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EUR/USD Consolidates Around 1.0640EUR/USD wrapped up the week at approximately 1.0640, a bit below the previous week's level. The exchange rate hit a Friday low of 1.0614, marking the lowest intraday point since March, mainly due to the late dip in the US dollar linked to falling Treasury yields. In terms of technical analysis, EUR/USD is currently navigating within a descending regression channel. The Relative Strength Index (RSI) on the 4-hour chart is below the 50 level, indicating a bearish sentiment in the short term. Key resistance levels include 1.0670 (20-period Simple Moving Average, marking the upper limit of the descending channel) and 1.0690-1.0700 (50-period SMA, a psychological level). A close above the latter on the 4-hour chart could draw technical buyers, potentially propelling the pair towards 1.0720 (100-period SMA) and 1.0760 (a static level). On the downside, immediate support levels are identified at 1.0630 (a static level marking the mid-point of the descending channel), followed by 1.0600 (a psychological level) and 1.0580 (the lower limit of the descending channel). EUR/USD's closing on Thursday remained almost unchanged and just below 1.0700, while Friday morning saw the pair entering a consolidation phase around 1.0650. Data from Germany and the Eurozone indicated a slight contraction in private sector economic activity in early August compared to July. Specifically, HCOB Composite PMI in Germany rose to 46.2, and in the Eurozone to 47.1. Despite these figures not significantly boosting the euro, they contributed to maintaining its stability. In response to the PMI survey results, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank (HCOB), stated that companies continue to display resilience and optimism in the face of weaker demand. The expectation is for the Eurozone to contract in the third quarter, with the nowcast indicating a 0.4% drop compared to the second quarter, considering the PMI indices. In the upcoming week, S&P Global will release PMI data for the manufacturing and services sectors in the US. If the Services PMI unexpectedly falls below 50, the US dollar could face challenges in finding demand before the weekend. Market participants will be closely monitoring risk perception. Following a significant two-day decline, major indices on Wall Street appear positioned to open in positive territory on Friday. US stock index futures are showing a rise between 0.1% and 0.3%. If risk flows dominate the financial markets during the American session, EUR/USD might experience an extension in its upward movement. My outlook remains bullish, and for the week ahead, I plan to look for a long entry point on M15 at the opening of the New York session on Monday. I'll be patient for a structural change on M15 before searching for a favorable entry point. Feel free to share your thoughts, comment, and show your support by leaving a like. Warm regards from Nicola, the CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
7
Will XAU/USD manage to rise?The price of gold showed resilience after a bounce in the range of $1,914-$1,913 from the previous day, recording a modest increase of just over 0.20% and breaking a three-day losing streak. However, it gave up the weekly gains, being below all moving averages. Technical indicators confirm the bearish sentiment, with the peak of the pair this week at the 61.8% Fibonacci retracement, then experiencing a sharp retreat. Gold is now below the 38.2% retracement, representing an immediate resistance level. The 4-hour chart suggests further bearish extensions, with the pair encountering selling interest in the short term. Support levels are identified at 1,907.30, 1,897.20, and 1,884.70, while resistance levels are at 1,921.80, 1,933.30, and 1,946.10. From a fundamental perspective, the weekly decline of XAU/USD was caused by the strengthening of the US dollar following the Federal Reserve's decision to keep rates unchanged. The Fed left open the possibility of a rate hike later in the year, focusing on a soft landing to avoid a recession. The Bank of England also kept rates unchanged, emphasizing the need for restrictive monetary policies to control inflation. These events triggered a decline in global indices and an increase in bond yields. My goal will be to wait for the opening of London before evaluating any market entry, in order to monitor any sharp movements that may occur during the London session, where numerous macroeconomic data are expected. I am primarily focused on a long position... Let me know what you think, happy trading to everyone from Nicola, CEO of Forex48 Trading Academy.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
3
