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Trend Analysis

MARKET STRUCTURE USING SMART MONEY CONCEPT (ICT)The market structure, when viewed through the lens of the smart money concept, refers to the way financial markets operate and how price movements are influenced by institutional investors, or "smart money." These entities, such as banks, hedge funds, and large financial institutions, have significant capital and access to superior information, allowing them to impact market prices and trends. The smart money concept suggests that these institutions leave discernible footprints on price charts, which can be identified through patterns like accumulation and distribution, liquidity hunts, and manipulation of key support and resistance levels. Traders who understand and recognize these patterns can potentially align their strategies with the smart money, improving their chances of making profitable trades by following the sophisticated moves of these influential market participants.
Education
by FrankFx14
The ONLY Strategy You Need to Identify The Market Trend In this article, we will discuss a proven price action based way to identify the market trend . ❗️And let me note, before we start, that no matter what strategy do you use in your trading, you should always know where the market is going and what is the current trend . Your judgement should be based on strict and objective rules that proved its accuracy. There are a lot of ways to identify the market trend. One of the simplest and efficient ones is price action based method . This method relies on impulse legs . The market never goes just straight up or down, the price action always has a zigzag shape with a set of impulses and retracements. The impulse leg is a strong directional movement , while the retracement is the correctional movement within the boundaries of the impulse. UPTREND 📈The market is trading in a bullish trend if 3 conditions are met: 1️⃣the price forms an initial bullish impulse , 2️⃣ retraces , setting a higher low , 3️⃣then starts growing again and sets a new high with the second bullish impulse . Once these 3 conditions are met, we consider the market to be bullish, and we expect a bullish continuation in such a manner. Take a look at a price action on USDCAD. According to the trend-analysis rules, the pair is trading in a bullish trend. DOWNTREND 📉The market is trading in a bearish trend if 3 following conditions are met: 1️⃣the price forms an initial bearish impulse , 2️⃣ retraces , setting a lower high , 3️⃣then drops lower and sets a new low with the second bearish impulse . Once these 3 conditions are met, we consider the market to be bearish, and we expect a bearish trend continuation. According to the rules, NZDUSD is trading in a bearish trend on the chart above. CONSOLIDATION ➖The third state of the market is called consolidation . The market is trading in a consolidation if the conditions for bullish or bearish trend are not met . The price chaotically forms bullish and bearish impulses, usually trading within the range . Above is the example of a sideways, consolidating market, where the price sets equal or almost equal highs and lows and conditions for bullish/bearish trend are not met. Knowing the current trend, one always knows whether a current trading position is trend-following or counter trend, or it is a sideways consolidation trade. Learn these simple rules and try to identify the market trend with them.
OANDA:XAUUSDEducation
by VasilyTrader
1
Trade Like A Sniper - Episode 12 - GBPAUD - (1st June 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing GBPAUD, starting from the 12-Month chart. - R2F
Education
by Road_2_Funded
The Mechanics Of Trading - Part IIIPart III I started this video because a friend asked me for help determining trends on multi-interval (time frames) and asked how I look at trading across multiple intervals. Asking how to best setup/use price trends to capture the best trade setups. Essentially, it comes down to three key components... A. Initial reversal/impulse waves should be traded lightly (if at all). They are the "potential price reversal setups" that are usually the most dangerous for traders (and often fairly short in length). B. Looking for the second wave to form provides traders with the opportunity to catch the bigger Wave-3. This wave forms after the impulse (Wave-1) and a corrective wave (Wave-2), which must stay below any previous ultimate high or above any previous ultimate low. C. Wave-3, and Wave-5 if applicable, are where traders can flex their muscles related to trade size using the techniques I present to try to capture the MEAT (Sweet Spot) of any trend. Remember, after Wave-3, you must prepare for the potential end of a trend setup where volatility is likely to increase and risks become a bit more elevated. I go over multiple techniques in this video. Fibonacci techniques and Fibonacci Price Theory Anchor Bars (breakaway bars) Using Fibonacci Retracements to identify key support/resistance levels for trending Stochastics RSI Wave formations (ZigZag) and Others This video is designed as an instructional video to help you incorporate usable techniques into your own trading style. Hope you enjoy.
AMEX:SPYEducation
by BradMatheny
The Mechanics Of Trading - Part IIPart I I started this video because a friend asked me for help determining trends on multi-interval (time frames) and asked how I look at trading across multiple intervals. Asking how to best setup/use price trends to capture the best trade setups. Essentially, it comes down to three key components... A. Initial reversal/impulse waves should be traded lightly (if at all). They are the "potential price reversal setups" that are usually the most dangerous for traders (and often fairly short in length). B. Looking for the second wave to form provides traders with the opportunity to catch the bigger Wave-3. This wave forms after the impulse (Wave-1) and a corrective wave (Wave-2), which must stay below any previous ultimate high or above any previous ultimate low. C. Wave-3, and Wave-5 if applicable, are where traders can flex their muscles related to trade size using the techniques I present to try to capture the MEAT (Sweet Spot) of any trend. Remember, after Wave-3, you must prepare for the potential end of a trend setup where volatility is likely to increase and risks become a bit more elevated. I go over multiple techniques in this video. Fibonacci techniques and Fibonacci Price Theory Anchor Bars (breakaway bars) Using Fibonacci Retracements to identify key support/resistance levels for trending Stochastics RSI Wave formations (ZigZag) and Others This video is designed as an instructional video to help you incorporate usable techniques into your own trading style. Hope you enjoy.
