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Psychology

HOW TO TRADE PULLBACKSHello everyone! Today I want to discuss pullback trading with you. You may have come across such a situation when you were waiting for a pullback to enter the market, but the price did not stop and went further. In the place where you expected the end of the rollback, there was a breakdown, and you did not receive an entry point. Something went wrong? Trend Trend is our friend! The most famous and most important rule. At the beginning of any market analysis there must be a trend definition. If you want to trade pullbacks correctly, you must determine the direction of the trend. If you are trading on the hourly chart, you must determine the direction of the trend on the daily chart and wait for the right situation on your chart, while trading, of course, with the trend. There must be a trend in the market in order to trade on a pullback. Trend types Trends are different, of different strengths. They can be divided into three types: 1. When the price bounces off the 20MA and stays higher, we say the market is in a STRONG TREND. 2. The price bounces and stays above the 50MA - GENERAL TREND. 3. The price reaches and bounces from the 200MA - WEAK TREND. Knowing these types of trend and being able to understand the movement will help us enter the market at the right point. Point of entry The entry points will be the areas around the MA lines. Here it is worth focusing on the word REGION. You must understand that the price can go below or above the MA and only then turn around, be prepared for this. Entry on a strong trend In a strong trend, the price stays above the 20MA. At the same time, you need to remember that with a strong trend, rollbacks are not deep. This means that finding the entry point will not be so easy. But you can open a position after the breakdown of the last maximum. Entry on a regular trend In a normal trend, the price makes deeper pullbacks. The price is testing the 50MA, while the previous resistance may become support. These are the moments we are looking for to enter. In such zones, we will wait for a price reversal candlestick pattern to enter. Entry on a weak trend In a weak trend, pullbacks are even deeper than in a normal trend. The price makes a strong pullback, reaching 200MA. When the price of the zone is reached, we are waiting for confirmation - a candlestick formation. Closing positions Closing a position is just as important as opening it. The main signals for closing will be the price movement beyond the MA line. For example, in a market with a strong trend, the price may go a little lower than 20MA, which is not critical yet, but it makes you be more careful. It is worth paying attention to the support level, which should not be broken by the price, but if the price still breaks through the level, then the position must be closed. With a weak trend, it is worth remembering that pullbacks can be deeper and the price will go beyond 50MA. You must be prepared for this. Watch for a support level that should not be broken. With a weak trend, holding a position is the most difficult. The price will make strong pullbacks, which will eventually force you to close the trade. Sometimes the price, having reached the desired zone, does not bounce right away. Consolidation begins and if you see such a situation, the best entry option would be to exit the consolidation zone. You must have a plan for every occasion. conclusions Trading with the trend is the most profitable business. You must be able to identify the trend on the higher timeframe and, importantly, be able to wait for the right situation on your timeframe. The market cannot be predicted with 100% certainty, so use stops and keep an eye on support and resistance levels. Good luck! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
9
CONQUER YOUR EMOTIONSHello everyone Today I want to talk about a very important topic in trading – emotions. Emotions accompany us in trading from beginning to end: when we open a position, while we hold and when we close. Our psychological state is constantly being tested. All this leads to constant mistakes and loss of money. But how to avoid all this? The main reason Think about what is the main reason for your emotional swings? It may seem strange, but the main reason for emotional mistakes is the continuous observation of the price chart. You constantly look at the chart, watch every tick, the price changes its direction every second, you overwork and begin to doubt the correctness of your forecast. At the same time, it is worth recalling that people like to watch: movies, magazines, books. We are constantly looking at something and looking for something new. Forex is interesting because there is money there. When a position is open, traders are happy to follow every price movement. And when the position is not open, what do you do? That's right, you don't look, because looking at the market is just so boring. If the position is open, it is difficult to resist and not look at the chart. What is the reason for the shaky psychological state of the trader? Your drug Constant monitoring of the price leads to addiction. You get tired, the exhausting observation of how profit comes and goes, leads to big mistakes. Continuous emotional roller coasters kill the desire to trade in us and at some point, on a subconscious level, you want to lose everything just to get away from the monitor. Familiar? How to overcome emotions? There are many different ways, today we will look at three that will help you avoid emotional overload. 1. Use a higher timeframe If you trade on minute charts and experience problems with emotions and fatigue, you should switch to an older timeframe. If you start trading, for example, on a daily chart, there will be no need to look at the chart every minute, because the price does not move so fast. The daily or 4-hour schedule does not change so often and it will be enough for you to look at the chart once or twice a day. Thus, you will remove from the equation the constant monitoring of the schedule, which leads to fatigue. You will have fewer mistakes, which means more profit. 2. Daily goals A great way to reduce emotional pressure is to set goals. The point is that you set yourself a certain profit and loss goal every day, and when you reach one of the indicators, trading for you stops today. You can set yourself a profit and loss goal, for example, of 50 points. As soon as you earn or lose 50 points, you go to rest until the next day. This is a great way, and it will definitely help to avoid over-trading. But not everyone can force themselves to leave, especially after losing money. Follow the strategy, otherwise you will be pursued by losses. 3. Lot reduction For many, this method may seem strange. After all, everyone thinks only about profit and how to get it quickly. The market is a dangerous place and there is no need to hurry here. Reduce the position by 5 times and you will see the difference in your trading. You will stop making mistakes, you will follow the strategy. But why? The problem is that when trading large lots, the trader thinks only about money, forgets about risks and rules. This is how the trader drains the account. When trading small volumes, your brain will be free from thoughts of quick profit. YOU will become more reasonable and attentive. Results Emotions will not go away and the market will always test you. Strong emotional swings make you make mistakes and lose money. Use the methods listed above and control over emotions will come, the results will improve. May peace come with you! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
22
SECRETS OF PROFITABLE DAY TRADING. №2. Continuation of the first part. SECRET 6 - High Time Frames Watch the situation on high timeframes. Watch out for high time frame trends. Often, this is how beginners open positions against the trend, do not follow higher timeframes. At the same time, there are situations when a correction has begun on a smaller timeframe, which is not yet visible on a higher timeframe. Such situations can be traded, but you should be very careful. SECRET 7 - Daily drawdown You should limit your losses per day. Choose for yourself a suitable value for losses and profits, upon reaching which, you will stop trading that day. If you decide that your daily drawdown is $100, this means that if you get a loss of $100, you will stop trading that day and do not make stupid trades in the hope of winning back. Hope for wagering - always leads to the drain of deposits from beginners. Control emotions and losses. SECRET 8 - Trading Sessions A day trader wants to make a quick profit and get out of the market, so it's important to keep an eye on the trading sessions and know when the market is most active. The European session, intersecting with the American one, creates the most volatile time on the market. At this time, the market moves faster, which will give you the opportunity to earn quickly. But do not forget about the risks, such volatility can bring losses just as quickly. It is worth remembering that the end of the Asian session and the beginning of the European one is a great time for reversal setups. SECRET 9 - Daily Volatility Each pair has its own daily volatility. And, if you know this value, it will be easier for you to understand when the movement potential is likely to be exhausted. These values ​​can be found on the Internet for each pair. SECRET 10 - Carrying positions through the night Very often, beginners make this mistake - they transfer positions to the next day. Do not forget that you opened on an intraday setup, that is, this setup most likely will not work the very next day. Tomorrow, and maybe even at night, the market will behave differently, go against you and reach your stop. Don't go against your strategy, follow its rules. conclusions Day trading is not easy, but it can be learned. In addition, it is very profitable. Good for overclocking a small account. But don't forget the rules. Don't go against the market, follow the strategy. Good luck!
