BTC/USD Binance.US - This is why I do not use stop losses.. I must start by saying that I believe Bitcoin and cryptocurrency investing offers the greatest opportunity for the common man to build wealth to have ever existed in the history of the world. Yet, it is still an endeavor that must be entered into cautiously and with research if one is to be successful.
The Daily Chart for BTC/USD on (the pathetic excuse of an exchange) Binance.US, serves as a teachable moment that should not be ignored. This chart demonstrates that if you cannot go to sleep peacefully without having a stop loss in place then you may need to reconsider being in this game.
The traditional methods of trading securities that were used in the regulated stock markets of the world and which subsequently made a lot of the famous traders of old very rich, predated high frequency trading and algorithmic trading bots on these mostly unregulated cryptocurrency exchanges. Yet, these outdated methods are currently being peddled and taught by the get-rich-trading-crypto-gurus today as the "secrets to crypto trading profits", despite this being 20th century methods that will cause you to lose your shirt if adhered to when trading crypto. Any endeavor to read and learn about crypto trading will, almost without fail, lead to a regurgitated list of the same old trading clichés. One such example: the so-called number one rule of trading. Always use a stop loss. The number one rule of successful trading is undoubtedly to limit your losses. This may be true, but if you are doing that with a stop loss on an exchange then you are asking to be robbed. Yes, you have to know when to cut your losses and move on, but unfortunately, because of the nature of swimming these dangerous financial waters, the sharks in the crypto space will eat your lunch, steal your crypto at bargain prices and laugh as you weep over what could've been. The order books are open. Anybody with a desire to do so can launch a trading "bot" using an API on most any crypto exchange. If that person or entity happens to have enough capital to clear the buy or sell side of the order books of an exchange, then they are free to do so. Once this is done, your crypto is gone at a bargain price with the classic stop loss shake out. Which is why if I cannot hold it without a stop loss, then I don't need it. If a drop in price doesn't present an opportunity for me to buy more, then I don't need it. If I'm not confident that it will be around in 2-5 years from now, then I don't need it. To limit losses, set a price alert on Tradingview, CoinGecko, or your exchange watchlist. If you are afraid it will drop too much before you can act on it, or if it suffers from a lack of volume and thus has a lack of liquidity, then perhaps it's best to HODL or leave it be.
If you don't know what any of this means, then that could be a sign that you may need to do a little more due diligence.
Trading Plan
Mentality - Identify Right or Wrong DecisionHi Traders. Here's a very impromptu topic regarding how do you know if you're doing the right thing or not. Often, most of us fail to differentiate whether are we making the right decisions or not, because of the outcome - profits. One main thing you must understand is that, trading the financial markets are all about the probable & possible. Short-term outcomes are completely random, what separates you from 90% of losing traders, is your trading edge, consistency and emotional detachment. If you are 'lucky' enough to make money not following your plan, are you able to duplicate this into the long-term projection? Ultimately, markets will reward discipline traders, so stick to your plan and keep grinding!
Comment down below what's the worst trading decision you've ever made.
Do not forget to like if you enjoy the sharing. Trade safe and take care.
DEVELOPING YOUR TRADING PLAN | Your Whys and Hows 📝
Hey traders,
To trade the market profitably you need to have a plan.
A set of rules & conditions to rely on each and every time when you are searching for a trading opportunity.
A trading plan of a professional trader is very sophisticated. It consists of various different elements. The precision there is pushed to the limits.
In this article, we will discuss a trading plan of a newbie trader. A trader who just completed a basic educational course and looks for a trading strategy to trade with. The proposed trading plan will be based on very very essential elements that must be included in any trading plan.
💱Know what you trade.
Know exactly what market are you focused on and which trading instruments are on your radar.
For example, being a stock trader, you can not follow all the world stocks, you should narrow down your list and specify that.
⌛Know what time frame you analyze.
There are multiple styles of trading. Trading style can be defined by a trading time frame.
Trading setups taken on a daily time frame are dramatically different from setups spotted on 1-hour time frame.
📈Know exactly the desired market conditions.
There are two main states of a market:
The market can be in a trend and the market can consolidate.
Depending on the state of the market the trader can look for trend-following opportunities; trade the ranging market or look for reversal counter-trading setups.
💸 Know your desired risks.
The max amount of active trading positions,
risk percentage per a single transaction,
max allowable drawdown.
All these numbers must be considered & calculated precisely.
💡Know your entry reasons.
There are thousands of different reasons to open a trading position. However, they can be easily sorted by various categories.
Three universally accepted categories of entry conditions are:
patterns, indicators, fundamental news.
The trader must strictly know in advance the conditions that he is looking for to open a trading position.
🛑Specify your stop placement rules.
Losses are inevitable and must be strictly controlled.
As with the entry reasons, there are a lot of different stop placement techniques.
You must know exactly what do you rely on to place your stop wisely.
3 most common stop placement techniques are:
pip-based, structure-based and indicator-based.
🟢Know your targets.
Opening a trading position and catching a rally the trader must have strict rules for profit-protection/profit-taking.
The two most common ways of profit protection are take profit levels based on fixed levels/pip numbers & trailing stop.
All these elements must be strictly included in your trading plan.
If at least one of them is missing, don't trade.
With time, as you mature, you will have more and more elements & conditions in your trading plan. That will make your trading more precise & consistent.
Do you have a trading plan?
❤️Please, support this idea with like and comment!❤️
3 Ways To Invest In Crypto Market WITHOUT Education 💡You got a busy life and you don't have time to research and learn about thousands of cryptos,
Or you maybe don't see yourself and your life a trader,
Maybe aren't even interested in capital market.
You just heard Crypto Market is gaining a lot of profit and you just don't want to miss it..
You know what?? You hear from a Shit Coin.. You buy some.. And You will lose most of or maybe all your money ..
This IDEA will guide you through this situation, it will let you know how to invest successfully (probably), in crypto market.
I tried to minimize the risk for you..
SHALL WE BEGIN???
There are three possible ways, the First one will cost you money, the Second and the Third are free of charge.
FIRST: Go to an expert consultant.
