AUD/USD tradeHere you can see the reasons why I decided to sell AUD/USD today. It ended with a solid +62 pips in profit.
Tutorial
EUR/USD most popular currency in the world!A little history…
The euro is a new currency that was born in 1999. It was created on the basis of the "European monetary unit", which replaced (abolished) the entire national currency of the countries of the European Union. Therefore, the peculiarity of the euro is that it is sensitive not only to the macroeconomics of the entire EU, but also to the individual economies of France and Germany.
It is the most popular currency pair in the world, representing the two largest economies in the world. The euro was created to facilitate international trade between European trading partners. The pair has experienced significant fluctuations since its founding in 1999, caused by many global events, such as the technology boom that led to the real estate price bubble and the European debt crisis.
The European Central Bank (ECB) plays the role of the issuer and regulator of the pan-European currency. The main support for its creation in 1998 is the banking system, which is based in Frankfurt am Main, and its fund was created on the basis of the participation of all representatives of EU countries. In addition to its issuing, supervisory and monitoring activities, the ECB charter is responsible for maintaining the financial stability of the eurozone.
General technical specifications
More than a third of the total volume of transactions in the foreign exchange market fall on a pair of euros to the dollar.
This is due to the economic scale of the countries.
The base currency is the euro, the dollar is the quoted currency. In other words, the euro-dollar exchange rate shows how many dollars you will have to pay for one euro.
If there is positive news in the US and you predict a rise in the dollar, then you should sell.
If you predict the growth of European currencies against the dollar, then you should buy quotes.
What factors do the euro dollar exchange rate depend on?
The main factors contributing to the change in the euro-dollar price revolve around the monetary policy of the United States.
There are several levers that can help the Fed regulate and change cash flows in various ways:
Open Market Interventions;
Increase or decrease of the discount rate;
Managing the level of reserve requirements.
The Federal Reserve Board may immediately change the terms of the reserve and the discount rate. By changing one of the three factors, the Fed affects the amount of funds and ultimately changes the real ratio of the dollar to other currencies (including the euro). Thus, the Fed's decision is a long-term priority factor for the euro currency pair.
The main factor affecting the euro/dollar exchange rate is the interest rate of the Federal Reserve System. This indicator represents the daily payment of interest on loans by credit institutions (banks). When it is necessary to tighten or weaken the national currency, US financial regulators will change interest rates. Traditionally, these measures have had a significant impact on both the foreign exchange and the stock market.
Euro to Dollar exchange rate
The European Central Bank regulates the monetary policy of the EU countries. The main decision on the European exchange rate is made by the Governing Council, consisting of representatives of national banks of the EU countries.
The main objective of the ECB's work is financial stability and full response to the consequences of the global financial crisis of 2008.
Serious economic problems of all EU countries can have a negative impact on the euro exchange rate. This is evident from the dynamics of euro prices during the economic crises in Greece and Spain. Macroeconomic emissions are also a very important factor influencing the strengthening or weakening of the euro.
The most important news is from Germany. This is due to the fact that Germany is the largest economy in the European Union. The most important information is the state of GDP, the theoretical and real inflation index, the growth or decline rates of industrial production, as well as unemployment figures. It is important to take into account the deficit and the effectiveness of current measures to combat the economic downturn of the economy.
Techniques for making a profit
There is a strong inverse correlation between the values of EUR/USD and USD/CHF, which shows an approximate relationship between the euro and the franc. This is due to the fact that Switzerland's economic situation largely depends on the economic and political development of the EU. In most cases, after the euro falls against the dollar, the euro/franc currency pair immediately falls. Given the correlation between the British pound and the euro, the pound/dollar pair has a significant correlation.
Euro Dollar chart
To make money in euro dollars, traders need some skills. Fast trading in 15 minutes or even 5 minutes can allow you to make a significant profit.
The frequent volatility of this quote allows you to implement the most daring and risky trading strategies. A moving average or a combined indicator (for example, MACD) will be able to give a fairly accurate entry point. Exit from the position can traditionally be based on a breakout of the price channel. When using the chart for 1 day or more, the deviation and reversal of the position can also be based on the intersection of the moving average.
Conclusion
EUR/USD has a relatively small history, but in this short time the pair has become popular with many.
High volatility creates many opportunities for earnings, but do not forget about the risks.
The pair is dangerous for untrained traders.
Good luck!
The reason for the stagnation in tradingMany times people trying to reach a new level face an invisible obstacle in their business.
At that moment, life turned into a routine. It seems to us that there are no changes in life and there is no way forward. This is quite unpleasant.
In those periods when it seems to us that our development has stopped, we become unhappy, because, after all, progress is the key to happiness.
There are three reasons why we feel like we're marking time, and sometimes it's a combination of these three reasons:
1. Your physical condition
Poor physical condition can increase negative emotions. Sports activities cause positive emotions. When you are physically active, you change your mental state and destroy your negative model. Thus, maintaining a good physical condition will cause positive emotions, which is one of the key ways to get out of stagnation. Develop a positive state of mind and get rid of all the negative by changing your physical condition.
2. Time limit
One of the reasons we think we are stuck in one place is excessive attention to the past or the future. But constant thoughts about the future or the past will not change anything. As you know, the past cannot be changed, and the future is unknown, so there is no point in worrying about them. We have the right to change only the present, that's what we need to focus on. Stop flying in the clouds of the future, stop suffering because of the past, get busy with the present.
3. Sitting on the plateau
Why do some people make breakthroughs that take them to the next level, while others can't? What is the difference between a master and an amateur, a creator and a speaker? The first dig deep to find an answer that will help them overcome stagnation, they do not stop fighting and searching and eventually achieve goals, reaching a new level.
5 signs that bring you closer to a breakthrough
1. Routine. You're tired of everything. You are tired of your financial problems, tired of your boring job, tired of carrying an extra 20 kilograms. Everything annoys you and you want to change something.
2. Unsatisfied. Whatever you do, it doesn't work for you anymore. Maybe it is unprofitable or uninteresting. Or maybe you are tired of the lack of energy, which, in your opinion, is necessary to achieve the desired result. Perhaps your current method has been successful in the past, but it is not suitable for your current conditions.
3. Border. This is the moment when change is needed. If you are on the verge of bankruptcy or, for example, if you have serious health problems. This is the point of no return, you are on the edge of the abyss and all you have left is to take a step, make an effort to become better and reach a new level.
4. Insight. You are illuminated by an idea or a deep understanding of something that opens up a new world for you. You begin to see the world in a new way, you have found a goal that can help you get out, your eyes are burning.
5. Open the door. The door opened... You enter it.
At this stage, you will feel a surge of strength, realize that everything is not in vain, and you will want to move forward with great enthusiasm.
Do not give up, do not stop, study.
Good luck!
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Methods to improve your tradingAny professional trader should monitor his daily routine.
Traders make a schedule, follow it and remove from life what is unproductive.
Beginners don't spend enough time making plans.
A typical trading day for beginners can consist of constant monitoring of price movement, even during lunch.
Today we will talk about how to make your trading day calm and productive.
1. Sleep
Sleep is still an important part of any person. Do not neglect sleep, because sooner or later the body will require rest, without which it is simply impossible to trade calmly and in a disciplined manner.
Needless to say, your attempts to trade, analyze the market and stick to your trading plan with a lack of sleep simply will not succeed. Perhaps the first and most important way to ensure a proper trading regime is to provide yourself with a good, full night's sleep for at least 7 hours a day.
• Do not drink coffee or other caffeinated beverages during the day. Try drinking herbal tea instead;
• Do not go to bed late thinking that you can sleep off the next day. Research proves that our body functions as productively as possible when we go to bed at sunset and wake up at dawn. This means that you need to go to bed early and wake up early;
• Create a proper sleeping environment. As a rule, this means that your bedroom should be cool (i.e. not too hot), dark and quiet.
2. Healthy breakfast
It has long been known that breakfast is the most important meal of the day.
After sleep, the body needs a boost of energy. Find time for a healthy breakfast every morning: take the necessary amount of protein, whole grains and some fruits.
