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Trading Psychology

Risk Management (Your #1 Priority)Risk Management in Price Action Trading Risk management in price action trading is much like risk management in any other style of trading; the same basic rules apply: 1. Know your maximum risk tolerance, i.e. the loss you are willing to take on each trade, before you place the trade. A common rule is that traders will not put more than 2% of their funds in the market at a time. 2. Understand correlation between assets, and to what extent you would like to be diversified. 3. Know when you will exit before you enter. 4. Know your reward/risk ratio. 5. Identify what you expect to happen and why, and what price point negates that expectation. This is price point at which you should put stop. Of course, with risk management, techniques are important, but, ultimately, it is up to the trader to ensure they are psychologically prepared for all that is involved. Even if a trader is using a fully automated system, he/she must still have confidence in the system, and must know when any losing streak experienced is just a temporary losing streak versus a more fundamental problem suggesting the system is no longer valid.
Education
by Anbat
Trend lines (How To Draw & Use)There are a few basic rules to bear in mind when drawing trend lines: 1. Tentative trend line - A diagonal line market bounces off of twice. This trend line is indicative of a potential trend, but is not confirmed & actionable yet. This is a tentative trend line; two points touch the line. It suggests the possibility of a trend in the making, though conventional analysis will not regarding the trend as established until there are three points on the line. 2. Confirmed trend line - The market has bounced off this trend line three times. Conventional analysis regards this as a sign that the trend line is real, and that the market will react around it. It is easiest to trade from a trend when its highs or lows trend closely to a recognizable diagonal line, since this line may be used to predict future highs or lows. Opinions vary on whether trend lines should be drawn from the highs and lows of candles or from body of the candle, open & close prices; successful traders can be found employing either approach. In an up trend, trend lines touched three times, this validates the trend line. Those who wish to trade with the trend may have looked for opportunities to buy based on validated trend. Price pulled back to the trend line that was previously confirmed. Traders can do a trend trade & may be a buying opportunity. Support and Resistance The price action trader pays particular attention to pivotal price levels, often “drawing” these lines horizontally as Support and Resistance levels. The theory behind employing these lines is that the market has a sort of memory: price behaves with respect to certain levels that have previously been significant turning points in the historical narrative of the price’s action, and other market participants are likely
Education
by Anbat
Risk management lessonI mentioned it on another day already, but this topic is very important so I decided to share it again to reach as much as possible. Hope it will help some! The last weeks it happend again, I saw some traders with less knowledge (young and old) who crashed their accounts very hard. They lost a lot of money and for some it was very dreadful! It is hard to watch this people how they burn money and bring even his own family in financial danger. That´s why I decided to share one important chapter from my book here to you. May be some will find very helpful, or some will remember this rules again. I will keep it a bit shorter here as in my book, but the main points are still mentioned! I can´t say it often enough, keep the important rules in trading. Trading is not the way to get rich quick, it is a serious and hard business! It take a lot of time to learn, it requires a lot of patience and it will happen a lot of failures. This failures are even more important than your success! Success will not open up how it will not work, failures will. Let´s talk about risk management! For each investment you have to consider you take for each trade the risk to lose money, that´s why it is mandatory to handle each investment with a good risk/reward distribution. You have to keep in mind, the determined risk/reward is only theoretically and can result complete different. But with knowledge you can dedicate a good entry for your trades to keep your risk as low as possible. Determine important support and resistance levels and think about all situations what could happen and what will you do if you are going into the red or into the green? Which levels are the best entry and exit? This all will help you to determine your riks/reward ratio. What is the Risk/Reward Ratio? Successful day traders are generally aware of both, the potential risk and potential reward before entering a trade. The goal of a day trader is to place trades where the potential reward outweighs the potential risk. These trades would be considered to have a good risk/reward ratio. A risk/reward ratio is simply the amount of money you plan to risk, compared to the amount of money you believe you can gain. For example, if you think a potential trade may result in either a $400 profit or $100 loss, the trade would have a risk/reward ratio of 1:4, making it a favorable setup. Contrarily, if you risk $100 to make $100, the trade has a risk/reward ratio of 1:1, giving you the same type of unfavorable odds that you can find in a casino. Which ratio should you desire? Like described above, finding trades with high risk/reward ratios (1:2 or higher), will help you maintain higher average profits and lower average losses, making