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10 things you need to know about Cryptocurrency1. Introduction: Cryptocurrency is a relatively new concept that has gained a lot of attention in recent years. But what exactly is it, and how did it become so popular? Definition of cryptocurrency: At its most basic, cryptocurrency is a digital or virtual currency that uses cryptography for security. Cryptocurrency is decentralized, meaning it is not controlled by any government or financial institution. This decentralization makes it possible for users to make secure, direct transactions with each other without the need for intermediaries. A brief overview of the popularity and growth of cryptocurrency: The first and most well-known cryptocurrency is Bitcoin, which was created in 2009. Since then, the popularity and value of cryptocurrency have exploded. As of 2023, there are over 21,844 different cryptocurrencies in existence with a total market value of over $859 Billion. The increasing adoption of cryptocurrency by merchants, investors, and consumers has led to its mainstream acceptance and the establishment of a thriving cryptocurrency market. However, despite its growing popularity and mainstream acceptance, cryptocurrency is still a controversial and misunderstood topic. In this blog, we will explore the basics of cryptocurrency, how it works, and its potential future impact. 2. Cryptocurrency is a digital currency: Cryptocurrency is a digital or virtual currency that uses cryptography for security. This means that it exists purely in electronic form and is not tied to any physical asset or currency. Instead of being printed or minted like traditional fiat currency, cryptocurrency is created through a process called mining. How cryptocurrency is created and stored: Mining is the process of verifying and adding transactions to the blockchain, a public ledger of all cryptocurrency transactions. Miners use powerful computers to solve complex mathematical problems and are rewarded with a certain amount of cryptocurrency for their efforts. The process of mining helps to secure the blockchain and prevent fraud. Once it is created, cryptocurrency is stored in a digital wallet, which is a software program that stores the user's public and private keys. These keys are used to access and make transactions with the user's cryptocurrency. Digital wallets can be stored on a user's computer or in the cloud, and they can be accessed from anywhere with an internet connection. The differences between cryptocurrency and traditional fiat currency: There are several key differences between cryptocurrency and traditional fiat currency, such as the U.S. dollar or the euro. One of the main differences is that cryptocurrency is decentralized and not controlled by any government or financial institution. This means that it is not subject to the same regulations and is not backed by any physical assets. Another difference is that cryptocurrency is not physical. It exists purely in digital form and is stored in digital wallets. In contrast, traditional fiat currency is physical and can be stored in a physical wallet or bank account. Finally, cryptocurrency is subject to high levels of volatility, meaning its value can fluctuate significantly over short periods of time. In contrast, the value of traditional fiat currency is generally more stable. Overall, while cryptocurrency shares some similarities with traditional fiat currency, it is a unique and distinct type of currency with its own set of characteristics and features. 3. Cryptocurrency uses blockchain technology: One of the key technologies that make cryptocurrency possible is blockchain. Blockchain is a decentralized, digital ledger that records transactions on multiple computers, making it difficult for any single transaction to be altered or tampered with. Each block in the chain contains a record of multiple transactions, and once a block is added to the chain, the transactions it contains become part of the permanent record. Definition of blockchain: At its most basic, a blockchain is a series of blocks that are linked together using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. This structure makes it almost impossible to alter the data contained in any single block without altering all of the blocks that come after it, making the blockchain a secure and transparent record of all transactions. How blockchain works to secure and record cryptocurrency transactions: In the context of cryptocurrency, the blockchain is used to secure and record transactions. When a user wants to make a transaction with their cryptocurrency, they create a digital "message" that contains the details of the transaction, including the amount of cryptocurrency being sent and the recipient's digital wallet address. The message is then broadcast to the network of miners, who verify the transaction and add it to the blockchain. Once a transaction has been added to the blockchain, it becomes part of the permanent record and cannot be altered. This helps to prevent fraud and ensure that all transactions are transparent and secure. The role of miners in verifying and adding transactions to the blockchain: Miners play a crucial role in the process of adding transactions to the blockchain. They use powerful computers to solve complex mathematical problems and are responsible for verifying and adding transactions to the blockchain. When a miner successfully adds a block to the blockchain, they are rewarded with a certain amount of cryptocurrency. The process of mining helps to secure the blockchain and prevent fraud. It also ensures that there is no single point of failure in the system, as the blockchain is decentralized and spread across multiple computers. Overall, the role of miners in the cryptocurrency ecosystem is essential to maintaining the security and integrity of the blockchain. 4. Cryptocurrency is decentralized: One of the key features of cryptocurrency is that it is decentralized, meaning it is not controlled by any single authority or entity. This is in contrast to traditional financial systems, which are centralized and controlled by governments or financial institutions. What it means for a system to be decentralized: A decentralized system is one in which there is no central authority or point of control. Instead, the system is distributed and controlled by a network of users. This can be contrasted with a centralized system, which is controlled by a single authority or organization. The benefits and drawbacks of decentralization for cryptocurrency: There are both benefits and drawbacks to decentralization in the context of cryptocurrency. One of the main benefits is that it makes the system more secure and resistant to censorship. Because there is no central point of control, it is much more difficult for an attacker to compromise the system or for transactions to be blocked or censored. Another benefit of decentralization is that it can make the system more transparent and accountable. Because all transactions are recorded on the blockchain, they are publicly visible and cannot be altered. This can help to build trust and confidence in the system. However, decentralization also has its drawbacks. One of the main drawbacks is that it can make the system more complex and harder to understand. It can also make it more difficult to reach a consensus on important decisions or updates to the system. Overall, the decentralization of cryptocurrency is both a strength and a weakness. While it offers many benefits, it also comes with its own set of challenges and complexities. 