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Trailing Stop / Stop Limit | Gunbot trading strategyThis is an example of Gunbot trading with the Trailing Stop / Stop Limit (tssl) strategy. Gunbot is a multi platform crypto trading bot. About this strategy This strategy is based on trailing prices, it trades when a price direction change is detected and the trailing stop / stop limit is hit. Additionally, you can set a minimum gain target for sell orders and constrain buy orders to only be placed when prices are below EMA . Settings used This example uses the "pure" version of the tssl strategy, meaning both the buy method and sell method are set to use tssl. No additional confirming indicators are used. The following relevant settings were used, all other settings were set to the defaults: BUY_RANGE: 0.5 SELL_RANGE: 0.5 GAIN: 0.7 BUY_LEVEL: 0 EMA1: 16 EMA2 8 Full disclosure I am the author the Gunbot wiki. This content is only meant as educational material to show an example of how Gunbot can be used, disclosing the full strategy settings used. Disclaimer While every effort has been made to ensure these simulations of Gunbot contain the same logic as Gunbot, they will not always buy or sell at the exact same time or prices as Gunbot (because of TradingView's inability to use ticker prices). This is close as you can get in TradingView to the real thing. Backtesting the past does NOT guarantee profit in the present or future. Please don't use these exemplary settings without doing your own research. Results can vary depending on the chosen market and it's conditions.
Education
by gunbotcom
4
Bollinger Bands TA | Gunbot trading strategyThis is an example of Gunbot trading with the Bollinger Bands TA (BBTA) strategy. Gunbot is a multi platform crypto trading bot. About this strategy With this strategy you can configure at which percentage from the lower Bollinger Band Gunbot should buy, and at which percentage from the upper Bollinger Band a sell order should be placed. Orders are placed after prices first move outside the set level, then move back in. Settings used This example uses the "pure" version of the BBTA strategy, meaning both the buy method and sell method are set to use BBTA. No additional trailing or confirming indicators are used. The following settings were different from the defaults: HIGH_BB: 30 LOW_BB: -10 STDV: 2.1 SMAPERIOD: 30 PERIOD: 15 Full disclosure I am the author the Gunbot wiki. This content is meant only as educational material to show an example of how Gunbot can be used, disclosing the full strategy settings used. Disclaimer While every effort has been made to ensure these simulations of Gunbot contain the same logic as Gunbot, they will not always buy or sell at the exact same time or prices as Gunbot (because of TradingView's inability to use ticker prices). This is close as you can get in TradingView to the real thing. Backtesting the past does NOT guarantee profit in the present or future. Please don't use these exemplary settings without doing your own research. Results can vary depending on the chosen market and it's conditions.
Education
by gunbotcom
1
Bollinger Bands | Gunbot trading strategyThis is an example of Gunbot trading with the Bollinger Bands (bb) strategy. Gunbot is a multi platform crypto trading bot. About this strategy With this strategy you can configure at which percentage from the lower Bollinger Band Gunbot should buy, and at which percentage from the upper Bollinger Band a sell order should be placed. Additionally, you can configure the minimum profit per trade and how much prices need to be below EMA for buy orders to be executed. Settings used This example uses the "pure" version of the bb strategy, meaning both the buy method and sell method are set to use bb. No additional trailing or confirming indicators are used. The following relevant settings were used, all other settings were set to the defaults: PERIOD: 60 EMA1: 20 EMA2: 10 BUY_LEVEL: 1 STDV: 2 SMAPERIOD: 30 HIGH_BB: 20 LOW_BB: 0 GAIN: 2.2 Full disclosure I am the author the Gunbot wiki. This content is only meant as educational material to show an example of how Gunbot can be used, disclosing the full strategy settings used. Disclaimer While every effort has been made to ensure these simulations of Gunbot contain the same logic as Gunbot, they will not always buy or sell at the exact same time or prices as Gunbot (because of TradingView's inability to use ticker prices). This is close as you can get in TradingView to the real thing. Backtesting the past does NOT guarantee profit in the present or future. Please don't use these exemplary settings without doing your own research. Results can vary depending on the chosen market and it's conditions.
