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Trend Analysis

How to Set Multiple TPs...for BeginnersHey Rich Friends, I wanted to share how I find multiple TPs for my Forex trades using free tools and only 1 technical indicator. This strategy is perfect for beginners because it is easy to follow and has clear confirmations for entering and exiting a trade in profit, even if it hits your Stop Loss. I keep my charts clean and let price action do the talking. Here's my setup: ✅ Session Breaks & Horizontal Lines – I mark the previous day’s highs, lows, and key levels to identify potential areas of interest. ✅ Stochastic for Entries & Exits – I use the Stochastic indicator to time my trades when the price reacts at my key levels (80 and 20 are very important here!) ✅ Horizontal Lines = Potential TPs – Instead of setting a take profit, I let the market tell me when to exit based on price action around these levels. Less noise, more precision. Drop a "7" if you made it to the end of the video and let me know if it was helpful! Peace and Profits, Cha
Education
by MoneyMantraCha
36
SOLUSD: How to Draw Quarter's Theory LevelsApplying Quarter’s Theory to SOL/USD helps traders identify key psychological price levels where institutional players might step in. With Solana’s volatility, these quarter levels (25%, 50%, 75%, and full dollar increments) act as crucial areas for potential reversals or breakouts. Current Market Outlook SOL/USD is currently trading around a major quarter level, signaling a potential shift in momentum. If buyers push above $150, the next logical upside target is $175, while a breakdown could send prices back to $125—both key quarter points. How to Trade It Aggressive traders can enter at quarter levels with tight stops, aiming for quick price movements. Conservative traders should wait for a breakout confirmation and a retest before executing trades. Renko charts can help filter noise and confirm trend strength, making it easier to spot clean setups. Is SOL/USD Gearing Up for a Big Move? With SOL/USD sitting at a crucial level, the next move could be significant. Will we see a drop toward $125, or is a deeper pullback coming? What’s your take? Drop a comment below!
CRYPTO:SOLUSDEducation
by TLTurnerTV
2
AUDUSD: How to Draw Quarter's Theory LevelsThe Quarter’s Theory , popularized by Ilian Yotov, is based on the idea that the market moves in predictable 25, 50, and 100-pip increments. When applied to AUD/USD, these psychological price levels become crucial for identifying potential reversals and breakouts. Current Market Outlook AUD/USD is currently trading near a key quarter level, indicating a potential reaction zone. The pair is hovering around 0.6500, a psychological price barrier that often serves as support or resistance. If buyers step in, the next upside target is 0.6750, while a break lower could send prices to 0.6250. How to Trade It Aggressive traders can look for confirmations near quarter levels and enter trades with tight stops. Conservative traders might wait for a breakout and retest before committing. Combining Quarter’s Theory with Renko charts can help filter out noise and confirm strong trends. Will AUD/USD Hold or Break? Quarter’s Theory gives traders a structured way to navigate price movements. Whether AUD/USD holds or breaks through the current quarter level will determine the next significant move. Are you watching these levels? Drop your thoughts below!
Education
by TLTurnerTV
Leap Ahead with a Dynamic Setup: Trading with Andrew’s PitchforkThe Leap Trading Competition: A Chance to Trade Micro Euro Futures TradingView’s "The Leap" Trading Competition provides an opportunity for traders to apply their futures trading strategies in a competitive environment. Participants can trade select CME Group futures contracts, including Micro Euro Futures (M6E). This article presents a structured trade setup using Andrew’s Pitchfork, a technical tool that helps define potential trend direction and breakout levels. The setup involves two intersecting pitchforks near a key UFO support level, signaling the possibility of either an uptrend continuation or a confirmation of a new downtrend. Understanding Andrew’s Pitchfork and Market Structure Andrew’s Pitchfork is a technical analysis tool used to identify trend channels by plotting three parallel lines from a major price swing. The tool helps traders anticipate support, resistance, and breakout levels based on median lines. In this setup, two pitchforks define opposing market structures. The green pitchfork represents an uptrend, suggesting that price could continue higher. The red pitchfork represents a developing downtrend, indicating a possible reversal. The intersection of these pitchforks at a key UFO support level marks an important decision point for the market. The Dynamic Trade Setup: Long and Short Scenarios In a long trade scenario, entry is confirmed if price breaks above the Upper Median Line (UML) of the red pitchfork. The target for the trade is the Median Line (ML) of the green pitchfork, representing trend continuation. A stop loss is placed below entry at a distance that ensures a minimum 3:1 reward-to-risk ratio. In a short trade scenario, entry is confirmed if price breaks below the Lower Median Line (LML) of the green pitchfork. The target for the trade is the Median Line (ML) of the red pitchfork, confirming further downside movement. A stop loss is placed above entry at a distance that maintains a minimum 3:1 reward-to-risk ratio. Because the UML, LML, and ML levels change dynamically with each bar, breakout levels and targets must be adjusted accordingly. If price remains inside the pitchfork structure, the setup remains neutral until confirmation occurs. Contract Specifications and Margin Requirements Euro FX Futures (6E) details: Full contract specs: 6E Contract Specifications – CME Group Contract size: €125,000 Tick size: 0.00005 per EUR/USD ($6.25 per tick) Margin requirements depend on broker conditions and market volatility, currently around $2,600 per contract. Micro EUR/USD Futures (M6E) details: Full contract specs: M6E Contract Specifications – CME Group Contract size: €12,500 (1/10th of 6E) Tick size: 0.0001 per EUR/USD ($1.25 per tick) Lower margin requirements provide access to traders with smaller accounts, currently around $260 per contract. M6E offers a lower-cost alternative to 6E, making it a useful instrument for adjusting position sizes and managing risk effectively. Traders should consider market conditions and leverage when determining position sizes. Execution and Trade Management Before executing a trade, price must confirm a breakout by fully breaking above UML for long trades or below LML for short trades. Additional confirmation through volume trends, momentum indicators, or candlestick patterns may help validate the move. If price does not confirm the breakout, the setup remains invalid. If price re-enters the pitchfork channel, traders should reassess market structure before taking a new position. Stop losses should be maintained at levels that align with a structured risk-reward plan. Conclusion Andrew’s Pitchfork provides a structured approach for trading trend continuation and reversals. This setup allows for both long and short breakout opportunities, depending on how price reacts at key pitchfork levels. For traders in The Leap Trading Competition, this setup highlights the importance of disciplined execution, waiting for confirmation, and managing risk effectively when trading futures. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME_MINI:M6E1!Education
by traddictiv
4
THE FEAR IS REAL. MAKE USE OF IT FOR THE LONG TERM!Disclaimer: The following article is not investment advice. It is solely prepared for educational purposes, specifically regarding the Indian markets and aimed at people interested in long-term investments. The numbers mentioned reflect the data available at the time of writing. Hello people, We are witnessing significant movements in the Indian markets, with news of small-cap stocks entering a ‘bear market’, mid-caps falling nearly 16%, and the major index, NIFTY 50, down about 11% since September. This has led to a decline in SIPs (by 109%) and raised questions about the resilience of common Indian equity investors. SMID stocks have performed the worst since the Covid crash, and various narratives are circulating, such as ‘BUY THE DIPS’ and others equally discouraging equity investment altogether. Regardless of these narratives, it is evident that during substantial declines or bear markets, even fundamentally strong stocks—those suitable for long-term investments—can be purchased at discounted prices. These are the stocks widely considered the right choice and can be made use of for this phase of the market according to proficient professionals. The question remains: which are they? This article highlights a few of these stocks based on my analysis. I share them to raise awareness, especially for those looking for such opportunities, but I am NOT advising you to buy them. What makes this content relevant is that it comes from someone who has been monitoring the market out of initiative, from a genuine interest over the past 3-4 years. So let's begin. My top pick stock ticking all the boxes is Mahanagar Gas . It has impressive financials and is a fundamentally strong mid-cap company. It's both a value stock and a good growth stock (two common investing styles are value investing and growth-based investing). The stock's P/E ratio is 12.6, indicating it might be undervalued. The current price is ₹1,343, and the intrinsic value (according to Screener) is ₹1,479. As a mid-cap stock, it holds significant growth potential with a medium risk level—lower than that of small caps. It’s currently priced at a 31% discount. Next I see Indus towers . Again good fundamentally, making it a good pick for long-term investors. As a large-cap stock, its growth potential is less than mid or small caps, but it’s still solid and carries lower risk of all. Its P/E ratio is 9.18, indicating potential undervaluation. However, one downside is that although its debt-to-equity ratio is 0.75 (which is good), its enterprise value exceeds the market cap, possibly suggesting high debt or overvaluation (which I doubt). Additionally, promoter holdings have decreased by 3% in the last quarter. Among the other options are Godawari Power and Andhra Petrochemicals . Godawari Power is a solid mid-cap stock, with one exception: its 10-year sales growth or compounded revenue growth does not exceed 10% over the last 10 years, a key criterion for long-term investments. However, its 7-year sales growth surpasses 10%, which is positive. With a P/E ratio of 14.5 and a 31% discount from its previous high, it seems undervalued and carries medium risk, with the potential for high growth. Last option is Andhra petrochemicals which unlike the others on this list, is a small-cap stock, making it suitable for those with a high-risk appetite. It has strong fundamentals and meets all the criteria required for long-term investment. The current price of ₹58.7 is below its book value of ₹64.8, and the intrinsic value is ₹154, indicating an attractive investment. It’s also interesting to note that when the price-to-book ratio is below 1 (P/BV < 1), it’s often considered an amazing deal .But again, this is a small-cap stock, so proceed with caution. Criteria Used All the stocks listed here have passed my evaluation based on four key areas required for a growing business: profitability, liquidity, leverage, and operational efficiency. Other factors considered include undervaluation, debt-to-equity ratio, and so on. Going forward, I am aware that there is a possibility of the markets falling further, which cannot be ignored. The narrative around March 20th and its significance in the market cycle is still present, and I would encourage caution. For those hesitant to invest now, I suggest keeping an eye on the charts. Wait for a solid bullish signal to appear, and confirm it with USOIL and USDINR charts. These are crucial for concluding about the trend of our markets. Additionally, perform a reality check on your investments: assess where your money is allocated, determine reasonable conservative targets, and evaluate the time frame for returns, apart from the projections made by portfolio managers and fund managers and their years of experiences too. Stats such as NIFTY MIDCAP 100 index giving negative returns from 2008 to 2014, is evident by directly observing the charts itself. I hope this information was valuable to you. Don't lose faith in the markets. Happy investing! “Be fearful when others are greedy and be greedy only when others are fearful.” – Warren Buffet
