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LONG & SHORT POSITION TOOL📚An In-Depth Look at Using This ToolThis illustration explains the functionality of TradingView's Long/Short Position Tool and is intended to help new people looking for more information on this tool in a "novice friendly" format. TradingView’s position tool will aid you in pre-planning and pre-evaluating trades and as such should be an essential part of every trader's toolkit . Note: At its simplest, the position tool can quickly show you the R:R (Risk-To-Reward) of a single trade. By doing a little extra work, you’ll be able to then use this tool to properly plan for the risk of all trades you are taking compared to your total account size. Hit that 👍 button to show support for the content! Help the community grow by giving us a follow 🐣 ----- Important terms: Tick = A tick is a measure of the minimum upward or downward movement in price. Trade outcome statistics = Used to track the outcome of a trade. Example: “Current XYZ position closed +5.25% gain 10840 account balance after trade impact” P&L = A representation of current Profit & Loss. Be careful where you position the tool, as the P&L is calculated based on the position of the tool. Here are two uses for the Position Tool: 1. Only R:R = To quickly find only the R:R of a trade. This method does not bother changing account balance and such is only acceptable if you are tracking your current account balance and doing risk calculations off-platform in something such as a google spreadsheet. 2. Risk+R:R = To ensure your current trade idea meets both your R:R and max risk tolerance (risk amount; in our case, 1%). This is achieved by changing the “Account Size” option every time you are building a new position. This is the advised method to use, since like your trade journal, it’ll help keep you accurate and accountable. ----- We will now explain the options contained within the tool’s input on-chart menu: Account size = The current available balance within your account, the keyword here is available. If you are using the "Risk" option explained below then this needs to be updated upon starting to create a new trade setup. Risk = Your max tolerable risk amount (either in absolute numbers or as a % of your account size). The default option is "absolute numbers," this uses the base currency of the on chart asset (If you were on ETHBTC, then the base currency would be BTC; for SPX500USD it is USD since this asset is displayed in its USD value). As you know, we suggest you stick to %. Entry Price = The price you will be entering the position at. PROFIT LEVEL: Ticks = The tick difference from the entry price to the profit target. Price = The take profit price. STOP LEVEL: Ticks = The tick difference from the entry price to the stop loss. Price = The stop losses price. ----- We will now explain all metrics being displayed on the tool while it is plotted on the chart: Top info panel: 1. The difference in base currency (USD) from the entry price to the take profit price. 2. The difference in percentage change from the entry price to the take profit price. 3. The difference in ticks from the entry price to the take profit price. 4. The hypothetical account balance after the take profit target is achieved. Middle info panel: 1. Simulated P&L from the entry price to where the current live price is. (Displayed in the base currency of the on chart asset, USD in this example) 2. The quantity of the asset that should be purchased at the entry price. This is calculated as follows: Qty = Risk / (Entry Price – Stop Price) 3. The risk to reward ratio, this is how much you could gain compared to how much you could lose. The calculation is as follows: Risk/Reward Ratio = ((Take profit price - Entry price) / (Entry price - Stop loss price)) Bottom info panel: 1. The base currency (USD) difference from the entry price to the stop-loss price. 2. The difference in percentage change from the entry to the stop-loss price. 3. The difference in ticks from the entry price to the stop-loss price. 4. The hypothetical account balance after the stop-loss is hit. ----- Lastly, we will explain how Position Size and Account Balance are being calculated by TradingView: Long Position Variant Position Size: Qty = RiskSize / (EntryPrice - StopPrice) Account Balance when a position is closed after reaching the Take Profit level: Amount = AccountSize + (ProfitLevel – EntryPrice) * Qty Account Balance when position is closed after reaching the Stop Loss level: Amount = AccountSize – (EntryPrice – StopLevel) * Qty Short Position Variant Position Size: Qty = RiskSize / (StopPrice - EntryPrice) Account Balance when a position is closed after reaching the Take Profit level: Amount = AccountSize + (EntryPrice - ProfitLevel) * Qty Account Balance when a position is closed after reaching the Stop Loss level: Amount = AccountSize – (StopLevel – EntryPrice) * Qty AccountSize: Initial account size specified in the settings RiskSize: If the "Risk" option is set to "absolute numbers" = Risk If the "Risk" option is set to "percentage of account size" = Risk / 100 * AccountSize ----- Reference: www.tradingview.com If we made any mistakes please let us know in the comments. There was a lot of formatting we needed to do to best display all of this information for you guys! Enjoy. :)
BITSTAMP:BTCUSDEducation
by AlphaBotSystem
40
NZDUSD the correction not over yet NZDUSD weakness extended overnight, breaking below the early August low and uptrend form March, currently at 0.6597/75, thus completing a small top and finally managing to follow through on the recent bearish “outside day” and the bear “wedge” that is still in place. Beneath .6503 could see weakness extend even further with next support seen at .6466, ahead of .6450/41. It’s worth highlighting the ‘wedge measured objective’ is at .6400.
