Trading Psychology and Your Losses
Hey traders,
In this post, we will discuss a common fallacy among struggling traders: overestimation of a one single trade .
💡The fact is that quite often, watching the performance of an active trading position, traders quite painfully react to the price being closer and closer to a stop loss or, alternatively, coiling close to a take profit but not being managed to reach that.
Fear of loss make traders make emotional decisions :
extending stop loss or preliminary position closing.
The situation becomes even worse, when after the set of the above-mentioned manipulation, the price nevertheless reaches the stop loss .
Just one single losing trade is usually perceived too personally and make the traders even doubt the efficiency of their trading system.
They start changing rules in their strategy, then stop following the trading plan, leading to even more losses.
❗️However, what matters in trading is your long-term composite performance . A single position is just one brick in a wall. As Peter Lynch nicely mentioned: “In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.”
There are so many factors that are driving the markets that it is impossible to take into consideration them all. And because of that fact, we lose.
The attached chart perfectly illustrates the insignificance of a one trading in a long-term composite performance.
Please, realize that losing trades are inevitable, and overestimation of their impact on your trading performance is detrimental.
Instead, calibrate your strategy so that it would produce long-term, consistent positive results. That is your goal as a trader.
Learning
Learning Post : Bajaj Fin Showed Recovery from Support Levels
This is a Learnig Post :
> Price Action Pattern Repeats on the Charts
> The Stock formed W Pattern at the Imp Support & witnessed Good Recovery
> It may Come for Pullback Retesting
*No Stock Recommendation
For Chart Practice & Learning Purpose
Again.. Fibs hell. Interesting to play with them...."Once upon a time, as we stood on the brink of uncovering the ultimate solution, the one that would unravel all others, there they were—The Fibs. Shrouded in shadows, they lingered in solitude... alone. :D"
It sounds like you're gathering pieces for a larger narrative. If you need further assistance or want to continue the story, feel free to reach out. Happy writing! 😊
Duolingo Soars as JP Morgan eyes Coverage with Bullish OutlookDuolingo ( NASDAQ:DUOL ), the popular language-learning app, witnessed a significant uptick in its stock price, surging 5.8% following JP Morgan's initiation of coverage with an Overweight (Buy) rating and a target price of $270. Analysts lauded Duolingo's unique strengths, including gamification features, personalized learning, and robust data analytics, which set it apart in a competitive landscape. Despite a slight pullback from its morning highs, Duolingo's shares remain buoyant, reflecting investor optimism about its future prospects.
JP Morgan's Bullish Thesis:
JP Morgan's bullish stance on Duolingo ( NASDAQ:DUOL ) underscores the company's compelling value proposition and competitive advantages. While acknowledging the potential for increased competition from tech giants like Google, analysts emphasized Duolingo's innovative approach to language learning, backed by deep data insights and a strong brand presence. The target price, representing a 25% premium, signals confidence in Duolingo's ability to deliver sustained growth and capture market share in the burgeoning ed-tech sector.
Market Reaction and Volatility:
The market's reaction to JP Morgan's coverage initiation reflects a nuanced perspective, with Duolingo's shares experiencing notable volatility over the past year. While today's uptick is viewed as meaningful, it's not perceived as a game-changer in the company's trajectory. Previous significant movements, such as the surge following the robust fourth-quarter results, underscore investors' sensitivity to key performance indicators and growth metrics.
Strong Financial Performance:
Duolingo's ( NASDAQ:DUOL ) recent financial performance has been impressive, with robust user and revenue growth driving positive sentiment among investors. The fourth-quarter results surpassed expectations, with accelerated DAU growth and outperformance across key metrics. Notably, the company demonstrated a commendable balance between growth and profitability, surpassing expectations for adjusted EBITDA, free cash flow, and EPS. Forward guidance for revenue and adjusted EBITDA further reinforces confidence in Duolingo's trajectory.