NSE:NIFTYEducation
by ThePassionate_investor
How to Trade Gold Using COT Data📌 Step-by-Step Analysis & Prediction 1️⃣ How to Trade Gold Using COT Data Scenario 1: Gold is Rising Commercials are heavily short (84%) → They expect a potential pullback or reversal. Institutions are long (84%) → This suggests strong bullish momentum. Retail traders are long (68%) → This confirms that the public is following the uptrend. 🔹 Trading Strategy: Look for resistance zones around $2,950 - $3,000 (historical key levels). If commercials start reducing shorts, the uptrend may continue. If commercials stay net short, expect profit-taking and a potential correction. Best trade: Wait for bearish confirmation and short near resistance with a stop-loss above $3,050. Scenario 2: Gold is Falling Commercials are now long (16%) → They expect prices to recover. Institutions are reducing longs (16%) → Hedge funds are exiting long positions. Retail traders are still short (32%) → This suggests fear in the market. 🔹 Trading Strategy: Look for support zones around $2,850 - $2,875. If institutions start adding longs, this confirms a bottom formation. Best trade: Look for bullish confirmation and buy at support, targeting $2,950+. 2️⃣ How to Trade USD Using COT Data Scenario 3: USD is Rising Commercials are short (77%) → They expect USD to weaken soon. Institutions are long (73%) → They are driving the uptrend. Retail traders are also long (52%) → Retail is following the institutions. 🔹 Trading Strategy: If DXY is at resistance (105-106), expect a reversal. Best trade: Wait for USD weakness confirmation and short the USD against strong currencies like EUR or JPY. Scenario 4: USD is Falling Commercials are long (23%) → They anticipate a USD recovery. Institutions are reducing longs (27%) → Hedge funds are exiting bullish positions. Retail traders are short (48%) → This suggests retail is bearish on USD. 🔹 Trading Strategy: If DXY is near support (102-103), expect a USD bounce. Best trade: Look for bullish confirmation and buy USD against weaker currencies (e.g., short EUR/USD). 🔵 Final Trading Plan Check COT Data Every Friday → Look for shifts in institutional and commercial positions. Confirm with Technical Analysis → Identify key support/resistance levels. Use Sentiment as Confirmation → If retail is overly long/short, the reversal could be near. Set Stop-Loss & Targets → Define clear exit points to protect capital. Would you like a TradingView indicator to automate this COT-based analysis? 🚀
FX:XAUUSDEducation
by alkalbanib39
1
Shooting Star Pattern: Meaning and Trading RulesShooting Star Pattern: Meaning and Trading Rules In the fast-paced world of trading, recognising key chart patterns is crucial for informed decision-making. One pattern that traders often look for is the shooting star trading pattern. This article will delve into what a shooting star pattern is, how to spot it on a chart, its associated trading strategies, and its distinctions from similar patterns. What Is a Shooting Star? A shooting star in trading is a bearish candlestick pattern that can signify a potential reversal of an uptrend. It consists of a single candlestick with the following characteristics: - A small body that is located at the lower end of the candlestick. - A long upper shadow that is at least twice the length of the candle's body. - A short or nonexistent lower shadow. The appearance of the setup suggests that the price opened near its low and rallied significantly during the trading session but ultimately closed near its opening price. This pattern indicates sellers regained control after a brief period of bullishness. While the formation is considered more probable when it closes red, it’s possible to see a green shooting star. A green shooting star candlestick simply indicates that sellers weren’t able to push the price down quite as aggressively. How Can You Trade the Shooting Star? The shooting star trading strategy involves the following key points: - Entry: After identifying the candle in the strong uptrend, consider entering a short position. To validate the pattern, you may wait for the next one or two candles to close below the shooting star. - Take Profit: Although candlestick patterns don’t provide specific entry and exit points, you can use common technical analysis techniques. For example, you may set a take-profit level based on the support level, Fibonacci retracement level, or nearest swing lows. - Stop Loss: You may want to protect your position with a stop-loss order. This is usually placed above the high price of the shooting star. This helps potentially limit losses if the pattern doesn't lead to a reversal. Let's consider a live market example of a shooting star in the stock market to illustrate the concept. A trader analyses the Meta stock chart and spots a shooting star stock pattern after an extended uptrend. They wait for confirmation, i.e. for the next bar to close lower. Upon confirmation, they decide to enter a short trade, setting their take-profit target at a significant support level and placing a stop loss above the formation’s high. How Traders Confirm the Shooting Star Signals Confirming the shooting star pattern's reliability involves a multifaceted approach, adding robustness to your trading decisions. Traders look beyond the candlestick itself, integrating various technical analysis tools to validate signals. Key confirmation methods include: - Volume Analysis: A high trading volume accompanying the shooting star candlestick pattern can strengthen the signal, indicating that the reversal is supported by significant market participation. - Subsequent Candles: Observing the next few candles for bearish confirmation is essential. A strong bearish candle following the shooting star suggests that sellers are gaining momentum. - Technical Indicators: Indicators can offer confirmatory signals, particularly momentum indicators like the Relative Strength Index (RSI) and Stochastic Oscillator. A moving average crossover can also add confluence. - Support and Resistance Levels: The proximity of the shooting star to established resistance levels enhances its significance. A shooting star forming near a resistance zone often signals a strong reversal point. - Above Swing High/Low: A shooting star pattern that breaks into the area just above a key high or low before reversing can signal a stop hunt/liquidity grab. - Contextual Analysis: The broader market context, such as prevailing trends and economic news, can influence the pattern's effectiveness. Aligning the shooting star with broader market sentiment increases the pattern’s reliability. Shooting Star and Other Candlestick Formations Let's compare the shooting star with other patterns with which it is often confused. Shooting Star vs Inverted Hammer The shooting star and inverted hammer look similar – they have small bodies and long upper shadows. However, they differ in their implications. The former is a bearish reversal pattern found in uptrends, while the latter is a bullish reversal formation seen in downtrends. Shooting Star vs Evening Star Both formations signal an uptrend reversal; however, the shooting star is a single-candle setup, whereas the evening star consists of three candles, including a large bullish candle, a small-bodied candle, and a large bearish candle. Shooting Star vs Gravestone Doji The shooting star and gravestone doji are both bearish reversal patterns. The shooting star features a small body at the lower end of the candlestick with a long upper shadow, signifying a failed rally. In contrast, the gravestone doji has no or a tiny real body, as the open and close prices are identical or nearly identical, with a long upper shadow and no lower shadow. The gravestone doji suggests strong indecision in the market, with buyers initially driving prices up but ultimately failing to maintain that momentum, which often signals a sharp reversal. Shooting Star vs Hanging Man The shooting star and hanging man also share similarities but differ in appearance and market positioning. The shooting star is a bearish pattern occurring after an uptrend, indicating a potential reversal as bears managed to pull the price down at the end of a trading session. Conversely, the hanging man appears at the top of an uptrend as well but has a small body at the upper end and a long lower shadow, reflecting that sellers were able to push the price down significantly before buyers pulled it back up. The hanging man suggests that selling pressure is starting to outweigh buying interest. Advantages and Limitations This formation offers traders valuable insights, but it comes with its own set of advantages and limitations. Understanding these can help traders use the pattern more effectively within their strategies. Advantages - Early Reversal Signal: It provides an early indication of a potential trend reversal, allowing traders to prepare for or act on a change in market direction. - Simplicity: The pattern is straightforward to identify, even for less experienced traders, making it an accessible tool for technical analysis. - Versatility: It can be applied across various markets and timeframes, with traders often spotting the shooting star in forex, stock, and commodity markets as well as across both short-term and long-term charts. Limitations - False Signals: The pattern alone is not always reliable and can generate false signals, especially in volatile markets or when not used with other confirmation tools. - Lack of Precision: It does not provide exact entry or exit points, requiring traders to rely on additional indicators or analysis to determine these. - Dependency on Context: The effectiveness of the formation is highly dependent on the broader market context and trend strength, limiting its standalone use. Final Thoughts Understanding chart patterns like the shooting star is essential for making informed decisions in trading. Remember that while this formation can provide valuable insights, it is more effective in conjunction with other tools for signal confirmation. As a trader, staying informed about market developments and continuously honing your skills could be a key to effective trading in the dynamic trading environment. Open an FXOpen account today to trade in over 600 markets with tight spreads from 0.0 pips. FAQ Can Candlestick Patterns Be Time-Sensitive? Yes, candlestick patterns vary depending on the timeframe. A shooting star on a 1-minute chart provides short-term signals, while a shooting star on a daily chart may signal a longer-term reversal. However, the choice of timeframe goes hand in hand with your market strategy and goals. How to Improve Candlestick Pattern Recognition Skills? Improving your candlestick pattern recognition skills requires practice and study. You can analyse historical charts, use trading simulators, read educational materials like those at FXOpen, and engage with experienced traders to gain insights and practical experience. Why Are Candlestick Patterns Important in Trading? Candlesticks visually represent price action and help traders identify potential trend reversals, continuations, and key support and resistance levels. They are valuable tools for technical analysis. What Is the Meaning of a Shooting Star Pattern? The shooting star pattern is a bearish reversal candlestick that forms after an uptrend. It signals a potential shift in market sentiment, where buyers initially drive the price higher, but sellers take over, pushing the price back down near its opening level. Is a Shooting Star Candlestick Bullish? No, a bullish shooting star does not exist. It is a bearish pattern, indicating that an uptrend may be losing momentum and that a reversal to the downside could be imminent. A similar bullish formation is the inverted hammer. Is a Shooting Star a Doji? A shooting star is not a doji. While both patterns can signal reversals, a doji has nearly identical opening and closing prices with no significant body, reflecting indecision, whereas a shooting star has a small body with a long upper shadow, indicating a failed rally. How Can You Trade a Shooting Star Candle? Trading this candle involves looking for confirmation of the reversal, such as a bearish candle following the pattern. Traders often set stop-loss orders above the shooting star's high and target profit levels near key support zones or previous lows. Trade on TradingView with FXOpen. Consider opening an account and access over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot. 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.
