Breaking down WTXUSDT @blockchain_maneHow I pull fibs
first look for retracements, then from within retracements, look for a range, a reversal pattern, support and resistance.
next, pull long fibs within the range, use volume and moving averages as your guide.
Use your long fibs to check to see if it's respecting price action.
Finally, look for entry and exit idea's, what may happen with price action, scenario A and Scenario B. create a game plane, stick to it.
Tutorial
Morning Star Candlestick Pattern: Trading strategy!🌟🕯️
✳️The Morning Star candlestick pattern is a candle formation that can often be seen on price action charts. It has a bullish character and can often determine the main minimum of market fluctuations.
✳️Three candles in a figure are one of the mandatory conditions of the pattern. Nevertheless, it is quite easy to find the morning star on the chart. It's easy to make sure of this – just look at the shape and location of the “Morning Star" figure.
⚠️ The shape of the Morning Star pattern
So, the formation consists of three Japanese candlesticks. Each of them must meet certain requirements.
🔵 The first candle is a bearish one with a rather large body and the absence of wicks or their presence with a very small length (no more than 10% of the body);
🔵The second candle is with a small body or completely without it. The candle should be with small wicks. The color of the second candle does not matter;
🔵The third candle is bullish with a large body. The body of the third candle should cover most of the body of the first candle (or engulf the whole body). Also, the candle should be without shadows (ribose) or with very small shadows;
🔵There should be a gap between the central candle and the other two. But, as practice shows, it is not always a prerequisite.
❗ Location of the candle model "Morning Star" ❗
The morning star is a bullish formation. Therefore, it is located at the end of a downtrend. The central candle is the local minimum of the downtrend. After the formation of this Price Action pattern, you should buy an asset.
❗ Signal amplification of the Morning Star model ❗
🔴If the central candle was formed without a body, then the pattern gives almost 100% about the change of the downtrend to an uptrend. This model is also called the "morning star Doji" or "abandoned baby";
🔴The presence of a gap between the central candle and the other two candles strengthens the trading signal;
🔴The bullish central candle is stronger than the bearish one. But the strongest is bodiless;
The third candle completely covers the first candle;
🔴The presence of a small trading volume at the first candle and a large volume at the third candle strengthens the model.
✅ When to enter into a transaction
We enter into the transaction after the closing of the third candle. It is confirmatory in the "Morning Star" pattern. This is a kind of guarantor of the model.
✅ When not to enter into a transaction
Everything is simple here. If the pattern does not satisfy the main conditions, then we do not enter into the transaction. It will no longer be a morning star model, but something else.
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The Opening Range TradeThis is one of my favorite trades to make because of the outsized risk reward ratio that it can offer. We're talking 10:1 or better some days. We are going to look at an example of an opening range trade in the S&P 500 E-mini this past Friday, October 29, 2021.
What is the opening range? In the days of screen trading, the opening range can be considered the first 60 seconds of the normal cash session. This is when all the orders that were set to trigger on market open come flooding in. You can think of this as the moment when ALL of the institutional traders begin to step in and have an opinion about what happened in the overnight session. It is very telling therefore to see how big of a bite this opening range carves out of the orderbook. On a very directional day, this opening range will be left as the high or low of the session. This is even more likely to happen if we are opening with a gap from the previous day's range and value.
When to take an opening range trade:
1. The opening 1 minute range is narrower than 2x your risk tolerance for stop loss placement.
2. The opening range is left at the high or low of the session.
3. The opening range leaves a gap from the previous day's cash session.
Rule 1 and 2 must always be true, while you can think of rule 3 as an additional validator.
How to take an opening range trade:
See the chart above for reference. We are opening within yesterday's range, so no gap. We wait for the 08:30(central) 1 minute candle to paint itself as the market opens. As soon as the candle is complete we mark it's high and low. We have a fairly large range of 20 ticks. The next 1 minute candle dips back into the opening range before extending above it. Because this candle does not reach the center of the opening range, we can go long when it begins to extend above. We set our stop loss at the center of the opening range.
A note about stop placement: For what it's worth, I was taught, (and most traders I know do it this way) to use the ENTIRE opening range for my stop loss. What I've noticed however, is that if price action returns to the center of the range, there is a high probability of it violating the other side. Therefore, you can use half the opening range, thus cutting your risk in half, and the money saved will by far outweigh the handful of trades per year that you miss due to being stopped out.
You could have taken this trade for very little risk and carried it all the way to the close for a 10:1 reward over risk.
The opening range trade is simple to implement, and you won't have to wait very long to find out if you're right or not. Typically, if this trade is wrong then you'll be stopped out in a few minutes and can move on. If the opening range IS left as the high or low of the session, then you can expect a substantial move in your favor.
Now you have one more tool to keep in your toolbox. I hope it helps.
Trade well everyone.
