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Riskreward

USDJPY on a support area , Long with proper Risk/Reward.as you can see price reached the last low of the chart , it acts as support area. Also we have a very strong resistance area on top wich you can see has 3 reversal points , we have 50% Fibbonacci retracement level in this resistance area too. RSI shows us good divergence. I believe price tests the support one more time after the markets opening , that's a good entry point for long with a good R/R. So our entery point is support area and we enter position after seeing candle confirmation in lower time frames. Our target is resistance area and our stop should be little pips below the support area. Don't forget to like and leave me any questions, comments or observations, thank you and have a profitable week.
Long
by mohsenfx
4
Ethereum Prepares to GrowthDue to the fall of Bitcoin on September 21st, the price of ETH fell by 10%, from $380 to $340. As a result, the price chart went down from the ascending triangle. Yesterday, ETH consolidated near the $340 level, which suggests that the nearest support is currently there. Stochastic also dropped sharply and reached the overbought line. It follows from this and in the coming days, it may begin its reversal. MACD has slowed down its decline and is now in a zone of uncertainty. At the same time, the price consolidated below the middle Bollinger band and almost reached the lower band. It also suggests that we should see a breakout to the upside towards the $400 level in the near future. Based on this, it is a good deal by risk/reward ratio (1to2). The optimism is added by the fact that rumors about the imminent transition of Ethereum to the PoS algorithm, have again spread in the community. A network upgrade proposal or EIP has already been published, which outlines the technical details. Also, some developers say that the transition may take place earlier than the scheduled date (recall that earlier they talked about November 4th). Ethereum has great fundamental news and a technical picture of the price. Therefore, we expect a reversal to begin in the coming days and we expect ETH will hit $400.
Long
by Crypterium_Analytics
1
Technical Analysis OverviewThe investment decision is based out of two different ways: Fundamental Analysis: Analyzing a company's financial statement Technical Analysis: Understanding the market sentiment behind price trends Technical Analysis The study of statistical trends, collected from historical price and volume data, to identify opportunities for trade. Assumptions of technical analysis Market discounts everything History tends to repeat itself (psychological) Price moves in trend (reflexive) Trend A trend is the overall direction of a market or an asset's price identified by trendlines. Three possible trends: Uptrend: Asset going up, making higher highs or higher lows Downtrend: Asset going down, making lower highs or lower lows Sideways: Asset trades in horizontal channel Technical Analysis considers: (Basics of Technical Analysis) Price Chart Patterns Volume-Momentum Indicator Oscillators Moving Average Support Resistance levels Movements are not linear, the price will face resistance as it goes up or support as it goes down. -‍Resistance: Level where an uptrend can be expected to pause or rebound due to a concentration of sellers. -Support: Level where a downtrend can be expected to pause or rebound due to a concentration of buyers. Technical Indicators broadly serve three functions to alert, to confirm, and to predict. There are two types of indicators: Leading Indicator: Leads the pice, generates a signal for trading opportunities. Eg. Oscillators i.e. RSI, CCI, Stochastic, Williams %R, Momentum, etc. Lagging Indicator: Follows trends and patterns, reduces the risk in exchange for missing early opportunities. Eg. Moving Averages, Bollinger Band, and MACD. A few myths about Technical Analysis: TA is only for short trading or day trading- TA can be used in all time frames, from 1 minute monthly charts TA has a low success rate- Solely TA can give you profits if used effectively Technical Analysis is quick and easy- Continued success requires in-depth learning, practice, good money management, and discipline Ready-made technical analysis software can be helpful- Such software may provide insights about trends or patterns but cannot guarantee profits, use of backtesting is necessary TA can provide price predictions accurately- TA is about probability and likelihood, and not guaranteed thereby price ranges can be predicted The winning rate in TA should be higher- Profitability does not depend solely on win-rate, it also incorporates risk-reward ratio Limitations of Technical Anlaysis Tend to give mixed signals when used in isolation, confusing traders TA is all about probability and signal cannot guarantee a successful trade even after thorough analysis Often technical analysts use indicators in different methods and may form a biased view regarding the same stock Many a time the technical signal may lag, and by the time proper signal is generated it is possible that the trade might be over A single trading strategy may not work in all scenarios as markets tend to be extremely dynamic Few Trading Mistakes Beginners Make: Starting with real money The best way to get acquainted with trading rules is to have a demo with virtual money before investing in real money, you can perform paper trades on Mudrex Not examining situation by yourself Make your own strategy, test them on the Mudrex platform, and then follow the same plan to trade by understanding things on your own Inevitable Losses Set risk limits for yourself and trade accordingly and accept the losses you face Margin Trading in the beginning It is not recommended to margin trade until and unless you understand the risk completely as crypto trading is rewarding yet risky Following the herd Before making a start with real money, make a set of rules which needs to be followed and have stop losses to limit the loss incurred on your trade ---------------------------------------------------------------------------------------- If you find the post useful, please like and share our ideas with the community! - Mudrex