The only thing you need to do, is to research and find suitable expert consultant for yourself. After that everything is done.
He/She, will gather some of your personal information to know you better to arrange a personal crypto portfolio.. This type of portfolio is uniquely designed for you and your personal goals..
And of course this way will cost you money due the type of expert you find.
SECOND: Bitcoin & Ethereum.
Clear your mind from whatever exciting coin and token you hearing all around the social media or you friends..
Bitcoin and Ethereum are the King and the Queen of the market, AND NOTHING ELSE MATTERS...
Try to calculate how much money can you HOLD or HODL for at least 5 YEARS . Buy Bitcoin/Ethereum with that money and store it in a safe place and just don't think about it anymore until that 5 year deadline comes up.
I believe you will be surprised when you see the outcome of your investment. And don't remember that at least 5 year is so important.
free of charge this one.
THIRD AND LAST: DCA, Dollar-Cost Averaging.
Did you remember older members of the family always told us, don't spend all your income. Put some of your income into the bank, monthly. It'll come handy some day.
Dollar Cost Averaging is something like that, and you know what?? It will work perfectly on Cryptos.
The only thing you need to do, is to calculate you monthly costs and income. After that promise something to yourself, I WILL SAVE SOME OF MY INCOME INTO CRYPTO EVERY MONTH. It can be %5, %10, %15,... whatever number you and your life feel comfortable with.
This DCA needs Three situations for you to concentrate on. First , You should keep your promise and buy crypto every month no matter what happens. Second , you should again wait at least 5 years . But don't worry the results will make you satisfied.
And Third , Just buy Bitcoin or Ethereum again and nothing else. Don't remember The KING and The QUEEN.
Why it is called AVERAGING??? because, no matter what is the price your filling your bag every month, so you will buy bitcoin in the deep, in the middle and in the top. This way you will buy your asset in an average price, without even knowing anything from the market.
This one was free of charge too, and I believe from bottom of my heart you will be excited from the result..
This is it.. I hope you enjoyed this IDEA.. If you did so, push the LIKE button and feel free to talk to me in comment section :)
10 Rules for Every TraderI have on the wall next to my trading desk a list of 10 rules which I remind myself of every day. These are rules that I've come up with as a result of mistakes that I've made in the past. New traders often have misconceptions about what good trading looks like, or how a successful trader behaves. The barriers to getting into trading today are low, but the learning curve is still just as steep. You can save yourself considerable time and money by learning from others. I'm sharing this list mainly for new traders, but anyone can benefit. So, without further ado:
10 Rules For Every Trader
1. Price doesn't HAVE to do ANYTHING.
A common misconception among very new traders is that skilled traders are able to 'predict' the market. This is not true. This is not even possible. As a trader, your job is to deal in probabilities and risk-management.
2. Ranges are more common than breakouts.
In any given market, for every successful breakout and acceptance of new price, you will find 3-5 failed breakouts. New traders often prefer breakout trades because they happen fast, they're exciting, and there's a certain thrill to profiting off of a sudden move that you know caught a lot of other traders with their pants down. Remember that price action stays rangebound by default, until a demand imbalance pushes the auction process to a new range. Range bound trading is a boring grind, but it's also the easiest money you'll make.
3. You will be wrong at least 50% of the time. Keep your risk tight!
So, it's not necessarily true that you'll be wrong more than you are right, however as a new trader it's highly probable. This is however the mindset that I adopt when I am evaluating the risk of a potential trade. With any trade I take, I assume that I've got a greater chance of being wrong than being right. When you think about your trading this way, I guarantee that you'll tighten up your risk management game.
4. Check your ego at the door.
You're here to make money. That's all. The market is not here to offer you self-validation. The market doesn't care about your need to prove anything. Stay humble, and always keep the possibility of being wrong in the forefront of your mind.
5. Take what is offered.
This goes hand in hand with rule one and rule four. A common saying is 'follow the signals, not the cents'. I've let winners turn into losers in the past because I FELT (rule 4) like price action HAD (rule 1) to go farther before rolling over. Take what the market offers, and see the next rule.
6. There will ALWAYS be another opportunity.
FOMO (fear of missing out) is very real. It will also lead you to get cut to pieces in a leveraged market. If you missed your ideal entry, don't chase. You didn't just miss the last and only good trade in the world. Think of your risk capital like ammunition. Save it for tomorrow.
7. Winners add to winners. Losers add to losers.
What more can I say? If you're adding to a losing position with the intent to move your average entry price, you're already in trouble. Every time you think about adding to a position, I want you to hear this rule in your head. "Winners add to winners. Losers add to losers." Close that losing trade. Save your capital for the next opportunity.
8. Be greedy with your entries: fight for price.
If your trading thesis requires price to reach a certain level to validate your entry criteria, then wait for that level. Remember, don't FOMO into a trade. See rule six.
9. Be patient with your entries: Being early is the same as being wrong.
Similar to rule 8, no FOMO! Have you ever taken a trade and then been stopped out before the market makes the move you were expecting? You're trying to predict the market instead of reacting to what it is showing you. Slow down, and remember that acceptance of price is validated by both time and volume.
10. Hope is NOT a strategy!
This is the difference between trading and gambling. Good trading looks very boring. As a general rule of thumb, if it's exciting, you're probably gambling and not trading. If you don't have a solid 'if this, then that' thesis about the market you're looking to trade, then you don't have a trade to make.
These rules are meant to be guidelines for self-improvement as a trader. Write them down. Add your own personal rules. Print them out and put them where you will see them every day. Look at them before you trade and while you manage your positions. At the end of the day, evaluate how well you followed them and record your thoughts in a trading journal. I promise you that if you incorporate these rules into your trading plan, and make them a part of your thinking, you will find success as a trader.
Trade well everyone.
