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CURRENCY CORRELATION HEAT MAPCurrency correlation is important to understand in forex trading because it could impact your trading results often without you even knowing it. In this post, I will share some information about correlations in forex trading and how you are able to use it to your advantage to avoid unnecessary losses. Throughout my journey as a beginner trader, I have bought or sold 2 different currency pairs many times without knowing they are negatively correlated just to let the gains be offset by the other pair. My aim in this short post is to bring awareness about the positive and negative correlations between the currencies, specifically the most traded major pairs in the forex market. What is correlation in forex trading? A foreign exchange correlation is the connection between 2 different currency pairs. There is a positive correlation when 2 pairs move in the same direction, a negative correlation when they move in opposite direction, and no correlation if the pairs move with no relationship. In order to understand the relationship between 2 currencies, you must know the correlation coefficient and how it relates. What is correlation coefficient? A correlation coefficient represents how strong or weak a correlation is between 2 forex pairs. They are expressed in values and range from -100 to 100 or -1 to 1, with the decimal representing the coefficient. The higher the value of the correlation coefficient will largely reflect the movement of the other pair. See Figure 1. Correlation Heat Map For example, If the reading is -70 and above 70, it is considered to have strong correlation between the two. Readings anywhere between -70 to 70 means that the pairs are less correlated. With coefficients near the 0 mark, means little or no relationship with one or another. As traders, implementing risk management in our trading plan also reflects to correlations as you may think its a good ides to buy 2 highly correlated pairs thinking you will double your profits when in reality you may lose double the money as both trades could end up in a loss as you're doubling your risk. Figure 2 . Positive Correlation: EURUSD / AUDUSD As we can see on this line chart between EURUSD / AUDUSD, both pairs have a strong correlation coefficient as they are moving in almost the same direction. The correlation coefficient is valued at 75 as noted on the heat map. For example, if you place a buy order EURUSD and place a sell order on AUDUSD, expect a win and a loss in most cases. Figure 3. Negative Correlation: EURGBP / GBPUSD On this line chart, we can see that both of these parts are moving in opposite directions which are showing a negative correction between the two which in fact is also known as an inverted correction. The correlation coefficient is valued at -90 on the heat map which means if you place a buy order on EURGBP and a place a sell order on GBPUSD you may double your profits, but again you're doubling your risk. Figure 4. No Correlation: GBPJPY / USDJPY This line chart shows that both of these pairs move in the same direction with a correlation coefficient of -9 which has almost no correlation. If you place a buy order on GBPJPY and place a sell order on USDJPY, one of these trades will most likely end up in a loss. The pairs that have no correlation usually have different and separate economic conditions therefore coefficient values tend to be lower. In summary, understanding which pairs are correlated with one another will be able to help build your strategy and improve your trading results. Every trading strategy NEEDS to have Risk Management implemented in it as it is the key to sustainability for the long run. Trading is a marathon NOT a sprint. To learn more about forex correlations and their relationships, please see the following links. References: www.tradingview.com ca.investing.com If you felt this information was helpful, and hit the LIKE button and FOLLOW me for more educational posts and analysis. Feel free to leave a comment if you have any questions! I appreciate all the feedback. Thanks Trade Safe
UEducation
by ktlfx
12
▶️▶️▶️ What is Wyckoff method? ◀️◀️◀️▶️▶️▶️ What is Wyckoff method? ◀️◀️◀️ This trading method was developed by Richard Wyckoff in the early 1930s. It consists with series of principles and strategies originally designed for traders and investors. Wyckoff devoted much of his life experience for studying market behavior, and his work still influences much of modern technical analysis (TA). Currently, the Wyckoff method is applied to all types of financial markets, although initially it was focused only on stocks. Richard has conducted a large amount of research that has led to the creation of several theories and methods of trading. This article provides an overview of his work and includes three fundamental laws. ✔️ Three Laws of Wyckoff ✔️ 1️⃣ Law of supply and demand The first law states, that the value of assets start rising when demand exceeds supply, and accordingly falls in the opposite direction. That's one of the most basic principles in the financial markets, that Wyckoff doesn't rule out in his writings. We can represent the first law as three simple equations: 📍 Demand > Supply = price Max; 📍 Demand < supply = price falls; 📍 Demand = supply = no significant price change (low volatility). In other words, Wyckoff's first law suggests, that an excess of demand over supply causes prices to rise because there are more buyers than sellers. But in a situation where there are more sales than buyers, and supply exceeds demand, it indicates a further drop in value. 2️⃣ Law of Cause and Effect The second law states, that the differences between supply and demand are not a coincidence. Instead, they reflect preparatory actions resulting from certain events. In Wyckoff's terminology, an accumulation period (cause) eventually leads to an uptrend (effect). In turn, the distribution period (cause) provokes the development of a downtrend (consequence). 3️⃣ The law of connection between efforts and results Wyckoff's third law states, that changes in price are the result of a collective effort that's reflected in trading volume. In the case when the growth in the value of an asset corresponds to a high trading volume, there is a high probability that the trend will continue its movement. But if the volumes are too small at a high price, the growth is likely to stop and the trend may change its direction. ❗️❗️❗️ For example, let's imagine that the Bitcoin market starts consolidating with very high volume after a long bearish trend. High trading volumes indicate great effort, but sideways movement (low volatility) suggests little result. If a large amount of bitcoin changes hands and the price does not fall significantly, this may indicate that the downtrend may be ending and there will be a reversal soon. You can find more my educational posts by hashtag #rocketbombeducational (You can click it under the pic of this post) Thanks for your attention I'll be glad to see your feedback Sincerely yours Kateryna💙💛
BITSTAMP:BTCUSDEducation
by RocketBomb
42