GBP/USD Near Channel Breakout?Boosted by a weaker US Dollar, the GBP/USD bounced from six-month lows near 1.2230 and rose to the 1.2300 area. However, the Pound remains among the worst performers following the surprising accommodative stance of the Bank of England. The Relative Strength Index (RSI) indicator on the four-hour chart stays below 30, and GBP/USD trades within touching distance of the lower limit of the descending regression channel, indicating oversold conditions. The level of 1.2300 sets up as initial support, and a four-hour close below that level could attract sellers. In this scenario, 1.2240 (static level from March) could be set as the next bearish target before 1.2200 (psychological level, static level). On the upside, the first resistance is located at 1.2330 (mid-point of the descending channel) before 1.2360 (upper limit of the descending channel) and 1.2400 (static level, psychological level). After rising above 1.2400 during the European trading hours on Wednesday, GBP/USD made a sharp U-turn and closed the day in negative territory. The pair extended its slide in the first half of the day on Thursday and touched its lowest level since early April below 1.2300. The Federal Reserve left its policy rate unchanged at 5.25%-5.5%, as expected. The revision of the Summary of Projections confirmed that policymakers intend to hike the policy rate once again in 2023. Specifically, the rate cut projection for 2024 was revised lower to 50 basis points (bps) from 100 bps. The hawkish dot plot framework provided a boost to the US Dollar (USD) and forced GBP/USD to stay under bearish pressure. Let me know what you think. Regards from Nicola, CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
1
You NEVER read Bitcoin Cycles in This WayAll Things Follow Patterns: Deciphering Bitcoin Through Nature's Lens Before delving deep, one must grasp a foundational truth: markets, with crypto being no exception, exhibit recurring patterns 🔄, much like nature's intricate tapestry. Witness these rhythms in seasonal shifts 🍁, the sun's majestic journey from dawn 🌅 to dusk 🌄, and even the emotional ebb and flow we undergo daily 😊😔. While countless individuals navigate the market's turbulent waters, a single trait echoes through every investor: raw emotion 😨😃. Fear and greed are the primary market drivers 📈📉. Stark numbers present a sobering reality: 95% of cryptocurrency enthusiasts witness their assets evaporate, leaving a meager 5% standing tall 🏆. However, mastering the art of reading market sentiments and recognizing the tides of collective joy and despair can be your ticket to the elite circle 🥇 Unraveling the Cyclical Model 🔄 Now that you're familiar with the cyclical model 📊, it's of paramount importance to dive deep into its intricate details and fathom how this insight can be wielded in the crypto realm 🪙. Let's explore the cycle's various stages. Below is a depiction of the cyclical model. You might be tempted to dismiss it as just another chart from a mundane tome on markets, trading, and investments 📚. But, hold that thought! Pause and imprint this graph onto your mind 🧠. The reason? You'll be in for a surprise when you discover the striking resemblance this illustration holds with concrete scenarios we'll unveil later 🕵️‍♂️. Accumulation Phase 📦 Smart Money 💼: In this period, the asset’s value seems stagnant and "unexciting" 🟦. Regular investors and traders, the retail crowd 🙍‍♂️🙍, tend to step back, paving the way for the "smart money" 💡💰 (major banks, hedge funds, big players) to seize assets at a bargain. First Growth Phase 📈 Institutional Investors 🏢: Here, the asset starts its ascent 🌱, yet subtly, not enough to make headlines 📰. The "smart money" persists in purchasing, preparing the terrain for what's next. Euphoria Phase 🎉 Public 🌍: Arguably the most electrifying cycle segment 🚀. As prices soar, retail participants flock 🐦. The media spotlight intensifies 🎥, newcomers enter buying en masse, further fueling the surge. And the "smart money"? They strategically exit, handing over to the novices. Capitulation Phase 📉 Capitulation 🏳️: Then, the downturn sets in. As prices dip, after "smart money" has exited, euphoria turns to dread 😱. Late buyers, who hopped in during the highs, are now in a frenzy, offloading assets. Thus, enters the "capitulation phase." The pattern? A perennial one, consistent across every market landscape 🔄. Grasping this cyclical nature aids in making informed moves – to buy, to sell, or just to hold and watch ⏳. Bringing Theory to Life: Tangible Scenarios 📚➡️🌍 Shifting our focus to concrete instances, consider the subsequent graph, which chronicles Bitcoin's entire financial trajectory 📈. This illustration lets us trace its periodic patterns. Conventionally, such a phase stretches over four years: a bullish 📈 period enduring 2.5 years and its bearish 