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How to Spot a Reversal Before It Happens (Before Your SL Hits)You know the feeling. You’re confidently riding a winning trend, high on the euphoria of green candles, when—BAM—the market flips faster than a politician in an election year. Your once-perfect trade is now a humiliating red mess, and your stop loss is the only thing standing between you and financial pain. But what if you could see that reversal coming before it smacks you in the face? What if, instead of watching your profits evaporate, you could exit like a pro—or better yet, flip your position and ride the reversal in the other direction? Reversals don’t happen out of thin air. The signs are always there—you just have to know where to look. In this idea, we break down how to spot reversals before they happen. 😉 Price Action: The Market’s Way of Dropping Hints Markets don’t just change direction because they feel like it. Reversals happen when sentiment shifts—when buyers and sellers agree, sometimes all at once, that the current trend has run its course. The first clue? Price action itself. Look for hesitation. A strong uptrend should be making higher highs and higher lows. A downtrend should be carving out lower lows and lower highs. But what happens when that rhythm starts breaking? A higher high forms, but the next low dips below the previous one? Warning sign. Price approaches a key resistance level, but momentum stalls, and candles start looking indecisive? Caution flag. A massive engulfing candle wipes out the last three sessions? Somebody just hit the eject button. Before markets reverse, they throw up some red flags first—and depending on your time frame, these red flags can give you a heads up so you can prepare for what’s coming. 🔑 Divergence: When Your Indicators Are Screaming "Lies!" Indicators might be lagging, but they’re not useless—especially when they start disagreeing with price. This is where divergence comes in. If the price is making new highs, but your favorite momentum indicator (RSI, MACD, Stochastic—you name it) isn’t? That’s a major warning sign. Bearish Divergence: Price makes a higher high, but RSI or MACD makes a lower high. Translation? The momentum behind the move is fizzling out. Bullish Divergence: Price makes a lower low, but RSI or MACD makes a higher low. Translation? Sellers are losing their grip, and a bounce might be coming. Divergences don’t mean immediate reversals, but they do suggest that something’s off. And when the market starts whispering, it’s best to listen before it starts shouting. 📍 Volume: Who’s Actually Driving the Move? A trend without volume is like a car running on fumes—it’s only a matter of time before it stalls. One of the clearest signs of a potential reversal is a divergence between price and volume. If price is pushing higher, but volume is drying up? Buyers are getting exhausted. If price is tanking, but selling volume isn’t increasing? The bears might be running out of steam. If a major support or resistance level gets tested with huge volume and a violent rejection? That’s not a coincidence—it’s a battle, and one side is losing. Reversals tend to be violent because traders are caught off guard. Watching the volume can help you avoid being one of them. 📊 Key Levels: Where the Market Loves to Reverse Price doesn’t move in a vacuum. There are levels where reversals love to happen. Support and Resistance: The most obvious, yet most ignored. When price approaches a level that’s been historically respected, pay attention. Fibonacci Retracements: Markets are weirdly obsessed with 38.2%, 50%, and 61.8% retracement levels. If a trend starts stalling near these zones, don’t ignore it. Psychological Numbers: Round numbers (like 1.2000 in Forex , $500 in stocks , or $120,000 in Bitcoin BITSTAMP:BTCUSD act like magnets. The more traders fixate on them, the more likely they become reversal points. Smart money isn’t chasing prices randomly. They’re watching these levels—and if you’re not, you might consider doing it. 🚨 Candlestick Warnings: When the Market Paints a Picture Candlesticks aren’t just pretty chart elements that give you a sense of thrill—they tell stories. Some of them hint at “reversal.” Doji: The ultimate indecision candle. If one pops up after a strong trend, the market is questioning itself. Engulfing Candles: A single candle that completely erases the previous one? That’s power shifting sides. Pin Bars (Hammer/Inverted Hammer, Shooting Star): Long wicks show rejection. When they appear at key levels, reversals often follow. Candlestick patterns alone aren’t enough, but when they show up alongside other reversal signals, they’re hard to ignore. 📰 The News Factor: When Fundamentals Crash the Party Technical traders like to pretend breaking news doesn’t matter—until it does. Earnings reports , economic data , interest rate decisions ECONOMICS:USINTR —these events can turn a strong trend into a dumpster fire instantly. A stock making all-time highs right before earnings? Tread carefully. A currency pair trending up before an inflation report? One bad number, and it’s lights out. A crypto rally before a major regulation announcement? That could end badly. Reversals don’t always come from charts alone. Sometimes, they come from the real world. And the market rarely gives second chances. ✨ The Reversal Cheat Sheet: When Everything Aligns A single signal doesn’t guarantee a reversal. But when multiple factors line up? That’s when you need to take action. If you see: ✅ Divergence on indicators ✅ Volume drying up or spiking at a key level ✅ A major support/resistance level getting tested ✅ Reversal candlestick patterns forming ✅ News lurking in the background Then congratulations—you’ve likely spotted a reversal before your stop loss takes the hit. ✍ Conclusion: Stay Ahead, Not Behind Catching reversals before they happen isn’t magic—it’s just about knowing where to look. Price action, volume, key levels, indicators, and even the news all leave clues. The problem? Most traders only see them after their account takes the hit. Don’t be most traders. Pay attention, recognize the signs, and act before the market flips the script on you. Because the best time to spot a reversal? Before it happens. Do you use any of these strategies to spot reversals in your trading? What’s the last time you did it and what were you trading—forex, crypto, stocks or something else? Let us know in the comments!

Education

TradeCityPro Academy | Dow Theory Part 2 👋 Welcome to TradeCityPro Channel! Welcome to the Educational Content Section of Our Channel Technical Analysis Training We aim to produce educational content in playlist format that will teach you technical analysis from A to Z. We will cover topics such as risk and capital management, Dow Theory, support and resistance, trends, market cycles, and more. These lessons are based on our experiences and the book The Handbook of Technical Analysis. 🎨 What is Technical Analysis? Technical Analysis (TA) is a method used to predict price movements in financial markets by analyzing past data, especially price and trading volume. This approach is based on the idea that historical price patterns tend to repeat and can help traders identify profitable opportunities. 🔹 Why is Technical Analysis Important? Technical analysis helps traders and investors predict future price movements based on past price action. Its importance comes from several key benefits: Faster Decision-Making: No need to analyze financial reports or complex news—just focus on price patterns and trading volume. Better Risk Management: Tools like support & resistance, indicators, and chart patterns help traders find the best entry and exit points. Applicable to All Markets: Technical analysis can be used in Forex, stocks, cryptocurrencies, commodities, and even real estate. 📚 Recap of the Previous Session In the previous session, we explained the first two principles of Dow Theory. Make sure to review and study them, and if you have any questions, feel free to reach out to us in the comments. 📑 Principles of Dow Theory 1 - The Averages Discount Everything (Not applicable to crypto) 2 - The Market Has Three Trends 3 - Trends Have Three Phases 4 - Trend Continues Until a Reversal is Confirmed 5 - The Averages Must Confirm Each Other 6 - Volume Confirms the Trend 🌟 Principle 3: Trends Have Three Phases In Dow Theory, the primary trend (which can be a Bull Market or Bear Market) is divided into three distinct phases. These phases reflect market behavior and investor psychology over time. Here’s a detailed explanation: 📉 Accumulation Phase Definition: This phase begins when the market is at its lowest point (in a bull trend after a bear market) or when general pessimism prevails. Smart investors, professionals, and those with a long-term vision (like large funds or experienced traders) start buying. Characteristics: Prices are still low, and economic news is typically negative (e.g., recession, high unemployment). Trading volume is low because the general public lacks confidence and doesn’t participate. Price changes are small and gradual, making the market seem "lifeless" or directionless. Psychology: This phase marks a transition from despair to hope. Smart investors recognize that the worst is over and that the real value of assets exceeds their current price. Example: Imagine after a major crash like 2008, some big companies stabilize their prices, but the media still talks about "collapse." Professionals step in here. Or with Bitcoin at $16K, most people thought it was heading to zero and were hopeless! 📈 Public Participation Phase Definition: This phase occurs when the primary trend is clearly established, and the market starts moving more strongly. Economic news improves, and the general public (retail investors) enters the market. Characteristics: Prices rise quickly (in a bull market) or fall sharply (in a bear market). Trading volume increases significantly as participation grows. Analysts and media begin confirming the trend with positive reports. Psychology: Confidence in the market grows, and greed (in a bull market) or fear (in a bear market) gradually takes over. This is where market momentum accelerates. Example: In a bull market, you might see indices like the Dow Jones hitting new records weekly, with ordinary people buying tech or industrial stocks. 💰 Distribution Phase Definition: This is the end of the primary trend. In a bull market, smart investors who bought during accumulation start selling to take profits. In a bear market, panic selling subsides, and some buy in hopes of a recovery. Characteristics: Prices may still be high, but volatility increases, and signs of weakness emerge. Trading volume might remain high, but discrepancies between volume and price (e.g., price drops with high volume) appear. News is still positive, but professionals know the market is overvalued. Psychology: In a bull market, excessive optimism (Euphoria) dominates; in a bear market, complete despair sets in. This is where the trend reverses. Example: At the peak of the dot-com bubble (2000), tech stocks kept rising, but professionals began exiting, and then the crash followed. Key Note: These three phases occur in sequence, and understanding them helps analysts identify the market’s position in the larger cycle. In a bear market, the phases reverse: panic selling (like distribution), temporary recovery (like participation), and final capitulation (like accumulation). 🔍 Principle 4: The Averages Must Confirm Each Other Charles Dow believed that for a primary trend to be confirmed, two key market indices—the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA)—must move in the same direction. This principle stems from economic and logical significance in Dow’s time and is still considered a key metric. Here’s the full explanation: 📊 Economic Logic: Industry and Transportation: In Dow’s era (late 19th and early 20th centuries), the U.S. economy relied heavily on industrial production and transportation (e.g., railroads). If industrial companies (producers of goods) were growing, demand for transportation (moving goods) should also rise. Thus, aligned movement in these indices signaled a healthy economy. Mutual Confirmation: If only one average rises (e.g., industrials go up but transportation doesn’t), Dow saw it as a sign of weakness or an unsustainable trend. 🤑 Practical Application: Bullish Trend: In a bull market, both averages should reach new highs (Higher Highs). If the DJIA hits a new record but the DJTA fails to confirm and stays lower, the uptrend is questionable. Bearish Trend: In a bear market, both should hit new lows (Lower Lows). Lack of confirmation (e.g., industrials fall but transportation doesn’t) might signal the end of the downtrend. Divergence: If the averages diverge (one rises while the other doesn’t), Dow viewed it as a warning of a potential trend change. ⚖️ Technical Details: Timing: Confirmation doesn’t need to be simultaneous but should occur within a reasonable timeframe (e.g., weeks or months). Volume: Though not directly mentioned in this principle, handbooks emphasize that high volume during confirmation adds credibility to the trend. Classic Example: In 1929, the industrial average began falling, but transportation initially resisted. When transportation also dropped, the bearish trend was confirmed, leading to the Great Depression. 🎉 Conclusion We’ve reached the end of today’s educational segment! We’ll start by explaining all of Dow Theory’s principles, and in the future, we’ll move on to chart analysis and the strategy I personally use for trading with Dow Theory. So, make sure you fully grasp these concepts first so we can progress together in this learning journey! 💡 Final Thoughts for Today This is the end of this part, and I must say we have a long journey ahead. We will continually strive to produce better content every day, steering clear of sensationalized content that promises unrealistic profits, and instead, focusing on the proper learning path of technical analysis. ⚠️ Please remember that these lessons represent our personal view of the market and should not be considered financial advice for investment.