How to Earn Self-Respect as a TraderIntegrity… It’s what gives you certainty, confidence and trust for yourself. It’s what tells you, you can do it. It’s what makes you leap forward in life. And it’s what earns you self respect. With trading, you need to achieve self respect, to help feel more assertive with the trading decisions you make. In this short letter, I’ll give you some actions to help you earn the self respect as a trader. Action #1: Do the hard things Anything that requires risking your hard earned money is tough. I get it. You didn’t make money just to lose it right? Well, you need to understand that in life there are no HIGH rewards without taking some element of risk. So, force yourself to sit down, deposit money into your account, wait for the proven trading setup to line up and TAKE THE TRADE. Next hard thing to do is, wait for the trade to hit your stop loss or take profit and don’t interfere with the process. And the last hard thing, is having tunnel vision and not listening to anyone about your trading decisions. Don’t listen to the news, your friends, strangers or even your family. You have your plan and system, follow it and you’ll feel in control and you’ll gain more self respect. Action #2: Don’t think it – DO IT Coming up with ideas are easy. Writing down goals and gluing your vision board with mansions and cars – are easy. What’s hard is actually taking the action. There is never the right time because it’s always the right time. So buckle up and take action with what you need to do to achieve trading success. Action #3: Take control and learn from your losses Losses are parts of the ying and yang of trading. You need a bit of good and a bit of bad to balance and build. Remember, the markets move in a zig – zag shape and so will your trading account. So when you realise this you’ll be able to acknowledge, own, take control and learn from your trading losses. But most importantly. The losses must only come from your proven plan. Don’t move a stop loss to make you risk more. Don’t remove a stop loss because you believe the market will turn. Take small losses so that the big winners make up and drive your portfolio up. Action #4: Don’t quit when it gets hard You only fail when you quit something. Read that again. When you quit, you lose. When you quit, you give up. When you quit due to premature excuses you lose self respect. Too many traders quit because they think the market is out to get them. This is either because they are taking a few losses or because they are trying to OUTBEAT the market through emotions. Listen if you have a few rules to manage your money like: ~ Risk 2% per trade. ~ Never allow your portfolio to be in -20% drawdown. ~ Never hold more than 7 to 8 trades at a time. You’ll be able to control your risk and boost your portfolio. Let’s sum these 4 actions up to trading self respect. Action #1: Do the hard things Action #2: Don’t think it – DO IT Action #3: Take control and learn from your losses Action #4: Don’t quit when it gets hard
JSE:J200Education
by Timonrosso
12
The Simpliest Math Behind Every Succesful TraderWhat exactly is risk management? The ability to control your losses so that you do not lose all of your equity is referred to as risk management. This is a system that may be applied to everything that involves probabilities: trading, poker, blackjack, sports betting, and so on. Many inexperienced traders underestimate the significance of risk management or don't understand the basics when it comes to risk management. Would you risk $5,000 on every trade if you had a $10,000 trading account? Probably not. Because it only takes two consecutive losses in order to lose everything. 🧠 Now, let's imagine a thought experiment, in wich 🤩Alex and 🤨Peter are both traders with $10,000 in their accounts. Alex is a high-risk trader who puts $2500 risk on every trade. Peter is a cautious trader who puts $100 risk on every trade. Both apply a trading strategy that has a 50% success rate with an average risk-to-reward ratio of 1:2. For good example, let's imagine the next 8 trades had the following results: 4 losing trades in a row 4 winning trades in a row Here is the result for Alex: -$2,500, -$2,500, -$2,500, -$2,500 = -$10,000 Loss of the total account 😭😭😭😭 Here is the result for Peter: -$100, -$100, -$100, -$100, +$200, +$200, +$200, +$200 = +$800 Profits. 🏆 🏆 🏆 🏆 Can you tell the difference? See how risk management show the difference between being a profitable or losing trader. Peter managed to recover losing trades, and get into good profits after 8 trades. Alex didn't survive 4 trades... 🚨 You might have the finest trading strategy in the world, but if you don't manage how much you lose, you'll lose it all. It's only a matter of probability and time. However, following this basic example will assist you to make your trading more profitable. Simply give it a shot. Kind regards Artem Crypto Follow, Like and Share are appreciated! Take a look at my other Educational ideas below:
INDEX:BTCUSDEducation
by ArShevelev
12
Biases that influence your decisions Biases that influence your investment decisions Most people who invest in the stock market don't reach their goals. The top 1% of investors can double or even triple their returns from the market. Reason: how investors think How this article will help you avoid these biases: * Awareness - Knowing what biases affect your decision making is half the battle. *Routine: I've made a list of biases that affect your analysis and biases that make you overestimate investments. Cognitive frivolity All of the following biases work so well because of the way people's minds work. Cognitive light-mindedness is a state of mind that is wanted and linked to good feelings. This is the main reason why people make bad choices. Halo effect It is much easier to think in black-and-white stereotypes than in gray ones. The halo effect explains why we like or dislike everything about someone or something that is connected to them. It's harder than we think to agree with some ideas and disagree with others. What You See Is All There Is All there is is what you see. You can't think about something you don't know. In a strange way, self-righteousness goes up when you only listen to one point of view. Again, we choose certainty over uncertainty. Anchoring Our decisions are mostly based on the first information we get. If you know that Apple shares are worth $150, they will look like a good deal at $120. Not even knowing if $150 is close to what something is really worth. Regression (Correction) We love to find links between things that don't have any. Regression to the mean can be one of the most important, but often overlooked, factors. Due to price balancing, everything tends to be worth about the same. Perceptual bias We think that events were easier to predict than they really were because of what we already thought. In hindsight, it's easy to make up connections between things. The truth, though, is more complicated. There are a lot of good ways to guess what will happen. The Fallacy of Mastery Both buyers and sellers know the same things. They buy and sell stocks based on what they think. People don't believe that short-term stock picking is good luck because it's done by smart people. Loss aversion Loss aversion makes us ignore even gambling that has a good chance of going our way. A loss has twice the weight of an equal gain. Dedication bias Commitment is linked to good traits like consistency and intelligence. In this way, we don't break our promises. Investment decisions must be talked about in public. The more you talk, the more you can persuade yourself of something. Leaning toward recent events We tend to give too much weight to things that have happened recently. Because of this effect, the market tends to move in a certain direction most of the time. When things are going well, we think they will only get better. We think that when things go wrong, they will only get worse. Effect of ownership When we own something, we value it more. This is one way we can explain why we did what we did. Before we buy a stock, we look at it critically and try to find any risks. After making a purchase, we think about the good things about it to justify our choice. This is called confirmation bias We choose what to believe based on what we already know. What doesn't fit with our ideas is either ignored or called a lie. Thinking based on odds We often think based on how we feel. But in our lives, everything is a game of chances. Using reasoning to think about the most likely outcomes will help us make better decisions. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
24