📉 counterpart occupying the next 1.5 years. Keep in mind, these periods are merely indicative and can oscillate due to a myriad of elements 🌪️. Still, this template sheds light on prospective oscillations in Bitcoin's valuation. Next, we're diving deep into each Bitcoin cycle 🔄. But first, rewind to the original cyclical model graph. Now, stack up real-world instances against the cyclical model chart 📊. Spot how the real-world examples mirror the cyclical graph? The First Bitcoin Cycle 🌱 BTC was crafted on PCs purely for enthusiasts' thrills, sans regulators 👨‍💻. Between July '09 and June '11, BTC experienced its premier bullish wave 📈, soaring to $18.5 from mere $0.05, a staggering +64,000% leap! The Second Bitcoin Cycle 📈 BTC touched its first peak 🏔️, ushering its maiden bearish phase 📉. After a steep 93% decline, the bullish vibe quickly resurfaced, and from Nov '11 to Nov '13, BTC rocketed 🚀 from $2 to $1,240 - a whopping +60,000%! The Third Bitcoin Cycle 🐻 Another bear market came with a deep 86% cut - BTC plummeted from $1,240 to $167. From Jan '15 to Dec '17, bullish vibes raised the stake to $19,800 📈, a rise of 11,800%. The Fourth Bitcoin Cycle ⏳ BTC faced another 84% trimming 📉. From Dec '18 to Nov '21, the bullish phase propelled BTC to a majestic $69,000 from a modest $3,123, charting a 2,108% ascent. The Fifth Bitcoin Cycle 🚀 We stand here, as BTC price dances between $18k- FWB:25K 🩰, setting the stage for the Bitcoin cycle's nascent stages. A bullish tide is on the horizon 🌅, a moment crypto aficionados keenly anticipate. ❗See related ideas below❗ Like, share, and leave your thoughts in the comments! Your engagement fuels our crypto discussions. 💚🚀💚
Long
by Yaroslav_Krasko
6
EUR/USD: Excellent reversal opportunities!Hello everyone! Today I want to share my thoughts on the current situation of EUR/USD. After the release of the Federal Reserve data, we are considering a possible short setup. However, during this decline, the market broke a key support level at 1.0640. This might trigger a market reaction and a shift to long positions. To make informed decisions, I've decided to enter the market only at the close of the London session. The reason for this choice is the significant high-impact American data expected in the morning during New York trading hours. My goal is to identify a structural breakout to the upside on the M15 timeframe and subsequently take advantage of a pullback. On a technical level, EUR/USD is currently trading in the upper half of a descending regression channel. The Relative Strength Index (RSI) on the four-hour chart indicates a bearish bias, remaining slightly above the 40 mark. This suggests a potential for a technical correction in the short term. On the positive side, 1.0670, representing the 20-period Simple Moving Average (SMA) and the upper limit of the descending channel, acts as immediate resistance. Next, we have 1.0700 - a psychological level and a support level, along with the 50-period SMA. A breakthrough of the latter could attract buyers and pave the way for an extended recovery towards 1.0740, where we find the 100-period SMA. Crucial on the support level is 1.0630, representing a static level and the mid-point of the descending channel. In case EUR/USD falls below this and begins to use it as resistance, we might witness a move towards 1.0600 - a psychological and static level, followed by the lower limit of the descending channel at 1.0540, a static level dating back to March. Please share your thoughts on this analysis. See you soon! Greetings from Nicola, CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
12
Long ETH - Adapting to a successful backtested strategyCurrent position is Long at 1640. Stop loss 3.5% The RSI and ATR on multiple timeframes has indicated a trend reversal from short to long. Thus we adapt. No Bias, no emotion. Pure TA and risk management. Is the current position down a few percent? yes... does it matter? No! The entire portfolio is up over 4400% since 2020 (Substatiated by the backtest). We stick to the gameplan, the intermediate market moves are irrelevant. Our risk profile is planned for. We follow the strategy that has consistently had major net profits year on year (Substatianted by the backtest) and we don't get swayed by emotional bias. Adaptation is a fundamental component of implementing a proven and backtested strategy. In financial markets and various other domains, adhering to a well-researched and tested approach is essential for achieving consistent success. The dynamic nature of these environments necessitates the ability to adapt when circumstances change. Therefore, recognizing the importance of adapting to current market realities while still adhering to a proven strategy is paramount for long-term sustainability and success.
