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Riskreward

Unlock the Secrets: Is GOLD the Ultimate Trade Today?Unlock the Secrets: Is GOLD the Ultimate Trade Today? In this episode, I dive into the current conditions of the gold market, providing a comprehensive breakdown on how to form an objective opinion. Drawing inspiration from "Market Wizards" and "Trading in the Zone," I share insights from legendary traders who emphasize the importance of patience and discipline in trading. Learn essential lessons on patience, understanding that you don't need to force trades or impose your personal bias on the market. Discover why it's perfectly fine to skip trades daily or even weekly if the market doesn't align with your setup. Mark Douglas, in "Trading in the Zone," highlights the significance of a trader's mindset and how maintaining an objective perspective is crucial for consistent success. I also share valuable advice on productive activities to engage in while waiting for the right trade opportunities. Just as the great traders in "Market Wizards" stress, sometimes the best trade is no trade at all. Use this time to refine your strategies, study market patterns, and enhance your trading skills. Remember, running in place won't get you anywhere—focus on strategic moves to elevate your trading game. By incorporating these principles and understanding the psychological aspects of trading, you'll be better equipped to navigate the complexities of the gold market.
OANDA:XAUUSD
by Adlercon333
1
Growing Small Accounts Without High Risk### Growing Small Accounts Without High Risk #### What to Avoid: Do not rush to make massive gains in either pips or % returns. Do not open yourself to large risk in hopes of equally large returns or profits. Do not assume taking small risk-defined trades will not grow your account. Do not sacrifice trading equity due to poor planning or lack of planning. #### What to Aim For: Determine how to realistically anticipate a favorable reward-to-risk model. Learn to respect the risk side of trade setups more than the reward. Identify trade setups that permit three reward multiples to one risk or higher. Frame good reward-to-risk setups that have little impact if unprofitable. ### The Reality of Reward to Risk Ratios | Winrate | Minimum Ratio | |---------|---------------| | 75% | 0.3 : 1 | | 60% | 0.7 : 1 | | 50% | 1 : 1 | | 40% | 1.5 : 1 | | 33% | 2 : 1 | | 25% | 3 : 1 | If your winrate is 50%, you only need 1:1 Risk to be profitable.
Education
by SerenityEquity
Price Discount in USD/JPY - Trend ContinuationThe market is a discounting mechanism. When prices rise too high, buyers start taking profits, aiming to buy at lower prices during an uptrend. This behavior sustains the trend. In USD/JPY, this concept is evident. The swing low at 160.26 attracted strong buyers, pushing the price above the previous high, creating a new higher high. At this peak, buyers no longer saw value and took profits, seeking a discount to buy at a lower price. Fibonacci retracement is useful in trending markets, as its key ratios indicate potential levels of trader participation. Currently, the price has been discounted to the 76.4% retracement level of the rally. The corrective ABC pattern brought the price from the high to the current discount. Based on this scenario, we expect more buyers at this higher low, pushing the price above the recent high. Using Fibonacci as a target tool, we anticipate the price reaching at least the 123.6% level of the current rally. The risk in this trade is if the swing low of 160.26 is broken, buyers won't be profitable, so this level will be our stop loss. The risk/reward ratio for this trade is 7.05. Always think in probabilities.