As soon as you wake up, drink a huge glass of water. Most people don't do that. Drinking water saturates your body and also helps to control appetite between meals, and since your body mainly consists of water, it is necessary, first of all, to drink water rather than any other drink.
3. Physical exercises
Regular exercise is the main key to your motivation, attention and focus on everything in your life, including trading. Physical exercise gives us a good feeling physically and mentally, and this is very important for the development of proper trading habits and productivity.
Regular physical training will keep you focused at the highest level, it will also help you sleep soundly at night, which, as noted above, is an extremely important factor for the proper functioning of cognitive activity, which is obviously crucial for success in trading.
4. Hobbies and entertainment
You definitely don't want to turn into a trading hermit. You don't want to turn into a guy who sits in his underwear in front of the charts in the hope that his positions are moving in his favor, and allowing every victory or defeat to affect his happiness.
Trading is a way to potentially improve your life, but it doesn't have to be your life. To succeed in trading, you need to have outside interests so that you are distracted from excessive market analysis and so that you feel happy and confident.
If you still don't have any hobby, then find some. Even if your hobby is just spending time with your family, that's fine, just don't be the "guy" who sits in front of charts all day long, because, I assure you, it's not good for you and your trading.
5. Plan your day
Make sure that you plan the key levels of the chart during or at the beginning of the week. Take some notes about the trend, your trading advantage, potential trading signals that you see.
The easiest way to do the analysis is when the market is closed, so you will avoid the pressure caused by the price movement. Make a plan for the week and every day and follow it without paying attention to the noise.
The famous French microbiologist Louis Pasteur once said: "Chance favors a pre-prepared thought."
6. Practice your trading strategy
This may seem obvious, but if you haven't mastered your trading strategy yet, or if you don't have a trading strategy at all, you won't be able to develop a trading regime. Many traders start in the wrong direction because they don't really have a clear trading method yet, but, instead, they have a vinaigrette of different methods and trading "tips" that they read here and there, mixed everything into one pile, "thinking" that they got, thus, your trading strategy.
You need a trading strategy that you can learn and master and that makes sense and is simple.
7. Discipline and consistency
Discipline, routine and patience are things that people usually consider "boring" or uninteresting, but they should not be perceived in this way at all, especially with regard to trade. You have to understand and accept these things as the ones with which you make money in the market. After you review them in the light that "discipline and everyday life are beneficial and useful," they will take on a different meaning for you.
Remember - trading should not be some random event without a structure or a firm approach and without an underlying regime, and if that is the case, you will end up wasting all your money by giving it to the market. You need to develop your own trading program that would fit your schedule and your personality, and then stick to your trading regime, maintaining cold discipline so that you can see how it works in your favor over a long period of trading and that it brings you income.
Advantages of trading on the daily chartHello everyone!
Today I want to discuss with you the advantages of trading on the daily chart.
Not all traders understand why daily timeframes are so attractive, but professionals trade on them.
Let's figure it out!
But first, let's recall the words of Ed Seikota:
Constantly looking at the charts is like playing roulette. You'll end up spending the whole day playing. I check my charts only once a day after the market closes.
You are learning patience
Patience is a key quality that is necessary for success in trading. If you trade on daily charts, you will have to learn patience, because you will have to wait for the right signal for several days, or even weeks. But don't be afraid, it will only increase your chances of success and allow you to use only the most reliable and profitable entry points.
Free all day
In trading, you will have to sacrifice not only your time, but also put some of your money at risk. When you trade on daily charts, you have a whole free day to go about your business and earn money. This will allow you not to rely only on trading and diversify your income.
You automatically filter the market noise
A variety of events can occur during the day that will affect the price movement. The daily chart allows you to filter intraday volatility spikes and focus only on the closing price of the trading session, without being distracted by anything else.
The technical signals and patterns that appear on these higher timeframes are much more reliable than the patterns you encounter on lower timeframes. In many cases, the price movement on lower timeframes is simply market noise.
Reliability
The closing price level, which is the result of a whole day of struggle between buyers and sellers, is a reliable signal about the current state of the market. When making your trading decisions, you should always pay attention to signals from higher timeframes.
Many novice traders who come to the financial markets tend to short-term trading on intraday timeframes. These traders believe that by trading on lower timeframes, they have more trading opportunities, and thus they can get more profit in the long run.
Although theoretically this type of thinking may sound logical, in fact it is just a myth. You should realize the fact that support and resistance levels, chart patterns, price action patterns, indicator signals are much more reliable on higher timeframes.
You avoid over-trading
Over—trading is one of the main problems faced by traders. When you use a daily timeframe, you focus on the global picture of the market, and you do not need to constantly open new deals. You can choose only the best setups.
Some traders are addicted to trading and have a psychological need to constantly enter and exit the market. It's like an adrenaline rush, which they constantly need. Obviously, this can be counterproductive and even lead to the drain of the entire deposit.
There is another type of traders who tend to constantly monitor their positions and analyze charts. These traders are very active, and it can be very difficult for them to make a deal. They are also usually emotionally traders, inclined to act on intuition.
The best advice I can give to any trader who has difficulty controlling his emotions in the market is to analyze the market only once a day.
You find the strongest trends
In trading, you should always try to follow the path of least resistance. This means that if the market is moving in a certain direction, the price is likely to continue its movement in this direction until there are factors indicating a reversal.
The trends on the daily chart are very strong and you will rarely fall into the trap if you use the daily chart.
You will only need 15-30 minutes to analyze the market
You don't have to spend whole trading sessions in front of the monitor and analyze the market in robot mode, which usually leads to its reanalysis. You can safely look at the chart and determine whether there is a signal to enter the market or not, and then place an order to open a deal.
Possible risks are reduced
Every trader should have a detailed risk management plan. As part of this risk management plan, you should take into account factors such as the average risk per trade, the risk-to-profit ratio, how you will handle drawdowns, as well as the maximum amount of leverage that you will use.
Some novice traders believe that they cannot trade on daily charts because they would have to place a stop loss at a relatively large distance in points compared to a smaller timeframe. They think they will take too much risk regarding the size of their small account.
However, this assumption is completely wrong. Even if the average daily range of a trading instrument is much higher than the hourly or four—hour range, the only thing a trader needs to do in this case is to reduce the size of the position in order to adapt to a potentially larger stop loss. And thus you will actually reduce your leverage, which in turn will reduce your overall exposure to risk.
You have a lot of time left to enjoy life
Isn't that why we started trading? It is foolish to deny the fact that almost everyone comes to the stock exchange for money and financial independence. And chaining yourself to the monitor screen for 8 hours can take away from you what you have been striving for.
In order to be an effective trader, you do not need to spend a whole working day analyzing charts. In fact, rarer and more selective trading can lead to better results. And as an added bonus, you can also keep your day job so that you always have an additional source of income.
Conclusion
Day trading provides many advantages, frees up your day and helps you avoid trading on false signals.
You will become disciplined, your capital will not jump sharply up and down, you will become a professional!
Good luck!
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
ORDERFLOW & LIQUIDITYPlease like, share & comment on my educational post.
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After a BOS we expect price to pullback and
mitigate a significant zone in the previous
range before continuing
to break structure again.
If we do not get this mitigation it is likely that the
high/low that failed to mitigate will become liquidity.
Bites Of Trading Knowledge For New TOP Traders #12 (short read)Bites Of Trading Knowledge For New TOP Traders #12
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What is Hedging? -
Hedging is the action taken through the use of a financial instrument to minimize the loss or risk of the loss of value of an asset due to adverse asset price movements.
Who are Hedgers? -
Hedgers are market participants such as commodity producers who want to lock in selling prices of commodities they produce, or food manufacturers who want to lock in buying prices of raw materials purchased.
Market participants also include financial institutions handling financial assets and use derivative products such as futures to manage the risk of a portfolio of financial assets.
What is the difference between Physically Delivered vs Cash Settled Futures Contracts? -
Physical delivery is a term in a futures contract which requires the actual underlying asset to be “physically delivered” upon the specified delivery date, rather than being traded out with an offsetting contract.