5. Cryptocurrency can offer anonymity: One of the features of cryptocurrency that has attracted both praise and criticism is its potential for anonymity. While traditional financial transactions are linked to the identity of the user, cryptocurrency transactions can be anonymous, making it difficult to trace the identity of the sender and recipient. How cryptocurrency transactions can be anonymous: There are several ways in which cryptocurrency transactions can be made anonymously. One of the most common is the use of pseudonymous addresses. These are unique, randomly generated addresses that are used to send and receive cryptocurrency. Because they are not linked to any specific identity, it is difficult to trace the identity of the user associated with a particular address. Another way to increase anonymity is through the use of a virtual private network ( VPN ) or a privacy-focused browser like Tor. These tools can help to mask the user's IP address and make it more difficult to trace their online activity. The potential for cryptocurrency to be used for illegal activities: Because of its potential for anonymity, cryptocurrency has been associated with illegal activities, such as money laundering and the sale of illegal goods. While it is true that cryptocurrency can be used for these purposes, it is important to note that it is also possible to trace cryptocurrency transactions and identify the users involved. Law enforcement agencies have successfully used blockchain analysis to track and prosecute individuals involved in illegal activities using cryptocurrency. Overall, while cryptocurrency can offer a certain degree of anonymity, it is not completely untraceable. It is important for users to be aware of the risks and potential legal consequences of using cryptocurrency for illegal activities. 6. Cryptocurrency is subject to volatility: One of the key characteristics of cryptocurrency is that it is subject to high levels of volatility, meaning its value can fluctuate significantly over short periods of time. This volatility is due to a variety of factors, including market demand, investor sentiment, and regulatory developments. How the value of cryptocurrency can fluctuate: The value of cryptocurrency is determined by supply and demand in the market. When there is high demand for a particular cryptocurrency, its value will generally increase. Conversely, when demand is low, the value will generally decrease. In addition to market demand, the value of cryptocurrency can be influenced by investor sentiment and speculation. When investors are optimistic about the future of a particular cryptocurrency, they may be more likely to buy it, which can drive up its value. On the other hand, when investors are bearish or uncertain, they may be more likely to sell, which can drive down the value. Finally, regulatory developments can also impact the value of cryptocurrency. For example, if a government announces new regulations or restrictions on cryptocurrency, it could affect investor sentiment and demand for the asset. The potential risks and rewards of investing in cryptocurrency: The high volatility of cryptocurrency can be both a risk and a reward for investors. On the one hand, the potential for significant price movements can make it a risky investment. On the other hand, the potential for significant price appreciation can also make it a potentially lucrative investment. It is important for investors to be aware of the risks and to carefully consider their investment strategies when it comes to cryptocurrency. It is also important to diversify investments and not invest more than you can afford to lose. 7. Cryptocurrency is not yet widely accepted: While cryptocurrency has gained a significant amount of mainstream attention in recent years, it is still not widely accepted by merchants and consumers. While some merchants have begun to accept cryptocurrency as a form of payment, the majority of transactions still take place using traditional fiat currency. The current level of adoption and acceptance of cryptocurrency by merchants and consumers: The adoption and acceptance of cryptocurrency by merchants and consumers vary depending on the location and the specific cryptocurrency in question. In some countries, cryptocurrency is more widely accepted than in others. For example, in countries with unstable or unreliable fiat currencies, cryptocurrency may be seen as a more stable and secure alternative. Overall, while the use of cryptocurrency is growing, it is still a relatively small part of the global economy. According to a 2021 survey, only around 5% of the global population has used cryptocurrency, and only a small fraction of merchants accept it as a form of payment. The potential for wider acceptance in the future: Despite the currently limited adoption of cryptocurrency, many experts believe that it has the potential to become more widely accepted in the future. As the technology continues to mature and more people become familiar with it, it is possible that cryptocurrency could become a more mainstream form of payment. In addition, the increasing use of cryptocurrency for cross-border payments and the potential for it to be used as a store of value could also drive wider adoption. As more merchants and consumers become aware of the benefits of cryptocurrency, it is likely that its use will continue to grow. 8. Cryptocurrency is not yet regulated: One of the challenges facing the cryptocurrency industry is the lack of clear and consistent regulation. Because cryptocurrency is a relatively new and decentralized asset class, there is currently a patchwork of regulations across different countries and jurisdictions. The current state of regulation around cryptocurrency: The current state of regulation around cryptocurrency varies widely depending on the location. In some countries, cryptocurrency is heavily regulated and treated like any other financial asset, while in others it is largely unregulated. In the United States, for example, the regulation of cryptocurrency is split between various federal agencies. The Internal Revenue Service ( IRS ) treats cryptocurrency as property for tax purposes, while the Commodity Futures Trading Commission (CFTC) regulates certain cryptocurrency derivatives. The Securities and Exchange Commission (SEC) also has authority over certain cryptocurrency offerings that are considered securities. In contrast, some countries have taken a more hands-off approach to cryptocurrency regulation. For example, Switzerland has a reputation for being a cryptocurrency-friendly jurisdiction, with relatively light regulation compared to other countries. The potential for future regulation: Despite the current patchwork of regulations, it is likely that cryptocurrency regulation will become more consistent and harmonized in the future. As the cryptocurrency industry continues to grow and mature, there is increasing pressure on governments and regulatory bodies to provide clarity and guidance on how to handle cryptocurrency. In particular, there is a growing consensus that there is a need for better consumer protection and regulatory oversight to ensure that the cryptocurrency market is fair and transparent. It is possible that we will see more countries adopt cryptocurrency regulations that are similar to those that currently exist for traditional financial assets. However, it is also important to note that the decentralized nature of cryptocurrency means that it is difficult to regulate in the same way as traditional assets. There is a risk that too much regulation could stifle innovation and limit the potential of cryptocurrency. Overall, the future of cryptocurrency regulation is uncertain and it is likely that it will continue to evolve as the industry matures. It is important for governments, regulatory bodies, and industry participants to work together to find a balance between protecting consumers and promoting innovation. 