TradingView Masterclass: Paper TradingIn this Masterclass, you’ll learn how to use our official paper trading tool. Paper trading gives trades the capability to test their trading skills in a simulated environment without risking real money. For all the new traders out there, you’ll want to make paper trading your best friend. Why? Have all the fun you want, practice endlessly, and never lose a dime.
Reminder: With Black Friday nearing (seriously… it’s coming soon), now is the time to master one of our most important tools. You’ll be ready to go the second you activate your upgraded account.
To get started, follow the steps below:
Step 1 - Click the ‘Trading Panel’ button located at the bottom of the chart.
Step 2 - Once you click the ‘Trading Panel’ button, a list of brokers in your region will appear, but also, at the very top, a Paper Trading account powered by yours truly, TradingView.
Step 3 - Click Paper Trading and you’ll now start the process of opening your free, simulated trading environment, entirely powered by us.
You made it! Time to celebrate! 🕺💃
Alright, let’s go a little deeper and talk about the buttons you’ll want to understand now that you’ve got your Paper Trading account opened.
While still having the Trading Panel open, click the button that says “Trade” and an order slip will appear. It’ll look like this:
As you get started, here are some tips to keep in mind:
Take Paper Trading seriously. Work Paper Trading as if it were a real account:
Record your trades, the reasons, the results obtained and the lessons learned.
Explore different approaches like intraday trading or swing trading.
Maintain emotional discipline, your trading strategy and risk management.
Practice, practice, practice - that’s what this is all about, getting better at trading through practice.
It gets better, because there are multiple ways to trade and customize your paper trading experience. Open the chart settings menu or right click on the chart, and you can add specific trading features to the chart as needed.
In-fact, we’ll explain all of the features available to you in the chart settings.
🟥🟦 Buy/Sell buttons :
When these are turned on, you’ll see a Buy and Sell button at the top right of the chart. When it comes to buying and selling, there are three primary order types:
Market (executed at the current market price),
Limit (executed at a defined specific value), and
Stop (executed when the price falls below a certain level).
👆 Instant Orders placement :
This option allows you to open positions at the market price by simply clicking the buy and sell buttons. You can choose the quantity by clicking on the number below the spread.
⏰ Play Sound for executions :
You can enable this option to receive an audible notification when a trade is executed, with eight different tones to choose from.
📲 Notifications :
Receive notifications for All events or Rejection orders only.
Tip : You can open the order panel by using the Shift + T shortcut or by right-clicking on a chart, then selectings Trade > Create a new order.
👁🗨 Positions :
Uncheck this box if you don’t want to see your active trading positions.
🔺🔻 Profit & loss :
This option allows you to view the profit and loss changes in your trades, which can displayed in both ticks and percentages.
🔃 Reverse button :
When enabled, a button is added to your active trading positions that allows you to reverse your trade.
👁 Orders :
See your current open unexecuted orders by checking this box.
🔺🔻👁 Brackets profit & loss :
It functions similarly to the Profit & Loss option, but for pending orders.
⏪ Executions :
It displays the past executed orders on the chart.
Execution labels :
Enable this option to view specific information about past execution orders, including trade direction, quantity, and executed price.
Extended price line for positions & orders :
It creates an extended horizontal line for your active trades.
⬅⬆➡ Orders & positions alignment :
You can move the alignment of your orders to Left, Center and Right in your charts.
🖥 Orders, Executions and Positions on screenshots :
Check this box if you want to download screenshots (shortcut: Ctrl + Alt + S) with active and pending orders.
Thanks for reading and we hope this tutorial helps you get started! We look forward to reading your feedback.
- TradingView Team
TIPS
HINDUNILVR - Elliott Wave CountHINDUNILVR - Elliott Wave Count
HINDUNILVR - the market seems to be forming a triangle pattern...
Please exercise caution when trading as this information is for educational purposes only.
plan your trade accordingly.
NSE:HINDUNILVR NSE:HINDUNILVR1! BSE:HINDUNILVR
Trading &/or GamblingThe difference between trading and gambling.
This article will shine a light on the most frequent mistakes that traders make. These mistakes blur the thin line between trading and gambling.
Many people have spoken on this topic, but we truly believe that it is still not sufficient, and traders should be better educated on how to avoid gambling behaviour and emotional outbursts. When we speak about trading versus gambling, we define gambling as the act of making irrational, emotional and quick decisions.
Most of the time, these decisions are based on greed, and sometimes fear of the trader. Let’s dive into the exact problems we have personally experienced thousands of times, and want to help others avoid.
1 ♠ Bad Money Management
This is something that everyone has heard at least once, but seems to naively ignore in the hopes that it is not that important .
It is the most important . When a trader enters trades, it is exceptionally alluring to enter with all of their money, or close to all of it. In gambling terms, that is going “All in”, or “All or nothing”.
As a rule of thumb, both traders and gamblers should only place or bet money that they can afford to lose.
Thankfully, at least in trading one can limit their loss for that specific trade, by placing a stop loss or exiting before total liquidation. In Poker, you can’t fold when you are “All in” and take a portion of your money back. However, that does not mean entering trades with full capital, even with a stop-loss, is going to give you exponential returns and feed your greed for profits.
Traders should enter positions with a small amount of their full capital, to limit the damage from losses. Yes, you also limit the possibility that you win a few trades in a row with all of your money and… There goes the greed we mentioned.
The “globally perfect” percent of equity you need to enter trades to reach that balance between being too cautious and too greedy does not exist. There are methods, like the Kelly Criterion, as described in our previous Idea (see related ideas below), that help you optimize your money management.
Always ask yourself, “How much can I afford to lose?”. Aim for a balanced approach. This way you can position yourself within the market for a long and a good time, not just for a few lucky wins. Greedy money management, or lack thereof, ends in liquidations and heartbreak.
2 ♣ The Use of Leverage
Anyone who has tried using leverage, knows how easy it is to lose your position (or full) capital in seconds. Using leverage is mainly sold to retail traders as a tool for them to loan money from the exchange or broker and bet with it. It is extremely profitable for institutions, since it multiplies the fees you pay them ten to one hundred-fold.
In our opinion, leverage isn’t something that should be entirely avoided. However, it should be limited as much as possible.
We cannot deny that using 1-5x leverage can be beneficial for people with small accounts and a thirst for growth, however as the leverage grows, the more of a gambler you become.
We often see people share profits made using 20+ times leverage. Some even use ridiculous leverages within the range of 50-125x.
If you are doing that, do you truly trust your entry so much that you believe the market won’t move 1% against your decision and liquidate you immediately?
At this point, the gambling aspect should be evident, and it goes without saying that you should not touch this “125x Golden Apple”, like Eve in the Garden of Eden. Especially when you see a snake-exchange promote it.
If you use a low amount of leverage, and grow your account to the point where you don’t need it for your personal goals in terms of monetary profit. You should consider stopping the use of it, and at least know you’ll be able to sleep at night.
3 ♥ Always Being In A Position
Always being either long or short leads to addiction and becomes gambling. While we don’t have scientific proof of that, we can give you our own experience as an example. To be a profitable trader, you do not need to always be in a position, or chase every single move on the market.