Cash settled futures on the other hand allows for the net cash amount to be paid or received on the settlement date of the futures contract.
Futures exchanges may offer both types of contracts to market participants who have different purposes for trading futures contracts.
RISKS AND OPPORTUNITIES FOR CORPORATES AND INDIVIDUAL INVESTORS -
Common application of financial market instruments for managing risk and opportunities.
Diversification: Correlation in Futures
Investors could allocate a portion of their portfolio to establish a managed futures position to deliver non-correlated results under most market conditions, which may serve as a risk mediator within an overall portfolio. This may deliver lower relative returns during periods of price stability. However, during periods of market stress, managed futures could outperform the broad market.
For example, the Asia Tech 30 index which has no Thai companies as a component stock would not be expected to have any Thai Baht (USDTHB) currency exposure and which could be included in a managed futures portfolio at times where there is no or low correlation between the two markets and could be used as a hedge during times of negative correlation.
Diversification: Portfolio Focused on Asset Returns
Individual investors who have a portfolio of foreign stocks will have a return that is composed of the return of the foreign currency-denominated stock plus the change in currency exchange rates. Therefore, investing abroad means having exposure to two different sources of risk and return made up of the underlying asset and the exchange rate.
For a long-term investor, the focus on return-generating assets may be the priority rather than returns from currency exchange rates. This could imply removing currency risk through a clearly defined hedging strategy process initially and then adding back currency exposure at a later stage if it is determined that currency exposures could improve a portfolio’s return. Investors would need to analyze their expected returns with and without currency exposures and determine their net currency exposure that they would like to remove. U.S. Dollar based portfolios could use futures contracts such as the Mini US Dollar Index ® Futures to hedge a basket of foreign stocks denominated in their respective domestic currencies.
TRADDICTIV · Research Team
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Disclaimer:
We do not provide investment advice, nor provide any personalized investment recommendations and/or advice in making a decision to trade. Before you start trading, please make sure you have considered your entire financial situation, including financial commitments and you understand that trading is highly speculative and that you could sustain significant losses.
Unstoppable TradersBeing a profitable distance trader is not easy. This requires discipline, a lot of patience and passion. In addition, you need to have certain habits that most people simply don't have.
All traders are different in some ways, everyone has their own trading strategy, but there is something that unites all successful traders.
Let's talk about these general features.
1. One deal is not the end
When the deal is already closed, you can start experiencing different feelings and emotions from happiness to grief and depression.
Newcomers drown in this wave of emotions and eventually lose control and money.
Professionals act differently. Each transaction is a common thing for them, while they do not experience a storm of emotions that can lead a beginner astray.
If you internalize the following ideas, it will be easier for you to deal with emotions:
• Success in trading is not one day, it is several months of trading and several hundred transactions. To understand how good you are, you have to trade following your strategy for a long enough time. Sometimes a year is not enough to understand that a trader is ready, and even more so one day is not enough. Therefore, prepare for a long journey and do not overreact to one losing trade.
• Risk management is very important. Before opening a deal, calculate how much you are willing to lose and not go crazy because of this loss. Losses should not lead you astray. You have to stay calm and follow the rules. Also, don't let profitable positions drive you crazy. In any situation, you should be calm and prudent.
2. They are confident, but not too irrational
Being confident in yourself is very important. A trader's confidence in himself and in his trading strategy comes with time. To do this, you need to learn how to clearly follow the rules of trading, be disciplined and eventually profit will come to you.
Confidence should manifest itself most of all in those moments when you have received a series of losing trades. This is inevitable and only the best are able to pass such tests with dignity. Professionals do not change the rules in the same situations, do not change the method of trading and coolly move on.
A confident trader does not give in to emotions, he knows exactly what he is looking for in the market and is ready to wait, ready to endure.
You should feel invulnerable, the market no longer has power over you.
3. Wait professionally
Professionals differ not only in the ability to trade, but also in the ability to wait. In the market, 80% of the time you will have to wait for your signal. The best traders are ready to wait for their highly profitable chance for several days, or even weeks. And even if they lose some money after a long wait, they are ready to wait again.
Newcomers suffer because they want to be in the market all the time. This is a big mistake. Most of the time, the market is unpredictable, especially for a beginner. Leave the sick desire to constantly be in the market, constantly open new positions. Learn to wait like the best traders.
In order to trade with a preponderance in your favor, you must patiently wait for obvious trading setups, and if they do not appear for several days, then you should not enter the market just like that. This time is worth spending on some other job or hobby. Unstoppable traders don't worry about not trading for days or even weeks, waiting for the next good setup to enter the market.
4. Good sleep is the key to success
Sleep is important not only for the trader, sleep is important for everyone. Without healthy sleep, you will not be able to be calm and calculating for a long time.
In addition, if you trade properly, namely:
• do not risk too much capital,
• do not open unnecessary positions,
• follow your trading plan,
• with respect to all of the above, observe discipline,
then you will not have any problems sleeping during real trading, since you will have nothing to worry about.
Well, if you sit in front of the monitor every day, anxiously watching the price movement, at a time when you should be sleeping, sooner or later this will lead to a complete loss of money.
Follow the strategy, don't chase the market, rest and come back full of energy.
5. Continuous training
All traders with experience know that it is difficult to trade because the market is volatile, and it is even more difficult to work on yourself, on your own discipline.
There is a good feature of trading – it helps you understand yourself. It's unpleasant, but it's definitely useful. This work is difficult, but the result is beautiful.
Thus, to become an unstoppable trader, you must know yourself and improve yourself in addition to your trading strategy. You will learn how to trade in the market and improve as long as you continue to trade. But you have to start doing it right now in order to start building your foundation for the right approach to your trading.
If you decide to go into battle, accept all of the above and your path will be much easier.
Good luck!
Reasons for the futility of short-term market fluctuationsAll markets move up and down. Most market fluctuations are not important and trading on them is very dangerous and risky.
Very often, beginners lose money trying to trade intraday on corrections or simply losing sight of the direction of the main trend. Sometimes the market knocks us out on a stop loss, after which it goes in the direction we need. All these errors appear because the trader pays too much attention to the daily price fluctuations in the market.
Today we will look at some facts about price movement and market dynamics that will help you understand why a "smaller" price movement is actually "more" important for trading, as well as some ways to avoid succumbing to the temptation to enter the market on any fluctuations.
Fact 1: Attempts to stop a moving train
If you look at the daily charts of USD/JPY, AUD/USD or EUR/USD pairs, you will notice long multi-month trends. Such trends move with a strong impulse, which is similar to an accelerated train, and they are not able to stop easily and quickly. A strong trend usually continues until something important happens. That is why intraday fluctuations do not matter, they are just noise and it is very difficult to trade on such noise.
Look at the daily currency charts. Daily trends are like moving trains that move in the direction they need almost without stopping, and it takes a lot of force and a lot of time to stop such a movement.
Everyone has heard the old expression: "the trend is your friend." It's true. The trend is your friend as long as you move with it, but as soon as you decide to go against it, it will destroy you, walk over you and not notice. Don't make the typical beginner's mistake, don't try to predict the reversal of a strong trend, don't trade against the trend!
It is trading according to the trend that gives a high probability of earning. Trend trading is the most profitable business, the best time to trade. You have to make sure that you are trading according to the trend if you don't want to get hit by a train.
Fact 2: Losses
No one wants to lose money. This is a fact. Any sane person would agree with that. But as soon as a person is behind the monitor screen, as soon as he starts trading, he immediately forgets about everything and tries to trade on all timeframes, in all known ways, losing all the rules of trading along the way and losing money. Some people trade as if they want to lose their money!
Losing money is a very unpleasant event. We all don't like it. Everyone comes to the market to earn money and this desire sometimes blinds us, and we forget about the most important thing – we don't want to lose money. That is why the most important and first goal of any trader should be to preserve their capital. And the easiest way not to lose money in the market is not to try to trade every price movement. You will not be able to trade these fluctuations, because most of them are just noise that defies logic.
