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Trading Psychology

How To Trade Divergence Divergence simply means separation.. When two similar things things---get separated and start going different directions, you have to consider which direction to follow. That's exactly the concept of divergence. When trading, and you spot a divergence, you want to be sure to understand what they are trying to tell you. In this video, I explain the concept of divergences, how to trade them and what to do when you sight one. Be sure to like, follow and comment. I want to see those div trades!
OANDA:NAS100USDEducation
by lazyluchi
Are Wicks Important? Types Of Wicks: Fill, Rejection & ReversalPlease look at your own charts: Do you see all of the following? Wick Fills? These type of wicks happen going with the trend and get filled with further price action on chart. Rejection Wicks? Mostly happen at key support and resistance zones or key quarter theory psychological numbers, a lot of traders have orders there. Reversal Wicks? Happen at key areas mostly on 1 hour, 4 hr, daily, weekly and even monthly charts- these are areas with large wicks in past which once price action comes into these areas at key resistance and support areas- will accumulate orders and reverse directions. See attached 1 hour charts---- How many different types of wicks can you see and/or spot.... you need to see quarter theory psychological numbers in actually real live time when trading Forex. Always start with monthly charts and keep going lower until you are trading with the chart of your choosing. Higher time frames will give you better risk to reward opportunities then under 1 hour... If you truly understand wicks- you will be a better trader and know if you scalp trade, day trade or position trade when to look for quick wick fill candles to catch some quick pips. These are the easy Forex trades to do, make sure you are trading during high liquidity and volume time periods only.
Education
by Anbat
Elements Of Candlesticks (You Need To Know)Each Candlestick consists of four important elements: 1) The Body- Large bodies equals more liquidity and more volume involved in candlestick, smaller is other side which is smaller liquidity and volume. 2) The Length Of The Wicks- Larger wicks equals higher or lower rejection of price action, from the other side. Example: Pin bar candlestick at top of a bullish run up equals bulls are losing their strength and bears are starting to get control over current price action. 3) The Ratio Between The Body And The Wicks- Example: Doji or indecision candlestick generally has around same length of upper and lower wicks and bodies are small- so both bears and bulls are at a stand off with each one not winning at the moment... sideways price action. 4) The Position Of The Body- Look to left, what do you see? Where are the quarter theory lines on charts- you can plot all xxx000, xxx250, xxx500 and xxx750 lines which are the standard ones to either highlight or be aware of on any chart you trade from. Did current body make either a pin bar candlestick pattern, harami candlestick pattern or an engulfing candlestick pattern? You need to know that 12 hours a day in Forex is high liquidity and high volume times: End of Tokyo to End of London, this is when most big moves happen. You can google or YouTube more on Quarters theory which I strongly advise you implement in all of your trading, specially in this choppy price action. Do not be greedy and protection your profits- risk management is always #1. Understand each pairs ATR, lot size , pip value so you can only use 1% to 2% of account per trade, if you slowly grow account using compounding in Forex trading and be a successful trader. Good luck and Good trading.
Education
by Anbat
Trading Mountain: How to reach the top step-by-stepHey, family! Good time of the day and welcome on another educational post. As we all know, the road that leads to successful and consistently profitable trading is a pretty difficult and long one. It takes years of hard work, patience, dedication, and experience to reach the top of the trading mountain. Many beginners make similar mistakes before starting their journey. They tend to have false expectations and a distorted vision of the big picture. As it can be inferred from the graphical illustration, the mountain pattern connects dots and shows a realistic path of a successful trader to the top of the hill. We all start somewhere, right? We start taking our first steps and making ourselves familiar with the thing we are interested in. In the example of trading, it can be the first YouTube video that we watch, a chapter of a book related to investments that we read, first chart analysis that we make and many more. What comes next? We decide on the type of a trader that we are. Do you have enough time to sit in front of the charts for several hours and press BUY/SELL buttons, or you are busy 90% of the time and prefer having a portfolio full of long-term positions? After we have decided what our strategy will look like, we build a trading plan around it and make it a part of our lifestyle. We identify our trade entry criteria, risk management plan and so forth. Backtesting our trading plan is a vital part for the journey. It can take days, weeks or even months. However, it will be worth it at the end of the day, as it is crucial to link our strategy with the trading plan and find out how profitable it will be. Executing, optimising, journaling. Where did I make a mistake? What could have been done better? What should I change in my trading plan? It is important to stick to one single trading plan and optimise it along the way. Before trading with real money, it is recommended to open positions on a demo account with virtual money. Getting a hand of things, practising the market and gaining experience is important. After having traded on a demo account for several consecutive weeks, months or even years, we can move to a real trading account. Demo account is completely different from a real account, both psychologically and mentally. Putting real money on the line is much harder than playing around with fake simulation money. Thus, it is advised to start with a small amount and get used to it before moving to larger sums of money and increasing the trading capital. After everything is went through and all hills are climbed, the top of the mountain will be reached. Of course, being a professional trader does not necessarily signify that there will be no failing trades and the win rate will always be above 90%. Losing days, weeks and even months will always happen. However, as long as you diversify your portfolio, stay cold-blooded, disciplined, and follow risk management principles, you will be profitable in the long-run.