NASDAQ:METAEducation
by FXOpen
1
To Short or Not to Short that is the question???Let me explain the risk-reward profiles for long and short positions: Long Position: When you buy an asset (go long), you purchase it hoping its value will increase Maximum loss: Limited to your initial investment (if asset goes to $0) For example, if you buy a stock at $100, your maximum loss is $100 per share Maximum gain: Theoretically unlimited, as the asset's price can keep rising If the stock goes to $200, $300, $1000+, your profit keeps growing Short Position: When you short an asset, you borrow and sell it, hoping to repurchase it cheaper later Maximum gain: Limited to your initial sale price (if the asset goes to $0) For example, if you short a stock at $100, your maximum gain is $100 per share Maximum loss: Theoretically unlimited, as the asset's price can keep rising If the stock rises to $200, you lose $100; at $300, you lose $200, and so on The asymmetric risk-reward comes from math: Long positions: Asset can't go below $0, but has no upper limit Short positions: Can only profit until $0, but losses grow with each price increase Shorting comes with several additional costs that make it more expensive than going long: Borrowing Costs (Short Interest) You must pay interest to borrow the shares you're shorting Rates can range from very low (0.25%) to very high (50%+) annually for hard-to-borrow stocks This cost reduces your profits or increases losses over time Margin Requirements Need to maintain a margin account with collateral Higher margin requirements for short positions (typically 150% of position value) Risk of margin calls if the position moves against you Dividend Payments Short sellers must pay any dividends to the lender of the shares This is an additional cost that long position holders don't face Can significantly impact profitability for high-dividend stocks Stock Recall Risk The lender can recall their shares at any time This may force you to close your position at unfavorable prices It is particularly risky during short squeezes These costs mean that even if your directional view is correct, you might still lose money on a short position due to holding costs. Asymmetrical Moves "Markets take the stairs up but the elevator down" The opposite happens more often! During bubble collapses and market crashes: Downside moves can be gradual as denial, hope, and orderly selling create a stepped decline Some investors average down, providing temporary support Circuit breakers and trading halts can slow dramatic falls During upside rallies, especially short squeezes: Price can explode upward very rapidly as shorts rush to cover Fear of Missing Out (FOMO) creates buying panic Margin calls force immediate buying Limited available shares can cause bidding wars Now let's evaluate the same thing for Options Trading: in a hypothetical situation, a call option can theoretically move toward infinity, whereas a put option has a limited downside. Here’s why: A call option gives the holder the right to buy an asset at a fixed strike price. If the underlying asset’s price keeps rising indefinitely, the call option’s value also increases indefinitely. In theory, there's no upper limit to how high a stock price can go, meaning a call option's price can rise infinitely. A put option , on the other hand, gives the holder the right to sell an asset at a fixed price. However, the lowest a stock can go is zero, which means the maximum intrinsic value of a put option is limited to its strike price. For example, if a put has a strike price of $100 and the stock price drops to $0, the put would be worth at most $100 per share. Unlike a call option, a put option has a finite maximum gain. Thus, while a call option has unlimited upside, a put option is constrained by the fact that an asset’s price can only fall to zero. The final Verdict: Do not short PLTR or other bubbles, if you want to do so, at least buy Put options to limit your risk!
NASDAQ:PLTREducation
by Moshkelgosha
Mastering Candlestick Patterns: Visual Guide for Traders 🔵 Introduction Candlestick charts are among the most popular tools used by traders to analyze price movements. Each candlestick represents price action over a specific time period and provides valuable insights into market sentiment. By recognizing and understanding candlestick patterns, traders can anticipate potential price reversals or continuations, improving their trading decisions. This article explains the most common candlestick patterns with visual examples and practical Pine Script code for detection. 🔵 Anatomy of a Candlestick Before diving into patterns, it's essential to understand the components of a candlestick: Body: The area between the open and close prices. Upper Wick (Shadow): The line above the body showing the highest price. Lower Wick (Shadow): The line below the body showing the lowest price. Color: Indicates whether the price closed higher (bullish) or lower (bearish) than it opened. An illustrative image showing the anatomy of a candlestick. 🔵 Types of Candlestick Patterns 1. Reversal Patterns Hammer and Hanging Man: These single-candle patterns signal potential reversals. A Hammer appears at the bottom of a downtrend, while a Hanging Man appears at the top of an uptrend. Engulfing Patterns: - Bullish Engulfing: A small bearish candle followed by a larger bullish candle engulfing the previous one. - Bearish Engulfing: A small bullish candle followed by a larger bearish candle engulfing it. Morning Star and Evening Star: These are three-candle reversal patterns that signal a shift in market direction. Morning Star: Occurs at the bottom of a downtrend, indicating a potential bullish reversal. It consists of: - A long bearish (red) candlestick showing strong selling pressure. - A small-bodied candlestick (bullish or bearish) indicating indecision or a pause in selling. This candle often gaps down from the previous close. - A long bullish (green) candlestick that closes well into the body of the first candle, confirming the reversal. Evening Star: Appears at the top of an uptrend, signaling a potential bearish reversal. It consists of: - A long bullish (green) candlestick showing strong buying pressure. - A small-bodied candlestick (bullish or bearish) indicating indecision, often gapping up from the previous candle. - A long bearish (red) candlestick that closes well into the body of the first candle, confirming the reversal. 2. Continuation Patterns Doji Patterns: Candles with very small bodies, indicating market indecision. Variations include Long-Legged Doji, Dragonfly Doji, and Gravestone Doji. Rising and Falling Three Methods: These are five-candle continuation patterns indicating the resumption of the prevailing trend after a brief consolidation. Rising Three Methods: Occurs during an uptrend, signaling a continuation of bullish momentum. It consists of: - A long bullish (green) candlestick showing strong buying pressure. - Three (or more) small-bodied bearish (red) candlesticks that stay within the range of the first bullish candle, indicating a temporary pullback without breaking the overall uptrend. - A final long bullish (green) candlestick that closes above the high of the first candle, confirming the continuation of the uptrend. Falling Three Methods: Appears during a downtrend, indicating a continuation of bearish momentum. It consists of: - A long bearish (red) candlestick showing strong selling pressure. - Three (or more) small-bodied bullish (green) candlesticks contained within the range of the first bearish candle, reflecting a weak upward retracement. - A final long bearish (red) candlestick that closes below the low of the first candle, confirming the continuation of the downtrend. 🔵 Coding Candlestick Pattern Detection in Pine Script Detecting patterns programmatically can improve trading strategies. Below are Pine Script examples for detecting common patterns. Hammer Detection Code //@version=6 indicator("Hammer Pattern Detector", overlay=true) body = abs(close - open) upper_wick = high - math.max(close, open) lower_wick = math.min(close, open) - low is_hammer = lower_wick > 2 * body and upper_wick < body plotshape(is_hammer, title="Hammer", style=shape.triangleup, location=location.belowbar, color=color.green, size=size.small) Bullish Engulfing Detection Code //@version=6 indicator("Bullish Engulfing Detector", overlay=true) bullish_engulfing = close < open and close > open and close > open and open < close plotshape(bullish_engulfing, title="Bullish Engulfing", style=shape.arrowup, location=location.belowbar, color=color.blue, size=size.small) 🔵 Practical Applications Trend Reversal Identification: Use reversal patterns to anticipate changes in market direction. Confirmation Signals: Combine candlestick patterns with indicators like RSI or Moving Averages for stronger signals. Risk Management: Employ patterns to set stop-loss and take-profit levels. 🔵 Conclusion Candlestick patterns are powerful tools that provide insights into market sentiment and potential price movements. By combining visual recognition with automated detection using Pine Script, traders can enhance their decision-making process. Practice spotting these patterns in real-time charts and backtest their effectiveness to build confidence in your trading strategy.
BINANCE:BTCUSDEducation
by BigBeluga
19
Trading with multiple VAMAsI want to show you how to analyse multiple timeframe VAMAs for trading opportunities. This is an interesting approach that can reveal valuable market structure information. For this example I am using a 15m, 1h and. 4h VAMA, but you can use this on lower or higher timeframes as well. First, let's understand what each timeframe VAMA represent in this case: The 15-minute VAMA indicates short-term trends and momentum The 1-hour VAMA reveals intermediate trend direction The 4-hour VAMA represents the broader market structure When these VAMAs overlap on your lower timeframe chart (15m in this case), they create what we might call "zones of interest." Think of it like layers of support and resistance that have different degrees of significance based on their timeframe. Here's how we can interpret and use this information: Convergence Zones When multiple VAMAs cluster in a tight price range, this creates a significant zone of interest. For example, if your 15-minute, 1-hour, and 4-hour VAMAs are all within a narrow price band, this often indicates a strong support or resistance level. These zones typically exhibit one of two behaviors: Price Bounces: When price approaches a convergence zone from above or below, it often respects these levels. The more timeframes that have converged, the stronger the zone becomes. A bounce from such a zone with corresponding volume can present a high-probability trade opportunity. Zone Breaks: If price successfully breaks through a convergence zone, especially with increased volume, this often signals a strong trend continuation or reversal, depending on the direction of the break. Hierarchical Trending You can identify the strength and maturity of trends by examining how the different timeframe VAMAs are arranged: Strong Uptrend Structure: 4H VAMA lowest 1H VAMA above 4H 15min VAMA above 1H This "stacking" of VAMAs shows a healthy trend structure. The higher timeframe VAMAs act as dynamic support levels in an uptrend (or resistance in a downtrend). Trade Entry Opportunities Alignment Trades: Look for moments when all VAMAs are pointing in the same direction and properly stacked. These situations often present high probability setups. For example: In an uptrend Price pulls back to test the 15-minute VAMA while the 1H and 4H VAMAs continue trending up.This creates a "buy the dip" opportunity with multiple timeframe confirmation. Divergent Zone Trades: When the faster VAMAs (1min, 15min) show divergence from the slower ones (1H, 4H), this can indicate potential reversal points: If the 1min and 15min VAMAs start curling up while price is testing the 1H VAMA as support. This divergence in shorter timeframes while respecting longer timeframe support can signal a reversal opportunity. Breakout Confirmation: Use the multiple timeframes to confirm breakout trades: When price breaks above a convergence zone Look for the faster VAMAs (1min, 15min) to cross above the slower ones Volume should increase during the break The previous resistance zone (marked by the VAMAs) should become support
Education
by jpkxyz
Adverse excursion: a key concept for risk managementAs a professional trader, I can tell you about the adverse excursion and its crucial importance in the world of trading. Adverse excursion: a key concept for risk management Adverse excursion refers to the unfavorable movement of the price of an asset after a position is opened. More precisely, it is the difference between the entry price and the worst point the price reaches before the position becomes profitable again or is closed. Maximum Adverse Excursion (MAE) The concept of Maximum Adverse Excursion (MAE), developed by John Sweeney, is particularly useful. It measures the maximum floating loss suffered by a position before it turns in your favor or is closed. The MAE is a powerful statistical tool for analyzing drawdowns in an open position. Trading Efficiency Using MAE has several benefits for traders: Optimizing Stop-Loss: By analyzing MAE over a series of trades, the optimal level for placing stop-loss orders can be statistically determined. Evaluating Trading Systems: MAE helps evaluate the performance of trading systems and identify areas for improvement. Refining Risk Management Strategies: By understanding the maximum adverse moves, traders can refine their strategies to better preserve their capital. Improving Trading Efficiency: MAE analysis can help improve decision-making and execute trades with greater accuracy and confidence. Practical Application To effectively use the concept of adverse excursion, it is crucial to collect data on a large number of trades. For example, if you observe a series of MAEs like this: 15, 23, 18, 16, 0, 11, 31, 17, 8, 0, 19, 26, 0, 38, 22, you can deduce valuable information about the behavior of your trades and adjust your stop-loss levels accordingly. In conclusion, the adverse excursion and especially the MAE are powerful tools for any serious trader. They allow to optimize risk management, improve the performance of strategies and make more informed decisions. As they say in the trade, "who controls his risks, controls his profits". _______ Using the Maximum Adverse Excursion (MAE) has several significant advantages over traditional stop-loss placement methods: Data-driven optimization The MAE allows for a more precise and data-driven approach to stop-loss placement: Statistical analysis: By examining the distribution of the MAE over a large number of trades, the optimal level for placing stop-loss orders can be statistically determined. Performance visualization: The graphical representation of the MAE provides a clear overview of trade performance, allowing the most effective stop-loss levels to be visually identified. Balancing protection and performance The MAE helps to find an optimal balance between capital protection and trading performance: Retention of winning trades: The stop-loss can be placed to retain 75-85% of winning trades, thus avoiding prematurely cutting potentially profitable positions. Elimination of large losses: At the same time, this approach eliminates trades that suffer large losses, thus protecting capital. Adaptation to the specific strategy The MAE adapts to the unique characteristics of each trading strategy: Customization: Unlike generic methods, the MAE takes into account the specific behavior of the trades of a given strategy. Flexibility: This approach can be applied to a variety of strategies, whether short-term trading, swing trading, or long-term positions3. Improved risk management Using the MAE contributes to better overall risk management: Deep understanding: The MAE provides a more nuanced understanding of how trades evolve, allowing for better risk assessment. Reduced stress: By having a solid basis for placing stop-losses, traders can reduce the stress associated with real-time decision-making. Complementarity with other tools The MAE can be used in conjunction with other techniques: Combination with the MFE: The analysis of the Maximum Favorable Excursion (MFE) in parallel can help to optimize not only the stop-losses, but also the profit-taking. Cross-validation: The results obtained by the MAE analysis can be compared with those of traditional parameter optimization methods for greater confidence in the strategy.