Examining Rejections - Probability of SuccessHi Traders. Today, we are going to discuss about Type 1, Type 2 & Type 3 Rejections that I personally examine prior to taking any Reversal setups. Are you someone who has multiples reversals strategies, but often when the trade lines up, you find it difficult to determine whether you should pull the trigger or not? If that's the case, there are two possible issues you are facing
A. You did not back-test the strategy
- Backtesting gives you to necessary confidence to take any setup without hesitation
B. You do not know exactly what you are looking for
- Due to the lack of research, backtesting and experience, you find it confusing to identify whether an entry trigger is valid or not
Below, I will be breaking down the logic behind these 3 different types of rejections, and which one had proven to give me a better Probability of Success over the long-term
Type 1 : Price just tap a Resistance zone , then begin showing signs of exhaustions
• This type of rejection often attracts traders who are FOMO (Fear of Missing Out) or have the sense of urgency to quickly get involved
• My data shows that Type 1 rejection gives the least success rate, often price tends to move sideways after the rejection, then slowly grind back up digesting the entire candle
• It is the weakest rejection due to the liquidity purposes (not always). It is not easy for a market to completely reverse into the opposite direction without attracting traders onto the wrong side
Type 2 : Price pierces through a Resistance zone , then showing strong sign of rejection closing back below
• e.g. Pin-bar, Doji , Spinning Top , etc
• It usually wick through the previous high, and wipe off traders who place their SL just slightly above the structure
• This type of rejections is often what I personally enjoy trading the most too, as it shows extreme price disagreement.
• Price attempts to break above the Resistance zone , but faced immediate opposing pressure defending the price zone, showing solid rejection
Type 3 : Price closes above the Resistance, then pop back below
• Commonly referred as a "Fakeout"
• The logic behind this is great as well. Price closes above a Resistance zone attracting more fresh buyers in, Buyers who bought at low would scale-in, Breakout traders would try to chase the aggressive buys
• All of a sudden, buying pressure turns off, Big Boys step in immediately reverse the market into the opposite direction
• Think about the amount of selling volume requires to shut down that huge amount of Bullish momentum
• A very reliable reversal entry trigger too
In this example, I am using a Bearish reversal scenario. It works the same way in a Bullish reversal environment too.
Comment down below which one is your favourite rejection trigger?
Do not forget to like if you enjoy the sharing. Trade safe and take care.
How to analyze the market from scratch (Impulse & Correction)Hello everyone:
Many have asked me about demonstrating how to analyze the chart from complete scratch.
When looking at my chart and educational video, it all seems very simple, but many are telling me they are struggling to identify the market.
Today I will go over how I analyze the chart, from the Higher time frame down to lower time frame by using multi-time frame analysis, top down approach.
Specifically by identifying price action, impulse and correction phases of the market.
1. Start from the Higher Time Frame (HTF): HTF can be any time frame higher than the daily chart, such as monthly, weekly, daily.
Personally I like to use daily as a go to time frame as it is widely used by traders.
2. Identify the impulse phase of the market. Understand the impulse phase is a period of fast momentum,
price is either pushing up or down very aggressively, and not much consolidation visible on the HTF.
3. Identify a period of consolidations. Using trendlines, connect the swing highs and lows of the price.
This is to identify the correction/consolidation phase of the market.
Which is the most important aspect in price action analysis.
You will need to be very knowledgeable on the type of continuation, reversal correction patterns/structures the market usually will form.
(I will share many price action patterns/structures that I identify and use in the market below)
4. Once you identify the HTF phase of the market, you will then go down to the Lower time frames (LTF).
LTF can be anything under 2/1 HR, 30/15 Min charts. It's not a specific time frame, rather “Multi time frame analysis”.
You will also identify the impulse phases & Correction phases on the LTF and use trendlines to connect the swing highs and lows of the correction/consolidation phase, just like what we did on the HTF.
5. Now that you have both the HTF and LTF charts drawn out, the key here is to have both the HTF and LTF tell you the same direction/bias.
They should align up and have the same bullish/bearish bias. This will strengthen your probability of success.
I always make sure when I am about to enter any trades, I want the multi-time frames all telling me the same story. Same bias, same direction.
6. Now all that comes down to is forecasting the possible entries, which I have made many videos on this topic and I will share some below.
Understand you would always want to make sure you are either entering during the impulse phase on the LTF,
or the price is about to start the impulse phase to gain the upper hands in the market.
You do not want to enter when the price is in a consolidation which is why many traders end up losing money, stuck in the correction and price isn't moving too much, rather just sideways.
7. Continue to work on analyzing the chart from scratch, get comfortable at identifying the impulse phase in the market,
and do backtesting continuously so you identify the corrections in the market.
This will make you see the chart and the market completely different than before, and you will have a much better probability of entering trades that work out in your favour.
Any questions, comments or feedback welcome to let me know.
Jojo
Below I will share many educational videos that will help you to understand more on price action analysis, impulse/correction phase, entry, forecasting, backtesting and more.
Continuation and Reversal Correction
Identify a correction for the next impulse move in price action analysis
Multi-time frame analysis
Continuation Bull/Bear Flag
Parallel Channel (Horizontal, Ascending, Descending)
Reversal Ascending/Descending Channel
Reversal Rising/Falling Wedge
Reversal Double Top/Bottom
Reversal Head & Shoulder Pattern
Reversal “M” and “W” style pattern
Reversal Impulse Price Action
Continuation/Reversal Expanding Structure/Pattern
Risk Management: 3 different entries on how to enter the impulsive phrase of price action
Risk Management: How to Enter and set SL and TP for an impulse move in the market
Risk Management: When/How to move SL to BE and to profit in a running trade ?
How forecasting can benefit your trading journey
Backtesting & Chartwork on Forex Market
Backtesting & Chartwork on Indices Market
Backtesting & Chartwork on Crypto Market
How & Why I backtest:
Processing Spreads Provide Fundamental CluesSome futures markets offer contracts that are related to others and are processed products of the commodity. Understanding the price relationships, history, and paths of least resistance of the processed product versus the original input can provide valuable insight into supply and demand fundamentals. Moreover, these relationships shed light on other related assets.
Market structures are the pieces of a jigsaw puzzle
Processing spreads are real-time supply and demand barometers
The soybean crush spread
Gasoline and distillate crack spreads
Monitoring corporate profits
There is so much data at our fingertips, but we need to understand how to use and interpret the information. Processing spreads are invaluable tools as they are critical variables for market calculus when forecasting the path of least resistance of prices.