COINBASE:BTCUSDEducation
by gunbotcom
BTCUSD Types of false breakdownsFALSE BREAKOUTS, BULLISH AND BEARISH TRAPS FALSE LEVELS BREAKOUT: TRADE, KINDS, PATTERNS Trading strategies using key support / resistance levels are among the most popular and often used in trading practice by most traders. However, behind the seeming simplicity of the trade of the rebound from levels, and their breakdown lies a lot of nuances, which are often the cause of an unsuccessful trade deal. One of them is a false breakdown of levels, which cannot be identified correctly identify on the chart by all traders. It is the trade of false breakdowns that leads in most cases to incorrect entry into the market. To minimize the risk of trading levels, let us study the concept of "false level breakdown", the logic of their formation, types and how to avoid mistakes in trading levels. So, a false breakdown is a situation where the price of the traded asset breaks the level, but it cannot gain a foothold above or below it and comes back. Schematically, this pattern and pattern are shown below. They are often called “bullish or bearish trap” in literature. You can come across them quite often in the upward and downward tendency, in consolidation, in figures of the graphic analysis on statistic and dynamic (movings) level. LOGIC OF FORMING FALSE BREAKDOWN At the heart of this price behavior there are two mechanisms. 1.The lack of demand or supply on the market. In this case, the price is actively moving to an important price level, but as we approach it, the size of bars (candles) begins to decrease, and volumes - begin to decline. This means that at these levels, the demand for the asset falls sharply due to a decrease in the volume of the traded asset or unwillingness of traders to buy / sell the asset at a too high / low price. And the output of prices beyond the important level (false breakdown) has no chance of continuation. In this situation, most often the market goes into a flat state. 2. Getting the position by a marketmaker / specialist due to small traders. As you know, when the price moves up / down, the marketmaker takes the opposite position, that is, he provides liquidity to the asset. When the important price level is reached, the activity of the participants decreases and the demand / supply falls. The marketmaker, in order to close its existing position and turn, needs to collect an asset at the prevailing price. Not being able to place his applications for the purchase / sale of an asset at one time, he performs manipulations (actions contrary to his intentions), provoking the “crowd” to sell / buy a trading instrument, that is, create additional supply / demand in this area. For this, he makes a false move beyond the boundaries of the resistance / support zone and most small traders, following the logic, buy / sell an asset to a marketmaker. Having gained a necessary volume and closed the current position, the maketmaker starts moving to the opposite side, and the crows loses money. It is a false breakdown, most often used by a marketmaker for these purposes. In this variant, the price is suitable and breaks the level with large-size bars and high volumes, but after the breakdown volumes fall sharply. This indicates the activity of market participants and requires knowledge of patterns for identifying false moving. TYPES AND VARIANTS OF FALSE BREAKOUT False breakout patterns can be different: single (puncture), double or multibar (tampering). Instant breakdown - the price makes a sharp move out of the channel by one bar / candle (puncture) and comes back, while the bar / candle closes below the resistance level and above the support level. Such a candle should have a high volume and a long upper shadow (pin bar). Breakdown of the level by two bars with the closing of the first step above the resistance level (fastening above the level), and the second - its return and closing under the support level and, conversely, for the support level. It is very important here that the volume of the candle return is greater than the volume of the candle penetration. Breakdown of the level with subsequent tampering over / under it (trade in a narrow range), return back. Here, the largest volume should have a candle breaking through the level and a return candle. On the chart, it looks like this: TRADING OF FALSE BREAKDOWNS: It is impossible to formalize all the rules for trading a false breakdown in a short article, but only the most important ones. First, the trading algorithm: •Never enter the market until the breakdown candle is completely formed (closed), ideally - it is not worth to enter the market at all in general. The beginning traders do this mistakenly as they emotionally react to the breakdown and are afraid to miss the move. It is necessary to make a decision after the formation of the next or several subsequent candles, depending on the type of the forming breakout pattern and the market context. Many traders take the sharply increased volume for a breakdown candle as a basis. But the reason for this phenomenon can be not only the entrance of new buyers, but also the banal demolition of stops, which is especially common in the breakdown of levels (boundaries) of price channels. Below is a schematic diagram of the algorithm for entering the market after the completion of the formation of false breakdown patterns. • after breaking through a strong level, carefully analyze the forming patterns, among them, often form reversal, which can tell you a lot about the current situation. The figure below, as an example, shows the situation on the chart with a false breakdown and several signals for a spread Always be very attentive: if the price matches the strong level the marketmaker will probably provoke the next false breakdown. And do not forget that level breakdowns including the false ones often happen as a result of strong news. And the last one, some traders avoid trading of such moves. This is completely in vain, since the trader loses the chance to enter into a deal at the best price with a small stop which allows to reduce the risk and easier to keep an open trading position.
