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Foundations of Mastery: 2025 Mentorship Begins!📢 Welcome to the 2025 Mentorship Program! Greetings, Traders! This is the first video of the 2025 Mentorship Program, where I’ll be releasing content frequently, diving deep into ICT concepts, and most importantly, developing structured models around them. My goal is to help you gain a deeper understanding of the market and refine your approach to trading. Before we get started, I want to take a moment to speak to you directly. 💭 No matter where you are in your trading journey, I pray that you achieve—and even surpass—your goals this year. 📈 If you’re striving for consistency and discipline, may you reach new heights. 💡 If you’ve already found success, may you retain and refine your craft—because growth never stops. 🎯 If you’re just starting out, I pray you develop patience, discipline, and above all, accountability—because true progress comes when we own our failures and learn from them. 🔥 If you’ve been trading for years but still struggle with consistency, do not give up. The greatest adversity comes when you’re closest to success. Stay disciplined, stay dedicated, and keep pushing forward. Above all, let this be a year where we grow together—not just as traders, but as individuals. May we foster humility, respect, and a learning environment where both experienced and new traders can share knowledge and thrive. 🙏 I pray over these things in the name of Jesus. Amen. Let's have a great year! The_Architect

Education

20:00

by The_Archi-tect

Stop Loss Mastery: Methods Of Trade Protection Stop Loss and Take Profit represent the fundamental boundaries of every trade, acting as the cornerstones of risk management in trading. While both are important, Stop Loss carries particular significance and is considered more crucial than Take Profit. In manual trading, implementing a Stop Loss is absolutely essential, whereas Take Profit settings remain optional, offering traders more flexibility in managing their profitable positions. Traders can employ various methods to set their SL levels, and while specific trading systems often dictate their own rules, several universal approaches have proven effective. Let's examine one of the most common methods. 📍 On the Local Extrema This method offers two primary variations. The first involves placing your Stop Loss relative to the signal candle. For buy positions, you would set the Stop Loss several pips below the minimum of the bullish signal candlestick. Conversely, for sell positions, you would place it several pips above the maximum of the bearish signal candlestick. The second variation focuses on the last local extreme point rather than the signal candle itself. When opening a buy position, you would position your Stop Loss a few points below the most recent local minimum. For sell positions, you would place it above the most recent local maximum. However, traders should be aware of a significant drawback to these approaches: their predictability. Market makers and experienced traders can easily identify these common Stop Loss placement patterns on their charts. They often exploit this knowledge by deliberately pushing prices to levels where they anticipate a concentration of Stop Loss orders. After triggering these stops and forcing smaller traders to close their positions at a loss, they frequently allow the price to resume its original direction. This practice, known as "stop hunting," particularly affects retail traders who rely on these conventional placement methods. 📍 Setting Stop Loss by Key Price Levels When using price levels for Stop Loss placement, traders can take advantage of significant order accumulation points that are naturally more resistant to manipulation. This method requires placing the Stop Loss a few points beyond the key level - below when buying and above when selling. A key advantage of this approach is that it typically positions the Stop Loss well beyond the last local minimum (for buy trades) or maximum (for sell trades). This strategic placement helps protect positions from premature exits that might occur with simpler Stop Loss methods. 📍 Technical Indicator-Based Stop Loss The ATR or Parabolic SAR indicator offers a straightforward approach to Stop Loss placement that appeals particularly to newer traders. Its clear visual markers provide explicit guidance for Stop Loss positioning, with traders simply placing their stops at the SAR marker level. This method offers an interesting advantage: traders can manually adjust their Stop Loss with each new candle formation, creating a flexible alternative to traditional trailing stops. However, like extrema-based stops, indicator-based placement can be predictable and potentially vulnerable to market manipulation. 📍 Stop Loss Based on Fundamentals Rather than relying solely on pre-set Stop Loss levels, fundamental analysis often guides manual exit decisions. Prudent traders might close positions before significant market events, such as: • At the end of the American trading session when market activity naturally declines • Shortly before major economic news releases that could trigger substantial price movements Some traders incorporate fundamental factors into their Stop Loss calculations. For instance, they might set stops based on average daily price movements for specific currency pairs - like using a 70-pip Stop Loss for FX:EURUSD trades, reflecting that pair's typical daily range. 📍 Advanced Technical Stop Loss Strategies Beyond basic indicator-based stops, traders can employ more sophisticated technical analysis tools for exit trades. These might include: • Moving average crossovers • Stochastic oscillator overbought/oversold signals These approaches often require active management, with traders monitoring indicators in real-time and executing manual exits when their chosen signals appear. 🔹 Psychological Aspects of Stop Loss Management The psychological impact of Stop Loss execution presents a significant challenge for many traders. Even when a Stop Loss performs its intended function of limiting potential losses, traders may experience: • Feelings of personal failure • Diminished confidence in their trading system • General market skepticism • Emotional distress after multiple consecutive stops 🔹 Avoiding Mental Stop Losses While some traders prefer "mental" stops over actual platform orders, this approach carries significant risks: • Technical failures could prevent manual exits • Emotional barriers might delay necessary exits • Small losses can balloon into significant account drawdowns To protect against these risks, traders should always implement their mental stops as actual platform orders, ensuring systematic risk management regardless of market conditions or psychological pressures. This structured approach to Stop Loss placement combines technical precision with psychological awareness, helping traders develop both the skills and mindset needed for successful risk management. 🔹 Additional Position Management Methods In trading, while Stop Loss and Take Profit orders form the foundation of exit strategies, several sophisticated techniques can help traders optimize their position management. Let's explore these methods that go beyond basic exit orders. ⚫️ Breakeven Stop Adjustment One of the most psychologically powerful position management techniques involves moving your Stop Loss to the trade entry point, effectively eliminating downside risk while maintaining upside potential. This strategy becomes particularly valuable when price movement has demonstrated strong momentum in your favor. The conventional approach suggests adjusting to breakeven when the price has moved in your favor by double the initial Stop Loss distance. For instance, consider a trade with a 20-pip Stop Loss and a 60-pip Take Profit target. When the position shows 40 pips of profit (twice the initial risk), moving the Stop Loss to the entry point ensures you won't lose money on the trade while still allowing for further gains. ⚫️ Dynamic Risk Management with Trailing Stops Trailing Stops represent an evolution in risk management, allowing traders to protect accumulated profits while maintaining exposure to continued favorable price movement. This technique dynamically adjusts your Stop Loss level as the price moves in your favor, essentially "trailing" behind the price at a predetermined distance. ⚫️ Strategic Partial Position Closure Traders often face a dilemma when price approaches their Take Profit level: should they close the entire position or attempt to capture additional gains? The partial closure strategy offers a balanced solution. When market conditions suggest potential for extended movement beyond your initial target, consider closing a portion of your position (typically 70-80%) at the original Take Profit level while allowing the remainder to pursue more ambitious targets. This approach becomes particularly relevant when trading near significant technical levels. For example, if you're holding a long position with a Take Profit set below a major resistance level, and technical indicators suggest this level might break, closing most of your position secures profits while maintaining exposure to potential breakout gains. 📍 Conclusion While numerous exit strategies exist in trading, successful execution requires more than just mechanical application of techniques. True trading mastery emerges from the ability to recognize market context, understand both technical and fundamental factors, maintain emotional equilibrium, and make flexible decisions within established risk parameters. The journey of becoming a skilled trader involves developing judgment about when to apply different exit strategies. This wisdom comes through experience in the markets, careful observation of price action, and a deep understanding of how different approaches work in varying market conditions. Traders gradually build their expertise by starting with fundamental concepts and progressively incorporating more sophisticated position management techniques into their trading approach. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣

Education

Trading BITCOIN and other things: less is more I present in the video a strategy I devised to trade Bitcoin that proved to work on a cluster of other ETFs and stocks.

Education

12:29

Episode 30 <<Trade Surplus and Trade Deficit>>"3-Minute Mini Class" Sharing basic financial knowledge every day, guiding you from beginner to expert. Follow me and improve a little bit every day! Financial freedom is getting closer to you!