Education
by DeGRAM
2
DEFINE YOUR LEVELHello to all! Let's talk about what levels of becoming a trader are. LEVEL #1: Unconscious Incompetence When a beginner enters the forex market for the first time, he thinks that it will be easy to make money. He has heard many beautiful stories and is now ready for you to go into battle. The price is going up! So it's time to buy. These first steps of an incompetent trader lead to disaster: usually a loss of the deposit. It can only be worse if the trader manages to earn something and starts to think that he understands the market. Over time, these traders lose everything. After a series of mistakes and losses, comes the realization of one's incompetence and the desire to become better. LEVEL #2: Conscious Incompetence At this level, the trader realizes that he lacks knowledge and the trader begins to study and seek… A trader looks for the Grail, buys "super profitable" indicators, learns trading methods and changes them every week without understanding. A trader experiments with indicators, Fibonacci lines, each new figure of technical analysis seems to be the one that will lead to success. The trader is looking for a bottom, an ideal entry point in the market and loses money again. This level can last for several months or even years. The trader will study, search, be disappointed every day. It is at this stage that most of the players leave, who do not believe that it is possible to make money on the market. LEVEL #3: “Eureka!” At the end of the second level, the trader begins to understand that it is not a matter of strategy, but of psychology. The trader begins to realize his mistakes and realize that he was succumbing to emotions that were blinding. The trader begins to study books on psychology and find his mistakes on the pages. At some point comes the realization that the future movement of the market is impossible to predict. The trader chooses a strategy that suits him and determines the risks for himself, trading becomes easier. Negative transactions do not upset, because the trader understands that the strategy works and sooner or later the trader will take his toll, you just need to act according to the strategy. A trader has learned to manage risk and learn the discipline to follow a strategy clearly. LEVEL #4: Conscious Competence A trader opens trades when the system gives a signal. A trader easily closes losing positions when he realizes that the market is moving against him. The trader allows profitable trades to grow, and cuts unprofitable trades. Most likely at this stage, the trader will trade at zero, learn not to lose money, understand how the market works. Losses do not bother, but the trader allows profits to grow, and this can continue for about a year. LEVEL #5: Unconscious Competence Trading is easy and unconscious. The trader, as if on autopilot, opens and closes transactions and does not feel emotional swings. The trader mastered his emotions. 100 pips of profit don't turn the trader's head like before. Trading becomes work. The trader does not stop developing and analyzes each trade in order to improve the system. And the trader likes all this, because it is still a very exciting journey, which now brings money to life. Conclusion Trading is not easy, but it can be learned. It should be understood that the main enemy in the market is your emotions. Do not lose control over yourself, study, analyze, follow the strategy and then you will succeed. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
22
SECRETS OF PROFITABLE DAY TRADING. №1. Hello everyone! Today we will discuss a very important topic - intraday trading . Intraday trading is considered not an easy task, but quite profitable. There are a few secrets that every trader should know about. These secrets will greatly improve your trading and relieve you of unnecessary stress. SECRET 1 - Don't trade below H1 During the day, the trader uses setups that will often give false signals on small timeframes, which will make trading nervous and unprofitable. On H1 timeframes and above, setups are processed much better and there will not be as many false signals as on small timeframes. The higher the timeframe, the stronger the setups formed on it. SECRET 2 - Don't make too many trades Even if you think that intraday trading involves a large number of transactions, this does not mean that you need to open transactions often. Each trade should be entered after the setup signal , don't open trades just because you feel like it. Look for clear signals, like in the books. Wait, don't rush. SECRET 3 - Number of tools Day trading involves many quick decisions from the trader. If you follow 30 pairs at once, you will not be able to clearly analyze the market and will not be able to make the right decisions. There are enough deals inside the day, so keep an eye on 3 pairs , no more. For beginners and it will be a lot, start with one pair and as you get better, add more charts. Don't make it difficult for yourself, it's not easy. SECRET 4 - Risks The old risk rule still works and works well. Do not risk more than 1% of your capital on each trade. This rule applies most to beginners. Experienced traders can deviate from this rule and risk a little more. But this applies to experienced traders and even they should not risk 50% of the capital. It's too much. SECRET 5 - News News has always influenced and will influence the market. If the news is not so scary for high timeframes, then for smaller ones it can become a big loss. Do not trade half an hour before the release of important news. This is a dangerous time when the market can go either way very quickly, stopping your position. Don't take risks. Good luck! End of the first part.
Education
by DeGRAM
15
The 12 Tasks Of Trading12 tasks of trading which include: 1. Self-analysis to determine if you are in a state of mind to trade Prior to starting your trading day, it is very important to make sure you are in the correct state of mind to trade. You need to analyse yourself and make sure you are at the best state of mind to avoid mistakes in the markets. You cannot finish fighting with a friend, spouse, or colleague and expect to make great analytical decisions. Therefore, the first and most important step, is always making sure your mind is clear and at its best. 2. Mental rehearsal to avoid mistakes The second step includes you rehearsing your set of rules and making sure you are going to strictly stick by them. This will allow you to avoid many mistakes in the markets and in your day. 3. Daily focus to lead you towards your goal It is very important to have goals, but specifically daily goals. You need to determine what your goals are for the day including the pairs you are looking at, the times you will be trading, your risk management, and what you aim at gaining from the markets that day. Once goals are met, it is important to step back and wait until the next day to trade. 4. Developing your own style of a low risk idea. For students of Opes Trading Group, low risk ideas and strategies are all taught to them during the course. It is important for every trader to develop their own ideas and strategies that are low risk in order to always protect their capital. Capital preservation is the most important rule of forex trading. 5. Stalking the charts starting from high to low time frames Looking at the charts from the higher to the lower time frames allows you to be able to see the bigger picture before looking right in. if you started looking from the lower time frames, you could have a wrong picture painted for you as to where the price could be heading. You cannot see the bigger picture if you are standing too close to something, it is the same concept on the charts. 6. Action requiring commitment and not thought Once a trade and an idea has been analized, it is important not to second guess yourself and take the trade. Do not second guess yourself if you believe in yourself and your trades. 7. Monitoring the trade to keep the risk low Always keep your eyes on your trades. Now that doesn’t necessarily mean you need to be glued to your charts, but check them every once in a while, and at important candle closure to make sure they are still playing out the way you expect them to. 8. Aborting is the trade is not going well If a trade does not go as planned (and the reality is some won’t), it is important to cut your losses if the trade is clearly not going to recover. There is no reason to hold on to a losing trade if there is no reason for it to recover. 9. Taking profits when the reason for the trade has ended A take profit is placed for a reason, however sometimes the reasons end before the take profit has been reached, meaning it is very important to close the trade even if it means closing it early. Never become attached to a trade that you chase the take profit only to find yourself back at 0 or even in negative. 10. A daily review to monitor and prevent future mistakes At the end of every day, all the trades taken should be reviewed. This will allow you to see what you are doing right, and what you are doing wrong. This will give you a good indication for what is needed for future trades. 11. Being grateful for what went well Something so many people pay no attention to and ignore is gratefulness. Any positive day in the markets, is a great day! Be grateful for all that goes right, no matter how small the profits might be, because 90% of traders lost that day. 12. A periodic review to make sure everything is still working well Every quarter it is recommended that you review your whole trading system. As the markets change, we need to be able to change and adapt with them, therefore a periodic review will allow you to know if things that are working still are or aren’t.
COINBASE:ETHUSDEducation
by opes_trading_group
4
ADA / USD Main trend (part). Chalice (Phase 4) PsychologyI made a specially line chart and to capture a large time period to show the main trend (part of the trend). Everywhere on the coins that are pumped at a very large percentage for mysterious, but logical reasons, the history of the chart disappears. The Binance chart is not the first exchange to start trading this coin. Before the first pumping in 2017 and super-draining, the coin was traded at $ 0.02, then it was pumped at $ 1.2, and the "promising technology coin" depreciated almost to the previous values ​​of $ 0.03. Just think about -99% of your deposit in 1.6 years! Further, the position before this hype was recruited in the range of 0.03 -0.04 dollars. Why am I describing this? And then, so that you are not fools and buy when there is an accumulation of position by large market participants. At the moment, with an average accumulation price of more than + 3000%. It doesn't matter here whether the price rises or not. The very fact of the behavior of the masses is important. Now, for example, you should not buy on this instrument (it does not matter if it grows or not), but sell, or if you know how to trade, increase your position (by trading, and not "topping up" money) if you are sure of further growth. Do not get attached to the "crypto wrapper" if you do not know how to work in a trend and thereby increase your position. All values on the price chart are extremely accurate. Pay attention to the price lows and highs on the candlestick chart, the numerical values of the levels and the percentages between them. A line chart (trend direction without noise) will not show this. A large cup has formed 3374.41%. At the moment, its 4th phase. An attempt to gain a foothold above the resistance of the cup (the highs of the previous madness hype). In the resistance zone of the large bowl, a horizontal channel of 52.42% was formed. At the moment there are attempts to break it out 1.72 ADA / USD Channel 52.42% Resistance 1.318 Breakout attempt 1.72 Fixation above this resistance at 1.318 will mean continued growth. Objectives on the chart. Not fixing the price above this resistance will give the potential to form a "Cup with a handle" formation. Rollback to the zone of the rising line of the secondary trend. In case of confirmation of support, working out already in the growth of the cup-with-handle formation, the goals are approximately the same. If this uptrend (green) price breaks out and consolidates below it, then you need to look for new entry points until the trend levels out.