BITFINEX:BTCUSDEducation
by EXCAVO
45
Real Price vs Heikin Ashi PriceHi! This is just a quick study for my own curiosity. It maps out the real world closing price vs the Heikin Ashi closing price. I think I'll make the indicator a mainstay of my trading charts, as it's useful to see. It also makes manual backtesting more viable. Some interesting observations: Long-term average difference between real world closing and HA closing ranges from 1 - 4 pips. There are intermittent spikes of up to 10 - 12 pips. These happen fairly infrequently (depending on the time frame being viewed). On average, HA prices are closer than I thought to real world prices. I would have expected an average greater than 1 - 4 pips. Spikes in difference often signify important points. Primarily they seem to signify new or continued trend activity in the relevant direction, but sometimes they can indicate tops or bottoms. Could be interesting to try and build a strategy around it. I'm not sure if I'll publish the Real Price indicator (it's literally just a few lines of code), but let me know if you want a copy of it. Cheers, DreamsDefined
Education
by DreamsDefined
3
Intermediate Trading Strategy - Part 4In the previous posts we discussed profit taking in different markets, profit targets, trailing stop losses, risk:reward, time horizons and how to identify a trend. Starting with part 1 is highly recommended. Best Indicators I have noticed that some indicators work really well when the asset is at or near all time highs and other indicators work best when the market is recovering or in a bearish trend. If ATH', or ATH' territory Tyler Jenks’ Hyperwaves: Help to identify areas of support in parabolic markets. Also indicates when the parabolic move is exhausted (phase 4 or phase 3 breakdown). Hyperbolic burst: Use 30 period RSI. If >/= 70 then parabolic status. Prefer week and daily to be > 70 with W > D. If both weekly and daily are > 70 then in a Parabolic High Risk (PHR) state. If Weekly and Daily > 80 then Extreme Parabolic High Risk (ePHR). Fractals/Parabolic SAR’s: Very useful for setting trailing stops and identifying a reversal in trend. Up fractals should not get broken in a down trend and down fractals should remain in tact while trending up. Ichimoku Cloud: Tenken-Sen serves as a high probability entry. Kumo twists can help identify the end of a trend. The cloud can act as support. I find it to be most useful as a way to identify no trade zones. This occurs when the price is inside the daily cloud. MA’s: Like 10MA - 50MA - 128 MA on the daily chart and the 7/30/50 on the weekly. If the 10 MA crosses the 50 then it is a good indication of upcoming consolidation and/or reversal. For Bitcoin' NVT: Most objective measurement we have to value the Bitcoin' blockchain. However, with the introduction of the Lightning Network and batching transactions I do not know if this will continue to work. For example: The blockchain could be getting used more but NVT could be showing the network as overvalued because there are less total transactions. If Bear Market or Recovery Horizontal support/resistance and/or FIB’s: Prior resistance turns into support. FIB’s can help identify major levels of support/resistance. Look for gaps that need to be filled. VRPR: Large volume profile on top = large resistance | Large volume profile below = large support | If gap in volume below price then high probability that the asset will retest that zone, a/k/a ‘fill the gap’. Patterns: Patterns can be very useful in identifying high probability entries and estimating profit targets. Candlesticks: Capitulation and Euphoria wicks are a very strong indication of a reversal. I like to look for reversal candlesticks to be in confluence with an area of support, such as a horizontal, trend or Ichimoku Cloud. Trendline: Can be very useful in identifying bottoms and catching trend reversals. If trend is violated and holds as resistance/support on a retest then it is a likely reversal. When the price is in a freefall using trendlines and/or hyperwaves can be useful in identifying key areas of support. Do not look for a reason to enter a trade, look for reasons to stay out! Anyone can find a reason to enter a trade, and anyone can come up with an eloquent explanation to make the trade sound profitable. When you are actively looking for reasons to take the other side of your position and are coming up empty then it is probably time to bet big and use a generous stop loss! Thanks for reading!
Education
by Sawcruhteez
4
Intermediate Trading Strategy - Part 3In the previous post we discussed risk:reward, profit taking and trailing stop losses. If you have not read part 1 and part 2 then you are highly recommended to start there. Taking Profit Always taking partial profits, never making decisions for the full position. This is true when entering and this is true when exiting. It minimizes anxiety and emotional decision making. In Trending Markets: Stop loss is trailed once new highs/lows are established. If long then move it up to be slightly under the recent low and if short move it slightly above the most recent high. This can generally be illustrated with Bill Williams Fractals on the weekly and daily charts. Full profit can be taken on the third test of a trendline. In Parabolic Markets: I like to gamble on house money, it makes me feel much more comfortable about the draw downs. Here is an example for how to take profits in a parabolic market: If +100% then take 10%-20% off the table. If +100% again then take another 15%-25% off the table. Keep doing this as long as price is making all time highs. Take full profit if phase 4 or phase 3 of hyperwave is violated If weekly and daily RSI (with 30 setting) are > 80 then take full profit. If Welles Wilder’s ADX is > 50 on the weekly and/or > 60 on the daily then time to take full profit. For Bitcoin' watch for NVT to reach overbought zones and consider how this metric will be affected by Lightning Network and batching transactions. If Trading a Pattern: A chart pattern will indicate a profit target. If your reason for entering the trade was the chart pattern then do not get greedy with the profit target! Relying on a trailing stop will often cause a trader to miss out on a large part of the profit when trading a pattern. Be very specific about what you are investing in long term/hodling and what you are using to trade. If investing/hodling then put into cold storage and don’t do anything for a minimum of 10 years. In the final post we will delve into the best indicators and provide guidelines for when they are most effective.