BITSTAMP:BTCUSDEducation
by Investroy
21
Busy Signal - Gamblertrading is not gambling and gambling is not trading , but like expert gamblers the best traders must think of trading as a numbers game and probability to produce consistent results. Probability may suggest inconsistency but it can still produce consistent results over a large sample of trades if the edge is good enough and is applied consistently. there is no such thing as ''prefect science'' in trading but there are occurrences in the market that are critical to understand and these can only be discovered by research and experience. It just takes practice and a lot of screen time to master this art, so be patient, your mind and eye need training, and lots of screen time till it becomes second nature to you. “"Easy money" means only one thing when it means money that has come easy: It means money goes even more easily than it came.” Edwin Lefevre
TVC:USOILEducation
by currencynerd
1
The Journey of a Trader 🛣🚶 Hey traders, Why 95% of traders fail? In this post, we will discuss the trader's road to success and why most of the traders give up at the halfway point. On the chart, I was trying to portray the journey of a trader: most of the traders start this game with gambling. They randomly buy and sell the market relying on their intuition and with a high degree of probability end up with nice cush.💰 However, as they proceed they realize that the profits that they made were the product of luck, not skill. 🍀 The more they trade, the less they win. At some moment losing trades start to outperform winners. Trying different things, jumping from one strategy to another, one comes to the conclusion that nothing seems to work.🙅‍♂️ He goes broke, he is panicking. At that stage, the majority blame the market for their failure. Forex, stocks, gold trading is complete scam. Making profits on the market is not possible. They give up and leave.👣 Only 5% are persistent. Only 5% are blaming themselves not the market for their failure. They start following a strict trading plan, they follow risk management recommendations of pro traders and at some moment they start making 0.📝 Buying and selling the market, at the end of the day, they don't lose anymore. That is the most important milestone in a trader's journey. Realizing that the one stopped losing, a trader starts polishing and improving his rules in order to achieve better results. He trains and works with his psyche.💪 After years of struggling, one finally contemplates a consistent account growth. He became a pro trader.🏆 I wish you to be persistent, traders and don't give up. Patience pay and at the end of the day winners win. ❤️Please, support this idea with like and comment!❤️
BITSTAMP:BTCUSDEducation
by VasilyTrader
252
The Power of a good Risk-to-Reward ratio. Reality of tradingRisk Management, alongside with discipline, experience and skillset, is one of the keys to unlock the doors of successful and profitable trading. As it can be inferred from the table, even with as low as 40% win rate, it is more than possible to stay consistent and make nice returns, as long as risk management principles are followed. *We used 30 pips Stop Loss and 60/90/120 pips Target Profits as a projection. It does not necessarily signify that 1% risk equals 30 pips Stop Loss, as different pairs have different pip values, price differences etc. Moreover, we determine our Stop Loss based on the amount of capital we are willing to risk on a particular trade, price action, intuition and other factors.*
BITSTAMP:BTCUSDEducation
by Investroy
19
Things you should consider in trading to make it as a career Hello everyone: 6 points I like to share on what you should consider in trading to make it as a career. 1. Trading is not a get rich quick scheme Contrary to what social media, scammers, fakers and fake trading gurus want you to believe, trading is NOT a get rich quick scheme. Those who believe such usually end up over trading, over leverage, blow accounts and give up. (Trading is actually a reasonable method to yield money return. It is how consistent traders make a return on their original investment/deposit with proper risk management, strategies and methods. ) 2. Technical/Fundamental Analysis dont work all the time. Trading ANY sort of strategy, method or style will always have a percentage of failure and losses. Its probability, not right or wrong. The main goal in trading is to make sure you have proper risk management, good Risk:Reward ratio, and look for consistency, sustainability in the long run. (Sometimes traders blame their strategies, method, style, mentor and other things due to their trades not working out. Not trading strategies can yield 100% strike rate, if there is, there will not need any risk management, and anyone trader should get rich) 3.Limit your risk per trade Proper risk management is super crucial to a trader’s success. Many traders often risk way more than their accounts can handle, after all what's 10%-20% of a $100 to many people ? But would you risk 10-20% on a $100,000 account ? and lose $10,000-$20,000 in one trade ? (Too many new traders deposit a small amount of money hoping it can double and double and double. But they often over risk, over leverage the account. The result is it only take a few trades to totally blow the account up.) 4.Must use stop loss It may have worked out for you a few times where you remove your SL, and the price reverses and you close with profits. But what if the price goes against you more and more? Can you stay mentally sharp enough and continue to hold the trade when the losses pile up more and more ? You more likely can not, which will end up resulting in a margin call and/or blow the account. (In the past I had a trader who approached me and showed me his losses on OIL where he removed his SL and price continued to go against him. IT has come to a point where he reaches margin call, and the broker actually open opposite positions to “hedge” his losses) 5. Don’t over analysis and combine multiple trading strategies, methods and style Over analysis and complicating your charts may lead to confusion and is not necessarily efficient. Most trading strategies do work on their own, but when combined with so many other strategies, it creates conflicts, contradiction and confusion for traders. (Often traders combine too many random indicators, S/R, trendlines…etc all on one chart. It makes it hard to analyze, and have a bias of the direction of the market) 6.Always use a top-down analysis approach. Multi-time frame analysis is key. Always start from the higher time frame to the lower time frame. The higher the time frame the stronger and noticeable the price action it is. Understanding a higher time frame can give you a possible direction and bias. While the lower time frame will be your confirmation and entry. (Have seen many new traders jump onto the 1 min chart to trade. While there are successful scalpers with proper years of experiences, good trading psychology and emotion, most newcomers will not be able to handle the stress and pressure from it. ) Don’t give up