You need to develop the ability just to sit back and watch, analyse and make conscious decisions. Let the bad opportunities trick someone else, while you patiently wait for all your pre-defined conditions to give you a real signal.
When you think of trading, remember that the market has a trend the minority (around 20-30%) of the time. If you are always in a position, this means that 70-80% of the time you are hoping that something will happen in your favour. That, by definition, is gambling.
Another aspect, that we have experienced a lot, is that while you remain in a position, especially if you have used leverage, you are constantly paying your exchange fees. You can be in a short position for a week and pay daily fees which only damage your equity, and therefore margin ratio. So why not just sit back, be patient and define some concrete rules for entering and exiting?
Avoid risky situations, and let the market bring the profits whenever it decides to.
4 ♦ Chasing Huge Profits
Hold your horses, Warren Buffett. Through blood, sweat and tears, we can promise you that you cannot seriously expect to make 100% every month, no matter what magical backtesting or statistics you are calculating your future fortune on.
Moreover, you will realise that consistently making 2-5% a month is an excellent career for a trader.
Yes, the markets can be good friends for a while, you may stumble into a bull-run and start making double-digit profits from a trade from time to time. Double-digit losses will also follow if you lose your sight in a cloud of euphoria and greed.
Many times, you can follow the “profit is profit” principle, and exit at a small win if the risk of loss is increasing.
5 ♠ Being Sentimental Towards Given Assets
You may have a fondness for Bitcoin and Tesla, and we understand that because we too have our favourites. Perhaps you’re deeply attached to the vision, community and purpose of certain projects. On the flip side, there may be projects that you completely despise and hope their prices plummet to zero.
What you personally like and dislike, should not interfere with your work as a trader. Introducing such strong emotions into your trading will lead you into a loop of irrational decisions. You may find yourself asking, “Why isn’t this price going parabolic with how good the project is?”.
This sounds, from personal experience, quite similar to sitting at a Roulette table and asking: “Why does it keep landing on red when I’ve been constantly betting black? It has to change any moment now”.
First and foremost, you may be completely wrong, but most importantly – it could go parabolic, but trying to predict the exact time or expecting it to happen immediately and placing your “bet” on that is again, gambling.
Don’t get attached to projects when trading. If you are an investor who just wants to hold their shares in an awesome company, or cryptocurrency, that is perfectly fine, hold them as much as you want.
The key is to make an important distinction between trading and investing, and to base your strategy on the hand that the market provides you with.
6 ♣ Putting Your Eggs In One Basket
We all have heard of diversification, but how you approach it is crucial. A trader should always have their capital spread between at least a few assets. Furthermore, the trading strategy for each asset must be distinct, or in other words – they should not rely on the same entry and exit conditions for different assets.
The markets behave differently for each asset, and you cannot be profitable with some magical indicator or strategy with a “one-size-fits-all” style. Divide your trades into different pairs and asset classes, and study each market individually to properly diversify. Manage the equity you put into each trade carefully!
Conclusion
The takeaway we want you as a reader to have from this article is that trading without consciously controlling your emotions inevitably leads to great loss and most importantly, a lot of stress.
We hate stress. Trading and life in general is exponentially harder when you are under stress. Control your risk, sleep easy, and let the market bring you profits.
Reaching this level of Zen will not be easy, but it is inevitable. Be happy when you make a profit, no matter how small or big. A lot of small profits and proper money management complete the vision you have of a successful business. Ultimately, trading is just that – work, not gambling or a pastime activity. Treat it as work and always remember to never rely on luck.
The advice we’ve included here is written by a few experienced gamblers… Oops, I meant traders 😉.
We hope that some of the lessons we’ve had to painstakingly learn through trial and error can now be shared with those who are interested. Of course, none of this constitutes investment advice. It’s merely a friendly heads-up.
TradingView Masterclass: How To Use Drawing ToolsWe continue with our Masterclass series, which we created to teach people how to get started with charting, research, and analysis. In this lesson, you’ll learn all about the Drawing Panel located on the left side of your chart. Let’s get started!
Drawing tools 🎨
There are eight categories in the drawing tool section: Cursors, Trend line tools, Fibonacci tools, Patterns, Forecasting and measurement tools, Geometric shapes, Annotation tools, and Icons. In addition, just below these categories, there are handy features that augment and optimize your research in specific situations, such as zooming in/out, measuring, and a magnet tool for selecting specific price points. Let’s analyze each of these in detail:
- Cursors: Located at the very top corner of the drawing tool section, Cursors gives you the capability to change your mouse as you move around the chart. For example, we have other variations such as the dot cursor or the simplest of all, the arrow cursor. Finally, we have an eraser tool to remove objects from the chart by clicking on them.
- Trend lines: Trend lines can be used to identify and visualize the direction of a price trend, and are sometimes used for drawing support or resistance lines as well. In this section, you can also find trend channels and pitchforks.
- Gann and Fibonacci tools: These advanced tools are often used by technical analysts and quants to locate retracements, pullbacks, measured moves, and advanced price sequences. The Fibonacci tools include retracement, extension, fans, arcs, and more. The Gann tools include box, square, and fan.
- Patterns: In this section, you’ll find popular drawing tools for mapping our complex patterns that require several different points to be drawn such as Elliott waves, head and shoulders, and impulses.
- Forecasting and measurement tools: These invaluable tools are used to make projections either long or short, study specific stats such as time or price ranges, and also give you the capability to analyze volume with VWAP and volume profiles.
- Geometric shapes: These tools are where you can find the brush tool to freely draw on your chart, but it also goes deeper than that, as there are also important shapes whereby a trader can highlight important areas on the chart with a rectangle or arrow such as accumulation or historical rebound zones.
- Annotation tools: These can be used to write notes, reminders, prices, and journal entries. These are key tools for traders who want to track their progress over time and always have specific notes attached to the chart. It also includes the ability to insert X links and images from your computer.
- Icons: Need a little more color or character on your chart? This section gives you hundreds of emojis, icons, and stickers to add to your chart. Highlight an area, add more art to your chart or spice up your creativity.
Tip: Keyboard shortcuts 🔠
Did you know that you can use keyboard shortcuts for the most popular drawing tools? To find out the command, you need to open the drop-down menu of one of the 8 drawing tool categories and you will see the command on the right side of some tools. For example:
Alt + T = Trendline
Alt + F = Fib retracement
Alt + H = Horizontal line
Alt + V = Vertical line
Alt + I = Invert chart
Alt + W = Add current symbol to watchlist
If you're a Mac user, use ⌥ instead of Alt.
Measure and zoom 📏🔎
When you use the Measure tool (the ruler icon just below the 8 drawing tool category icons), you can see at a glance how much an asset has fallen or risen in numbers, percentages, bars and days. Combined with the Zoom tool (the magnifying glass with +/- icons), you can also focus on the most important areas of the chart. For both measuring and zooming, the procedure is the same: select the tool, click on the point where you want to start measuring or from where you want to zoom, and end with another click where you want to end. You can also use the "Shift" hotkey instead of the icon. To remove a measurement, simply click on the chart.
