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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
"Gann’s Secrets: Time Cycles, Square of 9 & Market Reversals"Gann’s Trading Secrets | Gann Time Cycles, Gann Square of 9, and Predicting Market Reversals 📌 Topics Covered in This Video: - The Power of Gann 90 in Market Cycles - Gann Time Cycles & Gann Market Timing - Gann Fibonacci levels & Gann Price Levels - Gann Fan & The Billion-Dollar Trade - Gann Square of 9 & Price Movements - The 90-Year Gann Market Cycle & Financial Crises - How to Use Gann’s Methods in Modern Trading 📌 Why You Should Watch This Video: - Learn how to forecast market tops and bottoms using W.D. Gann’s techniques. - Understand how Gann time cycles and Gann price action align in market movements. - See real-world examples of how Gann’s methods predicted historical market crashes and reversals. - Discover how major traders, including George Soros, unknowingly used Gann's principles to execute billion-dollar trades. 📌 Timestamps: Gann’s Trading Secrets | Gann Time Cycles, Square of 9, and Predicting Market Reversals 00:00 ▶️ Introduction 00:43 ▶️ W.D.Gann 01:35 ▶️ His Contribution to Technical Analysis 02:19 ▶️ Core Principals 04:13 ▶️ Price and Market Cycles 04:52 ▶️ What is Swing Chart? 06:32 ▶️ Gann Square of 9 07:12 ▶️ Gann's Relentless Study of Markets 07:37 ▶️ The Role of Astrology in Market Cycle 08:13 ▶️ Key Natural Market Turning Points 09:12 ▶️ Gann's 50% Rule 09:58 ▶️ The Three Key factors in Gann Trading 10:13 ▶️ The Price 14:07 ▶️ Gann Fan 14:43 ▶️ The Core Concept of Time-Price Balance 19:02 ▶️ The Role of Geometry in Gann's Work 19:41 ▶️ The Power of the Number 3 24:37 ▶️ The 90-Time Cycle in the Market 27:40 ▶️ Famous Trader George Soros 29:52 ▶️ Historical Economic Depression 30:35 ▶️ 2019 as a Key Time Cycle 31:10 ▶️ Economic Conditions
Education
by GannAstroTrader
Chart Patterns That Keep Showing Up (Are Traders Predictable?)In the grand theater of financial markets, traders often fancy themselves as rational actors, making decisions based on cold, hard data. Yet, time and again, their collective behavior etches familiar patterns onto price charts, as if choreographed by an unseen hand (the Invisible Hand?) All across the world economy , markets trade in patterns. The trick is to spot those patterns before they unfold. These recurring formations, known as chart patterns, are a testament to the predictability of human psychology in trading. Let's rediscover some of these enduring patterns, exploring why they persist and how you can leverage them. 🚿 The Head and Shoulders: More Than a Shampoo Brand Imagine a market trend as a partygoer who's had one too many. Initially, they're lively (the left shoulder), then they reach peak status of euphoria (the head), but eventually, they slump with one last “let’s go party people” (the right shoulder). This sequence forms the Head and Shoulders pattern, signaling a trend reversal from bullish to bearish. Traders spot this pattern by identifying three peaks: a central, higher peak flanked by two lower, similar-sized peaks on each side. The neckline, drawn by connecting the lows between these peaks, becomes the critical support level. A break below this line suggests the party's over, and it's time to exit or short the trading instrument. Conversely, the Inverse Head and Shoulders indicates a reversal from bearish to bullish, resembling a person doing a headstand—a strong sign the market's ready to flip. Ready to hunt down the charts for some Head and Shoulders? Try out the Head and Shoulders drawing tool . ⛰️ Double Tops and Bottoms: Déjà Vu in Trading Ever experience déjà vu? The market does too, in the form of Double Tops and Bottoms. A Double Top resembles the letter "M," where the price hits a high, retreats, and then tests that high again before declining. It's the market's way of saying, "I've been here before, and I'm not going higher." The Double Bottom, shaped like a "W," occurs when the price drops to a low, rebounds, and then retests that low before rising. It's akin to the market finding a sturdy trampoline at support levels, ready to bounce back. These patterns reflect traders' reluctance to push prices beyond established highs or lows, leading to reversals. ⚠️ Triangles: The Market's Waiting Game When traders are indecisive, prices often consolidate, forming Triangle patterns. These come in three flavors: Ascending Triangle : Characterized by a flat upper resistance line and a rising lower support line. Buyers are gaining strength, repeatedly pushing prices up to a resistance level. A breakout above this resistance suggests bullish momentum. Descending Triangle : Features a flat lower support line and a descending upper resistance line. Sellers are in control, and a break below support signals bearish continuation. Symmetrical Triangle : Both support and resistance lines converge, indicating a standoff between buyers and sellers. The eventual breakout can go either way, and traders watch closely for directional cues. Triangles epitomize the market's pause before a storm, as participants gather conviction for the next move. Feel like looking for some triangles on charts? Jump straight to our easy-to-use Triangle Pattern drawing tool . 🏁 Flags and Pennants: The Market Takes a Breather After a strong price movement, the market often needs a breather, leading to Flags and Pennants. These are short-term continuation patterns that indicate a brief consolidation before the trend resumes. Flag : Resembles a parallelogram sloping against the prevailing trend. It's like the market catching its breath before sprinting again. Pennant : Looks like a small symmetrical triangle that forms after a sharp move. Think of it as the market pitching a tent before continuing its journey. Recognizing these patterns helps traders position themselves for the next leg of the trend. 