OANDA:XAUUSDEducation
by jojofang0901
35
Don't put all your portfolio in a single trade -why?I was reading about maths and came across this very nice explanation, that we can apply to especially trading and also to investing in a very obvious way. We all know and are told not to put it all down to a single trade. Too risky. Crazy. But you can bet it all and get rich! Well, just look at these numbers below: [adapted from towardsdatascience.com ]. Imagine that we are playing the following game: I use a random number generator to produce a number. If the number I generate is greater than or equal to 40, you win (so you have a 60% chance of victory) and I pay you some money. If it is below 40, I win and you pay me the same amount. Now I offer you the the following choices. We can either: Game 1 — play 100 times, betting $1 each time. Game 2 — play 10 times, betting $10 each time. Game 3 — play one time, betting $100. Which one would you pick? ... ... ... Outcome Distribution of 10,000 Simulations for each Game: (this is a super-crude and inexact approximation to the plot you can see on the website I linked above, but you see the gist). The "---" are the 100$ 1-time bet, followed by the 10$ 10-time and the 1$ 100-time ones. (ignore the plot frame, just look at the text box within the plot. This was the only way I could figure out to introduce formatted text in this post!) Seeing this, now which game would you pick? Game 3 offers the chance to win big money, and to lose it all, at a flat 60% chance of winning. In Game 1, however, you win less money, but look at the consistency... you traded 100 times and you make money in 97% of them (believe the numbers, otherwise check the above link)! Note that this example assumes a 60% winning chance, so you are not opening a position at random but based on indicators that increase your chance of a win. You can run your own numbers for a 50% winning chance. Happy trading!
Education
by molbioinfo
1
Elliott Wave Theory - Motive WavesElliott Wave Theory , developed by Ralph Nelson Elliott, proposes that the seemingly chaotic behaviour of the different financial markets isn’t actually chaotic. In fact the markets moves in predictable, repetitive cycles or waves and can be measured and forecast using Fibonacci numbers. The very basics of Elliott Wave Theory ; The Elliott wave principle at its core consists of motive waves, movement in the direction of the larger trend, and corrective waves, any correction against the main trend. Market prices alternate between a motive phase, and a corrective phase on all time scales of trend. Wave analysis offers insights into trend dynamics and helps you understand price movements in a much deeper way and offers the trader a level of anticipation and/or prediction when searching for trading opportunities Motive Waves Motive waves in general can be categorized as Impulse and Diagonal waves a- Impulse Waves Impulse waves consist of five sub-waves in the same direction as the trend of one larger degree. Elliott proposed that financial price trends, the waves, are created by investor psychology or sentiment and the waves can be measured and forecast using Fibonacci numbers . In adition to using fibonacci retracments and extetion to forcast probable targets, channeling technique is also presented, where channeling technique is used to forecast wave formations and targets using price action . Disclaimer: besides the rules, the below presented figures displays guidelines that elliott waves may form. Guidelines are tendencies, not set in stone rules b- Diagonal Waves (Wedges) Another form of motive waves are diagonals, they appear in the beginning of a larger trend, called leading diagonal and at the end of the larger trend, called ending diagonal They are five-wave structures in the direction of the main trend within which wave 4 almost always moves into the price territory of (overlaps) wave 1, breaking the rule of impulse motive wave Diagonals take a wedge shape within two converging lines Elliott was careful to note that these patterns do not provide any kind of certainty about future price movement, but rather, serve in helping to order the probabilities for future market action. They can be used in conjunction with other forms of technical and fundamental analysis, including technical indicators, to identify specific opportunities. Technical Indicators Using various technical indicators among elliott wave practitioners is not so common, except few, probably the common one used is a kind of momentum indicator, such as RSI or MACD , to detect divergencies Fibonacci retracement and extension drawing tools are essential for elliott wave practitioners. In todays computerized era many of the darawing tool's auto indicator versions are availabe on the trading platforms, such as Auto Fib ( where and how tp apply ) Elliott Wave Oscillator ( EWO ) , is inspired by the Elliott Wave principle and helps counting the waves Volume and Volume Profile ( Vol / Vol Profile ) combined with price action is esential in technical anlaysis and for elliott wave practitioners helps to identify impulse and correction phases Other indicators that are referred among elliott wave practitioners Pitchforks ( how to apply ), Pitchfans , FibFans ( how to apply ), FibChannels ( how to apply ), FibTime , LinReg Channel ( what it is ), Raff Regression Channel ( what it is ), etc
Education
by dgtrd
37