Magnet mode 🧲
Magnet mode is a wizard that helps you to bring the drawing tools closer to the nearest price bars that you hover over with the mouse. There are 2 modes: Weak magnet and Strong magnet. This tool allows traders to perfectly connect a drawing tool to a specific price point. The current values are OHLC, meaning when Magnet mode is turned on, all drawing tools will connect to the nearest open, high, low or close value. Want to draw support lines that always connect to a specific price? Use this tool.
Stay in drawing mode 🎨
If you are going to make several drawings on the chart at the same time, you may find it useful to activate this option (pencil + padlock icon), as it will allow you to make as many drawings as you want without deactivating the selected drawing tool. Remember that you must deactivate this option to return to normal mode.
Lock all drawing tools 🛑
Once the chart has been configured, if you do not want to make any further changes, you can lock everything that has been drawn with this option (padlock icon) so that you do not accidentally delete elements in the future.
Hide/Show drawings/indicators/positions & orders 👁🗨
This option allows you to toggle the visibility of the drawings, indicators, positions & orders or even all three to make comparisons with a blank chart. The keyboard shortcut is "Ctrl + Alt + H".
Drawing sync 🔄
This allows you to synchronize the drawings of the selected charts in the current layout or in all layouts (globally). You’ll surely want to test this feature as it’s perfect for those who perform multi-timeframe technical analysis and research across multiple charts or timeframes. For example, when this tool is turned on, if you draw on one chart, all of your drawings will appear on your other charts that have the same symbol.
Delete objects 🗑
With a single click, you can delete all drawings or indicators, or even both at the same time. There are also a few other options to remove specific things on your chart. Use this tool wisely and don’t accidentally delete everything!
Show favorite drawing tools toolbar ⭐
To set up the favorites toolbar, first, you must first go to one of the eight drawing categories and click on the gray star in one of the tools. When you click on it, it turns orange and the quick access toolbar for drawing tools is created. Once you have selected all your favorites, move the favorites toolbar around so that you can use it conveniently every time you want to draw something on the charts.
That’s a wrap! We hope you found this guide valuable. We'd love to hear about your favorite drawing tool, so please share your thoughts in the comments below. Additionally, if you have any feedback or suggestions, drop us a line.
- TradingView Team
📝 $USDJPY: Watch Potential Breakout and Bounce From Trendline👋 Full-time trader here. Posting out here free Forex analyses for you. Welcome to like, follow, & share. Thanks for your continued support. 👍
Scenario 1: Bullish Breakout
Trendline-bounce plays can be dangerous if you're new to trading. It's always good to wait for confirmation. In this case, an ideal scenario would be to bounce off the TL's third touch (now) and break into resistance for a confirmed breakout. If bulls come in here, they'll reclaim the resistance as support and continue higher. That's the ideal move. A safe trader would buy on break of resistance ONLY AFTER resistance becomes support. Here's a visual:
Scenario 2: Bearish Rejection
Many traders will like to think that this was a bearish rejection on the 4th touch of TL and they hopped in to short it. But wait. Not so fast - that can be a bearish fakeout. Need to be careful here and wait for proper confirmation, which would look something like this:
First, the blue trend gets broken. Next, the resistance holds up well for a violent breakdown. You can start shorting on a lower high after that.
You can play both sides, as long as you wait for confirmation.
Waiting for confirmation is difficult in a fast-paced trading environment. You want to jump on a trade, make some pips right away, and log off. It doesn't work like that. Patience pays off. Wait for confirmation and take safer trades.
Always check the shorter timeframe for the best entry and for trend confirmation!
If you see the wick of the last candle, it bounced PERFECTLY on the high wick from before. Also, what's great is that it confirmed a fakeout under the trendline on a strong, bullish, high-volume candle.
As I always tell my followers, go LIGHT on your trades. Baby gains add up! When you refine your strategy or hit 100 green trades, start making heavier trades.
Follow for more free insights. Posting a few times daily!
We’ve Paid Over $25,000 To Our Creators and CodersOur vibrant community is not only for professional investors, everyday traders and Pine scripters, it’s also home to content creators who share their wisdom, experiences, and market insights. We love our content creators and that’s why we recently launched our first-ever community content rewards program that gives $100 cash to anyone who is selected to Editors’ Picks and Pine Script Picks .
Since the launch of our program, we’ve given out over $25,000 .
Yep - $25,000 to our best creators, contributors, and coders.
Because of the success of this program, we’ve decided to keep it going, and invite more of you to join our social network whether it’s for meeting other traders, growing a brand or sharing insightful content about financial markets. If you still don’t know how to use our social network, we have plenty of resources available:
👉 Our official Help Center documentation about our content program and more
👉 Familiarize yourself with these guidelines for crafting exceptional ideas
👉 And, of course, don't forget to revisit our House Rules!
For those of you who want to learn more about earning $100, don’t fret, as we also wrote out a few simple steps below to get you started:
Open a chart.
Click the Publish button in the top right-hand corner or the Pine Editor button at the bottom of the chart.
Write your idea or code your script (if you’re up for a challenge), and when you’re ready, publish it to our network.
Our network values creativity, deep research, and insightful content. Here are some recent examples to showcase what our network values: example 1 , example 2 , and example 3 .
If you’re lucky enough to be selected to Editors’ Picks, you’ll earn $100 at the end of the month. There are no limitations to how many times you can publish per week. For example, say you’re selected five times in a month - that means you’ll earn $500.
Congratulations to our Editors Pick Authors so far.
