UsdChf weakest among allLooking at Uchf , if usd is to turn weak, will look more into shorting this pair
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Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
Risk
Risk/Reward Ratios 101In trading, the risk/reward ratio stands as the beacon guiding every trader's decisions. But what exactly is this ratio, and how does it define your success in the market?
In this article we will describe how risk/reward ratio affects your trading performance.
If you appreciate our charts, give us a quick 💜💜
Understanding the Risk/Reward Ratio:
At its core, the risk/reward ratio quantifies the balance between the potential gain and the potential loss in a trade. It’s a critical tool that aids traders in choosing trades wisely, ensuring they opt for opportunities that promise high rewards while keeping risks minimal.
Calculating the Ratio:
The calculation itself is straightforward. By dividing the potential loss by the potential profit, traders can gauge the attractiveness of a trade. For instance, if a trade has a potential loss of $5 and a potential profit of $15, the risk/reward ratio would be 1:3, indicating that for every unit of risk, there's the potential for three units of reward.
Implementing the Ratio in Trading:
Successful traders plan their trades, setting predetermined entry and exit points. This strategy allows to calculate the risk/reward ratio accurately, ensuring trades with favorable ratios.
For instance, consider a scenario where a trader aims for a 15% profit and sets a stop-loss at 5%. By maintaining a discipline of setting targets based on market analysis rather than arbitrary numbers, traders can achieve a consistent profits.
The Synergy with Win Rates:
Combining the risk/reward ratio with win rates elevates a trader's strategy. A higher win rate indicates more successful trades, further enhancing the overall profitability. For instance, a trader with a 60% win rate can afford a lower ratio, say 1:1 minumum, as the majority of their trades are profitable.
The Power of the Risk/Reward Calculation:
The true power of the risk/reward ratio lies in its ability to provide traders with an asymmetric opportunity. This means that the potential upside is significantly greater than the potential downside, leading to more profitable trades over the long term.
Keeping Records for Improvement:
Maintaining a trading journal is crucial. By documenting trades, traders gain a comprehensive understanding of their strategies' performance. Analyzing these records aids in adapting strategies for different market conditions and asset classes, leading to refined decision-making.
In conclusion, mastering the risk/reward ratio is paramount for every trader aiming for consistent profitability. By understanding, calculating, and implementing this ratio alongside win rates, traders can make informed decisions, mitigate risks, and ensure sustainable success in the volatile world of trading. So, remember, in the world of trading, it's not just about how much you win; it's about how much you win concerning what you risk.
How to backtest Signals with different Risk to reward ratioHello traders , this is my very first video on this platform, so please bear with me as I plan to make better content in the future.
In this video, I aim to show you how to test your trading signals using various risk-to-reward ratios. The goal is to identify the most suitable ratio for your signals and create a profitable strategy.
What's crucial in strategy development is effective risk management and selecting the right risk-to-reward ratio. You might have a signal that performs poorly at a 1:1 ratio but becomes profitable at a 3:1 ratio. I'll explain how to use this indicator and why it can be highly beneficial for your trading.
In this section of the video, I'm demonstrating how to apply this method to internal signals like RSI, moving averages, and Supertrend.
Additionally, I'm planning to create another video to teach you how to backtest your own external signals.
Please let me know if this is something you'd like to learn more about.
$BRN1! -Are you Ready for Winter's Storms ahead ?!- The most recent conflict on the Middle East between Israel and Palestine(Hamas)
has caused TVC:GOLD and Brent Crude Oil (futures) ICEEUR:BRN1! price to jump 4% .
This increase risk on Geo-Political spectrum is messing up with our Short in ICEEUR:BRN1! .
Short Call idea was shared on bingX copy-trade community where 2.000 people saw the Short trade opportunity.
Congratulations to those who took action.
(Calm before Winter's Storm Idea;
Russia & Saudi Arabia two of the largest World's Oil Producers steady keeping production cuts)
We have already partially taken profits off our trade before conflicts occurrence,
leaving the position opened by aiming at full TP profits at Golden Zone
(which may not be reached now due to the conflict)
*** NOTE
This is not Financial Advice !