Short
by Fx_Advisor
Trade Planning - How to Trade PlanThis video explains how to effectively trade plan to limit your risk and to maximize your gains. When it comes to Risk Management and Trade Planning, it's important to maintain a clear mind about the possibility of the asset your assessing going in either bullish or bearish direction. Furthermore, this video explains some ideas on how and where to place stop losses based upon entry confirmations and provides insights about position managing your trades as they develop into a winner. I hope you find this video informative and hope you use this video to your best advantage with your day-to-day trading activities. Thanks for watching. Always remember to trade safe - trade well. Regards, Michael Harding RISK DISCLAIMER Information and opinions contained with this video are for educational purposes only and do not constitute trading recommendations. Trading Forex on margin carries a high level of risk and may not be suitable for all investors.
FX:XAUUSDEducation
by Michael_Harding
ridethepig | Temporary High Cooking For Gold📍 Equity Liquidations Feb/March 2020 Gold buyers now hold a solid position, since the break of 1750 our opposition has been trying to get blood from a stone. The solidity behind the bull case has been so strong to date and it shows in itself the fact that 'everything is not roses' despite how the politicians and media sell re-openings and activity data. The highs cannot be ignored here, we have been tracking the $1,900 target together and came +/- within crumbs yesterday but failed for the official tick. The break. The move is still premature on account for those wanting to swing into the $2,000's and beyond. Challenging the bull case here is deflation and liquidations in equities. Retail have been sent into the wilderness, which in no way can turn into the Edenic garden they hope for. Note how the original 5 wave sequence started in 2018 when we traded live the assault from the lows: Buyers have had the upper hand ever since, sellers are hoping to prevent for as long as possible the annoying move to all time highs. In order to liberate the $1,900 highs buyers will need to pullback and allow equity liquidations to take place and secure the required energy. So those looking to take shorts in the same way we switched sides earlier in the year, we can calmly finish our profit taking from longs and look for the appropriate welcome of offers into the book. Note how we are combining defence at soft resistance and ONLY aiming to attack when we see a closing BELOW yesterdays low (1865.xx in spot). To put simply, we are outguessing profit taking in and the strategic start of wave 4 which will last into September. As usual thanks for keeping the feedback coming 👍 or 👎
FOREXCOM:XAUUSDShort
by ridethepig
18
VIX and stock market crashes I want to discuss why I use the trend in the VIX index as an indicator for downside risk. When the VIX is trending higher, I interpret that as increasing downside risk for stocks. My reasoning is as follows. I use the VIX Index as an indicator for real put demand. I say real demand, because traders buying and selling intraday is not what I’m looking for. If VIX is trending higher, it signals to me that larger risk-taking market participants are hedging the downside. When long puts, you’re also long volatility (demand for puts = long volatility demand). When those market participants buy put options, market makers (not risk takers) selling those puts needs to hedge. They do so by delta hedging, which is, in short, shorting the underlying security. When volatility increase, the delta of an OTM option rise. This is logic: an OTM option is more likely to go in-the-money (ITM) when volatility is higher. This is why you sometimes will see sharp sell-offs and market crashes: as the market starts to fall, market makers have to short more of the underlying to stay market neutral. This is causing a self-reinforcing cycle. So, when I watch the VIX intraday, I look out for the VIX trending higher. If so, the stock market is vulnerable. If the VIX is trending down, as on Friday, I’m not anticipating a sharp sell-off into close.
TVC:VIX
by eirikb007
2
Stock Trading Tips for FriiiiiidayStocks cratered on an abysmal day in the tech sector. The S&P is finding support at 3220, which is a very strong nested Fibonacci level. This is a healthy corrective wave for the overall impulse. The next level of support follows below at 3200, a psychological, technical and nested Fibonacci level. This is about as strong as it can get (our powers combined meme here). The Kovach OBV has rounded off, however, so be prepared for a dip if we are wrong and we don't get a bounce off current levels. We are still in buy on dip mode, so patience will prevail.
FX:SPX500Long
by quantguy
ridethepig | Sovereign Debt Crisis Cooking!This looks like the real deal... the trip we are planning for Gold here should be carefully mapped before making the play. 📍 If possible make use of the ' momentum ' Entice the sellers with obstacles inside 1820-1810 rage (a temporary stopover to collect energy). All that before playing the impulsive manoeuvre. Compare also this diagram: For its own sake, previous 1650 and 1700 resistance became latent support to help plug the ladder. The appetising bulls are now ready to march towards $1,900. An old, old story, but constantly worth playing for those tracking the recession the flows in Gold have been clean and simple for a while. There is no motivation for sellers and neither a reason to close longs. Buyers are in full control, the advance through $1765 will confirm the move. Lets see if we can get it for the Weekly Closing. With Covid boredom kicking in and retail participation through the roof we have all the boxes ticked to complete the Sovereign Debt Crisis. Smelling a massacre in the coming sessions for Equities, full of energy and arrogance of a second wave. Gold longs are the gentler approach, a worthwhile virtue. GL.