🧠 The Psychology Behind Pattern Persistence Why do these patterns keep appearing? The answer lies in human psychology. Traders, despite access to vast information, are influenced by emotions like fear and greed. This collective sentiment manifests in predictable ways, creating patterns on charts. For instance, the Head and Shoulders pattern emerges because traders, after pushing prices to a peak, become cautious. Early sellers take profits, causing a dip. A second rally (the head) attracts more participants, but if it fails to sustain, confidence wanes, leading to a sell-off. The final attempt (right shoulder) lacks conviction, and once support breaks, the downtrend ensues. Understanding the emotional drivers behind these patterns allows traders to anticipate moves and strategize accordingly. 🎯 Using Patterns to Your Advantage While recognizing patterns is valuable, it's crucial to approach them with a discerning eye: Confirmation is Key : Don't act on a pattern until it's confirmed. For example, in a Head and Shoulders, wait for a break below the neckline before taking a position. Volume Matters : Volume often validates a pattern. A genuine breakout is usually accompanied by increased trading volume, indicating strong participation. Contextual Awareness : Consider the broader market context. Patterns can yield false signals in volatile or news-driven environments. Risk Management : Always set stop-loss orders to protect against unexpected moves. Patterns suggest probabilities, not certainties. 🧬 The Evolution of Patterns in Modern Markets In today's algorithm-driven trading landscape, one might wonder if traditional chart patterns still hold relevance. Interestingly, even sophisticated trading algorithms (those used by hedge funds and investment managers) are programmed based on historical patterns and human behavior, perpetuating the cycle. Moreover, as long as markets are driven by human participants, emotions will influence decisions, and patterns will emerge. The tools may evolve, but the underlying psychology remains constant. 🤗 Conclusion: Embrace the Predictability In the volatile world of trading, chart patterns serve as a bridge between market psychology and price action. They offer insights into collective behavior, providing traders with a framework to anticipate movements. By studying these recurring formations, traders can align their strategies with market sentiment, turning the predictability of human nature into a trading edge. What’s your go-to technical analysis pattern? Are you and H&S trader or maybe you prefer to trade double tops? Share your approach in the comments!
Education
by TradingView
18
Leap Ahead with a Dual Breakout Setup on ES and MESThe Leap Trading Competition: A Chance to Trade S&P 500 Futures TradingView’s "The Leap" Trading Competition gives traders the opportunity to test their futures trading strategies in a competitive environment. Participants have access to select CME Group futures contracts, including E-mini S&P 500 Futures (ES) and Micro E-mini S&P 500 Futures (MES). This article presents a dual breakout trade setup, analyzing both bullish and bearish scenarios based on key Fibonacci levels and low volatility price ranges. The goal is to trade the breakout of a well-defined range and target either a Fibonacci extension to the upside or a retracement level to the downside. Understanding Breakouts and Fibonacci Levels A breakout occurs when price moves beyond a defined support or resistance level, often leading to a strong trend continuation. In this case, the trading range between 6146.75 and 6121.25 is the key level to watch. A breakout above this range suggests bullish momentum, while a breakout below signals bearish pressure. Fibonacci retracement levels are used to identify potential support or resistance zones based on past price movements. The 50% retracement level at 5985.75 aligns with a UFO support, making it a key downside target if price breaks lower. Fibonacci extension levels project potential price targets beyond the most recent high or low. The 100% Fibonacci extension at 6288.75 serves as the projected upside target if price breaks higher. The Dual Breakout Trade Setup In a bullish scenario, a breakout above 6146.75 confirms entry to the upside. The target for this trade is the 100% Fibonacci extension at 6288.75. A stop loss is placed below the breakout level at a distance that ensures a minimum 3:1 reward-to-risk ratio. In a bearish scenario, a breakdown below 6121.25 confirms entry to the downside. The target is the 50% Fibonacci retracement at 5985.75, which aligns with a UFO support zone. A stop loss is placed above the breakdown level, ensuring a minimum 3:1 reward-to-risk ratio. Risk management considerations include adjusting stop losses based on a trader’s preferred risk-reward ratio. Scaling out at intermediate levels can help manage volatility and secure partial profits. Contract Specifications and Margin Requirements E-mini S&P 500 Futures (ES) details: Full contract specs: ES Contract Specifications – CME Group Contract size: $50 x S&P 500 Index Tick size: 0.25 index points ($12.50 per tick) Margin requirements depend on broker conditions and market volatility – Currently ≈$15,000 per contract. Micro E-mini S&P 500 Futures (MES) details: Full contract specs: MES Contract