Long
by Charts247TradingAcademy
1
EGLDUSDT | Ready for Another Surge?Market Context EGLDUSDT has been on a fantastic upward trajectory, and it looks like the momentum might continue! This could be a golden opportunity for a quick trade with an impressive risk-reward ratio of 4.5:1. Chart Analysis • Strong Upward Movement: EGLDUSDT has been climbing steadily, showing strong bullish momentum that could push it even higher. • Bullish Indicators: Various technical indicators are aligning to suggest that this upward movement has the potential to continue. Strategy I’m diving in with a trade aiming for a 4.5:1 risk-reward ratio. This setup is all about capturing the next leg up in EGLDUSDT’s bullish run. Action Plan Setting my entry and watching closely. If EGLDUSDT keeps up its current pace, we could see some exciting gains. Buckle up and let’s ride this bullish wave together! Good luck, everyone! 🚀💪
Long
by minno91
KOG - "Fail to plan, plan to fail" Traders, The market is designed to confuse retail traders, the reason for that is they know 95% of you enter these markets with no plan. You’re not aware of the levels, you’re not charting the pairs you trade, and you lack the basic skills to manage your money and your risk. You need to have a plan before you enter a trade, you need to have a strict set of rules, and everything should line up as much as possible before you take the entry. By the time new traders understand they need a plan, they’ve blown their accounts and blame the markets. Every trader, before they start their day needs to have a strict set of rules they abide by before entering the markets for a trade. There are many variations and most will have their own rules, but to start you off here are a few we set out for our traders. They're not uncommon, simple steps to take to keep you safe in the markets. Is the market ranging or trending? We have to adapt our trading style in accordance with what the market is doing. If it’s a trending market, we know we have a clear direction on the pair and we know the levels of the trend as well as the levels that are provided. We then add the target to this and now have a clearer understanding of where price may support or resist before continuing the trend. When the market is ranging, we adapt our trading style knowing that we’re going to experience a lot of choppy price action as well as extreme up and down swings. We plot the range, we add the levels, and we now have a clearer understanding of support and resistance as well as the range high and low. When the range breaks and confirms the break, you know whether you should be entering or getting out of a trade. Holding on to hope will kill your account and you will then blame the market. Are there key levels above or below? Key levels on a chart are really important to understand. You need to add the levels on the long term charts and the levels on the short term charts. This gives you an idea of where price may go before it either supports or resist the price. It also tells you whether price is going to continue in the direction if the key level breaks and the turns into either support or resistance. You can now plan, if the price continues into that level how much will my account be in drawdown, will I be able to hold, do I need to hedge, should I take the loss and switch direction. Holding on to your bias and hope will very likely kill your account, you’ll then blame the market. How much capital am I risking? You need to treat this as a business, no matter what your account size. Every day there are large institutions who want to take your money away from you, you’re in this market to take from them and give them as little as possible. You should have a risk model in place, am I going to risk a certain percentage of my account? Am I going to stick to a stop loss of a certain amount of pips? Am I going to have a risk reward that makes sense? Your stop loss and risk management plan is your best friend in this market, it allows you to limit the losses and live to trade another day. It also allows you to trade with a fresh mind everyday because you’re not holding on to hope. Traders fail because they don’t have a risk model, they then get stuck in a drawdown which doesn’t allow them to trade because they’re waiting the entries that are in drawdown to come back into the price range. Cut your losses early, if you’re wrong you’re wrong, don’t let your ego right checks your butt can’t cash! Holding on to losing trades with no risk model will likely blow your account, you’ll then blame the market. Are there any new events? News events can move the markets in a very aggressive way but will move the price into the levels that you should already have added to your charts. News brings volume and a lot of traders will use this to their advantage to either scalp or to get good entries on the pairs they trade. It’s best practice to not trade before the news releases unless you’re already in the right way of the market. “The trade always comes after the event”, wait for the price to be taken to the level they want to either buy and sell, wait for a confirmed reversal on the smaller time frames, once everything lines up, then look to take an entry. Trading news events comes with years of practice, it also takes a lot of discipline and the ability to manage risk, not only that but you have to be willing to switch your bias in an instance if you get it wrong. Most traders lack this experience, trade news events like it’s a normal day on the markets and then blow their accounts in one hit, you’ll then blame the market. Am I following my trading plan? “Fail to plan, plan to fail”. As above, you need to plan every single trade you take, make sure the market conditions are in your favour, make sure the price is at the right levels, make sure your risk model is in place, make sure you’re aware of the risks involved if it doesn’t go your way. By doing all of this and making a plan, you know what the worst case scenario will be, by knowing that you’re emotions and psychology won’t be affected that much and you will build your confidence. You’ll then develop your strategy and you’ll have a better understanding of what kind of ROI you can consistently make in the markets. Have the discipline to follow your plan and stick to it like a you’re a robot. Get used to taking losses, this is part of the game you’re in. Your wins just need to be bigger and you’re on your way to becoming a consistent trader. Most traders don’t follow their plan, they then blow their accounts and you’ll blame the market. Hope this helps at least some of you stay the right side of the markets and we wish you the very best in your trading career. As always, trade safe. KOG
FX:XAUUSDEducation
by KnightsofGold
12
ARBITRUM Triple Bullish Signal!Arbitrum has seen a significant drop in value over the last few weeks, just like most other alts. Since ARB is one of the newer alts on Binance, it has an above average growth path ahead of it. Today I found 3 different "indicators" signaling a potential long-term bottom is in: - Daily RSI has hit oversold - Dotted purple support has held - Bullish divergence on the daily RSI A single indicator would be tricky to trade, but since all 3 are showing that this might be a great entry for a reversal I'm willing to take the bet. Stop below the support, target around the current all-time highs.