BITFINEX:ETHUSD
by TradingAlgorithms
USDJPY What will happen now?The USD/JPY pair is gaining momentum on the charts after the Federal Reserve's rate decision and update on inflation projections. It has surged to new highs near the 148.00 mark as the US dollar (USD) benefits from increasing inflation expectations set by the Fed. Starting at 147.50, the USD/JPY has gained a strong 50 pips following the Fed's rate decision. The Fed opted to maintain its benchmark rate at 5%, aligning with market expectations. However, the latest economic projections by the Federal Open Market Committee (FOMC) indicate a higher-than-anticipated rise in near-term inflation. The FOMC's one-year forecast predicts inflation reaching 5.1%, surpassing the previous projection of 4.6%. This has caused market movements as they position themselves ahead of the Federal Reserve's upcoming press conference scheduled for the next hour. The USD/JPY has reversed its Wednesday's downward trend and surged towards the 148.00 mark during the early session.
Short
by Forex48_TradingAcademy
3
How to trade Liquidity Sweeps 🌊 Trading liquidity sweeps 🌊 and identifying fake liquidity grabs 🕵️‍♂️ can be valuable skills for traders. These strategies involve capitalizing on market inefficiencies and understanding how institutional traders and algorithms influence price movements. In this guide, we'll explore what liquidity sweeps and fake liquidity grabs are and how to trade them effectively. Understanding Liquidity Sweeps: A liquidity sweep occurs when a trader executes a large market order that "sweeps" through the order book, clearing out available liquidity at various price levels. These sweeps often signal strong buying or selling interest, potentially leading to significant price moves. Identifying Fake Liquidity Grabs: Fake liquidity grabs 🎭 are market manipulation techniques used to deceive traders. Market makers or large players might place large orders on the order book to give the illusion of significant interest at a specific price level. However, they often cancel these orders before they get executed, leading to sudden reversals in price. Trading Liquidity Sweeps: Monitor Order Flow: Keep an eye on order flow and trade volume to identify sudden surges in trading activity. Liquidity sweeps are often accompanied by spikes in volume. Identify Key Levels: Look for important support or resistance levels where liquidity sweeps are likely to occur. These levels can be based on technical analysis, such as previous highs or lows. Entry and Stop-loss: Enter a trade when you spot a liquidity sweep that confirms your bias. Set stop-loss orders to manage risk in case the market moves against you. Take Profits: Take profits when the market reacts as expected, but be prepared for quick price reversals. Liquidity sweeps can be followed by retracements. Trading Fake Liquidity Grabs: Be Cautious: Approach price moves driven by apparent liquidity grabs with caution. These moves can be short-lived. Confirm Price Action: Wait for confirmation of the direction after the fake liquidity grab. Look for signs that real market sentiment is driving the price. Risk Management: Place stop-loss orders to protect your capital in case the market reverses quickly. Avoid chasing the initial price move. Use Additional Indicators: Combine your analysis with other technical indicators or market sentiment tools to increase your confidence in your trading decisions. Conclusion: Trading liquidity sweeps and fake liquidity grabs can offer opportunities for profit, but they also come with risks. It's essential to have a clear strategy, strict risk management rules, and the ability to adapt to rapidly changing market conditions. As with any trading strategy, practice and experience will help refine your skills in identifying and capitalizing on these market dynamics. 🚀📈🌊
INDEX:BTCUSDEducation
by AlexWhale
🥶 FACT: Most traders quit year one. Hmm, but why? 🤔You all heard the statistic, "gambling is more profitable than trading - 13 out of 100 gamblers leave the casino with gains compared to 1 out of 100 traders". Yeah yeah. Nice story. Now tell us the real story. The market is not a casino. Don't compare. What about the thousands of traders making consistent gains? It's a FACT that most traders quit their trading "hobby" or "career" within their first year of trading. But what's ALSO a FACT is most traders: Don't take profits when they see them (keep holding for more). Go too heavy on a single trade. Go all in on a single trade. HODL for glory, even when they're super green on a trade. Are too bullish/ bearish and turn a blind eye to the other bias. Are over-speculating all the time (i.e. " NASDAQ:AMD 120 tomorrow. All in calls" Trade without a chart. Have no risk management. Don't follow their own rules. Have no trading strategy. One cannot state the first "fact" without stating the other; the real reason. Otherwise, that's a shallow statistic. That's like looking at a 15 min chart and not realizing that each candle is constructed of 1,000+ mini candles. Here's a 15 min NASDAQ:AMZN chart: Here's the same chart in 15 second candles: Zooming in to the chart gives you a clearer picture. Digging deep into the "quitting" traders' psychology, you'll get the answer. Also, I wouldn't say they quit. It's possible that the energy they were putting in wasn't paying off, and they didn't want to waste their time any further. Treat your trading like a job. Be strict. You see quick +20% profit? Take it. But you believe it's going higher? Still take it. Find another trade. Baby gains add up! Most traders who got burned on NYSE:AMC NYSE:GME , kept HODLing. This is coming from someone who bought NYSE:AMC at $2.13 pre-split in 2021 and sold around $25 and $70: ACHIEVING SUPER GAINS WILL RUIN YOUR MENTALITY! You will start treating the market like a casino. You will stop appreciating the smaller 20 to 40% gainers that you can do once per day or week. You will see yourself starting to go heavy because you "believe" that "this is the next banger". To avoid all this headache, build a strategy slowly over time, use the right tools to plan your trade, find a community to trade with, use proven strategies (i.e. support/ res, supply/ demand, patterns), go light in your first 1,000 trades, and so on. Happy to help if you have any questions below. Follow for more insight and for live trade swing & day-trade ideas! Good luck trading! Trade safe and don't go all in. Baby gains add up.