Education

by tradecitypro

Scalper’s Paradise Part 2 – Insights on Transactions This is my second post and the continuation of the Scalper’s Paradise series . In this installment, I’ll dive into transactions—more commonly known as volume . While everyone is aware of it, few truly utilize it effectively. From a retail trader’s perspective, volume is often misunderstood and misused. That’s why today, I’ll break it down and provide exceptional insights, drawing from my institutional experience as a professional trader. First, let’s clarify what volume really is. Volume is simply the total number of transactions between buyers and sellers. For example, if one buyer wants to purchase a single stock and a seller is willing to sell that stock, the transaction is recorded as one, meaning the volume reflects 1. Now, if we see that the volume for a given period is 1,000 traded stocks, this means there were 1,000 buyers and 1,000 sellers. It’s crucial to understand that there are always an equal number of buyers and sellers in any transaction. With this in mind, we can debunk a common misconception: when we see high volume and price movement, it’s incorrect to say there were "a lot of buyers" or "a lot of sellers"—because both sides are always equal. The real reason behind price movements is a different story, and one that I’ll cover in a future post. Now, let’s take a look at a chart that’s particularly useful for day trading, especially when combined with the volume indicator. Here, you can see a 10-second chart, which is particularly effective for spotting algorithmic trades used by institutions. Now, I’ve marked the high-volume areas with a vertical line. Remember, high volume indicates a significant level of market activity. Now, I’ve marked the candles that had the highest relative trading volumes. But what can we do with all this information? Why is high volume so important? First , high volume disrupts the market. It clearly signals that a major player is in need of liquidity. The reasons behind this can vary, as discussed in Part 1 of this series, but for now, let’s focus on the key takeaway: big players need volume. When a market participant requires large volume, their activity becomes visible in chunks, revealing parts of their trading strategy. This is exactly why we use 10-second charts—to spot these institutional trades more easily. Once we identify them, we can determine the price levels where they are beginning to accumulate or distribute their positions. The second reason is more of an institutional strategy rather than something easily executed by retail traders—but I’ll explain it anyway. During my time as an institutional trader, my performance was often evaluated based on how efficiently I could accumulate volume over time. This required finding other large players in the market. Let’s say I needed to take a long position. To do so, I required sellers on the other side. If I spotted a large player selling, I could use their selling pressure to gradually accumulate my position around their activity. This strategy allowed me to secure better prices over time by executing fewer, larger trades instead of aggressively chasing liquidity. Ultimately, this is the core objective of an institutional trader—maximizing position size while maintaining optimal pricing. How Can Retail Traders Use This Information to Improve Their Trading? 1) Identify high-volume areas on a 10-second chart. 2) Mark these levels on your chart. 3) Wait for a breach of these levels and trade in the direction of the breakout. If there is no breakout, you can align yourself with the large player instead. For example, if a big player is accumulating buy orders, mark that level and observe whether they continue to hold their position. If they do, you can go long alongside them. However, if other traders (as I did in my institutional trading days) start pushing against that big player, wait for a breach of your marked level and look for short opportunities instead. Keep in mind that we are talking about day trading and scalping, meaning these are short-term trades. The goal is to capitalize on immediate price movements rather than holding positions for extended periods. Here, you can see the levels we discussed earlier. Notice how the market clearly reacts to these easily identifiable levels—though trading them successfully is not as simple. I always use order flow and Level 2 data to confirm my trade ideas. Wishing you good luck and plenty of valuable insights from my post! Marco

Education

by Marco_Boesing

Mastering ICT Concepts: The Ultimate Trading Strategy Guide A lot of people are drawn to ICT trading concepts because they offer a deep understanding of how the markets truly work. With this guide, I want to explain the most popular ICT strategies in a simple and detailed way to help traders navigate these concepts effectively. The Inner Circle Trader (ICT) methodology offers a suite of trading strategies that delve into market mechanics, focusing on institutional behaviors and liquidity dynamics. This guide explores five prominent ICT strategies: Fair Value Gaps (FVG), Power of Three (PO3), Inversion Fair Value Gaps (IFVG) with Liquidity Sweeps, Breaker Blocks, and the Silver Bullet Strategy. Each section provides an in-depth explanation, trading approach, key considerations, and designated spots for illustrative images. 🔍 1. Fair Value Gaps (FVG) A Fair Value Gap (FVG) represents a price imbalance created when the market moves rapidly in one direction, leaving a gap between consecutive candlesticks. This gap signals inefficient pricing, which the market tends to revisit later to balance liquidity. Understanding FVGs is crucial as they reveal hidden institutional footprints. How to Trade: Identification: Spot an FVG when there is a three-candlestick formation where the second candle creates a gap between the high of the first candle and the low of the third candle. Retracement Expectation: The market typically seeks to fill these gaps as it rebalances price inefficiencies. Entry Strategy: Wait for price to return to the gap and enter in the direction of the initial impulse. Confirm the trade with market structure shifts or other confluence factors. Targets: Use previous highs/lows, liquidity zones, or equilibrium levels (50% of the FVG) as potential targets. Key Considerations: Timeframes: Higher timeframes like 1-hour, 4-hour, and daily yield more reliable signals. Volume Confirmation: High volume during the initial impulse strengthens the likelihood of a retracement. Partial Fills: The market may not always fill the entire gap. ⚡ 2. Power of Three (PO3) The Power of Three (PO3) describes how institutional players manipulate price action through three key phases: Accumulation, Manipulation, and Distribution. This strategy highlights how smart money engineers liquidity and misleads retail traders before delivering the intended price move. How to Trade: Accumulation Phase: Identify consolidation zones where price ranges sideways, often before major sessions (London or New York). Manipulation Phase: Wait for false breakouts or stop hunts where price temporarily breaks out from the range before reversing. Distribution Phase: Enter the trade in the opposite direction of the manipulation, targeting the liquidity created during the false move. Entry Confirmation: Market structure shifts after the manipulation phase. Bullish or bearish order blocks aligning with the intended direction. Fair Value Gaps in the distribution phase. Key Considerations: Patience: This strategy often requires waiting several hours for all three phases to complete. Liquidity Zones: Look for equal highs or lows near the range to anticipate the manipulation move. Time Windows: PO3 often plays out during high-volume sessions. 🔄 3. Inversion Fair Value Gaps (IFVG) with Liquidity Sweeps Inversion Fair Value Gaps (IFVG) are advanced price inefficiencies that act as dynamic support or resistance zones. When price fills a traditional FVG, that zone can later serve as an IFVG—particularly when aligned with liquidity sweeps. How to Trade: Identify Original FVG: Locate an FVG that has already been filled. Liquidity Sweep Trigger: Wait for price to sweep liquidity above or below a key level. Inversion Zone: When price returns to the previous FVG, treat it as a new support or resistance zone. Entry Confirmation: Watch for market structure shifts or rejection candles at the IFVG. Key Considerations: Confluence Zones: Combine IFVG with liquidity sweeps and order blocks. Patience: Wait for price action confirmation before entering. Stop Placement: Place stops below the IFVG in bullish setups or above in bearish setups. 🧱 4. Breaker Blocks Breaker Blocks are zones where previous support or resistance levels are invalidated by a liquidity sweep, only to become reversal zones. They represent areas where smart money accumulates orders before delivering price in the opposite direction. How to Trade: Identify Liquidity Sweeps: Spot areas where price breaks above or below a key high/low before reversing. Breaker Formation: The candle that invalidates the liquidity sweep forms the Breaker Block. Entry Strategy: Wait for price to retrace into the Breaker Block and confirm the trade with rejection candles or market structure shifts. Targets: Previous liquidity pools or opposing order blocks. Key Considerations: Higher Timeframes: Use 1-hour or 4-hour charts for the best results. Volume Analysis: High volume during the breaker formation strengthens the signal. Risk Management: Place stops beyond the breaker boundary. 🎯 5. Silver Bullet Strategy The Silver Bullet Strategy is a time-based model designed to capitalize on institutional price delivery patterns during specific one-hour windows. This strategy focuses on liquidity sweeps and Fair Value Gaps within these timeframes. How to Trade: Time Windows: Target these key one-hour sessions: London Open: 03:00 AM – 04:00 AM EST New York AM Session: 10:00 AM – 11:00 AM EST New York PM Session: 02:00 PM – 03:00 PM EST Identify Liquidity Zones: Look for equal highs/lows or session highs/lows. Execute Trades: Enter trades when price sweeps liquidity and rejects from an FVG or Breaker Block within the Silver Bullet window. Targets: Use opposing liquidity pools or session extremes. Key Considerations: Strict Timing: Only trade within the designated time windows. Confluence Factors: Combine with market structure shifts and order blocks. Risk Management: Place stops beyond liquidity sweep wicks. Conclusion Mastering ICT trading strategies requires patience, precision, and continuous practice. These five strategies—FVG, PO3, IFVG with Liquidity Sweeps, Breaker Blocks, and the Silver Bullet—provide a comprehensive framework to align with institutional price delivery. Use confluence factors and practice in demo environments before applying these methods in live markets. Happy Trading! Note: This guide is for educational purposes only and not financial advice. __________________________________________ Thanks for your support! If you found this guide helpful or learned something new, drop a like 👍 and leave a comment, I’d love to hear your thoughts! 🚀