your trading strategy more sustainable. The common suggestion between traders is a distribution of minimum 1:2 ratio. In reality there are often even better ratios available, if you do your technical chart analysis. But what should you do if you have to cut losses? We have to place our stop loss right below our support or other important levels we determined before. The purpose is to cut losses before they grow too large. Stopping out of a losing trade can be one of the hardest things for traders to do consistently. However, failing to take stops can result in margin calls, unnecessarily large losses, and ultimately account blowouts. How big should I enter a position? To lower your risk I recommend to think about your size to enter a position. Overall you shouldn´t risk money you need, only deposit money in your broker you can afford. Entering small can be the smartest way to safe your account. I suggest that because of four reasons, the first reason is, you don´t risk to much of your funds and your stop loss should be tight anyway. The second reason is, you can average down if the price is going in the other direction, but consider this option only if you are sure what you are doing. The third reason is, you can buy the dips/pullbacks if the trend is strong and still heading in your desired direction. In addition, the fourth reason is, your emotional control is stronger if the price movement is heading in the wrong direction. That brings me to another topic. Should you use leverage? Yes I know, big leverage will give you big gains...but as a beginner you will not have the experience to know which trade has a very big potential or not. Even experienced traders use only a small amount to enter a position and not the whole fund. If you use leverage the losses can be much higher and the problem with that is, if you lose money, your leverage will also decrease significantly and the losses are harder to recover after each loss. So the answer of the question, if you should use leverage: For beginners we can easily answer: Take your hands of a big leverage! You can so hardly blow up yourself with that tool, it is ridiculous. Your way back into the profit zone will probably take years. But you have to save yourself and after a period of time, a period of taking profits and cutting losses you will gain knowledge until you feel much more comfortable on the market and you understand how trading really works, then you can consider to use leverage. Conclusion: As I said, I want to share only some big points about this topic, because I think many new investors don´t understand how important that topic is! Safe yourself and have fun in trading and learning! Sincerely, TradeandGrow Trade safe!
NYSE:AMCEducation
by TradeandGrow
2
The Hard Truth About Trading 😅 Well, that is just a joke. Or not a joke? In every good joke, there's a sliver of truth... So many people blew their trading accounts in a blink of an idea chasing the profits, so many people went bankrupt practicing leverage trading... Do not be that guy in a picture. Be a true trader! Never forget about risk management and don't be greedy. Never let your emotions control you. Stay calm and humble while you trade. Have a great weekend! ❤️Please, support these drawings with like! It really helps!
Education
by UnitedSignals
3
The Hard Truth About Trading 😅 Well, that is just a joke. Or not a joke? In every good joke, there's a sliver of truth... So many people blew their trading accounts in a blink of an idea chasing the profits, so many people went bankrupt practicing leverage trading... Do not be that guy in a picture. Be a true trader! Never forget about risk management and don't be greedy. Never let your emotions control you. Stay calm and humble while you trade. Have a great weekend! ❤️Please, support these drawings with like! It really helps!
Education
by UnitedSignals
10
🔋 Live to trade another day 🔋As the weekend has come we have lost many fellow traders in the days that have passed and we will lose many more in the next week and the week after that... but if they only knew the basic principles of what this video goes over, they (their accounts) would still be here with us! Our mission is to help other traders become successful and in an effort to achieve our goals we come up with simple yet effective tips and tricks on achieving our goals, by helping you achieve your goals! This video goes over some ideas and tips on how you can survive as a trader, the tips we go over are: LIVE TO TRADE ANOTHER DAY: - Use position sizing - Have a definite exit area - Prepare properly before starting to trade - Review your trades daily or weekly (always seek improvement) - Always follow your process & system - Don't listen to others, find your own trades daily - Cut your losers when the market tells you the trade is done, you can always re-enter We hope this video helps you achieve consistency! If you like it check out the other related videos on our channel! Happy Weekend Traders!
DEducation
by PrimedGroup
1
How To Trade With The Big Banks (Price Cycle Trade Setup)Elements To The Trade Set Up: Price Cycle Of Institutions. 1) Expansion= Order block/Zone Is when price moves quickly from a level of equilibrium in other words when price breaks out of consolidation. This will leave an order block or zone behind. 2) Retracement= PA Fills In Any Imbalance Is when price pulls back inside the recently created price range or close to breakout of expansion area. Look for imbalance to be filled on retracement. 3) Reversal= Seek To Pick UP Liquidity Is when price moves in the opposite direction from the current market direction was moving in. (from up trend to a downtrend). 4) Consolidation= Equilibrium In PA Is a period of ranging or sideways price action, before expansion in price action area.