April Editors Pick Authors
@akikostas @Be_Capy @Bullfighterr @ChristopherDownie @dchua1969 @DeGRAM @Donfelice @EXCAVO @financialflagship @FOREXN1 @inspirante @JimHuangChicago @Julien_Eche @LeviathanCapital @LuxAlgo @LuxAlgo @MacrodesiacTim @Nico.Muselle @norok @Options360 @Pandorra @peacefulLizard50262 @PropNotes @QuantVue @SolCollector @SPY_Master @SPYvsGME @SquishTrade @tbiktag @timwest @Tradersweekly @transparent-fx @Trendoscope @VasilyTrader @Vestinda @WayanEko @WillSebastian @WyckoffMode
May Editors Pick Authors
@allanster @bitdoctor @ChristopherDownie @CMT_Association @djmad @dudebruhwhoa @EXCAVO @FOREXN1 @G_Foster @Goontata84 @HoanGhetti @inspirante @Investroy @kaigouthro @konhow @LeafAlgo @Mayfair_Ventures @mintdotfinance @neo_karma @norok @Options360 @peacefulLizard50262 @QuantVue @RicardoSantos @RLinda @ShaquanLopez @ShawnMCR @SquishTrade @Steversteves @sudoMode @This_Guhy @Timonrosso @timwest @tradeforopp @transparent-fx @Trendoscope @veryfid @WalterMoon
June Editors Pick Authors
@AfnanTAjuddin @aneekaguptaWTE @Be_Capy @BitcoinMacro @ChristopherDownie @Crypto4light @DeGRAM @fikira @financialflagship @FOREXN1 @fract @HL-TradingFX @Investroy @JakeWuMarketResearch @JimHuangChicago @kaigouthro @KarimSubhieh @Keeleytwj @Lingrid @LuxAlgo @MarthaStokesCMT-TechniTrader @Mayfair_Ventures @mintdotfinance @Money_Dictators @moonypto @Moshkelgosha @Nemo_Confidat @NinjaTradingServices @norok @QuantVue @SquishTrade @Steversteves @Sublime_Trading @the_sunship @TheTradingParrot @This_Guhy @Thomas_Zito @Timonrosso @tradeforopp @Tradersweekly @Trendoscope @Vestinda
July Editors Pick Authors
@Akil_Stokes @Amphibiantrading @aneekaguptaWTE @ARESABI @BluetonaFX @ChristopherCarrollSmith @ChristopherDownie @CryptoCheck- @DeGRAM @financialflagship @FOREXN1 @Honestcowboy @Ingwina @Intetics @JimHuangChicago @KioseffTrading @LeafAlgo @LordWrymouth @LuxAlgo @Options360 @optionsswing @PrepForProfit @propfirmalec @PukaCharts @RodCasilli @SquishTrade @Steversteves @StewySongs @the_sunship @This_Guhy @Timonrosso @Trendoscope @VasilyTrader
August Editors Pick Authors
@Akil_Stokes @anthonycrudele @BluetonaFX @Celestial-Eye @fikira @financialflagship @Gentleman-Goat @JimHuangChicago @joerivdpol @KioseffTrading @LeafAlgo @LuxAlgo @MarcPMarkets @MarthaStokesCMT-TechniTrader @Mayfair_Ventures @MikeMM @mikezaccardi @mintdotfinance @Moshkelgosha @MUQWISHI @MXWLL-Capital-Trading @optionfarmers @PropNotes @PukaCharts @RicardoSantos @rossgivens @sabricat @Steversteves @The_STA @timwest @Tradersweekly @tradingwithanthony @Trendoscope @Vestinda @Victoredbr @WillSebastian @without_worries @WyckoffMode
September Editors Pick Authors
@Akil_Stokes @Algo_Alert @algotraderdev @anthonycrudele @ATradeSniper @basictradingtv @blackcat1402 @BradMatheny @bryandowningqln @CME_Group @CMT_Association @Crypto4light @DeGRAM @ImmortalFreedom @Investroy @jason5480 @KioseffTrading @konhow @LeviathanCapital @Madrid @mintdotfinance @MoneyMantraCha @Moshkelgosha @Paul_Varcoe @PeterLBrandt @PropNotes @PukaCharts @sofex @SpyMasterTrades @Steversteves @stocktechbot @the_sunship @ThinkLogicAI @This_Guhy @timwest @TradeAndMeApp @Trendoscope @VasilyTrader @Vestinda @without_worries @Yaroslav_Krasko
One final note: If you think we’re missing your ideas or scripts, please drop a link to your work in the comments section below. Our team is always looking to meet new community members and read the outstanding content being created.
We look forward to seeing your content!
- Team TradingView
📈 Charting Lesson: What do I even look for in a chart?!Full-time trader here. Sharing some knowledge for free . If this helps you, show some love: follow me for more and like this idea. 👍
Why do I need a chart anyway?
First, we need to convince you of why you need a chart. No problem. Let's say you're a fundamental analysis investor. The stock has to make sense. The stock has to last forever. It needs to be a growth stock. Let's say... NASDAQ:AAPL NASDAQ:GOOG NASDAQ:NVDA NASDAQ:TSLA is a good example over the last few years. Now that you found a good candidate, when are you going to buy? At an all-time high? At an all-time low? One share a day? One share a week? No. Buying a stock without looking at the chart is like driving with a blindfold. Don't do it.
Pull up a chart.
Observe past price action.
Try to find a trend.
Plan your entry.
Do this even if you're going to hold for 20 years.
When I pull up a chart, what do I look for? I just see a bunch of lines.
Let's first make sure you are looking at the correct view. On the top left corner of your screen, you'll see your user icon. Next to it is the ticker. Next to it is the interval. Next to THAT is the chart type. Make sure you select "CANDLES". Not "hollow candles". Here's how it should look:
Mine may look a bit different because I changed my theme. But the candles is what we care about.
Now the juicy part.
Support and Resistance are Key Reversal Levels.
When you open a chart, the first thing you want to do is look for areas where the price has reached in the past and reversed or got rejected or bounced. For example, every time SPY reached 443.37 in the chart above, it reversed. Let's call this a, "key level".
If the price is ABOVE that key level, the line is called SUPPORT.
If the price is BELOW that key level, the line is called RESISTANCE.
Using the horizontal line tool, make sure you have these key support and resistance levels on your chart. Try to ONLY buy near support and sell near resistance.
If the stock is choppy, do your best. If you can't, skip it and go to another stock. There's thousands!
Stocks, Currencies, and Cryptos Move in Trends. Up or Down.
Next, try to find a "trend". A trend is something where if you connect the dots, the price jumps right from that straight line.
Pull out your trendline tool and try to connect some dots. Don't go through any candle bodies. Going through wicks is okay. It's actually recommended.
Three touches are required to make a valid trendline. If you see only TWO touches? Is the price going TOWARDS the trendline if you were to extend it? There's a good chance it's going to head towards that TL and bounce! Good job. You found a good trade potential.
Identify Reversal or Continuation Patterns.
Look for known patterns. In the example above, there is a "head and shoulders" pattern. This is a bearish reversal pattern.
Know that not all patterns will come true.
It's good to know the overall signal the market is giving.
If every trader sees it, it's likely not going to happen.
In the above example, a looming H/S pattern is scary given already bad economic conditions and recession/ inflation worries. In this case, the market may be trying to tell you something.
Understand that these patterns are not just nice-looking drawings on a chart. They work because they display some sort of buyer/ seller psychology.
I will post more examples of known patterns on my TradingView profile soon. Be sure to follow if you want to learn more.
If you benefitted from this, you are welcome to follow me, comment any questions, or share this with your friends. Good knowledge should be free. I'll post more insight soon. Thank you for reading and for your continued support. 👍
How to survive your first 3 months trading.You may not believe this, but it is very difficult to trade the markets. Here is a statistic to back it up:
90% of new traders lose 90% of their stake in the first 90 days.
This is well known to the brokers, so they will do almost anything to get you to sign up, so they can get your money from you. Mostly they don't even send your orders to the market. They know you are very likely to lose, so they often just take the other side of your trade!
I am not going to bang on about this, just take it as fact.
So, how to survive:
Use a demo account for 2 months at least , before risking your own money. No. A week or two is not enough, it proves nothing .
Use a stop loss every time . If you don't have time to place the stop loss order at the same time as you place the order, it will be because you are rushing into a trade without thinking hard enough. You need to be calm and consider each trade properly. The stop loss level defines the quantity you trade, see the next point.
Only risk 1% of your balance on each trade. Even great traders can lose 10 trades in a row (it's inevitable, statistics mate). If you risk 10% per trade as a new trader, you are NOT going to survive, period. Set your stop-loss order accordingly. In FX, use a lot size calculator if you need to, example here:
Keep a JOURNAL . Write down your reasons for each trade, calculate the risk/reward ratio (known as R). Write down the result, win or lose, write down how you felt when you placed the trade. Even write down when you don't take a particular trade.