Education

What Is Market Capitulation, and How Can You Trade It?What Is Market Capitulation, and How Can You Trade It? Market capitulation occurs when investors collectively surrender to market fears, leading to a sharp decline in asset prices. This article delves into the mechanics of capitulation, how to identify it, and ways to trade effectively during these tumultuous times. Understanding Market Capitulation Market capitulation refers to a phenomenon where a large number of investors simultaneously give up on the market, leading to a rapid and substantial decline in asset prices. This mass surrender is driven primarily by panic and fear of further losses. Capitulation often marks the peak of a bearish trend and is typically characterised by a significant spike in trading volumes and sharp price declines. Stock capitulation occurs when investors, overwhelmed by fear and uncertainty, rush to sell their assets to avoid further losses. This behaviour is often triggered by prolonged market downturns or significant economic events. For instance, during the COVID-19 pandemic in March 2020, the S&P 500 experienced a nearly 5% drop in a single day, a classic example of market capitulation. This event led to a subsequent 17% rebound in the index over the following week, highlighting how capitulation can precede a market turnaround. Psychologically, capitulation represents the point where investor sentiment shifts from hope to despair. The collective mindset of "cutting losses" leads to a cascade of selling pressure, pushing prices to extreme lows. The intensity of selling can be so severe that it wipes out significant market value in a very short period. While capitulation can be daunting, it also presents opportunities. For contrarian investors and traders, these periods of panic selling can offer attractive entry points. As prices plummet, fundamentally strong assets may become undervalued, providing a chance to buy at lower prices. However, caution is essential as markets can remain volatile, and further declines are possible before a sustained recovery takes hold. Identifying Market Capitulation Identifying market capitulation involves recognising several key indicators that signify a dramatic surge in selling pressure and a sharp decline in asset prices. Here are the most notable indications to look for: Steep Price Decline Capitulation is typically associated with a rapid and substantial drop in asset prices. This sharp decline occurs as panic selling accelerates, pushing prices down swiftly, often with large candles and minimal wicks. High Trading Volume During capitulation, there is often a significant spike in trading volume as investors rush to sell their holdings. This increase in volume is a key signal that a large number of market participants are exiting their positions simultaneously. Extreme Bearish Sentiment Market sentiment during capitulation is overwhelmingly negative. News and investor sentiment indicators turn highly pessimistic, contributing to the panic and further driving down prices. Technical Indicators Various technical analysis tools can help identify capitulation: - Volume Oscillator and On-Balance Volume (OBV): These indicators track changes in volume and can signal when selling pressure is peaking. A sharp decrease in these indicators often accompanies capitulation. - Candlestick Patterns: Patterns like the hammer candlestick, which shows a recovery from intraday lows, and other patterns like the three white soldiers, can indicate that the market may have reached a bottom. The presence of such patterns, especially when accompanied by high volume, suggests a potential reversal. - Bollinger Bands: These bands plot 2 standard deviations above and below a moving average. During capitulation, prices often touch or fall below the lower band, which indicates extreme selling conditions and potential oversold levels. This is especially true if the price falls beyond 3 standard deviations. - Average True Range (ATR): The ATR is an indicator that’s used to measure market volatility. A sudden, sharp increase in ATR during a downtrend can signal capitulation as it reflects the heightened panic and large price movements typical of such periods. Exhaustion of Selling Capitulation often marks the point where selling pressure exhausts. This occurs when most investors who intend to sell have done so, leaving fewer sellers in the market. This depletion of sellers can indicate that a bottom is near and that a reversal may be imminent. The Impact of Market Capitulation on Markets Market capitulation has significant effects on financial markets, influencing both short-term and long-term trends. Short-Term Impact Immediately following capitulation, markets often experience extreme volatility and uncertainty. The intense selling pressure often drives asset prices sharply lower, causing values to drop significantly below their intrinsic worth. This phase is characterised by wild price swings as the market seeks a new equilibrium. The pervasive negative sentiment and widespread fear can further exacerbate the situation; across a broader downward move, there can be multiple points of capitulation with high volatility surrounding these additional selloffs. Long-Term Implications Over the long term, capitulation often marks the bottom of a market downturn. As the selling pressure diminishes and fewer investors remain to sell, the market begins to stabilise. This stabilisation allows new investors to enter the market, often leading to a gradual recovery in asset prices. However, it is essential to recognise that not every capitulation results in an immediate market reversal. Some markets may continue to decline or consolidate before a sustained recovery takes hold, with these new investors falling prey to the same fear-driven trading as another potential capitulation occurs. Psychological and Sentimental Effects Capitulation also has a lasting impact on investor sentiment. The severe downturn and associated losses can create a long-term negative perception of the affected assets, causing investors to remain cautious even after the market begins to recover. This psychological impact can lead to reduced trading volumes and prolonged periods of low investor confidence. How to Trade Around a Market Capitulation Event Trading around a market capitulation event can be challenging due to the difficulty in accurately identifying capitulation in real-time. Capitulation often becomes clear only in hindsight, which complicates the process of trading or anticipating it effectively. Avoiding the Falling Knife After identifying potential capitulation—characterised by a sharp price drop, likely on increased volume, and backed by extreme bearish sentiment—,it's typically unwise to try and buy during the initial plunge. The sharp decline often leads to further drops, even if they are less severe. Trying to "catch the falling knife" can potentially result in further losses as prices continue to fall. Taking a Short Position During a Dead Cat Bounce One of traders’ approaches is to take a short position during a "dead cat bounce" or brief pullback before another downward leg. However, this strategy carries a less favourable risk/reward ratio because it involves selling low with the intention of selling lower. This might be effective but requires precise timing and strong risk management. Waiting for Stability The most prudent strategy is often to wait until market volatility subsides and a bottom appears to form. Signs of a market bottom include the price overcoming a previous swing high or breaking through a prior level of resistance. This indicates a potential shift in market sentiment, offering the trader an opportunity to buy low and sell high with a much more favourable risk-reward profile. Using Confluence in Analysis Combining different forms of analysis can provide greater confidence in identifying a market bottom. For example, if prices fall to a key support level or the decline seems disproportionately sharp compared to fundamentals, it might indicate an oversold condition. Momentum indicators and moving averages can also help confirm potential reversal points. Risk Management Strong risk management practices are crucial. Limiting position sizes and always adhering to a stop loss can potentially prevent severe losses if the market experiences another leg down. This means that traders can potentially protect themselves against unexpected volatility and further declines. Common Mistakes Traders Make During Market Capitulation Navigating market capitulation is challenging due to the extreme volatility and widespread panic that characterise these events. Here are some specific mistakes that traders frequently make during market capitulation: Panic Selling One of the most common mistakes is succumbing to panic and selling off assets hastily. During capitulation, the market is driven by extreme fear, and many traders sell to avoid further losses. This emotional response can lead to selling at the lowest point, locking in significant losses and missing out on potential rebounds once the market stabilises. Holding onto Losing Positions Traders often make the mistake of holding onto a losing position, hoping for a reversal. When a trader holds a long position and witnesses market capitulation, the instinct might be to wait for the market to recover. However, this can lead to further losses as the asset's value continues to decline. Instead of cutting losses early, some traders let the losses accumulate, which can deplete their capital and limit future trading opportunities. This contradicts the previous point, and you may be confused about whether you sell or hold onto the trade. In any case, you will face a decision to either sell or hold on to their position if the capitulation is severe and protracted. It will always depend on the context and fundamental reason behind the capitulation, it’s worth noting that stocks generally recover over time. Trying to Time the Bottom Attempting to time the market bottom during capitulation is exceedingly difficult and can easily lead to additional losses. Capitulation typically involves sharp price declines and increased volatility, making it challenging to determine the exact bottom. Traders who try to catch the falling knife may find themselves buying into a market that continues to drop. Overexposing Positions Another mistake is overexposing oneself to high-risk positions during periods of extreme market volatility. Instead of taking bolder positions, traders are best served to limit their exposure with smaller positions, stop losses, a diversified portfolio, and more judicious entries. It's essential to maintain a balanced approach and avoid putting too much capital into volatile trades. The Bottom Line Understanding and navigating market capitulation can be challenging but offers potential opportunities for informed traders. By recognising key indicators and avoiding common mistakes, traders can better manage their strategies during these volatile periods. For a robust trading experience, consider opening an account with FXOpen to leverage these insights and trade with a broker you can trust. FAQs What Is Capitulation in the Stock Market? The capitulation meaning in the stock market refers to the moment when investors and traders, overwhelmed by fear and panic due to a prolonged decline in stock prices, decide to sell their holdings at any price to stop further losses. This mass selling leads to a sharp and rapid drop in stock prices. The term is derived from the military concept of surrender, indicating that investors are giving up on their positions. Is Capitulation Bullish or Bearish? Capitulation is both bullish and bearish. It is bearish during the actual event, as it involves widespread panic selling and a significant drop in stock prices. However, it can be bullish afterward, as it often marks the end of a severe downtrend and the beginning of a recovery or rally. This is because the selling pressure is exhausted, and buyers start to step in, finding attractive entry points. How Does Capitulation Work? Capitulation works through a cycle of fear and panic. Initially, as prices decline, some investors start selling to cut their losses. This selling pressure causes prices to drop further, leading more investors to panic and sell their holdings. This cycle continues until the majority of investors have sold their positions, leading to a sharp decline in prices. Eventually, the market stabilises as the selling pressure diminishes, often followed by a recovery. What Are Signs of Capitulation? Signs of capitulation include a sharp decline in prices, high trading volumes, extreme bearish sentiment, and market exhaustion, where selling pressure diminishes, stabilising the market. What Is Capitulation in Crypto*? Capitulation in the cryptocurrency market* follows a similar pattern to that in the stock market. It occurs when crypto* investors, driven by fear and panic due to a prolonged decline in prices, sell their holdings en masse, leading to a sharp drop in prices. This can be triggered by negative news, regulatory actions, or broader market downturns. *Important: At FXOpen UK, Cryptocurrency trading via CFDs is only available to our Professional clients. They are not available for trading by Retail clients. To find out more information about how this may affect you, please get in touch with our team. Trade on TradingView with FXOpen. Consider opening an account and access over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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TOP 5 TRADING SETUPS THAT MAY BE IN THE ARSENAL OF A SKIN TRADER Successful trading is not about “guessing the market”, but about clear strategies and discipline. Today I will show you 5 setups that really work and will help you find the entry point with the best risk management. 1️⃣ Breakout & Retest ✅ How I work: The price breaks through the rhubarb (strong support/support). Then it turns around, tests this rope and jumps. 🔍 What you need to joke about: High volume under breakdown (strong impulse). A clear retest without any deep push back. Candle pattern confirmation (pin bar, clay, etc.). 📈 De vikoristuvati: Cryptocurrency Forex Stock market 🔸 Example: BTC/USD breaks through $50,000, turns around, tests it as support - and goes up. 🛑 Stop loss: after the breakout (with a small margin). 🎯 Goal: 1:2 or 1:3 for risk management. 2️⃣ False Breakout ✅ How I work: The price breaks through the rhubarb, but then quickly turns back. This is a trap for those who “run after the market.” 🔍 What you need to joke about: Great tail of the candle after breakdown (manipulation). The volume falls after the breakdown - shows the weakness of the rukh. Confirming reversal pattern (pin bar, clay). 📈 De vikoristuvati: Crypt Forex NASDAQ, S&P500 🔸 Example: The price of Ethereum breaks through $3,500, but it quickly turns around under this pressure – the witches “took control.” 🛑 Stop loss: beyond the extreme of the fake breakout. 🎯 Purpose: front level of support/support. 3️⃣ Liquidity Grab ✅ How it works: The price breaks through the level sharply, knocking out stops. Then returns to the zone and changes direction. 🔍 What to look for: A strong impulse movement with a sharp pullback. Knocking out stops (candle tails). High volume on the return. 📈 Where to use: Forex Stock markets Cryptocurrency 🔸 Example: Before a big drop, BTC makes a sharp jump above $52,000, collects stops of longs - and then falls to $48,000. 🛑 Stop loss: short, following a manipulation move. 🎯 Target: the nearest liquidity zone. 4️⃣ Trendline Bounce ✅ How it works: Price tests the trendline and bounces. 🔍 What to look for: Minimum 3 touches of the trendline (it should be strong). Bounce with confirmation (candlestick patterns, volume). Previous support or resistance zone. 📈 Where to use: Any market (crypto, forex, stocks). 🔸 Example: NASDAQ tests the rising trendline, bounces - long entry. 🛑 Stop loss: below the trendline. 🎯 Target: nearest resistance level. 5️⃣ Double Top / Double Bottom ✅ How it works: The price forms two identical highs (or lows), after which a reversal occurs. 🔍 What to look for: Symmetrical pattern (two tops/two bottoms). Reversal signal (bearish or bullish candle). High volume during the second touch. 📈 Where to use: Stock market Forex Cryptocurrency 🔸 Example: SP500 makes a double peak at 4700 and falls. 🛑 Stop loss: just above the top/bottom. 🎯 Target: 50% or 100% of the figure. Conclusion: These setups work in any market if applied correctly! The main thing is not just to see the pattern, but to understand what is behind the price movement. Subscribe so you don't miss new discussions!

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by MVP_FX_Hunter

Double Top Trading Pattern: A Classic Reversal Setup Hello, Traders! 👋🏻 Have you ever noticed a market attempting to break through the same resistance level twice, only to fail both times? This formation is known as the double top pattern and often signals a potential bearish reversal. But is a double top bullish or bearish across all markets? Let’s dive into the meaning of the double top pattern and how to identify it on your charts! What Is a Double Top? 👀 A double top is a chart formation where the price reaches a high, pulls back, and then rallies again to the same or a very close high but fails to break through. This second failure to surpass the previous peak suggests buyers are losing momentum, paving the way for a potential downtrend. Key Points of the Double Top Chart Pattern: Two Prominent Highs: The peaks are usually at similar price levels. Neckline (Support Level): The interim low between the two peaks forms a support line. Bearish Sentiment: When the price breaks below the neckline, it confirms a potential trend reversal to the downside. Is a Double Top Bullish or Bearish? The double top pattern is bearish because it signals that the uptrend is weakening and sellers are gaining control. After the neckline breaks, it often results in a significant price drop. Key Features of a Bearish Double Top Pattern The Two Peaks Are Nearly Equal in Height. Volume Declines on the Second Peak, Showing Reduced Buying Pressure. A Breakdown Below the Neckline Confirms the Pattern and Triggers the Downtrend. Advantages of a Double Top Pattern Clear Trend Reversal Signal: A double-top chart pattern visually indicates a potential shift from an uptrend to a downtrend. Defined Resistance Level for Risk Management: The two peaks at similar price levels create a strong resistance zone. This allows traders to place Stop-Loss orders effectively and set profit targets with more confidence. Volume Confirmation for Stronger Signals: During a valid double top trading pattern, volume often decreases as the second peak forms and increases when the neckline breaks. This helps confirm the authenticity of the breakout and strengthens trade decisions. Favorable Risk-Reward Ratio: Because the expected price drop is often equal to the pattern's height, the potential reward is typically larger than the initial risk. This can make the double-top pattern an attractive setup for risk-management-focused traders. Disadvantages of a Double Top Pattern Not Always Reliable (False Signals): Like any technical pattern, the double top can fail, leading to false breakouts. Prices may temporarily create two peaks but then continue upward instead of reversing. Subjectivity in Pattern Recognition: Traders may interpret the double top pattern meaning differently based on variations in peak height, neckline positioning, or symmetry. This subjectivity can lead to inconsistent trade execution. Variations Across Different Markets: Not all double top chart formations look the same. Some may have uneven peaks, wider time frames, or irregular structures, making setting precise entry and exit points harder. Limited Profit Potential in Some Cases: While the projected price drop is based on the pattern's height, market conditions may prevent the price from reaching the expected target. Final Thoughts: Why the Double Top Pattern Matters The double top chart pattern is a bearish reversal signal that helps traders identify when an uptrend is losing momentum. So, traders, have you ever caught a double top trading pattern before a major price drop? Your experiences and strategies are valuable to the trading community. Share them in the comments and let's learn from each other!