Specifications – CME Group Contract size: $5 x S&P 500 Index (1/10th of ES) Tick size: 0.25 index points ($1.25 per tick) Lower margin requirements make it more accessible for smaller accounts – Currently ≈$1,500 per contract. Leverage in ES and MES magnifies both potential gains and losses. Traders should consider margin requirements and market conditions when determining position sizes. Execution and Market Conditions Before executing a trade, a typical breakout trader would watch price confirm a breakout by sustaining above or below the key levels. Additional confirmation from volume trends and momentum indicators can improve trade accuracy. If price does not break out, the setup remains invalid. If a false breakout occurs, traders may need to reassess conditions before re-entering. Conclusion A dual breakout setup provides both bullish and bearish opportunities depending on price movement. Fibonacci extensions provide upside targets, while retracement levels align with strong support zones for downside moves. For participants in The Leap Trading Competition, this setup highlights the importance of disciplined execution, confirmation, and structured risk management. 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:ES1!Education
by traddictiv
Breakdown Of My Personal Strategy On Dow Jones TutorialI will be giving a breakdown on my own personal strategy on how I trade the Dow Jones Futures. I am writing this post for two reasons. First and foremost, to help people. Secondly, to help myself in better understanding. The way that I trade is using support and resistance, only I don't use the traditional sense of support and resistance that is taught. I use price levels that all traders have. The four price points of a candle stick. I also use major round numbers of 1000's and 500's. The Open The Low The High The Close I start by looking at the monthly. When a new month opens, I.E. February 1st for example, I mark the opening price in Orange. I use the 2 hour chart to look for buying and selling areas, using key price levels. I look for these key price areas and see how price behaves once they get there. Low of Month trades Low of the Week trades Low of the Day trades High of Month trades High of the Week trades High of the Day trades Example 1: The month of February opens at 44,444. I mark this with a horizontal trendline in Orange Level 4. I see price gapping down right into 44,000. A major round number of 1000. I then drill down to my entry timeframe of the 15 minute to find the buy or sell trigger entry. In this case, I saw the creeping push down into the 1000 level followed by a bull 180 bar. I entered in on the close of that bar. I used a 75 tick stop per ATR and a 200 tick target. This is an actual trade I took. I recently changed my target strategy. I will explain in a bit. I use the same concept for the following three timeframes. The Monthly candle The Weekly candle The Daily candle The Monthly candle: The Weekly candle: The Daily candle: Another example of a trade I took This creeping layering into a level is one of my favorite ways to get into a trade. What I am doing now is I will set my stop loss of 75 ticks and I will have no profit target. I will hold the trade until the end of the trading day and close it out before the market closes. On this particular trade, I closed it out at 44,820 for a 343 tick profit. The weekly template structure: Some obvious points but worth repeating. Each Weekly candle has an opening price. Within each weekly candle, there are 5 trading days. Monday-Friday. There is a high and low of the week. Within each trading day, there is also an open, high and a low. I find that when day trading, only to focus on the specific day itself and to not really worry about "multiple time frame analysis" All you need is the major key levels I laid out up above. Here is another trade that I took. I was looking for the Monthly open and 44,500 to be used as resistance for a continuation short trade back through the weekly open. Of course you can see, I lost on this trade. No strategy is ever guaranteed, and I do routinely take losses. My job as a trader is to preserve my capital and to stay alive. My money management strategy: One trade per trading day MAX If lose, DONE Close out near end of day if in profits, DONE 75 tick stoploss on ALL day trades. DO NOT TOUCH. Do not move up or down. Sometimes to Break-even but only if trade is seeming to fail (more of an intuition thing) Risk 0.75%-1.5% per trade Only make slight adjustments to strategy after every 20-trade sample size. By limiting my losses to only one trade per day, I can easily recover from a losing day with any winning day. Somedays I will either not see the market well, enter at a poor location or just overall, not be at my best. My statistics show that RARELY do I enter another trade after a losing trade, does that one succeed. This tells me that I am not seeing something that particular day. I will wrap it up and try again another day. Revenge trading does no good but to hurt yourself. I admit I am wrong on the day and come back again. By limiting myself to one trade per day, I am also cutting down on slippage and commissions. Because of slippage and commissions, trading is NOT a zero-sum game, but in fact a NEGATIVE sum game. Your winners are smaller than they ought to be, and your losses are bigger than ought. I know that I can have three losing days in a row and be right back to normal after one or two winning days. Therefore, who cares if I take a loss. I need to get through the losing trades to find the big, winning trades.