De-Annualizing IVImplied Volatility is the expected volatility of a given asset and can be used for ones advantage
De-Annualizing IV allows one to apply annualized IV and alter it towards ones desired time frame
As some may know, Implied Volatility or IV is an annualized figure, meaning we have to do extra work to get what we want
Applying IV
To gain a greater understanding of this topic we will be applying this method to SPY(461.90) as of 11/3/21
In order to get IV of our desired time, we first have to get the 1-day expected volatility and to do so we use the formula as follows
IV ÷ √256(256 trading days in a year) and will be 0.1245 ÷ 16 for our case, which gives us a 1-day expected volatility of 0.00778 or .78%
After getting our 1-day expected volatility we then use the formula as follows
IV ÷ √256 x √Number of Trading days in period and once applied to SPY will become 0.00778 x √22 which gives us 0.036497298 or a monthly expected volatility of 3.65%. We are using 22 in our formula since there is 22 trading days in a month.
Conclusion
After calculating our monthly volatility we can then multiply the desired asset by it to receive the range in which this asset will most likely stay at
For example, regarding SPY at 461.90 we can multiply it by 1.0365 or 0.9635 to receive the prices in which there is a 68% chance that the desired
asset will stay at. Regarding SPY this means there is a 68% chance of SPY closing between 478.75 and 445.
Bites Of Trading Knowledge For New TOP Traders #5 (short read)Bites Of Trading Knowledge For New TOP Traders #5
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What is the bid-ask spread? –
Bid-ask spread is the amount by which the ask price exceeds the bid price for a market. The bid-ask spread is the difference between the highest price that a buyer is willing to pay and the lowest price that a seller is willing to accept. An individual looking to sell will receive the bid price while the one looking to buy will pay the ask price.
A wide spread may indicate low supply or demand for a market at that point of time during the trading period, while a narrow spread would indicate sufficient supply and demand for a market meaning strong buying and selling competition is at play.
What is the role of a market maker in the financial markets? –
Market makers are market participants who ensure there is enough liquidity and volume of trading in the markets and offer to sell a market at the ask price and will also bid to purchase a market at the bid price to traders and investors.
How does the bid-ask spread relate to liquidity of a market? –
The size of the bid-ask spread from one market to another differs mainly because of the difference in liquidity of each market. Certain markets are more liquid than others and that commonly is reflected in their lower spreads. Price takers demand liquidity while market makers supply liquidity.
For example, foreign currency futures would have very low spreads during the trading day given the use of currencies as a medium of exchange to do business globally compared to live cattle futures, which relates more to businesses in the United States domestic market.
RISKS AND OPPORTUNITIES FOR CORPORATES AND INDIVIDUAL INVESTORS –
Diversification: Futures Spreads with Currency Futures –
A futures spread is usually created when one futures contract is sold simultaneously to the buying of a second related futures contract in order to capitalize on a discrepancy in price. Currency futures spreads combine the use of different currencies usually paired to the U.S. Dollar with the same contract month to express a relationship between the two currencies usually taking into account their strength or weakness relative to each other.
For example, the Singapore Dollar (USDSGD) may be seen to be strengthening (price movement is downward) while the South Korean Won (USDKRW) may be seen as being very weak (price movement is upward). To take advantage of this observation, we would want to buy Singapore Dollar (sell the USDSGD future) and sell the South Korean Won (buy the USDKRW future) and as a result eliminate the U.S. Dollar.
However, it must be noted that not all currencies are quoted in the same way like the Australian Dollar futures is quoted “AUDUSD”. It means then that to take advantage of a strong Australian Dollar and a weak South Korean Won quoted as “USDKRW”, an investor would need to buy both the AUDUSD future and the USDKRW future.
Diversification: Portfolio Risk Using FX Futures –
Individual investors taking a portfolio approach with managed futures and spot foreign exchange could be entering into emerging market currency positions including for example Hong Kong Dollar, Singapore Dollar or South Korean Won.
Depending on the view of each of the currencies in the portfolio, it could be constructed to eliminate exposure to the U.S. Dollar. However, there may be a time during which investors would like to introduce U.S. Dollar exposure and they could do so by using Mini U.S. Dollar Index ® Futures with a contract value of $10,000.
For example, the U.S. Dollar Index ® may be observed to be in a medium term uptrend and an investor may want to consider entering into a long position in the Mini U.S. Dollar Index ® Futures based on their strategy of choice and exit the position when either their profit target is achieved or their loss limits are triggered.
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.
Triangle breakout PredictionWe can predict the direction of the breakout with a cumulative indicator such as the OBV.
Here you see the OBV increase from the first high to the breakout candle, this proves significantly accurate.
so OBV rising can be used as another step for verifying the congruency of your prediction.