Education

by Ronnie-Economy

The Trading Quest: Leveling Up Your Trading Game Hello, fellow traders. In this education post I will present the evolution of a trader as levels because, truth be told, trading sometimes feels like a video game—except the boss fights are market volatility, and here the only cheat code is discipline. Developing a winning strategy is a journey that starts with basic understanding and evolves into a well polished plan. For this to happen, certain levels have to be "burnt". So below I will outline what I think are the levels of development a winning trading strategy, starting from initial experimentation to highly refined and scalable strategy: 1️⃣ Level 1: The Trial and Error Phase In the beginning, traders experiment with different strategies, tools, and systems. They may rely on random tips, indicators, or systems they read about online, often jumping from one strategy to another without a clear understanding of why one works and another doesn't. Important Aspects: The main issue here is lack of consistency. Strategies often lead to inconsistent results because traders fail to backtest or assess the viability of a system over time. At this stage, the trader might experience frustration as they can't pinpoint why certain strategies work or fail. Why? Testing and refining are vital to developing a strategy. A trader must learn the importance of understanding market conditions and being patient with their trial-and-error process. Backtesting becomes an invaluable tool for this level. 2️⃣ Level 2: The Search for the Right Strategy By this stage, traders understand that there is no "perfect" strategy, but a variety of strategies can work depending on the market behavior. They start to narrow down their focus and look for strategies that align with their risk tolerance, personality, and time commitment. Important Aspects: The trial here is resisting the temptation to continuously jump between different strategies. Traders may still be tempted by the allure of quick profits and may find themselves trying too many things at once, leading to becoming overwhelmed. Why? It is important to focus on finding simplicity and focus on one strategy. Strategies should be tailored to personal strengths, whether that’s day trading, swing trading, or position trading. The trader needs to focus on risk-reward ratios and refine their approach to fit the market conditions. 3️⃣Level 3: Strategy Development and Backtesting At this level, the trader now begins to build their strategy around clearly defined rules for entry, exit, and risk management. Backtesting comes into play, allowing the trader to see how the strategy would have performed in different market conditions. This stage marks the beginning of data-driven decisions rather than relying on guesswork. Important Aspects: The main focus here is to avoid over-optimization. There is the temptation to over-optimize the strategy based on historical data, which can lead to curve fitting. Strategies must be robust enough to perform in a variety of market environments, not just those found in past data. Why? Robust backtesting provides valuable insights, but should not be viewed as a guarantee of future performance. The focus should be on understanding the strategy’s performance across a range of scenarios and refining risk-reward parameters. 4️⃣ Level 4: Refining and Optimization With a tested strategy in place, traders now focus on refining their approach to adapt to real market conditions. This involves implementing risk management techniques such as position sizing, stop-losses or maximum drawdown limits. Here the focus is on refining the strategy, ensuring it is flexible and adaptable to various market environments. Important Aspects: During this phase is important to maintain a balanced risk-reward ratio. Overoptimizing for profitability can lead to excessive risk exposure, which undermines the strategy's long-term viability. Why? Because optimization is an ongoing process. Strategies should never be set in stone. The trader learns that fine-tuning a strategy based on live market conditions and feedback is a continuous process. Optimizing the risk-reward balance will determine the long-term success of the strategy. 5️⃣ Level 5: Live Trading with a Demo or Small Capital Finally! Trust me when I say this is the biggest turning point. After refining the strategy, traders move to live markets with real money, (if then haven't been tempted already and lost money). Often time they start small or using demo accounts to minimize risk. At this level, traders will encounter the psychological elements of trading—such as fear of loss, overconfidence after wins, or hesitation after losses. Important Aspects: The main trial at this level is that the emotional component of trading takes over. Traders may experience a shift in behavior when real money is at stake, even though they had success in demo accounts or small-size trades. Overtrading, revenge trading, and second-guessing the strategy are common pitfalls. Why? The trader must apply the same rules from backtesting to live trading, despite the emotions involved. At this stage, mental resilience and psychological control are just as important as the strategy itself. 6️⃣ Level 6: Full Strategy Deployment and Scaling By now, the trader has developed confidence in their strategy. They’ve mastered the mental discipline required to follow their trading plan, even when emotions are high. The trader begins scaling their strategy, increasing position sizes while maintaining the risk-reward ratio and capital allocation that suits their risk tolerance. Important Aspects: At this level, the trial is to maintain consistency while scaling. The trader may face issues related to emotional attachment to larger positions or feel the pressure to adjust the strategy for increased capital. Market volatility can also affect decision-making, leading to increased risk exposure. Why? As the trader increases their trading capital, they must remain mindful of market conditions and adjust position sizes accordingly. Portfolio diversification and ensuring that no single trade has too large an impact on overall capital are essential here. 7️⃣Level 7: The Master Strategist - The Final Boss 🏆 Congratulations! At this highest level, you must have developed a consistently profitable strategy that can be applied in different market behavior. The strategy has become highly effective in various conditions, and the trader can easily adapt to different setups without deviating from the core principles. Important Aspects: Now the focus is on fine-tuning their mindset for optimal performance. They anticipate emotional triggers before they happen and know exactly how to deal with them when they do come. The trader’s mental clarity allows them to stay composed during market volatility and follow their strategy with unmoved commitment. Why? The pinnacle of trading psychology is the ability to systematically execute trades with confidence, without being influenced by fear, greed, or euphoria. This confidence comes from knowing that their strategy is built on years of testing, adjustment, and improvement. This allows them to consistently make rational decisions that align with their long-term trading goals. They maintain discipline regardless of market volatility and use data-driven decisions to continue growing their capital. 📈 Developing a winning trading strategy is a dynamic process that requires continuous learning, adjustment, and discipline. Traders must be patient with themselves during each level, from the initial trial and error to the refined, proven strategy that supports consistent success. The levels involve mastering both the technical elements of strategy development and the psychological factors that affect trading performance. 🌟

Education

Trading strategy is determination and waiting Hello, traders. If you "Follow", you can always get new information quickly. Please click "Boost" as well. Have a nice day today. ------------------------------------- BW(100) indicator and HA-High indicator show the high point range. In other words, the fact that the BW(100) indicator and HA-High indicator were created means that it has fallen from the high point range. Therefore, the range made up of the BW(100) indicator and the HA-High indicator is called the high boundary zone. When it falls in this range, you can sell (SHORT), but it is not easy to enter the actual sell (SHORT) position. Therefore, in order to reduce this difficulty, the box range was set and displayed based on the HA-High indicator. Therefore, when it falls below the 2.9660 point and shows resistance, it is possible to enter a sell (SHORT) position for the last time. In that sense, it can be said that entry was possible today. - Currently, the StochRSI indicator is showing a pattern of rising in the oversold zone and then failing to continue the upward trend and falling again. This means that the decline is strong. However, when the StochRSI indicator falls again to the oversold zone and then rises, it is highly likely to show a large increase depending on where it is supported. In that sense, if it shows support in the second zone of 2.5127-2.6031, it is highly likely to show a large increase. If not, there is a possibility of meeting the M-Signal indicator on the 1W chart. - (30m chart) For a trend change, you can see where it is based on the MS-Signal indicator. However, you need to check whether the trend is sustainable at the support and resistance points. In other words, it is currently showing signs of rising above the MS-Signal indicator. If it continues to rise like this, in order to continue the upward trend, it must rise above the M-Signal indicator and 5EMA+StErr indicator on the 1D chart to maintain the price. If not, it will fall again. Therefore, you need to buy (LONG) when it is supported near the HA-Low indicator and BW(0) indicator, and liquidate when it is resisted near the MS-Signal indicator. If you continue trading like that, if the MS-Signal indicator rises higher and the price is maintained, you can check for support near the M-Signal indicator and 5EMA+StErr indicator on the 1D chart and respond. Therefore, when looking at the 30m chart, it may be advantageous to trade with a buy (LONG) position. Then, when you meet the HA-High indicator or BW (100) indicator, you trade with a sell (SHORT) position. If you had previously traded with a sell (SHORT) position on the HA-High indicator or BW (100) indicator on the 30m chart, it would have been the best choice. - Thank you for reading to the end. I hope you have a successful trade. -------------------------------------------------- - Big picture I used TradingView's INDEX chart to check the entire range of BTC. (BTCUSD 12M chart) Looking at the big picture, it seems to have been following a pattern since 2015. In other words, it is a pattern that maintains a 3-year bull market and faces a 1-year bear market. Accordingly, the bull market is expected to continue until 2025. - (LOG chart) Looking at the LOG chart, we can see that the increase is decreasing. Accordingly, the 46K-48K range is expected to be a very important support and resistance range from a long-term perspective. Therefore, we do not expect to see prices below 44K-48K in the future. - The Fibonacci ratio on the left is the Fibonacci ratio of the uptrend that started in 2015. That is, the Fibonacci ratio of the first wave of the uptrend. The Fibonacci ratio on the right is the Fibonacci ratio of the uptrend that started in 2019. Therefore, this Fibonacci ratio is expected to be used until 2026. - No matter what anyone says, the chart has already been created and is already moving. It is up to you how to view and respond to it. Since there is no support or resistance point when the ATH is updated, the Fibonacci ratio can be appropriately utilized. However, although the Fibonacci ratio is useful for chart analysis, it is ambiguous to use it as a support and resistance role. The reason is that the user must directly select the important selection points required to create the Fibonacci. Therefore, it can be useful for chart analysis because it is expressed differently depending on how the user specifies the selection point, but it can be seen as ambiguous for use in trading strategies. 1st: 44234.54 2nd: 61383.23 3rd: 89126.41 101875.70-106275.10 (when overshooting) 4th: 134018.28 151166.97-157451.83 (when overshooting) 5th: 178910.15 -----------------

Education

Trade high probabilities using game theory According to statistics, 95% of traders are losing longterm. Not because they lack skill, but because they involve in high variance (or poor probability) situations. What is game theory? we can define GT with three principles. *People dont want to lose. (hence.. predictable). *People buy good things at good price, or they are profit maximizing. *Everyone is strategic. ** we assume that "nobody can predict future". ** markets respond to feedbacks or signals. Practice: the higher something goes, potential narrows and risk increases. Deeper something falls, "potential" becomes attractive. Once market decides that it will fall -- people assume crash as possibility. People who can buy at a strong trend line - has benefit of having more information. (1) Downtrending VIX highs and accumulating lows. a strong signal about SPX peak, with everyone expecting a market correction before US election. ---> GT in practice. (2) pre-election. Markets be wobbly, pointing to 50-50 probability or risk. Maybe there was fear of NVDA/AAPL high valuations, or the fear due to Trump tariff policy (markets are 6m forward looking) as bond yields were rallying. If we assume statistically, markets boom after elections. We can predict GT in action (or call it market forces). imo that still is a profitable risk. People hate uncertainty and they love guarantees. So the "wobble" was reasonable. (3) VIX higher low.. predictably (GT) sell off follows. Almost as by the book. other way to put it? people maximize potential while minimize loses/risk. There are periods of volatile markets and periods for one directional rallies. P.S. Blue arrows are longterm macd turning points.

Education

Episode 29 <<National Budget>>"3-Minute Mini Class" Sharing basic financial knowledge every day, guiding you from beginner to expert. Follow me and improve a little bit every day! Financial freedom is getting closer to you!