BITSTAMP:BTCUSDEducation
by Le-Loup-de-Zurich
Fair Value Gaps (FVGs) – A Complete GuideWhat Are Fair Value Gaps (FVGs)? A Fair Value Gap (FVG) is a price imbalance on a chart that occurs when the market moves aggressively in one direction, leaving an area where price did not trade efficiently. These gaps are often created by institutional traders (banks, hedge funds, and large market participants) executing big orders. Key Characteristics of a FVG: ✅ Occurs when price moves impulsively, creating an imbalance ✅ Appears in a three-candle formation ✅ The gap forms between the wicks of the first and third candles How to Identify a FVG: 1️⃣ Look for a strong price move (bullish or bearish). 2️⃣ Find a three-candle sequence where the middle candle has a large body and a gap between the first and third candle wicks. 3️⃣ Mark the area between the first and third candle wicks—this is your Fair Value Gap. Example: Imagine price explodes upward with a big green candle, skipping multiple price levels without much resistance. This creates an inefficiency because price hasn’t traded fairly in that area, making it likely that price will revisit it later to fill the imbalance. Here you can see that price completely filled up that gap and moved higher. Same here: How to Use Fair Value Gaps in Trading FVGs can serve as key zones where price is likely to react. Here’s how you can use them to improve your trading: 1️⃣ Fair Value Gaps as Support & Resistance Bullish FVG (Support Zone): If price retraces into a bullish FVG (gap formed in an uptrend), it can act as support and push price higher. This is a good area to look for buying opportunities. Bearish FVG (Resistance Zone): If price retraces into a bearish FVG (gap formed in a downtrend), it can act as resistance and push price lower. This is a good area to look for selling opportunities. 2️⃣ Using FVGs for Trade Entries & Exits Price often revisits a Fair Value Gap before continuing its original trend. A trader can wait for price to fill the gap and then look for confirmations like candlestick patterns or volume spikes before entering a trade. Stop-loss placement: Put your stop-loss below/above the FVG zone to reduce risk. 3️⃣ Liquidity & Institutional Activity Institutional traders often target these inefficiencies to fill their orders. When price returns to an FVG, it may be because institutions are executing trades at those levels. Why Are Fair Value Gaps Useful? They act as magnets for price – Price tends to revisit these gaps before continuing its move. They provide high-probability trade setups – FVGs help traders find potential reversal or continuation zones. They improve risk management – You can use them for better stop-loss placement. They align with Smart Money Concepts (SMC) – Institutions often use these levels for liquidity. Tips & Tricks: How to Combine Fair Value Gaps with Other Strategies 1️⃣ FVG + Order Blocks = Strong Confirmation If a Fair Value Gap aligns with an Order Block, it becomes a powerful area of interest. This increases the chances of a successful trade. 2️⃣ FVG + Fibonacci Retracements If an FVG aligns with a key Fibonacci level (like 61.8% or 50%), the chances of a price reaction increase significantly. 3️⃣ FVG + RSI or Divergence If price revisits a FVG while RSI is overbought or oversold, it signals a high-probability reversal. 4️⃣ Higher Timeframe FVGs Are More Reliable FVGs on the 1-hour, 4-hour, or daily charts are more effective than those on smaller timeframes. 5️⃣ Monitor News Events If an FVG is formed due to a major news event (e.g., Fed announcement, CPI data, earnings report), be cautious, as price may act differently than expected. Final Thoughts Fair Value Gaps are a powerful tool that help traders identify key levels of liquidity and institutional price action. They work best when combined with other strategies like Order Blocks, Fibonacci, and RSI to increase accuracy. By understanding how and why price moves back into these gaps, traders can anticipate potential high-probability trade setups and trade alongside smart money. __________________________________________ Thanks for your support! If you found this idea helpful or learned something new, drop a like 👍 and leave a comment—I’d love to hear your thoughts! 🚀 Make sure to follow me for more price action insights, free indicators, and trading strategies. Let’s grow and trade smarter together! 📈✨
KRAKEN:BTCUSDEducation
by TehThomas
33
How Do Traders Spot and Use the Dragonfly Doji CandlestickHow Do Traders Spot and Use the Dragonfly Doji Candlestick Pattern? The dragonfly doji candlestick pattern holds intrigue and fascination for traders in financial markets. Its distinct shape and positioning on price charts make it a keen subject for observation and analysis. In this article, we will explore this setup, its significance, and how traders use it in their trading strategies. What Does a Dragonfly Doji Mean? The red or green dragonfly doji is a candlestick pattern that forms when the opening, closing, and high prices of an asset are equal or almost equal. This formation resembles the shape of a dragonfly because it has an extended lower shadow. It provides bullish signals and is considered a neutral pattern as it provides continuation and reversal signals, depending on its context within a trend. The meaning of a dragonfly doji is that there is uncertainty in the market, and traders are prompted to carefully analyse other factors before making trading decisions. Traders may find the dragonfly doji pattern on charts of different financial instruments, such as currencies, stocks, cryptocurrencies*, ETFs, and indices, regardless of the timeframe. Test this pattern on various assets with FXOpen’s TickTrader platform. The Psychology Behind the Dragonfly Doji The dragonfly doji candle pattern reflects a tug-of-war between buyers and sellers, where neither side gains a decisive advantage. Its formation indicates that sellers initially push prices lower, but buyers step in to push prices back up to the opening level. This results in the distinct long lower shadow and minimal upper shadow. The psychological meaning of the dragonfly candlestick pattern is significant; it shows that despite bearish pressure, buyers are strong enough to regain control by the close. It signals indecision, highlighting the need for traders to carefully evaluate other indicators and the broader trend before making trading decisions. How Can You Trade the Dragonfly Doji? The bullish dragonfly doji provides valuable information about market sentiment. Here are two scenarios where this formation can be significant: The Dragonfly Doji in an Uptrend In a bullish trend, the dragonfly doji is generally seen as a continuation signal. This is because, despite sellers attempting to push the price lower, buyers remain active and prevent a significant decline. However, it is worth noting that the inability of buyers to push the price above its open level may indicate a potential weakening of bullish momentum. Traders may consider entering the trade above the open/close of the doji’s candle or if the proceeding bar closes above the doji’s open/close. The stop-loss level may be placed below the candlesticks, while the take-profit target may be set at the nearest resistance level. In the chart above, the pattern formed in an uptrend, and the trader placed a long trade on the next bar. The stop loss was set below the candle, with the take profit at the closest resistance level. Dragonfly Doji in a Downtrend The dragonfly doji in bearish trends may suggest a possible upward reversal. The long lower shadow indicates that buyers entered the market, pushing the price up from its lows. This could be seen as a signal to consider going long or watching for a further bullish confirmation before taking action. Traders may place a stop loss below the candle with a take profit at the closest resistance level or may consider the appropriate risk/reward ratio. The candle at the end of a downtrend signals a price reversal. The trader placed a buy order at the high of the doji with a stop-loss level below it. The take profit is calculated based on the risk/reward ratio. Traders can enhance their trading strategies by utilising the free TickTrader trading platform. How Can You Confirm the Dragonfly Doji? Confirming the dragonfly doji may increase the reliability of trading decisions. Here are key factors to consider: - Volume Analysis: High trading volume during the formation of a dragonfly candle may indicate stronger market sentiment and increase the likelihood of a significant move. - Subsequent Candlesticks: Traders look for a bullish candlestick following the dragonfly candlestick. This reinforces the potential for a trend reversal or continuation. - Support and Resistance Levels: A formation occurring near significant support levels can strengthen its validity as a potential reversal signal. - Technical Indicators: To gauge momentum and confirm signals, traders often complement the analysis with indicators like the Relative Strength Index (RSI), moving averages, and Bollinger Bands. - Market Context: It’s best to evaluate the broader market trend and news that may impact market sentiment to provide a clearer picture of its implications. Dragonfly and Other Patterns Dragonfly doji, gravestone doji, spinning top, and long-legged doji are all types of candlestick patterns commonly used in technical analysis to indicate potential reversals or indecision in the market. Traders often pay close attention to them when making trading decisions. Dragonfly Doji vs Gravestone Doji While the dragonfly doji has a long lower shadow and little or non-existent upper one, the gravestone or inverted dragonfly doji has a long upper wick and little or non-existent lower one. Both patterns indicate indecision, but the dragonfly provides bullish signals, whereas the gravestone indicates potential bearish reversals. Dragonfly Doji vs Long-Legged Doji The dragonfly has a long lower shadow with little to no upper shadow, indicating a potential bullish reversal. In contrast, the long-legged version has long upper and lower shadows, reflecting significant indecision and equal pressure from buyers and sellers without a clear directional bias. Dragonfly Doji vs Hammer The dragonfly and the hammer both signal potential bullish reversals, but they differ in appearance and context. The dragonfly has no upper shadow, but it has a very small body and an extended lower shadow, while the hammer has a body at the top of the candlestick and a long lower shadow. The hammer typically appears after a downtrend, signalling a reversal, while the dragonfly doji appears in uptrends and downtrends. Limitations of the Dragonfly Doji While the dragonfly doji is a valuable candlestick formation for traders, it is not without its limitations. Recognising these constraints can help them understand how to use it most effectively. - False Signals: The dragonfly sometimes produces false signals, leading traders to anticipate reversals that do not materialise. - Market Context: Its effectiveness is heavily influenced by the broader market context. It may not be reliable in all situations, particularly in choppy or sideways assets. - Confirmation Needed: Additional indicators or subsequent price action are usually required to confirm the pattern, as relying solely on its appearance can be risky. - Limited Power: It does not provide information on the magnitude of the subsequent price movement, making it challenging to set precise profit targets. Closing Thoughts Candlestick patterns should not be relied upon as the sole factor in trading decisions. It is essential to perform a comprehensive analysis and implement robust risk management strategies before making any trades. Once you are confident in your analysis, consider opening an FXOpen account to take advantage of spreads as tight as 0.0 pips and commissions starting at just $1.50. FAQ What Does Doji Candle Mean? A doji candle represents a session where the opening and closing prices are almost equal, indicating market indecision. It suggests neither buyers nor sellers are in control, resulting in a standoff. Doji candles can take various forms, including dragonfly, gravestone, and long-legged, each with unique implications. What Does a Dragonfly Doji Indicate? A dragonfly doji indicates indecision and potential trend reversal. It forms when the open, high, and close prices are near the same level but it has a long lower shadow. This formation suggests buyers counteracted initial selling pressure, signalling a possible bullish shift. Is the Dragonfly Doji Bullish or Bearish? The dragonfly is generally considered bullish, especially after a downtrend. Its formation indicates buyers pushed prices back to the opening level, potentially leading to a price increase. What Is the Opposite of the Dragonfly Doji? The opposite of the dragonfly doji is the gravestone doji. The dragonfly has a long lower shadow and little to no upper shadow, while the gravestone features a long upper shadow and minimal lower shadow, indicating a potential bearish reversal. *Important: At FXOpen UK, Cryptocurrency trading via CFDs is only available to our Professional clients. They are not available for trading by Retail clients. To find out more information about how this may affect you, please get in touch with our team. Trade on TradingView with FXOpen. Consider opening an account and access over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot. 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