SUPPORT & RESISTANCE. Explanation For Newbies👨🏫
✅Support and resistance levels are the price areas on the chart where the price has ever changed its direction. This place always attracts traders, because near the levels there are obvious places for setting stop losses and entering into a deal. Also, there are always limited orders of large buyers or sellers near the levels.
❇️We can say that the level is a price area in the market where traders consider the price to be overstated or undervalued, depending on the current market dynamics. Therefore, it is always important to pay attention to the key levels at which support and resistance have reversed roles or there has been a strong rebound in the price.
⚠️What is the support level?
🟢In theory, the support level is an area below the current market price where participants will make purchases and there are high chances to keep this area under pressure from sellers. At the time of the test of the support level, prices are repelled and begin to rise, therefore, the pressure from sellers decreases, since they cannot gain a foothold under the level to continue moving down. We can say that the buyers, in this case, were stronger.
🟢As a rule, such levels can be determined in advance on price charts. These can be both daily and hourly charts. However, experienced traders identify higher time intervals as more important. For example, the support level on the daily chart will be much stronger than the support area on the five-minute timeframe.
🟢On a daily time interval, prices can test support for weeks before bears can push the price lower. On a five-minute chart, sometimes one test is enough to gain a foothold below and move to the next level.
🟢Also, with the breakout of the support level, we can state the completion of the development of the upward movement. If prices are rising, and after the test of the support level, we constantly observe a rebound and a continuation of the rise. In this case, we can talk about the continuation of the upward trend. If at some point we observe a breakout of the support level, then we can think about the end of the upward trend on the chart.
⚠️What is the resistance level?
🔴The resistance level is the opposite of the support area. If the support is below the current market price, then the resistance area is above the current market price. Thus, resistance indicates an area where the pressure from sellers is much higher than the pressure from buyers, prices are repelled and a drop occurs. Therefore, at the moment of testing a strong resistance level, prices quickly push off and begin to move in the opposite direction.
🔴With the development of a downward trend, resistance levels represent a place for conservative selling in the direction of the current trend. Recall that the basic rule is to sell on resistance and buy near the support area. Therefore, if the trend goes down, then a correction occurs, after which prices test resistance. In this case, the buyers' strength runs out and there is a decline in the direction of the current trend.
❗️The ability to correctly draw support and resistance levels is one of the basic skills that every trader should have. Levels are also the basis for trading strategies and the right risk-to-profit ratio.
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Money missed and how to catch it next time!There's a lesson to learn in keeping your chart clean and referring back to you notes!
I predicted a relative strength index divergence on October 25th in a related published idea.
Made a purchase at the first blue horizontal line, 0.00004207.
I sold at the second blue horizontal line, 0.00004926, for roughly a 16% increase, only doing so assuming it was the top of the breakout.
If I would have referred BACK to my previous published idea (linked below), I could have looked for a divergence, seen as the purple horizontal lines on the R.S.I. Noted though, it is difficult to see. Instead of selling the token, there was an opportunity to catch the easier to spot divergence . This would have allowed an additional 9% increase, if sold at the top green horizontal line, 0.00005388
Ways to have prevented/predicted this increase: referring back to some of Thomas Bulkowski's writings, specifically "Getting Start in Chart Patters" Second Edition, he mentions a 25% increase, and to look out for this as a possible "top" to an upward movement. At the time of writing this (11:33 P.M on 10/26/2021) Shib is attempting to break resistance at, 0.00005361. Shibainu might reach a peak of 0.00005555-0.00005600 at a later point. A 30% increase seems to be an "average" for larger moves in the crypto-market, with a target around 0.00005750 (possibly).
Upside: Selling at the 0.00004926, for roughly a 16% increase is still a "smart" move, as selling at an increase is preventing any loss by a down-trend. This of course excludes larger uptrends, like the one seen here to 25%. Thomas Bulkowski also warns that 15% is a good selling point. Additional upside, it is clear (at the time of writing this) the SHIB is struggling to break/keep the resistance line, green horizontal line, 0.00005388. Plus, as Mr. Bulkowski puts it, you never go broke taking profits.
*for additional trading information, visit: thepatternsite.com (Thomas Bulkowski's' free Site), or see my previous published ideas.
related SHIB published idea linked below:
#CRK Power of Fibonacci with convergent signalswww.tradingview.com
NYSE:CRK
As per my analysis on October 19, the stock moved as expected on the support area + Fibo 0.618.
This trade shows the power of the Fibonacci levels ( mainly 0.5 and 0.618 ).
Fibonacci level associated with any other signal like divergence, support, resistance, and so on... give a great trade opportunity
How to Tweak & Sync Indicator Settings? (and Why should I care?)This post is dedicated to exploring and reviewing key concepts specific to configuring technical indicators - these concepts may be obvious to those who have been doing charting and technical analysis for a long time, but hopefully useful to some who are new to charting and the world of technical indicators.