By understanding a few key things, you can really reduce this temptation or get rid of it:
• The best trading setups are obvious. You don't have to be a genius to notice them. If you are sitting in the hope of opening a position, it means that there is not a single worthwhile opportunity on the market for which you could risk! Go away! Save your money! If you value your money, you will not enter the market thoughtlessly. Otherwise, go and gamble, throwing money away and losing it all if you like it.
• By saving your capital (without opening extra positions), when there is no reason to trade, you thereby earn money in the market already by the fact that you will have more money to trade with good trading signals. You should understand that not every price movement in the market makes sense, in fact most of them are meaningless. Learn an effective trading method, like Price Action strategies, master them, and then you will know what to look for in the market. And only after that you should have the discipline and patience to act only when your trading strategy shows you. But if you sit for several hours looking at charts and trying to figure out every tiny price fluctuation, you will surely lose your money, and we all know that losing money sucks.
Fact 3: A long-term trend causes a short-term price movement
If there is a long and strong trend in the market, then most likely the counter-trend short-term fluctuations will not last long. This means that the main trend in the end will still direct short-term fluctuations in the right direction.
This is a very important concept that helps us look for entry points in the direction of the main trend, thereby increasing our chances of winning. Beginners try to take profit from any movement, experienced players act in the direction of the trend and that is why they win at a distance.
Corrections go out faster and they do it unexpectedly, which makes trading on them very dangerous.
Thus, the facts stating that a steady trend behaves like a "freight train", the loss of money sucks in, and a long-term trend causes a short-term price movement are the main reasons why short-term market fluctuations are practically useless.
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
Keywords for beginnersHello, dear TradingView members.
This idea is dedicated to our new traders who might need a few introductions.
This is the first part of the 'Keywords for beginners' idea. The next part will be published tomorrow.
If you're around in trading platforms like TradingView, you will see some keywords used by analyzers and publishers, which you might not know what exactly they mean in the context of the trading market.
In this post, we will cover the first 11 keywords.
1. Cryptocurrency: Digital assets people use for investments, trades, and purchases. Like Bitcoin, Ethereum and Cardano.
2. Forex (FX): Short for Foreign Exchange. The trading of one currency for another.
For example, you can trade Euros for Dollars.
3. Stock: The goods, merchandise, or properties kept on the assumptions of a business, available for sale or distribution.
For example, the stock of Apple, Meta, Google, Netflix, and Tesla.
4. Indices: The plural form for Index. Index trading is also a type of trading of a group of stocks that make up the Index.
Like S&P 500, Dow Jones Industrial Average, and NASDAQ Composite.
5. Futures: Futures are a type of derivative contract to buy or sell a specific item or asset like Bitcoin at a set future date for a fixed price.
You can either set it as the price is going up or down.
6. Spot: The traditional buy and sell or invest in any asset.
You can invest in a specific stock or Bitcoin, and you can sell it when you decide to.
7. Demand Zone: A demand zone is the price area traders decide to buy.
That area is where the buy volumes go higher, which is one factor that pushes the value up.
8. Supply Zone: A supply zone is the price area traders decide to sell.
That area is where the sell volumes go higher, which is one factor that pushes down value.
9. Indicator: Indicators are tools based on calculations that help traders understand the prices, volumes, trends, and timeframes.
For example, the RSI, Bollinger Bands, and Fibonacci Retracements, are known trading indicators.
You can find and use these indicators on the upper side of your TradingView charts.
10. Take-Profit (TP): Stands for Take-Profit Order. It's a limit order that defines the price to close out an open position for a profit.
They are also known as Targets.
11. Stop-Loss (SL): Stands for Stop-Loss Order. It's a limit order that defines the price to close out an open position to stop your assets
from more losses or liquidations. You can control your positions with this order and protect them from sudden market crashes.
Are there any keywords you would like to know about? Let me know.
Thank you, and good luck.
Tutorial - Convert an indicator into strategy in pineHello Everyone,
I just made this video because, this question came up many times in Pine QA. In this video we are trying to load default Bollinger Band indicator from Tradingview and convert it into strategy.
Below are the steps
Load the indicator on chart
Click on source code (curly brackets next to indicator title) to load the code into your pine editor.
Make copy of the script. Remove the indicator on chart and load your copy of the script from pine editor
Replace indicator call with strategy call
Define your entry/exit conditions for long and short
Add strategy.entry, strategy.exit, strategy.close calls based on the conditions to generate trades on chart
Useful references
Pine Reference Manual
www.tradingview.com
Strategy template in the linked ideas.
Enjoy :)
Errors in automated tradingHello everyone
Surely you have heard about automated trading.
You may even have used it.
Today I want to talk about the mistakes that people make using automated trading.
Let's go!
1. Back testing or forward testing
Who really understands the creation of an adviser will be able to make the adviser bring 100% profit per month during back-testing, while trading with almost no risk.
But do not rely only on the results of back-testing. Checking the adviser on the history is of course important and useful, but what is really important is how the adviser shows itself in real trading. After all, you will not be able to earn on what has already been, you need to be able to earn in the future.
Therefore, it is very important to test any system on forward tests.
Forward testing is real–time testing in real market conditions. This means that all decisions are made based on the history of quotes, but only the result that is generated in real time is considered a true representation of performance.
2. Data accuracy
70%-80% of the data on the Forex market, including those provided by brokers, is complete nonsense.
Your system is as good as your data is, and if you can't rely on your data, then your system won't be able to do it either. Valuable data is quite expensive, and that's why so few people have it.
You need to be able to clean the data for the correct operation of the system.
A good system developer, even with a wonderful strategy, will fully understand its weaknesses and take appropriate actions to eliminate them.
3. Consider all expenses
There are a lot of costs associated with trading, brokers are very well aware of this, and you should also know this.
At a minimum, you should consider:
1) Spread – it is different on different instruments;
2) Commission expenses;
3) Slippage on various assets on which you are going to trade;
4) Broker delays in opening orders;
5) Infrastructure costs.
4. Risk and Capital management
The key to all trading systems lies in the rules of risk and capital management. In order to completely change the characteristics of the strategy, it is enough to change these rules a little.
The strategy developer must take into account all the details of his system. This is necessary not only to avoid everything that can blow up a trading account, but also for the purpose of emotional balance, in order to calmly leave your system or a working strategy and not interfere with it.
There is one more thing we try to do – it is a daily analysis of open/closed positions based on the current market situation.
This ensures that any gains or losses will be analyzed instantly. This avoids new such open positions and some emotional problems. This approach will quite easily confuse systems with unclear rules and those that have a rather attractive yield curve.
5. Investors are an emotional person
For those who plan to develop successfully, this point is key, and it must be taken into account by everyone who will invest their funds in trading systems. You should remember that although you may feel good with 30% drawdowns and wild fluctuations in your equity, your investors will not share such feelings.
If you want to move to the next level of development, you must cultivate a personality in which you can invest. As a rule, in the world of investments, this means applying a small leverage, allowing low drawdowns and earning consistent profits.
A common, time-tested method of evaluating investments is the Sharpe coefficient. For a good investment, it should be at least 3, the maximum leverage should be 10:1, and the drawdown should be no more than 10% of both equity and balance.
6. Consider the limitations
And the final key rule is that you need to know the limitations of your system. This includes both the trading conditions under which it will and will not work (no system is perfect) and its scaling. That is, if I pour $100 million into my account and my profit target is 2 points, then, most likely, slippage will swallow my entire profit target, and I will never see a profit from my investment.
Even the infrastructure you use needs to be taken into account. For example, the MT4 platform, which is used by most brokers, works so slowly that at the time of the NFP exit, the difference between your planned and actual market entry price will be 10 points. If your system is price sensitive, then it will kill it.
Yes, it happens. For the most part, our rules are based on common sense, but the vast majority of systems that we have encountered have never taken into account such errors. As a rule, even if the creators claim that the system takes them into account, this is not the case, since when answering these questions they are still far from understanding the essence.