Your Trading Style and Holding Period ⌛ ⌛ ⌛ How long to hold your trading position? Everything depends on your trading style. In this post we will discuss the preferable holding period for your trading positions. First, Let's define 4 main trading styles: Scalper, intraday trader, swing trader and investor. One of the core differences between these styles is the time horizon of their predictions of a market behavior. 1️⃣Scalper attempts to predict minor price fluctuations. His goal is not to pursue the waves, rather a minor moves up and down. For that reason, pro scalpers tend to hold their position minutes, sometimes even seconds. Expanding the time horizon they are risking to be stopped out from their positions. 2️⃣Intraday traders operate on intraday time frames. They are trying to predict the price movements within a day or even a trading session. The average holding period of a pro intraday trader is ranging from minutes to hours. 3️⃣Swing traders are aiming to catch swing moves - the waves. Typically by a wave we call a trend following movement. Pro scalpers usually close their positions once the market starts retracing (correcting itself). Following such a strategy, scalpers tend to hold their trades days to weeks. 4️⃣In contrast to a swing trader, the investor does not care about the retracements and pullbacks. The investor is trying to pursue the entire movement within the trend. Usually he hold his position till the trend lasts and closes that only when the market starts reversing. Investors tend to hold their positions months, even years. Recognizing an average holding period is crucially important for a selection of your trading style. Which one do you prefer? ❤️Please, support this idea with like and comment!❤️
BITSTAMP:BTCUSDEducation
by VasilyTrader
24
Are Losing Trades Still Winners?Alright, before I show you the “light at the end of the tunnel,” we need to create a fictitious system so I can logically demonstrate my point. I want you to bear with me here— it may seem a little ridiculous, but trust me, there’s a solid point I’m going to make. Let’s face the facts here: It’s easy to blame the market and commiserate with other traders, but it’s a lot harder to think for yourself and look for the silver lining after a bad trade. I know, “Are Losing Trades Still Winners?” sounds like a crazy question, right? Read on and you may just find that it’s not really an irrational thought once it’s put into perspective. Let’s list some trading rules to start: 1. You can only trade between the hours of 07:00 a.m. and 10:00 a.m. (UTC) London 2. You can only trade with the current trend of the market (up or down) 3. You must base your entries and exits using only support and resistance 4. You must have had a good night’s rest (no trading on 4 hours of sleep) 5. You must be drinking a Coffee while trading (just to be ridiculous) Some trading rules to set for yourself, Right? I know, it’s a little silly, but what can I say? I like Coffee. For this example, we’ll use an unrealistic stop for the EURUSD of 10 pips Looks like we have a winner! You followed the rules by only trading during the established hours, you entered as the price breaks the support, you took the trade (SHORT) in the direction of the current trend, and your still in the trade right now as you hold trades over the weekend or youv exited at a round no level of 1.09 for a neat 1:11 RR come 14:30 p.m. , as planned (all while sipping your Coffee)! We’re good, right? Wrong: you broke a rule! By “widening” your stop, as you can see from the chart above the price surpassed your 10 pip stop loss set at 1.10200 reaching 1.10242 give or take a few pips (spread) before resuming the freefall, but hey your still in the trade or youv closed the full position for a healthy 110 pip gain, you violated one of your day trading rules; does this send you to the traders naughty corner? Well, this is a losing trade (there will be losses, sorry), but you stuck to your guns and you've even created an opportunity to learn from your loss. I’ll be honest here, a 10 pip stop on the EURUSD with as much volatility as there is these days isn’t only too tight, it’s not realistic. Do some back-testing and you may find that the initial break of your rules (adjusting to 15 or 30 pips) may be what you need to set your stops at to weather the volatility and stay in the trade. If this is true, then make it a rule and stick with it. For starters, I want you to know how important trading rules are and how important it is to stick to them. I mean, what if you widened the stop to, say, 50 or 100 pips and got stopped out?! You’d be mad at yourself! There is ofcourse different ways of deciding how many pips risk you are are happy to risk per individual trade as stop loss doesn't have to be fixed number you can adjust accordingly depending on the trade type/where price is when you reach your charts but this is an interlinked-subject that is beyond the scope of this idea Another reason is that you can take a bad trade where you did stick to your rules and learn something from it. Who knows? Maybe you can even improve your day trading strategy. Last but not least, your rules can help keep you on track. What if you did do the back-testing and you discovered that, more often than not, “that” particular rule held true? If that’s the case, why change it? After all, in trading, you’ll have some losses— it’s just part of the business. And remember: Don’t beat yourself up if you have a bad trade. If you stick to your rules, you’ve made the best decision you can. Give yourself an A! Stay cool, drink Coffee, and trade well. FX:EURUSD 👍
Education
by AdamsLibrary
8
Is it okay to FOMO?You need to look at price action, and specifically, Heikin Ashi candles along with the Volume Indicator to tell you whether it's okay to FOMO. Use lower time frames to get in quicker. Mostly, I never recommend it, but sometimes where there is strong buying and a clear trend change, a dip might not come for a while. And when it does, because it went up so fast, it can usually lead to a downtrend so you have to be careful. Especially in crypto where there is Bull Trap manipulations upwards. However, the Volume Indicator can tell you if the bears have lost, which on the left hand side, they clearly lost as we went from Green to red to immediately Green again, showing the strength of the Bulls.