COINBASE:BTCUSDEducation
by Mudrex
19
Risk-To-Reward-Calculation with Key-Components.________________________________________________________________________________________________________________________________________ Hello Traders Investors And Community. Welcome to this educational idea about the risk-reward-calculation in position trading with the 5-Key-Components determined. Today's markets constantly changing and adapting and in such environments, we need to stick to a systematic trading approach to have the long term goals realized and do not fall apart of market-making and smart money operators, when considering position-trading there are some important steps in acquiring the long-term-success we should take apart when calculating the right risk in comparison to our capital and other key-steps to measure what trading is the best for ones individual trading-system to achieve the aims we desire. Therefore I contributed the 5-Key-Components inevitable to measure one's risk-to-reward in the market and best applied in a functional trading-system. 1.) The 5 Key Position-Trading Rules 2.) Acknowledging Risk Aversion 3.) Risk-To-Reward-Calculation 4.) Risk-Reward-Ratio vs. Winrate 5.) Possibilities of Success and Ruin ________________________________________________________________________________________________________________________________________ 1.) The 5 Key Position-Trading Rules 1. First Rule: Do not hold the position longer than necessary: It is important to choose a trading-system which has good entry timing and the right opportunities to exit therefore it is the best to be in the market when volatility increases and takes profit at the important levels to not hold the position unnecessarily longer. 2. Second Rule: Aim to make as much as possible by risking as little as possible: When trading we should advance by making the most of what we have at hand, today's markets offer options with leveraged trading which can work also with smaller percentages of the deposit at hand, in this case, the leverage should be calculated right. 3. Third Rule: Only risk a small amount of capital on any trade executed: It is commonly under beginner traders to risk a high percentage of the total deposit, this is a fatal mistake as the risk grows exponentially, to achieve security of the deposit in the long-run, the maximum risk per trade should not be more than 10% from the deposit, best is 0.5-2%. 4. Fourth Rule: Don't come to the situation to meet margin calls: This means you should avoid being marginally called on any occasions, when this happens there is evidence that the trade was too risky and the stop-loss better be placed before the margin call, when it happens, it should be a time to review your trading-system. 5. Determine the maximum drawdown for every trade in advance Before every trade you should measure how your position size with the stop-loss will possibly take a drawdown in the deposit. When the risk is too high then the smaller position should be preferred, when it is still too risky than a bigger account will be a good option. ________________________________________________________________________________________________________________________________________ 2.) Acknowledging Risk Aversion This is a very important step in determining ones individual trading-systems, as traders act differently to circumstances some traders are risk-averse and others are risk-seeking, this means how the trader is reacting to risk and how much the individual would risk receiving a return. In the graph, you can see that the lesser your capital is the higher your risk-seeking, you are more ready to risk something averagely when your capital is lower, this diminishes the higher your capital is, there are different risk preferences reaching from extreme risk averter to extreme risk seeker. ________________________________________________________________________________________________________________________________________ 3.) Risk-To-Reward-Calculation In the big table in my chart you can see the risk-to-reward calculation and the values in it, the first value is the risk meaning how much you want to risk in the particular trade coming to the second value, the return is what you get in return on your trade. For example, you want to buy bitcoin at 15000 and have set the target at 15010, by the technical analysis you have determine a stop-loss at 14500, this will be a highly risky trade as you are risking to lose 500 points comparison to 10 points. The best trades are in the green section on the table beginning with trades where you gain 2 and risk 1, these trades should be the aim and preferred, the breakeven ratio determines how much trades need to go in breakeven to be long-time