DISCIPLINE AND PATIENCE ARE HARD TO LEARN BUT YOU MUST LEARN THEM
I have written down many other tips that will help, see my profile, but these are the ones that can keep you alive long enough to learn. Don't expect to make money at first, even if your demo time made money.
If 1% sounds too small, then think about this:
If you make 5% a month, your annual rate of return will be almost 80%. How many hedge funds can say that?
🥶 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.
🤔 Full chart analysis on GBPUSD and trade idea review.Full-time trader here. Welcome to follow + like for more insights.
Understanding the charts and price action can help you in your next trade. Posted this chart below on September 11th, 2AM EST. But it got taken down because I accidentally forgot my watermark on there. My mistake.
imgur.com
Below was my explanation as well:
"You can see where shorts entered a few times at the retests of trendlines. The first green TL was a mini indication of rejection, then this turned into a steeper TL (blue).
Bulls have to regain control of the resistance @ 1.25332. That would be my ideal entry."
imgur.com
Now, a week later we can review what happened.
The price moved up above 1.25332 as expected. But it didn't stay there. It produced what's called a "fakeout", and right back down under. That's when a trader usually looks for a short on retest of 1.25332.
You can see it approached again, enabling entry for a short.
On that short, a potential of +123 pips was achievable, assuming you took profits at support and weren't greedy.
If this helped you in any way, please follow and like to show your support. Thank you!
FX:GBPUSD
TradingView Masterclass: How To Use The Top ToolbarIn this guide, you’ll learn about all the different tools that are available to you on the chart. Specifically, we’ll be looking at the toolbars that are located at the top, bottom, left and right of the chart:
To summarize the chart above, the breakdown looks like this:
Top toolbar: Chart tools
Left-side toolbar: Drawing tools
Right-side toolbar: Community tools
Bottom toolbar: Advanced tools
Now, let’s dive into each one starting with the top toolbar where you’ll find many of the most important chart tools for all your research needs. Keep in mind that we’ve ordered each item below as if we are moving from the furthest point at the top left to the furthest point to the top right. Let’s begin!
Symbol Search (Keyboard shortcut: type the ticker)
Open the symbol search at the top left-hand corner to access over 100,000 global assets across equities, forex, crypto, futures, and more. You can find them by their ticker (e.g., type NVDA for NVIDIA Corporation) or by their description names (e.g., type the name Apple to find AAPL stock). It’s also possible to find your favorite symbols with partial searches, that is, to write part of the ticker or description name and then select the corresponding asset in the search results. If you want to filter by asset type, you can select one of the following: Stocks, Funds, Futures, Forex, Crypto, Indices, Bonds and Economy (economic indicators).
Time Intervals (Keyboard shortcut: press ,)
Select the time interval for the chart. For instance, say you’re looking at a candlestick chart and you choose a daily chart. That means each trading day will be represented by 1 candle. The most common time intervals are: 1m, 5m, 30m (intraday setups) 1h, 4h (swing trading setups) and 1D, 1W and 1M (long-term trading setups). Traders can create custom intervals as well by clicking on the Time Interval arrow and then selecting the specific parameters needed. Don’t forget to add it to your favorites if you want it to be featured in the Quick Access toolbar.
Chart types
We have more than 15 chart types available to analyze all price movements, including the new HLC area, Line with markers and Step line. Most traders prefer to use Bars, Candles and Area charts, but everyone has a different approach to markets. Be sure to find the chart type that fits your style.
Indicators, Strategies, and Metrics (Keyboard shortcut: press /)
Indicators, Strategies, and Metrics are designed to provide additional insight and information that may otherwise be difficult to see. We have over 200 technical and financial indicators while also supporting over 100,000 custom scripts coded by our community. The best way to get started here is to start exploring the Indicators, Strategies, and Metrics menu as soon as possible.
Indicator Templates
Here, you can save your custom indicator setups so that you can load them at any point in time. This tool is essential if you utilize different forms of analysis. For example, if you chart technicals and fundamentals, you can make two separate templates that can be loaded at any point depending on your need.
Alert (Keyboard shortcut: Alt + A)
Alerts are used to create custom price alerts. Instead of watching markets 24/7, go ahead and create an alert at a precise level and then wait for that alert to trigger. Let our alerts do the heavy lifting. They’re always watching markets for you. It is also possible to configure them different notifications so that you can be alerted through email, our free app or with a webhook.
Bar Replay
Bar Replay is a powerful, yet simple tool for backtesting. All experience levels can use Bar Replay for backtesting, practicing or learning about price history. To get started, click the Bar Replay button and then select a historical moment to rewind the chart backward to that point in time. Then, you can press play or pause, and retrade that moment to see how your strategy performs.
Undo/Redo Scroll (Keyboard shortcut: Ctrl + Z / Ctrl + Y)
Any changes made to the charts such as drawings or indicators can be deleted or recreated. This works just like a Word document you might create on Microsoft or Google. Use the keyboard shortcuts to quickly undo or redo specific actions.
Multi-chart Layout
If you have an Essential, Plus, Premium, or Ultimate plan, you can analyze multiple charts on your screen at the same time. Simply choose one of the available layouts from the menu to get started. You can also synchronize symbols, intervals, crosshairs, time and data ranges with the selected layout.
Manage Layouts
Create, rename and load all the layouts that you save. You can also share your layout and enable the autosave option, which is very handy so that all of your work is saved automatically. Managing your layouts is an essential part of your analytical process because it enables multiple different chart layouts to be accessed as quickly and easily as possible.
Quick Search
Need to find a function or tool on your chart? Open and use Quick Search to do that. The name of the tool is just as it can be used: quickly search for the things you need to edit, add or remove on your chart, and do it in a flash.
Chart Settings
This is where you can customize all of the fine details about your chart. The Chart Settings menu has everything from the chart color, to the gridlines and labels, the text of the scales, and more.
Fullscreen Mode (Shift + F)
When this is enabled, you will see only the chart. To exit Full screen mode, click ‘Esc’.
Snapshot and Publish
Here you can download your charts as images, copy links, share tweets, publish ideas, create live streaming video content, and comment on assets with our latest feature Minds. If you want to share your expert analysis or get feedback from others, you’ll surely want to learn how these social tools work. Go ahead and give it a try - join our community of traders.
Thanks for reading and we hope this post helps all traders and investors. Whether you’re an experienced professional or someone just getting started, we plan to create more guides like this to ensure you know how to maximize the features on our platform.
Next week, we’ll share part two of this series, and cover the drawing tools menu on the left-side of the chart.
- Team TradingView
India - Stock Ride the Revival of Reality - Kolte Patil - Trade NSE:KOLTEPATIL
INDIA Company is in real estate business (Residential & Commercial) with dominant presence in the Pune and growing presence in Mumbai and Bengaluru.
Koltie patil
Company markets its projects under two brands:
'Kolte-Patil’ (addressing the mid-income segment)
‘24K’ (addressing the premium luxury segment).
Market Presence
Co. has delivered more than 20 Million Sq. Ft. of area across Pune, Bengaluru and Mumbai.