Education
by reiiss7
3
Journey of a Trader: All of us have gone through this!Good time of the day, dear TradingView family. Happy new month! May March bring you lots of happiness, love, and profits. Today we are gonna be doing a quick reality check and scrutinizing a long way every trader goes through before becoming successful and consistent. All beginning traders get super motivated and excited before beginning this long journey. Instagram “gurus” create false expectations and trick people into thinking they will be making quick profits and becoming millionaires with a $100 capital. Beginner’s luck is real and super relevant in this case. Without having a proper trading plan and a backtested strategy, newbies jump into the markets and start trading full-speed. “Wow, I made my first profits! I can keep going like this and make lots of “Benjamins”. Overtrading, greed and self-confidence lead to a losing streak, panic, anger, and loss of faith. Solutions need to be found, and therefore traders start changing strategies and trying to find a way to the doors of success. They lack motivation and hunger to keep going. They start questioning themselves and thinking whether they should quit or keep pushing. At this stage of the journey, around 90% of beginners give up and leave the markets. The remaining 10% still have hope, so they keep grinding and enhancing their trading capabilities. After some time, they start seeing some progress in their abilities. They start having more winning trades now, and they become breakeven traders, meaning they neither make any profits nor encounter any losses. They stick to their strategy and optimize it along the way. They plan, execute and journal all trades. After a few months, they finally reach the doors of success and profitability. Of course, they do not get greedy or self-confident. Though, they still have losing days/weeks/months, their main focus is concentrated on long-term growth and prosperity. They know that if they keep following their trading strategy, obeying risk management principles and being disciplined, they will always be profitable in the long run. To sum up and to motivate the beginners reading this: if you are going through hard time in the markets, if you do not know what to do or how to make thing work, keep pushing more and more. There is always a golden sky at the end of every storm. Therefore, never feel discouraged, do not give up, and keep grinding. YOU WILL ALL MAKE IT!
BITSTAMP:BTCUSDEducation
by Investroy
25
The Only Proven Way To Success in Trading 🥇 Hey traders, Like any discipline, consistently profitable trading requires many years of practice. In this post, we will discuss the only proven way to become successful in trading. 🔰First, let's start with the axiom: there are no inborn traders, trading is a skill, a skill that can be learned. Though talent may help you in some manner it does not guarantee your success. One more axiom that is logically derived from the first one is the fact that trading is a complex skill. The one that can be split into dozens of subskills. Making that statement we may assume that our success in trading directly depends on mastering each subskill, each domain that it consists of. But how do we master these skills?🤔 The only way to do that is to practice. Practice means doing something regularly in order to be able to do it better. With your first attempts, you are doomed to fail. Inevitable you will suffer and you will feel miserable because of your incompetence. Trying and doing the same thing again and again, at some moment you will feel the progress and growth. Your perseverance will bear fruit. Knock, and it shall be opened to you. And as a consequence, with some attempt, you will feel that finally the skill is mastered, that one more stage in your journey is passed. Polishing the entire set of subskills and learning to apply that as a single unit will make you a consistently profitable trader. Just stipulate the domains properly, name them and be ready to work hard. ❤️Please, support this idea with like and comment!❤️
BITSTAMP:BTCUSDEducation
by VasilyTrader
20
Can't stop trading Stock/Options? You may be addictedTraders with symptoms of gambling addiction “tend to follow a more active and speculative trading style, indicated by a higher frequency of stock trading, day trading and investing in derivatives and leveraged products.” Here are some signs of addiction: Trading becomes the main focus of your daily life. You are trading at work, which isn’t your job. You are chasing losses. You can’t stop trading. You have feelings for frustration, aggression, or attempt to suppress other personal problems. Losing money makes you depressed. You're constantly checking the latest value. You hide the degree of participation in trading. You rely on social media “experts” for investment advice. You borrow money on a home equity line or a personal loan to invest. No self-control or ability to stay away from your trading app. Your emotional state is directly tied to the outcome of the stock market. One of the strongest psychological factors that influence day trading is the fear of missing out (FOMO). That’s why day traders often suffer from ad-lib actions as they are not capable of anticipating sudden market changes. Trading is fun when it doesn’t hurt your health and daily life. Addiction-prone traders have a gambler’s mentality. The strategies to avoid harm associated with pathological trading that have similarities with gambling could be the following: Do not spend more than you can afford. Stick to the budget. Do not chase losses. Automated trading tools help to: Address the lack of time issue: many traders have day jobs, families, etc., and can't spend all day in front of a screen. React to the opportunity faster: Algos are way faster than people. Remove emotions: Algos have no emotions. Low code allows traders to experiment faster.