CME_MINI:ES1!Education
by kingdips
1
The JXY: Will It Continue to Rise?My first analysis about the JXY. It will be done periodically from now on to keep a fresh perspective over one of the most important currencies in the world. The Japanese Currency Index (JXY) is a stock market index that measures the performance of the Japanese yen against a basket of six other major currencies: the US dollar, the euro, the British pound, the Swiss franc, the Canadian dollar, and the Australian dollar. The JXY is calculated by weighting the currencies in the basket according to their relative importance to the Japanese economy. Technical Analysis On the 30-minute chart, the JXY is currently trading around its 50-day moving average (MA) and its 200-day MA. This suggests that the index will most likely reverse the trend on this smaller timeframe soon. However, the JXY is also facing resistance at its 50-day MA. If the JXY cannot break through this resistance level, it could fall back to its 200-day MA. On the 4-hour chart, the JXY is also trading around its 50-day MA and its 200-day MA. However, the JXY is also facing resistance at its 50-day MA. If the JXY cannot break through this resistance level, it could fall back to its 200-day MA. Fundamental Analysis The Japanese economy is the third-largest in the world, but it has been struggling in recent years due to a number of factors, including an aging population and a declining birth rate. The Japanese government has implemented a number of policies to stimulate the economy, but these have not been successful in boosting growth. The Bank of Japan has also taken steps to support the economy by keeping interest rates low. However, this has led to a weakening of the Japanese yen. The JXY has fallen by over 20% against the US dollar in the past year. I hope this post is helpful. This analysis represents my thoughts at the date it is posted. This analysis does not represent professional and/or financial advice. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content found on this profile before making any decisions based on such information.
TVC:JXYShort
by YExplore
Guide: SMA and RSI for Trend ReversalsWelcome, traders! In this comprehensive guide, we'll explore a long-term trading strategy that leverages two powerful technical indicators: the Simple Moving Average (SMA) and the Relative Strength Index (RSI). By the end, you'll have a solid understanding of how to use these tools to identify trend reversals and make informed trading decisions with a focus on the bigger picture. 📉📈 Educational Objectives: Understand the concept of long-term trading and its benefits. Learn how to use the Simple Moving Average (SMA) to identify trends. Master the Relative Strength Index (RSI) for spotting overbought and oversold conditions. Combine SMA and RSI for a comprehensive long-term trading strategy. Recognize key points of trend reversal for well-timed entries. 📌 Part 1: The Foundation of Long-Term Trading Long-term trading focuses on capturing significant price movements over extended periods. It requires patience, discipline, and the ability to ignore short-term noise. 📌 Part 2: Understanding the Simple Moving Average (SMA) SMA is a trend-following indicator that smooths price data to reveal the underlying trend. The 200-day SMA is particularly useful for long-term analysis, indicating the overall trend direction. An upward-sloping 200-day SMA suggests a bullish trend, while a downward slope indicates a bearish trend. 📌 Part 3: Mastering the Relative Strength Index (RSI) RSI measures the speed and change of price movements, helping identify overbought and oversold conditions. An RSI above 70 suggests overbought conditions and a potential trend reversal. An RSI below 30 indicates oversold conditions, potentially signaling a trend reversal to the upside. 