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How to Find Stocks According to my Setup In this Video, I shared my Setup and Discussed about Stocks finding According to our setup; with the help of Tradingview Pine Screener..

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06:56

by growbharat2005

Ultimate Guide to Technical Indicators 📌 Introduction: In the world of trading, correctly interpreting price movements is essential for making informed decisions. Technical indicators are key tools that help analyze trends, momentum, volume, volatility, and other aspects of market behavior. This guide explores a wide range of indicators—from traditional ones to those that combine advanced techniques—so you can design robust analysis strategies tailored to your style. 📈 1. Trend Indicators These indicators measure the direction and strength of a trend (bullish, bearish, or sideways), allowing traders to identify potential entry and exit points. • Moving Averages (SMA/EMA): Smooth price action to identify trends (e.g., moving average crossovers). • ADX (Average Directional Index): Measures trend strength (>25 indicates a strong trend). • Ichimoku Cloud: Defines support, resistance, and momentum through a “cloud” formation. • SuperTrend: Highlights reversals with a line that follows volatility. • Envelopes: Bands around a moving average to detect overbought/oversold conditions. • Parabolic SAR: Generates dots that indicate possible trend reversals, useful in trending markets. • Alligator (Bill Williams): Uses multiple moving averages to identify emerging trends. • Donchian Channels: Detects breakouts with bands based on historical highs and lows. • Vortex Indicator: Uses two lines to confirm trend direction. • ZigZag: Filters market “noise” to highlight significant movements. 💡 Tip: Donchian Channels can also be used to analyze volatility expansion. ⚡ 2. Momentum Indicators These measure the speed and strength of price movements, helping confirm trend validity and detect reversals. • RSI (Relative Strength Index): Identifies overbought (>70) and oversold (<30) conditions. • MACD (Moving Average Convergence Divergence): Signals momentum shifts through line crossovers and divergences. • Stochastic Oscillator: Compares closing price with the recent range to signal reversals. • CCI (Commodity Channel Index): Detects extreme levels, especially in cyclical assets. • TRIX: A triple-smoothed moving average oscillator that filters out minor trends. • Williams %R: Similar to Stochastic but inverted (-20 indicates overbought, -80 oversold). • Momentum Oscillator: Measures the rate of price change over a set period. • Awesome Oscillator (AO): Compares short- and long-term moving averages to detect momentum changes. • Chaikin Oscillator: Integrates volume and price to evaluate accumulation or distribution. • Rate of Change (ROC): Calculates the percentage price change over a past period. 🎯 Tip: Momentum indicators are often combined with trend indicators to validate moves and reinforce signals. 📊 3. Volume Indicators Volume is crucial for confirming trend validity and movement strength. • OBV (On-Balance Volume): Links volume to price changes to confirm trends. • Volume Profile: Displays price levels with the highest volume concentration. • MFI (Money Flow Index): Combines price and volume, similar to RSI. • Accumulation/Distribution Line: Evaluates money flow using closing price and daily range. • VWAP (Volume-Weighted Average Price): A volume-weighted moving average used by institutional traders. • Chaikin Money Flow: Integrates volume and price to measure buying/selling pressure. • Ease of Movement (EOM): Shows how easily price moves relative to volume. • Volume Oscillator: Measures the difference between two volume moving averages. • Herrick Payoff Index (HPI): Incorporates volume, price, and open interest (common in futures). • Volume Rate of Change: Measures the speed of volume changes over time. 🔥 4. Volatility Indicators These measure price dispersion, helping define risk and market activity levels. • Bollinger Bands: Expand/contract around a moving average based on volatility. • ATR (Average True Range): Measures the average price range over a period. • Keltner Channels: Similar to Bollinger Bands but uses ATR to set bands. • Standard Deviation: Quantifies price dispersion from its average. • VIX (Volatility Index): Measures expected volatility in the S&P 500. • Choppiness Index: Determines if the market is trending or ranging (high values indicate range-bound conditions). • Donchian Channels (Volatility): Identifies price extremes to measure expansion. • GARCH Models: Statistical models for predicting future volatility. • Chaikin Volatility: Measures volatility using high-low price ranges. • Fractal Adaptive Moving Average (FRAMA): Adjusts smoothing based on market volatility. 🏛 5. Support & Resistance Indicators These help identify key levels where price may pause or reverse. • Pivot Points: Daily levels based on previous highs, lows, and closes. • Fibonacci Retracements: Identify potential reversal zones (e.g., 23.6%, 38.2%, 50%). • Volume Profile: Helps spot natural support/resistance levels. • Moving Averages: Act as dynamic support/resistance over time. • Price Action (Highs/Lows): Psychological levels based on past price action. • Market Profile: Shows volume distribution across price and time levels. • Camarilla Pivots: A more detailed pivot system for intraday trading. • Anchored VWAP: VWAP calculated from a specific starting point, like trend beginnings. • Demark Sequential: Identifies potential reversals through candle counts. • Murrey Math Lines: Sets support/resistance levels based on mathematical scales. 🔍 Tip: Visual examples can help illustrate how these key zones form. 🔄 6. Cycle & Pattern Indicators Analyze seasonal repetitions or chart patterns that can anticipate future moves. • Elliott Wave Theory: Identifies cycles of 5 impulsive and 3 corrective waves. • Harmonic Patterns (Gartley, Butterfly): Geometric formations based on Fibonacci ratios. • Head & Shoulders: A classic reversal pattern signaling trend change. • Cup & Handle: A bullish continuation pattern. • Wolfe Waves: Uses price waves and channels to spot reversals. • Hurst Cycles: A model based on recurring time cycles. • Dow Theory: Classifies trends into primary, secondary, and minor. • Japanese Candlestick Patterns (Doji, Engulfing): Visual signals of reversal or continuation. • Cycle Analytics: Includes tools like Tom DeMark’s Cycle Indicator. 📊 7. Statistical & Quantitative Indicators Use mathematical models and algorithms for predictive analysis and risk management. • Linear Regression: Fits a trend line to price data. • Z-Score: Measures how far price is from its mean in standard deviations. • Monte Carlo Simulations: Simulates probabilities of future scenarios. • Machine Learning (Neural Networks): Uses AI algorithms to predict prices. • Asset Correlation: Measures relationships between assets (e.g., oil & USD/CAD). • Sharpe Ratio: Evaluates risk-adjusted returns. • Value at Risk (VaR): Estimates potential maximum loss over a timeframe. • Cointegration: Detects long-term relationships between asset pairs. • ARIMA (Time Series Models): Forecasts future movements using historical data. • Kalman Filter: Optimizes real-time market estimates. 📢 8. Market Sentiment Indicators Measure trader emotions and market positioning, such as greed, fear, optimism, or pessimism. • Fear & Greed Index: Combines multiple factors (volatility, volume, surveys) to gauge extreme emotions. • Put/Call Ratio: Compares put vs. call options to assess bearish/bullish expectations. • Commitments of Traders (COT): Weekly report showing institutional positions in futures. • Short Interest: Percentage of shares sold short, indicating bearish sentiment. • AAII Investor Sentiment Survey: Weekly retail investor market outlook. • Social Media Sentiment (Stocktwits, Twitter): NLP-based analysis of online market opinions. 📊 9. Custom/Hybrid Indicators These indicators are developed by traders or platforms to fit specific strategies, combining different techniques and data. • ✅ Volume-Weighted MACD: Integrates the MACD with volume data to filter signals. 📈 RSI with Bollinger Bands: Merges overbought/oversold analysis with volatility measurement. 🔗 Ichimoku + Fibonacci: Combines Ichimoku's dynamic support/resistance with Fibonacci retracements. 📉 SuperTrend with ATR: Adjusts SuperTrend sensitivity using the Average True Range. 🤖 Machine Learning Oscillators: AI-trained indicators (e.g., LSTM-based predictors) to anticipate movements. 📍 Custom Pivot Points: Tailored pivot points based on assets or specific timeframes. 📊 Market Profile + Volume Profile: Merges price-time distribution with volume analysis. ⚖ Synthetic Indicators: Mixes data from multiple assets (e.g., gold/oil ratio) to generate signals. 📆 Seasonality Indicators: Based on historical seasonal patterns (like the “January Rally” effect). 🚀 Hull Moving Average (HMA): Optimized moving average to reduce lag and noise. • 💡 Tip: Experiment and tweak these indicators to fit your personal trading style. 📉 10. Derivatives Market Indicators These indicators are designed for complex instruments like futures and options, allowing a deeper market analysis. • 📊 Open Interest: Number of open contracts in futures or options, indicating trend strength. ⚖ Delta Hedging Ratio: Measures the balance between call and put options. 🔄 Gamma Exposure (GEX): Assesses the impact of market makers on price through gamma hedging. 🌪 Implied Volatility (IV): Expected volatility derived from option prices (e.g., IV Rank). 📊 Skew Index: Measures volatility differences between out-of-the-money options, identifying bullish or bearish trends. 📈 Contango/Backwardation: In futures markets, shows whether prices are overvalued or undervalued relative to the spot market. 💵 Volume Delta: Real-time difference between buying and selling volume. 🔥 Liquidation Heatmaps: In crypto, highlight areas where large margin liquidations occur. 🎭 Options Pain (Max Pain Theory): Indicates the price where option sellers maximize profits. 📊 PCR (Put/Call Ratio) for Options: Similar to the Put/Call Ratio but focused on specific option volume. 🌍 11. Macro-Technical Indicators These indicators integrate technical analysis with macroeconomic factors, providing a broader market perspective. ⚖ Gold/Oil Ratio: Reflects geopolitical risk or inflationary pressures. ⚠ Yield Curve Inversion: Happens when short-term bonds yield more than long-term ones, considered a recession signal. 💲 Dollar Index (DXY) + Commodities: Shows the inverse correlation between the dollar and commodities. 🔗 Bitcoin Dominance: Represents Bitcoin’s market cap percentage relative to the total crypto market. 🚢 Baltic Dry Index: Measures shipping costs, acting as an indicator of global economic activity. 🛢 Copper/Gold Ratio: Relates copper (growth indicator) with gold (safe-haven asset) to predict economic cycles. 📈 Equity Risk Premium: Difference between stock and bond returns, useful for measuring risk appetite. ⚡ TED Spread: Difference between interbank lending rates and Treasury bonds, indicating financial stress. 📊 VIX vs. S&P 500: Links market volatility with index trends. 📉 Inflation Breakeven Rates: Calculates inflation expectations from the difference between TIPS and nominal bonds. 📝 Note: These indicators are especially valuable for contextualizing technical analysis within the global economic landscape. 📈 12. Price Action Indicators These indicators rely on direct price movement analysis, avoiding complex mathematical formulas. 🔹 Horizontal Support & Resistance: Key zones manually drawn based on historical price action. 🕯 Japanese Candlesticks: Patterns (Doji, Hammer, Engulfing, etc.) indicating possible reversals or continuations. 📊 Price Channels: Parallel trendlines framing price movement. 🚀 Breakout/False Breakout: Breaks of key levels that may confirm or turn into traps. 📏 Inside/Outside Bars: Candles that remain within or exceed the range of the previous candle. 📡 Order Flow Analysis: Real-time tracking of buy and sell orders. 🔄 Market Structure: Observing higher highs/lows or lower highs/lows to identify trends. 📊 Volume-by-Price: Side histogram displaying accumulated volume at different price levels. 📏 Wick Analysis: Examining candle wicks to detect rejections at certain levels. 🎯 Open/Close Levels: Using previous open and close prices as psychological references. 💡 Tip: Combining price action with other indicators can provide a more complete and precise market view. 🏆 Conclusion Integrating diverse technical indicators allows for a multifaceted market analysis. Each category—from trends, momentum, and volume to macroeconomic analysis and price action—offers valuable insights that, when combined, strengthen decision-making. 🚀 Key Takeaway: No single indicator is infallible! The real power lies in the synergy of multiple tools and strong risk management. Experiment, fine-tune, and adapt these indicators to your trading style and goals to build an effective and personalized strategy.