Education
by Anbat
3
Trading Style? High Win Rate? High Risk Reward? Can't Have BothWin Rate, Risk/Reward, and Finding the Profitable Balance You generally need to make a choice in your trading Forex: either have a high win rate % and low risk reward (hedge traders or scalp traders) or low win rate % and high risk reward. (day traders and swing traders). Either can be successful, but it is a personal choice and different style of trading. Sometimes you can change depending on: pair, price, time & session that you are trading. End of Tokyo to end of London is high volume and liquidity daily time, so day trading might work and swing trading mid week. Hedging is mostly a high end money way of trading related to taking positions on both sides of a pair and scalping is going for many trades in same session, but make little pips per trade, but having high leverage per trade. These are great anytime of session, but do pretty good during low liquidity and volume times. Win-rate is how many trades you win, usually given as a percentage. Such as 50%, 5 out of 10, or 50 out of 100. Means 50% of trades placed result in a profit. Win rate is what many people focus on. They want to be right, often! Yet reward:risk (R:R) is just as important. R:R is how much a trader wins on winning trades versus how much they lose on a losing trade. Most day traders focus on the win rate or win/loss ratio. The allure is to eventually reach that stage where nearly all their trades are winners. While this appears to make sense, having a high win rate doesn't mean you'll be a successful trader or even a profitable one.​ Your win rate is how many trades you win out of all your trades. For example, if you make five trades a day and win three, your daily win rate is three of five or 60%. If there are 20 trading days in the month, and you win 60 out of 100 trades, your monthly win rate is 60%.
Education
by Anbat
4
What Is Leverage?Leverage is the use of borrowed money (called capital) to invest in a currency, stock, or security. The concept of leverage is very common in Forex trading. By borrowing money from a broker, investors can trade larger positions in a currency. As a result, leverage magnifies the returns from favorable movements in a currency's exchange rate. However, leverage is a double-edged sword, meaning it can also magnify losses. It's important that Forex traders learn how to manage leverage and employ risk management strategies to mitigate Forex losses. KEY TAKEAWAYS: Leverage, which is the use of borrowed money to invest, is very common in Forex trading. By borrowing money from a broker, investors can trade larger positions in a currency. However, leverage is a double-edged sword, meaning it can also magnify losses. Many brokers require a percentage of a trade to be held in cash as collateral, and that requirement can be higher for certain currencies. Leverage simply allows traders to control larger positions with a smaller amount of actual trading funds. In the case of 50:1 leverage (or 2% margin required), for example, $1 in a trading account can control a position worth $50. As a result, leveraged trading can be a "double-edged sword" in that both potential profits as well as potential losses are magnified according to the degree of leverage used. Example: USD/CAD at 50:1 or 2% leverage ( in this example, if you place a 100,000 USD/CAD trade with 50:1 leverage, your margin requirement will be $2000. Trade Size: 100,000 Margin: $2,000 Trade Size: 10,000 Margin $200 and Trade Size 1,000 Trade Size $20. *Required Margin. Required margin is the minimum account balance needed to hold a position.
Education
by Anbat
Leverage 50:1 (maximum Reward Risk)Should you use 50:1 leverage or maximum Reward Risk on any one trade? Is that using proper risk management? Per chart example: 1) You could either lose on chart one trade 10% of your account or 2) You could win on chart one trade 25% of your account Using Leverage is a double edged sword, which can be used or abused in the context of risk management, lot size, margin and leverage. Bad risk management is number #1 reason why traders blow accounts. Use 2% of account on one single trade, adjust lot size accordingly, stop losses and targets- this is a marathon not a sprint.
Education
by Anbat
Leverage Trading (Example)What is leverage in Forex? Leverage is a facility that enables you to get a much larger exposure to the market you’re trading than the amount you deposited to open the trade. Leveraged products, such as Forex trading, magnify your potential profit - but also increase your potential loss. Leverage works by using a deposit, known as margin, to provide you with increased exposure to an underlying asset. Essentially, you’re putting down a fraction of the full value of your trade – and your provider is loaning you the rest. Leverage and risk management Leveraged trading can be risky as losses may exceed your initial outlay, but there are risk-management tools that you can use to reduce your potential loss. Using stop-losses is a popular way to reduce the risk of leverage. Attaching a stop-loss to your position can restrict your losses if a price moves against you. However, markets move quickly and certain conditions may result in your stop not being triggered at the price you’ve set.