📊 Smart Money Concepts | Supply & Demand🧐What is Smart Money? Smart money refers to the capital that institutional investors, central banks, and other professionals or financial institutions control. It is managed by expert investors who can foresee market trends and make most of the profits. Smart money was originally a gambling term, where it refers to the gamblers that have extensive knowledge of the activity that they wager on or have insider information that the common public is not able to access. The smart money concept suggests that these investors can identify trends and opportunities before the broader market and position themselves accordingly. They may also be able to manipulate the market to their advantage by creating buying or selling pressure on certain securities. Some traders try to follow the smart money by analyzing the actions of these large investors through public filings, news reports, or other sources of information. However, it is important to note that not all trades made by institutional investors or large financial institutions are necessarily "smart," and blindly following their actions can be risky. 🔹 Supply Zone In trading, a supply zone is a price range where there is an abundance of sell orders, resulting in increased selling pressure and potentially a temporary resistance level. A supply zone can be identified on a price chart as an area where the price has previously reversed or stalled, and where there are many unfilled sell orders or pending sell orders. Traders may use supply zones as a reference point for making trading decisions. For example, if the price approaches a supply zone, traders may consider selling or taking profits on existing positions. Conversely, if the price breaks through a supply zone, traders may see it as a bullish signal and consider buying or adding to long positions. 🔹 Demand Zone In trading, a demand zone is a price range where there is an abundance of buy orders, resulting in increased buying pressure and potentially a temporary support level. A demand zone can be identified on a price chart as an area where the price has previously reversed or found support, and where there are many unfilled buy orders or pending buy orders. For example, if the price approaches a demand zone, traders may consider buying or adding to long positions. Conversely, if the price breaks through a demand zone, traders may see it as a bearish signal and consider selling or taking profits on existing positions. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
34
💲Catch Profits in Channels💲Hello dear traders🙋🏻; I'm Pejman & this is the "How to get fish from channels" class. I guess you've heard, "Give a man a fish, and you feed him for a day🍣; teach a man to fish🎣, and you feed him for a lifetime." Like every other educational post, today I will teach you how to fish and make money from the Market River🏞️. As you know, fishing requires patience and practice, and you also have to take risks and throw bait into the water⛲. But today, together, we can use all kinds of price channels that are formed in this attractive river as a fishing net.🕸️ Our tool for fishing in the market river is technical analysis, which we discussed in previous posts. You can refer to this post and pick up your fishing rod. You must have noticed that in the financial markets, the prices have their patterns and trends, which help us to catch the best fish🐠. These patterns and specific price movements cause various trends in the market, which I explained in the market types post. Another feature of specific price patterns and trends is the creation of price channels. Of course, don't get me wrong, I don't mean TV channels📺. Although these channels are as attractive as sports channels and watching the Barcelona and Real Madrid games⚽🏟️, they have other features besides attractiveness✨. They help you to predict the area of price movement even for the future. But please don't confuse channels with a magic 8-ball🎱. Based on past trends, they can give you a sense of where the price may be headed👀. Trading without a price channel is like fishing without a net🕸️; you just guess.🤔 So, let's check the channels more closely and catch fish from them until the river is wavy.🌊 First, we need to know what the channel is.🤷🏻 Channels are like riverbanks that guide water flow, except, in this case, the channels guide the flow of candlesticks.🕯️ Price channels are made when the price is under the pressure of two ranges of supply and demand. A channel is a trading range between two trend lines in which the price of an asset moves in almost predictable directions💁🏻. A price channel is like a trend line with a friend; two are always better than one, right?🧑🏻‍🤝‍🧑🏻 They also say: "The trend is your friend, but the price channel is your guide🙏🏻." By drawing the channels, you can find the possible price path🛣️, and at the right time, your hook will be stuck on sweet and big dollars💰. Channels can be formed and used in any market with trending price changes, from stocks to forex and cryptocurrencies. Channels, like many other tools in this market, have different types. Put down your fishing rods and put on your swimsuits🩲👙; we have to dive into the next topic.🏊🏻‍♀️ ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Dear students welcome to the types of channels class.🧑🏻‍🏫 The first lesson is ascending channels.⬆️ The ascending channel for the price is like a staircase to heaven! An ascending channel is the same as an upward trend line, with the difference that in addition to the aligned valleys🌄, the peaks⛰️ are also aligned and are formed parallel to the valleys. Both the peaks and valleys will be predictable.💁🏻 Of course, you cannot be sure what the next price move will be, but you can predict many possibilities.👀 Now that we climbed the stairs and got acquainted with the ascending channel, it is time to get acquainted with the descending channel⬇️ and do some skiing⛷️. They say: In the deepest water is the best fishing. So let's swim deeper and get to know the descending channel.🤿 The descending channel is like a waterfall, pulling down everything in its path. Candles are no exception, and when they are in a descending channel, they slide like fish🐠 in a waterfall and go lower and lower. Look for a series of Lower Highs(LH) and Lower Lows(LL) to identify descending channels. The difference between ascending and descending channels is similar to climbing🧗🏻 and skiing⛷️; Descending channels push the price down and cause lower peaks and valleys. If you were trading in one-sided markets and encountered a descending channel, my friend, just sell and run🏃🏻. But if you were in two-sided markets, you can enjoy taking short positions🔻 and fishing in this drop.🎣 The noteworthy point✨ is that the longer a channel is and the more times⏳ the price has hit any side of this channel, the more essential and reliable this channel becomes.✅ But what if the price is too tired to climb the stairs🔺😩 and not in a good mood to play on the slide🔻😒? In this case, it will be stuck between two✌🏻 horizontal trend lines and form a range or sideway channel. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Range channels are just like ponds. There is no exceptional water flow🌊 in a pond, and fish and other creatures can only Move inside this pond. But range channels could be more attractive and eye-catching, like ponds.🌟 Range channels make traders tired.🙍🏻 Because trading in these channels will be more difficult than in other channels, it is challenging to recognize price movements or profit from small price movements in range channels.🤷🏻 The range channel is not similar to the ascending or descending channel. Because as its name suggests, it does not have a particular trend at all and is trendless. When the price is in a channel range, the number of buyers🟢 and sellers🔴 is almost equal, and supply and demand are virtually identical. 🙅🏻Unlike ascending and descending channels, no peaks or valleys can be seen in a range channel higher or lower than its previous peaks or valleys. Range channel is created by considering two trend lines from one peak to another peak and from one valley to another valley. 👌🏻Actually, the difference between a range channel and other channels is that these peaks and valleys are equal and basically in the same direction. These channels may be permanent for river fishes🐟 and have become their home🏡, but there is no permanent channel or trend line for candles.