BINANCE:ADAUSDEducation
by SpartaBTC
21
The ins and outs of trading psychologyThe ins and outs of trading psychology For something that I believe makes up the bulk of trading itself, I believe it is also the most overlooked. Trading psychology is what I am talking about, and it is definitely the most important aspect of trading that every trader needs to develop and master in order to become successful. In the most basic ways to put it, trading psychology is the term that defines all the feelings and emotions experienced day to day by traders. It is not something that can easily be controlled, however with time and experience it is definitely something that is needed to master in order to move forward in your trading journey. The two emotions that drive the markets are fear and greed. Based on these two emotions, you can find all the negative effects of trading psychology. Based on the emotion of fear, the following can occur: • Fear of missing out (FOMO), leading to bad entries • Exiting a trade too early • Exiting a trade in a drawdown only to see it go in their original direction • Adding to a losing position in hope of recovering the drawdown • Constantly checking your trade • Finding yourself glued to the charts Based on the emotion of greed, the following can occur: • Moving your original TP in order to gain more profits • Adding large positions after seeing gains in a position • Over trading and overleveraging to chase big returns • Risking big on a single trade Another important thing that needs to be understood is the difference between mistakes and losses. A lot of people think that trading mistakes and trading losses are the same thing. However, a trading loss is simply a trade that hit your stop loss and did not go your way. Until the day you learn to accept that losses are just as much a part of trading as winners, you will not become successful. A trading mistake on the other hand is you simply not following your own rules. You have to understand the importance of being disciplined and how it is possibly the single most important aspect of lasting in the markets. Never break your own rules just to be right, because as said earlier, you need to learn that losses are completely normal and expected. Emotions are a normal part of everyday life, however it cannot be stressed enough how important it is to leave them completely out of your trading. Many others believe that negative emotions should be shut off, however positive emotions are great to have, however I think otherwise. Emotions should not be attached in any way to trades, whether positive or negative. If emotions are attached to every single trade then what can happen is that you could have a great week and make a certain amount of money that week. Now by attaching an emotion to that trade, you are programming your mind to believe that the following week even if half that amount was made, it is not good enough as you do not have the same intensity of positive emotions. In trading you have to be emotionless towards both wins and losses and strictly follow your rules. Constantly working on your psychology and mindset is key to developing and succeeding as a trader. Something as simple as developing a daily morning routine, keeping a journal, meditation, exercise, and visiting a mindset coach, are great tools to constantly develop and keep your psychology and mindset at its best. Meditation alone has helped me to develop as a successful trader by improving my focus and attention, reducing stress, reduced panic, improved my information processing, increased mental strength and emotional intelligence, and increase in my focus. If there is one thing that cannot be stressed enough, it is that the aim of forex is to gain pips and not money. Chasing money, especially fast money, is gambling and you will never have control as long as you remain with that attitude.
BITFINEX:XRPUSDEducation
by opes_trading_group
Basics of Trading PsychologyPsychology is perhaps the single most important aspect of trading. Without the proper psychology, you are almost guaranteed to fail. First things first, you have to understand that trading is just as much of a profession as any other, and just like top performing athletes, trading reflects your performance, you are responsible for your results. In life your beliefs shape your reality, and you have to believe without a doubt that you could become a trader. Only once you completely trust yourself, you will be able to go ahead and become a trader. Every aspect of trading is psychological including everything we have spoken about pretty much. And since you trade your beliefs, that makes the biggest impact on the results you will receive. People make decisions based on fear or greed, it is that simple. And since the market is designed to take advantage of individuals psychological weakness, if you do not have control over yours then you will be a part of the 90% who lost that day. Since all trading is psychological, it is most important to always be working on yourself as a person, because that will greatly impact your mindset and attitude while trading. You cannot finish fighting with a friend, partner, or spouse, and sit on your computer expecting to make great analytical decisions while there is anger and indecisions going on in your head. Trading has to be treated just as much of a business as any other. A lot of people think that trading mistakes and trading losses are the same thing. However, a trading loss is simply a trade that hit your stop loss and did not go your way. Until the day you learn to accept that losses are just as much a part of trading as winners, you will not become successful. A trading mistake on the other hand is you simply not following your own rules. You have to understand the importance of being disciplined and how it is possibly the single most important aspect of lasting in the markets. Never break your own rules just to be right, because as said earlier, you need to learn that losses are completely normal and expected. By following your rules, you will focus less on being right and have less emotional attachment to trades. If emotions are attached to every single trade then what can happen is that you could have a great week and make a certain amount of money that week. Now by attaching an emotion to that trade, you are programming your mind to believe that the following week even if half that amount was made, it is not good enough as you do not have the same intensity of positive emotions. In trading you have to be emotionless towards both wins and losses and strictly follow your rules. According to Dr Van K. Tharp, there are 12 tasks of trading which include: 1. Self-analysis to determine if you are in a state of mind to trade 2. Mental rehearsal to avoid mistakes 3. Daily focus to lead you towards your goal 4. Developing your own style of a low risk idea 5. Stalking the charts starting from high to low time frames 6. Action requiring commitment and not thought 7. Monitoring the trade to keep the risk low 8. Aborting if the trade is not going well 9. Taking profits when the reason for the trade has ended 10. A daily review to monitor and prevent future mistakes 11. Being grateful for what went well 12. A periodic review to make sure everything is still working well   One of the biggest parts of a good trading psychology is believing in yourself. This can sound very straight forward until you deposit real money and place a trade. You will see parts of yourself being tested that you didn't know existed. You might find yourself checking the trade every few minutes or even seconds, you might look at your drawdown and doubt everything that you have done, you might lose a trade and think that you will never analyse another right. Let me give you some common examples, you analyse a trade and all the confluence is there, you then monitor your trade and after several hours you find yourself in drawdown leading you to close the trade, hours later you see that the price went to exactly where you had your take profit. Another might be after losing a trade you see a great opportunity, but your previous loss makes you doubt everything about the trade, only to see it reaching where you had in mind also. Of all the things learnt, if your psychology is not your main focus of work, you will not be able to succeed as a trader, not because you do not have the right knowledge and analysis to trade, but because you are your own enemy. Over trading is another reason why many people do not last long in the markets. Over trading is extremely negative as placing too many trades and adding on to your losses, you are not managing your risk correctly and only exposing your account and capital to more risk. The psychology going from demo to a real account is great also and individuals need to be careful as emotions will come into play. If there is one thing that cannot be stressed enough, it is that the aim of trading is to gain pips and not money. Chasing money, especially fast money, is gambling and you will never have control as long as you remain with that attitude.