AMEX:SPYEducation
by BradMatheny
The Mechanics Of Trading - Part IPart I I started this video because a friend asked me for help determining trends on multi-interval (time frames) and asked how I look at trading across multiple intervals. Asking how to best setup/use price trends to capture the best trade setups. Essentially, it comes down to three key components... A. Initial reversal/impulse waves should be traded lightly (if at all). They are the "potential price reversal setups" that are usually the most dangerous for traders (and often fairly short in length). B. Looking for the second wave to form provides traders with the opportunity to catch the bigger Wave-3. This wave forms after the impulse (Wave-1) and a corrective wave (Wave-2), which must stay below any previous ultimate high or above any previous ultimate low. C. Wave-3, and Wave-5 if applicable, are where traders can flex their muscles related to trade size using the techniques I present to try to capture the MEAT (Sweet Spot) of any trend. Remember, after Wave-3, you must prepare for the potential end of a trend setup where volatility is likely to increase and risks become a bit more elevated. I go over multiple techniques in this video. Fibonacci techniques and Fibonacci Price Theory Anchor Bars (breakaway bars) Using Fibonacci Retracements to identify key support/resistance levels for trending Stochastics RSI Wave formations (ZigZag) and Others This video is designed as an instructional video to help you incorporate usable techniques into your own trading style. Hope you enjoy.
AMEX:SPYEducation
by BradMatheny
ORDER BLOCK AND FAIR VALUE GAP SMART MONEY CONCEPT**Order Block**: An order block is a specific price area on a financial chart where institutional traders have placed large buy or sell orders. These areas often lead to significant price movements and are used by traders to identify potential zones of support or resistance. Order blocks represent clusters of orders from big players like banks or hedge funds, signaling where major buying or selling interest lies. When price revisits these zones, it often reacts strongly, making them valuable for predicting price reversals or continuations. **Fair Value Gap**: A fair value gap (FVG) is a price range on a chart where there is an imbalance between buyers and sellers, often created during periods of high volatility or news events. This gap typically occurs when the market moves so quickly that trades do not fully fill, leaving a visible gap on the chart. Traders use fair value gaps to anticipate potential price retracements to these levels, as the market tends to revisit and fill these gaps over time, aligning price with its perceived fair value. Both concepts are crucial in technical analysis for identifying key price levels where significant market activity is likely to occur.
Education
by FrankFx14
2
Divergence - asset price directionDivergence is the discrepancy between the direction of an asset's price and the readings of an indicator. There are three types of divergences: classical, extended, and hidden. The first two can be used to gauge market sentiment and to trade in the opposite direction. Hidden divergence, however, is more significant and can serve as a powerful supplementary factor in determining the price direction and opening positions. The use of extended divergence is not necessary, as it rarely occurs and forms at equal highs or lows. In such cases, an indicator is not needed to gauge market sentiment; the chart itself will suffice. Classical Divergence Classical divergence indicates a potential trend reversal or the beginning of a correction. Bullish classical divergence is identified when a lower low (LL) forms on the chart while a higher low (HL) appears on the indicator. The masses buy when classical bullish divergence appears, anticipating significant growth. An upward price movement may begin, but after short-term liquidity for buying is exhausted and the price rebalances, a reversal will occur, and the decline will continue. Long positions opened during the correction will become unprofitable. In a bear market, classical bullish divergence typically appears before the start of a correction. Bearish classical divergence is identified when a higher high (HH) forms on the chart while a lower high (LH) appears on the indicator. The masses sell when classical bearish divergence appears, expecting a significant decline. A downward price movement may begin, but after short-term liquidity for selling is exhausted and the price rebalances, a reversal will occur, and the growth will continue. Short positions opened during the correction will become unprofitable. In a bull market, classical bearish divergence typically appears before the start of a correction. The formation of multiple divergences is common. The masses will seize every opportunity to open their positions, leading to unprofitable outcomes. The number of divergences before the start of a correction is not limited. It is recommended to wait for the price to react after reaching the resistance zone. In the example above, the correction began after partially filling the imbalance on the 1D timeframe within the imbalance on the 1W timeframe. Hidden Divergence Hidden divergence serves as a confirmation of trend continuation. Bullish hidden divergence is identified when a higher low (HL) forms on the chart and a lower low (LL) appears on the indicator. In an uptrend, hidden bullish divergence may form before the continuation of growth, acting as a strong supplementary factor in determining the future price direction and considering positions. Bearish hidden divergence is identified when a lower high (LH) forms on the chart and a higher high (HH) appears on the indicator. In a downtrend, hidden bearish divergence may form before the continuation of the decline, acting as a strong supplementary factor in determining the future price direction and considering positions. Notes - The RSI (Relative Strength Index) indicator is used to identify divergences. - RSI is plotted without considering candle shadows. - Divergence should be viewed as an additional factor to your analysis, not a standalone tool. - Divergence below the chart will always be bullish, while divergence above the chart will always be bearish.