Please do your own research with your own diligence and
consult your own Financial Advisor
before partaking on any trading activity
with your hard earned money based solely on this Idea.
Ideas being released are published for my own trading speculation and
journaling needed to be clear on different asset classes price action.
NzdCad could see a new trend heading up on dailyCould be starting a new trend upwards on daily. looking for pullbacks or opportunities for long
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Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
Risk Management vs. Time ManagementHey! Have you been spending day thinking about mistakes you made and things you didn't do?
Investors are knowingly comparing an exchanges to a casino. A gambler, losing, does not get up from the gambling table in the hope of winning back. He believes that the likelihood of winning increases with every lost bet. This phenomenon, called player mistake, is common among investors.
The pioneers of the theory of behaviour finance Hersh Shifrin and Meyer Statman showed in 1985 that investors intuitively misjudge the likelihood of repeating random results - they hold unprofitable positions too long, hoping for a return in prices, and close profitable positions too quickly, fearing that the movement will end.
The assertion that the market cannot fall for many sessions in a row is untenable. Short-term changes in asset prices are mostly random, notes analyst and author of several books on behaviour finance, James Montier, in his article Global equity strategy, gamblers fallacy. Tails does not become more probable after a series of heads, the coin has no memory - in the same way, the chances of success do not increase after a series of failures.
The major problem in the trading when we trying to recoup from losses. Many people make this mistake over and over again.
The reason of this mistake is the unwillingness to accept and calculate affordable losses and come to terms with the result, the wrong internal setting that you must end every trade and every trading session with a profit. But not every trade will be profitable.
How can I avoid this mistake?
1. After loss trade, tell yourself: "Stop, I won't trade now, I will pause."
2. Analyze the failed trade and write it down. Thus, you will allow yourself to "cool down" and more intelligently approach the situation on the market. There will always be opportunities, don't be afraid to miss out on any movement and profits.
3. Calmly develop a new trading plan based on market changes. If according to the trading plan you need to enter, then enter and earn. Do not rush to enter the market immediately, because it is easy to enter, but it is difficult to exit, since it is no longer possible to change the initial price at which you entered.
4. Make sure you following your risk management and always trade with possibility to lose.
Stay safe and good luck!
CHMF - One more Russian metalurgic play for Q4-Q1'24 From a both, technical and fundamental perspectives, It looks like Russian metalurgic and extraction complex sets-up for the next wave higher in this Q4, or maybe early next year.
Maybe it is because of rubble current and future potential weakness, or because of the dividend that these companies (CHMF, MAGN, NLMK etc) pay or are planning to, we may observe rather neat base structures being in formation within supportive further advance ElliotWave structure.
My general thesis for Severstal is that the price has bottomed in running flat type corrective structure (running flat are rare in EW and are signs of a bullishness) and now is basing for break-out to new this year highs closer to 1530-1580 zone where I may see next resistance zone.
Please have look how price weekly advance is made on burst up in volume profile and how scares volume is, when price stops and digests its move. Holding above 10w line is crucial for me entertaining longs in any position and we may see how buyers actively support this moving average, not letting the price close bellow this line.
My personal plan, is to start building position above 1400 zone, if price breaks out with volume, having tight risk-management parameters within 3-5% breathing room.
I am perfectly fine staying out on the side line if the price will not cooperate or stops me out and waiting for the next low and time-right risk entry spot.
Satochi -- IS THERE A HUGE INCREASE COMING ON FTT?Thank you for reading our update. Please keep in mind that this is not trading advice.
There is still a 400M market cap + max supply and it's not possible to mint more coins.
Will we witness a similar impact on Luna's price, like the one it experienced when it increased to $7 after the huge fall? What could be the reason behind the data showing buy orders at $11 USD on FTT? Typically, it seems unlikely that Luna has a chance of rebounding to $11 after such a significant decline, especially given the current trends in this risky coin, FTT.
Data and technical analysis (TA) play a crucial role in trading, sometimes offering insights into patterns. Is there a substantial price increase anticipated in the upcoming days for FTT?
We will closely monitor FTT to see if it can achieve a price increase.