9. There are many different types of cryptocurrency: While Bitcoin is the most well-known and widely used cryptocurrency, it is far from the only one. As of 2023, there are over 21,844 different cryptocurrencies in existence with a total market value of over $859 Billion. These cryptocurrencies differ in a number of ways, including their underlying technology, use cases, and market value. The most well-known and widely used cryptocurrencies: Some of the most well-known and widely used cryptocurrencies include Bitcoin, Ethereum, and Litecoin. Bitcoin: Bitcoin was the first and is still the most well-known cryptocurrency. It was created in 2009 and has the largest market capitalization of any cryptocurrency. Bitcoin is decentralized and uses a proof-of-work consensus mechanism to secure the blockchain and validate transactions. Ethereum: Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. These smart contracts are powered by Ethereum's native cryptocurrency, Ether. Litecoin: Litecoin is a cryptocurrency that was created as a lighter and faster alternative to Bitcoin. It uses a different proof-of-work algorithm and has a faster block time, making it more efficient for small transactions. The differences between the various types of cryptocurrency: While all cryptocurrencies use blockchain technology and share some similarities, there are also significant differences between the various types. Some cryptocurrencies, like Bitcoin and Litecoin, are primarily used for peer-to-peer transactions and are designed to be a store of value. Others, like Ethereum, are designed to support smart contracts and decentralized applications. Cryptocurrencies also differ in terms of their underlying technology, such as the proof-of-work algorithm they use, their block times, and their block sizes. These technical differences can impact the performance and scalability of the cryptocurrency. Overall, there are many different types of cryptocurrency, each with its own unique features and characteristics. It is important for users to understand the differences between these cryptocurrencies in order to make informed decisions about which ones to use or invest in. 10. Conclusion: Cryptocurrency is a digital or virtual currency that uses cryptography for security. It is created through a process called mining, in which powerful computers solve complex mathematical problems to verify and add transactions to the blockchain. Cryptocurrency is stored in a digital wallet and can be used to make transactions online. One of the key features of cryptocurrency is that it is decentralized, meaning it is not controlled by any single authority or entity. This decentralization can make it more secure and resistant to censorship, but it also makes it more complex and harder to understand. Cryptocurrency can offer anonymity, as transactions can be made using pseudonymous addresses that are not linked to any specific identity. However, it is also possible to trace cryptocurrency transactions, and the use of cryptocurrency for illegal activities carries legal risks. Cryptocurrency is subject to high levels of volatility, meaning its value can fluctuate significantly over short periods of time. This volatility can be both a risk and a reward for investors, and it is important for investors to be aware of the risks and to carefully consider their investment strategies. Cryptocurrency is not yet widely accepted by merchants and consumers, and the regulation of cryptocurrency varies widely depending on the location. However, it is likely that cryptocurrency will become more widely accepted and regulated in the future. There are many different types of cryptocurrency, each with its own unique features and characteristics. It is important for users to understand the differences between these cryptocurrencies in order to make informed decisions about which ones to use or invest in. The future potential of cryptocurrency: Despite the challenges and uncertainties facing the cryptocurrency industry, many experts believe that it has a bright future. As technology continues to mature and more people become familiar with it, it is possible that cryptocurrency will become a more mainstream form of payment. In addition, the increasing use of cryptocurrency for cross-border payments and the potential for it to be used as a store of value could also drive wider adoption. As more merchants and consumers become aware of the benefits of cryptocurrency, it is likely that its use will continue to grow. Some experts also predict that cryptocurrency could have significant implications for the way in which financial systems operate, potentially disrupting traditional financial institutions and changing the way we think about money. Overall, while there are many challenges and uncertainties surrounding cryptocurrency, it is clear that it has the potential to transform the way we think about and use money. It will be interesting to see how the industry evolves in the coming years and what the future holds for cryptocurrency. We hope you found this post valuable and informative.
Education
by ROBINHOODLAB
2
7 main mistakes of new traders List of deadly crimes committed by new traders So far, you have created a new account, purchased your first Bitcoin. You are now prepared to become a trader in cryptocurrencies. You frequently trade on an exchange where the price of the first coin you purchase increases by 10% before you sell it. Self-satisfied that you did it. Using the ingenious "Buy Low, Sell High" method, you are advancing: a Twitter account. There is already a crowd of new employees awaiting your calls. It was going so well until you committed one of the following rookie errors. 1 - Waiting Pump and Dump Observing a green candle that rockets up into the sky is one of the most beautiful sights a trader can see - if they purchased at the bottom. However, without a horse to race, envy might be overwhelming. You will experience lapsed profit syndrome and attempt to wager your entire bankroll. Occasionally it will pay off, but more often than not it will place you in an awkward situation. A quick price swing in cryptocurrency is not always indicative of a pump-and-dump scam. Positive news or a major influencer's promotion might also result in exponential growth. Before purchasing a coin, it is essential to comprehend why its value is soaring. If not, you risk failure. Many inexperienced cryptocurrency traders try with pump-and-dump organizations that guarantee rapid gains with minimal effort. Failure once or twice will be sufficient to learn the lesson and pursue more intelligent trading tactics. 2 - Buying in illiquid markets For your coin to continue increasing, someone else must want to purchase it. The issue with numerous developing altcoins and numerous tiny exchanges is that they have a dearth of orders. You can be certain that Sprouts (SPRTS) is the future of crypto, but if a sufficient number of traders disagree, you risk focusing on a currency that no one wants to purchase, or at least not at a price that you are willing to pay. There is nothing wrong with long-term investment in a coin whose fundamentals you respect. However, these "undiscovered diamonds" are prone to a lack of liquidity in the short run. Traders who have grown weary of waiting for a coin's price to rise may be compelled to sell drastically below their desired price. 3 - Set the incorrect price Raise your hand If you've ever missed a zero on a trade setup and your coins surged, set your sell order 10 times lower. This is easy to accomplish when dealing with altcoins that are priced in fractions of Bitcoin: you think you're making an order to sell 0.0000457 BTC, but you've actually placed an order to sell 0.00000457 BTC. The majority of exchanges will rise to the maximum rate. However, services like Etherdelta are not as user-friendly as others. Always double-check the buy or sell price before pressing the execute button. 4 - Transferring the incorrect coin to an exchange's wallet or use wrong chain If you sent Bitcoin Cash to a Bitcoin wallet by accident, do not expect the exchange to bail you out. However, the larger exchanges are unlikely to be of assistance. You must exercise caution before sending funds to the wallet, as errors are nearly impossible to rectify. Sending Ethereum tokens to an Ethereum exchange wallet or requesting a mining pool payout directly to an exchange wallet are other rookie errors. Avoid doing that. The greater your trading motivation, the better you will become. 