Education

by Ronnie-Economy

Blueprint for Becoming a Successful Trader in 2025 Using AlgoBot **Blueprint for Becoming a Successful Trader in 2025 Using Algo Trading and Trading Bots** Algorithmic trading (algo trading) and trading bots are becoming increasingly dominant in financial markets, including stocks, crypto, and forex. To succeed as an algo trader in 2025, you need a well-structured plan covering **strategy development, risk management, automation, backtesting, and market adaptation**. Here’s a step-by-step blueprint: ## **1. Understand the Basics of Algo Trading** Before diving into automated trading, ensure you understand key concepts: ✅ **Market Microstructure** – Learn how markets function, order types, liquidity, slippage, and execution speeds. ✅ **Trading Strategies** – Get familiar with high-frequency trading (HFT), mean reversion, momentum, arbitrage, and market-making. ✅ **Programming & APIs** – Master Python, JavaScript, or C++ for coding bots and integrating them with exchanges. ✅ **Backtesting & Optimization** – Learn how to test and refine strategies using historical data. ### **Key Tools & Resources:** - **Languages:** Python (Pandas, NumPy, Scikit-learn), C++, JavaScript - **Libraries:** Backtrader, Zipline, QuantConnect, TensorFlow (for AI-based models) - **Market APIs:** Binance API (crypto), Alpaca API (stocks), MetaTrader (forex) ## **2. Choose a Trading Market & Strategy** Your strategy will depend on the asset class and market structure. ### **Popular Markets for Algo Trading in 2025:** 📈 **Cryptocurrency (Solana, Ethereum, Bitcoin, meme coins)** – High volatility, DeFi opportunities, 24/7 trading. 📊 **Stocks (Nasdaq, NYSE, Penny Stocks)** – Institutional competition, algo arbitrage, trend following. 💱 **Forex (EUR/USD, GBP/JPY, AUD/CAD)** – Global liquidity, macroeconomic-driven trends, HFT-friendly. ### **Types of Algo Trading Strategies:** 1. **Market Making** – Providing liquidity by placing buy/sell orders. 2. **Trend Following** – Using moving averages, RSI, and MACD to follow price momentum. 3. **Mean Reversion** – Buying oversold assets and selling overbought assets. 4. **Statistical Arbitrage** – Exploiting price inefficiencies using mathematical models. 5. **AI-Driven Bots** – Machine learning models predicting price action based on data patterns. 6. **High-Frequency Trading (HFT)** – Ultra-fast trading strategies requiring low-latency execution. ### **Key Trading Platforms & Tools:** 🔹 **Crypto:** 3Commas, Pionex, HaasOnline, KuCoin bots 🔹 **Stocks & Forex:** MetaTrader, NinjaTrader, TradingView Pine Script 🔹 **AI & Data Analysis:** QuantConnect, Zipline, TensorFlow, GPT-based bots ## **3. Build & Automate Your Trading Bot** ### **Steps to Create an Algorithmic Trading Bot:** 1. **Define the Strategy** – Choose a trading approach (trend following, arbitrage, etc.). 2. **Code the Bot** – Write scripts in Python, JavaScript, or C++ to execute trades via exchange APIs. 3. **Backtest on Historical Data** – Use past market data to see if your bot would have been profitable. 4. **Simulate in a Paper Trading Environment** – Run the bot in a risk-free simulated market. 5. **Deploy on Live Market** – Use a small amount of capital to test real-world performance. ### **Key Factors for a Good Algo Trading Bot:** ✅ **Latency Optimization** – Reduce execution delays for better entry/exit timing. ✅ **Error Handling** – Implement stop-loss, failsafe mechanisms to prevent large losses. ✅ **AI & Machine Learning** – Use AI to analyze market sentiment, detect patterns, and adapt to new conditions. ✅ **Auto-Tuning Parameters** – Use reinforcement learning or Bayesian optimization for continuous improvement. ## **4. Risk Management & Capital Preservation** Even the best trading bot can fail if risk management isn’t in place. ### **Risk Control Techniques:** 🚨 **Position Sizing** – Never risk more than 1-2% of your capital per trade. 🔻 **Stop-Loss & Take-Profit** – Set predefined exit points to limit losses and lock in profits. 📊 **Diversification** – Run multiple bots with different strategies across various markets. ⚖️ **Leverage Management** – Avoid excessive leverage that can wipe out your account in high volatility. ## **5. Optimize, Scale & Stay Ahead of the Market** The best algo traders **adapt** to market conditions and continuously improve their strategies. ### **Scaling Your Trading Operations:** ✅ **Optimize Execution** – Use low-latency execution via co-location services. ✅ **AI-Enhanced Strategies** – Incorporate machine learning for adaptive decision-making. ✅ **Multi-Bot Portfolio** – Run multiple bots across different strategies & timeframes. ✅ **Real-Time Monitoring** – Use dashboards for tracking performance and debugging. ### **Emerging Trends for 2025:** 🚀 **AI-Powered Trading** – GPT-based trading models analyzing market sentiment. 📡 **Decentralized Trading Bots** – Running bots on blockchain-based smart contracts. 🌍 **Multi-Asset Trading** – Crypto, stocks, forex, and commodities in one unified algo framework. 🔗 **DeFi Trading & Arbitrage** – Bots leveraging DEX liquidity pools & yield farming. ## **Final Blueprint for Success in 2025** 📌 **Master Algo Trading Basics** – Learn coding, market mechanics, and execution methods. 📌 **Choose a Profitable Market & Strategy** – Focus on AI-driven bots, arbitrage, or market making. 📌 **Develop & Automate Bots** – Use Python, API integrations, and machine learning models. 📌 **Implement Risk Management** – Use stop-loss, proper position sizing, and capital allocation. 📌 **Optimize & Adapt** – Constantly improve execution speed, data analysis, and bot strategies. 📌 **Stay Ahead with AI & DeFi** – Leverage blockchain innovations and AI-powered trade predictions. By following this blueprint and continuously refining your strategies, you can **maximize profits, reduce risks, and stay competitive in 2025’s algo trading landscape**. 🚀📈

Education

by ProjectSyndicate

Understanding Pitchfork The Pitchfork indicator, also known as Andrews' Pitchfork, is a popular technical analysis tool used by traders to identify potential support and resistance levels, as well as to gauge the direction of a trend. Developed by Dr. Alan Andrews, this indicator is based on the concept of median lines and is particularly useful in trending markets. How the Pitchfork Indicator Works The Pitchfork indicator consists of three parallel trendlines that are drawn using three key points on a price chart: Pivot Points: The first point (P0) is a significant high or low in the price action. The second (P1) and third (P2) points are subsequent highs or lows that form the basis of the trend. Drawing the Pitchfork: The middle line (median line) is drawn from P0 to the midpoint between P1 and P2. The upper and lower lines are drawn parallel to the median line, starting from P1 and P2, respectively. These three lines create a "pitchfork" shape, which helps traders visualize potential areas of support and resistance. Key Features of the Pitchfork Indicator Trend Identification: The Pitchfork is most effective in trending markets. The median line acts as a dynamic support or resistance level, depending on the direction of the trend. In an uptrend, prices tend to gravitate toward the median line and often find support there. In a downtrend, the median line acts as resistance. Support and Resistance Levels: The upper and lower lines of the Pitchfork serve as potential resistance and support levels, respectively. Traders often look for price reactions (bounces or breaks) at these levels to make trading decisions. Price Targets: The Pitchfork can help identify potential price targets. For example, if the price breaks above the upper line in an uptrend, it may continue to move higher, with the next target being the extension of the median line. Divergence and Convergence: The Pitchfork can also highlight divergences or convergences between price action and the indicator, which may signal potential reversals or continuations. How Traders Use the Pitchfork Indicator Trend Confirmation: Traders use the Pitchfork to confirm the strength and direction of a trend. If prices consistently respect the median line and the parallel lines, the trend is considered strong. Entry and Exit Points: Traders often enter trades when prices bounce off the median line or one of the parallel lines. Exits are typically planned near the opposite parallel line or when the price shows signs of reversal. Stop-Loss Placement: Stop-loss orders are often placed just outside the Pitchfork lines to minimize risk in case the price breaks through the expected support or resistance levels. Combining with Other Indicators: The Pitchfork is often used in conjunction with other technical indicators, such as moving averages, RSI, or MACD, to increase the probability of successful trades. Limitations of the Pitchfork Indicator While the Pitchfork is a powerful tool, it has some limitations: It works best in trending markets and may produce false signals in sideways or choppy markets. The accuracy of the Pitchfork depends on the correct selection of pivot points, which can be subjective. It requires practice and experience to use effectively. Conclusion The Pitchfork indicator is a versatile and insightful tool for traders seeking to analyze trends and identify key levels of support and resistance. By understanding how to draw and interpret the Pitchfork, traders can enhance their technical analysis and make more informed trading decisions. However, like all technical tools, it should be used in conjunction with other analysis methods and risk management strategies to maximize its effectiveness.