📌 Part 4: Combining SMA and RSI for Long-Term Trading Look for confluence: Confirm trend reversals when the 200-day SMA aligns with RSI overbought or oversold signals. A bearish signal could be an overbought RSI crossing below the 200-day SMA, signaling a potential downtrend. A bullish signal might be an oversold RSI crossing above the 200-day SMA, suggesting a potential uptrend. 📌 Part 5: Identifying Points of Trend Reversal Key points to recognize trend reversals include: Divergence: When the price makes new highs or lows but RSI doesn't, it signals a potential reversal. Crossovers: Pay attention to the 200-day SMA crossing above or below the price chart. Volume: Increasing trading volume often accompanies trend reversals. 🚀 Conclusion: Long-term trading can be highly rewarding, but it requires a deep understanding of market trends and the right tools. By combining the SMA and RSI indicators, you gain a powerful strategy for identifying trend reversals and making well-informed trades with long-term potential. Remember that no strategy is infallible, so always employ proper risk management techniques and continuously refine your trading skills. ❗See related ideas below❗ Like, share, and leave your thoughts in the comments! Your engagement fuels our crypto discussions. 💚🚀💚
INDEX:BTCUSDEducation
by Yaroslav_Krasko
1
XAUUSD: Investors' Post-Fed Outlook?On XAUUSD, we have a bullish setup as the market is gaining strength in anticipation of a new monetary tightening by the Fed. I noticed a breakout of a significant swing high, leading to the creation of a demand zone at the level of 1920-1930. I'll await a bounce within this range, where I'll assess the presence of at least one structural change at the 15-minute timeframe, which could prompt me to enter a long position targeting the supply area at 1940-1945 for a short-term trade. For a long-term trade, I might seek the support/resistance level at 1950-1960. Let me know what you think. Greetings from Nicola.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
1
Is EUR/USD ready for the Fed?On the EUR/USD pair, we have a bullish setup in anticipation of this Wednesday's Fed meeting. The H4 bias is long after a breakout in the afternoon at the level of 1.0690. My objective will be to look for a short opportunity with a slight bounce in the 1.067 area where we have a buying zone, and subsequently seek a long opportunity with a target of 1.0750 where we have a supply zone. Let me know what you think. Happy trading to everyone.
Long
by Forex48_TradingAcademy
4
Will GBP/USD manage to rise?On GBP/USD, we have a price that is within a buying range, between the levels 1.2340 and 1.24. Currently, my objective is to look for a structural breakout on M15 during the London session at opening and closing, and during the New York opening. The price could reach the selling range at the 0.38% Fibonacci level at 1.2435 and then test the second selling range at level 1.25, which is the 0.5% Fibonacci level. Let me know what you think. Happy trading to everyone, from Nicola.
Long
by Forex48_TradingAcademy
1
EUR/USD: Will the FED Surprise by Raising Rates?On EUR/USD, we have a bearish setup in anticipation of the FED meeting this week, specifically regarding the interest rate decision. The market has broken seven swing lows from the 1.07 - 1.0670 level, demonstrating its explosive strength. However, I continue to emphasize this simple concept: a break of a swing low signifies a show of strength, but at the same time, it's an excellent opportunity to look for long positions, essentially at the lows. In this case, on Monday during the London session, I will look for a falling wedge pattern at the 15-minute chart with a possible entry at a Falling Wedge Breakout (FVG) and a potential target at the 0.62% Fibonacci retracement level, which is at 1.071. Let me know what you think. Greetings and happy trading to everyone, from Nicola.