Education
by Sawcruhteez
Intermediate Trading Strategy - Part 1IMPORTANT NOTE: If you are looking for a shortcut then this is not for you! This is for individuals who are enthusiastic about putting in the time and effort but may lack the structure. I plan out my trades through in depth technical analysis, risk management and market research. I believe that consistency is the most important factor in regards to trading profitably. A traders success is determined more by the consistency of their approach than it is by the quantity or quality of indicators being used. Over the long run, a consistent process combined with a sound strategy will net a disciplined trader far greater returns than the market average. If you have any questions then feel free to leave a comment or send a private message. Click here for Sawcruhteez’ Trading Process Before Making an Entry Identify Trend Higher highs and higher lows = bull market Lower highs and lower lows = bear market Lower highs and higher lows = triangle continuation pattern Equal highs and equal lows = Consolidation/Range Tyler Jenks’ Consensio Price > Short term MA > Long term MA = Bull Market -I like to use the 50 & 128 day MA’s by default for crypto. For traditional markets I use the 200 MA. -For short term price movements (1 month or less) I like to use exponential moving averages. 12 & 26 EMA for crypto and for traditional markets the 9 & 21 EMA. Welles Wilder’s ADX If ADX > 25 then trending market If ADX < 20 then no trend is present If +DI > -DI then bull trend If -DI < +DI then bear trend In extreme circumstances I will bet against the trend. This will only happen when the risk:reward is too favorable to pass up. Identify Time Horizon Investment Is this a 10+ year investment? If so then I will dollar cost average my way in and not even look at the charts or listen to the news. Investments are not meant to be babysat, they are meant to develop over time. Bet it then forget it! Position Trade Buy/sell breakouts and attempt to hold on for the duration of the trend. This is done through technical analysis and trailing stop losses. If I am in a position trade I will tend to it daily by looking at charts and managing stop losses. It is not required to ‘baby-sit’ the position by watching it all day and this approach is actively discouraged. Position traders do not concern themselves with intraday movements. Managing the position too closely will often cause traders to make mistakes they wouldn’t have otherwise such as: taking profit too early or adjusting stop losses in the heat of the moment. This is my prefered method of trading for a number of reasons. Primarily it is because I like to live a balanced life. I like to be able to set my stop loss and forget about it while I am out playing golf, skiing or at the gym. Time horizon for a position trade is often a couple months or even a year+ Swing Trade “Markets do not go straight up, nor do they go straight down.” There is an ebb and a flow to the price movements. Swing traders try to capitalize on the daily - weekly price movements. Is price at resistance? Sell. Is price at support? Buy. Swing traders have well defined price targets. They can trade within ranges or in trending markets but they generally do not hold through significant resistance in order to speculate on the price movement. If it does breakthrough resistance then they can re enter without as much risk. Day trade Mostly scalpers and high frequency robots. In traditional markets the price generally isn’t very volatile on an intra-day basis so most traders will use high leverage. This will allow them to 10X, 50X or even 100X a 1% price movement in the underlying asset. In crypto the market is volatile enough for day traders to make a very handsome profit without using leverage. This approach is still the extremely risky.
Education
by Sawcruhteez
1
Intermediate Trading Strategy - Part 2In part 1 we discussed how to identify a trend and the importance of understanding the time horizon. Please start with that post so that you understand how I identify trends. Rules of Thumb The longer the time frame = the lower the risk The shorter the time frame = the higher the risk The higher the leverage = the higher the risk The lower the leverage = the lower the risk The stronger the market is trending the more comfortable I feel taking on risk, in terms of position size and time frame. When the market is trending and all of the time frames are lining up then I will make some day trades. However, this has not been the case in months and is not something I am actively looking for. Risk:Reward If Real Estate is ‘Location, location, location!’ then in trading it is ‘Risk:reward, risk:reward, risk:reward!’ For me it does not matter if it is shorting Bitcoin' (my favorite asset) or longing a US financial stock (one of my least favorite), if the risk:reward is unbalanced enough towards my favor then I will take a position. If it isn’t a 4:1 bet then I have to be very, very certain in the position. In order to understand this ratio I must write down my stop loss, and profit target(s) beforehand. The stop loss and profit targets are gospel! Changing them ruins the entire position. Lacking the discipline to stick to the stop loss/profit target in the heat of the moment = lacking the ability to actively trade. Stop Losses & Profit Targets Stop losses are usually straightforward. In parabolic markets they can change, but they shouldn’t be much more difficult. One thing that may separate me from other traders is that I like to give my position plenty of room to develop. I hate getting whipsawed on my trades! It is my least favorite feeling and one that has taught me many lessons. I am extremely patient and cautious with my entries. I wait until I am very confident in my position and therefore I am comfortable giving it plenty of room to develop. I set it at a level where I know I will not want to adjust it if the market is moving against me. In fact I would probably do well taking the other side of the trade, a/k/a ‘flipping my position’ as soon as my stop loss is triggered. However I have a strict no re entry rule for a minimum of 24 hours after getting stopped out. In bull markets I set it slightly under the prior low. I will use the weekly chart by default and then zoom in to see if I feel comfortable setting it a little tighter. In bear markets I set it slightly above the prior high. This is usually illustrated by ‘Bill Williams Fractals’. I will trail my stop loss once a new high/low is established. If the market has entered a phase 3 hyperwave, as defined by Tyler Jenks, then I will use the Parabolic SAR' instead of Bill Williams Fractals. On the weekly chart I will use the previous SAR' as my stop and trail it as soon as a new one is printed. Or if I am using the daily chart I will set it two SAR’s behind and move it up one each time a new SAR is printed. In the part 3 we will delve into profit taking.