Education
by truepersonal
SWING TUTORIAL - DIVISLABWatch how the stock was on a continuous Lower Low Patter and formed a Lower Low Trendline. Simultaneously, there was also a formation of Convergence Divergence indicating an upward move. Stock also broke out of the trendline with a strong green candle. While the MACD Cross indicated a good entry after the Convergence Divergence, the breakout from the Trendline later indicated a confirmation for a move upward. Coincidently, the stock also made a new Support zone at 3299 after a strong breakout from trendline. Another MACD cross has also successfully happened in the last few weeks. Do you think the stock can reach its All Time High again? Give your comments in the Comments Section below:
NSE:DIVISLABEducation
by thepranam
Trade Like A Sniper - Episode 10 - EURJPY - (31st May 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing EURJPY, starting from the 6-Month chart. - R2F
Education
by Road_2_Funded
Supply and Demand Trading Patterns and StrategiesSupply and Demand Trading Patterns and Strategies Understanding the nuances of supply and demand is essential for traders to discern potential market reversals, identify trend continuations, and execute well-informed trading strategies. This article delves into the core patterns and strategies of trading based on these zones, providing a structured approach to identifying potential trading opportunities. What Are Supply and Demand Zones? Supply and demand zones are specific areas on a chart that indicate where the price of an asset has historically made significant moves, either upwards or downwards. These zones are identified by observing patterns where price action has shown a strong reaction—either a sharp increase (demand zone) or a sharp decrease (supply zone). A demand zone is typically found where the market has stopped falling and then shot upwards. This area represents a level where buyers found the price attractive enough to enter the market in large numbers, driving it up. Conversely, a supply zone represents a level at which selling interest overcomes buying pressure, causing the price to fall sharply. This is typically where sellers find the asset overvalued and decide to exit their positions or open new positions to sell. These zones are typically drawn at the ‘bases’ found in the patterns described below, from the consolidation’s low to high. Identifying these zones can provide traders with insights into potential future movements, as prices often retest these levels. When the price returns to a supply or demand zone, it can indicate an opportunity for traders to open new positions in anticipation of a repeat of past market behaviour. The Role of Accumulations and Distributions Accumulation and distribution are critical in understanding how supply and demand zones form and behave in financial markets. These terms describe the actions taken by influential market players—often large institutional investors or "smart money"—as they prepare for a potential price movement. They form a key component of Wyckoff trading. Accumulation occurs when these entities begin to buy or "accumulate" a long position over a period, typically at lower levels. This phase is generally not accompanied by a notable price increase, as the buying is done gradually to avoid significant movements that could attract attention. The end of an accumulation phase is often marked by a reaccumulation, where buying resumes after a brief rally and pullback/consolidation, further establishing a demand zone. Distribution reflects the opposite scenario, where large holders begin to sell their holdings, usually after a rise. This selling does not immediately lead to a drop; it happens subtly to prevent a drastic decrease in price. Following a distribution phase, a redistribution might occur where selling continues after a minor rally or consolidation—this process helps solidify a supply zone. The Four Key Patterns in Supply and Demand Trading Recognising specific patterns in supply and demand zones can significantly assist traders in determining potential market movements. These patterns, derived from price action and the behaviour of market participants, provide visual cues on charts that suggest future trajectories. Here are four key patterns: 1. Rally-Base-Rally (RBR) This pattern is a bullish indicator and occurs as the price leaves an accumulation/demand zone. The sequence starts with a rally, where there is a noticeable upward movement. This is followed by a base, a period where prices consolidate within a relatively narrow range, indicating a balance between buyers and sellers. The pattern completes with another rally, suggesting that demand has overwhelmed supply, pushing prices higher. Recognising the Rally-Base-Rally pattern can signal traders to consider a long position as the market sentiment will likely continue upward. 2. Drop-Base-Drop (DBD) Mirroring the RBR, the Drop-Base-Drop pattern is a bearish formation found after a successful distribution from a supply zone. It begins with a drop, indicating strong selling pressure. The base phase occurs next, where the price moves sideways briefly, showing uncertainty or equal force from buyers and sellers. A subsequent drop follows, demonstrating renewed selling pressure and an overpowering supply. As the price leaves the base, there’s a potential selling opportunity for traders expecting further declines. 3. Rally-Base-Drop (RBD) The Rally-Base-Drop pattern typically signals the formation of a supply zone and is indicative of a bearish reversal. It starts with a rally, where buyers temporarily gain control. However, this rally is short-lived and leads into a base phase—a period of consolidation. The critical phase is the subsequent drop, where sellers dominate, reversing the initial upward trend. This pattern is particularly valuable for traders looking to capture the shift from a bullish to a bearish market. 