EDUCATION WHAT IS DRAWDOWN | 3 Types Of Drawdown ExplainedHey traders ,
is it drawdown . The account drawdown is the highest observed loss from the highest value of the deposit to the lowest value of the deposit at a certain period of time . Imagine you started to trade with 10,000 $ account . At the end of the year , your account size reached 15,000 $ . 1 However , at some point through the year the deposit value dropped to 6,000 $ . It was the absolute minimum for the one - year period . At some point , your net loss was -4,000 $ or 40 % of your account balance . The account drawdown is 40 % .
! Knowing the account drawdown is very important for the risk assessment of the trading strategy . Usually , 50 % and bigger drawdown signifies an extremely high risk .
There are 3 types of drawdown to know
Current drawdown - a temporary drawdown associated with the negative total value of opened trading position ( s ) at present . Once you start trading with 10,000 $ deposit , you open several trading positions . Being opened , with the constant price movements , your potential gains fluctuates from positive to negative . For examples , with 3 active trades : EURUSD ( -500 $ at present ) ; GBPUSD ( + 200 $ at present ) ; GOLD ( -100 $ at present ) your current account drawdown is -400 $ or 4 % of your deposit . Fixed drawdown - the negative value of the closed trading position ( s ) at present for a certain period of time . While some of your trades remain active , some are already closed . Imagine the same deposit - 10,000 $ . On Monday you opened 6 trades , 2 still remain active and 4 are already closed . Your total loss from your closed trades is -500 $ . Your fixed Monday's drawdown is 5 % . Maximum Drawdown - the maximum observed loss from
Stop
Where to place your STP LOSS is important & can be misleading Choosing your STP loss determines your risk, and is essential part of executing your trade.
On this trade analysis, we are looking at ticker F (Ford Motors) using the weekly (W) chart as the active chart, the price is selling off & coming into a Demand Zone (DZ). This DZ is also the last higher Low HL of the long-term (M) monthly uptrend.
my trading strategy; makes perfect sense of placing LNG entry, at this level. Order entered & waiting like a snipper in the DZ, surly enough the price penetrates into the DZ & the LNG order is executed at $12.90, now where to place your STP LOSS, meaning at which point do you determine the trade has gone against you & you need to exit & cut your losses short.
There are many strategies for placing your stop loss, some of the common ones, are placing the stop loss below the DZ, some other strategies offer a margin as a buffer, for example if price violates the DZ by lets say 0.50 points, am out & the STP Loss is triggered. the stop loss placement strategy that i used in this trade required a close of a candle stick below the DZ, few days after, once that occurred I executed you my STP loss, and was out at 11.30 points loss, so 1.60 loss per share. that is within my Risk to Reward ratio
Now, the trade was still a loss, yet it was not a bust; simply because I anticipated this risk within expected range of my trade plan. in other words, I followed my trading plan & rules; that really matters. Following a trading plan is how novice traders become trading sharks. Obviously it hurts the ego to witness price rallies to $15 and above; shortly after closing below the DZ & triggering my stop-loss; but thats life, you can't make sense of it all, the best we can do is learn how to navigate it.
*Active Chart (W)
*Long-term chart (M)
*Enter timing chart (D)
Don't be liquidityThis chart shows the common stop-loss touch and bounce pattern. And this happened because I was liquidity.
The stop-loss was set at an "obvious" invalidation level, the previous supply level ($20,800). So, right below it, there was heavy bidding.
The stop-loss hunters will place their bids just slightly below presumed ask levels.
BAH buying opportunityBuying opportunity
Why?
1. Relative strength to the markets SPY/QQQ and XLY
2. Higher Time frame alignment / Weekly chart is ok
3. Moving averages : 20/50/200 MA are pointing higher near and under the price
Price > 20Ma > 50Ma > 200Ma
4. Chart pattern breakout forming near the minor support area - Cup with handle/W with handle
Entry : 93.55
Stop : 90.25
Target 1 : 100.25
Target 2 : 105
How To Make Your Trading Plan In 7 Steps !How To Make Your Trading Plan In 7 Steps !
➡️ Choose The Correct Time Frame
All traders know what time frames are, but few know that each time frame has a specific way of working. Time frames from 15 minutes to 60 minutes fall under the name of day trading, meaning that all deals will be closed on the same day, whether with profit or loss, and traders call it the name "Scalping"
On the other hand, there is a time frame from 4 hours to the daily frame, which are considered long deals and traders call them “swing”
Time frames higher than the daily are considered investment centers and are not suitable for small capitals
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➡️ Risk Management
Most traders make a fatal mistake, which is not choosing a risk ratio for each trade, and this exposes the entire account to a loss. The best traders in the world believe that the reasonable risk ratio is between 1% to 3% for each trade.
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➡️ Conditions
You Must Choose Between " Ranging " Or " Trending "
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➡️ Markets
In Stock Markets We Have 4 Market ,,
- First One Is Option
Option or binary options is a currency, commodities and stock market that simulates the same conditions as the real markets, but you can set a time for the transaction and bet on the direction within a minute or two and you can win up to 90% of the bet amount, but in the event of a loss, you lose the entire bet amount and some believe that The option market has a lot of suspicions and scams
- Second Type Is Equity
- Third Type Is Futures
- Forth Type Is Forex
- Fifth Market Is Crypto Currency
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➡️ Type Of Your Entries
- Pull Back
- Break Out
- Cross Over
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➡️ How To Put Your Stop And Targets ?
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Print It And Don't Forget Any One From The 7 Steps To Be Successful Trader ❤️❤️
Dogecoin Long Price Target ConfluenceDoge on the 4 hour time frame,
I have identified multiple patterns,
(each one is indicated on the chart in different colors.)