The crude oil and soybean futures markets offer liquid futures contracts in products that can reveal significant trends, warning signs, and calls to action. Anyone who undertakes a home improvement project knows that the job will not go well without the correct tools. Trying to hammer in a nail with a screwdriver is far from optimal. Tightening a bolt with an ax is a disaster. The best tool leads to the optimal result. The processing spread is one of the most critical tools in my investment and trading toolbox.
Market structure are the pieces of a jigsaw puzzle
In the world of commodities, market structure are integral pieces of a puzzle. When put together, they provide clues about the path of least resistance of prices as they reflect and can be real-time indicators of supply and demand fundamentals. A commodity’s market structure includes:
Term structure- Price differentials for nearby versus deferred delivery periods.
Location differentials- Price differentials for delivery of a raw material in different regions.
Quality differentials- Price differentials for differing grades, sizes, or composition of the same commodity.
Substitution spreads- The price comparison of one commodity for another that can serve as a substitute.
Processing spreads- The margin or differential for refining or transforming one commodity into its products.
Together, the various pieces that comprise a market’s structure create a picture that often points to higher or lower price paths.
Processing spreads are real-time supply and demand barometers
The processing spread is one of the valuable tools in an analysts’ toolbox. It tells us if demand for the products is rising or falling.
Consumers often require the processed product instead of the raw commodity. The differential between prices of the input, the commodity, and the output, the product, is a critical fundamental measure. Narrowing processing spreads signal falling demand while widening spreads are a sign that supplies are not keeping pace with requirements. Since futures contracts prices are constantly changing, processing spreads can be volatile. When the commodity and product trade in the futures market, the differentials provide a unique supply and demand perspective for traders and investors. There can be many reasons for price variance in processing spreads. However, comparing them to historical levels can serve as real-time indicators of fundamental forces that determine the underlying commodity’s price direction when exogenous factors are not impacting the overall refining or treatment process.
Many commodities do not offer futures contracts in the products. The soybean and crude oil markets are exceptions.
The soybean crush spread
Soybean futures trade on the CME’s CBOT division. Soybean products, soybean meal, and soybean oil also trade in the futures markets on the CBOT with separate and independent futures contracts. Soybean meal is a critical ingredient in animal feed, while soybean oil is cooking oil. Both have other uses.
Processors crush raw soybeans into the two products; the oil is the liquid from the crushing process, while the meal is the solid substance.
The soybean crush spread can be highly volatile.
The monthly chart shows the soybean crush spread over the past fifteen years. The spread traded to a low of a quarter of one cent to as high as $2.1950. The low was in 2013 when soybean futures were trending lower from the all-time high in 2012 at $17.9475 per bushel. The high was in October 2014 when soybean futures were consolidating at lower levels. The move to the high was because consumers bought soybean products at lower prices around the $10 per bushel level.
More recently, the crush spread signaled that soybean futures had run out of downside steam. After trading to a high of $16.7725 per bushel in May 2021, the oilseed futures fell below $12 in October. When soybeans were on the high in May, the crush fell to a low of 52.75 cents.
At high soybean prices, consumers backed off buying the oilseed products, leading to a price correction that took the price below the $12 per bushel level in October. Meanwhile, falling prices caused demand for products to return. The crush spreads traded to the most recent high at $1.9050 during the week of October 18. The rising crush spread was a sign of robust demand that lifted the raw soybean futures from the recent low.
The November soybean futures chart shows the rise from a low of $11.8450 to the $12.50 level. The price action in the crush spread was a signal that demand for products would lift the soybean futures price. The processing spread action signaled the price bottom over the past weeks.
Gasoline and distillate crack spreads
Crude oil refiners process the raw energy commodity that powers the world into products, gasoline, and distillates. The NYMEX futures market trades contracts in crude oil, gasoline, and heating oil. Heating oil is a distillate fuel that is a proxy for other distillates, including jet and diesel fuels. Refineries process crude oil into the oil products by heating them to different temperatures in a catalytic cracker. The price differential between the input, crude oil, and the output, the products, are “crack spreads.” Rising crack spreads point to increasing demand for oil products. When they fall, it is a sign of oversupply or weak demand.
Crude oil futures reached lows in April 2020 during the height of the global pandemic’s impact on markets across all asset classes.
The NYMEX crude oil futures weekly chart highlights the bullish trend since April 2020 as the energy commodity has made higher lows and higher highs.
The weekly chart of the gasoline crack spreads highlights the bullish trend since March 2020. Gasoline is a seasonal commodity that tends to reach highs during the spring and summer months and decline during the winter as drivers tend to put more mileage on their cars during the warm months. However, at the $17.63 per barrel level at the end of last week, the gasoline crack spread was appreciable higher than the peak in October 2020, when it reached $11.62 per barrel. The gasoline crack spread has provided bullish validation for the path of least resistance of crude oil’s price.
The weekly heating oil or distillate crack spread chart also displays a bullish trend. Distillates tend to be less seasonal than gasoline as jet and diesel requirements are year-round. At the $22.53 per barrel level at the end of last week, the heating oil crack was far higher than its October 2020 peak at $9.96 per barrel.
The crack spreads have supported the rising crude oil price as they point to robust product demand.
Monitoring corporate profits
While processing spreads can provide insight into the path of least resistance of prices for commodities that are inputs, they are also real-time earnings indicators for companies that refine or process the raw commodities into the products.
Refiners or processors tend to buy the input at market prices and sell products at market prices. The refiners and processors make significant capital investments in refineries or other processing equipment. They make or lose money on the processing spread. When they widen, they experience a profit bonanza; when they fall, times can get rough. When the spreads rise above the cost of the process, profits rise. Low processing spread levels can lead to losses.
Valero (VLO) is a company that refines crude oil into oil products.
The chart shows that the high in October 2020 was at $44.88 per share. In October 2021, VLO was over the $80 level at the end of last week. Rising crack spreads have lifted profits for the oil refiner.
Archer Daniel Midland (ADM) and Bunge Ltd. (BG) are leading agricultural processors. Soybean processing is one of the many business lines for the two companies. The rising soybean crush spreads have lifted profits for the companies.