4. Drop-Base-Rally (DBR) Contrary to RBD, the Drop-Base-Rally pattern indicates a bullish reversal and creates a demand zone. It starts with an initial drop, reflecting strong selling. This phase is followed by a base, where the market finds equilibrium and the selling pressure begins to wane. The final phase is a rally, suggesting that buyers have regained control and are likely to push prices higher. This pattern aids traders in spotting potential entry points for long positions as the market sentiment shifts from bearish to bullish. To try spotting these patterns for yourself, head over to FXOpen’s free TickTrader platform to access real-time charts. How to Trade Supply and Demand Zones Trading supply and demand zones effectively involves understanding their potential role as areas of support (demand) or resistance (supply). In an established trend, these zones are formed from bases—periods of consolidation—that, once the price breaks out and moves in a consistent direction, are likely to act as areas of support or resistance on return. For instance, in a Rally-Base-Rally (RBR) pattern, the base, after the initial rally, is likely to act as a demand zone. If prices revisit this base, it typically serves as a support level, where the price is expected to stop falling and start rising again. Conversely, in patterns like Drop-Base-Rally (DBD), the base also functions as a demand zone. Here, if the price falls back to this zone, it is anticipated to encounter support, leading to a potential bullish move away. Supply and Demand Zones: Trading Strategies Trading strategies based on supply and demand zones are centred around the identification and reaction to key levels that indicate underlying shifts in market sentiment. Traders often focus on how price exits these zones to gauge potential continuation or reversal of trends. Strategy for Rally-Base-Rally (RBR) and Drop-Base-Drop (DBD) This Drop-Base-Drop/Rally-Base-Rally strategy capitalises on the formation of a base after a distinct move that often breaks an established trend, i.e. moving sharply above a lower high in a downtrend or higher low in an uptrend. Traders look to this pattern as it leverages the momentum generated from a strong initial move (rally or drop) followed by a stabilisation period (base) that offers a clear breakout point, indicating a potential trend continuation. Entry Traders typically monitor the price as it rallies or drops, forming a base. A breakout from the consolidation zone is awaited, where the price moves above the high in RBR or below the low in DBD. Entry may be made via a stop order at the breakout point to capture the movement as it happens. Stop Loss It may be placed just outside the opposite side of the base range to protect against false breakouts. Take Profit It may be set at previously identified supply or demand zones where price may potentially react and reverse. Strategy for Rally-Base-Drop (RBD) and Drop-Base-Rally (DBR) This approach focuses on reversal patterns forming in established supply or demand zones, offering insights into potential trend shifts. It utilises the inherent strength of existing supply or demand zones, coupled with a clear reversal pattern, to identify high-probability trades in line with the trend's direction. Entry Traders observe an established supply or demand zone and look inside it for an RBD or DBR pattern formation, respectively. A break of a significant high (in downtrends) or low (in uptrends) within these zones signals the strength of the pattern. Following the break, traders wait for a retracement back to the zone, placing a limit order at the edge of the zone. Stop Loss It may be positioned just beyond the opposite side of the zone to safeguard against the price moving beyond the established boundary of the zone. Take Profit It may be targeted at the next significant supply or demand zone that could oppose the current movement. The Bottom Line Supply and demand zones and their related patterns can offer traders a potential edge across various asset types, including forex, stocks, commodities, and cryptocurrencies*. The strategies described can be a great starting place for anyone looking to explore this trading style. If you’d like to put this theory into practice, consider opening an FXOpen account to access a wide range of assets and our advanced TickTrader platform. FAQs What Is a Supply and Demand Zone in Trading? Supply and demand zones are specific areas on a trading chart where significant buying (demand zones) or selling (supply zones) activity has occurred, causing the price to move dramatically. These zones are used to identify potential areas where the price might either stall or reverse based on past trading activity. What Is the Difference Between Supply & Demand Zones and Support & Resistance Zones? While both supply and demand zones and support and resistance zones identify key levels, supply and demand zones are identified by areas that cause substantial price movements, whereas support and resistance are defined by frequent price reversals at certain price levels. What Are the 4 Stages of the Market Cycle? The four stages of the market cycle include Accumulation, Markup, Distribution, and Markdown. These stages describe the systematic process of price movement in markets, from periods where smart money accumulates positions to phases where these positions are distributed, leading to price declines. *At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
2
Trade Like A Sniper - Episode 9 - NQ1- (31st May 2024)This video is part of a video series where I backtest a specific asset using the TradingView Replay function, and perform a top-down analysis in order to frame ONE high-probability setup. I choose a random point of time to replay, and begin to work my way down the timeframes. Trading like a sniper is not about entries with no drawdown. It is about careful planning, discipline, and taking your shot at the right time in the best of conditions. A couple of things to note: - I cannot see news events. - I cannot change timeframes without affecting my bias due to higher-timeframe candles revealing its entire range. - I cannot go to a very low timeframe due to the limit in amount of replayed candlesticks In this session I will be analyzing E-mini NASDAQ, starting from the Weekly chart. - R2F
CME_MINI:NQ1!Education
by Road_2_Funded
MARKET STRUCT USING ICT CONCEPTThe Inner Circle Trader (ICT) concept in trading, developed by Michael J. Huddleston, offers a comprehensive approach to understanding and navigating market structure. ICT emphasizes the importance of market structure, which refers to the organization and arrangement of various market components, such as support and resistance levels, trends, and price patterns. This approach involves identifying key levels where institutional investors might be placing orders, understanding liquidity pools, and recognizing the behavior of smart money. By focusing on these elements, traders can better predict market movements, identify high-probability trade setups, and manage risks effectively. The ICT methodology combines technical analysis with a deep understanding of market dynamics to provide traders with a robust framework for making informed trading decisions.