BITSTAMP:BTCUSDEducation
by opes_trading_group
3 Things I Wish I Was Told Before Becoming A TraderTrader Jamal… Hey, Finn—What you doing here… Are you here to wind me up? No, Jam! Shucks—Just heard you’re rich now. Trading stole our red-collar boy. How has it being though? Tough!… I won’t even lie to you man. It’s being real tough. I even told my story here to people. You know what they said, “I told you so”. I mean all I wanted was “financial freedom”. Pfft—I don’t even know what I was thinking. I’m broke man! Everything I’ve done has really messed me up, Finn. I’ve lost close to $70,000 in total. Mistakes, hesitations, personality problems, and fear. I think… I might just quit—Maybe trading isn’t for me man… Came to get some food. We’ll talk later Finn—Bye! “As a trader, the key is to learn more about yourself”… Huh! What do you mean sir?—Are you talking to me? Yes, Forgive me son—I overheard your complaints to your friend. 43 years ago—I was exactly like you son. If I may ask, how long have you been trading? Umm, 2 years sir. It really hasn’t being that long. Then why are you complaining? … I’ve been in the game for 43 years and I didn’t achieve consistency—until after 10 years of trials and lots of errors. So, don’t give up yet! Erg! sir… —I just don’t know what I’ve been doing wrong. I can’t tell. The Old Trader tale Everything I’ve done has been a total fail. You know, I went to school of candles Pretoria—Nothing has happened, so far. Tell me sir, what else should I do? All right Jamon… … It’s Jamal sir Jamal, can I tell you my story… I’ll appreciate that sir. November 3, 1850, I became a trader—A friend introduced me to trading, when I was at my lowest. A short story… What do you mean sir? I don’t understand… I’m going to let you in—on my secret. But, you have to make sure, you’re patient enough to listen. On January 5, 1849 I graduated with a first class honors in Business and Finance. It was the greatest day for me—Cos’ I could finally become the Businessman/Banker I’ve always wanted to be. I thought to myself, “Isn’t this great?” So I started job hunting, I focused more on the banking sector… I searched and foraged around Beverly hills but—It was total disappointment. Until, I finally got it. Hey! guess which bank came through—It’s The First Republic Bank. They took me in. Good pay and all; it was my dream job. I mean you must be asking, “why quit and become a trader?” Simple! it wasn’t the life I pictured. I know I wanted to be in the financial sector—Wanted that classy business guy life—But, the idea of sitting in a spot to make money… wasn’t what I imagined. Two words, “It’s Boring”! Why Quit Your Job Trader The questions I asked myself was, “Is this where you really see yourself in 5 years?”… That was the only bank that offered me a great job—I knew that per fas et nefas, I am definitely going to have my financial freedom. So, I started my search again. This time I was specific—No bosses, anywhere in the world and My own time. You should know what that means, right Jamal? Oh! Yes sir I do… Just curious to how trading met you… Sir, you graduated with a first class honors in finance yet, you spent 10 years in becoming a consistent trader What happened? Don’t worry I’m getting there. Most traders don’t know this yet but, “It’s really mind over market; EQ over IQ” here. You’ll think that, because I came out with such good grades—I’ll be a market wiz in a short period. That’s not how trading works! You know, my friend Victor once said, “The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… Ergo—the single most important reason that people lose money in the trading is because—they become too emotional, in denial, and cannot control these emotions”. That’s why Jamal, Trading is really not about your IQ; It’s more or less about you as a person. Your mindset, beliefs, character—everything about you would be tested. As a trader , you are really playing against yourself. It’s you versus you! I Discovered The Art Of Trading! Before I continue my story, I’ll ask you a question—Do you understand your personality? Shucks, well… Yes! I do. But, the change hasn’t been easy sir. I realized that my character flaws gets in the way of my progress. Exactly! Jamal… Back to my story. I wasn’t happy with my job; even though it felt like it was my dream job. After working there for a year and reflecting—I realized, “No! man this isn’t what I expected”. It’s a bore! Most people are like you Jamal. They’d ask, “Why spend 10 years in figuring out trading, if you graduated with a—first class Honors”. It’s because… trading is more than IQ! In trading, the intelligent also encounter problems, if not more—in trading. You know… You and I. That’s why I used victor’s quotes. Now, I was looking for my dream job, which was, making money whilst at the comfort of my home. My degree couldn’t give me that. I needed to have a skill. But, I’ll let you on a secret Jamal–-“A degree without skill is just nothing more than, a unit of angle measurements”. Something happened—on the 15 September, 1850, there was a seminar. The bank made sure every of its staff were in attendance—Most grumbled, some happy, others indifferent. I actually wanted to reject the offer… until I saw the topic of the seminar. It read, “Your missing key to financial freedom”. Of course I went. That’s what I wanted! Ugh… That seminar alone changed my view of the finance industry and I discovered the art of trading. A beautiful art I must say; The best! Immediately, I saw a reflection, I imagined what it would feel like—If I became a trader. Self-Reflection The moderator said something, he said, “What kind of life do you want to live? A 9-5 till your 60 or an anytime you want till your 30”. You see, I pondered on that quote for the longest time. I don’t think I’ve ever had to think so hard. Anyway, I made a choice! I have to know how to trade! That’s what I said to myself. But, I didn’t quit my job just yet. I needed that job at least, till—I was great at the art of trading. Damn! I probably shouldn’t have quit my job right? Heh! Listen, what’s already done shouldn’t be spoken about. You made a decision that was best for you at that time. Jamal you’re still young and there’s still time to make better decisions. As a trader, allow yourself make mistakes; if not, you’ll avoid them only to meet them at the finish line. Do you understand!… Yes sir. When I told myself that, I started looking. I searched for articles, books and listened to colleagues. We had no YouTube then—all we had were newspapers and the lying broadcast. But, I didn’t give up! Working in the bank kind of gave me an upper hand—because I had access to financial data. Jimmy was our foreign exchange (forex) wiz. I needed Jimmy to be my friend. I had to become a trader! Becoming a trader, gave room to a lot of challenges—I encountered… The first was putting up with old Jimmy’s attitude. Jimmy wasn’t a friendly person but, Jimmy had what I needed. Did that stop me? No! I had a goal. “I had to become a Trader!”… Old Jimmy wasn’t going to be a hindrance to that plan. Secondly, I had to be patient because I knew Old Jimmy might say—The words I dreaded the most, “No!”. Which he did—severally! Each time I got home, I’d tick my trading boxes. Each time, I realized how far I was—from becoming this trader. But, I stayed. Months passed, days tripled and I finally got a demo account. Trader Jimmy, Here—I Come… Jimmy insisted I start with the demo. His words, “You need to get familiar with the system”. So, I started practicing what I’ve learnt and I was doing surprisingly well. Also started making paper trading cash—I became obsessed with the reality that—it could all be mine. I assumed, “Maybe that’s all I need from learning”. So, I quit! Left the bank, told my colleagues, “bye”… I was out! Hmm… thought to myself, “Hey, Trader …here I come”. Months passed and I finally invested 50% of my salary into—a live account. I was ready or—I thought I was. The first few trades were great; an account of $50,000 tripled. “Woah! I can’t believe that worked—what have I been doing in the bank since?”, “Could have been earning twice my salary in a day”, I mulled. It’s a Friday morning. Hurrah! NFP… “the best time to get the bag”, that’s the phrase Jimmy would use. Wham! I opened several positions and… Sighs, it ate my equity. Damn! it’s all gone. As if that wasn’t enough—I added more money. Told myself, “You can’t give up now” This is all you have! In my bank account, $70,000 was left. Hmm… “well, it’s all or nothing” I exclaimed. Dialed the broker and added $30,000… left $40,000 for emergency reasons. Cos’ if I could lose $50,000—then it’s possible to lose more of that. Wasn’t going to be foolish twice! But, it was actually worse… For 9 horrible years of my life… I couldn’t figure it out. This Trader became miserable, broke and hurt. Until, I realized… One thing the demo does for the trader is, it reveals to you all you can achieve if—you didn’t