Long
by FieryTrading
2
TRADING TIPS That SERIOUS Traders Know ( ͡° ͜ʖ ͡°)Trading can be like... following a diet🥨 You need a clear plan, but also some space for cheats. If you're prone to jump-in trading, have some funds available for it - trading should be fun! Take that risk. But plan for it. If you've spent your 10% high risk capitol for the month/quarter, then that's that. - Look for Fractals Fractals in higher timeframes such as the weekly are often reliable, as it points towards the cyclic nature of the market. How did I make +118% on SOL? By following a fractal from the previous bull market: - Learn Elliot Wave Theory From the DOGE chart, we can see that Point 5 is not going to happen. (not that it won't happen at all, but just that it won't happen for the short term). How do I know this? ...Elliot Wave Theory. The EWT tells us that if point 4 retraces beyond point 1, the bullish impulse is invalidated. We are now more likely to slow bleed down to Point 2. - Look for Reliable Patterns Sometimes, certain patterns can be seen moments before they are finally "finished" forming. It's important to know the rules of these patterns, and trade reactively. I knew where to short ETH. How did I know? The M-Pattern: Deep Dive guide on Pattern-Trading here: - Learn to Manage Risk with Leverage Let's not duck around - Trading is risky but crypto trading is VERY RISKY. Make sure you have a strategy. - Learn To Trade the Rotations There's a secret pattern in the relationship between Bitcoin, Bitcoin Dominance and altcoins by market cap. Make sure you understand it before you take a leveraged trade: - Pick a few Technical Indicators and STICK TO THEM It's tempting to use whatever new indicator is the flavor of the day... but how will you ever learn the secrets? Technical indicators have "secrets". They look different on different markets. For example, SOL can be "Extremely Overbought" without correcting much for an extended period of time, where as Bitcoin usually corrects when the "Extremely Overbought" signal flashes. (This is an observation from using one indicator on many charts). Personally, I love Bollinger Bands, Moving averages and Cryptocheck START V3.5 as my combo indicator. That's how I called the beginning of the new Bullish season in November 2023: It's important to note that none of these strategies are 100% fail proof. Even the best Wallstreet traders average on 58% per annum. Stop trying to follow people who claim to make +1000000....% per annum. Often, these guys have lots of money to lose, in other words it's more a fly-by-night than studying charts for consistent wins. As long as you're making more than interest rates from a fixed deposit at the bank - you're winning! ________________________
by CryptoCheck-
Stacks (STXUSD): Balanced Strategy for a Solid UpsideFor Stacks (STXUSD), we see a Fair-Value Gap (FVG) on the weekly chart, along with similar gaps on the three-day and daily charts, plus a demand zone below. Our plan is to use these weekly FVGs and the demand zone for Dollar-Cost Averaging (DCA) entry points if the price drops to those levels. We see $1.31 as the maximum downside. On the upside, we aim to reclaim the recent high, with resistance around the three-day gap at $2.64. We're pretty confident that with a well-placed stop-loss, this setup offers a solid chance to build a long swing position. This strategy provides a balanced risk-reward scenario, allowing us to take advantage of potential upward movements while effectively managing the risks. Looking at the annual VWAP for STX, it's crucial because this year's VAL (Volume-Weighted Average Price Low) could act as support, which aligns with our planned entry in the orange zone. This point could be pivotal for holding and supporting STX's price action. On the upside, the annual VAH (Volume-Weighted Average Price High) will serve as resistance. If we flip this level, it could then become support, opening up significant upward potential. While the timing is uncertain, we're ready to see how the price action unfolds, barring any unexpected news. On the quarterly chart, we see a clear picture. Our worst-case scenario is the 2024 Q1 VHL (Volume-Weighted Average Price Low) at $1.56, which is our downside limit. We expect this level to serve as resistance, and currently, we're struggling to surpass it. However, we're focusing on the 2024 Q1 VAL as our critical support, marking it as our worst-case scenario. Overall, breaking through the 2024 Q1 VHL is challenging, but our strategy considers this level, ensuring we're prepared for potential downside movements while aiming for upward targets. Lastly, the monthly chart for STX is more complex. We have the February VAL and January VAH below us, which have acted as support multiple times. If we lose these support levels, they might turn into resistance, possibly causing a reversal before or at the January VWAP. Our first resistance on the way up will be the April VAL of $2.42. There are several resistances to navigate, making it crucial to move carefully. Despite this, we expect a trend reversal soon, but the key question is whether the market will shake out a few more participants before turning upwards.