1
2 Ways to Potentially Gauge a Dip in PriceTrading markets should be simple right? Establish the direction of a price trend, take a position in the direction of that trend and enjoy the ride! Of course, in practice, we all know trading is never that easy. All traders go through similar anxieties regarding whether the current level is the correct one to trade. Perhaps one of the hardest challenges if you want to buy an asset, is when a high in price has already been established and prices are selling off. Are you now wrong with your view to buy, or should this sudden weakness be used as an opportunity to take a long position at possibly a better level? As traders, we face these decisions every day, but fortunately, technical analysis offers several tools to aid us. Today, we want to look at 2 approaches that can assist in gauging how far a correction in price may go, and if we should consider that dip in price as an opportunity to take a position or not. Previous Highs as a Support: We all know prices never move in straight lines, be it to the up or the downside. Corrections are often seen as a healthy counter move to the on-going trend. However, being able to anticipate the extent of such weakness and when to make that trade, can be vital. If we look at the chart of the UK 100 Index above, we can see that between May 15th 2024, when the index traded to a high of 8477 and August 5th 2024, when the 7906 low was posted, a period of sideways price activity materialised. An upside closing break from this range materialised on January 17th 2025, at which point, traders perhaps began to anticipate a more extended phase of price strength. However, as we’ve said, prices don’t always move in straight lines, even after such a break higher. Often, a pullback in price develops, offering opportunities to enter the market at potentially a better level than if we’d blindly followed price strength after the initial break higher. A pullback in price is perfectly normal and doesn’t alter possibilities of a more extended phase of price strength. However, the challenge is anticipating where support may be found again, to hold and resume the advance. Often, old price highs can be useful, as having previously marked resistance to price strength, once broken they can become support on dips, and may hold future price weakness, even turn it higher once more. Within the UK 100 index, we might consider 8418 from August 30th and 8477 from May 15th as old price highs, which might then become support, after the January 17th upside break in price. To highlight this possible support area marked by these previous price highs, where buying opportunities might have been offered in the UK 100 index during the January price setback, we’ve drawn two horizontal lines on the chart below. Following the January 17th 2025 upside break, having previously been a resistance focus, the 8418 and 8477 highs, might now became potential support to a dip in price, possibly able to hold and reverse the correction back to the upside. This 8418/8477 range, proved to be support when tested on January 27th 2025, from which price strength developed again, to post new all-time highs. Importantly, it is possible given that this 8418/8477 range proved to be support in January, it could do so again, so keep that in mind, if price weakness develops, at any point in the future. Using The 10 Day Moving Average to Act as a Support to Price Dips: In the example above, the UK 100 index correction in January lasted several days, and in certain cases, this could even last weeks. However, what if price is already within an established uptrend? It’s here that setbacks may be seen over a shorter period of time with shallower price declines. In this type of set-up, it is often the rising 10 day moving average that marks the extent of a price dip, before turning price activity higher again. As an example, let’s look at Gold during 2025 so far, focusing on each recent setback in price. During this latest advance, it has been the rising 10 day moving average that has provided support for price dips on each occasion. Subsequent strength then extended the uptrend to new all-time highs. Within such an advance, as traders, we might focus on the rising 10 day moving average to highlight possible support to short term price dips within an uptrend, and an area we might wish to use to establish long positions, anticipating continuation of the on-going uptrend. However, it is important to be aware, a break under the 10 day moving average support might reflect a change in price direction and see deeper declines. So the use of a stop loss to potentially protect any positions is important. With all this in mind, last Friday (February 14th 2025) saw Gold weakness again back to the rising 10 day moving average support. It will be interesting to see if this holds the recent weakness to extend the current uptrend to new all-time highs, or if a closing break lower develops, suggesting risks could turn towards a more extended phase of price weakness. The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
PEPPERSTONE:XAUUSDEducation
by Pepperstone
4
2025 ICT Mentorship: Institutional Market Structure Part 22025 ICT Mentorship: Lecture 3_Institutional Market Structure Part 2 Greetings Traders! In Lecture 3 of the 2025 ICT Mentorship, we dive deep into the core principles of market structure, focusing on how institutions truly move the market. Understanding this is essential for precision trading and eliminating emotional biases. Key Insights from the Lecture 🔹 Distinguishing Minor vs. Strong Swing Points – Learn to differentiate between structural noise and true market shifts. 🔹 Marking Market Structure with Precision – Objectively analyze price action to refine your decision-making process. 🔹 Institutional Market Structure Techniques – Align with smart money to enhance accuracy and consistency. Why This Matters Mastering market structure allows traders to anticipate price movement, reducing impulsive trades and reinforcing a disciplined approach. By integrating institutional strategies, we position ourselves for more accurate and confident executions. Stay focused, keep refining your skills, and let’s continue elevating our trading game. Institutional Market Structure Part 1: Enjoy the video and happy trading! The Architect 🏛️📊
Education
by The_Archi-tect
13
Forex: from 500 to 100k: is it possible? Hello, I am the professional trader Andrea Russo and today I want to answer a question that is frequently asked: "Can you get to 100 thousand euros starting from just 500 euros?" The answer, as we will see, depends on several factors, but above all on the strategy you choose to adopt, on risk management and on the discipline in respecting the investment rules. In this article, we will look at a specific strategy, a sort of "daydream" that, although theoretically possible, also involves a series of risks to be considered very carefully. Imagine starting with a capital of 500 euros. The strategy that I will explain provides that each successful investment will lead to a 30% gain on the invested capital, while each wrong operation will result in a 10% loss. In essence, if the market goes in your favor, you will earn 30% on the invested capital, but if things go badly, you will lose 10%. If applied correctly, this strategy could lead to significant earnings over time, but let's make some assessments. The strategy of earning 30% on each positive trade is based on the "magic of compound numbers", that is, on the fact that, every time you earn, you earn on an increasingly higher basis, thus increasing the invested capital. If you maintain a good rate of winning trades, the capital will grow exponentially over time. How many earnings do you need to get to 100 thousand euros? To calculate how many trades it will take to get to 100,000 euros, we can use the exponential growth formula. If we start with 500 euros and want to know how many winning trades at 30% we need to get to 100,000 euros, we can do the following calculation: 500 is the initial capital. 1.30 is the multiplier for each winning trade (30% earnings). n is the number of trades needed. Solving the equation, we get that n is approximately 17 consecutive winning trades (approximate). Therefore, you will need to make at least 17 consecutive successful trades, without any losses, to get to 100,000 euros. Dangers of the strategy Although the numbers may seem promising, it is important to remember that the market is not predictable and that not all trades will be winners. Furthermore, the 30% gains and 10% losses are hypothetical and do not take into account other factors, such as trading commissions, slippage, and market volatility. Here are some of the main dangers associated with this strategy: Volatility and risk of loss: The 10% loss per mistake, even if small, can quickly accumulate in a drawdown period. For example, after 5 losing trades, the capital could be drastically reduced. Psychological complexity: Maintaining discipline in such a volatile trading environment is one of the most difficult challenges for any trader. There is always a temptation to “catch up” losses or make riskier trades to increase profits, which can undermine the effectiveness of the strategy. Market Unpredictability: The market is never linear. Winning trades are not guaranteed, and even with a well-structured strategy, it is possible to find yourself in a prolonged drawdown period that puts the solidity of the plan at risk. Capital Management: The Heart of the Strategy The real secret of this strategy is not so much in earning 30%, but in protecting your capital and limiting losses. Capital management is essential to any type of trading, and it is what separates successful traders from those who fail. Here are some key principles for effective capital management: Position Size: Do not risk more than 1-2% of your capital on any one trade. This allows you to survive even a long period of consecutive losses, without compromising your capital. Stop loss and take profit: Use stop loss to limit losses and take profit to cash in profits when the market moves in your favor. Don't expect the market to go up forever, but set clear goals. Controlling emotions: Being able to stay calm, even when facing losses, is essential. Greed and fear are a trader's worst enemies, so keeping a clear mind is the key to long-term success. Diversification: Don't put all your capital on a single asset or trade. Diversification helps reduce overall risk. Conclusions In summary, yes, it is theoretically possible to get to 100 thousand euros starting from 500 euros, but it is not easy at all. Success in trading does not only depend on the percentages of gain or loss, but also on the ability to manage capital and stay calm in difficult phases. Happy trading.