CBOT_MINI:YM1!Education
by Dow_Jones_Maestro
8
Understanding Buy The Dip In TradingBuying the dip is a trading strategy where you take advantage of temporary price drops in an overall uptrend. The goal is simple: enter the market at a lower price before it resumes its upward move. It sounds easy, but knowing when and how to do it makes all the difference. In this guide, we’ll explore key setups, ideal market conditions, and smart risk management techniques to help you trade dips like a pro. 🚀 1. Understanding Market Structure 🏗️ Before jumping into a trade, it’s crucial to understand how price moves. A strong uptrend is characterized by higher highs and higher lows—this is where buying dips can be very profitable. But beware: not every drop is a buying opportunity. Some dips are part of a pullback, a temporary retracement before the trend resumes, while others signal a complete reversal—the last thing you want to buy into. Key levels to watch include support zones, Fibonacci retracement levels, and high-volume areas. These zones act as potential turning points where the price is likely to bounce. 2. Proven Setups for Buying the Dip 🎯 🔢 Fibonacci Retracement Support When the price pulls back within a strong trend, it often lands on key Fibonacci levels like 38.2%, 50%, or 61.8%. These act as natural support points where buyers step in. If a strong bullish candle appears at one of these levels, it can signal a solid dip-buying opportunity. Combine this with an oversold RSI and rising volume, and you have a strong case for entry. 🎭 Liquidity Grab (Stop Hunt) Markets love to shake out weak hands. Sometimes, the price dips below a previous low, triggering stop-loss orders before reversing sharply. This is called a liquidity grab—smart money accumulates positions while retail traders panic. If the price quickly reclaims the level it just broke, it’s a strong buy-the-dip signal. Look for big buy orders, a sharp recovery, and bullish candlesticks to confirm entry. 📊 Anchored VWAP Test Institutions often base their trades around VWAP (Volume Weighted Average Price), especially when anchored from a significant swing low. When the price revisits this VWAP in a strong uptrend, it’s a potential dip-buying zone. Watch for bounces off VWAP, rising volume, and confluence with other support levels for confirmation. 🔥 Point of Control (POC) Revisit Markets move towards areas of high liquidity. If the price revisits the Point of Control (POC)—the price level where most volume is traded in a range—it often serves as strong support. When price pulls back into the POC and finds buying interest, it’s a great spot to enter. Look for strong reactions, failed attempts to move lower, and confluence with Fibonacci levels. 📏 Previous Range Support A breakout from a trading range is significant, but the price often returns to retest the range high as new support before continuing higher. If this happens on low selling pressure and aligns with moving averages or VWAP, it can be a golden buy-the-dip opportunity. Look for bullish reactions, buying volume, and strong candles off the level. 3. When Buying the Dip Works Best ✅ Not all dips are worth buying. The best setups occur when: The market is in a strong uptrend, making higher highs consistently. 📈 Volume is high, showing that buyers are stepping in. 🔥 Macro conditions support upside movement, like favorable economic news. 📰 4. Risk Management: Protecting Your Capital 🛡️ Even the best traders take losses. What matters is how you manage risk: Set a Stop Loss 🎯: Always place a stop below key support levels. Position Sizing 📊: Never risk more than a small portion of your capital per trade. Have an Exit Plan 🚪: Know where you’ll take profits, whether it's at a resistance level or a trailing stop. Scale In and Out 🎢: Enter gradually instead of all at once, and take profits along the way to lock in gains. Key takeaways 🎤 Buying the dip can be a powerful strategy—when done correctly. The key is patience: wait for strong trends, allow price to reach significant levels, and confirm with volume and momentum. Combine technical analysis with solid risk management, and you’ll improve your chances of success in the markets. Happy trading! 🚀
CME_MINI:ES1!Education
by CandelaCharts
6
Stepwise Distribution: How "Big Boys" Unload an Asset (Gold Ex.)In financial markets, price movements are not always the result of simple supply and demand dynamics. Large investors—hedge funds, market makers, and institutional traders—use advanced techniques to enter and exit positions without causing drastic market reactions. One such strategy is stepwise distribution, a method through which they gradually sell off assets while the price still appears to be rising. What Is Stepwise Distribution? Stepwise distribution is a process where large players liquidate their positions gradually, preventing panic or a sudden price drop. The goal is to attract retail buyers, maintaining the illusion of a bullish trend until all institutional positions are offloaded. S tages of Stepwise Distribution 1. Markup Phase - Institutions accumulate the asset at low prices. - Retail traders are drawn in by the uptrend and start buying. - The bullish trend is strong, supported by increasing volume. 2. Hidden Distribution - The price continues rising, but large players begin selling in increments. - Volume increases, yet price movements become smaller. - Fake breakouts appear—price breaches a resistance level but quickly reverses. 3. The Final Trap (Bull Trap) - One last price surge attracts even more retail buyers. - Smart money finalizes unloading their positions. - Retail traders get trapped in long positions, expecting the trend to continue. 4. Final Breakdown - After institutions have fully exited, the price begins to fall. - Liquidity dries up, leaving retail traders stuck in losing positions. - The pattern confirms itself as lower highs and lower lows start forming. ________________________________________ Stepwise Distribution in Gold: A Recent Example In recent days, Gold prices have shown an interesting example of stepwise distribution. While it does not meet every characteristic of a textbook distribution pattern, market dynamics suggest that large players are offloading their positions in a controlled manner. 1. Technical Structure and Market Perception Manipulation During the last upward leg, support levels were strictly respected, creating the illusion of strong demand. At first glance, this seems like a bullish signal for retail traders. However, in reality: • Big players temporarily halted selling to avoid triggering panic. • They maintained the illusion of strong support to attract more buyers. • Retail traders believed that “smart money” was buying, when in fact institutions were merely waiting for the right moment to finalize distribution. 2. Investor Psychology and How It’s Exploited Human psychology plays a critical role in stepwise distribution. Here’s how different types of traders react: • Retail FOMO traders (Fear of Missing Out) – Seeing Gold approach all-time highs, they aggressively enter long positions, ignoring subtle distribution signals. • Pattern-based traders – Many traders use support levels as buying zones, unaware that these levels are being artificially maintained by institutional traders. • “Buy the Dip” mentality – Each minor pullback is quickly bought up by retail traders, providing liquidity for large investors to sell more. 3. The Critical Moment: Support Break and Market Panic; Friday's drop Eventually, after the distribution is complete, the “strong” support level suddenly breaks. What happens next? • Retail traders’ stop-losses are triggered, accelerating the decline. • A lack of real demand – All buyers have already been absorbed, leaving no liquidity to sustain the price. • Widespread panic – Retail traders who bought during the final surge now start selling at a loss, reinforcing the downward move. Conclusion: Stepwise distribution is not just a technical pattern—it’s a psychological and strategic market operation. In the case of Gold, we observed a controlled distribution where smart money avoided causing panic until they had fully offloaded their positions. If you learn to recognize these signals, you can avoid market traps and gain a better understanding of how large investors maximize their profits while retail traders are left with losing positions. Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analyses and educational articles.