Education

by CRYPTONIC_trend

Strongest Reversal Candlestick Patterns For Gold & Forex In this educational article, we will discuss powerful reversal candlestick patterns that every trader must know. Bullish Engulfing Candle Bullish engulfing candle is one of my favourite ones. It usually indicates the initiation of a bullish movement after a strong bearish wave. The main element of this pattern is a relatively big body. Being bigger than the entire range of the previous (bearish) candle, it should completely "engulf" that. Such a formation indicates the strength of the buyers and their willingness to push the price higher. Bullish engulfing candle that I spotted on Gold chart gave a perfect bullish trend-following signal. Bearish Engulfing Candle The main element of this pattern is a relatively big body that is bigger than the entire range of the previous (bullish) candle. Such a formation indicates the strength of the sellers and their willingness to push the price lower. ________________________ Bullish Inside Bar Inside bar formation is a classic indecision pattern. It usually forms after a strong bullish/bearish impulse and signifies a consolidation . The pattern consists of 2 main elements: mother's bar - a relatively strong bullish or bearish candle, inside bars - the following candles that a trading within the range of the mother's bar. The breakout of the range of the mother's bar may quite accurately confirm the reversal. A bullish breakout of its range and a candle close above that usually initiates a strong bullish movement. Bearish Inside Bar A bearish breakout of the range of the mother's bar and a candle close below that usually initiates a strong bearish movement. Bearish breakout of the range of the mother's bar candlestick provided a strong bearish signal on EURUSD. ________________________ Doji Candle (Morning Star) By a Doji we mean a candle that has the same opening and closing price. Being formed after a strong bearish move, such a Doji will be called a Morning Star. It signifies the oversold condition of the market and the local weakness of sellers. Such a formation may quite accurately indicate a coming bullish movement. Doji Candle (Evening Star) Being formed after a strong bullish move, such a Doji will be called an Evening Star. It signifies the overbought condition of the market and the local weakness of buyers. Such a formation may quite accurately indicate a coming bearish movement. Above is a perfect example of a doji candle and a consequent bearish movement on Silver. I apply these formations for making predictions on financial markets every day. They perfectly work on Forex, Futures, Crypto markets and show their efficiency on various time frames. ❤️Please, support my work with like, thank you!❤️

Education

by VasilyTrader

Trendline Liquidity Grabbing – Smart Money Tactics!🚀 What Just Happened? A trendline was respected multiple times, creating a strong support level. However, instead of bouncing immediately, price broke below the trendline, grabbing liquidity before reversing with strong momentum! 🔍 Why Does This Happen? 📌 Retail Trap: Many traders place buy orders at the trendline and stop losses just below. Smart money hunts these stops to accumulate liquidity. 📌 Fake Breakout: The price temporarily dips below to trigger stop losses & weak hands before the real move begins. 📌 Confirmation Reversal: After liquidity is taken, strong buying pressure pushes the price back up! 📊 Lesson for Traders: ✅ Don't panic when a trendline breaks—watch for liquidity grabs! ✅ Wait for confirmation before entering trades. ✅ Use this as a sniper entry strategy for high RR trades. 🔥 Master this, and you'll stop falling for fake breakouts! 💰

Education

Understanding RSI In Trading This article takes a deep dive into the Relative Strength Index (RSI), a powerful tool for traders at any level. We’ll break down how RSI works, how to interpret it, and how to use it effectively in your trading strategies. Plus, we’ll touch on the math behind it. Whether you’re a seasoned pro or just getting started, this guide will give you the insights you need to make RSI a valuable part of your trading toolkit. Understanding Oscillators in Trading An oscillator is a technical indicator that moves between two extremes, usually ranging from 0 to 100. Traders use oscillators to spot overbought and oversold conditions in the market. An overbought signal suggests that excessive buying has driven prices too high and may not be sustainable, while an oversold signal indicates the opposite—excessive selling that could lead to a potential rebound. By tracking these price oscillations, traders can anticipate trend reversals and make more informed decisions. Key Functions of Oscillators: Momentum Analysis: Oscillators gauge the speed and strength of price movements, offering insights into an asset’s momentum. Volatility Detection: They help identify periods of high or low volatility, enabling traders to adjust their strategies accordingly. Trend Confirmation: When combined with other technical indicators, oscillators can validate or reveal emerging trends in the market. Introduction to the RSI Indicator The Relative Strength Index (RSI) is a momentum-based technical indicator used to assess the strength of recent price movements and identify overbought or oversold conditions in an asset. It helps traders spot potential trend reversals by oscillating between 0 and 100. An RSI above 70 suggests the asset may be overbought, while a reading below 30 indicates it may be oversold. By the end of this, you'll be an RSI expert! Interpreting RSI Readings RSI values above 70 suggest that an asset is overbought, meaning it has likely experienced a sharp price increase and may be due for a correction. On the other hand, RSI values below 30 indicate that the asset is oversold, implying a steep price drop and the possibility of a rebound. However, it's important to remember that RSI isn't foolproof and can occasionally give false signals. To increase accuracy, it's best to use RSI in combination with other technical indicators and fundamental analysis. Overbought: An RSI reading above 70 signals that the asset may be overbought and due for a correction. This could present a potential selling opportunity, but traders should be cautious, as false signals can occur. Oversold: An RSI reading below 30 indicates that the asset may be oversold and due for a rebound. This can signal a potential buying opportunity, but again, traders should be cautious of possible false signals. Divergence: Divergence happens when the RSI moves in the opposite direction of the price. For instance, if the price makes new highs while the RSI forms lower highs, this could point to a potential trend reversal. Support and Resistance: The RSI can also help identify support and resistance levels. If the RSI consistently bounces off the 30 level, it may indicate a support level. Conversely, if the RSI repeatedly fails to break through the 70 level, this could signal a resistance level. RSI and Divergence Divergence happens when the RSI moves in the opposite direction of the asset's price, often signaling a potential trend reversal. For example, if the price is hitting new highs but the RSI forms lower highs, it could indicate a bearish divergence, suggesting a possible sell signal. A common example of bearish divergence is when the price of an asset makes higher highs, but the RSI forms lower highs. This suggests weakening buying momentum, even as the price continues to rise. It can be a sign that the uptrend may be losing steam, with a reversal to the downside potentially on the horizon. On the other hand, bullish divergence occurs when the price is making lower lows, but the RSI is making higher lows. This indicates that selling pressure is subsiding, and the asset may be primed for a rebound to the upside. Traders can use this pattern to time their entries for long positions. RSI divergence can help traders identify overbought or oversold conditions, enabling them to make more effective decisions about entry and exit points. However, divergence should always be used alongside other technical and fundamental analysis for confirmation before acting on the signal. Calculating the RSI Indicator Calculating the RSI is straightforward once you break it down. The goal is to determine the average gains and losses over a set period, typically 14 days. This helps assess the strength of price movements and identify overbought or oversold conditions. While the math may sound complex, understanding the formula is key to using the tool effectively. The RSI formula is: RSI = 100 - (100 / (1 + (Average Gains / Average Losses))) This calculation provides valuable insights into the relative strength of an asset’s price movements. Factors Affecting the RSI Calculation The RSI calculation can be influenced by several factors, with the length of the time period being the most significant. A shorter period (e.g., 5 days) results in a more volatile RSI that responds quickly to price changes, while a longer period (e.g., 20 days) creates a smoother RSI, filtering out short-term fluctuations. The ideal time period depends on your trading style and the volatility of the market you're analyzing. Why the RSI Indicator is Powerful Identifies Overbought and Oversold Conditions: The RSI helps traders recognize when an asset is overbought or oversold, allowing them to time their entries and exits more effectively. Detects Divergences: Divergences between the RSI and price can signal potential trend reversals, giving traders an early warning to adjust their positions accordingly. Flexible and Customizable: Traders can adjust the RSI’s period to match their trading style and the specific market conditions, making it a highly versatile tool for technical analysis. Widely Adopted and Well-Understood: The RSI is one of the most popular technical indicators, with a wealth of resources and analysis available to assist traders in interpreting its signals. Practical Application in Real Life Here are a few effective strategies where RSI can be combined with other technical indicators for a more comprehensive analysis: Example 1: RSI + Support/Resistance + Moving Averages Scenario: You are analyzing a stock that has been in an uptrend, with the price currently approaching a key resistance level at $100. The 50-period moving average is also trending upwards, confirming the bullish trend. The RSI is at 75, indicating an overbought condition. As the price nears the resistance level, the RSI starts to flatten, suggesting the upward momentum might be weakening. You wait for the price to fail to break above the $100 resistance level and the RSI to drop below 70, signaling a potential reversal. This provides a clearer sell signal, as both the price and RSI align with the idea that a correction could be coming. Why this works: By using both RSI and moving averages with support and resistance, you have a solid confirmation of the potential reversal, as it combines trend analysis with overbought conditions. Example 2: RSI + SFP (Swing Failure Pattern) + Price Action Scenario: You’re monitoring a currency pair that recently made a new low, breaking through a previous swing low at 1.1500. However, the price quickly reverses and fails to sustain the breakdown, bouncing back above the previous low, forming an SFP. At the same time, the RSI is below 30, but it starts to turn upward, forming a bullish divergence (higher lows on the RSI while the price makes lower lows). This divergence and the SFP setup suggest that the selling pressure is decreasing, and a potential reversal to the upside could be imminent. Why this works: The Swing Failure Pattern highlights the false breakdown, and the RSI divergence confirms that momentum is shifting. This combination increases the likelihood of a successful trade when entering on the potential reversal. Key Takeways The RSI is an essential tool for traders looking to spot overbought or oversold conditions and potential trend reversals. By mastering how to interpret RSI readings and incorporating them into your strategies, you can improve your decision-making and potentially boost your trading results. For a more balanced approach, always use RSI alongside other technical indicators and fundamental analysis.