AMEX:SPYEducation
by BreakingEquity_official
Risk/Reward trade setups are more important than Win RateIf you told somebody new to trading that markets can only go in one of two directions, it would be natural for them to conclude that even a beginner could be right half the time. That’s not the reality because traders don’t make a binary up/down calls on their outright positions. What traders do is say, “I think it’s going to go up to point x (target) and in the process NOT hit point y (stop).” Markets do only go up and down, but the trades we place aren’t a binary call. Our target is “where we think the market will go” and our stop should be “I’m wrong if it hits this point.” It's not a binary decision, it is a decision on the direction and the amount of 'wiggle room' it needs on the way. Don’t Be Fooled by Trading Strategy Win Rate When novice traders come to the markets for the first time, they are bombarded with ads for magical trading systems offering extremely high win rates. It plays on the logical (but false) assumption that a higher win rate is always better. It ignores the cost of the higher win rate, what did we do to achieve it? For example, it's unlikely the S&P 500 Futures will ever hit 0.00, so you could go long S&P 500 over and over and have a 100%-win rate. In the process, you will no doubt sit in trades for extended periods with massive drawdowns. In the event of a market correction, you could quickly draw down $40-$50k per futures contract and sit in for years waiting for a recovery. A high win rate alone is not a measure of success. Should it be a goal? Not in absolute terms. Instead, a trader should chase a decent win rate relative to the break-even point of any specific opportunity. How Traders Think About Risk Reward Let's say you have an opportunity where you believe a price in the market is a key trading level. You think the market will rally higher from current prices 40 ticks. You enter the trade with a 10-tick stop. You risk 10 to make 40. Can you do this and be right every single time? Probably not but you could be right 50% of the time and make great money. This is where confusion creeps in. People associate a 50%-win rate with no edge, with a coin toss. In this example, our win rate is way above the break-even rate for this setup, and so 50% is excellent. It represents an edge. If you combine this with more active trade management, such as scaling into positions that go your way, you change the equation again. Your losers might be 2 lots but your winners 8 lots. This is of course what a lot of 'outright' proprietary day traders are doing — looking for an opportunity with a low break-even point, where they can beat the odds. They don’t care if the actual win rate is 40,50 or 60%. It doesn’t matter. Trading Strategy Win Rate and Run of Losing Trades One other important consideration is the ability to survive the inevitable run of losing trades. Let's say you use an artificially large stop to help achieve a 90%-win rate - an 8 tick stop and a 2-tick target. The moment your win rate dips below 80%, you will start to lose. Take 5 or 6 losers in a row, and you are looking at a drawn down account and the NEED to maintain a high win rate to stop the bleeding. Keep on down that road and the next thing you know they'll be calling you "the new Nick Leeson". Trader Takeaway The ability to exceed the break-even rate is where profits lie. Focusing on trading strategies with a low break-even rate will help you thrive and survive as a trader. BINANCE:BTCUSD 👍
BINANCE:BTCUSDEducation
by AdamsLibrary
A Chat With Traders: Traders And Psychology With EnochEnoch Baz, the 19-year-old, who literally pays his mama’s bills with: forex trading. Baz is a penultimate student of Architecture in Nigeria. He started forex because according to him, “it’s the only way I can work minor and earn major from home”. Enoch is an indices fan as he says, “that’s where the money is for me (lol). Work less, earn more.”—US30 and S&P500 do the trick. Chatting with Baz made me realize his undeviating and unswerving approach to trading these pairs. “I trade against Supply and Demand zones looking to be Liquidated and Mitigated”, he utters. The trader also advances to explain this strategy. To Enoch, It’s more of combining Zone to zone with smart money trading (institutional trading)”. In addition, he got introduced to Forex in October 2018, after he graduated High-school—by his cousin who’s not a trader currently. Albeit, he took it seriously in 2019. Enoch started off making researches and reading multiple PDFs in his genesis. Enoch And His Trade Management Hello Baz, so, how do you manage a trade when in it? Yeah, before I hop into any trade, I have 3 goals: Firstly, I close with big profits, secondly, small profits, and lastly small loss. Either way, I let my trade run. After I’m in—I go ahead with my day. I always have my risk in mind. Once I’m fine with it, It’s a good day then. Love the simplicity I must add. However, social media has allowed us as traders to have a wider footprint outside of the forex industry, what do you think your impact is in the industry? Well, I started my forex-focus-Instagram-account in October 2020, I’ve gotten a lot of messages regarding me leveling up individuals-forex game involuntarily from contents I post. It has been a good impact—helped people over the world know what this grind could bring. Love the term “over the world” What is your trading plan? And what is your go-to asset class (what pair(s) would you consider are your favorites) and why do you prefer these pairs? As for trading plan, It’s definitely the: Zone to zone ( risking just 4% of my account maximum), cos of its simplicity & direct approach to the market. I started trading XAUUSD, but currently, I trade indices like US30 & SPX500. Reason—that’s where the money is for me lol. Work less, earn more. Enoch On Trading Techniques Work less; Earn more. Yeah—the fun of trading the indices. Do you have a special way you trade this particular pair? If yes, can you share a tip for that pair? Trade against Supply and Demand zones looking to be: Liquidated or Mitigated. It’s more of combining Zone to zone and smart money trading (institutional trading). Woah. That’s a lot to take in. However, Fast