have emotions. But, you’re human! We all have emotions—that’s actually a problem. After my years of failing and picking myself up from the fence, I understood the market was trying to teach me something. Jamal, I’m going to share with you 3 lessons I learnt from my Chi-Fu called, “market”. These lessons all come with sacrifices… It should help you pick up your art and become its master. The first… As A Trader Become A Great Loser Jamal, can you think of a trader who actually boasted about his losses? Most people don’t like to show the black eye and swollen lips—they show you the beauty marks and glittering veneers. Obsessions over something makes you have less of it. To be a good winner; you have to be a good loser. Huh! what does that mean sir? You have to come to terms with losing. In-fact, losing should be an opportunity for you to learn something new about—yourself and the markets. Learn to appreciate your losses. Why sir? It hurts! That’s my hard-earned money… Jamal cries. Exactly, Jamal! It should. Life is all about lessons and so is the market. Have you ever received something without giving? Uh… Not that I can remember. Exactly! It’s because you haven’t. In everything, there’s a relationship. Now—this relationship can either be mutualistic or parasitic. Trading is only parasitic if the lessons aren’t fully digested. Listen, If I gave you $500 and you misplaced it; you became careless—It got missing. What will you do? Err, I probably look for it Sir. “What if you don’t find it, remember it’s not your money”, The man responds. “I’ll probably cry Sir. How else would I replace it”, Jamal interjects. Okay great, You know that “crying” doesn’t bring the money back right? That’s exactly what happens in the market. We fail to learn from our mistakes, we let our emotions take over, instead of listening to the actual lesson. The next time someone gives you $500—I know for a fact—Jamal, that you’ll be more careful. You know why? Because there’s being a loss before. Now, you either learn to protect it or become careless again. What will you choose? I’ll learn to protect it Sir. Good! That’s the first lesson. In the market however, you might keep losing this $500—Each time there’s a loss, there’s a lesson. Right? Which brings me to my next lesson. It’s a question first; then after the question—comes the lesson. Are you ready for it Jamal? Heh, yes sir! Haha! Nice, you want to take down notes. Interesting… Will You Allow The Market Bully You? Have you ever been bullied in life? Either a childhood school bully or a boss… “Oh, my God—Yes sir!”, Heh!… okay, That was a fast response—seems you can’t forget that one. It was bad huh? Bad! Anyway, bullies’ have power—only when they feel superior. It’s just like a Cat and Mice, the cat seems very powerful when ever he sees a mice—Cos’ he’s bigger. But, most times—The mice is smaller and wiser. A mice that isn’t wise gets trampled upon. So, If that school bully comes now and tries to bully you, will you allow it?… Of course not. I’m probably a lot bigger now and It ain’t possible anymore. Exactly, Jamal. You got better! If you’re that kid that got bullied in school, You know it’s no different from the market. The market is that childhood bully, that boss at work—but this time around, I want you to see the market as “Jimmy”. Yeah, he would bully you but—you should allow him: to gain from him. Try to come to terms with his agreement. Now, you have to be friends with this bully… What!… Why, I mean how do you get a bully to be your friend? “You don’t force the bully to be your friend Jamal, he doesn’t have to like you—but you have to like him.”, The man responds. The reason you allow this bully (market) to get to you—is because, you get to gain from him (the bully). The bully is a tough nut to crack but, knowing that each pain becomes an experience is the goal. Have you ever lost something valuable before Jamal. “Uh… Yeah” Jamal stutters, while answering. Okay, great—how did you feel? Not a pleasant emotion, right?… but, what happens—you learn from the experience. Two choices: you either decide to move on or avoid it right? What do you do Jamal? “Run away—I guess. Cos’ I really don’t want to feel that pain again. It’s horrible so why try to experience it twice?”, Says Jamal. Trading should a pleasurable pain—like a woman who just lost her virginity. A bittersweet experience… I thought you will say that. Listen Jamal—the bully is going to keep hurting you, as long as, you still in that school. Likewise, you’ll probably encounter more losses—as long as, you decide trading is what you want to do. Listen, in life change or experiences just don’t happen—they only happen when they become a necessity. You decide you want to change; when you know that beating becomes unbearable. It’s not something you run from. Don’t be a wuss Jamal! Face it!…You’ll need to actually face it. Most traders are wimps—looking for the nearest rat… because, the elephant becomes too big for them to handle. So, are you a wimp or are you valorous? The more you learn from the experience—the better you become. But, the more bruises.. Until, you become so good that—you no longer fear the bully and you might even learn to face this bully. Do you get it? I’ll give you some time to digest that before the last and final lesson. Try to know the other side “I’m ready sir!” Great! A wise man once said, “Certainty is the only illusion a trader has.” Do you know what that means? … I’ll take that as a “no”. Anyway, have you ever seen a coin before? Heh—who am I kidding, you probably have some in you pockets now. So, a little exercise—shall we? Now, look at the front of the coin you’re holding—carefully study it, Now—tell me what’s at the back of it? Eh… I have no idea sir—I’ll have to flip it. Exactly, most traders don’t actually flip this coin—you see. They don’t even want to know what’s on the other side. You know why? It’s because they love their comfort zone. These are the wuss traders; the ones who run from the bullies. We call them, “routine traders”. There are always two sides to a coin but most times, until you flip it… you’ll have no idea what the other side looks like. I won’t even lie—we always like the safe route to things. If something is safe for you, you might just tell yourself, “uh, well—I like it here. Why stress to know what’s on the other side?”. But, in trading—there’s no safe route. Don’t hold strong opinions about things you don’t truly understand. You have got to take that risk. No shorts to this cut, Jamal. There are two sides to a trader: the one who runs from the bullies—because the pain become unbearable and the ones who face the pain—knowing that the end to that tunnel is great. The question is, what side are you on? Most traders quit because they prefer the latter—“I like it here tommy, don’t pull me out yet—I can’t face the world”, They’ll say. My final lesson is; have an open mind. The strong willed—don’t always will lots of bucks here. Try not to have a strong opinion in your trading decision. Be the trader who adapts to the changes of the market—not the one controlled by it. Remember, be the lame kid who takes the blow. Painful but, worth it. Now You Know… What Next? You know Jamal—I tell people, “those who have strong opinions about the markets are either knowledge-able or totally ignorant”. The only strong opinion you should have about trading, Jamal, is—you shouldn’t be married to an opinion. A dangerous thing about trading is that—it isn’t really a game for spectators. If you ask me, the most dangerous sport out there is—trading. Traders are also the most dangerous people on planet… where-ever you breathe right now. You know why? These guys take crazy risk, without any form of medication in place. The number of heart breaks a trader has in a day/week will be enough to make him never believe in love. Haha! Nah trading is actually fun but—don’t let anyone deceive you into thinking, it’s all roses and sunshines. It’s really not! It’s a mental game—about emotions. Where the emotional ones get kicked out; The heartless/ruthless ones always make it far. Simple!, they really “don’t care”. My friend Scott will say, “i’m suspicious of people who have strong opinions on complicated stuffs”. Heh! people who sugar-coat things—they don’t tell you what you should hear. They’re also the ones who post for the media sake. Now most traders try so hard to understand the market that—they actually fail to make money. Don’t lose yourself in trying to beat the market… You can’t! She’s way smarter and richer. You’re a pauper! Stick to management cos’, this one’s a thief. She’ll dig you of all your diamonds if you think you can beat her. Probably the smartest woman out there! Anyway, Jamal, I think with this few lessons of mine—you should never, ever, think you’re the worst trader on earth. The fact that you even lost means you tried. Well, it’s a good thing you met me. Hey! i’m Trader Steve—the worst trader on earth.