Long
by freeguy_by_wmc
🔥 ADA: Don't Miss The Entry Of A LifetimeI've made several analyses on ADA before where I talked about this parallel channel and argued that there's a possibility of ADA going for the top of the channel in the coming bull-cycle. It's not a likely outcome, but with a R/R ratio of 116 it's worth the risk. This could be your best ADA entry for the rest of your life. The best entry would be from the support of the channel, maybe a bit lower on a wick of some sort. Keep an eye on this trade!
Long
by FieryTrading
12
🔥 Bitcoin: Don't Miss This Massive Trade!In this analysis I want to elaborate further on my previous analysis where I talked about the daily RSI of BTC almost being oversold, which is historically a great time to buy during bullish long-term trends. As seen on the chart, I'm looking at both the RSI and the diagonal purple trendline. Ideally, the daily RSI will be lower than 30 and BTC will be trading closely around the trendline. This will activate the reversal trade. In my eyes, it's possible that said reversal will be the start of a new bullish trend for BTC, which can potentially take us all the way to 100k. Small risk, huge reward. What do you think?
Long
by FieryTrading
21
RISK MANAGEMENT the most important setting?Trading without a structured risk management strategy turns the market into a game of chance—a gamble with unfavorable odds in the long run. Even if you possess the skill to predict more than half of the market's movements accurately, without robust risk management, profitability remains elusive. Why? Because no trading system can guarantee a 100% success rate. Moreover, the human element cannot be disregarded. Over your trading career, maintaining robotic discipline, free from emotional or impulsive decisions, is challenging. Risk is inherently linked to trading—it represents the potential for financial loss. Continually opening positions without considering risk is a perilous path. If you're inclined to take substantial risks, perhaps the casino is a more fitting arena. In trading, excessive risk doesn't correlate with greater profits. This misconception often leads beginners to risk excessively for minimal gains, jeopardizing their entire account. While eliminating all risk is impossible, the goal is to mitigate it. Implementing sound risk management practices doesn't guarantee profits but significantly reduces potential losses. Mastering risk control is pivotal to achieving profitability in trading. A risk management system is a structured framework designed to safeguard trading capital by implementing specific rules. These rules aim to mitigate potential losses resulting from analytical errors or emotional trading decisions. While market predictions can be flawed, the margin for error in risk management should be minimal. Key Principles of Risk Management: 1. **Implement a Stop Loss:** - While this might seem elementary, it's often overlooked. - Many traders, especially when emotions run high, are tempted to remove or adjust their stop loss when the market moves unfavorably. - Common excuses include anticipating a market reversal or avoiding a "wasted" loss. - However, this deviation from the original plan often leads to larger losses. - Remember, adjusting or removing a stop loss is an acknowledgment that your initial trade idea might be flawed. If you remove it once, the likelihood of reinstating it when needed diminishes, clouded by emotional biases. - Stick to your predetermined stop loss and accept losses as part of the trading process, void of emotional influence. 2. **Set Stop Loss Based on Analysis:** - Never initiate a trade without a predetermined stop loss level. - Placing a stop loss arbitrarily increases the risk of activation. - Each trade should be based on a specific setup, and each setup should define its stop loss zone. If there's no clear setup, refrain from trading. 