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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
According to jobless claims, recession is unlikely before 2019Jobless claims indicator has been a reliable indicator of recessions. By examining a historical chart that goes back to 1960s we see a similar pattern in the behavior of claims and recessions. Every single recession the U.S. encountered in the underlying period was preceded by a rise in jobless claims. The chart above draws the quarterly jobless claims. The shaded areas are the periods of recession. The quarters that the U.S. officially got into recession in all cases were preceded by multiple quarters of rising jobless claims, and in most cases these rises are consecutive. For example, ahead of the 2008 great recession, jobless claims increased for three consecutive quarters. 2001 recession was preceded by 5 quarters of rising claims( latest 3 were consecutive) 1990-1991 recession was preceded by 8 quarters of rising claims (latest 3 were consecutive) the earlier recession have also had the same pattern. Before any recession, we had a minimum of three quarters of rising jobless claims and in one case we had 8 quarters. Having that in mind, it is highly unlikely that the U.S. will encounter an official recession soon(before 2019). Best Technician
FRED:ICSAEducation
by Technician
9
BTC Aug 1 fork: the Exodus of the Hodlers?As many of you are aware, BTC will be implementing a protocol on August 1st entitled Bitcoin Improvement Proposal 148 (BIP 148). This proposed user activated soft fork, or UASF, will implement segregated witness, or SegWit (does every crypto term have an acronym?), and ease Bitcoin's scaling limitation. However, there are many nodes that do not support SegWit, and wish to keep Bitcoin as is. If there is not enough support of BIP 148, there will likely be a hard fork and the creation of a new Bitcoin, not unlike Etherium's fork in Nov 2016. ( news.bitcoin.com Support rate of BIP 148). So what does this mean for you? Bitcoin will be an unstable store of value at and around August 1st on many exchanges and in many non-upgraded wallets. Some exchanges may close transactions with Bitcoin or even with many altcoins for a short time. There will be a high risk of losing funds if they are not kept in a secure wallet. "First off, be aware that a chain-split creates a high-risk situation. There is a chance that some sort of cyber-battle will break out between the two camps, perhaps even escalating to the point where bitcoin’s exchange rate(s) drops sharply, possibly to zero. Make absolutely sure you are not holding more value in bitcoin than what you are willing to lose. If you do decide to hold onto your bitcoins, the single most important piece of advice is this: Ensure that you control your own private keys. If you are storing your bitcoins on an exchange, in a custodial wallet like Coinbase, Circle or Xapo, or on any other service that holds your private keys for you, you may or may not eventually receive coins on both ends of the chain. In fact, if these kinds of services aren’t well-prepared, there could be scenarios where you don’t get any coins at all. So far, no exchanges have given any kind of guarantee. So if you’re using any of these kinds of services to store your bitcoins, you need to create your own wallet. Send your bitcoins to one or several Bitcoin addresses in this new wallet. This wallet now holds your private keys." (bitcoinmagazine.com) Of course, a simpler solution would be to sell your Bitcoin, which isn't very emotionally difficult to do during a correction, or if you are a day/trend trader. For this reason, I expect a mass exodus of money from the market as August 1st approaches. This final bounce may be the time to make your egress. If you are hodling, take the proper precautions detailed in the bitcoin magazine article below. To recap "1. Control your private keys. 2. To be on the safe side, avoid any transactions a day or two before, on, and shortly after August 1st. (How “shortly after” depends on what happens; it could take weeks.) 3. If there are still two (or more) chains when the dust settles, split your coins into different wallets." If you follow these three steps, your transition into the new Bitcoin environment should be seamless. What it means for the technical ~ steemit.com (there should be an 'at' sign but tradingview does not support that symbol) getdfs/btc-uasf-in-aug-2017-understand-bip148-and-protect-your-money What it means for the hodler/trader ~ bitcoinmagazine.com Poloniex statement ~ poloniex.com Bittrex statement ~ support.bittrex.com Gdax statement ~ www.coindesk.com
BITSTAMP:BTCUSDEducation
by Kelly_John
3
To Indicator or Not To Indicator? - Eduseries Week 2"I trade like I bath" - the words of a self-created guru trader who wanted to convince me to join his "Premium Group" a while back. Although by his very nature the gentleman was a scammer and made more money through "teaching", those words lead me on a path which to a greater level of certainty in my own trading and analysis. (By the time we had that interaction I had spent 100s of hours trying to decode the secret "code" and logic in the markets through the use of countless mathematical indicators.) It is with that experience that I add to the Indicator vs naked chart debate . Firstly I believe that majority of strategies work( indicator or no indicator) and I have found that human beings have certain behavioral traits that if worked on correctly, will result in success. Dont get me wrong, yes there is propaganda and some illogical methods of analysis and yes there are some people who are not meant to be traders, but I have found that the reason 90% of traders I have met have changed their strategies is due to lack of understanding, psychological factors etc. ("We'll talk about this some other time") but NOT whether the method works or not. Back to topic,does trading with or without an indicator give anyone anyone an advantage? 