FOREXCOM:XAUUSDLong
by ridethepig
9
XRP where is it heading? I think it is gonna drop another time, if not, then why is it not showing the proper signals for a upward breakout. There’s no power before it’s moves. So next time it drops I’m gonna buy. I buy and sell with in the channel but never my full position. Always less than 25% of my full position in the pair. Because I don’t want to be wrong and lose. But I can risk 25% for a bigger gain but a small loss if I am wrong and it blows upwards. Management baby.
BITFINEX:XRPUSD
by JacobTrader100
1
RISK TO REWARD 📚 An Educational Write-up on How to Find ThisIntroduction: This illustration explains the minimum Risk-To-Reward ratio needed based on your average win-rate while using a fixed % risk amount. "Risk-To-Reward ratio": The ratio of what you stand to lose compared to win. "Fixed % Risk": A static % amount of your total account balance at risk per trade. "Fixed Dollar Risk": A static $ amount at risk per trade. Regardless of account size fluctuations. "Win-rate": The % out of all trades that are winners. Steps: 1. Before being able to determine what Risk-To-Reward is acceptable to use, you will need to create a baseline measurement of your strategy's performance. 2. To create this baseline, you will need to backtest your strategy and obtain its current average win-rate. 3. This can be done using your pre-determined entry logic with a fixed stop-loss/take-profit offset amount. (Adjusting your entry logic prior to finishing a round of backtesting may produce skewed results. Do not "cherry-pick" trades as that will lead to false results.) 4. Based on the resulting average win-rate you can then find the minimum Risk-To-Reward ratio you should be using. 5. Backtest again using the more optimal Risk-To-Reward ratio and repeat this step until the most optimal backtest results are obtained. Here is the formula for determining your Average win-rate after you have tallied the wins/losses of your backtest: #W = Number of winning trades #L = Number of losing trades (#W / (#W + #L)) * 100 = your average win rate % ----- Introduction to Fixed Dollar Risk: We have found it common for people to use the logic of fixed dollar risk amounts when calculating win-rates needed to break even, but then to use a fixed % risk in practice. This simple-to-make mistake can lead to account erosion over time due to the way compounding works. The fixed dollar approach uses relatively simple math for breaking even as shown below. Example: 3 losing trades followed by 1 winning trade using 1:3 risk-to-reward achieves breakeven (ignoring trading fees and slippage) This risk-to-reward ratio itself implies the win-rate needed (lose $100 three times, win $300 once, you break even). The fixed dollar amount risk doesn't deal with compounding. As such, its logic cannot be used for fixed %. ----- Using Fixed Percentage Risk: Fixed % uses a more complicated and less apparent method for calculating how to break even. As shown in our illustration, if you take three losses in a row you won’t break even after your next win. Fixed % is always dealing with the same % of your current balance. So as your balance decreases, the total dollar amount risked is less, and the total dollar amount gained with each win is reduced. Thus, strings of losses require additional wins compared to the fixed dollar approach. The fixed % method ensures against account erosion by showing the minimum win-rate needed to use each risk-to-reward ratio. MATH NOTE: We used a simplified method for finding the minimum win-rate to make this useful and generally applicable. Our method is based on a given risk-to-reward ratio and assumes the max number of losses in a row to produce a minimum win-rate, it does not factor in all different possible loss strings and their probability. ----- WHY USE FIXED % !?: The question one will have at this point is, "Why to use fixed % if it is so F'ing complicated!?" The answer to that is simple. Despite being more complicated, fixed % is actually objectively better by almost every other measure. With fixed % you generally perform better than fixed dollar during strings of losses and wins. As with fixed %, you lose less as you go down (because you only ever lose 1% of your balance), and you gain more as you go up (because of your winnings compounding). Not only that, but you also perform better even when losses and wins are more scattered, as you can see on the chart below. ----- Conclusion: Fixed % is more complicated than fixed dollar... to say the least. However , it is none-the-less superior in most instances. Use the logic above while using fixed % risk, since if you use fixed dollar logic but use fixed % in practice you will underperform your theoretical results. If there are any major flaws in our logic/approach please let us know in the comments as of course, we are looking to provide as accurate instructional writeups as possible!
BITSTAMP:BTCUSDEducation
by AlphaBotSystem
65
Best Trading Ideas for StocksStocks broke down from what appeared to be an inverse head and shoulders pattern yesterday. This is why it is important to wait for confirmation of a breakout before trading this pattern. It is also important to check the Kovach Momentum Indicators since these suggested a divergence, indicating a breakdown. Stocks are looking technically very weak at the moment, and the Kovach Indicators are all trending downwards. It looks like we are in the midst of a corrective phase in a 5-3 Elliott Wave. Watch for support at 3116, but if this cycle continues, we could test lower levels at 3094 or 3071.
FX:SPX500Short
by quantguy