In October 2020, ADM shares reached a high of $52.05 per share. At the end of last week, the stock was at the $66.22 level.
BG shares reached a high of $60.50 in October 2020 and were trading at the $88.33 level at the end of last week. The rise soybean crush spreads at least partially supported rising profits and higher share prices for ADM and BG.
Processing spreads are real-time indicators for the demand of the commodities that are the inputs. They are also real-time earnings barometers for companies that process commodities into products. Any tool that improves your ability to analyze markets is worth keeping in that toolbelt.
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The full article and spread charts are available using the link below. You can also sign up for the Monday Night Strategy Call below.
Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
PRICE ACTION TRADING | RISING WEDGE PATTERN 🔰
Hey traders,
Rising wedge pattern is one of the most accurate price action patterns.
Being relatively simple to recognize, it is applied in various trading strategies.
⭐️The pattern itself signifies the exhaustion of bulls.
Even though the asset keeps growing in value, the price action legs contract forming a narrowing channel.
Being stuck between two contracting trend lines, one serving as support and one serving as resistance, the price forms a wedge pattern.
🔔The trigger that we are looking for to sell the market is a bearish breakout of the support of the wedge (candle close below).
To not be caught by a false breakout, it is highly recommendable to wait for a bearish violation of the last higher low level as well.
Only then the wedge breakout is confirmed.
⚡️Trading the market aggressively, one opens a short position on spot just after the candle closes.
⚡️The conservative trader will wait for a retest of the broken support of the wedge though for a safer entry.
✔️Safest stop will lie strictly above the highest wick within the wedge.
✔️Initial target will be based on the closest key structure support.
Learn to recognize this pattern and be disciplined to wait for its confirmed breakout. Only then a high trading performance will be achieved.
What price action pattern do you want to learn in the next post?
❤️Please, support this idea with like and comment!❤️
What are candlesticks in trading and how to use them?🕯
✅The price dynamics of an asset are displayed on the chart in different formats, including bars, lines, or candles. The latter format is most popular among traders and is often used in technical market analysis. What are candles and how to work with them?
🟢Candlesticks (Japanese candlesticks) are a graphical way of displaying price dynamics, in which vertical rectangles and lines are used. This method was invented on the rice exchanges of Japan in the 17th century, from where it got its name.
A price candle consists of two main elements:
1️⃣the body is a vertical rectangle that shows the opening and closing levels of trades;
2️⃣wicks (shadows, tails) - vertical lines from above and below the body of the candle, reflecting fluctuations in value in the interval between opening and closing.
❗️The main advantage of a candle over bars and a linear chart is that it allows you to get 4 important indicators for technical analysis at once:
High - the highest price for the period;
Low - the lowest price for the period;
Open - the opening price of the period;
Close - the closing price of the period.
🔴When using a linear graph to get the same information, 4 indicators would have to be displayed on the screen at once, which is inconvenient and complicates the perception of information.
At the same time, candles display the process of cost formation in a specific time interval, so the position and appearance of candles on the hourly and daily periods will differ significantly
Types of candles
⚠️Two main types of candlesticks correspond to market trends:
Bullish candle - formed when the closing price of the period was higher than the opening price. On the chart, such a candle is displayed in green (on b / w - white) and indicates the victory of buyers in this time.
A bearish candle - is formed if the period is closed at a price lower than it was opened. On the chart, bearish candlesticks have a red color (on b / w - black) and they show that sellers are dominating at the moment.
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Can You Profit Day Trading? YesKeep Trading Simple!!!
Volume is the heart of trading Forex. This tells us how much interest is in a candle or at a price level zone- where big money and hedge firms are trading.
On chart example: London and NY session overlap is a very high liquidity and volume time every day to trade. Only 4 hour period.
Use only:
1) Simple Volume indicator
2) Session indicator
3) Bolliger Bands indicator
Rules are:
1) Is price action over a critical price action level? yes- 1.55000
2) Is price action over 20 ema of Bolliger Bands? yes- over yellow line
3) Use ATR for stop loss, entry and targets- this is something that all Forex traders should know on pair that is being trader.
4) On chart is 25 pip stop vs 62.5 pip is risk reward 1:2.5 setup
5) Only find setup at around start of London/NY overlap and trade during this 4 hour time period. Close all trades at end on London session.
Simple Forex (Support & Resistance) #1Support and Resistance
Support occurs when falling prices stop, change direction, and begin to rise. Support is often viewed as a “floor” which is supporting, or holding up, prices.
Resistance is a price level where rising prices stop, change direction, and begin to fall. Resistance is often viewed as a “ceiling” keeping prices from rising higher. If price breaks support or resistance, the price often continues to the next level of support or resistance. Support and resistance levels are not always exact; they are usually a zone covering a small range of prices so levels can be breached, or pierced, without necessarily being broken. As a result, support/resistance levels help identify possible points where price may change directions.
Major vs. Minor Resistance/Support
Minor resistance or support temporarily delays rising or falling prices within a larger market trend while major resistance or support altogether stops either rising or falling prices and larger market trend changes direction. Minor price resistance/support is an artificial horizontal line representing an area, which previously served as price support or resistance, and has now transformed to the other. If price was previously a support level, it is now a resistance level.
Trade the “Bounce”
Buy when the price falls towards support.
Sell when the price rises towards resistance.
Trade the “Break”
Buy when the price breaks up through resistance.
Sell when the price breaks down through support.
Trade everything that moves. The mechanics of the position set💡
Trading on the market can be regarded as a full-fledged struggle for the right to survival, where the main enemies are two factors, infinite randomness and time.
By adapting your positions to what is happening, you risk becoming that very accident and you can only fight with time.
The mechanics of the position set includes a theory about the direction of the price.
Directivity theory
The essence lies in the continuous direction of the price when the distance from the selected zone is inevitable. It is important to highlight the level and work as soon as the price reaches these values.
How is the usual set of positions made
Opening a position in a certain direction, as soon as the price goes against the desired forecast, closing with a stop loss, abandoning the transaction, searching for a new entry point, and trying to predict the direction, is an extremely difficult task.