5 - Revenge of trader You are unhappy because you refused to purchase a coin at the last minute, and then it flew to the moon. Or you purchased a worthless certificate - a sure loser - and it failed. Infuriated, you wager your entire fortune on the next green coin and attempt to ride this train to Profitville. In doing so, you overestimate your abilities and enter a market you have not yet explored. Where do you enter and exit the market? Why is the coin's value increasing? You are ignorant because you act based on your feelings. Revenge trading is analogous to capturing your partner in the arms of another person and then grabbing the first item you discover. Nine times out of ten, it will end in tears. The greater your ability to detach your emotions from your trade, the more successful you will become. 6 - Overactivity Too many chefs will destroy the broth, and too many traders will diminish your earnings. This is a simple trap to fall into, and every new trader does it. The day after purchasing a coin, you check to see if its value has increased by 20%. Isn't it preferable to sell and earn a profit? Not required Cut off your losses and let your winners run, as the adage goes. A basic trading approach that can deprive you of some of your greatest rewards is selling assets for the sake of profit. There is nothing more disheartening than selling a coin for a tiny profit only to discover that someone else paid 10 times as much. Additionally, excessive activity for minimal income will result in an increase in assets conserved through exchange costs. In certain ways, hyperactivity that generates tiny earnings is advantageous, but these profits will be consumed by commissions on any exchange. You comprehend the outcomes yourself. 7 - Self-confidence Intuitively, you purchase a coin and observe its value double over the next week. You repeat the procedure with a second coin and the same result occurs. You are fantastic. You are a man. You convert everything you touch into gold. You are staking your next decision on boldness, which may feel like flying to the moon. Then... one loses everything. What occurred? You are impudent, that is what. A little self-assurance is wonderful; it's what enables traders to go against the grain and make their own conclusions. Conversely, over confidence is a formula for disaster. When you disregard warning flags while feeling invincible. Eliminating these seven fatal errors does not qualify you as a professional trader; years of expertise, late hours and early mornings spent watching two monitors and creating charts are still required. Nevertheless, if you eliminate your rookie errors, you may survive long enough to become a pro. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
DEMONS OF TRADING | Don't Think Like This Have you ever wondered what helped all those professionals of Wall Street become successful? You will be surprised, but the key to their reached heights is hidden in their mistakes. Yes, that is right. Most professional and successful traders made many mistakes before they got to the top. Making mistakes is ordinary and sometimes even necessary because you learn when you make them. The crucial point of this idea is never to repeat those mistakes because some errors may cost us a fortune. That is why we gathered 10 most common trading mistakes to prevent you from faults and losses. Little preparation Entry to the Forex market is relatively easy, so people have a light-minded attitude towards trading knowledge. Beginner traders, especially, think that theory is not a big deal, and they will be able to build it up without a peep. However, it does not work this way. Miscalculating the risk/reward ratio For some reason, many traders believe that higher win trades are more profitable than lower ones. Sometimes, this idea even gets paid off, and due to blind luck, trades, where the potential risk exceeds the reward, benefit. However, in most cases, such trades are a sure way to lose money in the longer term. Avoiding risk management Risk management should be the core of your trading because it helps cut down losses. Trading without risk management is like skydiving without a parachute. Neglecting market events Relevant market news is essential as economic events influence the direction of trading during the day. So, if you are not aware of the financial reports or earnings, you might skip the volatility. To win the game, you need to develop your thinking and how you participate in the game. You are in a market trading against professional traders. Your goal is to think like a professional. That is the only way to survive in this game. Dear followers, let me know, what topic interests you for new educational posts?
OANDA:BTCUSDEducation
by SignalProvider
10
53 Important Trading Acronyms and AbbreviationsHere are 53 trading acronyms and abbreviations to remember and apply to your trading. I’ve also listed them in alphabetical order to make it easier to spot! ATH - All Time High ATM – At the Money ATR – Average True Range BB – Bollinger Bands B/O - Breakout Be - Bearish BE - Break even BOS - Break of Structure Bu - Bullish CFD – Contract for Difference DD – Drawdown DMA – Direct Market Access EMA – Exponential Moving Average E/R - Earnings Report ETF – Exchange Traded Fund FA - Fundamental Analysis FOMC – Federal Open Market Committee FOK – Fill Or Kill FX – Foreign Exchange (Forex) GTC – Good ‘Til Cancelled HH - Higher High HL - Higher Low HOD - High of Day HFT – High Frequency Trading HTF - Higher Time Frame ICO – Initial Coin Offering IPO – Initial Public Offering ITM – In the Money JBTD – Just Buy the Dip LH - Lower High LL - Lower Low LOD - Low of Day L/S – Long or Short LTF - Lower Time Frame MA – Moving Average MACD – Moving Average Convergence Divergence MS - Market Structure OI – Open Interest O/N - Overnight OTC – Over the Counter OTM – Out The Money NFP - Non Farm Payrolls P&L – Profit and Loss PIP – Percentage In Point PRE - Pre Market R/R - Risk / Reward RSI – Relative Strength Index S/R - Support and Resistance SL - Stop loss TA - Technical analysis TF - Time Frame TP - Take profit YTD - Year To Date Can you think of anymore? Let me know in the comments. Trade well, live free. Timon (Financial trader since 2003)
JSE:J200Education
by Timonrosso
1
Do That BEFORE You Start REAL ACCOUNT Trading Here is the list of thing that you should learn in advance before you start trading on a real account. 1) Open a demo (practice) account and learn to execute trades without making errors 2) Study the methods of great traders and financial minds throughout history - Jesse Livermore, W D Gann, Charles Dow/Dow theory, Paul Tudor Jones,Richard Wyckoff. Learn their methods and employ them. Learn their mistakes and avoid them. 3) Focus on learning, not winning. Forget about money and profits. Think about developing a winning strategy and a winning trading mindset. Always be open-minded. Observe. Be flexible. 4) I recommend reading the following books. These books will help you to start to think like a trader and realize what you are getting yourself into: a) "Reminiscences of a Stock Operator" by Edwin Lefevre b) "Art of War" by Sun Tzu (Not a trading book but an old book on rules of war and how to protect yourself from being outsmarted and defeated by your enemies) c) "The Trading Methodologies of W.D. Gann" by Hima Reddy d) "Time Compression Trading: Exploiting Multiple Time Frames in Zero Sum Markets" by Jason Alan Jankovsky e) "Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude" by Mark Douglas 5) Watch YouTube videos. Absorb all the info you can as the more you know, the more the pieces of the puzzle fit together later on. You can learn the basics of trading on your own and then when you are ready to take your trading to the next level. To win the game, you need to develop your thinking and how you participate in the game. You are in a market trading against professional traders. The beginning traders in the market are not your competition-they are incidental. You need to trade with the professional traders who run the market. I wish you luck on a battle field! Dear followers, let me know, what topic interests you for new educational posts?