Education
by Sawcruhteez
7
Comprehensive Trading ProcessBefore Entering Start the by writing down predictions for what I expect to happen before the end of the day. 1 day | 1 week | 1 month predictions: Make projections for what is expected to happen during the listed time frames Previous analysis/position: Review yesterday’s analysis to remember what your thought process was Patterns: Established patterns outweigh other indications Horizontal support and resistance: Horizontals are most important when no pattern or trend is present. Remember that prices range 70% - 80% of the time BTCUSDSHORTS: Analyze the trading view chart with patterns, support/resistance, trendlines and indicators. Do not short when short sellers are at or near ATH’ levels. This is when you are very likely to get squeezed out of the position. Then check the long:short ratio. 60% long:40% short indicates a good balance for a move to the upside. If it gets to 65%+ on either side then a squeeze is expected Funding Rates: If it gets too expensive to fund a long or short then the price is likely to react accordingly 12 & 26 EMA’s (calculate % difference): Check for crossovers and know how far away the price can get, historically speaking, from the EMA’s. This will help identify oversold/overbought conditions 50 & 128 MA’s: Same as above FIB’s: Very important for identifying major levels of support and resistance Candlestick analysis: Learn more here Ichimoku Cloud: Here is a great resource' if you would like to learn more TD’ Sequential: Here and here are great resources Visible Range: Volume = resistance or support. This indicates where the major volume has occurred and is very useful in identifying major s/r BTC’ Price Spreadsheet: Calculate price change over the following periods: 12h, 24h, 1w, 2w, 1m. This will help to identify being overbought or oversold Bollinger Bands: Very useful in ranging markets. Super squeezes indicate upcoming volatility Trendline: Very useful in identifying support and resistance as well as reversal when the trend breaks Daily Trend: Not necessary, but I like to know what the market is doing right now Fractals: Very useful in setting stop losses. Up fractals should not be broken in a bear market and down fractals should not be broken in a bull market On Balance Volume: Helps identify what the ‘big money’ is doing. Pay close attention to divergences ADX: Helps to identify if there is a trend and how strong it is. If -DI > +DI then bearish. If -DI < + DI then bullish. If ADX < 20 then ranging market. If ADX > 25 then trending market Chaikin Money Flow: Use it the same as the OBV RSI (30 setting): Used to identify tops in parabolic markets, according to parabolic burst theory Stoch: Can provide good signals, although I find it rare. Nevertheless the Stoch on the 3d has predicted price movements very well in the 2018 BTC' bear market End with reviewing predictions and making a summary. After entering Managing stop losses and avoided greed is all that remains. Stop Losses Are set slightly under the prior low (if long) and slightly above the prior high (if short). This will usually be illustrated by William's Fractals. For each open position go through the following process on a daily basis. SPX: New low established with down fractals at $2,800. Just broke up fractal and established new high. Adjust stop to $2,794 BTC: Has not established a new lower high or up fractal. Stop remains above prior high
Education
by Sawcruhteez
3
Trading Psychology Introduction to Trader Psychology There is evidence of technical analysis dating back to the 17th century. The candlestick charts most of use everyday to trade were created in the 18th century by a Japanese rice trader. By this point one would think technical analysis should result in more profitable traders and lead atleast a quarter of price technicians to a profit. However, this is not the case and in fact the opposite is true as most traders fail, even after years of studying price action. With this said, it is obvious learning how to read a price chart alone is not what leads to consistent profits. So what is it that seperates the very few succesful traders from the so many failures? Is it their strategy, their money managament skills, IQ, were they born with a different skill set than most, do they work harder than most, or are they just plain lucky? All of these sound plausible, but are they really the driving factor behind consistent profits? The short answer is no, none of the above. Perhaps we have been looking for the answer in the wrong place all along. In fact, most traders never even consider the possibility that it is their attitude or mental habits which prevent their success. What truely seperates the winners from the losers has nothing to do with external factors, but rather what goes on internally while observing and engaging the market, in other words; a traders mentality. "If the next bar is a bull follow through bar, the bulls have a 60% chance of making a profit. If the next bar is a bear bar that means....." Absolutely nothing! Unless you can structure a trade plan, and abide your plan as the market unfolds, without questioning yourself or your plan, and execute it flawlessly. Most beginning traders believe if they study harder and learn more setups, they will eventually become profitable. This is the fallacy of price action analysis. In fact, most economists and price analysts do not make good traders. Why? Because they form rigid rules and ideas as to what prices should or will do, and in turn fail to recognize and accept the "now opporutinty" the market is offering to traders who are open to all possibilities, including a lower probability event. Even more debilitating is the false belief that they can pick out winning trades, and avoid the losers, which leads to cherry picking through a traders edge. If the market spends most of its time with a probability between 40-60%, why is it so hard to generate a consistent profit? Understanding prices and their tendencies is only half the battle of becoming a Professional Trader. The other half and harder to develop, is the traders mindset. What makes a good trader is not only his knack for reading prices. It is the ability to flow with the market as it is unfolding, and the art of doing the right thing at the right time; without questioning himself. If the market is only offering X amount of profit, he takes it. If the market is unfolding in a way that he did not expect, he exits. He is willing to take a loss, and more importantly does not care what happens to "himself" in the market. He does not take it personally, and carries on throughout the day executing trade after trade. Continued...