1. I have found that mathematical indicators have their flaws in that they lag price action and are not effective as market timing tools. However, I believe and I have discovered that if used as a confirmation tools for a proper price action trading plan (Notice I didn't say candlestick patterns, more on this later), they can give a trader an edge so to speak and give an additional level of confidence in trade selection if ofcourse the indicator is being interpreted in the manner originally intended. 2. I have also found that price action in itself, not knowing different candlestick patterns or chart patterns but a proper understanding of the ebb and flow of the market and the psychology of majority of traders is enough on its own. Simply understanding why the price of something is going up and down i (I refer you to your high school economics textbook for this) coupled with the ability to leave your emotions at the door is enough to make money consistently. More and more traders don't realise that the key to understanding price movement is in exactly the manner in which they buy groceries (I promise to write about this later too :)). What's the conclusion? A proper understanding of price action before using indicators is essential for the success of any trader, without an understanding of price the trader is lead into believing that indicators can predict price action while the indicator in itself is just a mathematical formula based on previous data which in my opinion is the quickest way to burn through your capital. I recommend anyone struggling with understanding the business of trading to take a step back; (refer to the very first thing taught in econ101 and learn how the market auction system works (many books exist Those who call themselves "diehards" and are adamant that indicators are the best tools to have and one can use them with only an understanding of price action (NOT candlesticks); I have one request, please remove the candles off your charts and send me your analysis based on your magic 8ball indicator stochastic rainbow MACD TDI EMA strategy. My Name is Mutondi , price action trader; I sometimes use an indicator (MA) but I can do just fine W/O.
COINBASE:BTCUSDEducation
by Mutondi
4
Trading the News: How Dueling Speeches Affected the GBPUSDJust wanted to document how tracking the news should be an important part of EVERY trader's practice... Take for example, an hourly chart of this week's GBPUSD... In particular, notice how this week's MOST significant price action corresponds with two major speeches by UK officials. In the first instance, BoE governor Mark Carney delivered a "dovish" speech where the headline message was "no rate hikes yet" www.bloomberg.com However, no less than 24 hours later, Chief Economist and UK-MPC Andy Haldane delivered a "hawkish" speech which put him directly at odds with Carney. www.theguardian.com Both speeches initiated a 100pips movement (1st decline, then rally) in a relatively short period... So, the lesson to take from this moment...? Stay on top of your news..!!! (For those who don't know: I highly recommend ForexFactory as a great source of fundamental announcements as well as breaking news...) Good Luck and Always Trade Mindfully...! ...$B...
Education
by DollarBuddha
1
Over thinking is your enemySome analysts use many indicators to help them for decisions making. Some are not. It depends how much experience they have in this field. When I was learning civil engineering, my lecturer told all his students to remember this rule. "We don't need calculators or portable computers to to calculate bending moment when we are on site, the foremen and labours will laugh at us." It is quite true in technical analysis as well. One of my students told me 2662.HK is a healthy stock, and I asked her why? She said that she could not use a software or a smartphone APP to draw trend lines, Fibonacci ratio, and she must need some indicators like MACD, so she could not tell me immediately. When you see this graph, you don't need any tools, all you need to mind read and use your fingers to measure when you have no computer with you. You may spot that there is another consolidation area at somewhere around $2.6. By this simple method, your expected target will be around $4.1.
2Education
by SoloTraderAU
Civilian Employment to Population Ratio -great toolThe head and shoulders formation is a classic sell setup that traders are familiar with. A close below the neck line is a sell signal for traders. Well, as you can see this was a signal of an economic downturn and it predicted it in the summer before the market crash in the fall. This would have alerted people to prepare for the impending doom and for traders to sell short like Dr. Michael Burry of Scion Capital did with his hedge fund. The market low was set in the spring but the employment low occurred later. The previous lows set in 1961 and 1975 gave an angled level of support at which the recent 2011 low was set. We are now at civilian employment to population ratio levels of 1985! Let that sink in, 1985. This was a severe economic crash that we have yet to recover from. This data is from 1948 until 2017. I wish it started with data before the crash of 1929. What pattern was given then to signal a crash? I think this is a chart to keep an eye on every now and again.
FRED:EMRATIOEducation
by oakman
1