Also once we are familiar with these concepts, we are able to leverage them with almost any chart setup, any indicator, any trading style, any timeframe - or choose not to use them at all - or to partially use them - we will have the necessary background to make an intentional decision to develop our own configurations.
in this exercise, we will attempt to answer few -but very common- questions:
1. what are the best settings i should use for my indicator(s) ?
2. what are "correlated indicators" ?
3. Why should i use indicators on the chart - The price action has all the information i need.
First a quick, fun exercise............. What's wrong with the above chart ?
Nothing, right? we're looking at a daily chart of the Q's - we're using 3 of the most famous (built-in) indicators: The Moving Average Ribbon - on the price panel- and the MACD and the RSI - on lower panels- all 3 indicators are used with default settings (you may say "no one does that?" - we will for now - just for the sake of the exercise, and to explain couple of concepts, so hold that thought).
(for this exercise, assume i am a QQQ trader who traders the daily timeframe. I open and hold positions for few days to few weeks)
Now, let's use the chart above to identify long or short trades based first on the MA cross-over (looking at the 2 faster MA's in the ribbon) and check for confirmation from the MACD and the RSI in the lower panels. Should be easy, right ? we'll start by marking the MA cross-overs with a vertical line that cuts thru the MACD and RSI and see what we get.
here's the chart showing this part of our exercise
we have found 4 possible trade setups, based on the (2 fast) MA cross-overs on the price panel - but when looking for confirmation from MACD and the RSI, we ended up with 3 with confusing signals and 1 that's a "Maybe Long" (... if you find yourself in this situation -regardless of what is being traded, what indicators you use or the timeframe, then hopefully this post may help)
Question 1: So how to tweak and sync my indicator settings to get good, reliable trading signals across multiple indicators?
there are 3 steps to answer that question and get our "no confusion" chart setup completed.
Step 1: identify your trader's preferred timeframe and trader's time horizon
let's quickly review these 2 core concepts
a. The Traders Preferred Timeframe
each trader has one (or more) preferred timeframe that works best for what and how they trade (full-time vs part-time, stocks, futures, forex, options, crypto..etc etc), their trading style, their risk appetite and tolerance, their capital, and some other variables.
the first thing i need to determine is what is my preferred timeframe. for example, for me, it is the daily (1D) - i have tried the hourly, the 10min, and also the weekly...etc before, and i found i am much more comfortable with the 1D timeframe. it suits my trading style and goals - i have enough time to adjust trades, don't need to watch charts all the time...and many other reasons.
so 1st requirement: identify preferred trader timeframe: daily (check!) (what is your preferred trader timeframe?)
b. the trader's "time horizon"
with the preferred timeframe identified, the next step is to define what is my short, medium, and long time horizon i need to be watching and analyzing to make trading decisions (others may call this something else, let's call it the time horizon)
for example, as a day traders, who trades only stocks and basic options, i need to look at the price action for the current week, 2 weeks and 4 weeks (almost a month) - that doesn't mean i won't look at charts that show price action for a whole year, or an hourly - but for making a trade decision, the price action for this week and this month are what i need to check the most
there, we just solved 2nd requirement - my time horizon
let's express this in terms of my timeframe: 1 week = 5 daily bars, 2 weeks = 10 daily bars, and 4 weeks = 20 daily bars (check!)
(what are your short, medium and long time horizons as expressed in units of your preferred trader timeframe?)
from the above exercise, i identified that i need my indicators to be set to 5, 10 and 20 on a daily chart. this is going to be the most comfortable and relevant settings *for me* to support my trading decision according to *the way I trade*
Step 2:
Ok, so now let's tweak and sync our indicators in the above chart and see if that improves my ability to find possible trades
we'll set the MA ribbon to 5, 10, 20, 50 - we set the MACD to 5 and 10 (don't worry about the MACD smoothing/signal - let's make it 4) - and we set the RSI length to 10
make sure we're using the "close" price as the source across all indicators
make sure we're using EMA (vs SMA) as the moving average type across all indicators whenever possible.
Here's the *same chart* with my indicator settings tweaked and Sync'ed
Step 3:
let's make some simple but *really useful* visual enhancements to help us see the chart overall in a "visually clearer" way (this is very useful to the more "visual folks out there) -- here's what we did
- we hide the unused (slower MA's) on the price chart (for now)
- we added an EMA smoothing line on top of the RSI - and made it easier to see (color, width) - hide the underlying RSI itself - you know how to do that trick, right?
- we also tweaked the main MACD line (color, width) to make it stand out - other elements are tweaked to "fade"
Now let's see if it's now easier to find those trades - Here's the same chart with Sync'ed Indicators AND our "visual tweaks"
- and voila! we can see 5 trades with signals from all the indicators agreeing and confirming.