Education

by CandelaCharts

10 Technical Indicators Every Trader Uses for Trading 10 Technical Indicators Every Trader Uses for Trading Technical analysis indicators are essential tools for traders to analyse every aspect of market movements, including market trends, momentum, volume, and volatility. This article explores ten key technical indicators you could add to your toolkit. Read detailing definitions, uses, and the signals they provide to potentially enhance trading strategies. To get started with these indicators, head over to FXOpen. Ichimoku Cloud The Ichimoku Cloud, also known as Ichimoku Kinko Hyo, is a comprehensive technical analysis tool designed to provide a clear picture of market trends, momentum, and support and resistance levels. Considered one of the best stock market indicators, this Japanese tool is widely used for its ability to offer a panoramic view of the market. Definition The Ichimoku Cloud comprises five main components: - Tenkan-sen (Conversion Line): The average of the highest high and the lowest low over the past 9 periods. - Kijun-sen (Base Line): The average of the highest high and the lowest low over the past 26 periods. - Senkou Span A (Leading Span A): The average of the Tenkan-sen/Conversion Line and Kijun-sen/Base Line, offset by 26 periods ahead. - Senkou Span B (Leading Span B): The average of the highest high and lowest low over the past 52 periods, plotted 26 periods ahead. - Chikou Span (Lagging Span): The most recent closing price positioned 26 periods behind. These components create the "Kumo" or cloud, which projects future support and resistance levels. Signals 1. TK Cross: - Bullish Signal: Tenkan-sen crosses above Kijun-sen above the Kumo. - Bearish Signal: Tenkan-sen crosses below Kijun-sen below the Kumo. 2. Kumo Breakout: - Bullish Signal: Price breaks above the Kumo. - Bearish Signal: Price breaks below the Kumo. 3. Chikou Span Confirmation: - Bullish Signal: Chikou Span is above the price and Kumo. - Bearish Signal: Chikou Span is below the price and Kumo. 4. Kumo Twist: - Indicates a potential trend reversal when the cloud changes colour (from red to green for bullish, green to red for bearish). For cryptocurrency* trading, the standard settings (9, 26, 52) are often adjusted to 20, 60, 120 to accommodate the 24/7 trading cycle. More details on using Ichimoku in crypto* markets can be found on the FXOpen dedicated page. Fibonacci Retracements Fibonacci retracements are a technical tool that helps traders identify potential areas of support and resistance in a given market. This method is based on the Fibonacci sequence, a series of numbers where each number is the sum of the two preceding ones. In trading, key Fibonacci levels are 38.2%, 50%, and 61.8%, which are used to analyse potential reversal points. Definition Fibonacci retracements are widely used stock chart indicators that help traders determine where the price might reverse during a correction in a prevailing trend. The tool involves plotting horizontal lines at these key levels, calculated from a significant high to a significant low when the price corrects after a strong downward movement or from a significant low to a significant high when the price corrects after a strong upward movement. Signals 1. Support and Resistance Levels: - 38.2%, 50%, and 61.8% Levels: These are the primary retracement levels where the price is likely to reverse. 2. Trend Identification: - Uptrend: Place the tool from a swing low to a swing high. - Downtrend: Place the tool from a swing high to a swing low. 3. Trade Setup: - Entry Points: Traders often look for the price to reach and react at these levels before entering a trade. - Stop Loss: Typically set just beyond the nearest Fibonacci level the price targets. - Take Profit: Targets are often placed at the next Fibonacci level. For cryptocurrency* trading, settings may vary. We provide a detailed explanation on using Fibonacci retracements in crypto markets with adjustments to fit this unique trading environment. Volume Weighted Average Price (VWAP) The Volume Weighted Average Price (VWAP) is a technical indicator that provides the average price an asset has traded at throughout a particular period (usually one day), weighted by volume. It offers a more comprehensive view than simple moving averages by incorporating both price and volume data and is considered one of the best intraday trading indicators. Calculation VWAP is calculated using the formula: - VWAP = Sum(Typical Price * Volume) / SumVolume, where Typical Price is the average of the high, low, and close prices for each period. Signals 1. Assessing Fair Value: A price above VWAP indicates overvaluation, while a price below suggests undervaluation. 2. Market Sentiment and Trends: - Bullish Trend: Price above VWAP. - Bearish Trend: Price below VWAP. 3. Support and Resistance Levels: - Support: VWAP acts as support in a bullish market. - Resistance: VWAP acts as resistance in a bearish market. 4. Entry Quality: - Entry near VWAP suggests buying or selling at a reasonable market value. For cryptocurrency* trading, the VWAP settings remain similar to traditional markets, but the tool's application may vary due to the 24/7 nature of crypto* trading. Check out FXOpen’s page on how to use VWAP in crypto markets for more information. Accumulation/Distribution Indicator (A/D) The Accumulation/Distribution (A/D) indicator is a volume-based tool that assesses the cumulative flow of money into and out of an asset. It’s widely used as an indicator for day trading. It helps traders determine the underlying buying and selling pressure, making it one of the valuable forex and stock indicators for analysing potential price trends and reversals. Calculation The A/D indicator calculates the Money Flow Multiplier (MFM), which ranges from -1 to 1 based on the closing price's position within the period’s high-low range. If the closing price is in the upper half, the MFM is positive; if in the lower half, it is negative. This multiplier is then multiplied by the period’s volume to get the Money Flow Volume (MFV). The A/D line represents the cumulative sum of these MFVs over time, reflecting net volume flow. Signals Identifying Reversals: - Bullish Divergence: Price makes lower lows while the A/D line makes higher lows, indicating waning selling pressure and a potential price increase. - Bearish Divergence: Price makes higher highs while the A/D line makes lower highs, suggesting decreasing buying pressure and a possible price decline. Trend Confirmation: - Uptrend: Both price and A/D line rise, indicating sustained buying pressure. - Downtrend: Both price and A/D line fall, showing continuous selling pressure. Trading Breakouts: - The A/D indicator can confirm breakouts beyond support or resistance levels. A breakout in price aligned with a similar movement in the A/D line signals the start of a new trend. Average True Range (ATR) The Average True Range (ATR) is a technical tool used to measure market volatility. It reflects the degree of price movement over a specified period, helping traders understand the level of volatility in an asset. Calculation ATR calculation includes several steps. Find more details in our article. Signals ATR does not indicate the price direction but rather the degree of price movement. Traders use ATR to make informed decisions about stop-loss levels and to gauge the potential for market moves. It’s one of the popular day trading indicators. 1. Volatility Measurement: - A high ATR value indicates high volatility, while a low ATR suggests low volatility. This helps traders adjust their strategies based on market conditions. 2. Setting Stop-Loss Levels: - Traders often set stop-loss orders at a multiple of the ATR value. For instance, a stop loss might be placed at twice the ATR below the entry price in a long position to account for volatility and reduce the risk of being stopped out prematurely. 3. Identifying Potential Breakouts: - Sudden increases in ATR values can indicate the start of a new trend or a significant price move, alerting traders to potential trading opportunities. Donchian Channel Indicator The Donchian Channel is a technical analysis tool designed to identify volatility, market trends, price reversals, and potential breakout points. It consists of three lines based on the highest high and lowest low over a specified period, typically 20 periods. Definition - Upper Boundary: The highest high over N periods. - Lower Boundary: The lowest low over N periods. - Middle Line: The average of the upper and lower boundaries. These lines help traders determine market volatility and identify potential buy and sell signals based on price movements. Signals 1. Tracking Volatility: - Widening Channel: Indicates high volatility. - Narrowing Channel: Indicates low volatility. 2. Identifying Trends: - Bullish Trend: The upper boundary rises while the lower boundary stays flat. - Bearish Trend: The lower boundary falls while the upper boundary stays flat. 3. Trading Breakouts: - Above Middle Line: Potential bullish signal. - Below Middle Line: Potential bearish signal. 4. Trading Reversals: - In range-bound markets, the upper boundary acts as resistance and the lower boundary as support, guiding traders to close or open positions accordingly. Chaikin Money Flow (CMF) The Chaikin Money Flow (CMF) is a volume-weighted average indicator measuring the buying and selling pressure on an asset over a specific period, typically 20 or 21 periods. It combines price and volume data to provide insights into market sentiment and potential price movements, making it one of the key forex and stock market technical indicators. Calculation The CMF calculation involves three main steps: - Money Flow Multiplier (MFM): (Close - Low) - (High - Close) / High - Low. This value ranges from -1 to 1 and is positive when the closing price is in the upper half of the period's range and negative when in the lower half. - Money Flow Volume (MFV): Calculated by multiplying the MFM by the period's volume. - CMF Value: The sum of MFVs over the period divided by the sum of volumes over the same period. The resulting CMF values fluctuate between -1 and +1, providing a visual representation of money flow into and out of the asset. Signals 1. Trend Strength: - Positive CMF: Indicates buying pressure, suggesting a bullish trend. - Negative CMF: Indicates selling pressure, suggesting a bearish trend. 2. Trend Reversal: - Bullish Divergence: Occurs when the price makes lower lows, but the CMF makes higher lows, indicating a potential reversal to the upside. - Bearish Divergence: Occurs when the price makes higher highs, but the CMF makes lower highs, indicating a potential reversal to the downside. 3. Breakout Confirmation: - A breakout in price above/below a key level accompanied by a breakout in the CMF value above/below previous highs/lows can confirm the strength of the move. Average Directional Movement Index (ADX) The Average Directional Movement Index (ADX) is an indicator traders apply on a chart to measure the strength of a trend. It is particularly useful for traders who want to determine whether a market is trending or ranging. Definition The ADX consists of a single line that fluctuates between 0 and 100. It does not indicate the direction of the trend but rather its strength. The standard ADX setting is a 14-period, but this can be adjusted to suit different trading styles. - 0-25: Indicates a weak or non-existent trend. - 25-50: Signals a strong trend. - 50-75: Suggests a very strong trend. - 75-100: Reflects an extremely strong trend. Signals 1. Trend Strength: - A rising ADX value above 25 indicates a strengthening trend, regardless of whether it is bullish or bearish. - A falling ADX below 25 suggests a weakening trend or a ranging market. 2. Trend Momentum: - When ADX peaks and starts to decline, it can signal a potential weakening of the current trend, indicating that traders might consider closing or reducing positions. Combining ADX with DI Lines The ADX is often used in conjunction with the Positive Directional Indicator (+DI) and Negative Directional Indicator (-DI) lines: - +DI > -DI: Suggests a bullish trend. - -DI > +DI: Indicates a bearish trend. A rising ADX alongside these signals confirms the strength of the current trend. Traders use this indicator to enter trades. For this, they look for ADX to rise above 25 to confirm the beginning of a strong trend before entering trades in the direction of the trend indicated by the +DI and -DI lines. Commodity Channel Index (CCI) The Commodity Channel Index (CCI) is a momentum-based indicator that measures the deviation of an asset's price from its historical average. It helps traders identify potential overbought or oversold conditions, trend reversals, and divergence signals. Calculation - CCI is calculated using the formula: CCI = (Typical Price − SMA) / 0.015 * Mean Deviation, where: - Typical Price = (High + Low + Close) / 3 - SMA = Simple Moving Average of the Typical Price - Mean Deviation = Average of the absolute differences between the Typical Price and its SMA The constant 0.015 normalises the CCI values, ensuring that approximately 70-80% of the values fall between -100 and +100. Signals 1. Overbought and Oversold Conditions: - Above +100: Indicates the asset is overbought, suggesting a potential price pullback or a downward reversal. - Below -100: Indicates the asset is oversold, suggesting a potential pullback or an upward reversal. 2. Trend Reversals: - Bullish Divergence: When the market is making lower lows while the CCI makes higher lows, potentially preceding a bullish reversal. - Bearish Divergence: When the market is making higher highs while the CCI makes lower highs, potentially preceding a bullish reversal. 3. Trade Entries: - Traders consider entering long positions when CCI breaks above -100 from below. - Conversely, traders might enter short positions when CCI moves below +100 from above. Keltner Channel The Keltner Channel is a popular technical analysis tool used to determine market trends, price volatility, and potential reversal points. It consists of three lines: an exponential moving average (EMA) in the middle, and upper and lower bands calculated by adding and subtracting a multiple of the Average True Range (ATR) to the EMA. Definition The standard settings for Keltner Channels typically use a 20-period EMA and an ATR multiplier of 2. These settings can be adjusted to suit different trading styles and timeframes, making Keltner Channels effective technical indicators for day trading. The EMA provides a smoothed average price, while the ATR measures volatility. The bands expand and contract based on market volatility, creating a channel around the price. Signals 1. Trend Identification: - Upward-Sloping Channel: Indicates a bullish trend. - Downward-Sloping Channel: Indicates a bearish trend. - Flat Channel: Suggests a ranging market. 2. Dynamic Support and Resistance: - The upper and lower bands of the Channels serve as dynamic levels of support and resistance. Price action within these bands can help traders identify potential entry and exit points. 3. Breakout Signals: - Bullish Breakout: Price closing above the upper band. - Bearish Breakout: Price closing below the lower band. The Bottom Line These ten technical indicators could be added to your toolkit to potentially enhance your trading strategies. By understanding their signals and applications, traders can better navigate the worlds of forex, stocks, commodities, and cryptocurrencies*. Open an FXOpen account today to access advanced trading tools and start implementing these indicators in live markets. FAQs Which Types of Trading Indicators Are Common to Use? 4 common types of technical indicators include trend (Moving Averages, ADX), momentum (RSI, Stochastic Oscillator), volume (On-Balance Volume, VWAP), and volatility (Bollinger Bands, ATR) indicators. These help traders analyse trends, momentum, volume, and volatility. How Many Indicators Should a Trader Use? Traders often use 2-3 indicators to avoid overcomplication and conflicting signals. Combining different types of indicators can provide a more comprehensive analysis. Why Do Indicators Fail? Indicators can fail due to market volatility, news events, and their inherent lag. They may also produce false signals in choppy markets. Combining indicators with risk management can potentially improve reliability. Is It Better to Trade Without Indicators? Trading without indicators, known as price action trading, can be effective for experienced traders. However, using a few indicators can provide valuable insights and confirm price movements for most traders. Trade on TradingView with FXOpen. Consider opening an account and access over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Education