Gbpnzd,pretty dead...still bias to downsideStill on the downside for shorts...watching on the h1.
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If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏
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Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
Usd uptrend still intactNear term still bullish on USD, simply put, pullbacks will be opportunity for me to go long .So yup, bias on Majors to still go down.
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Hello there!
If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏
And if you would like to show further support for me, you can gift me some coins on tradingview! 😁
Thank you!
Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
Banks Across Europe Pause for Breath after Mammoth Rate Hike RunHello guys, my idea on EURGBP is that we are overall in a uptrend and due to the pause for breath after the mammoth rate hike run the trend might reverse or continue little higher before we expect a reversal to the downside.. trade safe. James ❤
Risk Management 1I firmly believe that risk management is the most important factor in trading, even more important than strategy in my mind, and if you're going to maintain some discipline to something, then please let it be risk management...
A good strategy with bad risk management WILL blow your account, but a bad strategy, with good risk management will still keep your account alive and in the game.
For the purposes of this idea, we will use a $1000 account size, on the assumption that most newer traders are around this figure.
So what is good risk management?
We hear that risking 1% per trade is good, but then following up with 50 trades a day isn't exactly in line with that.
Conversely, risking 5% per trade once a day isn't exactly the middle ground either, so what should your risk be?
First off, let me just tell you that I, nor any other trader, professional or amateur can tell you what your set risk should be as there is no set answer. It is one that only you can decide.
But to give you an idea of where to start, lets assume you have back tested a strategy which is known to be profitable over time but you know it has had 7 losses in a row and which is likely to happen again.
So, a $1000 account,
Lets assume you risk 2% per trade, and those 7 losses come around. You've now lost 14% of your account. Are you comfortable losing $140 in the space of 7 trades?
1% risk per trade is 7% loss of the account, or $70. Are you comfortable with that?
Maybe going to 0.5% is easier for you which is $35.
This is how you should come up with your risk per trade percentage. Not from me, not from anyone else, it has to be you. Forget the "I want to win big, and if I risk 2% per trade, and make a 1:3RR winner, then I have gained 6, 0.5% would have only made me 1.5% growth" Forget the winners, they look after themselves, its the losers that will eat you up if your risk is too much.
Another point to suggest is that if you place a trade, and you are somewhat uncomfortable watching the price slowly go towards your stop loss, then chances are your position or risk is too big. So lower it. If you aren't flinching at the potential loss, then its probably too low of a risk and maybe increase it a little bit
Lets also say your trade risk is 2% maximum, at a time. That means if you have 1 trade open, you have a 2% risk on that, if you wish to have 2 trades open, you risk 1% on each equating to 2% overall, or you bring the stops in so the overall risk is 2%. e.g. bring one to breakeven and the other maintains a stop of 2%.
Another question to ask yourself is are you profitable? For example the 90 90 90 rule. 90% of traders lose 90% of their account in the first 90 days. Though this statistic is somewhat contradicted by the ForEx chatroom, as everyone in there is a 'professional'.
If you aren't consistently profitable, then I would suggest go to a simulator, but if you don't want to do that, then I would argue even 0.5% is too much. Again, its about keeping your account alive long enough for you to become profitable.
So now you have set your risk per trade that you are comfortable with. Brilliant.
Now, what are you willing to lose a day? Lets assume you have settled on 1% per trade, are you willing to lose one trade a day and call it quits leaving you 1% down, or 10 times a day and potentially lose 10%? 2% daily loss, 3, 4, 5? Find it, do not exceed it
If you like to be in and out of trades but are only willing to risk a 2% daily drawdown, then maybe a 0.5% risk per trade is good for you, as it affords you 4 trades before you have to walk away. If you're comfortable losing 5%, maybe 1% a trade is good for you, offering 5 trades or 2 trades of 2%. You have to make these choices, write them in big bold letters on next to your trading station if you have to, but once made stick to them.
I want to put this out there as well, that I am not giving you these numbers, pick one and go from there. I'm asking you to think about your risk exposure on serious level as that is ultimately what will make you either a good trader, or one who thinks its a scam after losing all of your money.