All signals are in sync - no "maybe's" and a lot less confusion - and the best things is, all indicators are tweaked to my preferred timeframe and my trader's time horizons.
you can apply the same approach we used here to any other indicators you use. we just used this set as an example and to explain this concept.
Question 2: What are correlated indicators ?
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to answer that question, look at the last chart we arrived at above - Do you see something surprising in that chart?
if you inspect the MACD and the RSI plots, you will find they are - visually and broadly - similar , right? they both cross the base line (0 for MACD and 50 for RSI) almost at the same places - and they have overall similar "plot shape" - why is that?
this is because the MACD and RSI when sync'ed and tweaked, are correlated indicators - although the calculation formula is different for each, and one of them (RSI) is a restricted oscillator (+100 / -100) while the other (MACD) is not - they both express price momentum - and when tweaked and sync'ed the way we did above, they will (almost) give the same signals. in fact, in our example, all our 3 indicators (the MA pair on the price panel, the MACD and the RSI) are correlated - they're all ,basically, "saying the same" thing - the signals are triggered at exactly the same time - they are redundant in this setup.
what does that mean for me as a trader ?
it means i'm not receiving any "valuable, additional" insights by having 2 (or more) indicators that represent the same price attribute (in this case momentum) - unless,
-- i intentionally want that - and will change settings for one of those indicators to reflect a different "time horizon". for example, i can set the MA pair on top to lengths 20 and 50 - and use the MACD to get signal on the short term (5 and 10) action while the pair on the price chart act as a long-term filter (only take long trades when the MAs agree).
or
-- i start looking at utilizing other technical indicators that provide completely different insights - and inform me about other "hidden market action attributes" & variables beyond the ones i already have (volume is an excellent indicator by itself, also can check for indicators of sentiment, strength of move, squeeze...etc) - this is where more technical analysis research will guide the trader - also it's useful to learn from others and what they are using in their trading setups, and asking "why" questions.
there's so much to say in this part - but i will leave it there.. just a teaser and hope i was able to make some of you curious to research this further - review your trading setups and see if your settings are out of sync, there is redundancies, and how you can get a better picture of price action thru your chart setup.
Question 3: if price action has everything i need, why do i need technical indicators in the first place?
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- this is a big debate .. for me, the answer is simple - can you drive your can without the dashboard that informs you when you're about to run out of fuel, or that you're exceeding the legal speed limit - or less obvious things, like your engine temperature - or when the engine oil is below the (red) limit. if i do that once, and i still get safely to my destination, it's definitely not a sure sign that this is what i should always do, or how everyone should be driving their cars.
but then again, it doesn't have to get too sophisticated - if, for my preferred time frame and my time horizon, i can see insights that makes it easier for me to quickly understand the price action (like the dashboard in my car), if i can see the trend, strength / momentum, volume supply / demand, and the prevailing sentiment - i guess that would be good enough.
Also, there's that other big topic - that indicators are meant to indicate. again, the dashboard in your car is meant to show these things like fuel, speed, engine temperature and oil level, RPM..etc - but the dashboard will not tell you where to go with the car .. you already have a plan, and that's why you're driving your can in the first place.
so indicators do not trade for us -- and all this exercise above, is in the service of (and a function of) the trading plans and goals that you already have in mind, before looking at any indicators.
in closing, sorry for the long post :) - hope this post helps inspire some fellow traders to further improve the way they trade.
please trade safely.
Patterns of possible market correction or reversal 📊
Trend reversal or correction chart patterns signify a reversal of the current trend on the observed chart. In a bullish trend, a reversal formation indicates a highly probable reversal and initiation of a bearish movement.
In a bearish trend, a reversal patterns leaves bullish clues and indicates a highly probable bullish accumulation.
No matter bullish or bullish reversal pattern is spotted,
The trigger that we are looking for is a breakout of the pattern’s support/resistance.
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Trade everything that moves. The mechanics of the position set💡
Trading on the market can be regarded as a full-fledged struggle for the right to survival, where the main enemies are two factors, infinite randomness and time.
By adapting your positions to what is happening, you risk becoming that very accident and you can only fight with time.
The mechanics of the position set includes a theory about the direction of the price.
Directivity theory
The essence lies in the continuous direction of the price when the distance from the selected zone is inevitable. It is important to highlight the level and work as soon as the price reaches these values.
How is the usual set of positions made
Opening a position in a certain direction, as soon as the price goes against the desired forecast, closing with a stop loss, abandoning the transaction, searching for a new entry point, and trying to predict the direction, is an extremely difficult task.
An example of a set of positions taking into account the theory of price orientation and risk control R
The mechanics of position recruitment are based on clear and simple principles of operation, flexible thinking, quick adaptation to market sentiment.