Education
by Anbat
The basics: Higher Highs and Higher LowsMarkets trend. There are impulses, and in those the price consistantly makes several higher highs and lows, or lower highs and lows in the case of a downtrend impulse, or leg. The majority that try to compete in this activity fail, and from what I have seen they either don't know the basics, or have loss phobia. Or are dense, that's also a possibility. It is basic. Do not go against the trend. Especially when it is diagonal. The market goes up in impulses. Forget elliott or dow waves, there can be any number of impulses within the impulse. 5 higher highs and lows, 6, 7, 8. Of course I am not used to seing something like 25 in a row. People would become instant billionaires if that happened. I wish... I can't prove the market behaves in that way but I can use some empirical evidence. In here I will present a couple of examples. 2, 3 or 4 examples can be a coincidence. But when something repeats itself over and over it is unlikely it is a coincidence. It's basic and easy to play around the fact that currency pairs make successive higher highs and lows. For example it might be pointless to hold a long once the price has reached a lower low (but it's a bad idea to have a stop at the very low or just below it). Eurodollar downtrend from the 20 April to the 10 May: Put into context: And then the new low: Another example: Forex charts look noisy and random, but they are obviously not random. The price does not randomly make a higher high in a downtrend then continues down. It keeps making lower highs without fail, and once there is a higher high well, most of the time it does not go just slighlty higher then drop. How embarassing is it that PHD economists can't see this? Sometimes a higher high in a downtrend is a trap Here is what individual investors can be seen doing: Retail positions have no predictive abilities that I know of. Their entries are basically random. And don't matter. I am not contrarian to retail positions when I enter, sometimes I buy with 80% of them. I see 0 correlation with my entries. But where is there a difference? Each time I have a big winners going past 5R I look at retail positions, and what I see is 80-90% are in the opposite direction (and have been for a while). Them sucking and being on the wrong side could either be due to entering at stupid moments, or closing winners quickly and holding losers which leads to an aggregate of "80% long" at the bottom of long downtrends. Are they dumb or afraid? By afraid I mean loss aversion. I do not think personally they are all idiots that just go against the trend, but I do think there are a lot of individual investors that do just that. I can imagine them being all nervous while I'm just chilling. I would say at least 90% got to be afraid, let's simply call it what it is: weak. There are plenty of idiots. Who gets into this? People that have money and went to school right? Engineers and doctors? There has to be some gamblers too. In investing in general I know the vast majority is "educated" as well as IQ > 100 but short term like this might not have the same distribution. How basic is it? Price makes lower lows and highs it is going down, and once there is a higher high the trend takes a break or reverses. Trade like a pro, not another statistic.
Education
by MrRenev
38
COT Report (How To Find Information & USDJPY Bullish)Commodity Futures Trading Commission (Commission or CFTC) publishes Commitments of Traders (COT) reports to help public understand market dynamics. ------------------- I used website called: Tradingster to get COT Report but you can see information directly from CFTC.gov too. How To Find Official Information: 1) Google or DuckDuck go: cftc.gov 2) Left side under Market Data & Economic Analysis 3) Click On Commitments Of Traders 4) Scroll down to section called Current Legacy Reports 5) See 2nd one, which says Chicago Mercantile Exchange----> under Futures Only----> see Long Format or Short Format 6) Click on Short Format 7) You now see a lot of both commodity and/or Currency Futures (Forex) information---> scroll down to like Example Japanese Yen (chart example) Why Was USDJPY Bullish During Last Cot Report Of Date 08/10/2021 (Tuesday)? (BELOW IS CUT/PASTE of Japanese Yen Information) JAPANESE YEN - CHICAGO MERCANTILE EXCHANGE Code-097741 FUTURES ONLY POSITIONS AS OF 08/10/21 | --------------------------------------------------------------| NONREPORTABLE NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS --------------------------|-----------------|-----------------|----------------- LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT -------------------------------------------------------------------------------- (CONTRACTS OF JPY 12,500,000) OPEN INTEREST: 206,131 COMMITMENTS 36,684 97,341 461 151,720 68,459 188,865 166,261 17,266 39,870<------ THIS IS INFORMATION YOU NEED TO KNOW!!! FYI: From above information we can see total contracts of JPY of 12,500,000. Open Interest is 206,131. Non Commercial Traders have 33,000 more short contracts and Commercials have 83,000 more short contracts outstanding. What does that mean? JPY is Weak & USD is Strong- verified on chart.