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HIGH Volatility Alert! Everything You Need to Know Have you ever wondered why the certain trading instruments are very rapid while some our extremely slow and boring? In this educational article, we will discuss the market volatility , how is it measured and how can it be applied for making smart trading and investing decisions. 📚 First, let's start with the definition. Market volatility is a degree of a fluctuation of the price of a financial instrument over a certain period of time. High volatility reflects quick and significant rises and falls on the market, while low volatility implies that the price moves slowly and steadily. High volatility makes it harder for the traders and investors to predict the future direction of the market, but also may bring substantial gains. On the other hand, a low volatility market is much easier to predict, but the potential returns are more modest. The chart on the left is the perfect example of a volatile market. While the chart on the right is a low volatility market. 📰 The main causes of volatility are economic and geopolitical events. Political and economic instability, wars and natural disasters can affect the behavior of the market participants, causing the chaotic, irrational market movements. On the other hand, the absence of the news and the relative stability are the main sources of a low volatility. Here is the example, how the Covid pandemic affected GBPUSD pair. The market was falling in a very rapid face in untypical manner, being driven by the panic and fear. But how the newbie trader can measure the volatility of the market? The main stream way is to apply ATR indicator , but, working with hundreds of struggling traders from different parts of the globe, I realized that for them such a method is complicated. 📏 The simplest way to assess the volatility of the market is to analyze the price action and candlesticks. The main element of the volatile market is occasional appearance of large candlestick bars - the ones that have at least 4 times bigger range than the average candles. Sudden price moves up and down are one more indicator of high volatility. They signify important shifts in the supply and demand of a particular asset. Take a look at a price action and candlesticks on Bitcoin. The market moves in zigzags, forming high momentum bullish and bearish candles. These are the indicators of high volatility. 🛑 For traders who just started their trading journey, high volatility is the red flag. Acting rapidly, such instruments require constant monitoring and attention. Moreover, such markets require a high level of experience in stop loss placement because one single high momentum candle can easily hit the stop loss and then return to entry level. Alternatively, trading a low volatility market can be extremely boring because most of the time it barely moves. The best solution is to look for the market where the volatility is average , where the market moves but on a reasonable scale. Volatility assessment plays a critical role in your success in trading. Know in advance, the degree of a volatility that you can tolerate and the one that you should avoid. ❤️Please, support my work with like, thank you!❤️ I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.

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by VasilyTrader

Seeds in Chaos, Petals in Profit -A trader's guide Seeds in Chaos, Petals in Profit A trader's guide to reading the market through nature's lens. By: Masterolive Intro: This trader's guide is not another cookie-cutter trading system. Instead, it focuses on building a long-term mindset and a way to read the market's chaos through nature's lens. This guide is grounded in real success but is not for the daily trader; it works for long-term swings using hourly price moves. Over seven years of trading, I developed a unique way to view the market, which led to a practical trading mindset. The technique comes from simplifying the chart after experiencing endless combinations of indicators to no avail. It wasn't until I had to explain my concept to someone else that I found a way to use a garden analogy that fits the mindset well to see the market as a natural system: planting in chaos, thriving through storms. Later, I read two books: "The Alchemy of Finance" by George Soros and "The Misbehavior of Markets" by Benoit Mandelbrot and Richard L. Hudson. Surprisingly, these two books validated my approach and inspired me to share it. Previously, I would tell no one because I thought it was silly. The overall goal is to plant a garden, watch it grow, and understand how the weather affects the plants. This guide walks you through determining what flowers you want to plant and how to read the weather after you have made your choice. It uses a garden and planting flowers as an analogy to choosing the right stocks and interpreting an EMA indicator to determine the market's direction. This guide also works well for Bitcoin. This guide will help you understand how to read and interpret the chart. It will also give you accurate future context so you react less to the market moves and see the bigger picture: Plant while they panic. This guide is not financial advice. Part One - Planting. Some traders focus on various companies based on technicals or fundamentals, some short-term and some long-term. Other traders will focus on a few stocks or diversify across many. For this guide, we pick and diversify a sector with roles that thrive together. The industry can be broad or small, but we will use 10 assets, including nine stocks and Bitcoin, and explain how they correlate and grow into a weather-worthy garden. In this garden, we will focus on Tech and Finance and explain how to plant and organize the garden. First, we must look back at the broadest picture in finance. We will choose a stock exchange and a crypto exchange in this garden. (1 and 2 out of 10 flowers) Why an exchange? Simply put, traders will always look for stocks and crypto to buy. They will look for the best companies and the best opportunities. Therefore, stock exchanges will benefit from the revenue they generate. If a stock goes parabolic, the exchange still profits from that price move. Choosing the exchange skips the hassle of finding companies in a haystack. The same is true for the crypto exchange. Our garden has two flowers: one stock exchange and one crypto exchange, representing those two sectors. Next, what else can correlate with our garden from a zoomed-out view? Let's choose a Bank and a payment processor. (3 and 4 out of 10 flowers) Traders will need the bank to on and offramp their cash profits to and from the stock and crypto exchange. Meanwhile, they will need to process those electronic payments. The bank and payment processors benefit from trading surges; if everyone piles in for a parabolic price move of a particular stock, the bank and payment processors benefit from the action, and the exchanges offering the stock get revenue from the surge. Once again, this choice skips the need to hunt for specific stocks. It takes advantage of all stocks since traders need cash, banks, electronic payments, and exchanges to buy those company stocks or bitcoin. Our garden now has Four flowers, a bank and payment processor, and two exchanges for this sector. The correlation? Exchanges, banks, and processors all thrive when traders move money. The fifth is a pivot flower before we discuss the tech company sector. This pivot flower is a gambling company (5 out of 10). How does this correlate? Some traders and other users gamble with their cash and profits; even in a recession or a depression, people will still gamble. Plus, users might take their gambling winnings and invest them in a stock or buy bitcoin. They need a bank, an exchange, and a payment method. In this case, the flowers are self-reinforcing: gambling winnings or losses, stock booms or busts; it doesn't matter in the big picture because, once again, exchanges, banks, and processors all thrive when people move money. Our garden now has five flowers with a broad but strong correlation. Now, on to the tech sector with the last five flowers. You will hone in on specific tech roles at this point, but remember that your choices will be self-reinforcing. If your choice booms, the exchange benefits, and you benefit again from the exchange stock. You will electronically transfer your profits to your bank, which you benefit from by owning the bank stock and payment processor. But if you're smart, you will skip the gambling and let the crowd roll the dice while you plant the profits. We will focus on two more flowers (6 and 7 out of 10) for tech, so we need to find companies exposed to the popular and relevant tech we want. For tech company 1, you could expose yourself to AI, EVs, and ROBOTS. For tech company 2, Semiconductors (or graphics cards). In this section of our garden, graphic cards and AI rely on one another, while EVs and robots use AI to operate. Eventually, people will buy or sell the robot and EV, and some may use the profits to buy stock (or Bitcoin), requiring a bank and payment processor. Meanwhile, people use LLMs, log into their bank, or exchange daily on a computer that requires a graphics card. Our garden now has seven flowers out of 10, 3 more to go! We want to diversify (but stay correlated with our garden), so next, we will look at a real estate company or ETF—but not just any company or ETF, one that develops in tech hub areas. How does this correlate? Robots, AI, EVs, and graphics cards all need workers to operate the companies; young talent will want to move to places where they can work in AI or Robotics or factory EV workers, so the real estate in those areas will be in high demand, so now we own the real estate for our Ai, EV, Robots, and graphic card workers. As tech grows, real estate booms, driving more money through exchanges, banks, and processors. We now have eight flowers in our weather-worthy garden. For the 9th flower, we turn to a wildflower: none other than Bitcoin. Bitcoin is not just a crypto coin but a capital asset, a store of value for your currency when it debases. People, especially tech workers, will buy, trade, and sell Bitcoin. As people learn and turn to the asset, global capital will flow through Bitcoin as people around the world save their cash value, whether it be from gambling winnings, selling a car, selling real estate, selling a stock, or simply putting part of their income from their tech job into it regularly. All of this requires Exchanges, Banks, and payment processors to move. Bitcoin correlates with that, as exchanges profit off bitcoin, which you own stock in the exchange company. You still need a bank to land on and a payment processor to move the money electronically. We now have nine flowers in our garden, and it's almost complete. How can we diversify even more? We can use industrial metal for our last flower, but how does an industrial metal correlate with our tech and finance garden? Copper is the metal that conducts electricity, and electricity is needed to move money, send Bitcoin, power a growing network of EV superchargers, and power the factories that produce EVs, graphics cards, robots, and more. Copper's the most vigorous root, tying every flower, from tech to finance, into a weather-worthy bed. Meanwhile, the crowds go for gold and sleep on copper. That completes our garden with 10 flowers. It's a diversified flowerbed, but the flowers correlate in the big picture: Tech drives money movement, which benefits exchanges, banks, and processors; copper powers tech, which drives Bitcoin adoption. Your goal is to find and build your garden. Think up different bigger pictures with other sectors and roles. Correlating these assets keeps the garden strong through chaos and self-reinforces one another. To review, we have the following: Stock exchange Crypto Exchange Bank Payment processor Gambling Ai / EV / Robots Semiconductors (Graphics cards) Real estate Bitcoin Copper Now that we have planted our garden, let's examine the weather and its meaning. We will learn to read the weather and see when storms are coming or clearing. In part 2, you will set a simple EMA indicator, learn how to interpret the weather, and tend to the flowers in our garden.