If you start to apply these mechanics in practice, you will notice how at first glance simple things are difficult to do the practice. There will be a feeling that nothing will work, there is no logical explanation for this, eventually, everything will be lost and a big chaotic high-speed car will crush you.
This is the basic principle, as long as the market is such, you have very little chance of the death of capital. While large funds, investors, and someone else is fighting among themselves for huge movements, we do not necessarily have to accept their rules of the game and play on their territory in predicting the general and long-term direction of the market.
You should think with your head and look for benefits primarily for yourself, taking into account all the nuances of what is happening.
But how to be flexible?
Constantly turning over a position is completely unprofitable, in the final execution, losses exceed the target profit. It is not at all clear where and when to put stops, overturns, and takeaways.
This is where the risk control system R will help us
She kicks down the door, breaks into our strategy, and, as the most important puzzle, falls into its rightful place!
From my experience, the optimal risk per trade for a beginner is $10
With a smaller volume, there will simply be no motivation to work.
But it is worth remembering that the deposit should not be extremely small, as it will not withstand a series of unsuccessful transactions
For example, if the deposit is $100, 1R= $10, the power reserve is 10 stops, this is extremely small
But with $ 400, you can already try, since the probability of getting 40 stops in a row is extremely small
Example of risk calculation for a $1000 deposit
The risk is reasonably low
R=$10
Power reserve 1000/10=100
100 stops
I recommend having a power reserve for the 200R series, from practice I can say that for training and the first results will be enough.
All calculations are carried out without taking into account the commission
A few tips for improving efficiency:
- Do not risk your funds in vain, TradingView provides an excellent opportunity for paper trading (demo) completely free of charge, where you can try out any of your ideas and strategies.
- Search for highly volatile tools and work with them.
- Analyze the broker (exchange) for conditions, commissions play a particularly important role, pay attention and look for more favorable conditions.
- Before you start trading, you should have a clear action plan, the most important component of which should be a risk control system.
- Your stop should be tied only to the mathematical component of the transaction.
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How I use Elliott Waves to trade (maximize your risk/reward!!!)Educational video that covers exactly how I use Elliott Waves to analyze the market and then how I switch gears to actually find trade setups.
DIVERGENCE IS CONVERGENCE
✅There are several main ways to work on the stock exchange in trading. Technical analysis, for example, is recognized as effective and is used by almost all market participants. But the disputes about indicator analysis do not stop for a long time. Some traders talk about the backwardness of the method because trading operations are performed faster every day. Others build successful strategies based on one or more indicators. Still, others combine two methods to find successful market entries and get an effective tool for making money on the stock exchange. Divergence is often used for this, which will be discussed below.
🔴What is divergence
Divergence is one of the strongest signals that indicator analysis can demonstrate. To obtain it, one of the possible oscillators is used. The divergence conditions are that the curve of the price chart diverges from the indicator data. For example, with an uptrend, the price continues to move up, while the oscillator shows a decrease in the interest of the main participants of the trading system. In this case, we should expect a change in the direction of the price.
Such a change does not always mean a new trend. Sometimes it can be a normal correction or price fluctuation. To determine the exact forecast, the methods of technical analysis of divergence are used. The result largely depends on the timeframe, sometimes on the support and resistance levels.
⚠️There is also an opposite process — convergence when the price of an asset decreases, and the indicator shows growth. This process is called convergence. Both signals are used in the Forex market, but they are known collectively as "divergence".
There are bullish and bearish divergences in the Forex market. In addition, divergence is divided into three types:
1️⃣Classic divergence.
2️⃣Hidden divergence.
3️⃣Extended divergence.
❗️To successfully trade currency pairs on Forex, taking into account divergence, you need to learn how to correctly read information from the market. A combination of indicators and fundamentals of technical analysis will help in this. Divergence plays an important role, so its indicators cannot be ignored.
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Trend Reversal Patterns📈📉
1️⃣ Pattern head and shoulders
After the pattern has become visible, namely, the right shoulder is visible, the trader needs to wait for the breakout of the neckline. Breakouts occur on strong impulses with a sharp increase in volume. Therefore, in order not to miss the entry and enter at the best price, it is better to use a sell stop order.
To calculate where the price will go after the breakout of the pattern, it is enough to measure the height of the pattern (vertically from the maximum of the head to the neckline) and postpone it until the breakout point.
2️⃣ Inverted head and shoulders pattern
Occurs in a downtrend and foreshadows an uptrend. The rules for working on a figure are similar to the previous ones.
It should be noted that "head and shoulders" in its pure form is very rare. Be careful!
3️⃣ Double Bottom Pattern
After you have identified the pattern on the price chart, you need to wait for the breakout of its resistance line. If the price has broken through the resistance, then the target will be the width of the pattern's range - the distance from the lowest point to the resistance.
4️⃣ Double Top pattern
A double top is like a double bottom. The only difference is that this pattern is reversed and occurs in uptrends.