Education
by Anbat
The Art of Swing TradingHey, family, we are wishing you all a pleasant weekend and coming at you with another educational post. The topic of our article for today is the following: The Art of Swing Trading. As you all may know, Swing Trading refers to the practice of trying to profit from market swings of a minimum of one day and as long as several weeks. But what is it that makes this type of market trading so unique? Let’s follow through and find out! To start with, Swing Trading is safer than other types of trading such as day trading and scalping. This is due to the fact that with Swing Trading, you are less likely to overtrade, there is less stress and there is a reduced chance of making mistakes. Secondly, with Swing Trading, you are likely to spend much less time on the charts in front of monitors. You don’t have to open many positions within a day as opposed to intraday trading and scalping, which gives you plenty of free time in your hands. You can simply open your positions and then forget about those positions for days or weeks to come. You can go for a walk with your partner, grab a cup of coffee with your best friend, spend a quality time with your family, and do it all without being anxious about your trades. As the golden rule states: “Set (Your TP and SL) and forget”. Last but not least, financial news do not have a huge impact on your positions, as your SL is relatively higher than the Stops of day traders and scalpers. Therefore, you do not need to worry about some random spikes taking you out of the trades. However, as the famous proverb cites, every advantage has its disadvantage. When it comes to Swing Trading, he or she needs to have patience, patience and some more patience. Swing trades are meant to be held open for a few days of even few weeks (Well, at least till the price hits your Target Profit). And while the trade is running open, you should know how to remain calm, control your emotions, and not to stress out. Once again, set and forget. Do not monitor your positions every 10-15 minutes. Further to that, this type of trading generally requires a huge trading capital, or otherwise, the profits are gonna be minuscule. When it comes to the timeframes that need to be used, the Weekly and the Monthly are the best for identifying the direction of the trend, the Daily is the best for drawing the key zones and identifying the needed patterns, and lastly, H4 should be utilised for entering and exiting the market. As for the recommendations part, the utilised risk fully depends on the trading capital. The 1-1.5% risk would be the standard normal. As for the risk-to-reward ratio, 1:3 would be an appropriate one to go with. But remember not to be greedy in the markets. Take your profits and enjoy the fruits of your labor.
BITSTAMP:BTCUSDEducation
by Investroy
29
The COT Report (How To Use/Strategies) BonusHow To Use The COT Report In Your Forex Trading Before we discuss how to trade the Forex market using the COT Report, you should know why the COT Report is important for Forex traders. Forex trades are executed over-the-counter (OTC). There is no central body, like NYSE, where all trades are recorded. It is difficult to accurately track volumes behind all Forex trades. It is also harder to know what big banks, large speculators, and other market drivers, are doing. But with the COT report, Forex traders can have an insight into these pieces of info. Which brings us to first use of the COT report in FX. Trading Strategy 1: COT Report as a Forex volume indicator The COT report can serve as a powerful Forex volume indicator when you use it rightly. Since CFTC releases the weekly report every Friday for all trades recorded before Tuesday, you can only use it for long-term trades. To use the COT Report as a volume indicator, keep your eyes on the open interest numbers of an asset. When there is a rise in the open interest of an asset, it means more people are trading the futures contract of the asset. Trading Strategy 2: Using the COT Report to predict reversals There are two ways to use the COT report to spot potential reversals in the Forex market. The first method is the use of the spreads data on the report. A reversal may occur when the spread between commercial and non-commercial traders is wide. If the commercial traders are going heavily bullish while the non-commercials are heavily bearish, the market could experience a reversal to the uptrend. And if commercials are going short while non-commercials are going long, a reversal to the downtrend may occur. The other method involves noting where the non-commercial traders are accumulating their positions. Remember that non-commercial traders are the big money guys that are interested in making more money. They are the ones you want to mimic. So, when you find that their positions on a certain futures contract are reversing, and a reversal might be imminent on the underlying asset. This use of the COT report is similar to how you might use a sentiment indicator, such as the Current Ratio FXSSI indicator, in a Forex sentiment analysis. To get better results, you can use the data from the COT report to complement your technical analysis from other Forex trading tools. good luck.