Education
by FrankFx14
SPY Fibonacci Price Theory And BreakOut BarsThis instructional video teaches you the basics of Fibonacci Price Theory in conjunction with Breakout Bars and how price is the ultimate indicator. Throughout this video, I try to provide instruction on key elements related to the Fibonacci Price Theory (Unique & Standout Highs/Lows). Additionally, I've also included Breakout Bars and Fibonacci Price Retracement concepts. What I really hope you learn from this video is to see price as the true ultimate indicator for your trading decisions. Using technical analysis techniques is fine, but use price as the key element when trying to confirm or reject your trading ideas. I hope this helps you understand that price, action, and reaction through trends, peaks, and troughs are the most important components of the chart. Everything else is peripheral.
Editors' picks
AMEX:SPYEducation
by BradMatheny
3
BTC and Social MediaHello everyone, i will try to make this as simple as possible, so i will not take allot of your time, but still trying to prove my point. The best way in my opinion, in order to find out what is going to happen with BTC in 2024, is to ask the correct question. So i will ask the following, and answer with my personal opinion. Question: What is BTC in 2024 and it was in also 2018? Answer: A strange popular concept of virtual money, that makes people both curious and sceptics. The popularity among crypto currencies have increased allot since 2009, so we can say that today, crypto currencies are spread thru 90% of users of social media.( I don't have a statistic about this, i am just assuming this, since all the users of mobile phones are going to see some type of topic related to crypto or any type of investments.) In my personal opinion, popularity is what makes BTC and other crypto currencies to raise or fall. Its very simple, people are getting excited, they will buy at any price so the value will increase, or, people will get scared, and will sell at any price. I have posted to pictures. The one above, is the coin marketcap since 2014.The picture under, is the registered users on social media platforms, Facebook, Myspace, Friendster. without some other very important, like TikTok, YouTube or Tweeter. But, i think the rise will apply to all others platforms similarly. If you look at crypto market cap picture, and then at the registered users in 2018 and 202 you will see one of the most interesting things, that i am sure many of you have missed. Just take a second, and see if you can tell. ( Side question - does anyone knows if tradingview has a cryptomarketcap chart? ) My point is simple 2017 - 750 bil market cap and 1,731 bil users 2022 - 2,86 trl market cap and 4,632 bil users x 3 times increase than 2017 2024 - 2,72 trl market cap and 5,037 bil users NOT SO MUCH INCREASE ( another side question for Tradingview, can you share a similar graph with registered users since 2014?) I am associating Social Media users with potential customers for brokers, exchanges, trading platforms, investment banks, etc. Because this is how companies are targeting new customers in 2024, inclusive potential investors. In conclusion, even though we are 2 years from last bullish wave, there is a potential for crypto market to rise but not much. I can not say a fixed price, but i think now, in 2024, BTC hitting 100k is very optimistic, unless Biden start printing again USD. Another way for BTC and crypto to increase 40% this year, so BTC 100k and coinmarketcap 4trl, is that investors to move money from other assets to crypto, which is not so probable, since all the investors are having a vast portfolio. So yes, it is possible for BTC to hit 100k this year, but not probable, in my personal opinion, because there is not enough money willingly available, to be moved to crypto. Good luck guys!