😉 Remember that candles can leave their channel just like a bird🕊️ that jumps out of its cage or a prisoner escaping prison.🏃🏻 Do you remember in the previous posts when I talked about support and resistance lines, we said that candles could finally be released from their support or resistance prison? This case is the same.💁🏻✅ If you forget or don't know about support and resistance lines, take a breath and read this post before going to the next steps.👇🏻 The longer a channel is and the longer the price is locked in it🔒, the pressure of supply and demand on the price is more significant, and you will probably see a strong movement of the candles after the failure.💪🏻 But don't worry. You can still make money trading channels and even breakouts. In the following steps👣, I will teach you how to trade with all types of channels, as well as how to trade in breakouts.😉 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Now you must have questions about how to draw channels.🤷🏻 Well, obviously, with a very sharp pencil✏️ and a steady hand✍🏻. Just kidding😅, you must first recognize the trend and look for regular price movements to draw channels. To catch a good fish, you must patiently monitor the price movements and look for peaks and valleys that move in the same direction.🕵🏻 You will find your channel by connecting these peaks and the valleys to each other. You need at least two✌🏻 parallel peaks and two valleys to draw a channel. But how do you know that a channel has been drawn correctly?🤔 Channels have conditions, my friend. I wrote these conditions, so pay attention when drawing the channel.😊 When you draw your channel, make sure that the upper and lower lines of the channel must be parallel. If the two channel lines are not parallel and are angled, this is a sign of your terrible drawing🤦🏻‍♀️. What kind of school🏫 did you go to where you can't draw two parallel lines?😐 I'm kidding😄, but if this happens, the pattern is no longer a trend channel but a triangle, which I discussed in previous posts. Channels and trend lines create patterns by forming different shapes, which I explained in the above post. I said the lines should be parallel but don't take a ruler📏 to measure each channel and trend line. There is nothing quite like books, my friend.😉 According to the definitions, don't expect to always find a channel 100%. In that case, you will lag behind the whole market.🙅🏻 But there is a tool with the help of which you can draw your channels correctly and lower your error percentage. ✅You can find this expression from the toolbar beside your TradingView charts. Who doesn't like to cheat sometimes? Look to the left of your charts and click on the second one from the top. New options are displayed; the fifth option from the bottom is the Parallel Channel. Select this tool and look at your chart. Use this tool wherever you can draw a channel. To draw ascending channels, you have to find two valleys with a peak between them and you can look for the second peak by drawing the parallel channel. And vice versa, to draw descending channels, you must look for two peaks with a valley between them. If you found two valleys and there were no peaks between them, something must be wrong & you should reconsider to find the right points. Finally, the task of the range channels is also straightforward🙂 When you start drawing, from peak to peak or valley to valley, the range channel will show itself, and it will not be different.😊 By default, parallel channels are also a middle line.👀 The middle line is like a negotiator between the other two lines. When the price moves from the upper band of a channel to the bottom, the middle line can mediate and supports the price.🟢 Or when the price moves from the lower band of a channel to the top, the middle line can prevent the price from moving further.🚫 Dear students🧑🏻‍🏫, now you have acquired the necessary skills, and it is time to take your sticks🪝 and come with me to the river. Before you trade and catch fish yourself, pay attention🙏🏻 to the positions I took with the help of channels to gain skills in this field because a poor worker blames his tools. There are ✌🏻two strategies for trading using channels, both of which I will teach you. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- For example, in an ascending channel, such as trading with a support line, you can buy🟢 when the price is on the lower line of the channel and wait for it to reach the upper line of the channel and exit the positioning 🔚. In previous articles, we talked about candlestick patterns. Using these patterns, you can get help to enter and exit your positions. You can place your stop loss below the bottom line of the channel. You must indeed lose a fly to catch a trout.🎣 But always remember to be careful.😉 They say to invest what you can afford to lose. But remember to manage your Risk-Ratio and only trade after practicing and testing your strategies several times.✅ Indeed, even if the channel is downward🔻, you should only trade in the direction of the trend; as soon as the price reaches the upper line or resistance line, enter the position and take your profit💲 when you get the lower line of the channel. Of course, if you are facing a range channel, your general strategy should be to buy at the bottom and sell at the top of the channel, and it's like eating a piece of cake.🍰👌🏻 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- When the price is stuck in a channel, is it like a prisoner who can't guess whether he will finally escape by digging a tunnel or climbing over the prison walls? It is impossible to know from which side the price will eventually break its channel.🤷🏻 It seems that channels usually break against the direction of their slope, but it is always possible for a channel to break on both sides.😉 If a channel is broken, the price usually starts a significant move in the same direction as the break.🏃🏻 Did I say that the more the price is locked in a channel, the stronger it will move?💪🏻 Usually, the price can move according to the width of its channel. When the price is stuck in a channel, is it like a prisoner who can't guess whether he will finally escape by digging a tunnel or climbing over the prison walls? It is impossible to know from which side the price will eventually break its channel.🤷🏻 It seems that channels usually break against the direction of their slope, but it is always possible for a channel to break on both sides.😉 If a channel is broken, the price usually starts a significant move in the same direction as the break.🏃🏻 Did I say that the more the price is locked in a channel, the stronger it will move?💪🏻 Usually, the price can move according to the width of its channel. You can even use both strategies to trade channels.👌🏻 For example, if the price is locked in this channel, trade in the direction of the channel trend. Breaking channels is like breaking trend lines or support & resistance, and it comes with a breakout candle🚩 and a confirmation candle✅. After the breakout, if you have an open position in the trend direction of the channel, you should close it.🙅🏻 After seeing the confirmation✅ of the breakout, enter the position according to your trading strategy and follow the risk management points. For example, I would have ✌🏻two entry points. And I place my stop loss slightly above the breakout candle🔴. My first point of entry is after seeing the confirmation candle. And if the price returns🔁 to its channel for the last kiss💋, I activate my second entry point. This will reduce my Risk-Ratio, and I will have a safer position. To know that your channels are ending🔚, you should look for signs of weakness in price movements; for example, in an ascending channel, breaking below the low trend line or failing to reach higher peaks are signs of weakness. It's like the price is taking a break before going higher again. The last thing I'd like to tell you is don't try to force a price on a channel when it doesn't exist. Remember, patience is vital, and it is better to lose a trade than accept a losing trade. As said: "Sometimes the best catches are found in still waters." 