one Technical, Fundamental or Sentiments? Why? Technical. Although, fundamentals fuels the market, but only runs for a certain period. After that, we are left with the naked chart. So, Technical is king to me. A personal question, How much money do you handle now? Well, I handle two accounts: a $30,000 and a four figure on synthetic indexes. That’s huge and inspiring, What are your forex weaknesses? How do you plan on going about them? Have you succeeded in doing that? Forex weakness? Hmm. I’m thinking about that. I basically just trade my thing and what I have an edge in. Totally threw me of with that one. The confidence. I admire that no doubt. Who is one person/academy you think Neophyte or everyone should follow and why? Definitely—Cue banks. Following him on Instagram would give you valid reason not to quit. Enoch In Trade environment and Work history “Take a cue from cue”—I’ll do anything to interview him. He’s indeed a great trader. How would you describe your ideal work environment? Love trading alone. So just me and my screens with—UK Drills music playing in the back ground. The lone wolf. Tell me about a time you disagreed with a decision. A time you didn’t follow your trading plan. What did you do? Took out my SL, I didn’t want to get stopped out because, it was a fundamental market on BTCUSD, short story, lost over 85% when I got back. Ouch! What was your salary in your last job before forex? Was leaving it for forex worth it and why? I’ve never worked a job. I was barely 16 when I started Forex. Right. Makes sense—What are your trading aspirations? I know many trade for “financial freedom” but what happens when that’s achieved? What do you plan on doing with trading? Plan on putting young boy and girls on this grind. I know what it feels like earning above average. Enoch Talks Trading Psychology Great plan. What keeps you sane? Cos’ I won’t lie trading can stress you out and some even get depressed. So how do you overcome this. You know, I feel people risk money which they basically can afford to lose. Like I say, everyone needs to have a passive source of income to fund their trading accounts. That way, you stress-less after losses because it’s OPM (other people’s money). I leverage on OPM a lot, that way I don’t have to beat myself up after losses. Other people’s cash. Hmm, That requires trust though. However, this may sound “cliché” but why forex? What is your major reason for choosing forex? Personally, I got caught up with the lifestyle, but as a kid, I loved exploring. I had always wanted to test out everything, new gadget and stuffs I see. That way, I knew I could afford this when I make literally free money, that’s why I’m still trading; love giving major portions of my withdrawals. Who doesn’t love a giver? Do you trade for any proprietary firm? If yes, which one and how is it going? No, But FTMO is looking nice haha. What would you consider to be your biggest forex achievement? Tell me about a forex accomplishment you are most proud of. Being able to pay my mom weekly. Paying her more than her salary is a flex for me at 18. I’m also proud of being able to afford my trading gadgets without anyone’s assistance, fully funded by me and the markets. Good flex too. Also surprising my cousins with quite expensive gifts on their birthdays. Aww. That’s really nice. Indeed a big flex for a trader your age. Okay Baz, Let’s visualize now. So what would you want your forex dream to be like (in details). Inner circle for billionaire traders with the dope garages and cribs. That’s enough. Enoch In The Business Of trading Do you keep a journal? If yes, what does it consist of? No journals. Just Notepads with Risk calculations. Oh, okay. When you’re not trading, what are you doing? On YouTube watching pranks and skits. I don’t watch movies longer than 15mins or I’m working on my “Social Media Management” site (SMM). That interesting an weird. What would say is your “win-rate” and what really drives results in your trading? Haven’t really had time to know my win-rate. But 78%- 82% is reasonable, because I rarely over trade. Haha! My Risk management is key, that’s my major sauce in trading. With my style of risk management, 38% win rate is still Profitable. I love hopping on high-rewarding trades. Well, you ain’t lying. Listen, I think psychology is one of the most important if not the most important part of trading. So, that’s why I’m laying emphasis on it. What are your trading rituals and how has it helped your trading? Pray, plan my trades and trade my plan. That way, I worry less because I’ve literally done the easiest things which are the most important things too. Trading inspiration Who or what inspired you to start trading? If you have a mentor, what’s their name and what about that individual inspired you? I got inspired by Inyang Jude “Forex bae”. My cousin showed me his picture back in 2018. He was literally the first trader I saw from Nigeria. I’m grateful for the inspiration! Another mentor I have is MomoForex. His lifestyle is simple and that’s me. Yeah. I actually love Nick Shawn. I believe he was a mentor to Momo—drop a forex secret you feel should be shared and no-one talks about. How much are you risking on this trade? if you can’t answer that before taking the trade, don’t trade. Because I feel most people get surprised by how much they lose on a trade. They lack the background idea of how much they should be risking. Interesting. How long do you plan on trading forex and Where do you see yourself in five years with forex? Till forever. Let’s wait Enoch and trading strengths What are you biggest strengths in forex and What’s one thing you think you are very good at in forex? That will be, determining market directions in the long run. Nice. We have the Neophytes trooping in the industry. What’s your advice to them and what would you recommend they start with? Knowledge first. You’re here for a long run. “Do what is right and cash will flow” You hear that, it’s always the knowledge first. How do you handle pressure, impatience, fear, doubt and greed in forex? I only experience doubt. If you’re doubting a trade, it’s best not to take that trade. And if you’re in a trade already and you doubting, it’s safer to close or move your Stop-loss very tight