Education
by MariusStanescu
Learn What is Inducement and Trap in Smart Money Concepts SMC Smart Money Concepts can be applied for the identification of trend reversal in Forex and Gold trading. In this article, we will discuss what is an inducement and a trap in SMC . And how to apply them to spot an accurate trading signal. We will study the important theory and go through real market examples on XAUUSD chart. Imagine that there is a strong historical resistance on a price chart. Because the price reacted to that strongly in the past, many sellers will place selling orders on that in future, anticipating a similar reaction. Placing short trades, their stop losses will lie above the resistance. In case of a bullish violation of the underlined resistance, sellers will be stopped out from their short trades and close their positions in loss . After the violation of a resistance, according to the rules, it should turn into support . Many traders will place their buy orders there, anticipating a bullish continuation. Bearish violation of such a support will stop out the buyers as well. Such a price action will be called an inducement and a bullish trap. With that, smart money grab the liquidity both from the buyers and from the sellers. After that, with a high probability, the market will drop . For example, Bullish violation of an all-time-high on Gold can easily be a bullish trap. To confirm that, the price should simply break and close below a broken horizontal resistance. That will confirm a local bearish reversal. With a bullish trap and inducement, smart money are quietly placing HUGE SELLING ORDERS , making the retail traders close short trades in loss (buy their positions) and buy from the broken structure, providing them the liquidity. The ability to recognize the traps will let you understand real intentions of smart money and trade with them. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
2
Bitcoin: How to Forecast the End of a Trend.The advance from Dec 2018 seems to be tracing an impulse pattern. Wave 1 is an impulse, wave 2 is a zigzag which neatly predicts flat wave 4 by guideline of alternation. The fifth wave appears to be tracing an impulse as well; an extension. It's probable that two minute degrees have reached completion at this stage and the market appears to be tracing out the third wave. So how do you forecast the target for wave 5? One way is to use an Elliott wave channel. Connect the end of wave 2 and 4. Draw a parallel line along the top of wave 3 to project wave 5 target. It is quite common for wave 5 to end upon reaching the upper boundary line of the channel In some cases, when wave 3 is uncommonly strong, almost vertical. Draw a parallel line using the top of wave 1 instead of wave 3. From experience, it's quite advantageous to draw the two upper boundary lines.
INDEX:BTCUSDEducation
by Aquanet_Market_Forecast
Brilliant Basics - Part 2: Reversal ZonesWelcome to the second part of our educational series, Brilliant Basics. In this series, we'll explore how mastering the fundamentals lays the groundwork for achieving high-level performance in trading. Today, we focus on reversal zones, specifically the art of drawing support and resistance consistently across multiple timeframes. Understanding Reversal Zones Reversal zones are key areas on a chart where the price has the potential to reverse its direction. These zones are defined by support and resistance levels: • Support is a price level where a downward momentum can be expected to pause due to a concentration of demand. • Resistance is a price level where upwards momentum can be expected to pause due to a concentration of supply. Drawing Support and Resistance Correctly Drawing support and resistance levels correctly is crucial for accurate and consistent analysis. Here’s how you can ensure consistency and reliability in your charts: 1. Identify Significant Swing Points: • Resistance: Look for significant swing highs. A resistance level can be created by a single prominent swing high or multiple swing highs. • Support: Similarly, support is identified by locating significant swing lows. It can be formed by a single notable swing low or multiple swing lows. Past performance is not a reliable indicator of future results 2. Define Support and Resistance Zones: To create a more accurate representation, define support and resistance as zones rather than precise lines. • Resistance Zone: This should be defined by the highest close and the highest high. • Support Zone: This should be defined by the lowest close and the lowest low. Past performance is not a reliable indicator of future results 3. Use Coloured Boxes: A handy tip is to use coloured boxes to highlight these zones. Different colours can be used for different timeframes, such as: Weekly: Use one colour (e.g., red). Daily: Use a different colour (e.g., blue). Hourly: Use another colour (e.g., green). This visual differentiation helps in quickly identifying which timeframe a particular support or resistance zone belongs to. Past performance is not a reliable indicator of future results 4. Consistency is Key: Consistency in how you draw support and resistance levels across different charts and timeframes is vital. This ensures that your analysis remains objective and reliable. Practical Examples Let’s look at an example of how we can use our rule set for drawing reversal zones consistently as price action evolves. For simplicity, we are going to stick to the daily timeframe: Resistance Example: Phase 1. Draw the Zone: Locate significant swing highs on your chart. Mark the highest close and the highest high to form the resistance zone. Past performance is not a reliable indicator of future results Phase 2. Monitor the Market’s Response: In this example, gold pushes deep into the resistance zone and breaks above resistance before closing back below resistance. This ‘fakeout’ response is potentially sufficient to initiate a short position depending on your strategy and trade plan. We have also added the