🎣 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Conclusion : Price channels are the rails that keep asset prices on track.🛤️ Just like fishing in a river, trading requires patience, skill, and an understanding of your environment. Check and avoid being affected by market fluctuations.🙅🏻 Now you can take your fishing rod🎣. Whether you are fishing in a bullish, bearish, or range market, the right approach and tools can help you make big profits.😉💲 Remember that profit and loss are together. Profits are never permanent and remember that a bad day at fishing is better than a good day at work. Am I right?😊 For you to have more good trading days than bad days, remember that it's okay to make mistakes when drawing🖌️ those price channels. You can make up for all your mistakes by practicing and finding the right strategy. Warren Buffett says: The best investment you can make is your abilities.💪🏻 Feel free to experiment and try new strategies.✨ Don't be like a fish out of water; use the channels for swimming🏊🏻‍♀️ towards the market river. Remember what Jesse Livermore said: "Price channels are like guardrails on the highway🚧 - they keep you from going off track and help you stay on track." This post is over, but the road to the technical analysis journey is not over🧳✈️. In the following posts, I will accompany you step by step👣 and teach you other tools. Be healthy🙏🏻, profitable💲, and successful!✌🏻 Ask your questions in the comments💬 and share your opinions with me😍.
Education
by pejman_zwin
86
The Clarity of Renko'sThis is not a chart reading - and i'll keep it super short ... this is just a quick reminder that we have many powerful tools that we can use to enhance our analysis and trading outcomes.. too many that we sometimes forget to use them. The above chart shows a great example of that .. I was going thru the daily analysis and thought i should share this note with fellow TV chartists and traders. The 2 panels show 2 identical charts, same time frame, same date range, same symbol and same indicators .. the only difference, the chart on the right hand side is a Renko It's surprising to see how clearer the picture is when we analyze the chart and the price/volume action through the Renko lens. Taking for example, the 3 double/triple top formations and how they were expressed on both charts .. which chart is easier to action and trade? so the quick note here is, let's not forget about these powerful tools - and continue to leverage them as much as possible - Before initiating the next trade, check your Renko :) Note: most of my indicators and TA concepts are "Renko-friendly" ;) Notes & comments ?
NASDAQ:MSFTEducation
by RedKTrader
8
Why are only 10% of traders successful?Why are only 10% of traders successful? The popularity of exchange trading is growing rapidly today, but experience shows that only 10% of those who come to trade end up making a profit. Barrier N°1 Laziness and unwillingness to learn. Frankly, most people who want to profit from stock trading do not want to learn this. They feel sorry for the time to master the base, to practice. Having earned a couple of times on a demo account, they immediately go to trade for real money. And for this category of traders, failures are predetermined by their own attitude to the trading process. Barrier N°2 Greed and haste. "Exchange trading will make me a millionaire in just a week" - completely wrong expectations. Instead of trades with a profitability of 3-5% and a success rate of 70%, many traders are interested in trades with a profitability of 70% and a success rate of 3-5%. There is nothing surprising in the fact that such transactions do not end well. At the same time, +10% per month will increase capital very quickly if you trade systematically and do not chase fast super-profits, which always turn into losses. Barrier N°3 Mismanagement of finances. Even in the absence of a large risk of each particular trade, there is a danger of losing the profits of many previous trades by making one trade for too much. Equal lots that do not exceed 1% of the deposit are a guarantee of security. Barrier N°4 Too complicated strategy. A simple and transparent strategy is better than a complex one. It is worth striving for a yield of 60-70%, this is quite enough to consistently make a profit. The search for a "super strategy" with a 90% return is usually unsuccessful, and overly complex systems do not work very well. Barrier N°5 Wrongly organized trade. "Professional burnout" and the failures associated with it often haunt those traders who give a lot of time to work. It is advised to trade no more than 5 hours a day and conclude no more than 1-2 transactions. This will save energy and a positive attitude. Trading without drawdowns and with a stable income - exactly what you should strive for. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
28
What should I look at in the Income Statement?The famous value investor, Mohnish Pabrai , said in one of his lectures that when he visited Warren Buffett, he noticed a huge handbook with the financial statements of thousands of public companies. It's a very dull reading, isn't it? Indeed, if you focus on every statement item - you'll waste a lot of time and sooner or later fall asleep. However, if you look at the large volumes of information from the perspective of an intelligent investor, you can find great interest in the process. It is wise to identify for yourself the most important statement items and monitor them in retrospect (from quarter to quarter). In previous posts, we've broken down the major items on the Income statement and the EPS metric: Part 1: The Income statement: the place where profit lives Part 2: My precious-s-s-s EPS Let's now highlight the items that interest me first. These are: - Total revenue The growth of revenue shows that the company is doing a good job of marketing the product, it is in high demand, and the business is increasing its scale. - Gross profit This profit is identical to the concept of margin. Therefore, an increase in gross profit indicates an increase in the margin of the business, i.e. its profitability. - Operating expenses This item is a good demonstration of how the management team is dealing with cost reductions. If operating expenses are relatively low and decreasing while revenue is increasing, that's terrific work by management, and you can give it top marks. - Interest expense Interest on debts should not consume a company's profits, otherwise, it will not work for the shareholders, but for the banks. Therefore, this item should also be closely monitored. - Net income It's simple here. If a company does not make a profit for its shareholders, they will dump its shares*. *Now, of course, you can dispute with me and give the example of, let's say, Tesla shares. There was a time when they were rising, even when the company was making losses. Indeed, Elon Musk's charisma and grand plans did the trick - investors bought the company's stock at any price. You could say that our partner Mr. Market was truly crazy at the time. I'm sure you can find quite a few such examples. All such cases exist because investors believe in future profits and don't see current ones. However, it is important to remember that sooner or later Mr. Market sobers up, the hype around the company goes away, and its losses stay with you. - EPS Diluted You could say it's the money the company earns per common share. So, I'm finishing up a series of posts related to the Income statement. This statement shows how much the company earns and how much it spends over a period (quarter or year). We've also identified the items that you should definitely watch out for in this report. That's all for today. In the next post, we will break down the last of the three financial statements of a public company - the Cash Flow Statement. Goodbye and see you later!