OANDA:BTCUSDEducation
by SignalProvider
4
Are you prepared to lose? (and what to do if you are not)A new trader, let's call her Sarah, has just started trading in the crypto market. She has been reading articles and watching videos about trading, but hasn't taken the time to develop a solid trading plan, or to gain a good understanding of the markets and underlying assets she is trading. Sarah sees bitcoin's value is going up, she doesn't do any further research or analysis, she doesn't set a stop loss or take profit level, she just buys bitcoin, with the expectation that she will make a quick profit. Unfortunately, the value of bitcoin doesn't perform as well as Sarah had hoped, and instead of going up, it starts to go down. Sarah gets anxious and starts checking the bitcoin's value frequently, and since she didn't set a stop loss, she watches as her position continues to lose value. Eventually, the bitcoin loses so much value that Sarah is forced to sell it at a large loss. Feeling disheartened, Sarah starts to second-guess herself and her abilities as a trader. She didn't have a plan or a strategy, didn't manage her risk properly, and didn't have a clear understanding of the markets and the underlying asset. She didn't prepare for the possibility of losses and didn't have a plan for exiting losing positions. 😭😖😞Unfortunately, the story above is very common in trading, so how can we prepare for losing trades? ☝🏽 Preparing for the possibility of losses is an important part of risk management and can help traders to minimize the impact of losses on their trading capital. Some ways to prepare for the possibility of losses include: 1️⃣ Setting realistic trading goals: Traders should set realistic goals that take into account the inherent risks of trading and the potential for losses. By setting realistic goals, traders will be better prepared to handle losses when they do occur. 2️⃣ Establishing a risk management plan: This includes determining the appropriate size of each trade, placing stop-loss orders, and evaluating the potential reward relative to the potential risk. This can help to limit potential losses and protect trading capital. 3️⃣ Maintaining a proper risk-reward ratio: This means that the potential reward of a trade should be greater than the potential loss. This helps ensure that the potential reward justifies the potential risk. 4️⃣ Diversifying the portfolio: By spreading capital across a variety of different markets and instruments, traders can reduce overall portfolio risk and minimize the impact of losses in any one market or instrument. 5️⃣ Building a trading cushion: This means keeping a reserve of capital that can be used to absorb losses and maintain the trader's ability to continue trading. This cushion should be large enough to withstand a series of losses, but not so large that it affects the trader's ability to trade effectively. 6️⃣ Emotionally preparing for losses: It's important to remember that losses are a normal part of trading and to not let them affect you emotionally. By preparing emotionally for the possibility of losses, traders will be better able to handle them when they occur. 7️⃣ Have a plan for exiting losing positions: Having a plan for exiting losing positions will help to minimize the impact of losses on the portfolio. This could include setting a stop loss or taking profits at predetermined targets. ⚠️ Remember, it's important to accept that losses are a normal part of trading and that they are not a reflection of the trader's ability. By preparing for the possibility of losses and implementing a solid risk management plan, traders can minimize the impact of losses and increase the chances of long-term success. I hope this has been informative to you, and if it was, please leave a like or a comment below. 👇🏽👇🏽👇🏽 Thanks for your visit!
BITSTAMP:BTCUSDEducation
by Nico.Muselle
34
TRADING ACRONYMS YOU MUST KNOW Hey traders, Here is the list of trading acronyms, every trader must know. TA - technical analysis FA - fundamental analysis HOD - high of the day LOD - low of the day O/N - over night 52s - new 52 week high B/O - breakout BOS - break of structure E/R - earning report Pre - pre-market trades AH - after hours trades R/R - risk / reward S/R - support and resistance TP - take profit SL - stop loss YTD - year to date ATH - all time high HH - higher high HL - higher low LH - lower high TF - time frame MS - market structure HTF - higher time frame LTF - lower time frame BE - break even DD - drawdown Be - bearish Bu - bullish HNS - head and shoulder These acronyms are frequently applied but the proffessionals. Do you know all these acronyms? Please, like this post and subscribe to our tradingview page!👍
OANDA:BTCUSDEducation
by EliteTradingSignals
6
Learn Why Do You Need a Stop Loss 🟥 Hey traders, Talking to many struggling traders from different parts of the world, I realized that the majority constantly makes the same mistake: they do not set a stop loss. Asking for the reason why they do that, the common answer is that these traders consider the manual position closing to be safer, implying that if the market goes in the opposite direction, they will be able to much better track the exact moment to cut loss. In this article, we will discuss why it is crucially important to set a stop loss and why it is the number one element of your trading position. First of all, let's discuss what is a stop loss. By a stop loss, we mean a certain price level where we close our trading position in loss. In comparison to a manual closing, the stop loss should be set at the exact moment when the order is executed. Stop loss allows us limiting the risks in case of unfavorable movements. On the chart above, I have illustrated 2 similar negative scenarios: 1 with a stop loss being placed and one without. In the example on the left, stop loss helped to prevent the excessive risk, cutting the loss at the beginning of a bearish wave. With the manual closing, however, traders usually hold the negative positions much longer, praying for a reversal. Holding a losing trade, emotions intervene. Greed and fear usually spoil the reasoning, causing irrational decisions. Following such a strategy, the total loss of the second scenario is 5 times bigger than the total loss with a placed stop loss order. Stop loss defines the point where you become wrong in your predictions. Planning your trade, you should know in advance such a point and cut your loss once it is reached. Never trade without a stop loss. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
9
Learn to Read The Candlesticks Like Pro Candlesticks give you an instant snapshot of whether a market’s price movement was positive or negative, and to what degree. The timeframe represented in a candlestick can vary widely. Green candles show prices going up, so the open is at the bottom of the body and the close is at the top. Red candles show prices declining, so the open is at the top of the body and close is at the bottom. Each candle consists of the body and the wicks. The body of the candle tells you what the open and close prices were during the candle’s time frame. The lines stretching from the top and bottom of the body are the wicks. These represent the highest and lowest prices the asset hit during the trading frame. What do candlesticks tell us? Candlesticks can reveal much more than just price movement over time. Experienced traders look for patterns in order to gauge market sentiment and to make predictions about where the market might be headed next. Here are some of the kinds of things they’re looking for: A long wick on the bottom of a candle, for instance, might mean that traders are buying into an asset as prices fall, which may be a good indicator that the asset is on its way up. A long wick at the top of a candle, however, could suggest that traders are looking to take profits — signaling a large potential sell-off in the near future. If the body occupies almost all of the candle, with very short wicks (or no visible wicks) on either side, that might indicate a strongly bullish sentiment (on a green candle) or strongly bearish sentiment (on a red candle). Understanding what candlesticks might mean in the context of a particular asset or within certain market conditions is one element of a trading strategy called technical analysis — by which investors attempt to use past price movements to identify trends and potential future opportunities. Please, like this post and subscribe to our tradingview page!👍
OANDA:BTCUSDEducation
by EliteTradingSignals