Not every day is green, nor is every week. Thats the reality of this game.
For me personally, I dont wish to lose more than 2% a day. And in fact my losing days drawdown of the last 30 days are as follows:
Aug 25th -0.97%
Aug 31st -1.05%
Sept 5th -2.05%
Sept 19th -0.27%
Sept 20th -2.04%
Sept 21st -1.04%
All other days were either profitable, or not traded. I did have a 9.22% gain day on Sept 7th which completely writes off all these losses and gave me an overall gain of a few percent, and the rest of the winning days have grown my account.
Now, and be honest with yourself, are you doing this the other way around?
Losing 9% in a day, for 7 days of the month with the winning days being around 2% gains. It doesn't math. Restrict the losses. The winners take care of themselves and will always come around, same as the losses will always come around. But, the game is to stop those losses spiralling out of control and eating into the winners. Only you, and you alone can reduce these risks to yourself. Its you who has to have the discipline to say, nah, enough is enough. I'm done for the day. Not with the mindset of just one more, or this next one will be the winner.
LEVERAGE! BEWARE!
Moving onto something that is probably even more important than the aforementioned risk per trade is leverage, and margin.
The amount of people who are ignorant to the fact that say "ive a 2% stop loss, thats all I can lose" is frankly scary.
Leverage is money, given to you by the broker to trade bigger positions.
If you have a $1000 account, with no leverage, you can buy 1000 dollars in the forex markets.
If you have 50:1 leverage, you can buy 1000 dollars in the forex markets, with just $20 of your account. Its purpose is to enable you to free up your account, trade larger sizes with less up front. Or you could buy $50,000 and the broker lends you the other 49k and you put up the 1k.
Which brings us to margin , which is the money you put up front to the broker as a guarantee for the loan, or the leverage.
Now, I was watching a youtube guru the other day, who had an account of $100,000 dollars and was using a 2% risk with a 3 pip stop trading the EU. Simulator of course.
This is a scary and terrifying way to teach new aspiring traders. If you don't know why, then hopefully, you walk away from this with a better understanding of what is actually happening in the background when you press buy or sell.
Okay, so we all can agree that 2% of 100,000 is $2000 dollars right?
He has a 3 pip stop loss, meaning price per pip must be $666.66
(2000/3)
100000 units a standard lot and 1 pip is roughly $10
10000 units is a mini lot, and 1 pip is roughly $1
1000 units a micro lot, and 1 pip is roughly $0.10
This guy needs to get a value of $666.66 per pip.
So with some maths and a calculator, we can come to the conclusion that he would need a position size of 6,666,667 units of currency
He would need to use all of his $100,000 margin, with a leverage of 66:1 minimum to achieve this position in real life, and even then, it wouldnt breathe. It would be margin called within a second, IF the broker even allowed it.
With 100:1 leverage, he would be able to get into the trade and all is good, fine and dandy, no margin call, no brokers banging on his door...
That is, until a news spike comes out and drives price 30 pips in the opposite direction to his position and skips past his stop like it isn't there
30 pips at a cost of 666 per pip isnt 2000, or 2% of his account.
Its actually 10 times that and $19,980 rinsed. Gone. Blown. Bye bye. That is the damage that over leveraged positions do. His 100k account would be sat at $81,020. Almost 20% loss in 1 trade, at the wrong time
Watch this video of EURCHF in 2015, and whilst watching it, imagine what your account would look like, over leveraged, on the brink of margin position on the wrong side of this market.
www.youtube.com
Price dropped roughly 1000 pips in a few seconds, and over 1500 in the space of an hour.
Where would Mr youtuber be if he was in there with his $100,000 account, 2 percent risk long on EURCHF on this day, at $666 per pip
Well its gone, for sure. In fact he lost his account 6 times over and ultimately has to find $660,000 from somewhere... a 2% risk isn't the only risk. Remember that when you're balls deep in a position, your margin is screaming and news is coming!!
I wish you all be safe in trading, and if you aren't green, don't be too red!
Eurnzd likely more downside, waiting for pullbacks**Find out more from my Tradingview Stream this week**
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If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏
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Thank you!
Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
Usd as mentioned still on the upsideThough the pullback throughout the week till fomc, we see that USD still made higher high,trend still intact,just take note of the overhead R
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Hello there!
If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏
And if you would like to show further support for me, you can gift me some coins on tradingview! 😁
Thank you!
Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
Kelly Criterion and other common position-sizing methodsWhat is position sizing & why is it important?
Position size refers to the amount of risk - money, contracts, equity, etc. - that a trader uses when entering a position on the financial market.
We assume, for ease, that traders expect a 100% profit or loss as a result of the profit lost.
Common ways to size positions are:
Using a set amount of capital per trade . A trader enters with $100 for example, every time. This means that no matter what the position is, the maximum risk of it will be that set capital.
It is the most straight-forward way to size positions, and it aims at producing linear growth in their portfolio.
Using a set amount of contracts per trade . A trader enters with 1 contract of the given asset per trade. When trading Bitcoin, for example, this would mean 1 contract is equal to 1 Bitcoin.
This approach can be tricky to backtest and analyse, since the contract’s dollar value changes over time. A trade that has been placed at a given time when the dollar price is high may show as a bigger win or loss, and a trade at a time when the dollar price of the contract is less, can be shown as a smaller win or loss.
Percentage of total equity - this method is used by traders who decide to enter with a given percentage of their total equity on each position.
It is commonly used in an attempt to achieve ‘exponential growth’ of the portfolio size.
However, the following fictional scenario will show how luck plays a major role in the outcome of such a sizing method.
Let’s assume that the trader has chosen to enter with 50% of their total capital per position.
This would mean that with an equity of $1000, a trader would enter with $500 the first time.
This could lead to two situations for the first trade:
- The position is profitable, and the total equity now is $1500
- The position is losing, and the total equity now is $500.
When we look at these two cases, we can then go deeper into the trading process, looking at the second and third positions they enter.
If the first trade is losing, and we assume that the second two are winning:
a) 500 * 0.5 = 250 entry, total capital when profitable is 750
b) 750 * 0.5 = 375 entry, total capital when profitable is $1125
On the other hand, If the first trade is winning, and we assume that the second two are winning too:
a) 1500 * 0.5 = 750 entry, total capital when profitable is $2250
b) 2250 * 0.5 = 1125 entry, total capital when profitable is $3375
Let’s recap: The trader enters with 50% of the capital and, based on the outcome of the first trade, even if the following two trades are profitable, the difference between the final equity is:
a) First trade lost: $1125
b) First trade won: $3375
This extreme difference of $2250 comes from the single first trade, and whether it’s profitable or not. This goes to show that luck is extremely important when trading with percentage of equity, since that first trade can go any way.
Traders often do not take into account the luck factor that they need to have to reach exponential growth . This leads to very unrealistic expectations of performance of their trading strategy.
What is the Kelly Criterion?
The percentage of equity strategy, as we saw, is dependent on luck and is very tricky. The Kelly Criterion builds on top of that method, however it takes into account factors of the trader’s strategy and historical performance to create a new way of sizing positions.
This mathematical formula is employed by investors seeking to enhance their capital growth objectives. It presupposes that investors are willing to reinvest their profits and expose them to potential risks in subsequent trades. The primary aim of this formula is to ascertain the optimal allocation of capital for each individual trade.
The Kelly criterion encompasses two pivotal components:
Winning Probability Factor (W) : This factor represents the likelihood of a trade yielding a positive return. In the context of TradingView strategies, this refers to the Percent Profitable.
Win/Loss Ratio (R) : This ratio is calculated by the maximum winning potential divided by the maximum loss potential. It could be taken as the Take Profit / Stop-Loss ratio. It can also be taken as the Largest Winning Trade / Largest Losing Trade ratio from the backtesting tab.
The outcome of this formula furnishes investors with guidance on the proportion of their total capital to allocate to each investment endeavour.
Commonly referred to as the Kelly strategy, Kelly formula, or Kelly bet, the formula can be expressed as follows:
Kelly % = W - (1 - W) / R
Where:
Kelly % = Percent of equity that the trader should put in a single trade
W = Winning Probability Factor
R = Win/Loss Ratio
This Kelly % is the suggested percentage of equity a trader should put into their position, based on this sizing formula. With the change of Winning Probability and Win/Loss ratio, traders are able to re-apply the formula to adjust their position size.