Education
by Anbat
The COT Report (Why Did EurUSD Fall?) Part 3 of 3C.O.T. is an acronym for Commitment of Traders. It is a report that contains a weekly overview of how participants of the futures markets in the U.S. have traded. The report contains all the positions of the main market factors in the United States. Why Did EurUSD fall during the latest COT Report from 8/3/21 to 8/10/21 (date period)- came out Friday on 8/13/21. Yes, data is historical in nature, but has great future value in trading FX for long and short term traders. EURO FX - CHICAGO MERCANTILE EXCHANGE Code-099741 FUTURES ONLY POSITIONS AS OF 08/10/21 | --------------------------------------------------------------| NONREPORTABLE NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS --------------------------|-----------------|-----------------|----------------- LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT -------------------------------------------------------------------------------- (CONTRACTS OF EUR 125,000) OPEN INTEREST: 702,098 COMMITMENTS 212,809 178,952 8,072 388,866 458,925 609,747 645,949 92,351 56,149 Above is part of 8/13/21 cftc.gov latest COT report.. The Difference in total longs and shorts (of both non commercial/commercials) equals 36,202 more short contacts. Contracts of EUR 125,000 (total) divided by 36,000 (more shorts) equals around 29% more of short contracts outstanding. This is why I believe that EURUSD dropped during the last COT report period of around 180 pips. Note: The COT keeps you on right side of trading with smart money. Yes, using both commercial and non commercials are way to go for looking to where a particular market might go related to the COT report.
Education
by Anbat
The COT Report (Trade Like Banks) Part 2 of 3C.O.T. is an acronym for Commitment of Traders. It is a report that contains a weekly overview of how participants of the futures markets in the U.S. have traded. The report contains all the positions of the main market factors in the United States. These major market drivers include institutional traders, hedge funds, big banks, and more. And the weight these traders pull on the markets can sometimes be staggering enough to drive trends. As retail Forex traders, our best bet is to trade like big financial institutions or Big Banks, Central Banks, Hedge Funds. They are the non-commerical traders. Non-commercial traders are large speculators who already have a lot of money in the bank, but want to make some more by trading the futures market. Examples of these non-commercial traders include hedge funds, trading advisors, and other huge financial institutions. These institutions follow the trend religiously. They buy in an uptrend and sell in a downtrend. The majority of Forex traders are you and I; retail traders. We make up over 90% of all traders. The remaining 10% (or less) are smart money traders, such as banks. Smart money traders make the largest and most consistent profits between these two categories of traders. They are profitable 90% of the time. But retail traders lose money over 90% of the time.You may then wonder how banks make so much money and many retail traders lose so much money. The answer lies in how the banks trade Forex. FYI: There phases are: Accumulation then Manipulation then Distribution, then rinse and repeat over and over. Now that you know who the smart money traders are, you want to know how they are different from you. Firstly, smart monies have much more money to trade than you. I'm not talking about thousands or hundreds of thousands. Smart monies have tens and hundreds of millions to trade. And the sheer volume of their trades gives them the power to drive the market. Secondly, they don’t trade on small time frames. Smart monies trade daily, weekly, or even monthly time frames. Traders that trade on small time frames are usually looking to get in and out of the market in a short time. But the smart money is usually in the market for a long time.
Education
by Anbat
The COT Report (Trade With Smart Money) Part 1 of 3C.O.T. is an acronym for Commitment of Traders. It is a report that contains a weekly overview of how participants of the futures markets in the U.S. have traded. The report contains all the positions of the main market factors in the United States. The Commodity Futures Trading Commission (CFTC) provides this report every Friday at 3:30 P.M. EST for all positions recorded from the Tuesday of the same week to Tuesday in the previous week. As the name suggests, the COT report exposes their commitments. And these market participants are divided into three trading groups: commercial- Commercial traders are big institutions who are in the futures market to hedge against risks due to unfavorable price movements that could affect their investments. They only trade for the sake of reducing risk, not for profit. non-commercial- Non-commercial traders are large speculators who already have a lot of money in the bank, but want to make some more by trading the futures market. Examples of these non-commercial traders include hedge funds, trading advisors, and other huge financial institutions. These institutions follow the major trends religiously. They buy in an uptrend and sell in a downtrend. non-reportable traders- Non-reportable traders don’t have the heavy bank accounts of commercial and non-commercial traders. They are speculators with smaller accounts who are also looking to make money from the futures market. Retail traders fall into this category. These major market drivers include institutional traders, hedge funds, big banks, and more. And the weight these traders pull on the markets can sometimes be staggering enough to drive trends. As retail Forex traders, our best bet is to trade like big financial institutions or Non-Commercials.