OANDA:XAUUSDEducation
by Mihai_Iacob
23
Best Fibonacci Retracement and Extension Levels for Trading In this short article, you will learn the best Fibonacci extension and retracement levels for trading Forex and Gold. I will share with you correct settings for Fibonacci tools and show you how to use & draw Fibonacci's properly on TradingView. Best Fibonacci Retracement Levels First, let's discuss Fibonacci retracement levels. Here are the default settings for Fibonacci retracement tool on TradingView. We will need to modify that a bit. We should keep 0; 0,382; 0,5; 0,618; 0,786; 1 levels 0,382; 0,5; 0,618; 0,786 will be the best retracement levels for Forex & Gold trading. How to Draw Fibonacci Retracement Levels Properly In order to draw fib.retracement levels properly, you should correctly identify a price action leg. You should underline that from its lowest low to its highest high, taking into consideration the wicks of the candlesticks. Fibonacci Retracement of a bullish price action leg will be applied from its low to its high. 1.0 Fibonacci level should lie on the lowest lie, 0 - on the highest high. Fibonacci Retracement of a bearish price action leg will be applied from its high to its low. Best Fibonacci Extension Levels Above, you can find default Fib.extension settings on TradingView. We will need to remove all the retracement levels; 2,618; 3,618; 4,236 and add 1,272; 1,414 levels. 1,272; 1,414; 1,618 will be the best Fibonacci Extension levels for trading Gold and Forex. How to Draw Fibonacci Extension Levels Properly Start with correct identification of a price action leg. Draw the Fib.Extension levels of a bearish price movement from its high to its low . Draw the Fib.Extension levels of a bullish price movement from its low to its high. I apply the fibonacci levels that we discussed for more than 9 years. They proved its efficiency and strength in trading different financial markets. Learn to combine Fibonacci levels with other technical analysis tools to make nice money in trading. ❤️Please, support my work with like, thank you!❤️
FOREXCOM:XAUUSDEducation
by VasilyTrader
2
CPI Data & Trend Rejection – Precision Trading on USDJPY🚀 High-Impact CPI Data Moves Markets – Smart Traders Win! 🚀 This trade was executed with precision using a clear downtrend, key rejection zone, and market reaction to CPI data. Combining technical confluence with fundamental catalysts, we secured a solid 1:5 RR setup. 📉 Expert analysis confirms trend strength after inflation data! ✅ Strong break of the downward trend – Clear technical confirmation of bearish momentum. ✅ CPI impact on the markets – High volatility creates golden opportunities! 🔍 Technical indicators confirmed the entry from the rejection zone (AOI). ✅ Price reacted perfectly to the analysis, securing a solid 1:5 RR! 📢 This is the power of combining technical and fundamental analysis – trading smart, not random! 💬 Drop your analysis in the comments & follow for more top-tier setups! 🚀📉 #Forex #GoldTrading #USDJPY #CPI #TechnicalAnalysis #TradingStrategy #FinancialMarkets #SmartTrading
Education
by hamidTrader21
News TradingLet’s talk about news trading in Forex . While news trading is extremely lucrative it’s one of the most risky things a trader can do and experience. News and data cause extreme volatility in the market and as we always say “volatility can be your friend or your enemy” . Let’s take a deeper dive into news trading, which news and data affect the TVC:DXY precious metals such as OANDA:XAUUSD and other dollar related currency pairs. We will also cover having the right mindset for trading the news. 1. Understanding News Trading in Forex News trading is based on the idea that significant economic data releases and geopolitical events can cause sharp price fluctuations in forex markets. We as traders, aim to profit from these sudden price movements by positioning ourselves before or immediately after the news hits the market. However, due to market unpredictability, it requires a strategic plan, risk management, and quick decision making. 2. What to Do in News Trading 1. Know the Key Economic Events – Monitor economic calendars to stay updated on high-impact news releases. The most influential events include: Non-Farm Payrolls (NFP) – A report on U.S. job growth that heavily influences the U.S. dollar. Consumer Price Index (CPI) – Measures inflation, impacting interest rate decisions and currency valuation. Federal Open Market Committee (FOMC) Meetings – Determines U.S. monetary policy and interest rates, affecting global markets. Gross Domestic Product (GDP) – A key indicator of economic growth, influencing currency strength. Central Bank Statements – Speeches by Fed Chair or ECB President can create large market moves. 2. Use an Economic Calendar – Websites like Forex Factory, Investing.com, or DailyFX provide real-time updates on economic events. 3. Understand Market Expectations vs. Reality – Markets often price in expectations before the news is released. If actual data deviates significantly from forecasts, a strong price movement may occur. 4. Trade with a Plan – Whether you are trading pre-news or post-news, have clear entry and exit strategies, stop-loss levels, and a defined risk-to-reward ratio. 5. Monitor Market Sentiment – Pay attention to how traders are reacting. Sentiment can drive price action more than the actual data. 6. Focus on Major Currency Pairs – News trading is most effective with liquid pairs like FX:EURUSD , FX:GBPUSD , FX:USDJPY , and OANDA:USDCAD because they have tighter spreads and high volatility. 