VARAUSD - How to Find Accurate Pivot Levels For Swing Trades I'm using VARAUSD for this tutorial presentation because that is the coin I am currently trading. In this tutorial I demonstrate how to locate nearly exact pivot points for great entry and exit opportunities to swing trade like a professional. Just remember, the levels need to be updated often. You cannot set them and forget them. Something I did not mention is that order walls MOVE and they move ALOT especially during an active pump or dump. Investors choose to pull order walls deciding not to sell in which case the price will continue up beyond that resistance area. In this regard, update your levels OFTEN. VARA is in a massive squeeze / range bound trading with accurate pivot points can lead to easy wins however, neglect your levels and get left behind!

Education

14:05

How to Identify Smart Money Moves & Execute High-Probability Tra 📊 Mastering Institutional Liquidity & Volume Footprint Trading in Gold (XAU/USD) 🔥 How to Identify Smart Money Moves & Execute High-Probability Trades 📚 Introduction: Understanding Volume Footprint & Institutional Liquidity Why is Volume Footprint Crucial for Trading? Volume footprint charts reveal the actual buy and sell pressure at different price levels. Unlike standard candlestick charts, they show: ✔️ Where institutions are placing large orders ✔️ Absorption zones (where smart money accumulates positions) ✔️ Aggressive buying/selling areas (momentum zones) ✔️ Liquidity grabs (where stop-losses get hit to fuel bigger moves) This analysis will teach you how to read footprint volume data, identify institutional trading zones, and execute high-probability trades in Gold (XAU/USD). 🔍 Step 1: Analyzing Yesterday’s Trading Sessions & Institutional Behavior 1️⃣ Asian Session (Pre-Positioning, Low Volume) • Market ranged between 2,756 - 2,758 with minimal volatility. • Institutions were not actively trading, only minor order placement. • Key observation: Early bid absorption at 2,756, a possible sign of accumulation. 2️⃣ London Session (Volatility Increase, Institutional Pre-Staging) • Price attempted to break above 2,761, but it was quickly rejected. • This suggests institutions were building short positions at higher levels (distribution phase). • Simultaneously, buy orders were still present around 2,756 → this is a liquidity battle zone. 3️⃣ New York Session (📌 Institutional Execution Phase, Highest Volume) • This session had the most trading volume, meaning smart money was active. • Major bid absorption at 2,756, showing institutions were accumulating long positions. • Price spiked to 2,785.82, but heavy selling between 2,761-2,765 occurred. • Institutions engineered a liquidity grab below before pushing higher → a classic smart money play. 📌 Key Takeaway: Institutions accumulated liquidity at 2,756, then offloaded positions between 2,761-2,765. This provides insight into tomorrow’s key levels. —— 📊 Step 2: Volume Footprint Analysis (Where Institutions Are Placing Orders) 🔹 Bullish Institutional Liquidity Zones (Smart Money Buy Areas) • 2,730 - 2,740 → This zone had a strong liquidity grab before a sharp bullish move. • 2,756 → Heavy buy absorption, meaning institutions are likely defending this level. 🔸 Bearish Institutional Liquidity Zones (Smart Money Sell Areas) • 2,761 - 2,765 → Strong aggressive selling & rejection, indicating institutions offloaded long positions and started shorting. 📌 Institutional Footprint Clues: ✔️ Buyers Absorbed Supply at 2,756 → This confirms that institutions are accumulating longs. ✔️ Sellers Stepped in Aggressively at 2,761-2,765 → This is the key resistance zone. ✔️ If price returns to 2,756, institutions will likely defend it again. 📅 Step 3: Tomorrow’s Trading Outlook & Price Action Forecast 🔮 Market Bias: Bullish With Resistance at 2,761-2,765 • Institutional behavior suggests buyers are in control, but sellers are active at 2,761-2,765. • If 2,756 holds, we can expect another push to 2,770-2,780. • If 2,756 breaks, price may hunt liquidity down to 2,730 before reversing higher. 📍 Key Support & Resistance Levels • Major Support: 2,756 (Institutional Buy Zone) & 2,730 (Liquidity Grab Area). • Major Resistance: 2,761-2,765 (Institutional Sell Zone). • Breakout Target: If 2,765 breaks, price could push toward 2,780+. —— 📈 Step 4: High-Probability Trade Setups for Tomorrow Scenario 1: Bullish Trade Setup (If 2,756 Holds as Support) ✅ Order Type: Buy Limit @ 2,756 🎯 Take Profit: 2,770 - 2,780 ⛔ Stop Loss: 2,748 📊 Confidence Level: 75% 📌 Why? Institutional buying at 2,756 confirms smart money accumulation. Scenario 2: Bearish Trade Setup (If 2,761 Rejects Again) ✅ Order Type: Sell Limit @ 2,761 🎯 Take Profit: 2,745 ⛔ Stop Loss: 2,767 📊 Confidence Level: 70% 📌 Why? Institutions sold heavily at 2,761-2,765, meaning they might do it again. Scenario 3: Liquidity Grab & Reversal (If 2,756 Breaks Down) ✅ Order Type: Buy Limit @ 2,730 🎯 Take Profit: 2,756 - 2,765 ⛔ Stop Loss: 2,720 📊 Confidence Level: 80% 📌 Why? Smart money often triggers stop-hunts before reversing. ——— 🚀 Step 5: Execution Strategy & Smart Trading Tips 1️⃣ If price stays above 2,756 → Look for bullish continuation toward 2,770-2,780. 2️⃣ If price breaks below 2,756 → Watch for a liquidity grab at 2,730 before a reversal. 3️⃣ If price tests 2,761 and rejects → Consider a short-term sell opportunity down to 2,745. 🧠 Pro Tip: How to Confirm Institutional Activity Before Entering a Trade 📌 Look for footprint volume confirmation: ✔️ If you see strong bid absorption at 2,756, it’s a strong buy signal. ✔️ If you see stacked sell orders at 2,761, it’s a short confirmation. ✔️ If volume suddenly dries up after a sharp move, it’s often a sign of trend exhaustion. ——— 💡 Final Takeaway: How to Use This Information in Your Trading ✅ Understand where institutions are placing big orders. ✅ Trade in alignment with smart money, not against them. ✅ Look for liquidity grab zones before major moves. ✅ Use footprint volume to confirm whether a move is genuine or a trap. 💰 Trade smart. Follow the liquidity. Bank the profits. 📌 If this educational breakdown helped, consider supporting the analysis!