New Launches
Launches planned across
all 3 cities of presence –Pune, Mumbai &
Bengaluru with saleable area of ~7.2 msf
Aggregate topline potential of over ~Rs. 5,700 crore
Project Portfolio Q-1 FY 2021-22
29.38 million sq. ft. (MSF) project portfolio -
Under execution - 3.22 MSF
Approval - 10.36 MSF
Land bank - 15.80 MSF
Tie Ups under Capital Light and DM Model and expected Revenue and Profits
FY 21
Signed three new projects with a
combined saleable area of ~2.2 msf in
Pune (Baner, Moshi, Wagholi) under
capital light models. Expected Total
Topline of ~Rs. 1,500 crore and KPDL
PBT of ~Rs. 220 crore
Three redevelopment
projects with a combined saleable
area of ~0.52 msf in Mumbai (Evara,
Verve, Vaayu). Expected Topline of
over Rs. 1,000 crore
FY 22
Signed two new projects with a combined
saleable area of ~1.3 msf in Pune (Hinjewadi,
Tathawade) under DM model. Expected DM
fees of ~Rs. 80 crore
Three redevelopment projects with a combined saleable area of ~0.3 msf in Mumbai (Sukh Niwas, Golden Pebbles,
Jeevan Sudha). Expected Topline of ~ Rs. 700
crore
Bought Back Stake from ICICI
KPDL entered into a share purchase agreement to buy-out the 50% stake held by 2 funds managed by ICICI Venture Funds Management Company Limited in the flagship Life Republic township project. The buy-out consideration was of Rs. 210 Crore and it is paid fully.
Project Funding and Partners
1) Kohlberg-Kravis Roberts (KKR) committed INR 193 Crore in the R1 sector of Life Republic, Pune.
2) Company entered into a Rs 120 Crore agreement with an affiliate of J.P. Morgan Asset Management for its redevelopment project Jay-Vijay Society in Vile Parle (E), Mumbai.
Residential Development Platform
The Co. announced creation of a residential development platform with Planet Smart City, to develop 15,000 housing units. It will focus primarily on development of aspirational housing projects in Pune, Mumbai and Bengaluru.
CEO appointment
Mr. Gopal Sarda resigned from the post of Group CEO of the Company on 10 June 2021 and Mr. Yashvardhan Patil’s was appointed as Group CEO of Kolte-Patil Developers Limited (KPDL) w.e.f June 12, 2021.
Awards
Company received The Economic Times - Brand of the Year Award in 2019
Brand Excellence in Real Estate Sector
Improve Your Research With MindsOur new social feature, Minds, is now available on our free mobile app for iOS and Android.
Minds is an exclusive chat for your favorite symbols. Want to read what other investors are saying about AAPL? Head to the AAPL Mind. Curious to discuss Bitcoin’s price action? Check out the BTCUSD Mind. There’s now a place to chat about every symbol no matter how obscure or popular. Gather around a specific symbol with other traders and start sharing your mind.
To celebrate the launch of Minds on mobile, we’d like to show you how it works and specifically showcase how it can improve your research. If you don’t have our mobile app, get it now .
How to use Minds from your mobile phone:
Open the TradingView app and select a symbol from your watchlist.
Then, find and select the tab that says “Minds” - depending on your screen size, you may have to scroll down.
Now you can read what everyone is saying about that specific symbol!
To post your own ideas, thoughts and analysis, click the cloud with a plus at the bottom right-hand corner of the screen.
Type your message and then press the button that says “post” to share your message with everyone.
This new social feature will make it incredibly easy to meet, chat, and discuss your favorite symbols with others. You now have access to a highly specific chat only for those who care the most about specific symbols. Remember: this is a community feature, so the more active you are, the better it’ll be for you and everyone else involved.
Note: If you’re having trouble accessing Minds, double check that the Show symbol screen feature is on, which can be activated from the settings menu.
Wait… don’t go anywhere yet! We have some tips to share because Minds creates a whole new way to research your favorite symbols. Keep reading…
How can you improve your research with Minds?
1. Real-time sentiment analysis
With Minds, you will be able to read what other people think about your favorite symbols. It is very common to see new perspectives with this approach and avoid one of the biggest mistakes in trading, which is believing you’re always right. You know what they say… one big mistake is enough to blow your account, so reading what other people are saying can open your mind in that sense.
2. Concise Insights
Condensing intricate concepts or analysis into easily digestible bite-sized updates makes information accessible to a wider audience. Even those without a deep understanding of the charts can gain insights and stay informed, thereby fostering a more inclusive and informed community.
In today's world, there's a lot of information everywhere, and it can be overwhelming. The Minds’ updates make things clear and simple. They show you just what you need to know, making it easier to stay in the loop without getting lost in the noise.
3. See how other traders use technical and fundamental analysis
One of the most interesting features on Minds is the ability to share charts. This is useful as you can see Support or Resistance Levels, Triangles, Head and Shoulders and all sorts of chart patterns from different time intervals by traders all around the world. Every trader sees things differently so it is a great way to see how others analyze charts.
4. Timeliness and breaking news
In the financial world, where split-second decisions can translate into significant gains or losses, timing stands as an important cornerstone. The Minds feature helps in facilitating the instantaneous dissemination of news, charts and analysis since you don’t have to write lengthy descriptions. Minds enables real-time sharing of analysis, ensuring that traders and investors are aware of developments that could impact their decisions almost as soon as they happen.
5. Personalization
Imagine scrolling through a news feed – these updates are like short and interesting news pieces. You can easily look through them to find the ones that match what you're interested in or what you need to know. So, it's like getting the information you want without having to search too hard. This keeps you connected and up-to-date with what matters to you.
Meet others, share, and interact to get started. Think about it as a way to get the most important updates about symbols on your watchlist without all the extra stuff that might confuse you.
We look forward to seeing how you interact with Minds! Please write us in the comments below with any feedback, comments or suggestions.
Team TradingView
As Deflation Hits the Economy The Price of TIPs Should FallEarlier in 2022 I got some Bullish Exposure to Deflation by positioning Bearishly against TIPs (Treasury Inflation-Protected Securities) as can be seen here:
Fast-forward to today and we can now see the CPI declining and the TIPs declining even faster, This ETF Tracks the price of these TIPs and we can see that it is breaking through support even though the CPI has only retraced half way. If the CPI continues on this path and the Bond Market continues to price in Long Term Deflation, we should then see the pricing of this TIPs based ETF come down crashing in a big way. If that does happen, I would target at least the 1.618 Fibonacci Extension.
US 10-year real rates (TIPS) – the rising true cost of capital US 10YR ‘real’ rates are essentially US 10yr Treasuries adjusted for 10yr inflation expectations – TradingView users can set this up using the equation: TVC:US10Y-FRED:T10YIE.
We can see this as the true cost of capital and in effect, the higher yields rise the more this supports the USD and negatively impacts US equity valuations. The rate of change (ROC) is always important, but if US 10yr real rates head to 2% then this may accelerate the selling in the US500 and NAS100.
PSA#1 - Early 🤕(Crashing Warnings) for day and swing traders.This is a head's up to anyone who is a day trader or swing trader and wondering when and if it's going to crash, let me say this now.