Education
by Andrea_Russo_SwipeUP
Market Makers Baited Traders Into Perfect Reversals📌 Review of February 18 Trades – BTC/USD 1️⃣ Trade #1 – Long at Previous Day Low Rejection & Bullish Wedge 📍 Context: * The market was in a broad bear channel, making lower highs and lower lows. * The price tested the previous day’s low and showed signs of rejection, forming a wedge bottom (a common reversal setup). * The exponential moving average (EMA) was far above the price, suggesting a possible reversion to the mean. 📍 Two Reasons for Entry (Al Brooks Style): 1. Rejection at Previous Day’s Low: * The price dipped below the previous day’s low but failed to break decisively, showing exhaustion. * Large bear bars started shrinking, followed by small-bodied bars, signaling bearish momentum weakening. 2. Bullish Wedge Formation: * The market formed three pushes down (a typical wedge reversal pattern). * The final push had a strong bullish reversal bar, trapping late sellers. 📍 Execution: * Entry: Buy at the wedge bottom after confirmation of a strong bullish bar. * Stop-Loss: Below the wedge low. * Target: The high of the day (HOD). 2️⃣ Trade #2 – Short at High of Day Stop Hunt & Bullish Wedge Failure 📍 Context: * After the bounce from the previous day’s low, the market rallied into the high of the day. * A break above the high of the day triggered stops, but there was no follow-through → Likely a stop hunt (a common bull trap). * The bullish wedge breakout attempt failed, leading to a sharp sell-off. 📍 Two Reasons for Entry (Al Brooks Style): 1. Stop Hunt Above the High of the Day: * The price broke above the high of the day but immediately reversed, trapping breakout buyers. * Strong bearish bars followed, indicating heavy selling pressure. 2. Failure of Bullish Wedge Breakout: * The bullish wedge formed higher lows, but the breakout failed. * Instead of continuation, a large bearish bar closed below the wedge, signaling a downward breakout. 📍 Execution: * Entry: Sell below the first strong bearish bar after rejection at the high of the day. * Stop-Loss: Above the high of the day. * Target: Exit based on price action—Microwedge formed, indicating potential exhaustion. * Reason for Exit: After a strong drop, a series of overlapping small bars (microwedge) formed, signaling possible reversal or slowdown. 📌 Key Lessons from These Trades ✔ Al Brooks' "two reasons for entry" rule was effective: * First trade: Rejection of the previous day’s low + Wedge Bottom → Long worked. * Second trade: Stop Hunt at the high of the day + Wedge Failure → Short worked.
✔ Failed breakouts offer high reward-to-risk trades when confirmed.
✔ Micro Wedges often indicate exhaustion—good place to take partial or full profit.
✔ Always wait for price action confirmation before entering. 🚀 Both trades followed structured price action logic and resulted in strong moves.
Education
by PriceActionHero
1
Martingale and Anti-Martingale Position Size Trading StrategiesMartingale and Anti-Martingale Position Size Trading Strategies Martingale and Anti-Martingale trading strategies are contrasting approaches to risk management. While one doubles down on potential losses to recover with a single effective trade, the other scales up on potentially effective trades and reduces positions when suffering losses. Both have their strengths and challenges, making them intriguing options for traders. In this article, we’ll break down how each strategy works, so you can decide which or none suits your trading style. What Is Martingale Trading? The Martingale trading strategy originated in the casino industry in the 18th century. In the 20th century, French mathematician Paul Pierre Levy introduced it into probability theory. Later, it was adapted for trading. At its core, the strategy involves doubling the size of a trade after every loss. The idea is simple: one eventual effective trade will offset previous losses and generate a net return. While it can seem appealing in theory, the Martingale method requires significant capital to sustain, as losses can quickly escalate. This makes it particularly risky in volatile markets or without strict loss limits. It’s most commonly used in lower-volatility settings where price movements might be easier to gauge, but even then, the financial risks should not be underestimated. How Martingale Works A Martingale algorithm works by increasing the size of a trade after every loss, aiming to recover all previous losses with one trade. Once an effective trade occurs, a trader returns to the original position size and repeats the process. Here’s an example: - You start by risking $10 on a trade. - If it’s a loss, you double the next trade size to $20. - If that trade also loses, you increase to $40 for the next trade. - Suppose this $40 trade is effective. It covers all previous losses ($10 + $20 = $30) and leaves a $10 return. - After this trade, you reset your trade size back to $10. This approach relies on the assumption that consecutive losses won’t continue indefinitely and that one effective trade will balance the account. However, if multiple losses occur, the required position size increases rapidly. For instance, after just six consecutive losses, the next trade would need to be $1260, with the total exposure already exceeding $1,000. Key Considerations When using the Martingale strategy, it’s crucial to weigh the risks and choose the right conditions for its application. Choosing the Right Market The Martingale strategy is popular in low-volatility markets, where prices are potentially less prone to extreme swings. Instruments like currency pairs with narrow trading ranges could be more suitable. Highly volatile assets can cause significant losses before a recovery. Assessing Capital Requirements The strategy demands a large capital reserve to sustain consecutive losses if they occur. Each losing trade doubles the position size, and costs can escalate quickly. Before using Martingale, traders check if their accounts have enough balance to absorb potential losses without hitting margin limits. Setting a Maximum Loss Limit To prevent devastating drawdowns, traders often establish a hard stop on the total amount they’re willing to lose. For instance, if your account is $10,000, you might set a cap at $1,000. Once reached, the strategy halts. This keeps losses manageable and avoids the risk of depleting the account entirely. What Is Anti-Martingale Trading? Anti-Martingale strategy, also known as the reverse Martingale strategy, uses the opposite approach. It involves halving the size of each position after a loss and doubling it after an effective trade. How Anti-Martingale Works The Anti-Martingale strategy takes the opposite approach to Martingale, adjusting position sizes based on the effectiveness of a trade rather than failure. After each trade where a trader gets returns, the position size is increased to capitalise on potentially favourable conditions. Following a losing trade, the position size is reduced to potentially minimise further losses. This method balances potential risks and rewards. Here’s an example to break it down: - You start by risking $10 on a trade. - If you get a return, you double the next position size to $20. - If you get a return again, you double the position to $40. - If the $40 trade loses, you halve your position size to $20 for the next trade. - After another loss, you halve the size again, returning to $10. This dynamic scaling should ensure that you could maximise returns during strong market trends while potentially limiting losses during weaker periods. For instance, if you got returns in three consecutive trades followed by two losses, you would end up with a net gain, as larger position sizes during effective trades offset smaller losses. However, the risks of the Anti-Martingale strategy include overexposure after effective trades, where larger positions can lead to significant losses if the market reverses, and undercapitalisation after losing trades, which makes recovery challenging. Key Considerations When using the Anti-Martingale strategy, careful planning and risk management are essential. Here are the key considerations to keep in mind: Choosing the Right Market The Anti-Martingale strategy is popular in trending markets. Traders could choose instruments like major currency pairs, indices, or commodities with clear directional movement. Choppy or range-bound markets are less popular for this strategy. Evaluating Capital Needs While this strategy typically requires less capital than Martingale due to its risk-reduction approach in the period of losing trades, you still need sufficient funds to navigate potential fluctuations. Having a comfortable buffer allows you to continue trading even after a series of losses. Setting a Loss Cap Establishing a maximum loss limit is critical to potentially protect a trader’s account. For example, if a trader risks a small percentage of their account on each trade, they might ensure that even scaled-down trades don’t exceed their overall risk tolerance. This might help them keep losses manageable and prevent overexposure. Comparing the Martingale and Anti-Martingale The Martingale strategy involves increasing position sizes after a loss, aiming to recover past losses and secure a net return with one trade. While this approach could deliver quick recoveries in low-volatility markets, it’s inherently risky. Consecutive losses can lead to exponentially larger trade sizes, depleting capital rapidly. Traders using Martingale need substantial account balances and strict loss limits to avoid catastrophic drawdowns. In contrast, the Anti-Martingale strategy focuses on increasing position sizes after a trader gets returns and reducing them after they experience losses. This method leverages favourable trends, allowing traders to maximise potential returns while limiting losses. However, this strategy leads to increasing exposure after effective trades, which can magnify losses, and potentially slow recovery due to reduced position sizes after losses. Is it worth combining Martingale and Anti-Martingale techniques? As these are opposite approaches, the theory states a trader should choose the one that meets their requirements. Start by defining your risk tolerance and trading objectives, and then adapt your strategy to changing market conditions. By doing this, you will understand whether it’s more important for you to increase potential returns or reduce potential risks. Pros and Cons of Each Strategy Both Martingale and Anti-Martingale strategies have unique advantages and challenges, making them suitable for different trading styles and risk profiles. Martingale Pros - Potential recovery with a single trade: One effective trade could recover all prior losses. - Simplifies decision-making: The fixed doubling method removes complexity in adjusting position sizes. - Popular in low-volatility markets: This strategy is popular in markets with generally lower volatility where extreme price swings are less likely. Martingale Cons - High capital requirements: Losses can snowball quickly, requiring significant funds to maintain positions. - Risk of large drawdowns: A long period of losing trades can wipe out an account without strict limits. - Unpopular for volatile markets: Extreme market movements make it even riskier. Anti-Martingale Pros - Risk management focus: Reducing position sizes after losses could limit potential drawdowns. - Popular in trend trading: Larger trades in solid trends could potentially maximise returns. Less demanding on capital: Scaling down after losses conserves funds. Anti-Martingale Cons - Less popular in sideways markets: Struggles in sideways or inconsistent market conditions. - Lower recovery potential: Halving position sizes after losses makes it harder to recover quickly. - Discipline-dependent: Requires precise execution to avoid over-adjusting positions. Final Thoughts Although both strategies have their own benefits and drawbacks, it’s vital to determine the most important aspects for yourself as there is no one-size-fits-all approach. Remember, trading is not just about strategy; it’s also about discipline, patience, and continuous learning. To develop your own trading approach, open an FXOpen account to trade with low commissions and tight spreads. FAQ What Is a Martingale Strategy? The Martingale strategy involves doubling the size of a trade after each loss, aiming to recover losses and secure potential returns with one trade. It’s high-risk and requires substantial capital to withstand potential losing trades. Does Martingale Strategy Work in Forex? Using the Martingale strategy in forex can work, especially in low-volatility currency pairs, but it bears high risks. Forex markets are volatile, and a series of losses can quickly escalate, requiring significant funds to continue trading. Is Martingale a Good Strategy? Martingale is not inherently good or bad—it depends on the trader’s risk tolerance and capital. While it offers recovery potential, the risks of large drawdowns or account depletion make it unsuitable for most. What Is the Alternative Martingale System? The Anti-Martingale strategy, or reverse Martingale, is a common alternative. It takes the opposite approach by increasing trade size after effective trades and reducing it after losses, focusing on capitalising on trends while minimising risks during downturns. Trade on TradingView with FXOpen. Consider opening an account and access over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot. 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
1
Probabilistic thinking. Using Technical logic to get odds.Markets are simple if you think about it. moderate and long range resistance -- is the best odds for rally. "horizontal" or 50-50 supports -- risky. steep supports mean high demand, strong trends. Buying at such supports, at worst it bounces to the upside. (High market with strong trend can mean reversals) rule: break outs always must coincide with 200dma rallies. Bonus. High market, strong trend -- best odds for reversal . 50-50 resistance, with weak support --> trickster market. (trap) strong trend but no flying 200dma --> trap. 50-50 resistance with strong trend, high market, but weak 200dma ---> good odds for reversal. keeping it simple. P.S. this method shows why odds favor BTC reversal . Or why 110/120k had to be peak point. for now.