Investor Perspective:
With Duolingo ( NASDAQ:DUOL ) trading close to its 52-week high and delivering substantial returns since its IPO, investors are reaping the rewards of their early investment. The company's solid performance and strategic positioning in the language-learning market have attracted favorable attention from analysts and investors alike. As Duolingo ( NASDAQ:DUOL ) continues to expand its user base and innovate its platform, shareholders remain optimistic about its long-term growth potential.
Conclusion:
Duolingo's ( NASDAQ:DUOL ) ascent following JP Morgan's bullish initiation underscores the company's market positioning. With a differentiated product offering and strong financial performance, Duolingo ( NASDAQ:DUOL ) is well-positioned to capitalize on the growing demand for language-learning solutions.
Learn to Take Losses. Trading Psychology Basics
Hey traders,
In this post, we will discuss a typical psychological mistake that a lot of traders frequently make, facing a losing streak.
🤑 Analyzing different charts, we may spot a decent trading setup. Being 100% sure in our predictions, we open a trading position.
After some time, we are stopped out.
Instead of admitting that we were wrong, we are looking for a reason why it is not our fault: market manipulation, stop hunting, news.
Instead of reevaluation of our analysis, we start forcing our previous predictions.
🧠 We open a position again, being sure that it is a perfect moment for us to recover the loss.
And we are wrong one more time. What the hell is going on? Who to blame? Of course, that is not us.
These ugly hedge fund managers again sunk our trade.
😢 But we stay strong, we have a big trading account, so we decide to show this schmo who is a real pro here.
Consistency! That is the secret of success in trading.
So we open the third position again.
And... we screwed.
🤬 Eureka! The market reversed! It's time to open the position in the opposite direction. The trend has changed, and it's time to get on board and recover this losing streak.
We open a trade, however, it's too late already: while we were forcing our previous predictions a new impulse has already gone exhausted.
We s*ck...
That is a typical situation every struggling trader faced.
The psychological barrier to take the loss and admit the mistake makes many people leave this game.
The only way to proceed is to learn to take losses. Take losses and reevaluate your analysis.
"It's ok to be wrong. It's unforgivable to stay wrong!"
Why You Should Never Hold on to Your Positions Beyond a CertainGood day, traders.
I would like to take this opportunity to advise both new and experienced traders that holding onto your position indefinitely is not recommended. Based on percentage calculations, the return required to recover to break even increases at a considerably faster pace as losses grow in size due to compound interest. After a loss of 10%, a gain of 11% is needed to make up for it. When the loss is 20%, it takes a 25% gain to return to break even. To recover from a 50% loss, a 100% gain is required, and to reach the initial investment value after an 80% loss, a 400% gain is necessary.
Investors who experience a bear market must understand that it will take some time to recover, but compounding returns will aid in the process. Consider a bear market where the value drops by 30% and the stock portfolio is only worth 70% of what it was. Suppose the portfolio increases by 10% to reach 77%. The subsequent 10% gains bring it to 84.7%. After two further years of 10% gains, the portfolio reaches its pre-drop value of 102.5%. Consequently, a 30% decline requires a 42% recovery, but a four-year compounding rate of 10% returns the account to profitability.
I will be doing a second part of this post on the idea of "DOLLAR COST AVERAGING" (DCA).
The math behind stock market losses clearly demonstrates the need for investors to take precautions against significant losses, as depicted in the graphic above. Stop-loss orders to sell stocks or cryptocurrencies that are mental or limit-based exist for a reason. If the market is headed towards a bear market, it will start to pay off once a particular loss threshold is reached. Investors occasionally struggle to sell stocks they enjoy at a loss, but if they can repurchase the stock or cryptocurrency at a lesser cost, they will like it.
Never stop learning! I would also appreciate hearing your thoughts and opinions on the topic in the comment section.
Thank you.
Head and Shoulders Tutorial on Crude Oil ChartI have decided to start a short series of tutorials covering common instruments used in technical analysis.