5
GoldViewFX - BULL & BEAR FLAG PATTERNSREPOST ON CHART PATTERNS. Hey Everyone, As promised, this year we will also share basic educational posts for our newbies to learn and level up. BULL & BEAR FLAG PATTERNS BULL FLAG This pattern occurs in an uptrend to confirm further movement up. The continuation of the movement up can be measured by the size of the pole. BEAR FLAG This pattern occurs in a downtrend to confirm further movement down. The continuation of the movement down can be measured by the size of the pole. Please don't forget to like, comment and follow to support us, GoldViewFX XAUUSD TOP AUTHOR
OANDA:XAUUSDEducation
by Goldviewfx
15
DON'T TRADE ON HOLIDAYS | 4 Crucial Reasons Explained In this educational article, we will discuss why is it recommendable not to trade during the holidays season. 🏦 The main source of problems comes from the fact that the big market players like banks, hedge funds and investing firms are absent. Similarly to ordinary people, bankers and investors prefer to spend the holidays with their relatives and friends instead of staring at charts on Christmas Eve. But how does it affect the market? Big players are the main source of the market liquidity. The liquidity itself is the measure to which an asset can be quickly bought or sold in the market at a price of its quotes. Therefore, when the big players are missing, the market liquidity drops. 1️⃣ That fact instantly reflects in the market spreads. They become substantially bigger, directly increasing the costs of each trade and making it problematic to open a position at a desired price. 2️⃣ Secondly, low liquidity leads to a decrease in volatility. The market becomes weak and indecisive. As traders, we make the money on market moves. Our goal is to catch a bullish or a bearish wave. Their absence deprives us of profits or, at least, dramatically decreases them. 3️⃣ Thirdly, when the liquidity is low, even small market participants can move the market. It dramatically increases the probabilities of false signals. Relatively low trading volumes may manipulate the market, substantially decreasing the efficiency of technical and fundamental analysis. 4️⃣ The increased costs of trading, low volatility and manipulations should have convinced you to stay from charts during the holidays season. However, the main reason to not trade on holidays is much simpler. Holidays give you an opportunity to stay with your family, to take a break, to recharge and relax. Even a part-time trading is very exhausting and requires a constant attention. Let yourself be distracted and return after holidays. I wish you a great holidays season, traders! ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
17
THE FOREX SUCCESS PYRAMID What is your recipe for success in trading? Developing traders often don’t understand, when you are asking to be a successful (or professional) trader, you are asking not just to build a pyramid, but to sit on top of it. What most forget is the base is the biggest part of the pyramid and the foundation for building higher levels. As the pyramid continues to grow higher, it gets a little more complicated, but you have a base (foundation) and structures in place to carry the stones up to the higher levels. But just like a pyramid, there are more stones at the base and this takes more time to build. Also like a pyramid, there are more traders at the base (not making money or breaking even) then there are at the top. However, with structures and rhythm in place, the fruits of your labor will result in a steady conditioning of your muscles (discipline, diligence and psychology). This will allow you to take on greater and greater heights, challenges and climb the pyramid of trading. Having forex trading discipline, diligence and psychology will give you a sense of confidence and a feeling of mastery over the process. This is the pyramid of trading and the attributes needed to climb to higher levels. While most traders spend time trying to find profitable trades, or the next great system, make sure you take time out to build the attributes which develop your trading muscles (discipline, diligence and psychology). By yourself this can be a very difficult task so it helps to create mechanisms in your life to build these habits. Please, like this post and subscribe to our tradingview page!👍
OANDA:BTCUSDEducation
by EliteTradingSignals
4
GoldViewFX - TRADING ETHOS & STRESS FREE TRADING Here at GVFX, we constantly remind our followers to take profit off the table by banking in stages or protecting profit with a trailing stop after each incremental profit level has been reached as it heads toward the target TP. Far too many retail traders hold positions until it's too late and then the market turns against them and they end up breaking even or even making a loss in the hope that it will go back in the right direction and hit their ultimate, full-on dream TP. Making money, or to use a specific example, getting into profit through a click on MT4/5 is an initial action. If that entry turns out to be profitable, it was either through blind luck or skilful analysis. Keeping that money, or profit on an open position in our example, requires learnt behaviour. Thus, you would either bank after a certain level of profit or trail your stop up/down depending on whether you're long or short using a habit that's now second nature to you. Growing money, or increasing your equity balance for our example, requires knowledge and discipline. Growing your account size means not going in heavier with an increased lot size in relative terms to your account size simply because you've had a good run prior. It also means sticking to the same successful strategy that has made you profitable up to that point. Stay disciplined. Also, level up with your skills by gaining more knowledge regarding additional strategies (THAT FIT INTO YOUR EXISTING SYSTEM) and fine tune existing strategies to increase ROI. As an example of the latter, think about how you trail your entries. Advanced techniques on how to use trailing stops can significantly increase your profit on each entry. Trading is a strategic business activity. It requires action, good habits and the thirst for knowledge. Trade safe and trade profitably. GVFX - Stress Free Trading Strategy If you find trading stressful, then one of two things is happening. Firstly, your trading strategy and risk management is not effective and the excessive drawdown (reversal) on each entry and/or the large number of entries you are having to chop is causing undue stress. Secondly, you may have a strategy and risk management style that works but you simply don't have the kind of personality/temperament that can tolerate any amount of stress. In the latter case, perhaps trading is not for you. For those followers who occasionally want to take it easier for a bit of a break or for those who need to build up their resilience before being able to trade more aggressively, I suggest the following: 1) Risk no more than 1% even though we risk between 1 to 3 per cent. 2) Enter on a significant reversal to a key level. Do not enter on open even if it is a small lot as seeing this go into the red will cause you stress if you cannot handle it. 3) If you enter on a significant reversal, you can move the SL further back by the difference between where you opened your entry and the entry price on the trade setup. In that case, it will be unlikely that you will get anywhere near your SL so even if it reverses, you can relax. Have a great weekend all GoldViewFX XAUUSD TOP AUTHOR
OANDA:XAUUSDEducation
by Goldviewfx
27