NASDAQ:TSLAEducation
by Be_Capy
What is Bitcoin Halving?Bitcoin halving is a significant event on the Bitcoin network every four years. During this event, the block reward that miners receive for verifying transactions and adding new blocks to the blockchain is reduced by 50%. This means that the rate of new Bitcoin creation slows down, and the total supply of Bitcoin approaches its maximum limit of 21 million. Bitcoin halving is a programmed event and is built into the Bitcoin protocol to ensure that the inflation rate of Bitcoin remains controlled and predictable. The reduced rate of new Bitcoin creation and the expectation of scarcity can increase the value of Bitcoin, which has historically led to an increase in the asset's price in the months leading up to a halving event. Despite this, the market can be unpredictable, and the impact of halving Bitcoin's price is not guaranteed. However, the reduced supply of Bitcoin resulting from halving helps to maintain its value and ensure that it remains a finite and scarce asset. The previous Bitcoin halving occurred on May 11, 2020, at a block height of 630,000. At that time, the block reward for miners was reduced from 12.5 BTC to 6.25 BTC per block. This was the third halving event in Bitcoin's history, following the first halving in November 2012 and the second halving in July 2016. The next Bitcoin halving is expected to occur in march 2024, at which point the block reward will be reduced from 6.25 BTC to 3.125 BTC per block. After the first Bitcoin halving in November 2012, the price of Bitcoin increased by over 8,000% over the following year. After the second halving in July 2016, the price of Bitcoin increased by around 2,500% over the following 18 months. After the most recent halving event in May 2020, the price of Bitcoin initially experienced a slight drop but quickly recovered and went on to gain over 300% in value over the following year, reaching an all-time high of over $64,000 in April 2021. Thanks Hexa
INDEX:BTCUSDEducation
by HexaTrades
16
Understanding the Relationship between DXY Index and GoldIntroduction: The US Dollar Index (DXY) is a widely followed indicator of the value of the US dollar relative to a basket of foreign currencies. As gold is priced in US dollars, changes in the value of the dollar can have an impact on the price of gold. In this article, we will explore the relationship between the DXY index and the price of gold, and why this relationship is important for gold traders and investors. The DXY Index: The DXY index measures the value of the US dollar relative to a basket of six major currencies. These currencies include the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. The index is weighted according to the amount of trade conducted between the US and the other countries represented in the basket. As such, it provides a measure of the US dollar's strength or weakness relative to these currencies. The Price of Gold: Gold is a precious metal that has been used as a store of value for thousands of years. It is traded on commodity markets around the world, and its price is quoted in US dollars per troy ounce. As gold is priced in US dollars, changes in the value of the dollar can have an impact on its price. The Relationship between the DXY Index and the Price of Gold: When the DXY index rises, it means that the US dollar is strengthening relative to the other currencies in the basket. This can make gold more expensive for investors who use other currencies to purchase it, since they will need to exchange more of their own currency to buy the same amount of gold. As a result, a rising DXY index can put downward pressure on the price of gold. Conversely, when the DXY index falls, it means that the US dollar is weakening relative to the other currencies in the basket. This can make gold relatively cheaper for investors using other currencies, which can increase demand for gold and drive up its price. Other Factors: While the DXY index is an important indicator of the value of the US dollar, it is not the only factor that influences the price of gold. Other factors, such as global economic and political developments, interest rates, and inflation, can also have a significant impact on the price of gold. For example, if there is uncertainty about the future of the global economy or if inflation is high, investors may turn to gold as a safe haven asset, regardless of the value of the US dollar. Conclusion: The relationship between the DXY index and the price of gold is an important one for gold traders and investors to understand. A rising DXY index can put downward pressure on the price of gold, while a falling DXY index can increase demand for gold and drive up its price. However, it's important to keep in mind that other factors can also have a significant impact on the price of gold. As with any investment, it's important to consider all relevant factors and do your own research before making any decisions.