Education
by tradersmentality
How to be part of the LOSING MAJORITYIf there is one huge wrong idea people usually have is that to profit, they must be the side of the majority of TRADERS. No, you DIDN'T. You must be by the side of the majority of the VOLUME. If you + 100 traders with your huge 10000 USD accounts are making buy pressure and only one whale with 2kk USD start shorting, you are rekt. You also should know that whale's favourite sport is making money out of your fear and greed. That being said, let's watch longs (line chart) and shorts (candles chart) and understand how you have been giving them all your money. Let's observe 2 different points on this chart: Orange (2018-3-6) price chart was unstoppable, it have just made a higher low, it was about to break last high, everybody was hopeful that big old internet magic money was back, everybody looking for lambos on ebay, people can smell the success, they feel like geniuses! They are buying SOOO cheap BITCOIN! Jusk 11k, it was 20k a couple of months ago! They are going to be rich! BUT, whales see that as easy money opportunity. Look at BTCUSDLONGS, There is so many LONGS, so many stop-losses waiting to be hitten, so many dreams waiting to be destroyed, why not to? Then suddenly a big sell wall appears on every single exchange, little naive bulls notice it's not going to be easy, they keep pushing up, whales don't move a single penny, bulls start sweating, they aren't going anywhere, and what if it start going down? The fear is knocking bull's doors, they stop buying, they start pushing their stop-losses a little up (just in case, you know?) a whale make a tiny selling pressure and BAM, all stop-losses start hitting each others, prices start falling sharply, LONGs getting closed, the guy that forgot the stop-loss realises he is losing everything, he covers that stupid LONG. And feel so relieved for not being losing anymore. Green (2018-4-12) there is this other guy who don't need stop-losses. He is so smart, he is never wrong, he is HODLing! This time he was wrong, his LONG at 11k is still openned, it's already below 7k, price just attepted make a new high and failled miserably. He can't keep that losing position, he will accept he was wrong (no matter how painful it is) and close that shitty position. Than he has a really good idea: why not to short? There is this twitter guy he follows who is making so much money shorting all the way down. That guy has so many followers, he can't be wrong. He makes some lines at the chart, look at the volumes, he is pretty sure: it's shorting time! He shorts. What he didn't know: everybody is shorting too. Look at BTCUSDSHORTS, it's all time high, price is close to a support (that maybe he failed drawing correctly and he thinks this support have been broken). That whale again look at charts, and decide: why not LONGing here? When he does, our bear (former bull) can't even understand what happened, when he saw he was with a losing position AGAIN! It was everything so fast, how could a price move that fast up? This, my friends, is called long/short-covering rallies. When there is so many volume at one side, a fast squeeze at the opposite side is just a matter of time. Now look at the right side of the BTCUSDSHORTS, shorts are increasing, are you shorting? Are you sure that support got really broken? Did you draw it the right way? May it be another false breakout? Is there any reversal pattern? Is there volume confirming that breakout? Don't be fooled, trade smart.
BITFINEX:BTCUSDEducation
by UnknownUnicorn288635
2
Currency StrengthCurrently, USD benefits from two forces that build up sentiment worth mentioning, the Peace Summit and the FED meeting. However, powers are already fainting. Buying power of both currencies is exceeding selling power, however in USDJPY (UJ) there can only be one the strongest. So here it may look JPY is being sold mainly but it's merely aiming down because in the UJ relation the balance of buying against selling is in favor of the USD. Direction of the individual currencies steer the pair of the two. In this case of chart layout, divergence sends USDJPY up and convergence USDJPY down.