Paying attention to these things at the very beginning will allow you to save a lot of time, effort and develop an exceptional personality in you.
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
IS IT TIME TO CHANGE THE STRATEGY?In order for your strategy to start making a profit, it takes time, patience and discipline, no matter if you bought it or developed it yourself.
To see the weaknesses and strengths of the strategy, you need to test it, and this means strict adherence to the rules for a long time.
At some point, there may come a situation when it is worth abandoning the strategy in order to develop further.
But when should it be done?
That's what I want to talk about today.
How to understand that the strategy is outdated and it's time to get rid of it?
I present to you four signs that it's time to get rid of the strategy:
1. Inability to follow the rules
Any strategy implies rules to be followed.
Take a look at the list below:
• It is too specific;
• It is extremely uncertain;
• It's too complicated;
• Contains a large number of items/rules.
If your strategy contains these items, it's probably time to get rid of it.
The strategy should not be too complicated, otherwise you will not be able to use it. At the same time, it should be understandable.
If you don't understand your strategy and can't change it, make it easier, then it's time to throw it away.
2. You spend a lot of effort and end up getting nothing
Do you sit in front of a monitor screen all day all week?
Do you compare a large number of indicators to confirm the signal?
Does your strategy require you to turn to the sun and recite the alphabet in reverse order at exactly 5:30 in the morning?
If it is inconvenient for you to use your system consistently for long periods of time, or if you believe that it brings plus or minus the same number of points of profit in comparison with not using it at all, then it's probably time to look at other options.
3. You lose more than you gain
This applies to those who prefer to buy ready-made strategies from other people.
Although not all strategies available on the market are "divorce", the chances that you have chosen one of them are very high. If your signal provider generates more various signals for entering and exiting the market every month than real profits, then it's time to admit your mistake.
The same applies if you use your own system, but pay a lot of money for subscribing to some data - you should also think about replacing your strategy with another one.
4. It just doesn't make a profit
There is not much to say here.
If you have shown due diligence and tested your strategy, tried to revise it, adjust it and launch it in various market conditions.
If it still won't bring you profit, then obviously it's time to move on in search of a new strategy.
Thank you for your time – I hope this will help you and your trading.
don't FOMO, instead, JOMOread the text in the chart
instead of being a FOMO trader, be a JOMO trader (reasons are written on the screenshot)
I hope this will help you FORTIFY your MINDSET and make you heal from your scars (losses)
u have the capability to shift ur mind and to become a healthy trader
Pending orders: how to use it?What is a pending order?
A pending order is a tool that allows you to open or close positions at the desired price automatically after the price reaches the set value. This is the main difference from a market order, which is executed at the current price immediately. At the same time, pending orders differ in that if the price has not reached the set value, the order will not be executed.
Pending orders will help those who use technical analysis and do not want to constantly sit at the screen, waiting for the best entry price.
With the help of pending orders, you can not only open, but also close positions.
Stop Loss is an order that is placed in case the price does not go where the trader expected. When the price reaches this order, the position will be closed at a loss.
Take Profit is an order that will automatically close a profitable position when the price level predicted by the trader is reached.
Opening positions using limit orders
A limit order is an order to open a position at the stated price or better. To make a purchase transaction, an order is placed below the current market price, and for sale – higher. Thus, limit orders are applied when the trader expects that the price will reach a certain level, and then turn away from it in the opposite direction.
Such orders are used in situations when a trader expects a price rebound from strong levels. They are executed at a price no worse than the stated one. Execution is possible even at the best price if the value specified in the order falls into the price gap.
Buy Limit
Buy Limit is a pending order to buy (at the Ask price) below the current market price. This order is used by a trader when he expects the price to decrease to a certain value and wants to open a buy position there. For example, if the price of the GBP/USD currency pair is at 1.3880 and the trader wants to buy it from the 1.3800 level, he needs to set a Buy Limit order to this level (or maybe a little higher).
Sell Limit
Sell Limit is a pending sell order (at the Bid price) above the current market price. This order is applied if the trader expects the quotes to rise to a certain level and is going to open a sell position there. For example, if the quotes of the EUR/USD currency pair are now around 1.1750, and the trader wants to sell the asset when the price reaches the 1.1800 level, a Sell Limit order is placed at this level (or slightly lower).
Opening a position on a stop order
A stop order is a tool that allows you to open a position at the market price when the values specified in advance in the order are reached. A buy order is placed above the current price, and a sell order is placed below. Stop orders are used when a trader expects that the price, having reached a certain level, will continue to move in the same direction.
Usually this type of orders is used in strategies based on the breakdown of levels.
If there is an impulse in the market at the moment due to high volatility, there may be slippage and the order will open slightly worse than the value indicated by the trader.
Buy Stop
Buy Stop is an order to buy (at the Ask price) above the current market price. Activating an order and opening a buy position is triggered when the price rises to the specified value.
Example:
The quotes of the AUD/CAD pair are at 0.8940.
The trader expects that the growth will continue if the price breaks through the resistance level of 0.8975.
To do this, a pending Buy Stop order is placed just above this level (for example, at 0.8990).
When the Ask price reaches 0.7160, a buy position will open.
Sell Stop
Sell Stop is a sell order (at the Bid price) below the current market price. When the price reaches the desired values, the order is automatically triggered and opens a sell position.
Example:
The quotes of the GBP/JPY pair are around 160.60.
The trader expects that the pair will continue to decline if it breaks down the support level of 160.
To do this, a pending Sell Stop order is placed slightly below this level (for example, at 159.85).
When the Bid price reaches the value of 159.85, a sell position will open.
Conclusion
Thanks to pending orders, the trader has another, powerful tool that helps to use various strategies profitably, helping to increase the number of openings or closures of positions.
It becomes possible not to monitor the market 24 hours every day, but to place orders in a planned place, with fixed risks. Trading becomes almost completely automatic.
BEFORE, ON TIME and AFTERHello everyone
Today we will try to figure out what kind of thinking is correct during the opening, holding and closing of a deal.
Any trader faces these three stages, but not everyone knows how to behave correctly and therefore mistakes are made.
Go!
Before opening a deal...
Every time you find an entry point that matches the rules of your trading strategy, you should think about the following important points:
• Determine the level to set the stop loss.
It is not necessary to set a smaller stop loss due to greed. You should have a stop loss strategy that will be based on the highs or lows of the price, at the levels, because these values are really important and it will be much more difficult for the price to pass the level - this will protect your position and your stop loss from premature closure.
• You must be able to accept losses.
Before each trade, you should remind yourself that a trade can be unprofitable, since there is nothing 100% in the market. Remember this every day. Remember that setups don't always work, and then you won't lose more by rearranging the stop loss or not putting it at all in the hope that the setup will definitely work.
• It takes time.
The deal does not reach the goal in a minute. The market will move in different directions, and you should be able not to react to every movement and give the deal time. Many people forget about it, but due to the constant monitoring of the market and reactions to every movement, traders make mistakes, lose money. You need to be able to wait, understand this. Let the deal work and don't interfere.
The position is open!
The most interesting thing starts right here!
And it is here that a huge number of unnecessary mistakes are made.
• The market must prove you wrong.
After opening a position, the set stop loss will be the level at which it will be clear that you were wrong. You should leave the open position alone and let the price prove you right or give you an erroneous opinion. Touching the take profit price will mean that you were right, there is no stop loss.
• Constant monitoring of the situation.
If you are still following every movement, most likely you will react to false price fluctuations and sooner or later you will close the position. You may just get tired of watching the price move and eventually make a mistake.
You can check your deal once or twice a day, but no more.
You must act according to your strategy, which gave the signal to open a position. Let the strategy work and don't interfere.
Closing a position
It does not matter whether the deal was profitable or not, it is important to rest after it, stop, put your thoughts in order.
It is difficult, after closing a position, to return to the market for a new setup, especially if the transaction was profitable. After all, they lead to excessive self-confidence, which leads you to open bad deals in large numbers.