In today's tutorial, we observe a successfully identified head and shoulders pattern on the 4-hour chart of Crude Oil, resulting in a substantial movement of around 17%.
Here's how to find the instrument: navigate to the left sidebar and select 'Patterns,' where you will find 'Head and Shoulders.'
Analyzing and trading correctly involve the following steps:
1) Both shoulders must form within a rising or falling trend. In the case of that Oil chart, we observe a rising trend, indicating a potential short position.
2) The size of the head becomes our target for take profit (TP), and upon reaching TP, we close 80% of the position.
3) Ideally, volumes at the right shoulder should decrease, and upon breaking, they should increase.
Risk Management Strategy:
1) Limit each trade to no more than 2% of your deposit.
2) Always utilize stop-loss and take-profit orders.
3) Never trade money you are not prepared to lose.
4) Start with small budgets.
It is crucial to emphasize that risk management must be adhered to whenever you engage in trading!
Register and trade stocks and crypto using my link with a discount on commissions: bingx.com/invite/E6RCUFJT
Duolingo Stock Soars As Online Learning Surge and AI Boost Duolingo (NASDAQ: NASDAQ:DUOL ) has witnessed a remarkable surge in its stock price, soaring over 19.79% as the company projects robust revenue growth fueled by the booming online learning trend and strategic integration of artificial intelligence (AI) on its platform. The language learning giant's forecast for 2024 revenue surpasses analyst expectations, underscoring its dominant position in the evolving online education landscape.
As the language learning market undergoes a paradigm shift towards online platforms, Duolingo ( NASDAQ:DUOL ) has emerged as a frontrunner, capitalizing on its "freemium" model to capture a significant market share. With the introduction of Duolingo Max, a subscription tier featuring advanced AI features, the company has tapped into growing demand for personalized learning experiences, driving higher engagement and user satisfaction.
"We saw a lot of demand at higher prices for our Max offering," noted CFO Matt Skaruppa, highlighting the success of Duolingo's AI-driven initiatives in enhancing the platform's value proposition and monetization capabilities.
The company's stellar financial performance reflects its ability to leverage AI technology effectively, with record total bookings of $191 million in the fourth quarter and a substantial increase in paid subscribers, reaching a record 6.6 million. Moreover, Duolingo's robust user growth metrics, including a 65% increase in daily active users and a 46% year-on-year growth in monthly active users, underscore its widespread appeal and growing user base.
Analysts at Seaport Global emphasize Duolingo's leadership position in the language learning market, attributing its success to the strategic integration of AI technology and the execution of its "freemium" business model. With the online learning trend gaining momentum, Duolingo ( NASDAQ:DUOL ) stands poised to capitalize on emerging opportunities and drive sustained growth in the years ahead.
Despite the impressive surge in Duolingo's stock price, trading above $227, there remains room for further upside potential, with analysts highlighting the company's strong fundamentals and positive market sentiment. While trading at a discount to analysts' median price target of $251.50, Duolingo's transformative growth trajectory and strategic vision position it as a compelling investment opportunity in the dynamic ed-tech sector.
In conclusion, Duolingo's ( NASDAQ:DUOL ) ascent to new heights underscores its resilience, innovation, and strategic foresight in navigating the evolving landscape of online education. With AI integration at the forefront of its growth strategy, the company is poised to redefine the future of language learning and solidify its position as a global leader in the digital education space.
Trading Sessions in Forex | Free Market Sessions Indicator
Hey traders,
In this post, we will discuss trading sessions in Forex .
Let's start with the definition:
Trading session is daytime trading hours in a certain location.
The opening and closing hours match with business hours.
For that reason, trading hours are varying in different countries because of contrasting timezones.
❗️Please, note that different markets may have different trading hours.
Also, some markets have pre-market and after-hours trading sessions.
In this post, we are discussing only forex trading hours.
The forex market opens on Sunday at 21:00 GMT
and closes on Friday at 21:00 pm GMT.