Let’s see an example of this formula.
Let’s assume our Win/Loss Ration (R) is the Ratio Avg Win / Avg Loss from the TradingView backtesting statistics. Let’s say the Win/Loss ratio is 0.965.
Also, let’s assume that the Winning Probability Factor is the Percent Profitable statistics from TradingView’s backtesting window. Let’s assume that it is 70%.
With this data, our Kelly % would be:
Kelly % = 0.7 - (1 - 0.7) / 0.965 = 0.38912 = 38.9%
Therefore, based on this fictional example, the trader should allocate around 38.9% of their equity and not more, in order to have an optimal position size according to the Kelly Criterion.
The Kelly formula, in essence, aims to answer the question of “What percent of my equity should I use in a trade, so that it will be optimal”. While any method it is not perfect, it is widely used in the industry as a way to more accurately size positions that use percent of equity for entries.
Caution disclaimer
Although adherents of the Kelly Criterion may choose to apply the formula in its conventional manner, it is essential to acknowledge the potential downsides associated with allocating an excessively substantial portion of one's portfolio into a solitary asset. In the pursuit of diversification, investors would be prudent to exercise caution when considering investments that surpass 20% of their overall equity, even if the Kelly Criterion advocates a more substantial allocation.
Source about information on Kelly Criterion
www.investopedia.com
Usd still bullish, not much sign to turn yetShould be cautiously taking long on USD , but also mindful of the extended rally it has so far since mid july 2023
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Hello there!
If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏
And if you would like to show further support for me, you can gift me some coins on tradingview! 😁
Thank you!
Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
Educational : Diversification, systematic vs unsystematic riskWhen it comes to investing and trading, risk is a constant factor that requires careful consideration. Let's explore the concepts of systematic and non-systematic risk:
Deeper Dive
Market risk and non-diversifiable risk are other names for systematic risk. It is the kind of risk that is intrinsic to the entire market or a particular area within it and cannot be completely avoided by diversification. This means that you cannot totally protect yourself from systematic risk, regardless of how diversified your investment portfolio is. There are many ways of mitigating risk in the market but due to the nature of the market there is no way to completely eliminate this risk element. There will also be a certain level of risk that you need to account for.
Unpredictability:
The unpredictability of systemic risk is one of its difficult elements. These risk factors frequently come as a surprise and can appear quickly, making it challenging to plan for their effects. Even seasoned investors can be caught off guard by events like global economic crises or political turmoil because of the intricate network of interconnected factors that affect financial markets. There is also the fact that markets are inherently fractal. You can read more about this in my publication on how the market is fractal. (Will be in related ideas)
Unsystematic Risk on the other hand refers to the risk that is specific to a particular company, industry, or asset and can be mitigated through diversification. Unlike systematic risk, which affects the entire market, unsystematic risk is unique to individual entities and can be reduced or eliminated by spreading investments across different assets. Some of these risk might be in individual companies or assets but do not have a widespread impact on the entire market. Examples include management changes, product recalls, lawsuits, technological innovations, and changes in consumer preferences. These factors can significantly influence the performance of a single company's stock or asset. There is also sector or industry specific risk. If you work for a company that produces technical indicators, changes in regulations affecting the financial industry or a downturn in the technology sector could impact the company's performance. Investing solely in one sector exposes your portfolio to a higher degree of unsystematic risk.
Unsystematic risk can be mitigated using many strategies. Two popular methods listed below.
Asset Allocation or portfolio diversification: Allocating your investments across different asset classes (stocks, bonds, real estate, etc.) can help mitigate the impact of unsystematic risk. Different asset classes may respond differently to market events. Where one asset starts to go down another might start to go up and the fall and rise of these assets might be at different severity allowing you the flexibility to deploy risk management strategies to maximise on the rising asset
Hedging: Using financial derivatives like options and futures contracts can provide a way to hedge against specific systematic risks, such as currency fluctuations or interest rate changes.