After a losing trade, you always want to quickly return to the market to recoup. This is a big mistake. Opening deals that are based on the desire to win back what is lost is an abyss into the abyss. Emotionally, you run to open a deal, open on bad signals and lose even more, and so again and again. You have to understand that losing money in the market is normal, you don't have to run to win them back. Learn to accept losses.
The only thing you should do after closing any position is to be disciplined and stick to the trading strategy. The easiest way is to just leave the market and get away from the chart for a while.
It is very important to remember that you need to be able to save money. If you have earned something, withdraw some part at the end of the month, let it be your reward, which will give you self-confidence and you will become a calmer trader in the long run.
Good luck!
Dollar IndexHello everyone!
There are many tools on the market to understand the general state of the economy or the company.
As a rule, indexes are responsible for this.
And today we will discuss the Dollar Index.
A little history
In 1973, the dollar Index (DXY) was invented and first introduced by JP Morgan.
Level 100 is the base value of the index. If the instrument shows, for example, a value of 110, it means that the dollar has grown by 10% relative to the base value.
As you may remember, in March 1973, the largest countries in the world introduced a floating exchange rate – this date was the beginning of the index.
About the index
With the help of the dollar index, analysts determine the strength of the dollar as a whole. This is a very simple analysis tool that almost every analyst uses and shows the index how strong or weak the dollar is relative to other world currencies.
Method of calculating the dollar index
The index consists of weighted components of the following currencies: euro (57.5%), Japanese yen (13.6%), British pound sterling (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%) and Swiss franc (3.6%).
As you can see, the currencies with which the dollar is compared are European countries, which is why DXY is called an "anti-European" index.
Based on the number of currencies in the index, people believe that the US is compared with six European countries, which is incorrect, since the euro is officially the currency of 19 EU countries: Austria, Belgium, Germany, Greece, Ireland, Spain, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Finland, France, Estonia.
Add to this 5 more countries — Japan, Great Britain, Canada, Sweden and Switzerland and we get almost the entire civilized world.
Although all countries are united by one currency, their economies are still different and therefore each currency of a separate country has a corresponding weight in the index.
Dollar Smile
One of the Morgan Stanley analysts noticed an interesting feature of the dollar – the dollar can strengthen in both bad and good economic conditions. This analyst was Stephen Jen and it was he who came up with the "dollar smile theory", the essence of which is that the dollar adheres to three scenarios:
1. "safe harbor" - investors believe that the economy is experiencing difficulties, so everyone is investing in less risky dollar assets.
2. When the US economy is weak, the dollar falls. The fall is strongly influenced by interest rates, as a result, everyone gets rid of the dollar, and the smile becomes wider.
3. Perhaps the easiest period to understand is the growth of the dollar due to the economic growth of the United States.
People increasingly believe in the country and the currency, which contributes to a greater growth of the dollar.
Thanks to this theory, it is easier to understand the market situation in general and the cyclical nature of the market.
How to use the index
The index is usually used to analyze currency pairs.
The index helps to determine the relative strength of the currency relative to the dollar, at those moments when you trade currencies in which there is USD, for example, EURUSD, GBPUSD, USDCHF, etc. The
index is also used to find discrepancies.
If DXY falls and the dollar weakens, then you will see growth on the GBPUSD chart. If the dollar is the base currency, for example, USDJPY, then the index and the currency pair will move in the same direction.
Often you will notice that the dollar index is growing, and the currency pair is standing still – this is the discrepancy, which is very profitable for an observant analyst.
In addition to correlation with currency pairs, DXY correlates with oil.
The fact is that the largest oil consumers are hedgers of dollar inflation. Hence the inverse correlation of these instruments.
Professional analysts, before currency trading, look at the dollar index to understand the trend directions.
Conclusions
Thanks to the index, you can understand the state of the US economy.
DXY is a great addition to your strategy, which helps you identify trends or find discrepancies on the charts.
Using the index you will avoid mistakes and increase your profit.
Hartley PatternsHello everyone
Today we will talk about another method of analysis that will help you bring significant profits.
Let's go!
Introduction
H.M. Hartley in 1935 in the book "Profit on the stock market" for the first time revealed Hartley's patterns. Gatli patterns are used in technical analysis and are based on Fibonacci values. The patterns are reversal patterns and have clear rules and an excellent profit-to-risk ratio.
Hartley patterns work better than most well-known graphic formations, which also use different Fibonacci levels, but not as clearly as in Hartley patterns.
Designations
Hartley decided to designate waves with 5 letters for simplicity:
The letter X - is the beginning of the trend;
The letter A - is the end of the trend;
The letter B - is the first pullback of the trend;
The letter C - is a rollback correction (not breaking through the level of point A);
The letter D - is the target of the letter C.
The zones for the letters B, C, D are determined using the Fibonacci ratio between XA and AB.
Patterns are divided into types and have their own names, in addition, patterns work for any direction of the market.
Let's take a closer look at the patterns.
Bat
Pattern formation: the price reaches the maximum/minimum of the XA wave and forms a point B at the Fibonacci correction level from 38.2 to 50%. Using the XA points, you can find the value of the D point, which usually tends to the Fibonacci retracement level of 88.6% relative to XA.
In this case, CD is most often longer than the segment AB.
Butterfly
When wave B finishes its formation at the Fibonacci retracement level of 78.68%, they talk about the formation of a Butterfly pattern. At the same time, the target for wave D will be values beyond XA and will be 1.27-1.618 XA.
Crab
This pattern is formed when the price touches and bounces off the maximum/minimum of the XA oscillation and forms a point B at the Fibonacci correction level from 38.2-61.8%. The goal of point D is outside the original segment XA and is 1,618 XA
Simplifying pattern identification
With careful study of patterns, it can be noticed that the formation of patterns depends on the location of wave B in relation to XA. Apart from the drivers and 5-0 patterns, there is an easier way to identify the remaining patterns.
Let's divide the values of wave B by Fibonacci levels.
1) 38.2%: Bat, crab
2) 50%: Bat, crab
3) 61.8%: Bat, crab, AB = CD
4) 78.6%: Butterfly
5) 88.6%: Deep crab.
If you see one of these values, you can understand which pattern is being formed. For example, if you see on the chart that the price reaches the level of 50%, then you can expect a Bat or crab figure.
To calculate where the point C will be, you can use Fibonacci levels relative to the point AB: on 38,2%, 50%, 61,8%, 78,6 % and 88.6%.
Now let's define goal D.
1) Bat: 88.6% Fibo HA or 2,618 BC
2) Alternative Bat: 113% Fibo XA (below X) OR 2.0 BC
3) Crab: 161.8% Fibo (below X) OR 3.14 BC
4) Hartley: 78.6% Fibo HA or 1.27 BC
5) Butterfly: 161.8% Fibo (below X) OR 1.618 BC
6) Deep Crab: 161.8% Fibo (below X) OR 2,618 BC.
How to trade?
It is necessary to open a position at the level, on a confirmation signal or on an impulse breakdown, using pending orders at Fibo levels.
Confirmation – in this case, you should wait for the reversal candlestick pattern at the Fibonacci level. Breakdown – in this case, the price bounces off the Fibonacci level and breaks through the trend line in the expected direction.
It is worth paying attention to the following clarifications: trading on wave B goes in the direction of the trend, but with a limited purpose (on the letter C). Wave C trading is counter-trend trading, but with a good profit-to-risk ratio (with a goal on the letter D). Trading on the letter D can be considered as trading in the direction of the trend (very close to the support and resistance levels) and also with a good profit-to-risk ratio (the target can be the top in an uptrend, the bottom in a downtrend or any Fibonacci level of the CD segment).
These patterns are quite common, and the success rate is quite high.
Use the patterns correctly and they will bring you a lot of profit.
Good luck!
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
HOW TO SWING TRADE USING BB - MACD!Today im going to show you how to use Bolinger Bands and MACD together to understand where the price is going.
So you can swing trade easily.
By the way swing trade is holding assets for profit for more than a day.
So this strategy is suitable for novice investors. But you will need practice before applying this to your trading strategy!