3. What NOT to Do in News Trading 1. Don’t Trade Without a Stop-Loss – Extreme volatility can cause sudden reversals. A stop-loss helps prevent catastrophic losses. 2. Avoid Overleveraging – Leverage magnifies profits but also increases risk. Many traders blow accounts due to excessive leverage. 3. Don’t Chase the Market – Prices may spike and reverse within seconds. Jumping in late can lead to losses. 4. Avoid Trading Without Understanding News Impact – Not all economic releases cause the same level of volatility. Study past reactions before trading. 5. Don’t Rely Solely on News Trading – Long-term success requires a balanced strategy incorporating technical analysis and risk management. 4. The Unpredictability of News Trading News trading is highly unpredictable. Even when a report meets expectations, market reactions can be erratic due to: Market Sentiment Shifts – Traders might focus on different aspects of a report than expected. Pre-Pricing Effects – If a news event was anticipated, the market might have already moved, causing a ‘buy the rumor, sell the news’ reaction. Liquidity Issues – Spreads widen during major news events, increasing trading costs and slippage. Unexpected Statements or Revisions – Central banks or government agencies can make last-minute statements that shake the market. 5. How News Affects Forex, Gold, and the U.S. Dollar 1. U.S. Dollar (USD) – The USD reacts strongly to NFP, CPI, FOMC statements, and GDP reports. Strong economic data strengthens the dollar, while weak data weakens it. 2. Gold (XAU/USD) – Gold is an inflation hedge and a safe-haven asset. It often moves inversely to the USD and rises during economic uncertainty. 3. Stock Market & Risk Sentiment – Positive economic news can boost stocks, while negative reports may trigger risk aversion, benefiting safe-haven currencies like JPY and CHF. 6. The Right Mindset for News Trading 1. Accept That Volatility is a Double-Edged Sword – Big moves can mean big profits, but also big losses. 2. Control Emotions – Fear and greed can lead to impulsive decisions. Stick to your strategy. 3. Risk Management is Key – Never risk more than a small percentage of your capital on a single trade. 4. Adaptability – Be prepared to change your approach if market conditions shift unexpectedly. 5. Patience and Experience Matter – The best traders wait for the right setups rather than forcing trades. Thank you for your support! FxPocket
OANDA:XAUUSDEducation
by FxPocket
4
What Is a San-Ku (Three Gaps) Pattern?What Is a San-Ku (Three Gaps) Pattern? The intriguing and captivating San-Ku, or Three Gaps, pattern draws the curiosity of traders within financial markets. Its distinctive form and strategic placement on price charts make it a compelling subject for observation and analysis. This article aims to explore the intricacies of the San-Ku pattern, highlighting its importance and providing insights into how traders can incorporate it into their trading strategies. What Is a Three Gaps (San-Ku) Pattern? The San-Ku, or Three Gaps, pattern is a distinctive technical analysis formation characterised by three consecutive upward or downward price gaps. This pattern often signifies a significant shift in market sentiment and a potential trend reversal. Traders keen on spotting trend changes find the formation intriguing due to its clear visual representation on price charts. Identifying the setup involves recognising three successive gaps in the price movement, whether upward or downward. These gaps indicate abrupt shifts in market sentiment and are typically accompanied by increased trading volume. The pattern manifests itself as a series of price jumps, creating a visual sequence that stands out on a chart. How to Trade the San-Ku Three Spaces Traders may enter a position based on the assumption of a trend reversal. In a bullish formation, you may consider entering a long position after the third gap down, signalling a potential bullish trend. Conversely, in a bearish pattern, you may initiate a short position after the third gap, anticipating a bearish trend. To establish a take-profit level, you may assess the historical price behaviour around the formation. Look for significant support or resistance levels, trendlines, or Fibonacci retracement levels to gauge potential reversal points. Adjust your take profit accordingly, aiming for a favourable risk-to-reward ratio. Implementing a well-placed stop loss is crucial to manage risk. You may position the stop loss below the setup in an upward pattern and above the setup in a downward pattern. This may help mitigate potential losses if the market does not follow the expected reversal. Live Market Example Let's explore a live market example. In this scenario, we observe the setup, indicating a potential reversal of a bullish trend. A trader could enter a short position after the third candle closes, anticipating a bearish trend, setting the take-profit level at a support level based on historical price action. As the trader used a daily chart, the stop-loss level was supposed to be calculated based on the risk/reward ratio and placed above the Triple Gap. Final Thoughts Although San-Ku is an effective pattern, it can’t guarantee a trend reversal. As with any technical analysis tool, it's crucial to consider the broader market context and use risk management strategies to improve overall trading performance. Remember, no pattern guarantees success, and thorough analysis remains paramount in making informed trading decisions. If you want to test different trading approaches, you can open an FXOpen account. FAQ Is the