The number of extrema in a pattern can be not only double, but also triple. But the rules of work will be the same for everyone - enter the breakout, postpone the target to the height of the figure and wait for it to be fulfilled.
5️⃣ Diamond
We measure the height and wait for the breakdown. If there is a breakout, then the target of the price movement will be the height of the pattern from the breakout point.
6️⃣ Cup and handle
Trades are opened when the "handle" is broken upwards. The target is the height of the formation.
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Education: Three Day Trailing Stop Rule (3DTSR)ICEUS:KC1!
I learned a handy tool used to manage risk under certain circumstances - the Three Day Trailing Stop Rule (3DTSR)
In this example, I actually fade the 3DTSR, but being able to execute different styles of trading strategies reflects an understanding of them, while acknowledging that no system or strategy used in markets will be perfect.
Three Day Trailing Stop Rule:
There is one initial criteria for the 3DTSR to become active -
Either
Upon Pattern Breakout - to limit initial risk/add to position at lower relative risk
OR
Upon Reaching 70% of Target from Breakout as a Trailing Stop
In an Uptrend, to exit a position using the 3DTSR
Day 1 is the High Day, defined by a new price high - at this point, we are not aware of the setup
Day 2 is the Setup Day, defined by a closing price (end of day) that is below the low of Day 1 - at this point, the trigger is active
Day 3 is the Trigger Day, as the stop is placed below the low of Day 2
The 3DTSR can also be used as an entry strategy, as shown in the chart here.
Day 1 = High Day
Day 2 = Setup Day, where price closed below the low of Day 1
Instead of placing a stop below the low of day 2, here I fade the 3DTSR by ADDING to a long coffee position, and jamming the stop to below the low of Day 2
Day 3 = The low of Day 2, or the trigger, is never penetrated, and price opens a cent higher
If using the Trigger as a stop, or below the low of Day 2, and using the Triangle shown to imply a measured target, this is a whopping 20 to 1 trade setup.
Do you have any profitable trading systems or strategies?
BTC.D : A quick note on bitcoin dominance and altsCRYPTOCAP:BTC.D
Hello everyone 😃
Before we start to discuss, I would be glad if your share your opinion on this post and hit the like button if you enjoyed it !
It is inevitable that at some points in the cycle, Bitcoin will outperform almost everything. With a few outliers of course. However, it's important that this doesn't change your game plan.
Your game plan should already be set in motion. If you track your portfolio daily, both in USD and BTC, there are always fluctuations if you are holding a mixture of BTC, Alts and USD.
It would be near impossible to maintain your portfolio's equivalent BTC value round the clock, unless of course you were all in BTC.
I personally hold BTC as my base asset during bull runs (switching to USD at local tops or as near as I can) as well as moving to ETH as my base asset when ETHBTC looks set to out perform.
However, it is inevitable that my alt coin holdings (spot) that I have accumulated will take a hit during a strong BTC run - so you may see your 'BTC worth' drop at times; However, I think of alt holdings like a coiled spring. When under pressure BTC, they bleed - and are suppressed.
If you've accumulated at support, you need not to worry about the temporary drawdown in BTC, because in general alt coins out perform BTC in the right conditions, and so when bitcoin puts in a local top, altcoins regain their dominance and begin out performing.
HOWEVER
It is important not to be 'alt heavy' at times when the BTC dominance is at support.
It is important to rotate the ratio of BTC:ALT:USD holdings to lessen the impact of alts bleeding at certain times in the market.
For example, in January of this year, it was an amazing time to load up on altcoins given that BTC dominance was at resistance. We then saw astronomical gains in alts across Feb/March when BTC.D dropped like a rock. Then, in May when BTC.D hit support, the whole market tanked but alt coins got hit the hardest. Alts will lose value when BTC is volatile, in either direction. So it's important to balance the ratio of your holdings across BTC, alts and stables at certain times in the market.
I pay attention to Bitcoin dominance more so for my spot holdings. For my trading account, every asset is simply a method of making a profit on percentage gains.
So whether I'm trading BTC, ETH or alts - it doesn't matter as much.
But for spot holdings, I generally want to cycle my ALT:BTC or ALT:USD holdings.
When BTC.D is at support, I want to hold less alts.
When BTC.D is at resistance, I want to load up on alts.
Trading Basics | Your Main Trading Time Frame ⏳
Hey traders,
You frequently ask me what is the most important time frame to analyze and follow.
And even though I must admit that multiple time frames must be taken into consideration for successful trading like weekly/daily/4h/1h. Among them, there is the one that is universally considered to be principal. That is a daily time frame.
There are a lot of reasons why so many traders rely on a daily time frame:
1️⃣ - Daily time frame shows a global market trend at the same time reflecting a mid-term and short-term perspective letting the trader catch trend following moves and spot early reversal signs.