First of all i do not recommend betting against the market.
Do follow the trend when using this strategy. If the trend is upwards do not short the asset.
But there can be breakout from the existing trend.
Therefore we can also use trendlines to have better understanding of the market.
Lets identify indicators that we are going to use then i will explain how to use them to swing trade.
MACD measure specific EMAs and their relations. EMAs are mainly 12 period EMA and 26 period EMA.
There are 2 lines and 1 histogram on MACD. They are called, MACD line, Signal line, Histogram.
MACD line = 12 EMA - 26 EMA
Signal line = 9 EMA of MACD line
Histogram = Difference between MACD line and Signal line
We use MACD to identify trends so we can trade accordingly.
If the MACD line is above 0, we are in a uptrend.
If the MACD line is below 0, we are in a downtrend.
If the MACD line is above or crosses above signal line it is a buy signal.
If the MACD line is below or crosses below signal line it is a sell signal.
Longer histograms and being too far away from zero line means momentum of the trend is high.
These are the basic of MACD.
Bolinger Band is easier to grasp than MACD.
There is an upper channel and lower channel calculated with volatility and 2 Standard Deviations from 20 Simple of MA line.
Generally if the price is closer to the upper band, market is considered overbought and vice versa.
If the market is highly volatile bands widen and if volatility is low bands contract.
The most important thing about BB is 20MA. Generally price will test 20MA line after it hits the upper or lower band.
If price breakout or rejceted from it, trend is established.
So how can we combine both of them to swing trade successfully?
1- We have to identify the market trend. We can simply draw a trendline on the chart to identify it.
2- Use 20 MA as entry-exit
3- Look MACD histogram for momentum
4- Use lower - higher band as SL-TP
Example;
Look at the chart on the left!
Feb 04 19, uptrend started and MACD signal buy.
But there is no momentum.
MACD far away from zero line and price far away from 20MA.
Wait until price breakout from 20MA.
1- is the confirmation of trend with momentum rising and price breakout above 20MA line. BB start to widen meaning high volatility.
You can enter long trade here since price and momentum rising with volatility.
2- is the upper band of BB. This is take profit levels.
If you are seasoned enough you can open short position here with 20MA area TP.
3- Test of 20MA. You can enter short or long here with lower BB being SL - TP.
But with MACD signaling sell and losing positive momentum in histogram, short seems to be the RIGHT CHOICE .
4-Price cant hold 20MA. Drop to the lower band. SL-TP zone.
If you are seasoned enough, potential entry zone for long trade. TP being with 20 MA zone.
Lets take a look at the chart on the right.
Same chart, after a couple of weeks from chart 1.
There is a clear uptrend that started 09 March 20.
1- At 20 April MACD signal buy but there is no momentum and price was still below MA20.
It is logical to wait for confirmation which is the breakout of MA20.
2-Price breakout MA20 after a week.
Between 27 April - 05 Oct, there are more than couple times that market offers good entry zones.
Between this time, MACD momentum and lines are rising to the positive-buy zone.
3- Price is around upper band for a long time. Could be a TP zone.
Price also lost %25 value 2 in weeks. Some people use here as TP zone.
But MACD lines and histogram were positive.
Price didnt test the 20MA.
Also BB is still widening. Meaning high volatility in a bull market.
Opening short is not logical here.
4- Last time price touched the upper band.
Histogram started to lose momentum.
Potential TP zone and short entry.
To be honest this seems to be a good point for short trade but didnt work out.
Price went up (2. ATH) couple of weeks later with MACD momentum nearly finished.
Therefore always put SL-TP with your orders.
5- MACD signaling sell.
Low negative momentum.
If open short here, it could be like NO.3 on the chart.
Wait for confirmation.
6- Price test MA20.
After couple of weeks we broke down MA20. Bear confirmed.
Momentum rapidly increase to the negative zone.
Potential short entry.
7-Price cant hold MA20.
Lower BB reached.
Possible SL-TP area.
So sign from MACD to enter a long trade just yet.
8- Possible long entry with MA20 breakout above.
MACD signal buy with low momentum. Therefore wait for confirmation is logical.
After a week momentum rises.
Long entry seems logical.
New ATH for BTC.
So in short,
Identify a trend!
Check MACD for momentum and trend strength.
Enter when price breakout MA20.
Confirm the breakout before enter!
TP-SL at the MA20 and Band limits.
ERRORS ON PIN-BARSThere are a large number of technical analysis figures, there are many different patterns, but as you know, they do not work 100% of the time.
No matter what you trade, you should always pay attention to the market context and the pin bar is no exception.
Pin bar is a very profitable pattern, provided that you trade it correctly.
Beginners often make mistakes trying to trade every pin bar that is formed in the market.
Today we will try to analyze the most common mistakes of beginners when trading a pin bar.
1. Trading pin bars in trending markets
To begin with, every beginner should learn how to trade a pin bar in trending markets, because any pattern will work itself out if it trades in the direction of the trend.
The trend is still our friend and we should use its strength to open positions.
Look for an entry point on the pin bar in the direction of the trend and avoid losses.
2. Pin bar on daily charts
A trader should be able to trade a pin bar on daily charts, because a daily chart is the best chart for trading. This is a fact.
If you do not know how to trade a pattern on a daily chart, then you will not be able to trade it on smaller timeframes.
As you know, the market is full of trading noise on low timeframes. That is why patterns are most difficult to work out there.
In such noise, false signals appear that confuse beginners, but an experienced trader will be able to determine a really profitable entry point.
3. Market conditions
It is very important to understand where to expect the right pin bar, which will bring profit.
Pin bars can be found anywhere in the market, but this does not mean that each of them will bring you profit. No.
The strongest signals occur near strong levels, it is at such points that it is worth looking for an entrance.
4. Stop loss
Very often, traders trade a reversal pin bar, hoping to catch a trend change.
If you catch such a movement, you can earn a lot, but it's difficult to do it.
The price rarely immediately reverses after the pin bar, the market will fluctuate and if you put a stop loss too close to the position opening point, you may be knocked out.
It is most correct to put a stop loss where the closing of the position will be correct, perhaps a little further than the opening point.
No one wants to be knocked out of position ahead of time and watch the price go where we wanted, but without us.
Conclusion
The strongest signals simply cannot appear everywhere on the chart.
You need to be able to filter out the signals correctly and use the most profitable ones.
To do this, first study the theory, gain experience on older timeframes and only then practice more.
Take your time.
Good luck!
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
THE MAGIC OF COMPOUND INTERESTEach of us wants to get rich in order to fulfill our dreams: to fly around the world, buy a car or a house, and maybe even buy a plane.
Investing can help make a dream come true, but not everyone has enough knowledge to make money trading.
And what to do?
Capitalization magic increases numbers to high values very quickly. Naturally, it also works with money, but a little slower. This is called compound interest, and that's what we can use now, no matter how deeply you understand investments.
The most frequent advice in the financial sphere is to accumulate your funds and invest them as early as possible. When you start accumulating as early as possible, time is on your side, and the accrual of compound interest plays a big role in this. The best way to demonstrate compound interest in action is the following example.
There is Louis and Jen, both 20 years old. They are given the opportunity to make a long-term investment with a starting capital of $ 5,000 at 10% per annum for the next 45 years. And they have to make a choice:
1. Annually collect the earned interest or
2. Reinvest interest income annually.
Louis likes to get paid. He already has ideas on how to spend the first interest payment. However, Jen is looking to the future. She decides to reinvest them.
Louis invests his funds and receives the same income of $500 every year.
Louis is happy to take his $500 every year. After 45 years, nothing changes for him. He still has his original $5,000 and 45 years of interest spent.
The power of capitalization
Jen is obsessed with savings. She knows that over time, interest will bring her much more money.
The first few years of capitalization are pretty boring, but Jen waits patiently, because every year her interest income is higher than in the previous one. Little by little, but the snowball effect is gaining momentum.