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US Nonfarm Payroll Report: Market Insights US Nonfarm Payroll Report: Market Insights Navigating the complex waves of the financial markets requires an astute understanding of various economic indicators. Among them, the nonfarm payroll report stands out as a pivotal monthly metric that can significantly sway financial markets. This article demystifies the intricacies of this influential report, walking through what to know before trading it. Nonfarm Payroll Definition The nonfarm payroll (NFP) is a key economic barometer that tallies the number of employed individuals in the US, excluding the agricultural sector. Besides the farm workers, government, private household, and nonprofit organisation workers are not included. This nonfarm payroll, meaning the workforce in industries like manufacturing, services, construction, and goods, reflects the health of corporate America and, by extension, the US economy. It’s one of the components of the Employment Situation report released on the first Friday of every month by the US Bureau of Labor Statistics. Nonfarm employment change data is released along with unemployment rate and average hourly earnings data. Given its encompassing nature, the NFP and its importance to economic vitality makes it a beacon for investors and traders, who see the data as a projection of economic trends and an influencer of the Federal Reserve's monetary policy. Fluctuations in NFP numbers can cause significant movements in currency, bond, and stock markets. The Nonfarm Payroll Report and Market Volatility The release of NFP figures is a major event on the economic calendar, often triggering heightened market volatility. As nonfarm payroll news hits the wires, traders and investors brace for potential rapid swings in asset prices, particularly in the forex market. The immediate aftermath can see significant fluctuations in currency pairs with the US dollar. The anticipation and reaction to the nonfarm payroll in forex markets exemplify the weight this report carries. Impact of NFP on USD Pairs The nonfarm payroll report has a profound influence on USD pairs. When the NFP data is released, traders immediately compare the figures to market expectations, leading to price adjustments based on how well the actual data aligns with analyst forecasts. The broader trend of NFP data is also important, but it generally takes a backseat compared to actual vs expected figures. For example, if the report indicates stronger-than-expected job growth, the US dollar typically strengthens, especially against currencies like the euro, yen, and pound. A robust employment outlook suggests economic health, potentially raising expectations for tighter monetary policy from the Federal Reserve. On the flip side, if the NFP numbers fall short of expectations, the US dollar may weaken, particularly if the data points to economic slowdown or stagnation. In such cases, currencies like the euro or Japanese yen might rise against the dollar, as traders speculate that the Federal Reserve could delay interest rate hikes or even consider easing measures to boost the economy. The NFP report also reverberates through other major currency markets. For instance, currencies in economies closely tied to US trade and investment—such as the Canadian dollar or Mexican peso—may experience volatility as changes in US employment data often reflect shifts in economic demand for their goods and services. The Role of Employment Rates and Wages in Market Sentiment Within the US nonfarm payroll release, two key indicators—unemployment rates and average hourly earnings (month-on-month)—are pivotal in influencing market sentiment. Unemployment Rates The unemployment rate measures the percentage of the labour force actively seeking employment but currently without a job. A falling unemployment rate generally signals that more people are finding work, a positive indicator for economic growth. As a result, equities may rally, and the US dollar often strengthens, particularly if the data beats expectations. Traders interpret lower unemployment as a sign of economic resilience, which could influence the Federal Reserve to maintain or tighten monetary policy, further boosting the dollar. Conversely, a rising unemployment rate may signal economic weakness, spurring concerns over reduced consumer spending and slowing economic activity. This could lead investors to shift towards so-called safer assets like bonds or gold. In the forex market, a rising unemployment rate tends to weaken the US dollar as it lowers expectations for interest rate hikes and prompts speculation about potential stimulus or rate cuts by the Federal Reserve, further pressuring the dollar and encouraging risk-off sentiment. Average Hourly Earnings Alongside unemployment, average hourly earnings (m/m) is another key metric that traders closely monitor. This indicator tracks changes in wages from one month to the next and offers insight into inflationary trends. When average hourly earnings rise, it can indicate that workers have more disposable income, which can increase consumer spending. Higher wages often fuel concerns about inflation, prompting markets to anticipate interest rate hikes to combat potential overheating in the economy. This expectation typically strengthens the US dollar. However, if average hourly earnings come in below expectations or show signs of stagnation, markets may interpret this as a sign of weaker inflationary pressures. In such cases, traders may anticipate a more dovish stance from the Federal Reserve, potentially delaying or even reversing interest rate hikes. This can weigh on the US dollar and boost equities. Execution Tactics for the Nonfarm Payroll Report Release On the day the NFP data is released, specific execution tactics tailored to the NFP's unique market footprint can add substantial value. Due to the potential for rapid price movements, traders narrow their focus to liquid markets, like EUR/USD, USD/JPY, and GBP/USD, to facilitate quick entries and exits. They’ll typically trade on the 1m, 2m, 5m, or 15m charts and often require platforms built with speed in mind. Nonfarm payroll trading involves comparing the actual data against market expectations. The outcomes can typically be categorised as follows, with each scenario influencing forex markets differently: - As Expected: Currency values may experience minimal immediate impact if the report aligns with analyst forecasts, as the anticipated news is already priced into the market. - Better than Expected: A robust report can boost the US dollar, as higher employment rates suggest economic strength, potentially leading to rising interest rates. - Worse than Expected: Conversely, weak employment figures can devalue the US dollar, reflecting economic concerns and pressuring policymakers towards accommodative measures. Given the volatility, many traders prefer limit orders to manage slippage, potentially ensuring they enter the market at predetermined points. Lastly, spreads can widen substantially, inadvertently triggering a stop loss. Some traders choose to set a wider stop loss than normal for this reason. Traders usually monitor not just the headline number but also revisions of previous reports and associated metrics, such as unemployment rate and wage growth, which can influence market sentiment. High-speed news feeds and an economic calendar containing nonfarm payroll dates are employed to access the numbers in real-time, enabling immediate analysis. Analysing Unemployment and Wage Growth Numbers Together with NFP When trading around the nonfarm payroll release, it's essential to look beyond the headline number and integrate unemployment and wage growth data into your analysis. The NFP number alone can drive initial market reactions, but combining it with unemployment and wage growth figures provides a more nuanced view of the economy’s direction. Traders start by comparing the trends across these three metrics. For example, if the NFP report shows strong job creation but unemployment remains stubbornly high, this could indicate that the economy is absorbing a larger labour force, potentially due to discouraged workers returning to job-seeking. This dynamic might lead to a more muted market response, as the overall labour market picture is mixed. On the other hand, rising average hourly earnings alongside strong US nonfarm payrolls often signals not just employment growth but increasing inflationary pressure. If wages grow faster than expected, especially when paired with a low unemployment rate, it could indicate that labour shortages are driving up pay, raising inflation risks and making Federal Reserve action more likely. In this scenario, traders might anticipate a stronger US dollar, as higher interest rates become more probable. To streamline your analysis during nonfarm payrolls, consider the following approach: - Aligning Expectations: Traders compare actual numbers for NFP, unemployment, and wage growth with analyst forecasts. If NFP and wages grow but the unemployment rate falls, the market is likely to favour USD strength, while mixed results can trigger choppier price action as traders digest the implications. - Gauging Momentum: Looking at the broader trend can provide further insight. If unemployment has been trending down and wages are steadily increasing (i.e. an expanding economy), the overall market sentiment may remain bullish even if NFP slightly underperforms. Conversely, if there’s a rising unemployment rate despite decent NFP growth, it could signal that the economy is slowing down. - Assessing Policy Impact: It’s good to know how the Federal Reserve might interpret the combined data. For instance, moderate NFP growth with stagnant wage numbers may not trigger immediate policy shifts, allowing for more accommodative conditions in the near term. However, strong wage growth and low unemployment alongside robust NFP numbers are more likely to prompt a hawkish response. Trading the NFP: A Strategy Traders often consider analytical nonfarm payroll predictions to calibrate their strategies. However, an approach to take advantage of whichever direction the market takes uses an OCO (One Cancels the Other) order. This order straddles the current price range just before the report is released. Such a strategy prepares the trader for movement in either direction, as the NFP release can generate a significant breakout from the prevailing range. According to theory, the strategy unfolds: - An OCO order is placed with one order above the current price range and another below it. This setup positions the trader to catch the initial surge regardless of its direction. - Stop losses might be set on the opposite side of the pre-report range to potentially manage risk. - Profit targets might be established within a four-hour window post-release, aiming for a favourable risk/reward ratio, such as 1:3. - Alternatively, a trailing stop may be utilised, adjusting above or below newly formed swing points to protect potential returns as a trend develops. Such strategies allow traders to potentially capitalise on the new trend direction ushered in by the NFP data. Risk Management When Trading NFP Trading the NFP report often brings heightened volatility, making risk management crucial for protecting capital during these market swings. Below are some key risk management practices often employed when trading the NFP: - Awareness of Spreads: Spreads can widen substantially during NFP releases. This can trigger even wide stop losses; tight stop losses can suffer extreme slippage, where the stop loss execution price differs substantially from the desired price. - Conservative Position Sizing: Some traders take smaller positions when entering pre- and post-NFP release. The increased volatility when the report is released can lead to slippage and greater-than-anticipated losses as a consequence. Likewise, post-release conditions can also be unpredictable if data is mixed. - Avoiding Overtrading: Aim to be selective with trades to avoid chasing price swings in a highly reactive market. It might be preferable to wait for a clear direction to emerge before entering a trade. Comparative Analysis with Other Economic Indicators The NFP report serves as a primary mover in the forex market, but its full value is best understood in concert with other economic indicators. Investors compare its findings with the Consumer Confidence Index for insights into spending trends, as employment health can influence consumer optimism and spending behaviours. Likewise, juxtaposing NFP data against the Gross Domestic Product (GDP) figures provides a more complete narrative of the economic cycle since higher employment typically signals increased production and economic growth. Additionally, assessing the Consumer Price Index (CPI) and Producer Price Index (PPI) alongside NFP numbers can offer insight into inflationary pressures; strong employment data may point to higher inflation, a significant factor in central bank policy decisions. The Bottom Line In closing, learning how to trade nonfarm payroll data today may sharpen your market acumen and create exciting trading opportunities in the future. For those ready to apply these insights when NFP data is released, opening an FXOpen account provides access to over 700 markets, high-speed trade execution, tight spreads from 0.0 pips, and low commissions from $1.50. Happy trading! FAQ What Is NFP and How Does It Work? The NFP meaning refers to the nonfarm payroll report, data that measures the number of jobs added in the US economy, excluding the agricultural sector. Released on the first Friday of every month by the US Bureau of Labor Statistics, the NFP is a key indicator of economic health, affecting currency, bond, and stock markets. How Does Nonfarm Payroll Affect the Stock Market? NFP data can drive stock market volatility. Strong job growth signals economic strength, often boosting equities. Conversely, weak NFP figures may indicate a slowing economy, leading to stock market declines as investors anticipate weaker corporate earnings. What Happens When NFP Increases? An NFP increase suggests robust job growth, typically strengthening the US dollar and stock markets, as investors expect economic expansion and potentially tighter monetary policy from the Federal Reserve. Why Is Nonfarm Payroll So Important? An NFP report is crucial because it reflects the overall health of the US labour market and economy. Traders and investors use the data to gauge economic trends, determine Federal Reserve actions, and understand where markets are headed. Trade on TradingView with FXOpen. Consider opening an account and access over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Why ATR Stops Work (And When They Don’t)Ask ten traders where to place a stop-loss, and you’ll get ten different answers. Some swear by fixed-point stops, others use percentage-based levels, and then there are those who simply ‘feel’ where the market might turn. But traders looking for a more structured approach often turn to the Average True Range (ATR) —a volatility-based indicator that adapts to market conditions. ATR stops can be a great tool for trade management, but they’re not perfect. Let’s break down when they work—and when they don’t. Why Use ATR for Stop-Loss Placement? ATR measures the average volatility of a market over a set period, usually 14 days. Instead of setting a static stop-loss, traders use a multiple of the ATR to position their exit level. The logic is simple: a more volatile market needs a wider stop, while a quiet market can afford a tighter one. For example, if the ATR on GBP/USD is 50 pips and you’re using a 2x ATR stop, your stop-loss would be 100 pips away from your entry. In contrast, if volatility drops and ATR shrinks to 30 pips, your stop would adjust to 60 pips. This approach helps traders avoid getting stopped out by normal market noise while still maintaining a structured risk framework. EUR/USD Daily Candle Chart Past performance is not a reliable indicator of future results When ATR Stops Work Well Adapting to Market Conditions Markets aren’t static. Volatility expands and contracts, and ATR-based stops naturally adjust to these shifts. This makes them particularly useful in trending conditions, where price swings can widen over time. Avoiding Arbitrary Stop Placement Instead of guessing where a stop ‘feels right,’ ATR provides an objective framework based on real price movement. This helps remove emotional bias from trade management. Reducing the Impact of Spikes and Noise Many traders place stops just below recent lows or above recent highs—prime hunting grounds for liquidity grabs. ATR stops, positioned at a calculated distance, can help avoid these shakeouts. When ATR Stops Can Fail You Low Volatility = Tight Stops = Premature Exits ATR stops rely on recent price action. In quiet markets, ATR contracts, leading to tighter stop placement. This can be problematic when volatility suddenly picks up, as small price swings can take traders out of otherwise good trades. Doesn’t Consider Market Structure ATR is purely mathematical—it doesn’t care about support, resistance, or key technical levels. Traders who use ATR stops in isolation may find themselves stopped out just before price respects a critical level. Choppy Markets Can Whipsaw ATR Stops In sideways, erratic markets, ATR stops can lead to unnecessary exits. If a market is ranging tightly and ATR is small, stops may be placed too close to entry, leading to multiple stop-outs in quick succession. One Rule That Can’t Be Broken: Never Widen Your Stop One of the biggest mistakes traders make—whether using ATR stops or any other method—is moving a stop-loss further away once it’s placed. This usually happens when a trade starts going against them, and instead of accepting the loss, they ‘give it more room to breathe.’ The problem? This completely undermines risk management. A stop-loss should be a pre-determined level that, if hit, signals the trade idea was wrong. Widening it turns a small, manageable loss into a much bigger one—sometimes even wiping out weeks of gains. If a trade isn’t working and your stop is at risk of being hit, accept it, take the loss, and move on. Adjusting stops should only ever mean tightening them to lock in profits—not loosening them to avoid taking a hit. How to Improve ATR-Based Stops ATR stops work best when combined with other trade management techniques: Use ATR in Conjunction with Market Structure Rather than blindly placing a stop at 2x ATR, check if your stop aligns with key support or resistance levels. If ATR suggests a stop that sits just below a major level, consider widening it slightly to avoid getting shaken out. Adjust for Volatility Cycles If ATR is unusually low due to a period of calm, consider using a longer lookback period (e.g., 21-day ATR) to get a broader view of market volatility. Pair ATR with a Trailing Stop Strategy ATR-based trailing stops allow traders to lock in profits as a trend develops while still giving the trade room to breathe. Instead of setting a fixed stop, you can trail a stop at 1.5x ATR below the most recent high in an uptrend. Final Thoughts ATR stops provide a structured, volatility-adjusted approach to risk management, helping traders avoid common pitfalls like placing stops too tight in high-volatility markets or too wide in quiet conditions. But like any tool, they’re not foolproof. Used in isolation, ATR can lead to premature exits or misplaced stops. The best approach? Use ATR as a guideline, not a hard rule. Combine it with market structure, trend analysis, and an understanding of volatility cycles to refine your stop placement. After all, trading is about staying in the game long enough to capitalise on the big moves—without getting chopped up in the noise. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