2️⃣ - Covering multiple perspectives, daily time frame is the foundation of the majority of the trading strategies being the main source of key levels & pattern analysis.
3️⃣ - Daily time filters out news events that happened during the trading day. It shows the composite reaction of the market participants to all the data posted in the economic calendar.
4️⃣ - Daily time frame reflects all trading sessions. Within one single candle, we see the outcome of the Asian, London, and New York Sessions.
5️⃣ - Daily candle filters out all the noise from lower time frames & intraday price fluctuations and sudden spikes & rejections.
6️⃣ - Covering all the trading sessions, daily time frame mirrors the activities of big players like hedge funds and banks. Showing us the flow & direction of big money.
⚠️Being so important for analysis, do not neglect other time frames.
The most accurate trading decision can be made only relying on a combination of intraday and daily time frames.
What is your favorite time frame to trade?
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Keep your schedules in order
Keep your schedules tidy and clean. Focus on understanding and feeling the market, not clouding your judgment with indicators!
When people send me their screenshots of technical analysis, sometimes it happens that I have a hard time understanding them. Such graphs are in complete disarray and cause confusion and frustration.
Tip: after you have used the indicator, remove/hide it from your chart. Keep only what is relevant.
Do you keep your charts clean?
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Stop loss is your enemy?
One of the most common misconceptions in trading is that your STOP LOSS is your ENEMY.
But in fact, the opposite is true. Stop loss is your best friend
There will always be losing trades because they are part of the trading system. You cannot avoid them, but you can CONTROL the losses.
Stop Loss is a defense mechanism designed to get you out of the market at the PRESERVED PRICE and LOSS that you planned.
Exiting a stop loss certainly doesn't make you a bad trader.
When a trade goes against you, you are the most vulnerable in terms of irrationality and emotional instability. SL (Stop Loss) exists to get you out of the market safely and securely before your emotions get the better of you and further damage your account balance.
Most newcomers to the market make the same mistakes ... Always increase the SL size, add more positions at a loss, and risk most of their accounts for a few trades.
Always adhere to 1-3% RISK PER TRANSACTION.
The key to the game is longevity.
By understanding that your SL is your savior, you can release the emotional tension of a losing trade and instead maintain maximum clarity on your charts to quickly move away from PRE-CALCULATED losses as a simple part of the process.
With the right RISK / PROFIT RATIO and adherence to the RISK principles of 1-3%, you can get more losing trades than profitable ones, but at the same time remain a profitable trader 💰
Your worst feeling is greed.
Keep your losses minimal and you will quickly find that your trading will improve tenfold by simply exiting the market when it no longer matches your preconceptions and plans.
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RISK MANAGEMENT + PATIENCE = SUCCESS
Hello everyone! In this idea, I will try to warn you against the wrong approach to trading.
As you know, 95% of retail traders hold their losing positions for too long in the market, but at the same time cut profits before the trade reaches its potential.
That is, a trader, being in unprofitable positions, is ready to sit out huge drawdowns -50% ..- 70% ..- 100% of the deposit, but at the same time, with a profitable trade, he is ready to close the profit with a yield of + 1% with trembling hands.
It is a common trait of a retail trader to be constantly at war with the market.
The fastest way to drain your deposit is to fight against trades that are going against you. 95% of traders fall into the trap by increasing their stop loss on an open trade or, even worse, adding even more positions to a trade that goes against them, sincerely hoping that the market is about to turn around and go in their direction.
Successful traders do the opposite.
Taking the risk per trade of 1-2%, they minimize their losses in unprofitable scenarios by closing by stop loss. But in the case of profitable trades, they take MORE profit than they initially risk.
In this case, a profitable trader may have more losing trades than positive ones, but he will still be in profit.
Take the emotion out of your trade and let price hit your stop loss where you set it. Thus, your losses do not exceed the threshold of the planned risk, allowing your profitable positions (with a good risk: reward ratio) to override any that did not work in your favor.
Cut your losses and let your profits grow
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KNOW WHEN TO STOP TRADING🛑
A trader who is in a bad mood should think about taking a break.
The easiest way to determine when a BREAK from trading is needed is to first assess your current emotional state and performance.
- Do you constantly close the trades couple of seconds/minutes after you opened them, chaning your mind?
- Do you spend all day "burning" your eyes, watching charts to find patterns just for the sake of making money fast?
- Are you deviating from your trading plan?
- Are you taking more risks than usual?
If you answered "YES" to at least one of these questions, then it's time to stop.
Always let the market give you the conditions for trading. Build your analysis = Follow your trading plan & strategy and let the market do what it needs to do. Never get into the market at random or into the first pattern you come across. You will often notice that the pattern is not the best trading condition.
When you find yourself violating strict risk management and trading plan, take a step back and understand what may be causing your irrational decision-making.
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