to curb losses. Tell me about the toughest decision you had to make in the last six months. Was it a trading decision? If yes, tell me how you handled the situation. Leaving a MLM company (best decision). I left this company that offered to help my trading journey. But it was clear BS! Full of fake traders and lifestyle. I was earning 3 figures for two months. My journey skyrocketed after I took the bold step to leave that company and start trading Full-time. Grateful for the growth now. You calling MLM out like that, makes me want to ask further but, I WON’T PRY. Tell me how you think other people would describe you. What do you want to be remembered for in the industry? Don’t really care of how anyone would describe me, Everyone has various opinions. I want to be remembered for the impact. Trading traits Straight-forward. Like that… What are traits do you have that keeps you successful? Fearless. I take calculated risk always I involve myself in profitable relationships. I know this particular question may sound weird. The reason asked is because as humans we have the whole “act now, think later” thingy going on even when it’s not the right thing to do. So, do you have a trading “guilty pleasure”? If “yes” what is it and how do you handle it when it happens? Heh, FOMO “Fear Of Missing Out” from cryptos, If you don’t ignore the internet noise these days, you tend to hop on trends due to the hype and find yourself getting screwed up after. I can hugely relate. We all talk about trading psychology, what can you say about that? Good question Baz. What is your go-to strategy? I would also love that you explain why that is your go-to. Do you have a major reason why you chose that strategy and how it has helped sharpen your trading. Why beat yourself up when you were not comfortable risking such amount of money? That’s the major thing I can say. Always going to be: zone to zone. I spend two minutes analyzing a trade that would be take a regular trader hours. Yeah, it helped me create more time to do other important thongs. Final words from Enoch What’s your take on Neophytes that want to learn forex? Do you prefer they paid for the knowledge or stick with YouTube videos and free materials? This question. First of all, there are two ways to acquire knowledge. By Discovering or Duplicating. These two approaches require different sacrifices. Time or money. When Discovering, You spend time in search of knowledge, absorbing but important & less important stuff. As time goes on when trading, you’ll find out you have a lot of things to unlearn cos they’re literally useless. That way, you spend another precious time trying to focus on the main sauce. For Duplication, you meet a “Guru” Mentor, who’s been in the game for a while, this way you don’t have to pass through the process of sourcing for a scheme. This guru puts you on what’s needed in the market and that way, you’re starting the major aspect of the market with enough time to execute Knowledge gained (while someone discovering is still trying to unlearn some things) either way, experience is important.
OANDA:NAS100USDEducation
by lazyluchi
Why do most traders fail? Common reasons that lead to failureWe have listed some of the main reasons that incline most traders towards lack of success. After being in this industry for quite a few years, we have noticed that 90% of beginner traders make the same mistakes all over again. We would like to address those issues below, and provide some recommendations: 1) Overtrading is a problem that many beginners and experienced players in the market face. Quality will always be over quantity. Taking a few high-probability trades is much more convenient and professional than buying and selling many positions at the same time. 2) Risk management should be strictly followed in all cases. Many traders tend to risk 5-10% on a single position and end up blowing their accounts. It is much safer and better to risk 1-2% per trade and keep things consistent. 3) Adding 10s of indicators into their charts and making their graphs messy is what many participants of the markets do. Making trading decisions based purely on indicators lead to failure 90% of the time. It is essential to rely on price action and use indicators as confluences. 4) "I will start trading with $100 and flip it into thousands of dollars in a few months, because I have seen a guy on Instagram do the same". That's such an unrealistic and distorted statement. Always set your expectations low if you want to be profitable in this field. Moreover, do not trust fake Instagram "gurus". 5) Never ignore the major fundamental drivers, as in some particular cases they can easily make the market jump around. 6) "Many authors on TradingView are going short on BITCOIN! Let's go and do the same". Never rely on randomness and other people's opinions and analyses. Make your own chart analysis and use other authors' views as a means of confirmation. 7) Always and always journal your trades. It will help you a lot in identifying your errors and fixing them. 8) Patience is always the key. Those who rush, stumble and fall. 9) Do not let a win get to your head and a loss get to your heart. Always remain cold-blooded and emotionless. 10) It is impossible to be profitable and consistent in this sector without having a valid trading strategy. Create a trading plan that works for you the best and stick to it for the long-run. 11) Many novices tend to increase their risk in order to make more profits. Instead of increasing the risk, increase your trading capital! 12) Getting aggressive and trying to open a trade every minute is not a way to go. It is important to remain calm, trade with caution, and be patient! 13) If you want it, you will get it. Most of beginners do not treat trading as a serious business and they spend less time practising it. In order to be successful and make money, you need to put in work! 14) Greed is not an option! Always set realistic target profits and enjoy your gains. Holding a trade forever is not a way to go 15) Giving up is for the weak. If you ever feel like giving up and quitting it all, think about that one reason that made you start
BITSTAMP:BTCUSDEducation
by Investroy
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