These patterns have very similar price targets
Which makes me more confident in potential success of my trade set ups.
Indicators: 200 EMA (red) 50 EMA (green)
The 50 EMA is currently holding down the price, but a break above it should allow the price to hit the top of the ascending wedge (yellow) Which is inline with the 200 EMA (the next resistance)
The patters I found and their price targets are:
#1) Ascending wedge (Yellow)
- Price target: $0.1915
#2) Descending Triangle (Purple)
- Price target around $0.1960
#3) Descending Triangle (Pink)
- Price target: $0.2200
#4) Double Bottom (Red)
- Price target: $0.1890
The first trade could be taken once price breaks above the 50 EMA (green)
- Price target: at the top of the yellow wedge ($0.1540)
- And a stop loss trailing the bottom Support Line (Bottom Yellow line)
The Second Trade:
Enter Long If and When:
- The price is above 200 EMA
- And the Ascending wedge is broken out of (Turning $0.1540 into support)
Stop Loss:
- Under the Support zone: @ $0.1495
Take Profit:
- Between $0.1875 and $0.1960
The Third Trade:
Enter long:
- once $0.19 is broken and becomes support
Stop Loss:
- $0.1795
Take Profit:
- Between $0.2150 and $0.22
Not financial Advice
Please leave a comment if you have anything to add, I would like to hear your thoughts.
TOTAL (Crypto Market Cap) - Bullish Double Bottom at Support 4HRTOTAL (Crypto Market Cap) has double-bottomed above 1.8T trendline support
If support prices hold strong, an industry-wide bullish crypto rally could occur.
-Bullish Targets to the upside are 1.92T, 1.96T, 2.0T.
-Chart setup would be cancelled if the index price falls and holds below 1.79T.
Utilize stop loss, position sizing, risk management.
Note: Crypto has short-term correlations with the USA stock market & tech stocks. Support prices need to hold strong, and bullish continuation is needed to sustain a bull rally.
All content is Not financial advice. Trade at your own risk.
If you buy stocks, use STOP orders!If you buy stocks, use STOP orders.
Don't ride the submarine to the depths of the ocean. If it's a submarine, you want out! Not because the submarine may come back to the surface for oxygen, but because a submarine can stay under for a LOOOONG time, or it can sink (which you don't want). So instead, the goal is to avoid the submarines and to try to ride dolphins...and then hop onto a hot air balloon, that then brings you to an trans-orbital ship that brings you to the international space station. From there, you want to hop into a space shuttle ship that will take you as far as Mars. From there, you want to hop out and hitch a ride w/ passing by aliens, and ride w/ them to another galaxy.
Each of those levels, use stops! Careful that the dolphin isn't on LSD and swims you down to the submarine or to antarctica. Don't let the air balloon drop you back into the ocean where you may hurt the dolphin. The trans-orbital rocket can easily explode. And don't let the international space station explode w/ you in it...you will be stranded in outer space and freefall back onto the top of the hot air balloon. Be weary of the space shuttle ship flying on the wrong course into the sun (that is oblivion). And make sure the extraterrestrials are headed in the direction away from earth.
Do I have any stocks that are in orbit or in outer space or on their way out of the ocean. No. So take what I say with a tub boat overflowing of salt. But, conceptually, what I said ought to be the real goal. Long term investing but playing it w/ smart, protective tools to ensure that we stay away from submarines. The main goal really is to avoid submarines. Anything else is bonus.
Gold Bullish Scenario Pennant BreakoutGold has reclaimed its contracting price action and will likely breakout to the upside
with a target of 2201. Stops would be below the middle of the pennant pattern. 1775 or so.
Losing the middle price action could take this in the opposite direction therefore we must
manage risk and stay vigilant until price action has broken out of the pennant pattern and successfully
retested, where it would be a buying opportunity to add to the positions.
a short term long for your long term shortthis one is for the gutty. i am projecting the weekly candle to draw a higher up-wick, before closing around the mid 26xx region. such a close would mark the continuation of the short to 13xx in my aforementioned post(s).
trigger at 239x, triggered limit at 254x
target - 29xx
position at target - full close taking short entry
trade with caution
anything i post is at the very best, just an idea. it is not a suggestion for what you should do with your money, it is an archived entry of what i am doing with mine. any further correlation between our trades; including profit(s) and loss(es), is solely coincidental. my content is not intended to be interpreted as financial advice.
Liquidity and wycoffTwo trades I had taken on the pound dollar on thur-fri. In my opinion understanding what liquidity is and why it drives price is extremely important if u want to have any success. Understanding that if you don't enter on someone else's stop loss ; some one will enter on yours and that its a 0 sum game. Just remember when you enter a trade there is someone else entering the opposite trade at that exact price, think how that can be exploited
MSFT - MICROSOFT UP MINITrading suggestion:
". There is a possibility of temporary to break to the suggested resistance line (291 ).
. if so, traders can set orders based on Price Action and expect to reach short-term targets."
Technical analysis:
. MSFT is NOT in a range bound, and the continuity of an uptrend is expected.
. 13 AGOST 2021 have a GAP bullish
Take Profits:
TP1= 299
Stop:
Stop1= 284
Trigger:
Trigger1= 291
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Nasdaq Head and Shoulders: Trade StrategyPlease see my previous post for an explanation of the technical signals shown. The post is linked below.
In my opinion, this is the best way to utilize the technical information. My vehicle of choice would be SQQQ, which would give a potential profit/loss of 10%/-2.5%.