new support zone onto the price chart – creating a target for shorts. Past performance is not a reliable indicator of future results Phase 3. Redraw the Resistance Zone as Price Action Evolves: As price moves away from the original resistance zone, we can now redraw the resistance zone based on the highest high to highest close rule set. Past performance is not a reliable indicator of future results Support Example: Phase 1. Draw the Zone: Locate significant swing lows on your chart. Mark the lowest close and the lowest low to form the support zone. In this example, there is a small support zone (zone 1) and a larger, more significant support zone (zone 2). Past performance is not a reliable indicator of future results Phase 2. Monitor the Market’s Response: We can see that EUR/GBP breaks through support zone 1, but then forms a bullish engulfing pattern at support zone 2. A reversal pattern of this quality is potentially enough to initiate a long position depending on your strategy and trade plan. Past performance is not a reliable indicator of future results Phase 3. Redraw the Support Zone as Price Action Evolves: As price moves away from the original support zone, we can now redraw the support zone based on the lowest low to lowest close rule set. Past performance is not a reliable indicator of future results Summary Understanding and accurately drawing support and resistance zones is fundamental for effective trading. These zones help identify potential reversal points, providing valuable insights into market behaviour. By maintaining consistency as price action evolves and using clear visual aids like coloured boxes, traders can enhance their analysis. As we continue our Brilliant Basics series, stay tuned for Part 3, where we will delve into the concept of moving averages and their role in trend analysis. Understanding this fundamental concept will further enhance your ability to identify and follow market trends. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.84% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
CAPITALCOM:GOLDEducation
by Capitalcom
2
SWING TUTORIAL - LALPATHLABNotice how the stock exactly revisited the most recent Swing High exactly after the Convergence Divergence. MACD Cross after the Convergence Divergence gave a good entry as it happened at a Higher High Higher Low Pattern indicating a good move upward. Eventually gave a 38% up move. Another MACD Cross is under play currently. Can it break the Resistance zone of 2758 and go all the up to the next 3342 Support/Resistance zone? Give your comments in the Comments Section below:
NSE:LALPATHLABEducation
by thepranam
Order typesIn the past, a person would typically have to go to the brokerage or another financial entity to buy or sell a security. The trade would be then settled through a personal meeting or, as technology progressed, over the phone. Nonetheless, the implementation of modern technology within the financial markets of the 21st century made placing buy and sell orders as easy as a few mouse button clicks. Nowadays, many trading platforms allow their clients to execute various types of orders beyond ordinary buy and sell orders. Key takeaways: Using limit orders is generally considered one of the safest ways to buy or sell a security. Modern technology allows placing buy and sell orders with a few mouse clicks. A stop-loss and stop-limit orders are used to protect an investor’s capital. A trailing stop locks in some of the accrued profits. Quick trade orders get instantly filled by a single or double click on a bid or ask button. Limit order A buy limit order is used to buy a security at a specified price. This type of order is executed automatically in a case when the price of a security is lower than the value of the buy limit order. A sell limit order is used to sell a security at a specified price. It gets automatically filled when the price of a security is higher than the value of the sell limit order. This design occasionally allows for the execution of the buy limit order or the sell limit order at a better price. Generally, limit orders are one of the safest ways to purchase or sell a security. Quick-trade order Some trading platforms allow the use of quick-trade orders. A quick-trade order is a type of order that is instantly filled by a single or double click on a bid or ask button in a trading platform. These orders are relatively safe to use. However, filling this type of order in highly volatile markets might be difficult due to a quickly changing price. Market order When traders choose to use a market order, they let the market set the price of security. In essence, this means that for a buy market order, a trade execution occurs at the nearest ask. For a sell market order, a trade execution takes place at the nearest bid. The use of the market order is less safe in comparison to limit order because it allows for worse filling of orders in illiquid markets and markets dominated by algorithmic trading. However, some platforms offer their clients the option to choose the tolerance threshold for such trade orders. Good ‘Til Canceled order (GTC) This type of order remains active until it is filled or canceled. Stop-loss and stop-limit orders A stop-loss order sells a position at a market price if it reaches or passes a specified price. Unlike a stop-loss order, a stop-limit order liquidates a position only at a specified or better price. These types of orders are used to protect investor’s capital before depreciation. Trailing stop order A trailing stop order trails the price as it moves in the trader’s favor. For a long position, a trailing stop moves higher with the price but stays unchanged when the price falls. Similarly, for a short position, a trailing stop moves lower with the price but remains unchanged when the price rises. The intent of a trailing stop is to lock in some of the accrued profits. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Therefore, your own due diligence is highly advised before entering a trade.