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Smart Money Unicorn Setup Breakdown - Lord MEDZ 1. Liquidity Sweep (Stop Hunt) The market started by sweeping liquidity during the London session, taking out the lows formed in the Asian session. This liquidity grab ensured that weak-handed traders were removed before a true move could be initiated. 2. Break of Structure (BOS) Following the liquidity sweep, we observed a strong break of structure to the upside, confirming a shift in market direction. This BOS indicated that Smart Money had absorbed sell-side orders and was now preparing to push price higher. 3. The Breaker Block Confirmation The price retested a Breaker Block, which acted as a high-probability area for entry. This breaker aligned with an area of unmitigated orders, confirming institutional interest at this level. 4. Fair Value Gap (FVG) Entry A clear Fair Value Gap (FVG) was present at the retracement, providing a discounted entry. The market efficiently filled the imbalance, which served as the optimal entry point for long positions. 5. Expansion & Target Zones New York Session momentum fueled the expansion move. The trade was closed at a strong premium, securing a solid Risk/Reward Ratio of 6.29. Final Notes ✅ Unicorn Setup Complete: Liquidity grab, BOS, Breaker retest, and FVG entry. ✅ Institutional Move Confirmed: Clean structure shift with high-volume expansion. ✅ Precision Execution: Entry aligned with FVG, securing max efficiency. 📈 Lesson: Smart Money Concepts (SMC) provide high-probability setups when all confluences align. This trade was a textbook SMC Unicorn Setup, demonstrating the power of liquidity, structure shifts, and imbalance fills. Profit Secured: Risk/Reward: 6.29 Execution Level: A+ Lord MEDZ 🔥

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Effective inefficiency Stop-Loss. This combination of words sounds like a magic spell for impatient investors. It's really challenging to watch your account get smaller and smaller. That's why people came up with this magic amulet. Go to the market, don't be afraid, just put it on. Let your profits run, but limit your losses - place a Stop-Loss order. Its design is simple: when the paper loss reaches the amount agreed upon with you in advance, your position will be closed. The paper loss will become real. And here I have a question: “ Does this invention stop the loss? ” It seems that on the contrary - you take it with you. Then it is not a Stop-Loss, but a Take-Loss. This will be more honest, but let's continue with the classic name. Another thing that always bothered me was that everyone has their own Stop-Loss. For example, if a company shows a loss, I can find out about it from the reports. Its meaning is the same for everyone and does not depend on those who look at it. With Stop-Loss, it's different. As many people as there are Stop-Losses. There is a lot of subjectivity in it. For adherents of fundamental analysis, all this looks very strange. I cannot agree that I spent time researching a company, became convinced of the strength of its business, and then simply quoted a price at which I would lock in my loss. I don't think Benjamin Graham would approve either. He knew better than anyone that the market loved to show off its madness when it came to stock prices. So Stop-Loss is part of this madness? Not quite so. There are many strategies that do not rely on fundamental analysis. They live by their own principles, where Stop-Loss plays a key role. Based on its size relative to the expected profit, these strategies can be divided into three types. Stop-Loss is approximately equal to the expected profit size This includes high-frequency strategies of traders who make numerous trades during the day. These can be manual or automated operations. Here we are talking about the advantages that a trader seeks to gain, thanks to modern technical means, complex calculations or simply intuition. In such strategies, it is critical to have favorable commission conditions so as not to give up all the profits to maintaining the infrastructure. The size of profit and loss per trade is approximately equal and insignificant in relation to the size of the account. The main expectation of a trader is to make more positive trades than negative ones. Stop-Loss is several times less than the expected profit The second type includes strategies based on technical analysis. The number of transactions here is significantly less than in the strategies of the first type. The idea is to open an interesting position that will show enough profit to cover several losses. This could be trading using chart patterns, wave analysis, candlestick analysis. You can also add buyers of classic options here. Stop-Loss is an order of magnitude greater than the expected profit The third type includes arbitrage strategies, selling volatility. The idea behind such strategies is to generate a constant, close to fixed, income due to statistically stable patterns or extreme price differences. But there is also a downside to the coin - a significant Stop-Loss size. If the system breaks down, the resulting loss can cover all the earned profit at once. It's like a deposit in a dodgy bank - the interest rate is great, but there's also a risk of bankruptcy. Reflecting on these three groups, I formulated the following postulate: “ In an efficient market, the most efficient strategies will show a zero financial result with a pre-determined profit to loss ratio ”. Let's take this postulate apart piece by piece. What does efficient market mean? It is a stock market where most participants instantly receive information about the assets in question and immediately decide to place, cancel or modify their order. In other words, in such a market, there is no lag between the appearance of information and the reaction to it. It should be said that thanks to the development of telecommunications and information technologies, modern stock markets have significantly improved their efficiency and continue to do so. What is an effective strategy ? This is a strategy that does not bring losses. Profit to loss ratio is the result of profitable trades divided by the result of losing trades in the chosen strategy, considering commissions. So, according to the postulate, one can know in advance what this ratio will be for the most effective strategy in an effective market. In this case, the financial result for any such strategy will be zero. The formula for calculating the profit to loss ratio according to the postulate: Profit : Loss ratio = %L / (100% - %L) Where %L is the percentage of losing trades in the strategy. Below is a graph of the different ratios of the most efficient strategy in an efficient market. For example, if your strategy has 60% losing trades, then with a profit to loss ratio of 1.5:1, your financial result will be zero. In this example, to start making money, you need to either reduce the percentage of losing trades (<60%) with a ratio of 1.5:1, or increase the ratio (>1.5), while maintaining the percentage of losing trades (60%). With such improvements, your point will be below the orange line - this is the inefficient market space. In this zone, it is not about your strategy becoming more efficient, you have simply found inefficiencies in the market itself. Any point above the efficient market line is an inefficient strategy . It is the opposite of an effective strategy, meaning it results in an overall loss. Moreover, an inefficient strategy in an efficient market makes the market itself inefficient , which creates profitable opportunities for efficient strategies in an inefficient market. It sounds complicated, but these words contain an important meaning - if someone loses, then someone will definitely find. Thus, there is an efficient market line, a zone of efficient strategies in an inefficient market, and a zone of inefficient strategies. In reality, if we mark a point on this chart at a certain time interval, we will get rather a cloud of points, which can be located anywhere and, for example, cross the efficient market line and both zones at the same time. This is due to the constant changes that occur in the market. It is an entity that evolves together with all participants. What was effective suddenly becomes ineffective and vice versa. For this reason, I formulated another postulate: “ Any market participant strives for the effectiveness of his strategy, and the market strives for its own effectiveness, and when this is achieved, the financial result of the strategy will become zero ”. In other words, the efficient market line has a strong gravity that, like a magnet, attracts everything that is above and below it. However, I doubt that absolute efficiency will be achieved in the near future. This requires that all market participants have equally fast access to information and respond to it effectively. Moreover, many traders and investors, including myself, have a strong interest in the market being inefficient. Just like we want gravity to be strong enough that we don't fly off into space from our couches, but gentle enough that we can visit the refrigerator. This limits or delays the transfer of information to each other. Returning to the topic of Stop-Loss, one should pay attention to another pattern that follows from the postulates of market efficiency. Below, on the graph (red line), you can see how much the loss to profit ratio changes depending on the percentage of losing trades in the strategy. For me, the values located on the red line are the mathematical expectation associated with the size of the loss in an effective strategy in an effective market. In other words, those who have a small percentage of losing trades in their strategy should be on guard. The potential loss in such strategies can be several times higher than the accumulated profit. In the case of strategies with a high percentage of losing trades, most of the risk has already been realized, so the potential loss relative to the profit is small. As for my attitude towards Stop-Loss, I do not use it in my stock market investing strategy. That is, I don’t know in advance at what price I will close the position. This is because I treat buying shares as participating in a business. I cannot accept that when crazy Mr. Market knocks on my door and offers a strange price, I will immediately sell him my shares. Rather, I would ask myself, “ How efficient is the market right now and should I buy more shares at this price? ” My decision to sell should be motivated not only by the price but also by the fundamental reasons for the decline. For me, the main criterion for closing a position is the company's profitability - a metric that is the same for everyone who looks at it. If a business stops being profitable, that's a red flag. In this case, the time the company has been in a loss-making state and the size of the losses are considered. Even a great company can have a bad quarter for one reason or another. In my opinion, the main work with risks should take place before the company gets into the portfolio, and not after the position is opened. Often it doesn't even involve fundamental business analysis. Here are four things I'm talking about: - Diversification. Distribution of investments among many companies. - Gradually gaining position. Buying stocks within a range of prices, rather than at one desired price. - Prioritization of sectors. For me, sectors of stable consumer demand always have a higher priority than others. - No leverage. I propose to examine the last point separately. The thing is that the broker who lends you money is absolutely right to be afraid that you won’t pay it back. For this reason, each time he calculates how much his loan is secured by your money and the current value of the shares (that is, the value that is currently on the market). Once this collateral is not enough, you will receive a so-called margin call . This is a requirement to fund an account to secure a loan. If you fail to do this, part of your position will be forcibly closed. Unfortunately, no one will listen to the excuse that this company is making a profit and the market is insane. The broker will simply give you a Stop-Loss. Therefore, leverage, by its definition, cannot be used in my investment strategy. In conclusion of this article, I would like to say that the market, as a social phenomenon, contains a great paradox. On the one hand, we have a natural desire for it to be ineffective, on the other hand, we are all working on its effectiveness. It turns out that the income we take from the market is payment for this work. At the same time, our loss can be represented as the salary that we personally pay to other market participants for their efficiency. I don't know about you, but this understanding seems beautiful to me.