An example of a set of positions taking into account the theory of price orientation and risk control R
The mechanics of position recruitment are based on clear and simple principles of operation, flexible thinking, quick adaptation to market sentiment.
If you start to apply these mechanics in practice, you will notice how at first glance simple things are difficult to do the practice. There will be a feeling that nothing will work, there is no logical explanation for this, eventually, everything will be lost and a big chaotic high-speed car will crush you.
This is the basic principle, as long as the market is such, you have very little chance of the death of capital. While large funds, investors, and someone else is fighting among themselves for huge movements, we do not necessarily have to accept their rules of the game and play on their territory in predicting the general and long-term direction of the market.
You should think with your head and look for benefits primarily for yourself, taking into account all the nuances of what is happening.
But how to be flexible?
Constantly turning over a position is completely unprofitable, in the final execution, losses exceed the target profit. It is not at all clear where and when to put stops, overturns, and takeaways.
This is where the risk control system R will help us
She kicks down the door, breaks into our strategy, and, as the most important puzzle, falls into its rightful place!
From my experience, the optimal risk per trade for a beginner is $10
With a smaller volume, there will simply be no motivation to work.
But it is worth remembering that the deposit should not be extremely small, as it will not withstand a series of unsuccessful transactions
For example, if the deposit is $100, 1R= $10, the power reserve is 10 stops, this is extremely small
But with $ 400, you can already try, since the probability of getting 40 stops in a row is extremely small
Example of risk calculation for a $1000 deposit
The risk is reasonably low
R=$10
Power reserve 1000/10=100
100 stops
I recommend having a power reserve for the 200R series, from practice I can say that for training and the first results will be enough.
All calculations are carried out without taking into account the commission
A few tips for improving efficiency:
- Do not risk your funds in vain, TradingView provides an excellent opportunity for paper trading (demo) completely free of charge, where you can try out any of your ideas and strategies.
- Search for highly volatile tools and work with them.
- Analyze the broker (exchange) for conditions, commissions play a particularly important role, pay attention and look for more favorable conditions.
- Before you start trading, you should have a clear action plan, the most important component of which should be a risk control system.
- Your stop should be tied only to the mathematical component of the transaction.
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Managing Negative Emotions - Psychology of Winning TradersHi Traders. When it comes to trading, psychology is often the biggest pieces among strategy and risk management. In this workshop, I will be breaking down 3 of the most common emotional issues happening on most retail traders. To becoming a consistently profitable trader, it's never about eliminating emotions. Emotions are biological not psychological, it exists within our body system, which cannot be removed completely. But what you can do is to condition your mind to organize its performance, and reduce emotions to the least possible.
If you enjoy the content, make sure you follow my profile and give me a thumbs up for daily fx forecast & educational content.
Trade safe and take care.
Leave Your Ego At The DoorAl Pacino played John Milton in the 1997 film the Devil’s Advocate. Milton ran a hugely successful law firm as a front. The fictional character was really the devil. The final line of the movie is, “Vanity is definitely my favorite sin.”
Vanity is excessive pride in or admiration of one’s own abilities, appearance, or achievements. There is a fine line between vanity and ego. Ego is a person’s sense of self-esteem or self-importance. Vanity may be the devil’s favorite sin, but ego can be a trader or investor’s worst nightmare. Ego gets in the way of rational, logical, and reasonable conclusions because fear and greed can tug on our egos and cause us to make mistakes that are sins when growing our nest eggs.
The quest to buy at the low- Ego leads us to state the market is wrong
Looking to sell at the “high”- A recipe for disaster
Following trends requires no ego at all
Suppressing emotions is harder than you think
Never listen to that voice on your shoulder- It leads you to make mistakes
The quest to buy at the low- Ego leads us to state the market is wrong
Human nature is a powerful force, but it deludes us to believe our gut instincts. When the price of an asset falls to a level where an investor or trader believes is a logical, reasonable, and rational low, they perceive the price as a bargain.
After an initial purchase, if the price continues to fall, our emotions cause a dangerous impulse. The little voice in our heads declares that the market is wrong. The market price is never the wrong price. It is the level where buyers and sellers meet in a transparent environment, the marketplace. All of the fundamental analysis in the world can go out of the window when sellers overwhelm buyers. A perfect example occurred on April 20, 2020, in the crude oil futures arena. Who wouldn’t want to buy crude oil at zero? After all, what is the risk? Well, there turned out to be plenty of risk for those who purchased the nearby NYMEX crude oil futures on April 20, 2020, at zero, negative $10, negative $20, and even negative $30. Those with long positions on the expiring contract who could not store the energy commodity learned an expensive lesson.
As the chart shows, a purchase of the expiring futures contract at zero looked more than ugly at negative $40.32 per barrel, the April 20, 2020 low.
The oil example is dramatic. However, it is a reminder that the quest to buy the low in any market has everything to do with ego and little to do with making a profit.
Looking to sell at the “high”- A recipe for disaster
It is easier for most investors and traders to rationalize a long position as they assess the total risk from the current price level to zero. Oil was an exception to that assumption.
Meanwhile, shorting an asset has the same ego dynamics. Bull and bear markets can take prices to levels on the up and downside that defy logic, reason, and rational analysis. There are many instances where prices rise to levels that make no sense. The lumber market in May 2021 is the perfect example.
The annual chart of the illiquid lumber futures market shows the wood price never traded over the 1993 $493.50 per 1,000 board feet level before 2017. After falling to a low of $251.50 in early 2020 as the global pandemic gripped markets across all asset classes, the price took off on the upside. At $660 in August 2020, it reached a new record high. At $1,000 in September 2020, the price was irrational, and it more than halved in value, reaching a low of just over $490 in October 2020. In May 2021, the price exploded to $1711.20 per 1,000 board feet before collapsing.
Lumber is a dramatic example, but it reflects the potential for the ego to trigger impulses that lead traders and investors to financial ruin. Selling short at $1000 the second time up and ignoring the power of the trend was disastrous. Just because a market price rises to a high, does not mean it cannot go higher a lot higher.