CME:BTC1!Education
by citsvar
Best Strategies to Identify a Bearish Reversal in Gold Trading In this article, I will explain to you 4 efficient strategies to identify a bearish reversal with technical analysis in Gold trading. You will learn price action, SMC and technical indicator strong bearish signals. First, let me remind you that different bearish signals may indicate a different magnitude and a degree of a potential reversal. While some signals will be reliable for predicting short term reversals, some will be more accurate in projecting long-term ones. One more thing to note is that one of the best time frames for bearish reversal confirmations on Gold is the daily. So, all the cases that will be explained will be on a daily time frame strictly. XAUUSD Bearish Reversal Signal 1 - Bearish Price Action Pattern. One of the perfect indicators of the overbought state of a bullish trend on Gold is bearish price action patterns. I am talking about classic horizontal neckline based patterns like head & shoulders, inverted cup & handle, double/triple top and descending triangle. Typically, these patterns leave early bearish clues and help to predict a coming downturn movement. A strong bearish signal is a breakout of a horizontal neckline of the pattern and a candle close below. The price may continue falling at least to the next key support then. Above is the example of a head and shoulders pattern on Gold, on a daily. Its formation was the evidence of the overheated market. Bearish breakout of its neckline confirmed that, and the price continued falling. Bearish Reversal Signal 2 - Rising Channel Breakout. When the market is trading in a healthy bullish trend, it usually starts moving with the boundaries of a rising channel. It can be the expanding, parallel or contracting channel. Its support will represent a strong vertical structure , from where new bullish waves will initiate after corrections . Its breakout will quite accurately indicate a change of a market sentiment and a highly probable bearish reversal. Look at this rising parallel channel on Gold chart on a daily. The market was respecting its boundaries for more than 3 months. A bearish violation of its support was an accurate bearish signal that triggered a strong bearish movement. Bearish Reversal Signal 3 - Change of Character & Bearish Price Action. One of the main characteristics of a bullish trend is the tendency of the market to set new higher highs and higher lows. Each final high of each bullish impulse is always higher than the previous. Each final low of each bearish movement is also higher than the previous. In such a price action, the level of the l ast higher low is a very significant point. The violation of that and a formation of a new low is an important event that is called Change of Character CHoCH. It signifies the violation of a current bullish trend. After that, one should pay attention to a consequent price action, because CHoCH can easily turn into just an extended correctional movement. If the market sets a lower high and a new lower low then, it will confirm the start of a new bearish trend. That is the example of a confirmed Change of Character on Gold on a daily. To validate the start of a new bearish trend, we should let the price set a lower high and a form a bearish impulse with a new lower low. Bearish Reversal Signal 4 - Death Cross. Death cross is a strong long-term bearish reversal signal that is based on a crossover of 2 moving averages. On a daily time frame, it is usually based on a combination of 2 Simple Moving Averages: one with 50 length and one with 200 length. The signal is considered to be confirmed when a 50 length SMA crosses below 200 length SMA. It is commonly believed that it signifies that the market enters a long-term bearish trend. On the chart, I plotted 2 Moving Averages. When the blue one crosses below the orange one, a global bearish trend on Gold will be confirmed The 4 bearish signals that we discussed will be useful for predicting short term, mid term and long term bearish reversals on Gold. While price action patterns will indicate local bearish movements, Death Cross will confirm a global trend change. Learn to recognize all the signals that we discussed to make more accurate trading and investing decisions. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
5
Mastering the Marubozu Candlestick Pattern in Trading Mastering the Marubozu Candlestick Pattern in Trading Have you been looking at a chart for hours, wondering when to buy or sell? In one moment, the chart is green, screaming “buy.” Next, it’s all red, and the price is falling. Buying or selling becomes a tough decision if you resonate with this. However, candlesticks on your chart can help you. This FXOpen article will help cover one of them – the Marubozu candle pattern. Tag along to learn about this candlestick, its types, and how to trade using it. What Is a Marubozu Candle? A Marubozu is a candlestick with no wicks that has a long body. It signals a strong price action as buyers or sellers dominate the session. “Marubozu” is a Japanese term meaning “bald” or “close-cropped.” It can be bearish (if the open price is above the close) or bullish (if the open price is below the close). When it occurs, traders prepare for a significant price movement. But first, how can you identify it? Marubozu in a Range In a range, the price moves within horizontal support and resistance. It indicates that the buyers and sellers are in a serious battle, and neither dominates. It also shows that traders have their hands folded with little activity. A Marubozu might break the range, indicating that momentum is starting to build up. Aside from range, the Marubozu candlestick pattern occurs in a trend. This might be at its beginning, middle, or end. Marubozu Starts a Trend A new trend starting with a solid price movement may contain a Marubozu. It might pop up due to important news events. Traders who come on board early might have more room to capture new opportunities. Marubozu in Mid-Trend Whether it’s a bull run or a bear market, trends often slow down for some time. This causes traders to slow their activities. Afterwards, trends pick up the pace and continue in the same direction. A Marubozu candlestick pattern may signal that traders’ momentum is back, and they can position themselves for market opportunities. This may occur mid-trend or after the trend halts for a period. Marubozu Ends a Trend The end of a trend is a spot where investors position themselves for new opportunities. Why? A new trend will likely begin, and catching it allows one to place a new trade. This is a reversal, and the Marubozu candlestick pattern can show when it occurs. Marubozu Candle Types There are two main types of the Marubozu pattern in forex, commodity, stocks, crypto*, and other markets. Bearish Marubozu Candlestick What does a red (bearish) Marubozu mean? A red Marubozu indicates strong selling pressure in the market. It forms when the open price is at the highest point of the period and the close price is at the lowest, meaning the price fell consistently throughout the session without any upward movement. You may consider these steps in trading the bearish Marubozu pattern: - Identify the bearish Marubozu. - Consider opening a short trade at the next candle or after a few candles form. - Place the stop-loss level above the nearest swing high. - Take profit at the next swing low, support level, or based on other technical analysis tools. Check this example for a vivid illustration: Bullish Marubozu Candlestick A bullish Marubozu is the opposite of the bearish version. It catches the eyes of bulls seeking buying opportunities. It opens at a low price and closes at a high, so it has no wicks. The significant length of the candle also indicates buying pressure. The theory states you can trade the bullish Marubozu candlestick pattern as follows: - Identify the bullish (green) Marubozu candle. - Consider going long at the opening of the next candle or after a few candles form. - Place a stop-loss level below the closest swing low. - Take profit at the next swing high, when the price begins to range, or when other technical analysis tools signal a price reversal. Here’s an example providing more details: How Can You Confirm a Marubozu? Confirming the Marubozu candlestick pattern involves more than just spotting its distinct body. Traders often look for additional signals to validate the strength and direction indicated by the Marubozu. Traders typically consider the following factors for confirmation: - Volume Spike: A significant increase in trading volume accompanying the Marubozu can suggest the price movement has conviction. The high volume shows that many market participants are behind the move. - Trend Context: Marubozu patterns within an established trend hold more weight. For instance, a bullish Marubozu during an uptrend is more likely to lead to continued bullish action than one in a sideways market. - Proximity to Key Levels: Traders often observe support and resistance levels. A Marubozu breaking through a key resistance or support level confirms momentum, as it shows the market overpowering those critical areas. - Candlestick Clustering: The following candles can provide additional context. For example, if after a bearish Marubozu, bearish candles appear, it reinforces the downward momentum. Limitations of the Marubozu Pattern While the Marubozu candlestick pattern signals strong momentum, it comes with certain limitations that traders must consider: - Lack of Context: A Marubozu doesn't provide enough context on its own. Without understanding the broader trend or the market conditions, it may not accurately determine future price movements. - False Signals in Sideways Markets: In ranging or choppy markets, a Marubozu can create false signals. The pattern might suggest a breakout, but if the market is indecisive, the movement may not follow through. - Absence of Retracement Information: The Marubozu doesn't indicate whether the price will retrace before continuing in the same direction. Traders may enter too early, only to face pullbacks that can hit stop-loss levels. - Dependence on Volume: While a Marubozu shows strong price action, low trading volume can render it unreliable. A lack of volume behind the move could indicate weak conviction from market participants. Trading Strategies Involving Marubozu Finally, let’s take a closer look at a couple of Marubozu trading strategies. Marubozu Retracement Breakout This strategy revolves around identifying a Marubozu candle in line with a broader trend and waiting for a brief price retracement before the trend continues—similar to the concept of a dead cat bounce. Traders can use this setup to capture trend breakouts. Entries After observing a Marubozu candle that aligns with the prevailing trend, traders typically wait for the moment when the price briefly moves against the trend before resuming. Once the retracement is identified, a stop order can be placed at the high (for bullish setups) or low (for bearish setups) of the candle formed before the retracement. Stop Loss Traders may place a stop-loss order above the opposite end of the retracement move. For a bullish setup, this means below the retracement low, while in a bearish setup, it would be above the retracement high. Take Profit Profits might be taken at a favourable risk-reward ratio, such as 1:3. Alternatively, traders may aim for a significant area of support or resistance where a reversal