3. **Adopt Moderate Risk Per Trade:** - For novice traders, a recommended risk per trade is around 1% of the trading capital. - This means that if your stop loss is hit, the loss should be limited to 1% of your total account balance. - Note: A 1% risk doesn't translate to opening a trade for 1% of your account balance. Position sizing should be determined individually for each trade based on the stop loss level and total trading capital. By adhering to these risk management principles, traders can build a solid foundation for long-term success in the markets, safeguarding their capital while allowing for growth opportunities. In the scenario of a losing streak—let's say five consecutive losses—with a conservative risk of 1% per trade, the cumulative loss would amount to slightly less than 5% of your trading capital. (The calculation of 1% is based on the remaining balance after each loss.) However, if your risk per trade is set at 10%, enduring five consecutive losses would result in losing nearly half of your trading capital. Recovering from such losses, especially with a high-risk approach, presents a significant challenge. The table below illustrates this challenge: if you lose 5% of your capital (approximately five losing trades), you would need to generate a mere 5.3% profit to break even—equivalent to just one or two successful trades. However, if you overextend your risk and suffer, for instance, a 50% loss, you would need to double your remaining capital to restore your original deposit. 4. Utilize a Fixed Percentage of Risk, Not a Fixed Amount for Position Sizing Position sizing should be dynamic, tailored to both your predetermined risk percentage and the distance to your stop-loss level. This approach ensures that each trade is individually assessed and sized according to its unique risk profile. In the following section, we will delve into the methodology for calculating position size for each trade. 5. Maintain Consistent Risk Across All Positions While different trading styles like scalping, intraday, and swing trading may warrant varying risk levels, it's crucial to cap your risk at a reasonable threshold. A general guideline is to not exceed a 5% risk per trade. For those in the early stages of trading or during periods of uncertainty, a risk of 1% or less is advisable. The table below offers an illustrative example of the outcomes achievable by adhering to risk percentages tailored to individual trades. Regardless of your confidence level in the potential profitability of a trade, maintaining consistent risk per trade is paramount. 6. Avoid Duplicating Trades Based on the Same Setup Opening identical trades based on a single setup doubles your exposure to risk. This principle is especially pertinent when dealing with correlated assets. If you identify a favorable combination of factors across multiple trading pairs, opt to execute the trade on the pair where the setup is perceived to have a higher probability of success. 7. Aim for a Risk-to-Reward Ratio of at Least 1:3 The Risk-to-Reward (RR) ratio measures the potential profit of a trade relative to its inherent risk. A RR ratio of 1:3 signifies that for every 1% risked through a stop-loss activation, a trader stands to gain 3% of their deposit upon a successful trade. With a 1:3 RR ratio, a trader doesn't need to be correct on every trade. Achieving profitability in just one out of every three trades can result in a net positive outcome. While RR ratios of 1:1 or 1:2 can also be profitable, they typically require a higher win rate to maintain profitability. For instance, if you're willing to risk 1% to gain 1%, you'd need at least 6 out of 10 trades to be profitable to yield a positive return. It's worth noting that a high RR ratio doesn't guarantee profitability. It's possible to have trades with a 1:6 or greater RR ratio and still incur losses if the win rate is insufficient.