Learn to Read Candlestick Strength | Trading Basics Hey traders, In this educational article, we will discuss how to objectively measure the market momentum with candlesticks. Please, note that the concepts that will be covered in this article can be applied on any time frame, however, higher is the time frame, more trustworthy are the candles. Also, remember, that each individual candle is assessed in relation to other candles on the chart. There are three types of candles depending on its direction: 🟢Bullish candle Such a candle has a closing price higher than the opening price. 🔴Bearish candle Such a candle has a closing price lower than the opening price. 🟡Neutral candle Such a candle has equal or close to equal opening and closing price. There are three categories of the strength of the candle. Please, note, the measurement of the strength of the candle is applicable only to bullish/bearish candles. Neutral candle has no strength by definition. It signifies the absolute equilibrium between buyers and sellers. 1️⃣Strong candle Strong bullish candle signifies strong buying volumes and dominance of buyers without sellers resistance. Strong bearish candle means significant selling volumes and high bearish pressure without buyers resistance. Usually, a strong bullish/bearish candle has a relatively big body and tiny wicks. 2️⃣Medium candle Medium bullish candle signifies a dominance of buyers with a rising resistance of sellers. Medium bearish candle means a prevailing strength of sellers with a growing pressure of bulls. Usually, a medium bullish/bearish candle has its range (based on a wick) 2 times bigger than the body of the candle. 3️⃣Weak candle Weak bullish candle signifies the exhaustion of buyers and a substantial resistance of sellers. Weak bearish candle signifies the exhaustion of sellers and a considerable bullish pressure. Usually, such a candle has a relatively small body and a big wick. Knowing how to read the strength of the candlestick, one can quite accurately spot the initiate of new waves, market reversals and consolidations. Watch how the price acts, follow the candlesticks and try to spot the change of momentum by yourself. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Education
by VasilyTrader
7
Learn Pros & Cons of Trading on Demo Account Hey traders, In this article, we will discuss demo account trading. We will discuss its importance for newbie traders and its flaws. ➕Pros: Demo account is the best tool to get familiar with the financial markets. It gives you instant access to hundreds of different financial instruments. With a demo account, you can learn how the trading terminal works. You can execute the trading orders freely and get familiar with its types. You can get acquainted with leverage, spreads and volatility. Trading on paper money, you do not incur any risks, while you can see the real impact of your actions on your account balance. Demo account is the best instrument for developing and testing a trading strategy, not risking any penny. The absence of risk makes demo trading absolutely stress-free. ➖Cons: The incurred losses have no real impact, not causing real emotions and pressure, which you always experience trading on a real account. Your performance (positive or negative) does not influence your future decisions. Real market conditions are tougher. Demo accounts execute the orders a bit differently than the real ones. That is clearly felt during the moments of high volatility, with the order slippage occurring less often and trade execution being longer. Trading with paper money allows you to trade with the sums being unaffordable in a real life, misrepresenting your real potential gains and providing a false confidence in success. Even though we spotted multiple negative elements of demo trading, I want you to realize that it still remains the essential part of your trading journey and one of the main training tools. You should spend as much time on demo trading as you need to build confidence in your actions, only then you can gradually switch to real account trading. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
3
The 5 Outcomes Of a Trade | How not to blow your account Successful traders know there are 5 outcomes that can come out of a trading position. When managed well these outcomes can lead to great success. However, when manage badly can cause disaster to a trader’s account. Below I’ll highlight and discuss the possible 5 outcomes of a trade and how you can manage them. 1. Small Profit This is when a position ends in a very small profit, for trend traders, this is usually the case. However, in this situation, there is no loss. 2. Small Loss This is when you lose a small amount at the close of your position. This is part of normal and good trading. In fact, you should cut your losses early. Taking small losses or cutting your losses early will help you stay in this business long term. 3. Breakeven This is a position where you really didn’t make or lose any money. They’ll come too, they are not necessarily bad trades. These types of trades may just mean you should find re-entry to the position or may just be a quick exit without a loss or profit. 4. Big Profit This is when a position ends in a very big profit. This type of trade does not come too often but when they do come they are the trades that move your general account return for the period to the next level. As a trader, these are the type of trades you should look forward to. 5. Big Loss This is when a position ends up closing at a very big loss. This type of trade should never happen on your trading account as a pro-trader. This is the type of trade that can blow your trading account. It’s why you should know how to cut your losses quickly and take a small loss. I’m glad I’ve been able to share with you the possible outcomes of a trade and how you can manage them properly. A simple knowledge like this can suddenly turn your trading account to become profitable. Please, like this post and subscribe to our tradingview page!👍
Education
by EliteTradingSignals
7
DEMONS OF TRADING | Don't Think Like This Have you ever wondered what helped all those professionals of Wall Street become successful? You will be surprised, but the key to their reached heights is hidden in their mistakes. Yes, that is right. Most professional and successful traders made many mistakes before they got to the top. Making mistakes is ordinary and sometimes even necessary because you learn when you make them. The crucial point of this idea is never to repeat those mistakes because some errors may cost us a fortune. That is why we gathered 10 most common trading mistakes to prevent you from faults and losses. Little preparation Entry to the Forex market is relatively easy, so people have a light-minded attitude towards trading knowledge. Beginner traders, especially, think that theory is not a big deal, and they will be able to build it up without a peep. However, it does not work this way. Miscalculating the risk/reward ratio For some reason, many traders believe that higher win trades are more profitable than lower ones. Sometimes, this idea even gets paid off, and due to blind luck, trades, where the potential risk exceeds the reward, benefit. However, in most cases, such trades are a sure way to lose money in the longer term. Avoiding risk management Risk management should be the core of your trading because it helps cut down losses. Trading without risk management is like skydiving without a parachute. Neglecting market events Relevant market news is essential as economic events influence the direction of trading during the day. So, if you are not aware of the financial reports or earnings, you might skip the volatility. To win the game, you need to develop your thinking and how you participate in the game. You are in a market trading against professional traders. Your goal is to think like a professional. That is the only way to survive in this game. Please, like this post and subscribe to our tradingview page!👍
Education
by EliteTradingSignals
7
Learn How to Trade Descending Triangle Pattern Descending triangle formation is a classic reversal pattern. It signifies the weakness of buyers in a bullish trend and bearish accumulation. ⭐️The pattern has a very peculiar price action structure: Trading in a bullish trend the price sets a higher high and retraces setting a higher low. Then the market starts growing again but does not manage to set a new high, setting a lower high instead. Then the price drops again perfectly respecting the level of the last higher low setting an equal low. After that one more bullish movement and one more consequent lower high, bearish move, and equal low. Based on the last three highs a trend line can be drawn. Based on the equal lows a horizontal neckline is spotted. ❗What is peculiar about such price action is the fact that a set of lower highs signifies a weakening bullish momentum: fewer and fewer buyers are willing to buy from horizontal support based on equal lows. 🔔 Such price action is called a bearish accumulation. Once the pattern is formed it is still not a trend reversal predictor though. Remember that the price may set many lower highs and equal lows within the pattern. The trigger that is applied to confirm a trend reversal is a bearish breakout of the neckline of the pattern. 📉Then a short position can be opened. For conservative trading, a retest entry is suggested. Safest stop is lying at least above the level of the last lower high. However, in case the levels of the lower highs are almost equal it is highly recommendable to set a stop loss above them all. 🎯For targets look for the closest strong structure support. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