Three Gaps Setup Suitable for All Types of Assets? This formation can be applied to various financial instruments, including stocks, currencies, commodities, and indices. However, it's essential to adapt your strategy to the specific characteristics of the asset you are trading and consider factors like liquidity and market behaviour. How Can Traders Stay Updated on Potential Three Gaps Formations? Traders can use charting platforms, technical analysis tools, and market scanners to stay informed about potential Three Gaps formations. Setting up alerts for specific price movements and gap occurrences can also help traders promptly identify opportunities as they arise. Are There Any Common Mistakes Traders Make When Interpreting the Three Gaps? One common mistake is relying solely on the setup without considering broader market conditions. Traders shouldn’t neglect the overall trend, market sentiment, and potential catalysts that could influence price movements. Additionally, thorough backtesting and analysis are crucial to validating the reliability of the pattern in different market conditions. Can I Find the Three Gaps Pattern on the NVDA Candlestick Chart? You can find this pattern in different markets, but remember that its effectiveness will depend on the timeframe you use and the strategy you implement. Keep in mind that the presence of the Three Gaps Pattern on a stock's chart does not guarantee future price movements. It's essential to conduct thorough technical and fundamental analysis and practise risk management when making trading decisions. 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:TSLAEducation
by FXOpen
1
Thoughts on Technical Analysis (Part 2) 1. Trading systems do not yield the same results in all markets (or across all timeframes). 2. All markets have their own characteristics. For example: XMR moves within ranges and experiences strong volatility spikes, while the S&P 500 is highly trend-driven with a strong upward bias (since 1984, it has closed bearish only 7 times). 3. Effective trading systems with lower win rates are generally the most profitable, as they are trend-following and have long periods of market exposure. *Note: Longer exposure period = Higher failure rate = Greater profits when catching a major trend.* 4. Reversal patterns in bullish trends with an upward slope are extremely dangerous, as such a slope indicates strong buying pressure. Reversal patterns in bearish trends with a downward slope are dangerous, as they indicate the presence of selling pressure. 5. Market participants are drawn to historical patterns, confluences, favorable risk-reward ratios, and protected stop-losses. (This is why it’s a bad idea to trade without a protected stop-loss or with a risk-reward ratio below 1:1). 6. Algorithmic trading systems are trained based on historical patterns and confluences. 7. Generally, when a good technical analyst is uncertain about what might happen next, it’s because many participants may be uncertain as well, so it’s wise to stay out of the market. The best opportunities present themselves clearly. “Strength manifests itself, it is not predicted.” 8. Catching prices in free fall (“catching falling knives”) or trying to halt bullish trends with extreme momentum (vertical rallies) is the quickest way to blow up an account. If there is no exhaustion pattern or formation, there is no protected stop-loss. Without a protected stop-loss, there’s no way to calculate the risk-reward ratio. Without these elements, participation drops drastically. 9. Reversal formations (e.g., Head and Shoulders) with descending necklines (in bullish trends) typically offer few opportunities for profitable trades. Reversal formations with ascending necklines (in bearish trends) generally provide few profitable trading opportunities. *Explanation: Placing the stop-loss behind the high (in bullish trends) or the low (in bearish trends) results in a risk-reward ratio below 1:1, which attracts little participation. This often triggers a correction that may draw opposing market forces.* 10. Classic authors emphasized market manipulation, used multi-timeframe analysis, and understood mass psychology deeply. Meanwhile, the daytrading industry was built to attract undercapitalized masses. Keep your timeframe above H4, and you’ll witness the magic.
Education
by Especulador96
1
Is Liquidity Zones The Hidden Battleground of Smart Money In every market move, liquidity zones are the battlefields between buyers and sellers. Understanding these zones is crucial for spotting reversals and breakouts before they happen. What Are Liquidity Zones? High Liquidity Areas, Where large orders are placed, typically around key support/resistance or round numbers. Low Liquidity Areas. Where price moves quickly due to fewer orders, often creating price imbalances. Why Liquidity Matters Smart money (institutions) seeks liquidity to execute large orders without massive slippage. Their footprints appear as wicks, sudden volume spikes, or rapid price reversals. Spotting Liquidity Traps False Breakouts, Price pierces a key level, triggers stop losses, and reverses quickly. Stop Hunts, Sudden price spikes beyond a key level, only to return inside the range. rading Strategy Example 1. Use volume profile or heat maps to spot high-interest price areas. 2. Wait for Reaction, Enter only after confirmation (e.g., a sharp wick or order flow shift). 3.Risk Management, Place stops beyond liquidity zones to avoid getting trapped. Master liquidity zones, and you'll start seeing the market through the eyes of institutional players.