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How I play 0DTE during EOD volatility of last 15min/30min Chart is from yesterday 3/3/2024(mon) + today 3/4/2024(tue) Timeframe:1min Indicator used: MACD, SlowStochastic RSI, 5MA, 20MA. I use 1min 5ma as TREND(S) to scalp, just make sure MACD+SlowStochastic agrees.

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05:01

Trading is the realm of response Hello, traders. If you "Follow", you can always get new information quickly. Please also click "Boost". Have a nice day today. ------------------------------------- It's been a while since I made an indicator and explained it, so I'd like to take the time to introduce and explain something I heard a long time ago. (Original text) I made purchases at m-signal 1W in yesterday's fall as I see it rose above ha-low and closed above m-signals. It looks like m-signals can't prevent traps. Now I'm losing money again. I think it's better to make purchases when RSI is below 30. I don't want to feed market makers, somehow it happens over and over. - Looking at the above, it seems that the purchase (LONG) was made when the price rose above the M-Signal indicator on the 1W, 1D chart and then started to fall. If we check this on the 30m chart, it is expected that the purchase (LONG) was made near the section indicated by the circle section. I said that it would have been much better to buy (LONG) when RSI was below 30, but when RSI was below 30, it refers to the section from February 25 to March 1, so I think it's regret due to the loss. - If you look at what I explained as an idea, I said that you need to get support in the section marked with a circle to continue the upward trend. And, I said that support is important near the HA-Low indicator when it falls. Therefore, if it falls in the section marked with a circle, you should enter a sell (SHORT) position. However, if you do not see a downward trend, you should trade based on whether there is support in the HA-Low indicator. - To check for support, you need to check the movement for at least 1-3 days. Therefore, checking for support is a difficult and tedious task. Since most futures transactions are made on time frame charts below the 1D chart, you cannot check for support for 1-3 days. Therefore, you need to check the movement at the support and resistance points you want to trade and respond accordingly. - The coin market is a market where trend trading is good. Therefore, it is important to know what the current trend is. It is better to think of the basic trend based on the trend of the 1D chart. The current trend of the 1D chart is a downtrend. Therefore, the SHORT position can be said to be the main position. As mentioned earlier, in order to turn into an uptrend, support must be received within the range indicated by the circle. If not, it is likely to continue the downtrend again. Since the HA-Low indicator has been newly formed, the 89253.9 point is the point where a new trading strategy can be created. If it is not supported by the HA-Low indicator, it is likely to lead to a stepwise downtrend, so you should also think about a countermeasure for this. - What we want to know through chart analysis is the trading point, that is, the support and resistance points. You should decide whether to start trading depending on whether there is support at the support and resistance points. Even if you start trading properly at the support and resistance points you want, you must also think about how to respond to a loss cut. If you cannot think of a response plan for a loss cut, it is better not to trade at all. - Indicators are only reference materials for your decisions, not absolute. - The M-Signal indicator on the 1D, 1W, and 1M charts is an indicator for viewing trends, - The HA-Low and HA-High indicators correspond to points for creating trading strategies. The creation of the HA-Low indicator means that it has risen from the low range, and if it is supported by the HA-Low indicator, it is the time to buy. If it does not, and it falls, there is a possibility of a stepwise decline, so you should think about a response plan for this. The creation of the HA-High indicator means that it has fallen from the high range, and if it is supported by the HA-High indicator, there is a possibility of a full-scale upward trend. If not, it may fall until it meets the HA-Low indicator, so you should think about a countermeasure for this. - If the price is maintained near the StochRSI 50 indicator on the 1D chart, it is expected to lead to an increase to rise above the HA-Low indicator on the 1D chart. At this time, if it rises above the M-Signal indicator on the 1D and 1W charts, it is likely to lead to an attempt to rise near 94827.9. If not, it is likely to end as a rebound. - Thank you for reading to the end. I hope you have a successful trade. --------------------------------------------------

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UKOIL from an Elliott Wave perspective This Wave starting from the Wave C marked in black is the first wave of a 3 wave move move of a Flat. This wave expressed itself in a 5 Wave move and on its completion will be named Wave A. A correction to the upside would occur and on its completion, would be named Wave B. A Wave C would then follow to complete the B of a Flat.

by machariavictor017

KOMAUSDT CHART ANALYSİS - EDUCATIONAL POST How NFT Technology Developed NFT technology was created in 2017 based on Ethereum smart contracts. Since then, we have witnessed many successful NFT projects and deals. Stories like these perfectly describe the current and future possibilities of the technology. The development of blockchain technology and the emergence of NFT services coincided with other processes in society and the economy. Many new players appeared in the stock markets, including non-professional traders and amateur investors. The democratization of financial markets coincided with the pandemic: being in self-isolation, alone with their devices, many people began to pay attention to new financial instruments. The information that arose around them also played a specific role in the “revival” of NFTs. The big names in the news headlines supporting NFTs couldn’t help but draw attention to them. That is one of the reasons why the success of the technology was inevitable.

Education

02:31

by EngineeringRobo

Bonus Update: Scalpers notes on 1 min chart BAR method applies to every times frame. Those break and retest candle levels are so good on lower time frame when you know what to look at 🔑 Share with a friend in need 🫡

Education

04:02

by HollywooodTrades

Avoid Market Maker Traps: Liquidity Sweeps & FVG Explained Understanding Market Maker's Perspective: Liquidity Sweeps and Fair Value Gaps (FVG) In this educational post, I'll dive into the smart money concepts (SMC) that help traders understand market behavior from a broker or market maker's perspective. This analysis will focus on liquidity sweeps, Fair Value Gaps (FVG), and how market makers use these strategies to manipulate price movements. What is a Liquidity Sweep? A liquidity sweep occurs when the market pushes through a known level of liquidity, such as stop losses or pending orders. This action often creates sharp wicks or sudden moves, typically engineered by smart money to gather liquidity for their positions. Fair Value Gap (FVG) Explained An FVG is a price gap between a consecutive bullish and bearish candle (or vice versa), leaving a void in the market. These gaps often act as magnets for price, as market makers seek to "fill" these gaps, using them as traps for retail traders. The Retail Trader's Perspective Many new traders view the FVG as a signal to enter the market, expecting price to move in their favor immediately. They often set stop losses below recent lows, providing market makers with a clear liquidity target. How Market Makers Exploit Liquidity Market makers often execute a classic trap strategy: Push the price up slightly to create a false sense of security for retail buyers. Execute a sharp move down to trigger stop losses and capture liquidity below key levels. Finally, reverse the price direction sharply to the upside, aligning with their true market intent. Practical Trading Strategy For new traders, understanding this concept can help avoid common traps: Avoid entering trades at the FVG without confirmation. Look for signs of a liquidity sweep, such as long wicks or strong rejections. Enter trades only after seeing a market structure shift (MSS) that confirms the true direction. Conclusion By thinking like a market maker, traders can align their strategies with smart money concepts, improving their chances of success. Always remain patient, seek confirmation, and avoid the traps set by market manipulation. This post aims to educate traders on avoiding common pitfalls and developing a more strategic approach to trading using smart money concepts.

Education

Support & Resistance in Trading – Key Concepts & Strategies Support & Resistance in Trading – Key Concepts & Strategies 📌 What are Support & Resistance Levels? Support and resistance are fundamental concepts in **technical analysis** that help traders identify key price levels where an asset's price is likely to **reverse, consolidate, or break through. - **Support Level:** A price point where demand is strong enough to prevent further decline. When the price reaches support, buyers tend to step in, causing a bounce. - **Resistance Level:** A price point where selling pressure is strong enough to prevent further rise. When the price reaches resistance, sellers often push the price lower. --- **🔹 Why Are Support & Resistance Important?** 1️⃣ **Identifying Reversal Points:** These levels help traders anticipate where price might change direction. 2️⃣ **Entry & Exit Strategy:** Traders use them to plan buy/sell positions, stop-loss, and take-profit levels. 3️⃣ **Breakouts & Fakeouts:** If price breaks through a key level, it signals a strong trend; however, false breakouts (fakeouts) can also occur. 4️⃣ **Psychological Impact:** Many traders watch these levels, making them **self-fulfilling price zones**. --- **📊 How to Identify Support & Resistance?** - **Historical Price Action:** Look for levels where price previously reversed multiple times. - **Trendlines:** Draw diagonal trendlines connecting higher lows (for support) or lower highs (for resistance). - **Moving Averages (e.g., EMA50, EMA200):** Act as dynamic support/resistance. - **Fibonacci Levels:** Key retracement levels (38.2%, 50%, 61.8%) often act as support/resistance. - **Volume Analysis:** High volume near certain price levels indicates strong buying/selling pressure. --- **🔹 Trading Strategies Using Support & Resistance** **1️⃣ Range Trading Strategy** ✅ **Buy near support** and **sell near resistance** when the market is moving sideways. ✅ Stop-loss: Below support for buy trades, above resistance for sell trades. ✅ Best used in **range-bound markets** (no strong trend). **2️⃣ Breakout Trading Strategy** ✅ Enter a trade when price **breaks through a strong support or resistance** level. ✅ Confirm the breakout with **high volume** to avoid fakeouts. ✅ Stop-loss: Below the breakout level (for buy) or above (for sell). **3️⃣ Retest Trading Strategy (Break & Retest)** ✅ After a breakout, wait for price to **retest the previous support/resistance** before entering. ✅ Provides a better entry with lower risk. ✅ Stop-loss: Below the retested level (for buy) or above (for sell). --- **📌 Common Mistakes Traders Make** ❌ **Buying too close to resistance** or **selling too close to support** – wait for confirmation. ❌ **Ignoring fakeouts** – always check volume & price action before entering a breakout trade. ❌ **Not using stop-losses** – markets can be unpredictable, and risk management is key. --- **📈 Example in Real Market (Gold – XAU/USD Analysis)** - **Support:** $2,900 - **Resistance:** $2,950 - **Scenario 1 (Bullish Breakout):** If price **breaks above $2,950**, it could rally to $3,000. - **Scenario 2 (Bearish Rejection):** If price **fails to break $2,950 and drops below $2,900**, a pullback to $2,870 is possible. --- **🔹 Final Thoughts** Mastering support & resistance is essential for **both beginners and advanced traders**. By combining these levels with other indicators (EMA, RSI, volume), you can improve your trade accuracy and risk management.

Education

by smarttradingstar

Exhaustion Today, we will break down candle exhaustion and how to use it for high-probability trade entries. We will analyze a bearish engulfing pattern, the role of trendline breaks, and how we combined this with the ORB strategy at the US open to secure a strong entry for the 2905 target. What is Candle Exhaustion? Candle exhaustion occurs when price action slows down after a strong move, showing signs that buyers or sellers are losing strength. This is often seen through smaller-bodied candles, wicks rejecting key levels, or a sharp engulfing candle reversing prior movement. Candle exhaustion smaller body's larger wicks. A bearish engulfing candle formed, engulfing three previous candles, signaling that sellers have aggressively stepped in. This confirmed a shift in momentum, suggesting that buyers were losing control. Key Takeaway: A multi-candle engulfing increases the strength of the reversal signal. The 15-minute trendline was broken, adding further confluence for a shift in market structure Early entry model Price came and tapped the supply zone, rejecting and closing under trend. This was the 2nd confirmation of sells. This 2nd engulfing was the 3rd confirmation sellers have taken control. The US session opened at 2:30 PM, a key time for volatility. We then applied the Opening Range Breakout (ORB) strategy to refine our 2nd entry. With price under the 50 moving average The breakout confirmed momentum towards our 2905 target, aligning with our pre-trade analysis. Conclusion By recognizing candle exhaustion, engulfing patterns, and trendline breaks, we stacked confluences for a high-probability sell trade. The ORB strategy allowed us to refine our 2nd execution at the perfect time. Lesson: Trading is about patience, waiting for confirmations, and executing with confidence.

Education

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