OANDA:NAS100USDEducation
by lazyluchi
2
BEST REVERSAL PATTERNSDuring the existence of the market, a large number of technical analysis figures have been found. They all work with varying degrees of accuracy. Such a large number of patterns can confuse anyone, especially a beginner. Today we will look at just two models that are quite common and, with proper trading, can bring you big profits. Both models are united by one idea – breakouts. Beginning. First, the price goes down, creating new lows below the previous ones and new highs below the previous ones. At some point, the sellers' strength ends and the market turns around almost immediately, or it stops before accelerating upwards. For profitable trading, a trader must learn to catch this moment when the strength of the trend is extinguished and the price is preparing for a reversal. Confirmation. Stopping the previous trend is not a reason to enter a trade, you need to wait for confirmation. Confirmation will be a new maximum, higher than the previous one, after which the price will try to start moving down again, making a pullback down, but there will not be enough forces for further fall and the price goes up. The entry point will be the moment when the price returns to the breakout line, bounces off it and goes up. Stop loss. Very often, such formations will give you a lot of movement and big profits. But do not forget about the stop loss, which can be set below the breakout line (risky, since there may be an earlier close) or below the previous minimum. You can find a lot of trading opportunities on the market every day, but beginners are advised to study a couple of patterns and learn how to trade them correctly. Take your time and luck will definitely find you! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
12
BIG SHORT STRUCTUREToday we will consider a frequently occurring formation that can bring you big profits. Beginning It all starts after breaking through the resistance line of the lateral movement. Lateral movement is nothing but the accumulation of force for subsequent takeoff. Upward movement After the breakdown, the price goes up, creating new highs, correcting from time to time. All this continues until the last peak is formed – the head. Head The head is characterized by a large price rise in the beginning, after which there is a sharp drop. The fall is characterized by large volumes that grow until the breakdown of the left shoulder line. Right shoulder. After that, the formation of the right shoulder begins. In this situation, the price may break through the line of the 50-day moving average several times. The ray point of entry. After several breakthroughs of the moving average, the price will make a dash down. The ideal entry point will be the last breakout of the moving average. It is very difficult to determine and enter the position at the ideal point, so you can try to enter after breaking the neck line or a little higher. Conclusion Such situations are common in all markets, giving a huge opportunity to make a profit if everything is done correctly. Sometimes the price can fall even below the sideways movement that started it all. Don't forget about the risks, good luck! ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
NSE:NIFTYEducation
by DeGRAM
3
METHODS FOR SETTING STOP LOSS. PART 2.We continue to study! Moving Average method When choosing this type of stop loss setting, the moving average indicator is used. The moving averages indicator has long been known in the forex market and many traders use it in their trading, since trading on this indicator is simple and reliable enough. The strategy of setting a stop loss on the moving average indicator is very simple: We need to wait for the price to rebound from the long-term average and put a stop below the indicator line, or above it, if we are talking about a rebound down (short). Fibonacci Levels In addition to the moving average indicator, Fibonacci levels can help you with setting a stop loss. These two methods are somewhat similar and both are quite easy to use. All you have to do is first measure the market phase and wait for the rebound from the Fibonacci levels. After rebounding and opening a position in the appropriate direction, set a stop loss below or above the 78.6 level. The simplicity of these methods lies in clear rules, it is difficult to get confused in them, so these methods are effective. Trailing Stop A trailing stop is a stop loss that follows the price by a certain percentage, points, or dollar amount when the price moves in your direction. Thanks to the trailing stop, the risk will decrease, protecting your profit and preventing a profitable position from turning into a negative one. Usually a trailing stop is set when the price has already moved in the direction we need and in order not to lose profit, we set a trailing stop. But be careful, do not place your stop too close to the price, do not forget about corrections, give the price room to accelerate. High/Low Method This method is most often used by swing traders. The essence of the method is that the stop is placed behind the minimum/maximum of a pre-selected day. In addition, the stop can move if the price shows a new high/low the next day. This method is considered not the best, but it exists, and you should know about it. Be careful when using. Conclusion There are many ways to set stop losses, but which one to choose? As is often the case in trading, you should choose the method that suits you, your character and your strategy. Do not forget that excessive stop-loss setting can lead to premature closing of a position. Frequent repetition of this error can lead to the loss of all capital. Stop loss should not be set at any point you like on the chart, it should be set according to the method and logic of price movement. Do not forget about volatility, which can knock you out of position, and then turn around in the direction you need. In addition, it is not necessary to set the stop loss clearly at the support/resistance level. The price often passes these levels and returns back. Don't forget about it. Setting a stop loss in each position is an important rule. This should become your habit. You should know before opening where you will put your stop loss. Do not forget about the rules, follow them and then you will succeed. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
13
FOREX TRADING SESSIONSThe forex market operates 24 hours from Monday to Friday and is divided into three trading sessions: Tokyo Session ( Asian ) London Session ( European ) New York Session ( American ) Each session has its own characteristics and its own time, in addition, at certain times the sessions overlap each other. Let's take a closer look at the sessions. Asian session. This session is characterized by a small trading volume, compared to other sessions. At this time, there are few major players on the market, so the price may move sideways for a long time. There are many other countries present during the Asian session, such as Russia, China, New Zealand, and Australia. Due to such a large number of countries and different opening hours, it is considered that the Asian session lasts from 11 p.m. to 8 a.m. GMT. This session is suitable for those who do not like sudden movements. The session is characterized by smooth and slow movement, without strong bursts and without unexpected jumps. With the right direction, your stop loss will rarely be affected by market noise. European session. The London session is the most important. Most of the financial world turns on at this time. This trading session is considered the largest in terms of trade volume, accounting for 34% of trade. In addition to London, other major markets participate in the European session – the markets of Germany and France, because of this, it is considered that the working time of the European session starts from 7 a.m. to 4 p.m. GMT. Large trading volumes are due to the fact that three sessions intersect at this time: the Asian one, which will close soon, the American one, which is about to open, and the European one itself. This session is suitable for people who are not afraid of big movements and huge volatility. At this time, the market is as active as possible, there are many opportunities to earn, but do not forget about the risks, strong price movements can deprive you of all the capital in an instant. At this time, there is a frequent knocking out of stop-losses of retail players, after which the price often accelerates in the opposite direction. American session. At this point in time, New York is included, with a market share of 16%, the second largest trading market. The American and European sessions overlap each other, creating a large amount of liquidity. The US dollar and the Pound are the most traded currencies, occupying a huge part of all transactions on the market, because of this, volumes are increasing. At this time, important economic news often comes out, which adds strength to currency movements. New York opens at 1:00 pm and runs until 10:00 pm. What time is considered the most active? The most active moments in the market are the moments when two sessions overlap each other: New York and London: from 1:00 pm to 5:00 pm Sydney and Tokyo: from 12:00 am to 7:00 am London and Tokyo: 8:00 am to 9:00 am When two sessions overlap, it is profitable to trade the main currencies of these sessions. For example, trading in EUR/USD, GBP/USD currency pairs will give good results when the European and American sessions intersect from 1:00 pm to 5:00 pm. Conclusion Markets can move very fast, making big jumps, knocking out your stop losses, on the other hand, there may be a market situation in which the market moves very slowly and if you don't know how to wait, you won't be able to earn in such situations. Choosing the right time that suits your style is an important component of a trader's work.
NSE:NIFTYEducation
by DeGRAM
METHODS FOR SETTING STOP LOSS. PART 1.The market is volatile and very unpredictable, it is impossible to constantly correctly guess the future direction of the market, and in order not to lose everything in one transaction, a stop loss was invented. Stop loss, like the trend, is our friend. Without a stop-loss strategy, there can be no profitable trading strategy. The ability to correctly find the stop loss zones will help each trader to avoid unnecessary losses and not to exit the position ahead of time. Let's look at these strategies. Methods for setting Stop Loss PERCENTAGE METHOD The interest method is a method in which the stop will be equal to a percentage of the capital, depending on your risk management. At the same time, a large number of professionals recommend not to risk 1-2% of the capital in one transaction. And this method is very popular because of its simplicity and ease of calculations. For example, if your capital is $ 10,000, and the risk management in each transaction is 1%, then the stop loss will be $ 100, everything is very simple. CHART STOP This method is based on placing a stop loss behind the support and resistance levels. After several bounces from the levels, you can set a stop loss above the resistance or below the support, because if the price breaks through these levels, then potentially the deal can go strongly against you. Such levels will be our protection, because it will be very difficult for the price to break through strong levels, but even if there is a breakout, we will be protected by a stop loss. TIME STOP Another method of setting a stop loss is a method based on time parameters. This method will be of interest to those who do not want to leave their deals overnight or want deals to close at the end of the week and not remain open on weekends. Everyone knows about the uncertainty that arises on weekends. At this time, it is impossible to close a position, and the news can be dangerous and you can suffer big losses at the opening of a new trading week, in order to avoid all this, this method was invented. VOLATILITY STOP Each currency pair has its own volatility value. Some couples walk fast and a lot, some walk less. If a trader knows the average daily range of a particular pair, then he can set his stop loss slightly above this value so that the position is not closed prematurely due to market noise. For example, if we imagine that GBP/USD has an average daily movement range of 100 points, then setting a stop loss by 20 points is likely to lead to premature closing of the position. But, if a trader puts a stop above the daily range, you can thereby protect yourself from accidental price spikes. This method forces you to place large stop-losses, thereby giving you space to work so that the price is not closed prematurely. Conclusion Setting a stop loss is a vital condition for any trading strategy. Without a stop loss, you will inevitably lose capital. In the next part, we will look at other methods of setting a stop loss. Good luck to everyone! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