TVC:DXYEducation
by FaisalFX51214
26
🏵MOVING AVERAGE TYPES🏵 🏆What Is A Moving Average: A moving average is one of the lagging technical indicators which the traders and investors use for determining the trend’s direction. It totals the data points of the chart and then divides the total by the number of data points over a specific time period for arriving at an average. It is referred to as the “moving” average as it is continually recalculated which is based on the latest price data. The moving average is used by the trader for determining support and resistance by evaluating the price movements. This indicator shows the previous price movement of the asset which the traders use to determine the potential direction of the future price move. 🏆Simple Moving Average: The SMA Is the simplest moving average that is obtained by adding the most recent data points set and then dividing the total by the number of time periods. The SMA indicator is used by traders to generate signals of when to enter or exit the trade. An SMA is a lagging indicator as it is based on the past price data for a given period that can be computed for different types of prices such as high, low, open, and close. Traders use this indicator for determining buy, sell signals. It also helps to identify support and resistance zones. 🏆 Exponential Moving Average (EMA): EMA is the other type of moving average that gives more weight to the most recent price points and makes it more responsive to recent volatility. EMA is more responsive to recent price change when compared to the SMA as it applies the same weight to all price changes in the given specific period. 🏆Most Common MA’s: • 20ema - Best for shorter time frames and volatile price movement • 50ema - Good for overall trend insight and outlook • 200ema - Best for longer time frames and larger trends 🏆KEY TAKEAWAY: While one might prefer one or the other type of MA, traders can use both to gain the trading edge. The key is to know how to use the indicator properly. I can say for myself that I use both sometimes, especially when going through my stocks watchlist and these indicators have proven to be effective despite being relatively simple. I Hope you guys learned something new today✅ Wish you all Best Of Luck👍 😇And may the odds be always in your favor😇 Do you like this post? Do you want more articles like that?
Education
by ProSignalsFx
30
Why You Should Follow the Economic CalendarWhy You Should Follow the Economic Calendar The economic calendar is an important tool for traders and investors, as it provides valuable information on important economic events. Whether you are trading stocks, commodities , currencies or any financial instrument, understanding the economic calendar can help you make informed investment decisions and increase the chances of achieving your financial goals. In this post, we will discuss why you should use and follow the economic calendar if you are a trader or investor. Stay Up-to-Date with Key Economic Announcements: The economic calendar provides a comprehensive schedule of economic releases, such as GDP reports, interest rate decisions and employment data. This information is crucial for traders and investors because it can affect the value of financial assets, making it important to stay on top of the latest publications. By using an economic calendar, you can ensure that you are always up to date with the latest developments in the world economy and can make informed investment decisions. Plan Your Trading Strategy: By monitoring key economic events and announcements, traders can plan their trading strategy in advance. For example, if an interest rate decision is expected to have a significant impact on the currency market, a trader can plan accordingly. With a thorough understanding of the economic calendar, investors can make informed decisions and increase the chances of achieving their trading goals. Avoiding surprises: The economic calendar provides information about key economic events in advance, allowing traders and investors to prepare for potential changes in the market. By being aware of upcoming economic releases, you can avoid surprises that can adversely affect your investments. Identifying trends and patterns: The economic calendar provides a historical record of past economic releases that can be used to identify trends and patterns. By analyzing this data, traders and investors can gain a more complete understanding of the market and make informed decisions. Make data-driven decisions: The economic calendar provides a wealth of data that can be used to make informed investment decisions. Traders and investors can use this data to analyze market trends and make data-driven decisions that can increase the chances of success. In conclusion, the economic calendar is a valuable tool for traders and investors. By using the economic calendar, you can stay on top of key economic announcements, plan your trading strategy, avoid surprises, identify trends and patterns, and make data-driven decisions. If you are serious about succeeding in the financial markets, make sure you follow the economic calendar understand it and use it to your advantage. 🚀 If you appreciate my work and effort put into this post, I encourage you to leave a like and follow on my profile. 🚀
OANDA:XAUUSDEducation
by InvestMate
27
Best Editors' Picks of 2022This year, we introduce the awards for the Best Editors' Picks of the year. Among the 84 selections of 2022, our PineCoders voted these four script publications as the most outstanding. Each of the authors of these four scripts will receive 50,000 TradingView coins. These are all open-source, freely available scripts, which their authors have generously chosen to publish publicly so that all Tradingviewers may use and learn from them. We are immensely grateful to these authors and all others Pine Script™ programmers contributing to our ever-growing Community Scripts . The four winners are: ​Volume Profile ​Volume Delta OI Delta Double Tap R:R Trading System Framework Next ​Pivot Projection We look forward to seeing more amazing scripts in 2023! What are Editors' Picks ? The Editors' Picks showcase the best open-source script publications selected by our PineCoders team. Many of these scripts are original and only available on TradingView. These picks are not recommendations to buy or sell anything, nor to use a specific indicator. Our aim is to highlight the most interesting recent publications to encourage learning and sharing in our community. Any open-source script publication in the Community Scripts can be picked if it is original, provides good potential value to traders, includes a helpful description, and complies with the House Rules.
AMEX:SPYEducation
by PineCoders
22
Learn Risk-Reward Ratio | Risk Management For Beginners 📚The risk-reward ratio (or risk return ratio) measures how much your potential reward (or return) is, for every dollar you risk. 📚For example: If you have a risk-reward ratio of 1:3, it means you’re risking $1 to potentially make $3. If you have a risk-reward ratio of 1:5, it means you’re risking $1 to potentially make $5. You get my point. ⚠️Now, here’s the biggest lie you’ve been told about the risk reward ratio: “You need a minimum of 1:2 risk reward ratio.” This statement is incorrect! Because the risk-reward ratio is meaningless on its own. 📚Here’s an example: Let’s say you have a risk reward ratio of 1:2 (for every trade you win, you make $2). But, your winning rate is 20%. So out of 10 trades, you have 8 losing trades and 2 winners. Let’s do the math… Total Loss = $1 * 8 = -$8 Total Gain = $2 * 2 = $4 Net loss = -$4 By now I hope you understand the risk reward ratio by itself is a meaningless metric. Instead, you must combine your risk-reward ratio with your winning rate to know whether you’ll make money in the long run (otherwise known as your expectancy). 📍THEREFORE: The key to success is the combination of the RR and Win Rate in such a fashion that yields a positive return. 📙Example: 🔘If your RR is 1:1 then you start making money with 51% win rate and above. 🔘If your RR is 1:1,5 then you start making money with 41% Win rate and above. 🔘If your RR is 1:2 then you start making money with 34% win rate and above. 🔴The higher the RR the lower is the breakeven Win Rate! Like, comment and subscribe to boost your trading! Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