Education

by ICHIMOKUontheNILE

Acceptance: The Hardest but Most Powerful Skill in Trading & Lif Have you ever felt completely overwhelmed by trading? The endless cycle of self-doubt, frustration, comparison, and emotional exhaustion? If you have, trust me—you’re not alone. Trading is not just about charts and strategies. It’s about navigating the mental battles that come with it. Today, I want to share something personal—the reality of acceptance in trading and life —because, in the end, acceptance can save you from a lot more pain than resistance ever will. The Burden of Comparison & Expectations One of the first mental struggles every trader faces is comparison—seeing others with bigger wins, higher profits, or what looks like an effortless journey. You start asking yourself: "Why am I not there yet?" "How did they make it so fast?" "What am I doing wrong?" But here’s the truth: We all have different limitations . Some start with larger capital, some have years of experience, and some simply got lucky early on. T he moment you accept where you are right now instead of where you " should be, " everything changes. If you have limited capital, accept that you won’t get rich overnight —and that’s okay. Instead of chasing unrealistic dreams with high leverage and reckless trades, focus on a real path: ✅ Spend 3-4 years mastering your craft. ✅ Backtest, forward test, and refine your strategy. ✅ Build consistency, and capital will follow—whether from your own profits, investors, or prop firms. Acceptance vs. Denial: The Cost of Avoiding Reality Acceptance isn't just about money—it’s about embracing probabilities instead of seeking guarantees. Think about it: Death is 100% certain. We accept it because there’s no alternative. Getting liquidated is NOT 100% certain—it only happens when you ignore stop losses and risk management. Yet, many traders choose denial over acceptance. They refuse to accept small losses, hoping a bad trade will recover, only to watch their account get wiped out. 📌 The price of refusing to accept reality is always higher than the price of accepting it. Just like we use stop-losses in trading, we need stop-losses in life. Without them, you might wake up one day realizing: ❌ You spent 5 years in a toxic relationship. ❌ You kept pursuing a wrong path for way too long. ❌ You ignored the signs, hoping things would magically fix themselves. Learning to accept losses, failures, and mistakes is not weakness—it’s a superpower. And ironically, the faster you accept things, the faster you move forward. My Journey & What I Do Here I’m Skeptic . I analyze markets, develop trading strategies, and share real, no-BS insights to help traders grow—not just technically, but mentally. If this post felt different from my usual ones, it’s because it is. Some things go beyond just trading—they shape how we think, react, and navigate both markets and life. 💬 Have you ever struggled with acceptance in trading? Drop a comment —I’d love to hear your experience. Stop fighting reality. Accept where you are, work with what you have, and set stop-losses in both trading and life . That’s how you survive long enough to win :)

Education

How to Trend the Trend for Beginners Hey Traders so today I starting a new series for beginners about how to trade trends using techincal analysis. Enjoy! Clifford

Education

11:22

by TradetheFuturesCharts

What I think trading is... Hello, traders. If you "Follow", you can always get new information quickly. Please click "Boost". Have a nice day today. ------------------------------------- Thank you @TradingBrokersView for the great article. 🚨 Bitcoin update! 🚨 BTC rejected at MA50 (4h) inside a Channel Down pattern. If history repeats, we could see a Lower Low at 95K (-10.7%), aligning with MA100 (1d) support. RSI (4h) is confirming bearish momentum. 🔥 Trading Plan: Sell now before further downside! I was thinking about how to say it, and I came up with this idea. Thank you again. ------------------------------------ #BTCUSDT 1M As shown in the chart, it has risen a lot, so it is natural to feel downward pressure. No one knows how big this downward pressure will be. However, what I can tell you is the flow of funds. To see a more detailed flow, you need to look at the gap occurrence status on the 1D chart, but when looking at the overall flow of funds, it is true that a lot of funds are flowing into the coin market. Selling all of this inflow of funds means that you will not be able to overcome the volatility in the upcoming bull market and will rather increase the probability of suffering losses. The reason is that the average purchase price is likely to be set too high and is likely to be located in the volatility range. Therefore, you need to respond according to your investment style. In other words, if your investment style is one that wants to trade quickly and urgently, a strategy that sells whenever it shows signs of falling would be appropriate to gain profits. If not, if you have a longer-term outlook or trade mainly in spot transactions, I think it would be better to leave coins (tokens) corresponding to profits rather than selling all of them so that you can more easily purchase them in the future bull market. Leaving a coin (token) corresponding to the profit means a coin (token) with a purchase principal of 0. In other words, it means that when the price rises after purchase, the purchase principal is sold. In that sense, when looking at the BTCUSDT 1M chart, you can see that the Fibonacci ratio point of 1.618 (89050.0) is a very important support and resistance area. #BTCUSDT 1D This volatility period is expected to continue until January 31. Therefore, it is expected that the key will be whether there is support near 101947.24 after this volatility period. If it falls without support near 101947.24, it is expected that the trend will be determined again by touching the M-Signal indicator on the 1W chart. If you have been reading my ideas, you will understand that you should not try to create a trading strategy by analyzing charts. As I mentioned earlier, you should create a trading strategy that suits your investment style with the information obtained from chart analysis. That is why the opinion that it will fall now and sell everything can be interpreted differently by different people, so you need to be careful. Some people are currently making profits and others are losing money. Those who are making profits will have the luxury of waiting even if the price falls, and those who are losing money may be suffering from psychological pressure. The information I am giving you is to provide information on how to respond to all of these people. In that sense, you need to focus on the price that I am talking about, that is, the support and resistance points or sections. If your average purchase price is below the support and resistance points or sections that I am talking about, you can check the downward trend and intensity and judge the situation. If not, you need to create a response strategy based on how much cash you currently have. If your current cash holding is less than 20% of your total investment and you feel unstable psychologically, it is a good idea to sell some of it to secure cash. This will allow you to secure the ability to purchase more even if the price falls, so you will be able to secure a certain level of psychological stability even if the price falls. I think trading is about responding to your investment style and psychological state in this way. Therefore, you should calmly look at your current psychological state, check your cash holdings, and create a response strategy that suits your investment style. This is the strategy I can tell you. - Thank you for reading to the end. I hope you have a successful trade. --------------------------------------------------

Education

Pivot Points Part 1: Understanding the Pivot Welcome to this two-part series on one of the oldest and most reliable tools in short-term trading: pivot points . First developed in the trading pits of Chicago, pivot points gave traders a quick and consistent way to identify potential turning points for the trading day. Despite the evolution of markets from open-outcry to electronic trading, pivot points have stood the test of time. They remain a valuable tool for traders, providing a clear roadmap to navigate intraday price action. In Part 1, we’ll focus on the pivot point itself—what it is, why it’s so effective, and three ways to incorporate it into your trading. In Part 2, we’ll build on this foundation by delving into the support and resistance levels derived from the pivot. What Is the Pivot Point? At its core, the pivot point is a calculated price level based on the previous session’s high, low, and close: Pivot Point (PP) = (High + Low + Close) / 3 This level acts as the day’s central reference point, dividing the market into two zones. Prices trading above the pivot point generally suggest bullish sentiment, while prices below it indicate bearish sentiment. Day traders use the pivot point to gauge market bias for the session. If the price opens above the pivot and holds there, it often signals that buyers are in control. Conversely, if the price opens below the pivot and stays below it, sellers likely dominate. The pivot point frequently acts as a magnet for price action, with the market often testing it multiple times during the day. This dynamic adaptation to the prior session’s activity makes it especially useful for short-term traders seeking actionable levels. Pivot Point: S&P 500 5min Candle Chart Past performance is not a reliable indicator of future results The Key Advantage: Objectivity One of the standout features of pivot points is their objectivity. Unlike other technical tools that rely on subjective settings or interpretations, pivot points are calculated using a straightforward formula. This standardisation is a crucial advantage because it ensures that many traders are watching the same levels. This widespread attention gives pivot points their strength. They act as a universal benchmark, creating a self-reinforcing cycle: when many traders anticipate reactions around a pivot point, the likelihood of significant price action at that level increases. This objectivity also benefits newer traders by providing a clear, consistent framework for interpreting price movements. Pivot points eliminate guesswork, allowing traders to focus on developing strategies around reliable levels. Three Ways to Use the Pivot Point in Your Trading 1. Developing a Bias Where the price opens relative to the pivot point can set the tone for the session. In markets with a defined open and close, such as equities, the opening price’s position above or below the pivot point is a key indicator of sentiment. For 24-hour markets like forex, the calculation is based on the high, low, and close from the New York session—the most significant closing price. While the opening price in these markets is less critical, understanding where the Asian session has traded relative to the pivot can provide valuable insights into sentiment and potential momentum for the day ahead. Example: Tesla In the below example, Tesla opens the session by gapping through the pivot point on the open. This is then followed by a period of consolidation above the pivot point – setting a bullish bias for the session. Tesla 5min Candle Chart Past performance is not a reliable indicator of future results 2. Recognising Price Patterns Around the Pivot Price action around the pivot point can reveal important trading opportunities: • Bounce: A strong bounce off the pivot suggests it’s being respected as a significant level, often leading to continuation in the direction of the bounce. • Break and Retest: If the price breaks through the pivot and then retests it as support (in an uptrend) or resistance (in a downtrend), it can offer a reliable entry point. • Choppy Action: Repeated crossings of the pivot without clear direction indicate indecision—often a signal to step back and wait for clearer trends to emerge. Combining these price patterns with candlestick signals, like bullish engulfing patterns or bearish pin bars, can add further confidence to your setups. Example: Here we see a classic ‘break and retest’ pattern form around the pivot on the FTSE 100 5min candle chart. Having initially held the pivot as support, the market breaks below the pivot and the retraces to retest – using the pivot as resistance and creating a well-defined short setup. FTSE 100 5min Candle Chart Past performance is not a reliable indicator of future results 3. Enhancing Context with VWAP Combining pivot points with the Volume-Weighted Average Price (VWAP) can give traders an additional layer of confirmation. Both tools are objective, widely used, and calculated from historical price data, making them a natural pairing. If both the pivot point and VWAP align as support or resistance, it strengthens the level’s importance. Divergence between the two can provide insight into whether short-term momentum might conflict with longer-term trends. By blending these tools, traders gain a more comprehensive view of market dynamics. Example: In this example we see price action on EUR/USD across two days. The first day sees the market make steady gains as prices hold above the daily pivot and VWAP. The second day shows a more mixed start with prices chopping back and forth on either side before finally establishing a foothold above VWAP and the daily pivot – leading to steady gains during European trading. EUR/USD 5min Candle Chart Past performance is not a reliable indicator of future results Final Thoughts The pivot point is more than just a calculated level—it’s a bridge between historical price action and current sentiment. Its simplicity, objectivity, and widespread use make it an indispensable tool for day traders. Whether you’re gauging market bias, identifying key price patterns, or combining it with other tools like VWAP, the pivot point provides a solid foundation for making informed decisions. In Part 2 of this series, we’ll explore how the support and resistance levels derived from the pivot point have the potential to add further precision to your short-term trading. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