Diversification in one of the big factors in reducing your risk. As the diagram shows the more diversify the portfolio becomes the less subject it is to unsystematic risk but you will eventually get to a equalising point where you still have to account for systematic risk.
It is important to note that diversifying your portfolio is not just simply investing in as many assets or industries as possible. This process needs to be a calculated application. If not, what can happen is that you fill your porfolio with random assets and stocks that end up having bad correlation between each other causing you to lose. When you buy on one asset you will lose on another constantly making it hard for you to find and edge/alpha
EU at last support,if can bounce might reverseWe could be seeing usd to turn weak this week...Watching it first.
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Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
SOYB- the soybean ETF moves on buying pressure LONGOn the 4H Chart, SOYB has moved above both tthe near and intermediate term POC lines
of the respective volume profiles. Upward price volatility above the running mean
on the relative volatility indicator. In confluence pric emoved above the mean basis
band of the double Bollinger band. Fundamentally, supply-demand imbalances including
the collapse of the Black Sea shipping deal as bad actor Russia continues to inflict chaos
has a ripple effect throughout agricultural commodity markets. Soybean prices are
not following the chaos and volatility of the general markets like AMEX and NASDAQ but rather
they follow the beat of their own drum like seasonality crop yields shipping costs and
others. This make an alternative to avoid going heavy into topping or sinking general
markets. They allow diversification not unlike adding bonds to a portfolio when trying
to weather the storm. Given the narrow trading range I will play this with some call options
If you would like my idea of an excellent call option trade please leave a comment.
See also my ideas on WEAT and CORN.
se to expire after the harvest and into the planting in in Brazil.
Reverse Psychology... TraderTrading in Reverse Psychology.
1. Base your trading strategy on waiting for patterns or roadmaps to develop before taking action (trades).
2. Maintain a risk-reward ratio of no less than 1:2 for favorable results, aiming for 1:3 or higher whenever possible.
3. Define your trading approach—scalper, day trader, swing trader, or investor—and select specific assets and timeframes. Avoid trading impulsively and diversify your choices.
4. When allocating margins, refrain from concentrating all your resources in a single trade; distribute investments to manage risk effectively.
5. Trading may seem like gambling but it is not. Day traders can secure long-term victories by practicing effective risk management and reverse psychology techniques.
EU contrary to USD move, likely moving up
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Thank you!
Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
USD Likely taking a turn to the down side
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Hello there!
If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏
And if you would like to show further support for me, you can gift me some coins on tradingview! 😁
Thank you!
Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared.
Thank you, and please do your due diligence before any putting on any trades!
Are You Taking the Right Risks in Trading? Best RISK Per Trade
What portion of your equity should you risk for your trading positions?
In the today's article, I will reveal the types of risks related to your position sizing.
Quick note: your risk per trade will be defined by the distance from your entry point to stop loss in pips and the lot size.
🟢Risking 1-2% of your trading account per trade will be considered a low risk.
With such a risk, one can expect low returns but a high level of safety of the total equity.
Such a risk is optimal for conservative and newbie traders.
With limited account drawdowns, one will remain psychologically stable during the negative trading periods.
🟡2-5% risk per trade is a medium risk.
With such a risk, one can expect medium returns but a moderate level of safety of the total equity.
Such a risk is suitable for experienced traders who are able to take losses and psychologically resilient to big drawdowns and losing streaks.
🔴5%+ risk per trade is a high risk.
With such a risk, one can expect high returns but a low level of safety of the total equity.
Such a risk is appropriate for rare, "5-star" trading opportunities where all stars align and one is extremely confident in the positive outcome.
That winner alone can bring substantial profits, while just 2 losing trades in a row will burn 10% of the entire capital.
🛑15%+ risk per trade is considered to be a stupid risk.
With such a risk, one can blow the entire trading account with 4-5 trades losing streak.
Taking into consideration the fact that 100% trading setups does not exist, such a risk is too high to be taken.
The problem is that most of the traders does not measure the % risk per trade and use the fixed lot. Never make such a mistake and plan your risks according to the scale that I shared with you.
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