Education
by Anbat
Emotional Mastery (Controlling Your Emotions)The power of mind discipline... Is really about sticking to your choices. That as a discipline, it is expected to be difficult for shaping oneself to be good if not great doesn't happen overnight neither that it provides an outcome on the onset. To go through this process needs determination, hard work, patience and time, hence, all these shall allow you to whether to continue to be or to be not. “The key here is to establish emotional mastery first, getting a control of yourself. Being able to respond in a moment rather than react. And you can do that, you can win”. This is so powerful! Forex trading is 99% mental and only 1% strategy. In trading you want to always respond not react to what price action is doing. Faced with a set back you are either in emotional control or out of emotional control. Emotional control: *How you use your body during a set back? breathing, etc.. *How you use your language during a set back? describe experience *What we chose to label the set back? positive or negative. What we chose to focus on during that moment. Trading with leverage increasing emotional control... so less is more in Forex trading until you 100% understand. If you have emotional mastery prior to trading this will give you a foundation of calmness and balance from which to fall back on, during losing or set back in trading.
Education
by Anbat
Trading Psychology Is Worth 95% To Overall Failure or SuccessThe Cold Hard Truth "You Are You're Own Worst Enemy" You will probably develop technical skills required in placing trades and learning money management. But you constantly end up sabotaging yourself. What Is Trading Psychology? Knowing when to quit and when to push Using a stop losses Hitting targets Controlling greed, fear and hope *Discipline, Discipline, Discipline! If you want to be 10% successful FX traders then do the following: Have a trading plan and view, have money management rules, have emotional control, each trade is unique and has nothing to do with last trade, you do not revenge trade, you only trade during certain times not 24/7 & review trade results. Do opposite of above if you are part of the FOMO traders whom do not treat Forex trading as a probability based business but as gambling. Note: If a Forex trade is not doing what and when you want it too, then FIRE it ( get out of it), you are the BOSS. Have a detailed trading plan. More specifically have a detailed set of money management rules within a trading plan to take control over EMOTIONS.
Education
by Anbat
Using Correlations to Predict Markets: Review & DiscussionSeveral months ago, I posted the original idea (see related) when I thought that markets were preparing for major asset rotation. Instead, it seems that we only got a preview of the real thing. Meaning, that Bitcoin had a major selloff right around the time of the first post, but it wasn't severe enough to drastically shift the major asset classes. Right now, I feel a similar type of paradigm shift is coming, so I wanted to review some key points that I've gathered since monitoring this correlation study. The major takeaways are listed in the top part of the chart and the updates to what the correlations with Gold could mean for each asset class are shown in the bottom sections, respectively. In my opinion, not much has changed regarding the future direction of the various asset types, with the exception of USD. I think that as of today, inflation will get its recognition as a potential destroyer of wealth and will lead to mass exodus from risk assets. The reasons for this are too many to include and are beyond the scope of this post. The main point of this is that I believe that due to the bizarre and artificial economic landscape painted by the Fed, that inflation will be viewed as a harbinger for risk assets, before it is considered an "invisible tax" on the USD, which would lead to broader questions concerning its purchasing power. The reason for mentioning this inflation belief is that we find ourselves in a unique situation whereby there are only two main asset types that are "undervalued": 1) USD, 2) Gold. Ironically, these two things should be polar opposites; yet it is now undeniably true (based on recent correlation studies), that the two move in tandem when correlated, and have been such more often than not over the past several years. Lastly, I would strongly recommend keeping tabs on USD/Gold corr going forward, since it can really help to find true direction when financial markets unravel. -Pig/USD TVC:GOLD TVC:SPX TVC:DXY CURRENCYCOM:OIL_CRUDE BITSTAMP:BTCUSD
TVC:GOLDEducation
by UnknownUnicorn5511258
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