5
Learn Cup & Handle Pattern | Profitable Trading Strategy For Beg A Cup and Handle is a bullish continuation chart pattern that marks a consolidation period followed by a breakout. Chart patterns form when the price of an asset moves in a way that resembles a common shape, like a rectangle, flag, pennant, head and shoulders, or, like in this example, a cup and handle. There are two parts to this chart pattern: The cup The handle The cup forms after a downtrend and is followed by an uptrend and looks like a bowl or rounding bottom. As the cup is completed, the price trades sideways, and a trading range is established on the right-hand side and the handle is formed. A breakout from the handle’s trading range signals a continuation of the previous uptrend. The cup should resemble a bowl or rounding bottom. The perfect pattern would have equal highs on both sides of the cup, but in the real world, just like when finding someone to marry, perfect doesn’t exist. After the high forms on the right side of the cup, there is a pullback that forms the handle. The handle is the consolidation before the breakout. The handle needs to be smaller than the cup. The handle should not drop into the lower half of the cup, and ideally, it should stay in the upper third. If the Cup and Handle pattern completes successfully, the price should break above the trend established by the “handle” and go on to reach new highs. The buy point occurs when the asset breaks out or moves upward through the old point of resistance (right side of the cup). Please, like this post and subscribe to our tradingview page!👍
Education
by EliteTradingSignals
7
Do That BEFORE You Start REAL ACCOUNT Trading Here is the list of thing that you should learn in advance before you start trading on a real account. 1) Open a demo (practice) account and learn to execute trades without making errors 2) Study the methods of great traders and financial minds throughout history - Jesse Livermore, W D Gann, Charles Dow/Dow theory, Paul Tudor Jones,Richard Wyckoff. Learn their methods and employ them. Learn their mistakes and avoid them. 3) Focus on learning, not winning. Forget about money and profits. Think about developing a winning strategy and a winning trading mindset. Always be open-minded. Observe. Be flexible. 4) I recommend reading the following books. These books will help you to start to think like a trader and realize what you are getting yourself into: a) "Reminiscences of a Stock Operator" by Edwin Lefevre b) "Art of War" by Sun Tzu (Not a trading book but an old book on rules of war and how to protect yourself from being outsmarted and defeated by your enemies) c) "The Trading Methodologies of W.D. Gann" by Hima Reddy d) "Time Compression Trading: Exploiting Multiple Time Frames in Zero Sum Markets" by Jason Alan Jankovsky e) "Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude" by Mark Douglas 5) Watch YouTube videos. Absorb all the info you can as the more you know, the more the pieces of the puzzle fit together later on. You can learn the basics of trading on your own and then when you are ready to take your trading to the next level. To win the game, you need to develop your thinking and how you participate in the game. You are in a market trading against professional traders. The beginning traders in the market are not your competition-they are incidental. You need to trade with the professional traders who run the market. I wish you luck on a battle field! Please, like this post and subscribe to our tradingview page!👍
OANDA:BTCUSDEducation
by EliteTradingSignals
12
BIGGEST TRADING MISTAKES YOU MUST KNOW While some trading mistakes are unavoidable, it is important that you don’t make a habit of them and learn from both successful and unsuccessful positions. With that in mind, these are the 10 most common trading mistakes. 1 - Not researching the markets properly Some traders will open or close a position on a gut feeling, or because they have heard a tip. It is important to back these feelings or tips up with evidence and market research before committing to opening or closing a position. 2 - Trading without a plan 3 - Over-reliance on indicators 4 - Failing to cut losses The temptation to let losing trades run in the hope that the market turns can be a grave error, and failing to cut losses can wipe out any profits a trader may have made elsewhere. 5 - Overexposing a position 6 - Overdiversifying a portfolio too quickly While diversifying a trading portfolio can act as a hedge in case one asset’s value declines, it can be unwise to open too many positions in a short amount of time. 7 - Not understanding leverage 8 - Not understanding the risk-reward ratio The risk-to-reward ratio is something every trader should take into consideration, as it helps them decide whether the end profit is worth the possible risk of losing capital. 9 - Overconfidence after a profit 10 - Letting emotions impair decision-making Emotional trading is not smart trading. Emotions, such as excitement after a good day or despair after a bad day, could cloud decision-making and lead traders to deviate from their plan. Every trader makes mistakes, and the examples covered in this article don’t need to be the end of your trading. However, they should be taken as opportunities to learn what works and what doesn’t work for you.
OANDA:BTCUSDEducation
by EliteTradingSignals
4
Dealing with losses...before they happenLosses are part of this business. People do not react well to losses. Badly handled losses in trading can trigger bigger losses. Furthermore, these have the dangerous potential of wiping out entire accounts. If you want to make it as a trader you need to have a solid psychological approach to accept and handle losses. Lots of internet articles are suggesting that the way to prevent debilitating losses in trading is to follow risk management rules. What are those rules about? Basically, they are simple thresholds indicating the maximum $ /percentage you should risk per trade, day, month, etc. Having such rules is a must but it’s not enough. You can still lose much if your mind is not actually prepared to implement them. That’s why many traders set rules only to break them in the most inappropriate moments. People do not follow their own risk management rules because they are not psychologically prepared to accept losses. They are not prepared for the pain caused by a loss or a series of losses. The single most efficient way to handle losses is to accept them consciously and unconsciously. One of the most dangerous ways to react to losses is “revenge” or “on tilt” trading. This happens when the pain caused by a loss is so high that the trader loses his / her rationality and only wants his / her money back, disregarding most of the things he/she actually knows about the market. The brain cannot accept the emotional discomfort and the fastest solution is to quickly find a trade to make the money back. Most of the time, the quickest trade is in the same instrument (FX pair, stock, etc) that generated the initial loss, by averaging down/up or flipping. Some of the most experienced traders can work their way out but the vast majority will only make things worse. In order to prevent this kind of psychological slippage, you need to prepare your mind to consciously and unconsciously accept losses BEFORE they occur. With the help of a psychotherapist or by yourself you can perform visual exercises where you will imagine yourself being in a losing position and reacting the right way. This would desensitize you if done right. The technique I always use each time I open a position is to do that desensitization process “on the fly”. I watch the market and I see an opportunity. BEFORE opening the position, I imagine myself in the posture of facing that trade ending in a loss. After that, I imagine that trade going the way I want. I might even go back and forth (in my mind) a few times between losing and winning. This way, I prepare my unconscious mind. If I cannot imagine myself easily handling the loss (or the win) I will simply reduce size. Pay attention though, I am not recommending here to imagine yourself constantly losing because this would do more harm than good. This would be a separate topic about the power of visualization exercises.
OANDA:XAUUSDEducation
by Mihai_Iacob
12