Education
by Deep-Peat-Shark
3
Can Technical Analysis Be Used In Crypto? I Say Yes!Dear friends! I’m going to start a new serie of posts where I would like to show you how different technical tools work in crypto markets. The main reason for this is: some of you think that the crypto markets are unique and the standard tools of Technical Analysis don’t work properly. Based on my experience I would like to say that any tools which are used for making analysis in traditional markets can also be used for cryptomarkets. Knowledge in Technical Analysis allows to make stable profit in the long run in all financial markets. The same goes about crypto markets. I will show you support and resistance lines, levels, chart patterns, candlestick patterns and the main indicators. And you will see possible signals which you could get. One thing I should note for you. I’m going to use Bitcoin and the top altcoins markets for the examples. Any shitcoins are not interesting because they have very low capitalization and they can be manipulated very easily. Before we get the first examples, let me remind you what is TA and the main ideas. You will see why it is cool! Here are some definitions and principles from Wikipedia. I wouldn’t be able to say it any better: Technical Analysis (TA) - what is it? It is an analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. Technicians employ many methods, tools and techniques. Technicians using charts search for archetypal price chart patterns, look for forms such as lines of support, resistance, channels. Technical analysts also widely use market indicators of many sorts, some of which are mathematical transformations of price, often including up and down volume, advance/decline data and other inputs. These indicators are used to help assess whether an asset is trending, and if it is, the probability of its direction and of continuation. A core principle of Technical Analysis is that a market's price reflects all relevant information impacting that market. A technical analyst therefore looks at the history of a security or commodity's trading pattern rather than external drivers such as economic, fundamental and news events. It is believed that price action tends to repeat itself due to the collective, patterned behavior of investors. Technical Analysis focuses on identifiable price trends and conditions. Principles of TA: - market action discounts everything Based on the premise that all relevant information is already reflected by prices, technical analysts believe it is important to understand what investors think of that information, known and perceived. - prices move in trends Technical analysts believe that prices trend directionally, i.e., up, down, or sideways (flat) or some combination. The basic definition of a price trend was originally put forward by Dow theory. - history tends to repeat itself Technical analysts believe that investors collectively repeat the behavior of the investors that preceded them. To a technician, the emotions in the market may be irrational, but they exist. Because investor behavior repeats itself so often, technicians believe that recognizable (and predictable) price patterns will develop on a chart. Recognition of these patterns can allow the technician to select trades that have a higher probability of success. Technical Analysis is a really powerful tool for making money. You have to learn it if you want to trade properly and get profit in long run. So, the next post will be about signals from support and resistance levels. Please, note: I will not give you the theory of what is support and resistance levels, how to draw them properly. I will show you how they work with crypto. You should learn the theory by yourself in order to understand what I will be talking about.
Education
by DLavrov
29
BITCOIN ROLL YIELD: a graphical way to digest market sentimentBITFINEX:BTCUSD BITMEX:XBTM18 TOPS AND BOTTOMS: Bitcoin Guru's always tend to be able to do them effectively without any mis-steps or errors. When they're wrong; you should have done your own analysis, & when they're right; you're a noob if you didnt take that call. So why not just trade the opposite of what they say? is it possible to aggregate market sentiment and make informed trades against them? Below is a simple study that can show us how easy it is to trade against market sentiment, that is to use caution when the market is too hot and to start getting aggressive when the market gets cold. We're using the roll yield (the premium in which a futures contract holds over spot) and comparing it to spot price. In this case, we've taken the near dated Bitmex bitcoin future XBTM18 and normalizing it in percentages (candles), and then plot that against price (area) The results are self evident: it's often a good time to look to take on risk (go long) when the premium (roll yield) is below 0, and often a good time to take off risk when the premium (roll yield) is above 0. This is a very normal way to digest a roll yield, as often times when the market is in backwardation (a future's contract price is below spot price) it gives the person who is long with the contract a positive appreciation: Eventually that future's contract price will rise to the spot price. think of it as a gift from the market that gives the bullish speculator extra money for taking the risk of going long. Of course, this type of analysis does eventually become irrelevant as the contract gets closer and closer to expiration because the future price eventually becomes the spot price, so it's important to know that any type of call based on this appreciation/deprecation (contango/backwardation) does become less evident and useful, so always be comparing multiple contracts in relation to spot.