Please do me a favor and reframed from asking that cause I can't call it when the 4 hour chart is not at a peak high. This thing will kill your wallet in a day and take away over 30% or more of what you gained, but the best way for me to call it - is when it's at a peak high, no where else.
I get it, you want to turn a profit with a day trade, take my opinion I will be giving a lesson soon on - but don't day trade with crypto, it's to volatile and can rapidly change in mere moments, so day trading crypto in my opinion is a death trap for your money.
Swing trading however; has a better chance of making gains in this scenario.
I try to warn everyone one day ahead of the suspected 4 hour chart and day chart crash, giving you time to save yourself from loses, I'm not always on point but the best I can do is warn you, it is up to you if you want to take the risk of selling.
Once the day reach a peak high - it's coming down, I literally will warn everyone a day before - that drop is coming and there is hardly anything outside a whale or rally can do to stop it.
This thing creates panic selling issues which adds on to the problem and makes it drop even worse. But once it starts to recover those that sold either get back in before it grows to fast gaining more shares in return, or miss out and be stuck with a lost.
An even calling that can be hard to do when this 4 hour chart is rapidly crashing and a stopping point is just as hard to determine, you can over shoot the target for a rebuy or under shoot and take on loses with everyone else.
So remember when the Day is announced as having a peak high and I see red on the 4 hour chart peak - be ready to sell and don't buy back in for at least 1 full trading day or even 2 - it'll be none stop crashing even with support.
Anywho
Happy Trading everyone.
What's the Best Trading Advice You've Ever Heard?In the comments below, share the best trading advice that you've ever heard. This could be an intelligent quote you heard or read. It could also be a piece of advice given to you by a family member or friend.
Let's create a collection together!
We'll also be gifting exclusive and limited edition TradingView shirts to 5 lucky comments! Please keep in mind that these shirts are only for members based in the US or Canada. If you're from another country, and you're randomly selected, we'll gift you some TradingView Coins.
We look forward to reading all the comments below 🔥
7 Expert Risk Management Techniques for TradingRisk management refers to the techniques used to identify, evaluate, and mitigate the potential risks associated with trading and investing. Whether you are a day trader, swing trader, or scalper, effective risk management can help you minimize losses and protect your hard earned money all while maximizing potential profits.
Let's take a look at the top 7 risk management techniques for trading! 👌
Have a Trading Plan
Many traders jump into the market without a thorough understanding of how it works and what it takes to be successful. You should have a detailed trading plan in place before making any trades. A well-designed trading plan is an essential tool for effective risk management.
A trading plan acts as a roadmap, laying out a set of guidelines/rules that can help traders avoid impulsive decisions. It is crucial because it requires you to think deeply about your approach before you begin risking real money. Having a plan can help you stay calm under stress as your plan will have specific steps to take for anything the market throws at you.
It is essential to clearly define your trading goals and objectives. Are you aiming for short-term gains or long-term wealth generation? Are you focused on a specific asset class or trading strategy? Setting specific and measurable goals helps you stay focused and evaluate your progress.
Another important part is to describe the trading strategy you will employ to enter and exit trades. This includes the types of analysis you will employ (technical, fundamental, or a combination), indicators or patterns you will rely on, and any specific rules for trade execution. Determine your risk tolerance, set appropriate position sizing rules, and establish stop-loss levels to limit potential losses.
The Risk/reward ratio
When you are planning to open a trade, you should analyze beforehand how much money you are risking in that particular trade and what the expected positive outcome is. Here is a useful chart with some examples to understand this concept:
As you can see from the data above, a trader with a higher RR (risk-reward ratio) and a low win rate can still be profitable.
Let’s examine this a little more by looking at a profitable example with a 20% success rate, a RR ratio of 1:5, and capital of $500. In this example, you would have 1 winning trade with a profit of $500. The losses on the other 4 trades would be a total of $400. So the profit would be $100.
An unprofitable RR ratio would be to risk, for example, $500 with a success rate of 20% and a risk/reward ratio of 1:1. That is, only 1 out of 5 trades would be successful. So you would make $100 in 1 winning trade but in the other 4 you would have lost a total of -$400.
As a trader, you need to find the perfect balance between how much money you’re willing to risk, the profits you’ll attempt to make, and the losses you’ll accept. This is not an easy task, but it is the foundation of risk management and the Long & Short Position Tools are essential.
You can use our 'Long Position' and 'Short Position' drawing tools in the Forecasting and measurement tools to determine this ratio.
Stop Loss/Take Profit orders
Stop Loss and Take Profit work differently depending on whether you are a day trader, swing trader or long term trader and the type of asset. The most important thing is not to deviate from your strategy as long as you have a good trading strategy. For example, one of the biggest mistakes here is to change your stop loss thinking that the losses will recover... and often they never do. The same thing happens with take profits, you may see that the asset is "going to the moon" and you decide to modify your take profit, but the thing about markets is that there are moments of overvaluation and then the price moves sharply against the last trend.
There is an alternative strategy to this, which is to use exit partials, that is closing half of your position in order to reduce the risk of your losses, or to take some profits during an outstanding run. Also remember that each asset has a different volatility, so while a stop loss of -3% is normal for a swing trading move in one asset, in other more volatile assets the stop loss would be -10%. You do not want to get caught in the middle of a regular price movement.
Finally, you can use a trailing stop, which essentially secures some profits while still having the potential to capture better performance.
Trade with TP, SL and Trailing Stop
Selection of Assets and Time intervals
Choosing the right assets involves careful consideration of various factors such as accessibility, liquidity, volatility, correlation, and your preference in terms of time zones and expertise. Each asset possesses distinct characteristics and behaviors, and understanding these nuances is vital. It is essential to conduct thorough research and analysis to identify assets that align with your trading strategy and risk appetite.
Equally important is selecting the appropriate time intervals for your trading. Time intervals refer to the duration of your trades, which can span from short-term intraday trades to long-term investments. Each time interval has its own advantages and disadvantages, depending on your trading style and objectives.
Shorter time intervals, such as minutes or hours, are often associated with more frequent trades and higher volatility. Traders who prefer these intervals are typically looking to capitalize on short-term price fluctuations and execute quick trades. Conversely, longer time intervals, such as days, weeks, or months, prove more suitable for investors and swing traders aiming to capture broader market trends and significant price movements.
Take into account factors such as your time availability for trading, risk tolerance, and preferred analysis methods. Technical traders often utilize shorter time intervals, focusing on charts, indicators, and patterns, while fundamental investors may opt for longer intervals to account for macroeconomic trends and company fundamentals.
For example, If you are a swing trader with a low knack for volatility, then you can trade in assets such as stocks or Gold and ditch highly volatile assets such as crypto.
Remember that there is no one-size-fits-all approach, and your choices should align with your trading style, goals, and risk management strategy.
Here is a chart of Tesla from the perspective of a day trader, a swing trader, and an investor:
Backtesting
Backtesting plays a crucial role in risk management by enabling traders to assess the effectiveness of their trading strategies using historical market data. It involves the application of predefined rules and indicators to past price data, allowing traders to simulate how their trading strategies would have performed in the past.