COINBASE:ETHUSDEducation
by Tradersweekly
2
Forex Market Sentiment StrategiesForex Market Sentiment Strategies In forex trading, high performance often hinges not only on fundamental knowledge and technical analysis skills but also on the collective psychology of market participants. Leveraging market sentiment can thus be effective. This article discusses forex market sentiment, unravelling its nuances, exploring key indicators and sources, and offering strategies you may use to integrate sentiment analysis with technical indicators. Understanding Forex Market Sentiment Market sentiment in forex encompasses the collective mood and attitude of traders towards a particular currency pair. Traders often categorise market sentiment into various types, primarily: Bullish Sentiment: Indicates an optimistic outlook, where traders expect the price of a currency to rise. Bearish Sentiment: Reflects a pessimistic outlook, suggesting that participants expect a currency's value to decline. Market Sentiment Indicators and Sources Sentiment analysis in trading requires research into specific indicators and data sources, allowing for the integration of market psychology with objective market data. News Sentiment News data can be a powerful catalyst. Positive or negative surprises in economic indicators can trigger significant market reactions. Geopolitical events and trade negotiations also introduce uncertainty, prompting traders to reassess their positions. Breaking news related to economic policies and political issues can additionally trigger rapid market movements. Traders typically utilise an online Economic Calendar and follow reputable media sources to stay organised and informed about upcoming events. Social Media Sentiment The rise of social media has given traders a new avenue to express and gather sentiment. Platforms like X (formerly Twitter), Reddit, and Discord can provide valuable insights. However, filtering through the noise becomes imperative to distil relevant insights. You may consider relying on information from multiple social media platforms to cross-verify sentiments and distinguish informed analysis from speculative chatter. Retail Trader Sentiment Retail traders, often considered the "crowd", collectively shape sentiment through their actions and reactions. However, monitoring retail trader sentiment can provide contradictory signals, as both excessive bullishness and bearishness may indicate a potential reversal. It may be useful to look for divergence between retail sentiment and prevailing market trends, as a significant misalignment might indicate a potential reversal. Institutional Sentiment Institutional investors, comprising hedge funds, investment banks, and large financial institutions, often operate on a scale that dwarfs individual and retail traders, executing large trades that can significantly impact market prices. Traders may enhance their forex sentiment analysis tools by accessing reports, such as the Commitments of Traders (COT) report, to gauge sentiment by checking whether institutions are accumulating long or short positions. You can visit FXOpen and explore the impact of sentiment on the markets at the free TickTrader trading platform. Forex Sentiment Strategies Among the technical indicators that can be used to evaluate the prevailing mood are the Advance/Decline Line, the On Balance Volume (OBV), and the Average True Range (ATR). Below we show three strategies implementing each of them. 1. The Contrarian Strategy The contrarian strategy involves taking positions against the prevailing market sentiment, aiming to take advantage of potential reversals. Three key technical indicators employed in this strategy are the Relative Strength Index (RSI), the Moving Average Convergence Divergence (MACD), and the Advance/Decline Line. Entry The theory states that traders enter a contrarian long/short position when both RSI and MACD provide signals opposing the prevailing sentiment: bearish/bullish crossover for MACD and a cross below the overbought area and above the oversold area for RSI. Entry points are confirmed with signals through a divergence of the Advance/Decline Line: this should decline when the asset price rises and climb when the asset price falls. Stop Loss A stop-loss order may be placed above the recent swing high in a bearish contrarian trade or below the recent swing low in a bullish contrarian trade. Take Profit A take-profit order may be placed near a significant resistance/support level for a long/short trade. 2. Trend-Following Strategy The trend-following strategy involves aligning positions with the prevailing market sentiment, anticipating that established trends will continue. The two technical indicators employed in this strategy are the On-Balance Volume (OBV) and the Moving Average Convergence Divergence (MACD). Entry Traders may enter a trend-following long/short position when both OBV and MACD provide signals aligning with the prevailing trend. If the market sentiment is bullish/bearish, a rising/falling OBV and a bullish/bearish MACD crossover may imply the trend is about to continue. Stop Loss A stop-loss order might be placed below the recent swing low in a bullish trade or above the recent swing high in a bearish trade. Take Profit An opposite MACD crossover combined with signs of an OBV reversal could indicate a potential take-profit level. 3. Volatility-Based Strategy Traders utilising a volatility-based trading strategy seek to capitalise on heightened market volatility triggered by a sudden surge in bullish or bearish sentiment. This strategy utilises the Average True Range (ATR) indicator in conjunction with the Relative Strength Index (RSI) as a confirmation tool and a Moving Average crossover for directional guidance. Entry Traders would wait for a noticeable spike in the ATR as an indication of heightened market activity and potential significant moves. Then, a Moving Average crossover helps determine the likely direction of the trade: a bullish/bearish crossover reflects a potential upward/downward move, implying a long/short trade. The RSI is observed for confirmation, with a sharp rise/decline above/below 50 confirming a bullish/bearish sentiment for a short/long trade. Stop Loss Traders might place stop-loss orders just beyond recent swing highs or lows, aligning with the direction of the trade to manage risk effectively. Take Profit A long/short trade may be exited when there's a bearish/bullish MA crossover combined with RSI falling/rising below/above 50. Final Thoughts Implementing sentiment analysis in forex trading strategies acts as a bridge, seamlessly integrating human psychology with dry statistical data, allowing traders to decipher the emotional undercurrents that influence market movements. Ready to start trading on market sentiment? Consider opening an FXOpen account and trying out CFD trading in over 600 assets! This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
2