Long
by Forex48_TradingAcademy
5
Role of Risk Management in Trading and How to calculate riskThe Foundations of Solid Risk Management 🛡️📊: Risk management in trading involves a series of strategic decisions aimed at minimizing potential losses. It revolves around understanding the risks associated with each trade and employing measures to mitigate them. Whether you're a novice or an experienced trader, risk management remains a non-negotiable aspect of sustainable trading. 👍 Pros of Effective Risk Management: Shields your trading capital from significant losses. Provides a structured framework for decision-making. Fosters discipline and rationality in the face of market fluctuations. 👎 Cons of Neglecting Risk Management: Exposes your portfolio to undue risks that can lead to substantial losses. Increases the likelihood of emotional decision-making driven by fear and greed. The Emotional and Financial Benefits of Risk Management 🧘‍♂️❤️: Effective risk management isn't just about preserving your financial resources; it's also about maintaining emotional equilibrium. When traders implement robust risk management strategies, they reduce the psychological stress and anxiety that often accompany trading. This enables traders to make more logical decisions, avoiding impulsive actions triggered by heightened emotions. Calculating Position Size and Setting Stop Losses 📈🛑: Two key elements of risk management are calculating the appropriate position size and setting stop-loss levels. These practices are integral to controlling the amount of capital at risk in each trade. By determining the position size based on a percentage of your capital and setting stop-loss orders to limit potential losses, traders ensure that no single trade can significantly erode their account balance. Comparing Potential Losses and Gains for Different Risk Management Scenarios 💹📉: Let's explore how the 2% rule affects potential outcomes for different risk management scenarios: Risking 2% of a $1000 Deposit: Maximum Risk per Trade: $20 (2% of $1000) Potential Loss: Limited to $20 per trade Potential Gain: Can vary, but the focus is on maintaining risk control Risking 5% of a $1000 Deposit: Maximum Risk per Trade: $50 (5% of $1000) Potential Loss: Larger at $50 per trade Potential Gain: Higher, but the risk of significant losses is elevated Risking 10% of a $1000 Deposit: Maximum Risk per Trade: $100 (10% of $1000) Potential Loss: Considerably larger at $100 per trade Potential Gain: Higher compared to 2% risk, but risk of capital depletion is significant How to calculate your position size ? You can easily calculate risk directly in TradingView using the built-in calculator! Choose the direction of your position - long or short. The next step is to set up according to your deposit and risk per trade. After that, simply drag it onto the chart in line with your stop loss and take profit (more on this in the upcoming article), and it will automatically calculate the position size for you!
Education
by Yaroslav_Krasko
11
GBP/USD Will Today be the Big Day?On GBP/USD, we have identified a bearish setup following the Eurozone data and the data on the dollar. During this morning, the market began to change its structure on a 15-minute timeframe, creating an important entry zone at the level of 1.2412. This trade will be confirmed today during the London ink hour, that is after the release of US data, which could affect this idea in case of significant results for the dollar. Naturally, looking at the chart, it is noticeable that the price has broken several swing lows, thus creating two selling zones: one at the level of 1.2480 and another at the level of 1.2550. The first one will be used as a target in case of a long entry. Let me know what you think. Greetings and happy trading to all.
Long
by Forex48_TradingAcademy
1
Battle-tested through the ups and downs of Etherium historyA trading strategy that's been battle-tested through the ups and downs of Eth's history. This strategy doesn't blink in the face of market chaos or get swayed by emotions. It's a calculated game plan that knows when to step in and when to step back. Compare that to emotional investing, where fear and greed call the shots. Imagine making decisions when you're on an emotional rollercoaster—buying high in excitement and selling low in panic. That's a recipe for disaster. A backtested risk-managed strategy, though, is like a cool-headed coach that sticks to the game plan no matter what. It's about discipline, rules, and consistency. So, do you want to ride the emotional wave or play the long game with a strategy that has been consistently profitable year on year since 2016 (start of Eth - substantiated by backtest data). Average annual net profit (substantiated by the backtest) 196% (No Leverage) & 661% (3x leverage) This year (Jan 2023 to Sep/15th/2023) has already generated 45.21% (no leverage) 144.93% (3x leverage) in net profit. This strategy does Not re-paint, No-look ahead bias. and 100% forward tested. Tradingview has a default caution for strategies that use the multitimeframes data. This does not apply to this strategy as all calculations are based on closed bars. So how does it work? Postions are entered based on RSI Divergence on Higher Timeframes and confirmed by the ATR. Stop Loss and Trailing ATR-based Take Profit:The strategy incorporates a risk management mechanism with a built-in stop loss set at 8%. Additionally, it employs a trailing take profit mechanism based on ATR. This means that as the trade moves in the desired direction, the take profit level adjusts itself based on the current volatility, allowing for gains to be secured as the trend progresses. SMI-based Re-entry after Stop-out: Stochastic Momentum Index (SMI) is used as a re-entry signal if the trade is stopped out (i.e., the stop loss is triggered). This re-entry is contingent on higher timeframes and ATR still supporting the original trend, indicating that the initial stop-out may have been a false signal. Portfolio Reinvestment for Compound Growth: The strategy allocates 95% of the portfolio's capital to each trade. This approach maximizes the potential for compound growth, as a significant portion of the available capital is reinvested in each trade, provided that risk management rules are satisfied. This approach is appropriate for this strategy as strict risk management is applied and the winrate is almost 50% Accounting for Exchange Fees: Exchange fees, set at 0.1%, are factored into the strategy's calculations. This ensures that trading decisions take into account the cost of executing trades on the exchange. Avoiding Lookahead Bias and Repainting: The strategy is designed to prevent lookahead bias by making calculations based only on closed bars of price data. Lookahead bias occurs when future data is used to make past trading decisions, potentially leading to unrealistic expectations.
