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A brief explanation on the importance of risk managementEvery human activity has its ups and downs. You may face good days and bad days and it’s a norm in any other human kind activities. Read history! Did all dynasties get consistently stronger? In politics, did popularity rates of political figures get better day by day? Sure not! Even in natural events, you see uneven decreases and increases. Not only the annual rainfall rates are not always the same, but the rate of increases and decreases varies from year to year. So strategies and setups won’t always work because they simply are man-made things to predict a human-based activity! They may fail, expire or disused someday, because this is the neutrality of nature and creatures including humans and their markets. For the last instance, even stars grow and fall. I know there are some traders who claim their strategy will never expire. They may be liars, but they are not necessarily liars! Those who believe their strategy will never expire will admit that their strategy had bad days too. I like to say their strategy has expired and reactivated again and since they consider longer cycles (monthly, yearly or even bigger) they believe their setup has never expired. If we want to be more precise their strategy has expired but just for shorter periods (may be just for hours!). Let me explain a little more technical, every setup is compatible with specific conditions of the market and they will fail in other markets’ conditions and traders are not foreteller but predictors, so they sometimes may get conditions have changed and sometimes they predict it wrong or get the change so late! So they sometimes make profit and sometimes don’t. For example RSI overbought and oversold strategy do not make profit in trending market on the side of the trend! I mean if markets are bullish, overbought is a norm not a sign of reversal (most peak of reversals happens in overbought or oversold but not every oversold is a sign of reversal in a trending market) and in a super bullish trending market you almost can’t find any RSI oversold. So you should use another setup! ( some traders using kind of strategy which has different setups for different conditions of market, they actually guess when their strategy is going to expire) I divide the professional traders by methods that they choose to avoid using an unsuitable for market conditions into four general categories. 1- Ignorers: Since they got a conservative risk management strategy and they could easily ignore expiration phenomena and trade without worrying about expiration. 2- Rule makers: They have different setups for different conditions. They specify some rules to distinguish market conditions and adapt new setups to their trades. Rules could be created by using both indicators or indicator-free (price action) chars. 3- Sentimental Market traders (in case of expiration): Some traders do not use specific rules! They simply just sense market conditions has changed. They differ from rule makers because they don’t use a specific rules every time. They may use some rules unconsciously but those rules may differ time to time. 4- Equity curve analyzers. They simply analyze equity curve! They make specific rules to start using or stop using a strategy! For example they will stop using it if it is a loss-maker one for 2 weeks (this one won’t work in most strategies) or they simply try to use price action rules to analyze EC of a setup! “Mark Douglas (1990) is saying that if traders were to chart their equity, these charts would look very much like the typical bar charts and charts like these also can have the same predictive value as in the markets” “Procedia Economics and Finance 32 ( 2015 ) 50 – 55” these kind of traders may use indicators like SMA or WMA to predict profitability of a setup in future and they are also eager to use price action rules. I believe no method is superior to another, the way an experienced trader use the method is important! But having a method to avoid large losses is necessary. And all traders consciously or unconsciously use one of them. Most price action traders are ignorers. Their strategy may expire but for short period of time. For example mine is expired right now but I’ll continue using it cause I know it’s temporarily and I don’t know when exactly it will reactive again. I also use a self-made auto-trading expert which use different indicator based setup and since the period of expirations of that setups are long, I use EC analyzing methods to detect expirations . No matter which method you use, you can’t be an always winner trader! Ignorers may loss and they will name it exceptions. Rule makers’ rules may detect and signal expiration too soon or too late! The 3rd and 4th kind of traders may make mistakes too. There is no single trader in the world with 100% win rate in long-term! That's why you need to limit our risks, I like optimism in life (I prefer pessimism in back-tests) but you should not be deluded, you should think what happen if you lost some consecutive trades? If you risk more than you can handle consecutive losses emotionally, You will empty your trading account, no matter how good a teacher you had or how much you have practiced or how great trading past you have or how experienced you are or even how much you believe your emotions are in control of you (you actually can’t control in real big loses trading), YOU NEED TO LIMIT YOUR RISK by managing it in a way that your trading is profitable enough and simultaneously do not be destructive at certain times "Profit a little less but more consistent." There are also too many other important rules for money and risk management and you should take them into consideration too. Best Regards, Alisignals
OANDA:XAUUSDEducation
by AliSignals
Defined Entry & Exit Points Using MACD, W%R and 3EMA's Easily define entry and exit points by using a simple crossover strategy using the indicators above. This strategy is based on trend and momentum price movements. This strategy is described below. Strategy: Defining Entry Points Timeframe: 5 / 15 / 30 minutes MACD - When the MACD line crosses above the Signal line, a upward trend may be occurring. W%R - When the W%R line moves upward toward 0 and crosses the -50 line, an upward trend may be occurring. 3EMA - When the 20 MA cross above the 60 MA line, and both are above the 100 MA, an upward trend may be occurring. When all three of these happen simultaneously, there is a 99% change that an upward trend is occurring. Your entry point should be at a price point three to six cents ABOVE the 3EMA, MACD & W$R cross over line. Entering your position a few cents above the crossover line reinforces that your entry is being done in an upward price movement instead of getting stuck in a sideways or downward price movement. To Exit, simply use the reverse strategy of the Entry. MACD - When the MACD line crosses below the Signal line, a downward trend may be occurring W%R - When the W%R line moves downward toward - 100 and cross the -50 line, a downward trend may be occurring 3EMA - When the 20 MA crosses below the 60 MA line, and both are below the 100 MA line, a downward trend may be occurring.
NASDAQ:AAPLShort
by Daily-Trader
5
Learn the Range Trader Strategy | Part 1 - The LevelsIn this lesson, I discuss the important levels to know for the Range Trader Futures Trading Strategy. The indicators on the chart that produce these levels and values are the following: 1) The "T-Line" is a 233 period Exponential Moving Average (EMA) | Built-ins >> Indicators 2) The prior session highs and lows are plotted using the 4C Yest HLC/O indicator | Community Scripts >> Search for the script name 3) The overnight or Globex highs and lows are plotted using the High/Low Of Custom Session indicator | Community Scripts >> Search for the script name 4) Volume Point of Control (VPOC) is calculated with a Session Volume HD script | Built-ins > Volume Profile (These scripts require a paid TradingView plan) Now for the levels ... Identify the prior session high and low. Identify the overnight high and low. Identify the prior session VPOC. (Current session VPOC is noted only if the overnight range exceeds 50% ATR prior to the U.S. stock market open). Identify if price is above or below the T-Line (233 EMA), indicating a bull/bear continuation or bull/bear neutral pattern. Identify the 7-day Average True Range (ATR) for the instrument/product you are trading. Follow Me here on TradingView to be alerted to the next videos in the series that go into set-ups, signals, and entries for the Range Trader based on these levels.
CME_MINI:ESZ2021
by RodCasilli
6