Following trends requires no ego at all
Following trends requires a special skill, which is no skill at all. Following trends allows us to go with the flow, ignore expert advice, the news, and any other exogenous forces. The only tool necessary is a simple chart that displays the path of least resistance of the price. And, it does not matter what the asset is; it can be a stock, a commodity, a currency, a bond, or any other product with liquidity that allows for effective execution of buy and sell orders.
Following trends allow the markets to work for us instead of us slaving for the market. The process is entirely objective, while fundamental analysis is completely subjective. So many variables determine the path of least resistance of market prices, making it impossible to legislate for all potential outcomes. Experts may make a compelling case for buying or selling an asset, but they do not have a monopoly on the truth or offer any guaranty.
James Surowiecki wrote The Wisdom of Crowds in 2004, arguing that the many are smarter than the few and how collective wisdom shapes business, economies, societies, and nations. A price chart is the roadmap of the crowd’s wisdom.
Suppressing emotions is harder than you think
Tucking away your ego takes practice. Understanding that ego triggers the emotions that lead to pushing the buy or sell button is the first step.
Many investors wind up selling the lows and buying the highs in wild markets because they allow fear and greed to guide their behavior. Wild markets are the exception, not the norm. Training yourself to manage your ego objectively will reduce the odds of allowing it to destroy you when the you know what hits the fan in markets.
Eliminating ego from all investment and trading decisions starts with ignoring the news, experts, and any inputs other than the herd behavior in markets.
Since prices rise or fall to levels that many believe are not sustainable, following trends allows you to take advantage of their mistakes. Make a conscious decision that you will end the quest to pick a high or low in any market is a great place to start. Successful trend following will cause you to be long at the high and short at the low, but that is OK. It will also allow you to take the most significant percentage from a market move when trends emerge.
Moreover, following trends is an automatic exercise that reduces stress.
Never listen to that voice on your shoulder- It leads you to make mistakes
Eliminate any thoughts about picking lows or highs. When I first began trading in the early 1980s, a colleague in London offered sage advice, saying, “Andy, when you look to pick a bottom, all you will wind up with is a dirty finger.”
Ignore those voices in your head that appeal to your ego, trigger fear and greed, and lead you down a losing path. Never forget that your view has no relevance whatsoever. Vanity is definitely the devil’s favorite sin. Ego and vanity are dangerous. Follow those trends. Approach markets with a clear risk-reward plan where the rewards are equal to or greater than the capital at risk. Understand that you will be wrong all the time, but the market will never be wrong.
The most successful traders do not make money on all of their trades or investment positions. Many will tell you that losers far outnumber winners. However, success depends on catching that wave or substantial trend that yields the most significant profits.
Leave your ego at the door; it is your worst enemy, while the trend or the market’s wisdom is your only friend in the pursuit of profits.
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Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
CANDLESTICK PATTERNS BASICS | Engulfing Candle 📚
Hey traders,
In this educational post, I want to discuss with you one of the most accurate REVERSAL candlestick patterns - the engulfing candle.
On EURUSD chart, I spotted for you bullish & bearish examples of this pattern.
The logic behind this pattern is quite simple:
⭐️In a bullish trend, after a strong directional movement, the price reaches some important structure level. Growing steadily and forming a sequence of green bullish candles the price suddenly forms a strong bearish candle.
What is particular about that candle is the fact that its total range (distance from the wick high to wick low) & body range (distance from body open to body close) exceed the ranges of a previous bullish candle.
🔻Such a candle we will call a bearish engulfing candle.
Most of the time it signifies a strong spike in selling volumes and willingness of sellers to push.
With a high probability, such a formation leads to a pullback or even a trend reversal.
⭐️In a bearish trend, after a strong short rally, the price reaches some demand cluster. Instead of breaking that and going lower, the price forms a strong bullish candle.
That candle engulfs the range of the previous bearish candle & its body size exceeds the size of the previous candle.
🟢Such a candle we will call a bullish engulfing candle.
Quite often such a formation leads to a pullback or even a trend reversal.
🔔And there is just one single tip that will dramatically increase your performance trading the engulfing candle:
It is recommended to rely on this pattern ONLY IF it is formed on a key level:
❗️Bullish engulfing candle must strictly form on a strong support.
❗️Bearish engulfing candle must strictly form on a strong resistance.
Forming beyond key levels, the pattern occasionally will give false signals.
⏳Preferable time frames to trade engulfing candles are daily/4h.
Learn to spot this pattern & you will see how efficient it is.
What candlestick patterns do you want to learn in the next posts?
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Mastering One Strategy Dear traders,
My name is KeySlot and I have been trading in the forex markets for over five years now and have gone threw a lot to get to the point I am at now. I have gone threw pretty much all of the common beginner mistakes from risking too much on a single trade, wanting to become a millionaire in one trade, or becoming too cocky and thinking that I am unstoppable have all been some of my downfalls in my journey and probably something that many of you are way too familiar with. Today I am going to be going over one of these major problems and will be going over more in the near future. I hope you get something out of me sharing my experience and problems I have gone through.
Jumping from strategy to strategy:
When starting off in the trading game everyone will go to Youtube and look up "best forex strategy" click on that video and try to copy their strategy. While sometimes you might get lucky and find a really good system there are a lot of systems that will work for one person but may not work for another. This does not mean that it is a bad strategy but it just might not be your style of trading, this is why I say everyone is different. Some people will be willing to risk a lot more money than some other people will want to do, some people will want to spend more time in a trade than others, and some people will want to trade other pairs than one another.
This is why I fell in love with trading, every single person can see a pair a different way and approach that market a certain way, every one can be different for once. When I first started trading I also did the same thing, I went to Youtube and searched for a strategy and probably went through two or three different ways of approaching the market a week. After a few weeks of switching back and forth between strategies I realized that all of these indicators are not really doing anything for me, I thought that when they told me to buy price HAD to go up no matter what. But I quickly realized that this is not the case, indicators are lagging and cannot tell the price of the future or we would all be filthy rich. When I understood this concept that indicators could be actually hurting me more than helping me I ditched them completely, this is when I started to study the concept of Price Action.