Around the ninth year, the picture becomes fascinating. Jen gets enough interest income to double her first deposit. Soon, the interest income exceeds her initial investment amount of $5,000. And she gets a percentage of her interest. This is the power of compound interest.
Imagine what Jen could have done if she had invested $5,000 in work every year for the same period of time. Currently, 10% look too optimistic, but let's take, for example, that she earned 6% annually on this money. At this interest rate, Jen's total income would be $1,196,363 (by the way, at a rate of 10%, her total income would be $4,318,429).
Rule 72
Rule 72 is a simple way to estimate the time required to double an investment based on a fixed rate of return. If you divide 72 by the rate of return, you get an approximate number of years during which the investment will double.
For example: if you invested $ 1000 at 4% per annum, then in order to turn your investment into $ 2000, you will need about 18 years (72/4 = 18).
Using this formula, you can also determine the rate of return needed to double your money in 10 years: divide 72 by the number of years, 72/10 = 7.2%.
Regardless of the investment instrument, whether it's bond yields or dividends, Rule 72 gives you an idea of how long it takes to double your money at a given interest rate.
Don't let it work against you!
No matter how good capitalization looks, there are 4 factors that weaken it and work against you:
• Inflation. There are ways to avoid or reduce this risk;
• Taxes. Taxes eat up profits, so use tax-advantaged accounts like IRA and 401k's;
• Expenses. For example, taxes, fees and commissions also eat up profits. The less you pay them, the better;
• Time. The longer you wait, the less profit is accrued to you under the compound interest system.
The basics of mathematics do funny things with money over time. In the early stages, compound interest acts slowly and brings little income, and this is probably why many people ignore it in the early stages. But once it starts, it speeds up exponentially the longer you let it go. If you don't have a billion dollar idea in your mind, then compound interest is the best thing you can use to increase your funds and achieve wealth.
Don't waste your time, be patient and use compound interest correctly.
How to determine the real value of the national currency?The National Regulator openly manipulates the exchange rate to the benefit of the economy, undervaluing it when there is a trade deficit, thereby helping exports, and overvaluing it when there is a surplus, so that citizens and businesses can buy more imported goods.
The real exchange rate of a nation's currency is determined by its purchasing power abroad. In theory, it is calculated through a sample of identical goods. It is enough to estimate how much a certain conditional consumer basket costs in the home country, and compare the amount spent in another country.
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Why do we need to know the exchange rate regime and the real value of the national currencies?
If a country has a fixed or transitional exchange rate, a currency trader can determine the entry points with a guaranteed profit.
For example, the yuan is strictly "locked" in the corridor of 2% on the stock exchange, which allows you to enter at the maximum deviations, knowing exactly what intervention of the People's Bank will soon follow. The peculiarities of such trading are described in our article about USDCNH trading.
Knowing the pricing mode, you can determine the entry strategy on the border of the basket value. Examples of trading such currency pairs using currency corridors are presented below.
Trading on the Boundaries of the Nominal Value of National Currencies in Fixed and Transition Modes
UAE Dirham (AED)
The USDAED currency pair is the easiest to trade because of its strongest peg to the dollar - the national central bank kept the exchange rate at 3.6725 dirham even during the 2008 crisis.
As a result the UAE national currency chart looks like a series of candles with long tails, above and below which pending orders should be placed.
The figure shows a weekly candlestick chart, where you can see the possible deal levels at a glance, but there are some subtleties in this kind of trading. Firstly, there are only two brokers who are ready to provide access to the USDAED pair; secondly, they ask for a minimum deposit of $10,000; thirdly, the maximum leverage for this currency is 1 to 5.
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Models for determining the real exchange rate
There is no single ideal model in the Forex market that works out 100% of the signals for the differences between the nominal value of the currency. Just like any indicators, the presented formulas need a historical check, they are suitable for certain currency pairs with different accuracy and work in combination with each other. This is why we will try to examine the basic models and theories of exchange rates.
The purchasing power of the national currency against any other currency is determined in four ways, which we will talk about below.
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The law of one price - comparing the cost of the same good in different countries
The current price of a commodity in national currency units = The exchange rate of the currency pair* The current price of a commodity in a foreign currency.
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Absolute Purchasing Power Parity
In the formula of absolute parity instead of the price of one product, the average price level of the same basket of goods for different countries is used as expressed in national currencies or minimum subsistence values.
For example, in Australia the living wage was 600 AUD for 2017, while in the European Union it is equal to: in Germany - 1240 euros, in France - 1254, in Italy - 855.
The euro is a common currency for 26 states, so the three largest EU economies were chosen to use the average value of (1240+1255+855)/3= 1117 in the formula.
If 1117 is the average EU living wage and 600 is Australia's living wage, then solving this expression, we get 1117/600 = 1.86.
In 2017, the EURAUD exchange rate was 1.38. As you can see from the graph of the currency pair, the arbitrage correctly predicted the trend of strengthening of the euro.
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Relative trade parity.
Economists in their calculations use economic indicators that show the relative change in consumer prices. The difference between the current indicator value from the economic calendar and previous data is substituted into the formula.
For example, the U.S. Consumer Price Index was 119.4 in 2012 and rose to 121 by 2013. During this period, the EU CPI showed values of 118.3 and 120.1. The EURUSD exchange rate changed from 1.30 to 1.36.
Using the formula, let's calculate the real euro exchange rate by taking the 2012 value of 1.30, successively multiplying it by a fraction of the relative values of the U.S. CPI 121/119.4 and the European CPI 120.1/118.3:
1,3* (121/119,4) *(120,1/118,3) = 1,3374.
As you can see from the formula, the euro was undervalued, which led to the collapse in 2014, where parity was equalized due to monetary measures taken by the ECB and the Fed.
The consumer price index is essentially an indicator of inflation, which is the primary focus of central banks when making decisions on the size of the discount rate. In economic statistics, it is rare to see this indicator published in relative units; everywhere there is a percentage change, which can also be used in another model.
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Relative Inflation Parity
When calculating the real value of national money relative to the currency of another country, a slightly modified formula is used.
The current rate of a currency pair can be represented as equal to (1 + annual inflation of one country/1 + annual inflation of another country) * the current rate of the pair at the Forex market.
Let's calculate the EURUSD exchange rate in 2015. At the end of that period, U.S. inflation was 0.73%, while in the Eurozone it was 0.08%.
The real EURUSD exchange rate at the end of 2015 = (1 +0.0083)/(1+0.073)*1.0565= 0.992.
EURUSD quotes at the beginning of 2016 were undervalued, and the rate hike policy adopted by the Fed did not immediately save the situation - the market saw values close to 1.02 before the value of the European currency began to rise.
This formula can be used to forecast the exchange rate by fitting it with the future inflation that central banks calculate in the reports they publish at every monthly meeting.
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Sincerely R. Linda!
Bitcoin Short Term Analysis with Curved Trend Line!Today i will be showing you how to use Curved Trend Line indicator.
This indicator contains 21 period ema which is red line and 20 period sma which is yellow line.
This 2 averages together work like a trendline. So if the prices are below both lines we are in a downtrend and vice a versa.
If price is in the green are which between the 2 lines, that means price is in a area of indecision.
Just like regular trendline, this curved trendline shows us resistance and support areas.
Let me show you with an example.
There is an uptrend that formed in the late January.
Price tested that trend line 1 month later and price went 45k area quickly.
Last week we tested that trendline again and held.
Price can go to the 45k area again.
It can retest trendline before going up.
Or it can go up without testing it again.
This also correspond with my Curved Trend Line indicator!
We are trying to break above Trend Indicator at 40k!
Right now we are testing CTL to go higher. If we can manage to stay above price action will be to the upside of 45k.
Also, for a month CTL act as a resistance.
Everytime price test the CTL and try to breakout above it got rejected.
This is an indicator that works as an support - resistance of a price!
You can also use this CTL to validate your formations, SL-TP points!
Use this CTL with daily or higher timeframes for more accurate decisions!
If you want to try that %100 free indicator just message me!
Important Daily Support
38k
35k
Important Daily Resistance
40k
41k
45k