BITFINEX:ETHUSDEducation
by TradingAlgorithms
Mechanical Consistency Weekly Review 8; +8% Return.04 Sep to 08 Sep 2023 TL;DR Total Profit of approximately $800 (around +800%) for the 1st week of September 2023. Total 8 trades, 6 wins & 2 loss. 1-hour Timeframe, Oanda, XAUUSD(Gold), $10,000 Capital, $200/ 2% per trade. Mechanical Consistency Trading Strategy; Purely rule-based strategy, zero guesswork, zero analysis. Disclaimer: I am not a financial advisor. The content for this article is purely for educational/research purposes only and is merely based on my personal opinions. Please note: There will be affiliate links in this article. But it will only benefit both of us. If you do not wish to participate under my affiliate links, please feel free to Google them separately. Cheers! I'm truly thankful for yet another successful week employing my mechanical consistency strategy. My retracement trades are consistently delivering the expected results, while any losses I've incurred can be attributed solely to my mean reversion trades on Tuesday. Let's review every day. Monday (04 September 2023) 1x Win Trade Daily bias: Downtrend I was only able to trigger a retracement trade on Monday, but it turned out to be a highly profitable one. Despite the slowing down at night, I was fortunate that the price continued its downtrend the following day, reaching my desired profit level. Tuesday (05 September 2023) 2x Lose trades Daily bias: Downtrend The only losing days I've had this week were both due to my mean reversion trades. These trades carry significant risk since they go against the prevailing trend, relying on a rebound to reach my 21 SMA+EMA level. Unfortunately, the downward trend proved to be stronger, resulting in losses. Wednesday (06 September 2023) 1x Partial win & 1x full win trades Daily bias: Downtrend Contrastingly, I managed to secure a profit with my two mean reversion trades on Wednesday. Fortunately, the price did rebound successfully in both cases, albeit with the first trade yielding a partial profit and the second trade lasting until Friday morning. Nonetheless, I'm quite satisfied with the overall outcome. Thursday (07 September 2023) 0x trade Daily bias: Downtrend There were no trades on Thursday as my mechanical consistency strategy did not trigger any of my limit orders. It was yet another stress-free day for me. Friday (08 September 2023) 1x partial win 2x solid win trades Daily bias: Uptrend Friday turned out to be quite a rollercoaster day for me, with three consecutive trades triggering throughout the day. Fortunately, all of these trades ended in profit. The first mean reversion trade yielded a partial win, the second mean reversion trade was an immediate victory with zero drawdowns, and the third retracement trade delivered a profit by Monday morning. Endnote While I encountered some losses with my mean reversion trades due to their inherent risk of going against the trend, I also enjoyed significant profits from retracement and mean reversion trades that went as planned. Despite the fluctuations, my mechanical consistency strategy helped maintain a stress-free approach to trading, and I ended the week on a positive note, with successful trades on Friday. This experience reinforces the importance of a well-rounded trading strategy and the need to adapt to market conditions while remaining disciplined and focused on long-term goals. Learn My Strategy For Free As a full-time working individual, I do not have the time to constantly monitor the charts and look for the "perfect" trading opportunity. This is why I adopted the mechanical trading strategy to earn extra money. This approach eliminates the need for extensive technical or fundamental analysis and removes any guesswork. It is a 100% Mechanical rule-based strategy, ensuring disciplined and consistent decision-making. If you want to learn my strategy, please visit my blogging site, link in bio. Thank you!
OANDA:XAUUSDEducation
by Barry_Games_Trading