78
5 Things To Remember About Bull MarketsHey everyone! 👋 Bull markets are a time of optimism and growth, and they can be a great opportunity for making substantial gains. However, it's important to remember that bull markets don't last forever, and it's crucial to approach them with a healthy dose of caution while keeping your eye on your long-term goals. 🙂 Here are a few things to keep in mind when trading and investing in bull markets: 🚨 Don't get caught up in the speculative frenzy It's important to remain level-headed and avoid making impulsive decisions based on short-term gains. Take time to thoroughly research any trades you're considering. It’s always good to focus on ideas with strong fundamentals as well as technicals. 📚 Keep an eye on valuations In a bull market, it's common for prices to rise, sometimes to levels that may not be justified by a the underlying fundamentals. For investors, it can be important to keep an eye on supply and demand, valuation, and more to make sure the assets you're positioned in are reasonably priced. 🔔 Be prepared for reversals Like all good things, the Bull markets too eventually come to an end. Hence, it's essential to be prepared for a downturn. It’s always good to manage risk exposure by employing techniques such as diversification, hedging and more. 💸 Control your risk It's natural to want to hold on to the positions that are performing well, but it's important to remember that bull markets eventually come to an end. If you've made substantial gains, trailing may be a good option to lock in profits should things change quickly. Letting the winners ride by continually trailing your positions is a particularly good strategy for improving a trade’s Risk-Reward ratio. 📈 Keep a long-term perspective Trading is a marathon, not a sprint. Bull markets can be a great opportunity for gains, but it's important to keep a long-term perspective about your goals. Did you miss the big moves? Don’t get angry and make bad decisions. There will be more opportunities down the road to apply what you’ve learned. Bull markets can provide excellent opportunities, however, they must be approached with caution and with defined personal goals. Consider the risks and rewards of each investment, keep an eye on valuations, and always be prepared for a downturn. We hope you enjoyed this post! Please feel free to write any additional tips or pieces of advice in the comments section below. – Team TradingView ❤️
NASDAQ:AAPLEducation
by TradingView
70
The correlation between US Interest Rates and The US Dollar (DXYInterest rates and USD strength are positively correlated. An increase in US interest rates will typically result in a strengthening of the USD. The reason is... Foreign investors tend to flock to US assets, such as bonds and fixed bank rates for higher returns. Higher demand for US assets drives up their price, and as a result, the USD strengthens. As for the relationship between USD strength and US stock market prices, it is more complex and can have both positive and negative effects. On one hand, a strong USD can make US exports less competitive, reducing demand and potentially leading to a decrease in corporate profits. This can weigh on stock prices. On the other hand, a strong USD can attract foreign investment into US stocks, driving up demand and prices. There are other reasons for the correlation such as: Interest rate differentials When interest rates in one country are higher than in another, capital tends to flow to the country with the higher interest rates. This results in an increase in demand for the currency of the country with higher interest rates, strengthening its currency i.e US Dollar. Inflation expectations Interest rates are also closely linked to inflation expectations. When interest rates rise, it is generally expected that inflation will rise too, which makes the currency more attractive to investors. Trade flows The USD is the currency used in most international trade transactions, and as a result, changes in trade flows can have a significant impact on the value of the USD.
ECONOMICS:USINTREducation
by Timonrosso
6
What I've learned after backtesting So, I love backtesting. Recently I've found my self in a 3% drawdown and needed to figure out what the cause of it was and trading at this moment won't give me that answer. So, I decided to backtest. Here is what I found: 1. I'm overtrading my system I am a proud swing trader who got back into scalping the market in December 2022. It was mot my idea, but I thought I could handle it. I started out great, but then the market reminded me why I left the lower timeframes. 2. I'm not holding my trades long enough. Thanks Prop Firms! Since joining a prop firm my mind has been changed to holding trades for less time than I normally would. I don't mind holding trades for weeks or months, but prop firms give you time limits during evaluation periods. That was and still is a huge adjustment for me. Being a swing trader means I have to let my profits run. So, now, I've found a prop firm that will allow me to hold my trades with no time limits. 3. Not holding trades to my weekly and monthly targets. I need to see past my daily targets. Normally my daily risk to rewards are between 1:1 and 1:2. I'm in drawdown because I'm not recovering from my losses with these risk to rewards. So now, I'm only taking trades with RR over 1:2 and better. This way I'm trading less, holding longer(sometimes), and getting the best bank for my buck. Backtesting helped me see my mistakes and how to correct them. This is called fixing your strategy. Notice how I'm not changing my strategy. I'm tweaking my strategy to fit my mental capacity and trading style. If you find you're in a drawdown and can't see, stop trading and backtest what you're currently doing and find a way to stop the behavior thats causing your drawdown. Then, stop doing that particular thing so you can see better results. I pray this has helped you. Let me know your key takeaway by commenting below.
Education
by ShaquanLopez
53
Rule of the Majority SignalA "Rule of the Majority" (RM) signal occurs when one of the three main U.S stock indices; S&P 500 (SPX), Dow Jones Industrial Average (DJI), Nasdaq Composite (IXIC) makes a new high or low unaccompanied by the other two indices. The signals occur at major, intermediate and sometime short-term market turns. Because of the difused nature of stock market tops, RM signals are more likely to occur at stock market peaks as opposed to bottoms. I first observed the RM phenomenon after the major U.S stock market top in early 2000. This post illustrates an efective signal at the all-time high for U.S stocks - late 2021 and early 2022. The IXIC topped first on 11/22/21. SPX topped on 01/04/22. When the DJI made a solo new high on 01/05/22 it was an effective RM signal. The IXIC had on RM signal on 03/14/22 with its solo new low.
SP:SPXEducation
by markrivest
8
Strategy Coding E01: Adding a custom Trailing-StopIn my experience there are phases to creating a strategy. In this episode we will cover one of the most important steps: establishing an exit strategy. Exiting a position is crucial to risk management. If your entries are terrible but you have a good exit strategy, you might get by and not lose a lot of your capital. And vice-versa, if your entries are great, but your exit strategy is terrible, you my not make any profit. Concepts we will cover in this episode: Integrating an indicator value as a trailing stop. Lowering the trailing stop sensitivity by using the Average True Range (ATR). Customizing the ATR value. Brief introduction to 'modules'.
AMEX:SPYEducation
by Electrified
13