Education
by truepersonal
1
Buy Low, Sell High: Meta and Nvidia's Opportunity NowBuying NASDAQ:META and NASDAQ:NVDA : Balancing Risk and Reward Despite the recent market downturn, the long uptrend and strength of Meta and Nvidia remain intact. While short-term market fluctuations may present challenges, the long-term growth potential of Meta and Nvidia outweighs the current market volatility. Risk-Reward Profile: While investing in any stock carries inherent risks, the risk-reward profile for Meta and Nvidia appears favorable at current levels. Despite short-term losses, utilizing volatility to compute a close stop-loss level can effectively manage risk in this negative environment while leaving ample room for potential gains. This strategy, frequently employed by seasoned traders, maximizes opportunities in turbulent markets. Stop level: 480 Weekend Factor: However, it is important to keep in mind the negative exposure to war-related news associated with any long trade carried before the weekend. There's no guarantee that Monday's open will align with or exceed the stop level, potentially resulting in larger losses than anticipated. Therefore, investors should carefully assess their risk tolerance and adjust their positions accordingly. *************************** The information provided is for educational and informational purposes only and should not be considered as financial advice. Investing in stocks carries risks, and individuals should conduct their own research or consult with a financial advisor before making investment decisions
NASDAQ:METALong
by CF_444
Buying the Opportunity: NVDA BTDDespite the recent market downturn, the long uptrend and strength of Nvidia and Meta remain intact. While short-term market fluctuations may present challenges, the long-term growth potential of Meta and Nvidia outweighs the current market volatility. Risk-Reward Profile: While investing in any stock carries inherent risks, the risk-reward profile for Meta and Nvidia appears favorable at current levels. Despite short-term losses, utilizing volatility to compute a close stop-loss level can effectively manage risk in this negative environment while leaving ample room for potential gains. This strategy, frequently employed by seasoned traders, maximizes opportunities in turbulent markets. Stop level: 810 Weekend Factor: However, it is important to keep in mind the negative exposure to war-related news associated with any long trade carried before the weekend. There's no guarantee that Monday's open will align with or exceed the stop level, potentially resulting in larger losses than anticipated. Therefore, investors should carefully assess their risk tolerance and adjust their positions accordingly. *************************** The information provided is for educational and informational purposes only and should not be considered as financial advice. Investing in stocks carries risks, and individuals should conduct their own research or consult with a financial advisor before making investment decisions
NASDAQ:NVDALong
by CF_444
A Trading Plan MUST Include A Sound Risk Management StrategyOne of the biggest mistakes a trader can make is to neglect the aspect of risk management. In this video, I divulge the most pivotal lesson I’ve gleaned from my experience in trading. During the initial years of my trading journey, I disregarded the importance of risk management, which proved to be detrimental in a significant way. The watershed moment of my trading career came after incurring substantial financial losses. This experience was a stark revelation of the imperative nature of a robust risk management strategy for trading success. It was an excruciatingly costly lesson. Should you have bypassed dedicating time to understand risk management, you might be on the brink of a potential calamity. By watching this video, I hope you can sidestep the blunder I once made in the nascent stage of my trading endeavors.
Education
by fxtraderanthony
commodities high conviction entry in FebLooking back, commodities had a high conviction in february based on a longterm trend. Combining macd and BB break out. Markets have either risk-on sentiment or defensive. During risk-on phase people want to put money to work, there is too much money. During risk-off or defensive, people want money and safety. Assets become too expensive. Bitcoin rallies during risk-on phases. Oil or gold can be either risk-on and risk-off . Markets are fascinating. Faang can be a risk-on and risk-off, till everything becomes too expensive to have. Markets leave clues. and they move on cycles. It makes sense why commodities are risk-off . Small caps usually are risk-on (when economy does well, there are no global conflicts; ie the future is BRIGHT). More concerns move the weight to risk-off , ie markets are a weighing machine longterm. People tend to be stuck in one mood or another, and it's tough to adjust? markets can change gears quickly.
AMEX:DJP
by citsvar
AGIX: Why trading the long option is a better strategySingularityNET price action (AGIX) is generating an interesting technical pattern. A potential double-top has formed which strengthens strong bearish divergence on the daily chart. However, a recent bit of strengthening suggests a bullish continuation triangle is in the make at the same time. I'm not trading this pattern, but if I were, I'd choose to go long. If I'm right then my entry point should not be threatened by a little reversal on an intraday timeframe. If I'm wrong, then I'd expect a confirmation move to touch the bottom of the triangle, allowing me to get out close to my entry point for a relatively small loss. It's all about risk-reward. A long target: US$2.33 - that's a 100% gain IF... oh that bloody IF... :)
ALong
by Fractaleer
3