence/Divergence) Traders use MACD to identify changes in the direction or strength of the asset’s price trend. MACD can seem complicated at first glance, because it relies on additional statistical concepts such as the exponential moving average (EMA). But fundamentally, MACD helps traders detect when the recent momentum in an asset’s price may signal a change in its underlying trend. This can help traders decide when to enter, add to, or exit a position.MACD is a lagging indicator. After all, all the data used in MACD is based on the historical price action of the asset. Because it is based on historical data, it must necessarily lag the price. However, some traders use MACD histograms to predict when a change in trend will occur. ◻️VWAP(Volume-Weighted Average Price) The volume-weighted average price (VWAP) is a measurement that shows the average price of a security, adjusted for its volume. It is calculated during a specific trading session by taking the total dollar value of trading in the security and dividing it by the volume of trades. The formula for calculating VWAP is cumulative typical price x volume divided by cumulative volume. VWAP gives traders a smoothed-out indication of a security’s price (adjusted for volume) over time. It is used by institutional traders to ensure that their trades do not move the price of the security they are trying to buy or sell too extremely. ◻️EMA(Exponential Moving Average) An exponential moving average (EMA) is a type of moving average (MA) that places a greater weight and significance on the most recent data points. The exponential moving average is also referred to as the exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average simple moving average (SMA), which applies an equal weight to all observations in the period. ◻️THE FOUR TYPES OF EMA: ▪️9-EMA is use for short term trading ▪️21-EMA is used for day trading ▪️50-EMA is used for analysis ▪️200-EMA is used for long term view ◻️RSI(Relative Strength Index) The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to evaluate overvalued or undervalued conditions in the price of that security. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100.Generally, when the RSI indicator crosses 30 on the RSI chart, it is a bullish sign and when it crosses 70, it is a bearish sign. Put another way, one can interpret that RSI values of 70 or above indicate that a security is becoming overbought or overvalued. It may be primed for a trend reversal or corrective price pullback. An RSI reading of 30 or below indicates an oversold or undervalued condition. Overbought refers to a security that trades at a price level above its true (or intrinsic) value. That means that it's priced above where it should be, according to practitioners of either technical analysis or fundamental analysis. Traders who see indications that a security is overbought may expect a price correction or trend reversal. Therefore, they may sell the security. Thanks for reading bro, you are the best☺️ Like, comment and subscribe to boost your trading! Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
8
10 Common Technical Indicators Simply Explained for Easy TradingTrend Indicators: 1. Moving Average (MA): The Moving Average is a popular trend-following indicator that smooths out price data by creating a constantly updated average price. The MA is used to identify the general direction of a trend, as well as potential support and resistance levels. The most commonly used MA types are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). Short-term traders often use shorter MAs, such as the 10-day or 20-day MA, while longer-term traders may use the 50-day or 200-day MA. 2. Moving Average Convergence Divergence (MACD): The MACD is another trend-following momentum indicator that shows the relationship between two moving averages of a security's price. The MACD consists of a fast line (12-day EMA), a slow line (26-day EMA), and a signal line (9-day EMA). The MACD is used to identify trend reversals and momentum shifts. When the fast line crosses above the slow line, it is considered a bullish signal, and when the fast line crosses below the slow line, it is considered a bearish signal. Momentum Indicators: 3. Relative Strength Index (RSI): The RSI is a popular momentum oscillator that measures the velocity and magnitude of price movements. The RSI compares the average gains and losses over a specific period of time to determine whether a security is overbought or oversold. The RSI typically ranges from 0 to 100, with readings above 70 indicating overbought conditions and readings below 30 indicating oversold conditions. The RSI can be used to confirm price trends and to identify potential trend reversals. 4. Stochastic Oscillator: The Stochastic Oscillator is another momentum oscillator that compares the closing price of a security to its price range over a specific period of time. The Stochastic Oscillator consists of two lines: %K and %D. The %K line is the main line, and the %D line is a moving average of the %K line. The Stochastic Oscillator is used to identify overbought and oversold conditions and potential trend reversals. When the %K line crosses above the %D line, it is considered a buy signal, and when the %K line crosses below the %D line, it is considered a sell signal. Volatility Indicators: 5. Bollinger Bands: Bollinger Bands are a popular volatility indicator that consists of three lines: a moving average, an upper band, and a lower band. The upper and lower bands are typically set two standard deviations away from the moving average. The bands expand and contract as volatility increases and decreases. When the price is at the upper band, it is considered overbought, and when it is at the lower band, it is considered oversold. Bollinger Bands can be used to identify potential trend reversals and to confirm price trends. 6. Average True Range (ATR): The ATR is a volatility indicator that measures the average range of a security's price over a specific period of time. The ATR is typically used to identify potential breakout opportunities and to set stop-loss orders. High ATR readings indicate high volatility, while low ATR readings indicate low volatility. Oscillator Indicators: 7. Commodity Channel Index (CCI): The CCI is an oscillator indicator that measures the difference between a security's price and its average price over a specific period of time. The CCI typically ranges from -100 to +100, with readings below -100 indicating oversold conditions and readings above +100 indicating overbought conditions. The CCI can be used to identify potential trend reversals and to confirm price trends. 8. Relative Vigor Index (RVI): The RVI is another oscillator indicator that measures the strength of a security's price relative to its closing price range over a specific period of time. The RVI typically ranges from 0 to 100, with readings above 50 indicating bullish conditions and readings below 50 indicating bearish conditions. The RVI can be used to identify potential trend reversals and to confirm price trends. Volume Indicators: 9. On-Balance Volume (OBV): The OBV is a popular volume indicator that measures the buying and selling pressure of a security based on its volume. The OBV adds the total volume of a security when its price increases and subtracts the total volume when its price decreases. The OBV can be used to confirm price trends and to identify potential trend reversals. 10. Chaikin Money Flow (CMF): The CMF is another volume indicator that measures the buying and selling pressure of a security based on its volume. The CMF takes into account both the price and volume of a security to determine its overall buying and selling pressure. The CMF typically ranges from -1 to +1, with readings above 0 indicating buying pressure and readings below 0 indicating selling pressure. The CMF can be used to confirm price trends and to identify potential trend reversals. In conclusion, technical indicators are essential tools for traders to analyze securities and make informed decisions about buying and selling. Each indicator has its own strengths and weaknesses, and traders often use a combination of indicators to confirm their trading decisions. By understanding how these indicators work and what they measure, traders can gain a deeper insight into the behavior of the markets and potentially improve their trading performance.
Education
by Julien_Eche
2