XEducation
by JonathanKrier
This is Why Beginner Traders Lose Their Capital – 1. No StrategyDear friends, before my last education post, I have to say it has been a long time since I was very active. I have been busy and a bit unmotivated to post on TradingView. The place changed much, and very few times good strong analysts come up on top. People I look up to, analysts and traders with strong years of experience and good trading strategies are buried down with few views. It's just a pity because there is little respect for logic and good strategies left over here. Still, I get messages often that sound like this: "I bought X coins and made 500% profit but then I did not take profit, I changed X for Y coins and Z coins and then changed back to X and then again to Y and then it fell and now I am 30% (20%, 10%?") from where I started. Help me get it back!" - Same story again and again. I wish new traders would play this scenario in their head before starting trading with 0 knowledge. Also, I think it would be smarter to not start giving trading advice after they only traded for a short period. It creates a false impression of expertise, which will hurt them badly when the markets start falling. And worse, other people follow their advice and the effect multiplies. I have traded for 11 years, and in some areas I am a beginner myself. Plus, I read and follow traders with 30+ years of experience I look up to, and I feel like an ant compared to them. That is the reality. You know, if trading would be easy, everyone would be riding Lambos, and to me, it seems that too many people are riding the bus after the past months. These stories like the one from the message are sad, and every one living it feels they are in the greatest pain. It gave me the idea for this series of posts. Why do people keep losing? Especially beginners, as they make up the mass of the hype on the posts in TradingView. I owe a lot to this community, it’s the place where we made so many good trades together and shared our ideas for a long time, and I think it will be good for the new people who joined the platform to get a chance to learn good practices. As I said, I will post a series of tips and solutions to beginner mistakes. Here is tip #1: If you are losing a lot you might not know how trading strategies work and you are not using a strategy This problem, I see a lot! I said it before but it sounds boring – why to use a strategy when you it looks so easy to win a ton of money in a short time? People! Strategies are cool! Strategies help you eliminate emotions from trading and they provide you with the confidence that if you follow your plan you will profit in the long run. When you know you profit in the long run you will stop feeling terrible if you make one mistake or if a few trades are lost. It is part of pro trading and all strategies take into account losses, not only profits. People are afraid of the red color and the “-“ sign. Many beginners are afraid to see their trade on red, and I just want to assure you – it’s ok. If you are working with a tested method, created and validated in years by a professional trader, you should not have stress. You will know when to take profit and you will know to get out when the stop is reached and wait for a better trading opportunity. You will understand why staying in bad trade is bad and why HODL in hope it will go back up is a very naive strategy. You should not hope for anything in trading, you should just have strategy.
Education
by DLavrov
409
Guide to Pivots Points: Chapter 3This is my third installment about Pivot Points. This Chapter is a simple discussion of estimating UPCOMING Pivots. The math is based on the ''Traditional'' Pivot calculation method. This process would apply to other Pivot styles as well. I have not found any existing Script/Indicator that looks to Next Period. So I am learning Pine Script to program my own Indicator soon. This will be my Template and perhaps Instructions for script when released. Here the two PREVIOUS chapters: Introduction to Pivots Chapter 2: Adding ''Mid'' Pivots
COINBASE:BTCUSDEducation
by EuroMotif
5
trading market cycles with PRO SinewaveFor those who already know or simply heard about Sinewave oscillator created by J.Ehlers out of Hilbert filter formulas... The PRO Sinewave indicator will stun you ! For those who don't, well you might be missing a very interesting market approach and I suggest you to google the two names above to eventually start tipping a toe into the beautiful cyclical world of trading ! Usages can be very wide but I personnaly focussed on creating an algorithm to filter, and signal out of the sinewave oscillator. It ended up with this PRO Sinewave indicator ! But there's an important thing you might need to know (if not already) is that a proper trading signal can never come out of a single indicator... (holy grail indicator doesn't exist and therefore every indicator will have its own strengths and also weaknesses). To avoid this I also developped the PRO Momentum wich is also a very complex signaling indicator (with patterns coming out of momentum based indications). Momentum and cyclical approaches are very complementary and when you combine the signals from the two indicators you'll obtain a very low risk trading signal. That doesn't mean they'll be 100% winners... Only fools could believe such thing. Everything about the Momentum & Sinewave signaling process is details in this PDF manual (right clic to download) Anyway I hope I caught your interest on this great topic that is cyclical analysis of the market !
FX:SPX500Education
by PRO_Indicators
1
Elliott Wave1. The Elliott Wave Principle posits that collective investor psychology, or crowd psychology, moves between optimism and pessimism in natural sequences. These mood swings create patterns evidenced in the price movements of markets at every degree of trend or time scale. In Elliott's model, market prices alternate between an impulsive, or motive phase, and a corrective phase on all time scales of trend, as the illustration shows. Impulses are always subdivided into a set of 5 lower-degree waves, alternating again between motive and corrective character, so that waves 1, 3, and 5 are impulses, and waves 2 and 4 are smaller retraces of waves 1 and 3. Corrective waves subdivide into 3 smaller-degree waves starting with a five-wave counter-trend impulse, a retrace, and another impulse. In a bear market the dominant trend is downward, so the pattern is reversed—five waves down and three up. Motive waves always move with the trend, while corrective waves move against it. 2. Elliott wave rules and guidelines A correct Elliott wave count must observe three rules: Wave 2 never retraces more than 100% of wave 1. Wave 3 cannot be the shortest of the three impulse waves, namely waves 1, 3 and 5. Wave 4 does not overlap with the price territory of wave 1, except in the rare case of a diagonal triangle formation. A common guideline called "alternation" observes that in a five-wave pattern, waves 2 and 4 often take alternate forms; a simple sharp move in wave 2, for example, suggests a complex mild move in wave 4. Corrective wave patterns unfold in forms known as zigzags, flats, or triangles. In turn these corrective patterns can come together to form more complex corrections. Similarly, a triangular corrective pattern is formed usually in wave 4, but very rarely in wave 2, and is the indication of the end of a correction.
BITSTAMP:BTCUSDEducation
by EXCAVO
62