During the backtesting process, traders analyze various performance metrics of their strategies, such as profitability, risk-adjusted returns, drawdowns, and win rates. This analysis helps identify the strengths and weaknesses of the strategies, allowing traders to refine them and make necessary adjustments based on the insights gained from the backtesting results.
The primary objective of backtesting is to evaluate the profitability and feasibility of a trading strategy before implementing it in live market conditions. By utilizing historical data, traders can gain valuable insights into the potential risks and rewards associated with their strategies, enabling them to manage their risk accordingly.
However, it's important to note the limitations of backtesting. While historical data provides valuable information, it cannot guarantee future performance, as market conditions are subject to change. Market dynamics, liquidity, and unforeseen events can significantly impact the actual performance of a strategy.
There are plenty of ways to backtest a strategy. You can run a manual test using Bar Replay to trade historical market events or Paper Trading to trade real examples. Those with coding skills can create a strategy using Pine Script and run automated tests on TradingView.
Here is an example of the Moving Averages Crossover strategy using Pine Script:
Margin allocation
We are not fortune tellers, so we cannot predict how assets will be affected by sudden major events. If the worst happens to us and we have all of our capital in a particular trade, the game is over. There are classic rules such as the maximum allocation percentage of 1% per trade (e.g. in a $20,000 portfolio this means that it cannot be risked +$200 per trade). This can vary depending on your trading strategy, but it will definitely help you manage the risk in your portfolio.
Diversification and hedging
It is very important not to put all your eggs in one basket. Something you learn over the years in the financial markets is that the unexpected can always happen. Yes, you can make +1000% in one particular trade, but then you can lose everything in the next trade. One way to avoid the cold sweats of panic is to diversify and hedge. Some stock traders buy commodities that are negatively correlated with stocks, others have a portfolio of +30 stocks from different sectors with bonds and hedge their stocks during downtrends, others buy an ETF of the S&P 500 and the top 10 market cap cryptos... There are unlimited possible combinations when diversifying your portfolio. At the end of the day, the most important thing to understand is that you need to protect your capital and using the assets available to you a trader can hedge and/or diversify to avoid letting one trade ruin an entire portfolio.
Thank you for reading this idea on risk management! We hope it helps new traders plan and prepare for the long run. If you're an expert trader, we hope this was a reminder about the basics. Join the conversation and leave your comments below with your favorite risk management technique! 🙌
- TradingView Team
BANKNIFTY 7/7/2023As per chart banks is weak as compared to yesterday so now you can hold PE because box support breaked.
Overconfidence BiasCauses of overconfidence bias
In order to define overconfidence bias, it is important to understand some of the causes. These could include:
Doubt avoidance. Very often, people don’t like moments of ambiguity or doubt. Overconfidence could work as a solution, with the overconfident person feeling confident in their abilities to feel sure, even in a situation where they should feel doubtful.
Inconsistency avoidance. A lot of the time, people search for consistency when it comes to new ideas. There is a tendency to search for a link between previously held beliefs and new ones. This may lead people to hold onto their old ideas, even if new evidence contradicts them.
The endowment effect. This phenomenon is where people overvalue things purely because they own them and could feed back into overconfidence.
Hindsight bias. Hindsight bias, the false belief that they saw something happening before it happened when they didn’t could lead to overconfidence.
Incentives. Sometimes, the higher an incentive someone has for doing something, the more determined they are to do it. This could make them believe they have made the right judgments and have the skills to get it done, even when they don’t.
Types of overconfidence bias
Overconfidence can come in various forms, including:
Illusion of control: This type of overconfidence bias refers to the belief that someone has more control over a situation than they do. In trading, it could lead to traders believing they can control the market when they can’t.
Over ranking: This refers to the belief that someone is more talented than they actually are. This is common because no one wants to believe they are below average. In trading, this could lead to traders making trades based on overly optimistic forecasts, culminating in potential losses.
Timing optimism: This is when someone incorrectly thinks they could do work far quicker than they can. This relates to trading when traders believe a trade or investment would pay off far faster than it could.
Desirability effect: Perhaps better known as wishful thinking, this is when someone thinks that something will happen just because they want it to happen.
Overconfidence bias examples
These are some hypothetical cases where trades could go wrong because traders have fallen victim to the overconfidence effect:
Believing an asset’s price will continue moving in the same direction – An example of overconfidence bias in trading is when a trader believes an asset will continue to move in a way that benefits them, despite receiving negative news or signals. Suppose a trader made a profit when going long on a contract for difference (CFD) on Amazon (AMZN) shares. They now feel confident the price will likely continue rising, leading them to hold onto the position for too long, meaning there are significant losses when its price trajectory changes.
Ignoring risk – Overconfidence could lead traders to ignore potential risks associated with an investment. For example, they may miss the risk associated with a particular sector or industry and trade it heavily. This could lead to significant losses if the sector or industry experiences a market correction.
Overtrading
Overconfidence bias could make traders believe they may make quick profits through frequent trading. They may take more risks than they should and trade too frequently, leading to high transaction costs and lower returns. Overtrading could also lead to a lack of trading discipline and increased susceptibility to making mistakes.
Failing to consider alternative viewpoints
Overconfidence bias may be linked to confirmation bias, where people seek information supporting their beliefs while ignoring information contradicting them. This could result in traders ignoring or missing important information and making decisions based on incomplete or inaccurate information, potentially leading to losses.
How to counteract overconfidence bias
There are ways people can consider if they want to overcome and counteract overconfidence bias. These could include:
Acknowledging it. Knowing that overconfidence exists could be the first step in tackling it.
Being realistic. Understanding that you do not always make the best decisions all the time could help guard against overconfidence bias.
Researching the market. Knowing that markets can do unexpected things very often could help someone understand the consequences of overconfidence.
Keeping a note of trades. A trader who records their trades could look over them, see where they went wrong, and gain a perspective that could prevent overconfidence bias.
Being diligent. Doing their research and trying to make trades based on facts rather than emotions, coupled with regularly checking and updating their trading strategies, could help stop someone from suffering overconfidence.
Conclusion
A simple overconfidence bias definition is the tendency to overestimate one’s abilities, knowledge, or judgement that could lead to excessive confidence and risk-taking and result in significant losses. Traders and investors should be aware of the different types of overconfidence and take steps to avoid them, such as seeking out diverse sources of information, avoiding making trades based on emotions, and regularly reassessing their investment strategies.
By doing so, traders could minimise the risk of overconfidence bias and make more informed trading decisions.
Difference b/w candle closure and wick closureWelcome to game of resilience be love yourself . open up and try the new things .Earn from learn to make possibilities . here the difference of liquidity grab .
TIP off?Overlayed the TIP a chart with SPY (blue line). Quite clear that TIP (amongst JNK/HYG and even copper) precedes the index.
Given all previous analyses and outlook, what we would like to see is that TIP break out and above its trend line resistance, as does its VolDiv. When this happens, can expect a bullish advancement.
MACD has not yet turned to crossover, but VolDiv is already giving us a heads up tip off! < Pun not intended >
USDJPY bearish After a breakout of strong bearish movement with confirmation of bearish US fundimental , there's a continuation pattern with retracement candle stick showing we going down to complete the 90% rule of the ascending channel.