CME_MINI:NQ1!Education
by wolfchemist
[Strategy] Trend Re-Entry Strategy using a Stoch and Zero Lag MATrend re-entries can be hard. The difficult part is knowing if price will continue to pull back or will it shift back into the original direction. This is a strategy with some extra notes to help you understand 1. The Original entry 2. The Re-Entry 3. Is my trend ending For this you'll need two indicators: The Zero Lag Multi Timeframe Moving Average and The Stocashi + Caffeine Crush In the video I show you how to adjust the settings for a 5 minute chart on both indicators. Long Entry rules: You have 3 MAs. The longest one is your support and resistance The other two are your "trading" and "trending" MAs If price is above your support and resistance, your trading and trending should be right side up. If price close in between trading and trending, the stocashi should be at a low point. It needs to arrive at this low point by previous crossing down through its midline. **If it did not cross down through its midline, there is no entry here** Once price closes above the trading MA, you should have a rising stocashi from its valid low point. During this uptrend, each time price pulls back in between the trading and trending MAs, the Stocashi should be at a valid low point. Re-enter your long trade as long as: Stocashi made a valid low Price is closing above the trading MA Trading MA is above Trending MA Trending MA is above Support and Resistance MA. You can reverse all of these instructions for taking short trades. Potential Market Flip If you are getting consistent invalid lows on Stocashi while price is in a correct position, this means you are losing your trend, and you should wait for your price to close below the Support and Resistance MA. At this point your Trading and Trending MAs should be upside down. They do not always have to be BELOW the Support and Resistance MA.
Education
by CoffeeshopCrypto
A poem of the marketIn the financial markets, the Pin Bar candle is like a poem silently composed within the charts, a poem that tells the tale of the battle between buyers and sellers. This candle, with its long shadow, narrates the story of effort and defeat, as if one side sought to conquer the sky or split the earth, but in the end, was pushed back, leaving only a shadow of its aspirations. **The Bullish Pin Bar** is like a poet who, in the darkness of night, sees a star and, with hope for light, draws its long shadow toward the earth. It says, "The sellers tried to pull me down, but I, with the light of hope, rose again and conquered the sky." **The Bearish Pin Bar** is like a poet who, at the peak of day, sees a dark cloud and, with fear of darkness, casts its long shadow toward the sky. It says, "The buyers tried to lift me up, but I, with the force of reality, returned to the ground and embraced the darkness." The Pin Bar candle, with its small body and long shadow, is like a poem that encapsulates all the emotions of the market in a single moment. This candle, in its simplicity and beauty, reminds us that sometimes efforts do not yield results, and sometimes, turning back is the only way forward. Within this candle lies the story of hope and despair, effort and defeat, light and darkness—a story that repeats itself every day in the financial markets, each time narrated in a new language. "Taken from artificial intelligence."
Education
by eltd
What is V pattern? V pattern is a basic trading pattern which happens when market gets chaotic! It has a sharp decline(left angle) and a sharp recovery (right angle) Most of the times, V patterns won't change anything and their effect on market is mostly nothing! The trends will continue after these patterns are crafted! for example look at the BINANCE:BNBUSDT Chart and you can see that the price was pretty stable. after a sharp deny and a sharp recovery, the price shall return to the ranging stat which It was in! ⚠️ Disclaimer: This is not financial advice. Always manage your risks and trade responsibly. 👉 Follow me for daily updates, 💬 Comment and like to share your thoughts, 📌 And check the link in my bio for even more resources! Let’s navigate the markets together—join the journey today! 💹✨
Education
by CRYPTONIC_trend
Pattern Identification ExerciseHere I run through an exercise I first started carrying out around 4 years ago. It is a brilliant tool to help train yours eyes to spot patterns within the market, log the data across multiple different instruments and find specific characteristics with that instrument. The importance behind carrying out an exercise like this is training your lens to spot these in the live markets, and also stacking your confidence so when you see these develop you are able to approach them in the best way possible. Any questions just drop them below 👇
Education
by JordanWillson
1
How To Locate Pivot Points Easily Using Free IndicatorsHere are some helpful links for all of you... My indicators on Trading View, I don't use that many. Bad Ass B-Bands by WyckoffMode (follow this guy on all platforms) Chart Champions CC Pocket VuManChu Cipher B Off of Trading View I use BookMap for order flow data. This is where I can pick out exact locations of order walls i.e. pivot points. My Tutorial on how to easily find squeezes Here are links to my watchlists (some new ones are missing from Coinbase, add new ones manually) Coinbase tradingview.com/watchlists/74158386/ Gemini tradingview.com/watchlists/74158590/ Kraken tradingview.com/watchlists/96996184/
COINBASE:VARAUSDEducation
by fritbjorn