17
TYPES OF TRADING STRATEGIESHello to all! Throughout the history of the forex market, several types of strategies related to the trading interval have been invented. Strategies have differences in the time of holding a position, and each trader must choose the type of strategy that suits him. SCALPING Scalping is a well-known style of short-term trading, using technical analysis. Scalpers, as a rule, enter into impulse movement, on breaking through levels or rebounding from them, in areas where large volumes of orders have accumulated, and close positions immediately after the end of the first impulse. They do not sit out in a position and do not hold it for a long time. Positions are usually closed within a minute. Scalpers use tick or minute charts for analysis. Impulse movements can be born during the period of news release, so the trader should follow the news. Since scalpers take a small number of pips, their profit also depends heavily on the spread, so they trade liquid pairs. Day Trading Day traders open and close positions within the day. They do not transfer transactions to the next day. 5- 30 minute charts are used for analysis. Day trading differs from scalping by holding a position for a longer time, up to several hours, if the trend allows. Day traders profit only from intraday fluctuations, so they can afford to use higher leverage levels than long-term traders. SWING TRADING Swing trading is a method of trading with holding a position from several hours to several days, that is, positions can be left overnight. Swing traders use hourly and higher charts to analyze the chart. Much attention is paid to trading formations and levels, indicators are used. Swing traders can profit from both trends and corrections, because the profitability may be higher than that of trend traders. NEWS TRADING Such traders pay attention to the news more than anyone else. The opening of a position is made during the release of important news that can push the market against the trend or, conversely, disperse it. As a rule, such traders do not leave their positions overnight. The idea is that during the release of important news, market volatility increases and it is here that traders who trade on the news earn. They wait for this liquidity, open positions before the news comes out and hold them under any circumstances. TRADING ON TREND Trend trading is a very well-known type of trading and perhaps the most profitable. Everyone remembers the rule: Trend is our friend. And this friend can bring big profits, without serious emotional burden. This type of long-term trading implies the ability to identify a trend with the help of technical analysis and opening positions in the direction of the trend. The main indicator for trend traders is the trend itself, so holding a position can be from several days to several months until the trend stops. Often, in order not to lose profit, a treling stop is used. To analyze charts, traders of this type use daily and weekly charts. They often use long-term models and resort to using fundamental analysis to open and hold positions. The spread does not bother them, as positions are opened for a long time, so trend traders can afford to trade illiquid pairs. Conclusion It is not enough to know what types of trading strategies there are, it is very important that the strategy suits you. Maybe you like to take profits quickly and leave the market? Or do you like to hold positions for a long time and you don't like to follow sharp short-term price fluctuations? Every trader should understand himself first, and only then choose a strategy.
Education
by DeGRAM
2
CORRELATION COEFFICIENTS on FOREXHello everybody! Professionals have been aware of correlation for a long time and use it profitably. The essence of correlation is not difficult to understand and using it in trading can significantly increase your profit. Correlation coefficient of currency pairs – what is it? Correlation is a statistical relationship between two or more random variables. The correlation coefficient is an index of the interdependence of quotations of different currency pairs. Correlation of currency pairs is divided into two types: direct (positive) and inverse (mirror or negative). A positive correlation is a similar movement of quotations of different currency pairs. Inverse correlation is the reverse movement of the exchange rate of different currency pairs. For example , EUR/USD and USD/CHF are in a mirror correlation because both European currencies are against the dollar. Any change in the euro affects the franc exchange rate and vice versa, on the chart, the price of the euro and the pound moves the other way around because in the EUR/USD pair, the dollar is in second place, and in USD/CHF in the first. Method Analysts have come up with a method that makes it easier to understand the correlation, it is called the correlation coefficient. Using it, you can understand in which range each pair is relative to the other, where +1 is a complete correlation, and -1 is the opposite. The stronger the link between the economies, the stronger the value tends to unity. Let's consider the main ranges of coefficient values and their impact on the currency pair: • 1 - Denotes the same movement of currency pairs. * From 0.9 to 0.5 – High dependence of currency pairs among themselves. * From 0.5 to 0.1 – There is a decrease in correlation. * 0 – There is no correlation, the instruments do not depend on each other. * From 0.1 to -0.5 - Characterized by a decrease in correlation. * From 0.5 to -0.9 – An increase in correlation and a change in the direction of movement of currency pairs in the opposite direction. * -1 – Inverse dependence of currency pairs. One price is going down, the other is going up. Trading options Novice traders often think that they reduce risks when they invest in different currency pairs, but at the same time they do not understand that a large number of pairs correlate with each other. Forgetting about the correlation, you can start getting double losses. Correlations can be used to confirm signals. For example , the analysis of the EUR/USD chart showed growth. To make sure that the forecast is correct, you need to get a reverse confirmation for USD/CHF. Sometimes, to confirm trading signals, a comparison of three assets that are minimally related to each other is used. Take for example EUR/USD, USD/JPY and EUR/JPY. • If EUR/USD is predicted to go up, then the forecast for the reverse currency pair USD/JPY should signal a fall. In the event that there is no signal for USD/JPY, then it is necessary to carefully study the behavior of EUR/JPY. No matter what tactics a trader uses, you always need to remember about correlation and use several pairs with positive and negative correlation in the analysis to increase the accuracy of the forecast. In addition, correlation helps to hedge transactions. Having decided to invest in one currency pair, you can divide the investment amount into two parts and invest the second part in a currency pair with Time interval in correlation analysis The correlation has the ability to change depending on time. It may be that the daily correlation = 0.6, but when switching to a monthly interval, this value increases and shows a strong correlation. There may be an inverse situation, when the correlation drops relative to the selected interval. Pay attention to this when analyzing. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
16
ACCOUNT DRAWDOWN – HOW TO AVOID IT?Today I want to touch on a very important topic - account drawdown. Every trader will face this problem sooner or later, because losses in the forex market are inevitable. And if a professional knows what to do and has experience dealing with such a problem, then beginners often get lost when faced with a drawdown, which leads to even greater losses. What is a Margin Call? Margin Call - is a "call"-notification of the broker with a requirement to deposit additional funds to guarantee open transactions. If no additional funds have been received to the trading account after the Margin Call, and losses continue to grow, then when the price reaches a certain value, the Stop Out procedure will be launched, and the brokerage company will automatically close part, and possibly all transactions on the trading account. Causes of drawdown. There are two possible reasons. The first reason for the drawdown is a bad trading strategy. Each strategy needs to be checked and only then use it. No risk management will help if the strategy is unprofitable. The second reason is psychology. Even if you have a proven strategy, you can still lose money because you lose control of the situation. Discipline is the key to profitable trading. To act according to the strategy and even after a series of losses to adhere to the plan and not exceed the value of risk management - that's what a professional does and a beginner misses. Newcomers try to regain what they have lost by opening deals with a large volume, risking even more money, driving themselves into an even greater minus. First of all, you need to put up with losses, it is impossible to avoid them! Accept losses, do not lose your head, trade further according to the rules and then you will not only return, but also earn even more money. An important thought! Every beginner should remember that the more he loses, the more he will need to make profits in the future in order to reach zero. It is very difficult to make 50% of the profit to the capital in one transaction. It is almost impossible to make 100%, but beginners do not understand this and invest a lot of money, open positions with a large volume and lose even more. Losing 1% is not so scary, losing 10% you need to do 11% already to get to zero. Having lost 50% in the future, you will need to make 100% to go to zero! Don't bring your account to this. Remember: it's better to move up slowly than to fall down quickly and crash. Decide on the drawdown level. Professionals do not let their account fall below reasonable values. A beginner brings his account to exhaustion in two or three transactions. For a beginner, a drawdown of -50% or -70% occurs easily and quickly, a professional cannot afford this. Each trader must decide for himself how much percent of the capital he can lose and still remain calm. For each person, these values are different, someone cannot survive a 20% drop in the bill, and someone lives quietly with -50%. Drawdown levels up to 15% – normal working drawdown. 16-30% is not a reason to panic, but the time is coming to reduce the risks and intensity of trading. And it is also worth reviewing the state, dynamics of the market and the trading instrument. 31 - 60% is the beginning of the end. If the account is down by more than 30%, trading should be stopped and a break should be taken. After that, come back with a modified strategy for making trading decisions. Drawdown is an unpleasant thing, but the main thing is not to start it and not to delay the time after exiting it. If you have already fallen into a drawdown, then you need to follow the following rules: If you use a proven trading strategy that has repeatedly made a profit, then you just need to fix losses and continue trading using the same strategy, but with a more gentle money management system. If the trading strategy used is no longer effective, then you should fix the losses and look for a new working trading system. Due to the fact that there are no exceptionally accurate methods to exit the drawdown, your further actions will be reduced to the same trade. In this situation, the trader should identify weaknesses in his strategy and try to eliminate them. The revision of approaches to risk management and funds will also allow you to balance trading and avoid deep drawdowns in the future. Be disciplined, follow the money management, trade systematically, and the drawdown on the deposit will not bother you. ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