Education

123 Quick Learn Trading Tips #2: Stay Cool, Trade Smart 🎯 123 Quick Learn Trading Tips #2: Stay Cool, Trade Smart "Don't let anger empty your pockets. Trade with a cool head." Navid Jafarian ❓ Ever get mad when you lose a game? ❓ Want to try again and win RIGHT AWAY? Trading can feel like that, but with real money. It's easy to blame losses on things you can't control, like the news or bad luck. ✅ Truth is, everyone loses sometimes in trading. The best traders don't get angry. They learn from their mistakes and move on.💪 ‼️ Don't try to "get even" with the market after a loss. That's how you lose even more! 🗝 Take charge, learn, and make the next trade better. ❗️Remember: The best traders stay calm and focused. Just like a pro!

Education

by Navid_Jafarian

I gave up on trading EUR/USD. Here is why Today I was about to violate my trading plan because of being unable to recognize when I didn't understand what price action was doing. My trading plan stipulates that I can only trade when Higher timeframes (1D, 1W, 1M) are in alignment with lower timeframes (H4, H1, M15) If they're not in alignment, my strategy doesn't work. I have no way of predicting price movements and knowing I'll most probably be right. Today this alignment was not present, yet, because I subconsciously wanted my market analysis to be right, I failed to acknowledge this misalignment and tried to come up with trade ideas. Price action kept on invalidating my trade ideas as I prepared them, and I found myself looking for new ideas. "Since this entry scenario is now invalidated, maybe price will do this instead and I will look to enter after this scenario is confirmed" "This scenario failed, instead of looking to buy EUR/USD today, I might look to sell instead after price rejects this level" "Since price failed to reject this level, maybe it will reject this other level and I will look to sell there" You get the point. I was unable to make strong cases, my cases kept on being invalidated and I kept coming up with new ones on the go! Sort of chasing a rabbit. Don't do this. For example, understanding when a 1H bearish trend is a Daily timeframe pullback from a Bullish trend and having an expected level where that 1h trend and Daily pullback is likely to find support and reverse, continuing the main trend. This stops me from entering long trades and losing because although the Daily timeframe is bullish the lower timeframes are still trending bearish which indicate the pullback is not yet finished. or from taking 1H short trades past the daily pullback target just because I saw a 1H bearish trend, failing to realize that trend might be reaching its end. If However price pulls back past my target level, and the lower timeframe trend continues pulling back even though the Higher timeframe is supposedly bullish, then If I don't have a logical pull back target — I am effectively neutral. In other words, I do not understand what price is doing at that point in time. It's time to step back and wait for a new development that I can understand occurs. What happens when I am either overconfident or eager to trade is that I can get into my own head and fail to realize I'm in unknown territory. This failure led me to keep trying to establish trade scenarios that of course kept getting invalidated because I do not know how to make prediction in such market conditions — My timeframes were not aligned. I was able to realize this and adjust my behavior. However, what often happens is you fail to realize this, you come up with a trade idea, and you take the trade and it ends up being a loss — Caught up on the wrong side of the market. Or even worse, 2 or 3 trades work out, and the trader believes their strategy is good. Then get caught in a 10% drawdown because of acting on the same patterns. My point is, that it's important to be able to recognize when market conditions fall outside the scope of your strategy and its edge — Recognize when the market is in a cycle where you don't understand how to trade profitably — and be able to sit out and say I don't know. Don't try to find trends in the middle of price ranges. The number one job of a trader is to Protect Capital in order to have available capital to allocate to profitable market opportunities. Trading outside the scope of your strategy and its edge is failing to protect the capital — It's like trying to Play Soccer with a Basketball, the shots, the passes, the tricks might work here and there, but will usually come out faulty. In my specific case, I began the week with a bullish view for EUR/USD from the daily timeframe, but the lower timeframes, where I execute and manage trades, have been in a bullish trend since Monday NY Session, So since I couldn't find long opportunities, I started looking for short opportunities, even though I had no clear rationale that aligned with the higher timeframes. My scenarios and ideas kept failing, and I kept coming up with new ones, until I became aware of the pattern due to writing down my analysis and process and realizing I actually did not understand the current stage of price action. That's where the importance of a well-documented trading plan alongside a journal for analysis comes in. A journal isn't just to record trades. It's also to develop your rationale and ensure you can clearly explain the why behind your actions which can then be cross-examined with the trading plan. I have established clear rules for when to stay out of the market and sit on my hands. If timeframes are not aligned and moving in synch, I stay out — It's a non-negotiable. Of course this is specific to each strategy, but every strategy must have an underlying trading plan with its non negotiables.

Education

Learn Supply and Demand Basics in Gold XAAUSD Trading In this article, we will discuss the basic principles of Smart Money Concepts in Gold trading. I will explain to you how Gold price relates to supply and demand on the market. What is a fair value and how to identify it. We will discuss a relation between a fair value and supply and demand and why is it so important to learn to recognize the imbalance. Gold Price First, let's briefly discuss how the price of Gold is valued . Gold price is determined by the basic economic principles of supply and demand. Supply is defined by the actions of the sellers and selling volumes. While a demand is defined by the activity of buyers and the volumes they wish to purchase. When supply exceeds demand, it leads to a decline in prices. Increased selling pressure leads to lower prices as sellers compete to attract buyers. Above, you can see how the excess of demand pushes Gold prices up rapidly. When demand exceeds supply, we see an increase in the price of the financial asset. In the example above, you can see how the excess of supply leads to a depreciation of a Gold price. Imbalance & Fair Value The excess of supply or demand on the market is also called an imbalance in Smart Money Concept trading SMC. The imbalance causes strong bullish or bearish movement on the market. However, such moves do not last forever. At some moment, reaching a particular price level, the market will stop growing or falling, and the market will find the equilibrium in supply and demand. Such an equilibrium is also called a fair value in SMC trading. On the chart above, Gold was growing rapidly. After reaching some price level, the growth stopped and the market found a fair value. Supply finally absorbed the excess of demand. Sideways Movement & Range When the market finds a fair value, it usually starts trading in sideways . The sideways movement forms a horizontal range - a horizontal parallel channel. Such ranges signify that the market participants agree about a current price of an asset. Above, you can see that after a strong up movement, Gold found a fair value and a consolidation within a horizontal range started. Fair Value Range When you spotted the range, you should remember that the market may stay within that for a very long period of time. The trigger that will make the market reassess the fair value is typically a some important fundamental factor, the surprising geopolitical or economic event that will create a new imbalance on the market. A strong signal that the market strives to find a new fair value is the breakout of one of the boundaries of the range. It is a signal of a violation of a current fair value. You can see that Gold found a fair value and was stuck for quite a long period within a wide horizontal range. Then, because of the release of significant US fundamental news, an imbalance occurred. Fair value range was violated, and the price found a new fair value higher. Trading Tips When the imbalance on the market occurs and it violates the fair value, the price tends to find a new fair value around significant liquidity zones. That is why it is so critical to pay attention to them. Also, the laws of supply and demand, imbalance and fair value work on any time frame and can be applied for any trading style. Learn to perceive a price chart from a Supply and Demand perspective in order to master Smart Money Concept trading strategy. ❤️Please, support my work with like, thank you!❤️

Education

by VasilyTrader

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