profitable. ________________________________________________________________________________________________________________________________________ 4.) Risk-Reward-Ratio vs. Winrate This rate is showing you how your trading develops by time, when you have a good winrate this means you are closing many of your positions in a profit on the other side when this winrate is low you closing too many positions in a loss and often be unprofitable in the long-run. What determines an excellent trader now as it is marked in the chart is when the average risk-reward ratio is high and the winrate also, this means you close many of your positions in a profit and also with the proper risk-reward-ratio. On the middle of the chart is the threshold determining low and high, you can also be profitable when your risk-reward is high and your win rate low or in reverse, what should definitely be avoided is when both the winrate and ratio are lows this means you have to adapt your trading-system for sure. ________________________________________________________________________________________________________________________________________ 5. Determine the maximum drawdown for every trade in advance This is a simple but very effective and important graphic showing the likelihood traders have for a point of ruin and how much the risk of ruin in comparison to it is, meaning when your deposit is at a level on which there is no longer possibility to continue. This graphic shows that when your capital is more your risk of losing it diminishes, on the other side when it is low the possibility for losses is more as the capital is not big to stand the losses, this is a groundstone knowledge in determining the trading-system together with risk. The graphic shows that the higher your deposit is the better you can take the risks in comparison and the lower it is the higher is the risk of losing more, this is why it is important to combine the risk together with a solid portfolio. _______________________________________________________________________________________________________________________________________ Alright, these where the 5 key-components to determine risk in markets accordingly, traders should always look for the individual situation and where the journeys should lead, therefore it is important to determine the risks in comparison to rewards which I bundled into the 5 Key-components necessary determining the risk-management in ones trading-system, these components can be combined applied, or single integrated into ones trading-system. _______________________________________________________________________________________________________________________________________ In this manner, thank you for watching , support for more tutorials and a good day! "Good luck is when opportunity meets preparation." Information provided is only educational and should not be used to take action in the markets. ________________________________________________________________________________________________________________________________________
Editors' picks
COINBASE:BTCUSDEducation
by VincePrince
29
The loonie is gonna flyThe pair has broken the 100 sma in h4 chart and has bounced from the support area between 1.316 and 1.313; there was a stop hunting yesterday when the price has had a spike at 1.31189 (it was a fakeout of the trendline). Now there will be the 5th elliot wave which will go towards the 50% of fibonacci retracement in the daily chart ( around 1.335), the trade has a wonderful risk reward ratio. TheCanadian dollar is going to get weaker because of oil prices slump and the Bank of Canada wants it to be lower in order to have a larger amoun of exports, the quantitative easing programme will keep on at about 5 billions/week of bond purchased and the interest rates will remain at 0.25% for probably 2 years. Use a good money management. Enjoy your trading Francesco
Long
by Dragon_Investments
1
EURUSD - Bullish Flag Pattern - Trend Continuation + MTFAHi Traders! The market is in an Uptrend. Let's begin our Multiple-Timeframe-Analysis with the Daily: The market is clearly in a strong Uptrend. We here have an ascending Parallel Channel. The price is also respecting those other S&R Levels. Great, here is the H4-Timeframe: The market was moving in a consolidation. Then it came back and is now retesting this break. Here comes the important part! Now we have to consider the behavior and the price action of the market during the Retest. What is the market telling us? For Example: The market is breaking down and closes. Then it comes back and closes even above the opening price of the previos candle. (Bullish Engulfing Pattern) This is a sign of Bullish Power, even it did break down at first. Or what about that: The market is making lower highs and comes to the Support. You realizing that this could be a descending Triangle. This is clear bearish Power, because the Traders are willing to sell at lower and lower prices. Is everything understandable so far? If not, write a comment below! Finally, here is the Entry Timeframe: Firstly we have drawn the Fibonacci Retracement Tool. It was falling until the Level between the 50% and the 61.8% Retracement. Then we drawed the channel from the retracement move. We realized that this could be the Bullish Flag Pattern. Even we have a save SL which is far away, the RTR-ration is 1 to 4! And we're trading WITH the trend. We recommend to be careful at the Resistance Level. Thanks and successful Trading :)!
Long
by swissmoneymakers