When I switched to price action the market just seemed so much clearer to me and a light bulb seemed to click suddenly in my head. But then I doubted my self again, I took a few trades using solely price action and they were all losing trades, guess what I did? I went right back to using the indicators that eventually lead to another losing streak. No matter what I had done I was always taking losing trades, it seemed like the market was out to get me and only me.
After around a year and a half of trading I had finally gone back to price action and told myself this is something that I need to master. I wanted to learn how to read the market like a book and was ready to do anything to do so. It was only until I devoted all my time into learning this one continuation strategy using price action where I started to become a break even and eventually a profitable trader. I started to see the same setup over and over again but I learned what made my setup one I would take versus one I would not.
This is where it became very useful taking a deep dive into one singular strategy, overtime I saw my setup time and time again but I began to notice that sometimes when my setup had formed there would be small details that would stick out to me after seeing it so many times. After doing a good amount of trades I was really able to pick out the really big winners and started to cut out the losers. I noticed that some pair just seemed to not work on certain pairs and this is when I started to narrow down my list.
Becoming an expert in one list of pairs and one strategy allowed for me to become a more profitable trader by mastering a single strategy and being able to pick out a good trade with a higher probability and allowed for me to avoid getting into any losing trades as well. While it might sound stupid or too good to be true, focus on one strategy and a set list of pairs and only those things for one month and tell me if your results have improved. Another very important thing when starting out is keeping a trade journal, I will go more in detail on a journal in the upcoming week.
I hope all of you have an amazing trading week.
Thanks again,
Keyslot
What Is A Buy & Sell Stop Order?Both Buy and Sell Stop Orders are trade order set before current price hits those orders and gets you into a new trade.
Buy Stop Order:
An order that is executed at a specific predetermined price that is above the current price.
Sell Stop Order:
An order that is executed at a specific predetermined price that is below the current price.
NEVER chases price when making a Forex trade, let price action come to your entry by setting either a Buy or Sell stop order. Then make sure you set your stop loss and targets at that time too.
A.C.E. Strategy is:
1) Alert candle
2) Confirm candle
3) Enter candle
What Are 10 Things You See On Daily September Chart? Add YoursExamples: Do this on daily charts- understanding candlestick language will assist you in trading and risk management.
1) Supply Zone/Resistance area
2) Demand Zone/Support area
3) Trends- bearish or bullish
4) Price Action? Top to bottom how many pips?
5) Any Engulfing Candlestick patterns?
6) Any Harami Candlestick patterns?
7) Any Pinbar Candlestick patterns?
8) And Doji's (undecided) candlesticks?
9) From 1st day to last day of September- was it bearish? was it bullish? or doji (monthly candlestick?)
10) Where are critical price line levels (round numbers or psychological numbers)
11) ADD YOURS...
PLEASE ADD IN COMMENTS: What do you see on attached naked or price action only chart of AUDJPY- thanks!!!
Where and How could you have entered into a trade on this chart, with enter, stops and targets set up and make a profit?
Break & Retest Strategy (Should Be A Favorite)Break and Retest Strategy:
Bullish example on chart:
1) Quick price action move or continuation phase on chart
2) Price action protected the critical line, structure and future stop loss of 119.000, during exhaustion phase. Could use a fib ret 50%-61.8% for entry.
3) Showed a great two day Engulfing pattern on chart for entry for buy market trade at close of that candlestick. (I use harmi, engulfing and pin bar candle stick patterns to entry all trades, especially on this break and retest strategy)
4) Stop loss would have been at 119.00 (yes, that is 88 pips from entry)
5) Targets 1st target 88 pips from entry, 2nd target 176, 3rd target 264 and 4th target is 352.
Related to daily chart, adjust your risk management appropriately just like all trades you do- is at beginning of trade set stops, entry, targets.
Picking Out The Strongest 123 Forex SetupsHow To Pick Out The Strongest 123 Forex Setup: The Most Powerful Trading Setup In Forex!!!
1) The 1 needs to be at the extreme high or low of chart (on chart example a bearish 123 setup).
2) The 2 needs to be lower then 1 on chart and turn around to the 3
3) The 3, but 3 can not be higher then 1 on chart
4) From 3 to 4, you can (if aggressive entry) enter bearish trade at 50% to 61.8% area (see chart) or conservative entry at horizontal break of 2 on chart. Then enter the trade. This trade depending on your entry to trade would have been 1:1 to 1:2 risk reward setup.
5) This happened in between the high liquidity and volume areas between Tokyo end to London end, which is where most scalping or day trading should happen, when big banks and hedges are trading most of the Forex daily rollover of $6 trillion dollars. Just get a piece of pip pie, do not be greedy.
3 Bar Reversal Pattern A.C.E. StrategyChart is example of a 3 bar reversal pattern A.C.E. Strategy.
1) Alert Candle - Large red candle ( wick to wick or bottom to top of candle)
2) Confirm Candle- Smaller red candle ( doji is a very good sign and candlestick)
3) Enter Candle- Larger blue (green usual) that is larger then Alert candle
When 3rd candle of this three bar reversal pattern hits the open of 1st candle of this pattern- ENTER buy signal for bullish trade.
Place stop loss below this 3 bar reversal pattern, I place them at quarter levels: example (.xx000, xx125, xx250, xx375, xx500, xx625, xx750 & xx877), on Eur pairs and or chart example of EurCad (see chart). The setup would be 1:2 or 18 pip stop vs 39 target. Noted chart stop loss is 1.43125.
Use always right risk management and lot sizes etc... for time frame of chart used and ATR for setting stop losses and targets too.
Why Do Traders Fail?Most of the novice traders believe that trading FOREX is a gamble!
Why do traders fail?
1) They trade with the aim of getting luck to make money.
2) Their greed exceeds their need.
3) They think trading is a game of chance and luck and do not get the proper education to succeed.
4) They do not favor to invest enough time and amount for education and mentor-ship to get basic knowledge.
5) They have poor focus.
6) They are more emotional than intellectual.
7) After failing, they want to make up their loss; therefore they may further incur loss.