Education
by DeGRAM
6
PRINCIPLES OF DRAWING UP A TRADING PLANHello traders! Today we will talk about WHAT should be in the trading plan of any self-respecting trader. Many, as it turned out, do not know the basic principles of building a trading plan. This article will help beginners understand WHAT should be added to their trading arsenal. 1. Timeframe. The first stage of drawing up a trading plan is to determine the timeframe. Every trader should know in what time interval he is going to look for entry opportunities and build a trading strategy accordingly. As a rule, timeframes are divided into three types: 2. Risk management. Risk control is probably the most important issue in any trading plan. The ability to control risks and follow principles distinguishes a professional from a beginner. In this section, the best rule is rule 1-3% 3. Market structure. Every trader should have a trading strategy even before opening a position during periods when the market is trending or in a sideways movement and, of course, be able to correctly determine when the market is moving from one phase to another. 4. Markets. Each market has its own characteristics. Not every trader, for example, can approach the forex market. You need to know where you are trading and use the appropriate tools. It may be worth trying all the markets to understand what is right for you. Study the markets, gain experience. 5. Entry conditions. The entry point must be chosen by the trader according to the rules prescribed in the strategy. A trader should know when and under what conditions to enter a position. Strategies can be different: based on a pullback or a breakout of the level, or maybe you want to trade according to the intersection of the indicator lines. And, yes, no one forbids using all strategies at once, the main thing is not to get confused. 6. Stops. Placing stops is an important part of the strategy. A properly placed stop can protect you from premature closing of the transaction. Failure to place a stop order may result in the loss of all capital. In any case, the strategy of placing stops should be in every trading plan. You can set a stop according to some percentage you have chosen, or you can set a stop for the maximum or minimum, it's up to you, but you need to decide before entering the position. 7. Target. A correctly set goal and a set take profit helps a trader to take profit and not stay in a position until it turns from profitable to unprofitable. There are different ways to fix profits: fixed - the value you have chosen according to your trading strategy. Trailing stop is a slightly advanced method, the essence of which is that the stop will move along with the price at the distance you choose and will close when the price goes against you too much. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
37
Principles Of Risk Management One of the main topics, and perhaps the most important, is the topic of risk management and risk reward. Beginners often do not take this topic seriously, trying to hit the jackpot in every transaction, risking all or almost all of the capital and not realizing what the consequences of such actions may be. Whatever trading style you use, whether it's day trading or scalping, the way you manage risk will still be decisive in the question of whether you will be profitable at a distance or not. Margin trading gives a lot of advantages, but most often it ruins newcomers who open deals with a large volume and quickly lose money when the price goes against them. The ability to manage risks correctly will help you stay in the game for a long time and be profitable at a distance. Focus on protecting what you have. In the pursuit of profit, traders forget about risks, forget about capital protection. It is important to remember that after each loss, the percentage of profit that needs to be returned to breakeven increases exponentially, depending on how much you lose. Fundamentals of Risk Management The market is changing every second and at any moment there may be news that will make the price go against you. The desire to risk everything in one transaction leads to the closure of novice accounts, instead, it is better to manage risks and stay in the game for a long time, making a profit. Anything can happen in the markets and it is simply unwise to risk everything in one transaction. You must remember: 1. You should not risk more than you can afford to lose. 2. Each trade must be opened with the correct risk reward ratio. (RRR) The Risk Reward Ratio (RRR) is how much you are willing to lose, compared to the expected profit in each trade. You should strive for a ratio of less risk / more profit. One of the best ways to manage risk is the 1% method. This method of risk control means that in each transaction a trader risks 1% of his capital. This is correctly used even by managers of large hedge funds and they do it for a reason. Do not think that only 1% of the capital can be traded. You can use at least all your capital for trading, but your stop loss should be no more than 1% - this is your risk. You can use leverage if you need to, but don't lose more than 1% in one trade if you want to become a professional. The Best Risk-Reward Ratio For Trading Before opening a position, you should know how much you can lose and how much you expect to win, and the ratio should not be lower than 1:1. A ratio below 1:1 means that you lose more than you can win, and this is an extremely dangerous activity that can eventually lead to the loss of the entire account. If the ratio is 1:1, you will be at breakeven, even if 50% of your trades are unprofitable. If the ratio is higher than 1:1, then you will be in the black, even if more than half of your trades are closed in the negative. Do not forget that it is impossible to win in every transaction and without proper risk management, such a game will lead to big losses. Do not forget about the rules of risk management, use a profitable strategy and act according to the rules, do not give in to emotions and then success awaits you. ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
Education
by DeGRAM
1
TRADING PRINCIPLES THAT EVERYONE SHOULD KNOW. PART 2.Hello traders! Today we will continue to explore the principles that every trader should know and do. READ THE NEWS. The impact of news on ALL markets is enormous. Every news can turn the market against you and break any trading plan. Read news, professional analytics, reports, any information that may be useful. You should always be up to date with the latest news in order to correctly assess future movements. MAKE A TRADING PLAN. Every trader should have a well-built strategy and a clear plan of action. Before each trading session, the trader analyzes the market and outlines the possible direction of the market and opportunities for opening positions. Even before the market opens, you should be ready and know what you will do. After each trading day, you have to analyze positions and work on mistakes. BE RESTRAINED AND DISCIPLINED. Do not give in to emotions. Don't go into a new position often. Don't change your mind every five minutes. Don't forget about the risks! A good strategy will help you not to drown in this emotional storm. ACCEPT YOUR LOSSES AND MOVE ON. There are thousands of profit opportunities on the market every day. But if you lose all your money in the pursuit of winning back the lost money, you will not have the opportunity to trade for a long time and will not have the opportunity to become a successful trader. Trading is a long distance where you need to be able to stay on track, be able to accept losses and move on. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
12
UNSUCCESSFUL vs. SUCCESSFUL TRADERUnsuccessful Trader You are trading without a Specific Trading Strategy The main reason for opening positions for you is not clear strategy rules, but your own intuition. And even after several failures, you continue to repeat your mistakes due to the lack of discipline and the lack of a trader's trading journal. You often over-trade and get Margin Calls Your instincts make you trade too much, open new positions again and again, forgetting about the risk and thus getting frequent margin calls. Because of such disorderly market entries, you become very emotional, lose control and lose money quickly. You get attached to Open Positions Following your own emotions, you often hold on to an open position for too long, hoping that the profit will become even greater, while forgetting about the take profit that you set yourself. As a result, a profitable position becomes unprofitable, and you begin to believe and expect that it will become profitable again, overstaying the unprofitable position. You're Too Emotional Your mood changes with every price reversal. Forgetting about the analysis, you often open new positions and lose more than your risk management can afford. Successful Trader You have an Effective Trading Plan You have written on a piece of paper a strategy of actions for any market situation and always follow the rules prescribed in the strategy. You often analyze your trades in a trade journal and always remember your mistakes and hits. You Understand What Risk Is You have clear rules of risk management. Even before opening a position, you know how much you can lose in this trade and do not lose more than allowed by the rules of risk management. You don't move your stop loss and you don't act emotionally. You Control Your Emotions You clearly follow your strategy, leaving no room for emotions. Even before opening a deal, you have analyzed everything and know exactly what to do – you have a plan of action. You always fix a part of the profit You do not forget to protect your capital, so you close part of the position in plus or zero, and let the rest of the position grow further. Now you will not only not lose your money, but you can also earn. ------------------- Share your opinion in the comments and support the idea with Like. Thanks for your support!
Education
by DeGRAM
2