is likely. Marubozu EMA Strategy This strategy combines the Marubozu candlestick pattern with a pair of exponential moving averages (EMAs) to confirm strong trend momentum. Traders often use one short EMA and one long EMA, such as 12 and 28, though some may prefer alternatives like 9 and 21 or 20 and 50. Entries Traders typically look for the Marubozu candle to close strongly through one or, ideally, both EMAs. This signals strong momentum in the trend direction. Some traders may choose this as their entry point, while others may prefer to wait for extra confirmation, such as a crossover between the two EMAs, signalling a stronger trend continuation. Stop Loss Stop-loss orders might be set just beyond the high (for bearish setups) or low (for bullish setups) of the Marubozu candle. Alternatively, more conservative traders might place the stop beyond one of the recent highs/lows, depending on their risk tolerance and the specific setup. Take Profit Profits might be taken at a preferred risk-reward ratio, such as 1:3. Another common approach is to target a significant support or resistance level, where a reversal is more likely. Final Thoughts The Marubozu candlestick pattern, when combined with other forms of analysis and tools, offers traders a powerful way to capture market momentum. FXOpen provides an ideal platform for applying these strategies, offering more than 600 markets, blazing-fast speeds of trade execution, and competitive trading costs. Open an FXOpen account today to explore these opportunities and enhance your trading experience. Good luck! FAQ What Is a Marubozu in Candlestick? The Marubozu candle meaning refers to a candlestick with no upper or lower wicks, indicating that the price opened and closed at extreme levels during a session. Its long body reflects strong buying or selling momentum, depending on whether it’s bullish (green) or bearish (red). How Can You Identify a Marubozu? A Marubozu candlestick can be identified by its lack of wicks. In a bullish Marubozu, the open price is at the lowest point, and the close is at the highest, signifying strong buying pressure. A bearish Marubozu is the opposite, with the open at the highest point and the close at the lowest, showing dominant selling pressure. What Is the Difference Between Bullish and Bearish Marubozu? The difference lies in price movement. A bullish Marubozu opens at a low and closes at a high, reflecting strong buying pressure. In contrast, a bearish Marubozu candlestick pattern opens at a high and closes at a low, indicating strong selling momentum. How Can You Trade a Bullish Marubozu? Traders often look for a bullish Marubozu pattern in uptrends or at key support levels. It suggests further upward momentum. Confirmation through volume or other indicators, like moving averages, is often sought to enhance trading decisions. What Does a Marubozu Determine? A Marubozu determines strong market momentum, with a bullish Marubozu indicating continued upward movement and a bearish Marubozu signalling further downward pressure or a potential trend reversal, depending on the market context. How Does a Marubozu Work? A Marubozu works by showing a candlestick with no wicks, indicating that either buyers (in a bullish type) or sellers (in a bearish type) were in complete control throughout the trading session, signalling strong market momentum in the direction of the candlestick. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules. They are not available for trading by Retail clients. Trade on TradingView with FXOpen. Consider opening an account and access over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot. 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
1
Understanding Buying Climax, Stop, and Spring in VSAMastering Institutional Trading: Understanding Buying Climax, Stop, and Spring in Volume Spread Analysis (VSA) Observation – Understanding Buying Climax, Stop, and Spring in Market Structure A buying climax (BC) occurs when price surges sharply alongside high trading volume, signaling strong buying activity. However, this aggressive move often exhausts demand, leading to a stop, where price movement either pauses or begins to reverse. At this point, the market assesses whether buyers can sustain the uptrend or if selling pressure will take over. In Volume Spread Analysis (VSA), a classic sequence is: 1. Buying Climax (BC): A sharp move up with high volume. 2. Stop Bar: Price consolidation or minor pullback after the climax. 3. Spring Bar: A downward shakeout followed by a reversal, indicating the presence of renewed buying interest. A spring bar after a stop is a bullish signal, suggesting that previous selling pressure has been absorbed and institutions may be accumulating positions. If confirmed by a strong up bar with high volume, this signals a potential breakout, as it demonstrates that buyers are stepping back into the market. The strength of the bar following the spring is crucial. A wide-range bullish candle with rising volume confirms that buying pressure is resuming, increasing the probability of an uptrend continuation. However, weak volume or failure to clear key resistance levels can indicate a fakeout, leading to further downside. 🔥 XAUMO Institutional Analysis – Gold (XAU/USD) Tokyo Session (Feb 18, 2025) Market Context – Tokyo Session vs. Prior Market Structure 📍 Current Price: $2,902.98 📍 Key Institutional Levels from Yesterday: • Resistance Rejection: $2,906.30 (VSA Liquidity High) • Support Zone: $2,891.67 - $2,888.11 (Institutional Demand Area) • XAUMO 2RC/Black Swan Stop Zones: $2,892.92 (Key Bullish Trigger or Stop Hunt Zone) Tokyo Session Key Observations ✅ Buying Climax (BC) → Strong price rally with high volume. ✅ Stop Bar Formation → Market paused following the aggressive buying. ✅ Spring Bar Emergence → Potential bullish reversal structure forming. ✅ VSA Condition: Neutral → The market is in transition; no clear trend yet. ✅ Volume Change: -10.7% (Slight decline, indicating caution among buyers). ✅ Spread Change: +23.27% (Wide price movements suggest liquidity testing by institutions). 📊 XAUMO Institutional Breakdown – Understanding Buying Climax & Spring 1️⃣ Buying Climax (BC) – Institutional Aggression & Liquidity Test 🔹 Yesterday, price reached resistance at $2,906.30 and pulled back. 🔹 A sharp rally (BC) on high volume suggested aggressive buying by institutions. 🔹 Liquidity was likely absorbed in the $2,892.92 - $2,891.67 range before the price pushed back up. 📌 XAUMO Key Takeaways: • A buying climax signals strong demand, but the pause suggests Smart Money is evaluating the next move. • The next confirmation move is crucial—continuation or reversal depends on volume and structure. 2️⃣ Stop Bar – Institutional Liquidity Testing 🔹 After the BC, price stalled and formed a stop bar (consolidation). 🔹 This stop represents either accumulation (buying) or distribution (selling). 📌 XAUMO Key Takeaways: • Break below $2,892.92 → Indicates deeper liquidity absorption; potential downside continuation. • Holding above $2,891.67 → Suggests institutions are accumulating for a bullish breakout. 3️⃣ Spring Bar – The Institutional Shakeout Before a Move? 🔹 Price dipped towards $2,891.67 before rebounding—forming a spring bar. 🔹 This can be a bullish signal, but confirmation is needed. 📌 XAUMO Key Takeaways: • If the next candle is a strong up bar with increasing volume → Confirms bullish continuation. • If the price struggles above $2,905+ or volume remains weak → Expect a fakeout and potential dump. 🚀 XAUMO Institutional Trade Plan – Tokyo Session Execution 📈 Scenario 1: Bullish Breakout (Spring Confirmation & Volume Increases) 💰 Buy XAU/USD @ $2,903.50 - $2,905 📍 Stop Loss: $2,892.92 (Institutional Stop Zone) 🎯 Target Levels: 1️⃣ $2,910 2️⃣ $2,916 3️⃣ $2,923 ✅ Probability: 75% 📌 Why? • The spring bar bounced from liquidity → Possible upside confirmation. • If the next bar shows strength, buyers are stepping in → Expect breakout above $2,906. 📉 Scenario 2: Bearish Rejection (Failure at $2,905 - $2,906 Again) 💰 Sell XAU/USD @ $2,905 📍 Stop Loss: $2,910 🎯 Target Levels: 1️⃣ $2,895 2️⃣ $2,892 3️⃣ $2,888 ✅ Probability: 70% 📌 Why? • If price rejects resistance at $2,906.30, Smart Money is distributing positions. • Volume drop (-10.7%) suggests buyers aren’t fully committed. • Break below $2,892.92 could trigger more sell pressure towards $2,888. 📢 XAUMO Execution Strategy – Final Institutional Outlook ✅ Next hourly bar confirmation is critical → The spring must be followed by a strong up bar for a bullish breakout. ✅ If price holds $2,892 - $2,891.67, upside potential remains valid. ✅ If price fails at $2,906 and volume weakens, expect another rejection and potential downside move. 🔥 Smart Money moves strategically—wait for confirmation before entering! 🚀 📖 XAUMO Institutional Strategy – Simplified for Beginners 1️⃣ Buying Climax (BC): The price surges fast, attracting late buyers, but Smart Money is already planning their next move. 2️⃣ Stop Bar: The price pauses or reverses. This is where institutions test liquidity to see if there’s enough demand for a move higher. 3️⃣ Spring Bar: A small drop that shakes out weak traders before a possible reversal. If confirmed, it means Smart Money is accumulating. 🔹 Next Step? • If buyers come back strong, price breaks higher (bullish). • If volume remains weak, Smart Money sells into the rally, and price drops again (bearish). 💡 Tip: Don’t rush in! Institutions don’t reveal their moves immediately—wait for confirmation before entering a trade. 🚀
FX:XAUUSDEducation
by ICHIMOKUontheNILE
NVDA: FREMA Linear Extensions - Horizontal VS DirectionalFREMA bands offer a dynamic edge over traditional ATR-based volatility bands by adapting to real buying and selling pressure (bullish and bearish part of candles) rather than just price movement. Unlike ATR bands, which expand symmetrically based on historical volatility, FREMA bands widen asymmetrically — expanding more on the upside during strong buying pressure and on the downside when selling dominates. This makes them highly effective for identifying momentum early, spotting true breakouts, and distinguishing strong trends from choppy markets. By responding directly to market psychology, they provide superior trade entries and exits, minimizing noise in ranging conditions while highlighting areas of genuine demand and supply shifts. For traders seeking a more responsive, trend-sensitive tool, FREMA bands deliver a clearer picture of market dynamics compared to conventional volatility indicators. RESEARCH Testing how price behaves within 2 types of linear extensions: Horizontal While giving an impression of being static, they're actually based on FREMA which is dynamic. Use Horizontal Levels when expecting price to respect historical support/resistance, especially in sideways or mean-reverting markets. Directional Gives an immediate clue of being adaptable to the general angle of trend. Use Linear Extensions when trading with momentum or trend continuation, as they adapt to market directionality. Will price respect the static balance of past support and resistance, or will momentum dictate its own path along the trajectory of directional expansion? By tracking price interactions with both projections, we’ll uncover which model best maps the market’s intentions, offering valuable insights for future setups. Stay tuned as we register these behaviors in real-time because once the market chooses its guide, the next move could be crystal clear.
NASDAQ:NVDAEducation
by fract
4