There are 4 main trading sessions in Forex:
🇦🇺 Australian (Sydney) Session Opens at 21:00 GMT and closes at 06:00 GMT
🇯🇵 Asian (Tokyo) Session Opens at 12:00 GMT and closes at 9:00 GMT.
🇬🇧 UK (London) Session Opens at 7:00 GMT and closes at 16:00 GMT.
🇺🇸 US (New York) Session Opens at 12:00 GMT and closes at 21:00 GMT.
Asian trading session is usually categorized by low trading volumes
while UK and US sessions are categorized by high trading volumes.
Personally, I trade the entire UK session and US opening and usually skip Australian and Asian sessions.
There is a free technical indicator on TradingView that allows to underline trading sessions on a price chart. It is called "Market Sessions".
Being added, it displays the market trading sessions.
What trading sessions do you trade?
Understanding the ICT BREAKAWAY GAPIn this video I go through the ICT Breakaway Gap and how YOU can use it to your advantage. I include some tips and tricks with a real trade setup demonstration.
The Breakaway Gap may have been an elusive concept to understand, but I present a simple way you can spot them on the chart and frame your trades around them. It is a powerful weapon that can be used to snag some awesome trades.
Simple put, the Breakaway Gap is a gap that does not get traded into with the NEXT FEW CANDLES. Emphasis on the last part because price is fractal, and the best way to frame a trade with ICT's Concepts is by taking a few candles on the higher timeframe for your bias, and going to a lower timeframe to form your narrative, and either entering on that timeframe or even going to a lower timeframe for your entry.
Hopefully this gives you some insight into one of the many concepts that ICT has bestowed upon the public.
If you need clarification about the content, or you are still struggling with finding your groove as a trader and need personal guidance or mentorship, feel free to reach out to me via TradingView’s private message or on X.
Happy trading and happy studying!
- R2F
Understanding LIQUIDITYIn this video I try to explain liquidity as it pertains to training in a simple manner.
Liquidity are basically orders in the marketplace. Since trading is a zero-sum game, without liquidity, there is no trading. Simply put, If you wanted to BUY, then you would need someone to SELL to you, and vice versa.
Smart Money has deep pockets and needs a large amount of liquidity to facilitate their positions. They want to be able to get in and our of their trades, as well as to be able to trade with capital that would be worth the reward.
The largest pools of liquidity usually reside above swing highs and lows, and equal highs and lows (double/triple tops and bottoms). Support and Resistance ideologies dominate the market, and besides that, psychologically it makes sense to put stoplosses at such areas rather than at some random area within a range. There are also breakout traders who see price breaking out of an area as a sign of strength (or weakness if bearish) and they set their entries above/below these levels. This is how liquidity is "engineered" in the market and sentiment manipulated. These pools of liquidity can be seen as a magnet, drawing price to these levels, either to grab liquidity before reversing or continuing in its current direction.
- R2F
2U (Is e-education the future?) I stand before you to discuss the transformative power of e-education and its pivotal role in shaping the future of learning. As we navigate the dynamic landscape of education, e-learning emerges as a beacon of innovation, offering unprecedented opportunities for learners across the globe.
In this digital era, e-education transcends geographical boundaries, providing accessibility to knowledge regardless of one's location. The future of learning lies in the integration of technology into education, fostering a culture of continuous and personalized learning experiences.
Consider the vast potential of e-learning in reaching the global youth population. With an estimated 2.2 billion children worldwide, the digital realm offers a scalable solution to meet the diverse educational needs of this burgeoning demographic. E-education becomes a catalyst for inclusivity, breaking down barriers and ensuring that every child has the chance to access quality education.
The e-tech era has ushered in a wave of innovation, offering interactive and engaging platforms that cater to varied learning styles. Virtual classrooms, online resources, and collaborative tools redefine the educational landscape, preparing students for the demands of the digital future.
As we embrace the e-tech revolution, let us recognize the power it holds to democratize education. It empowers learners to chart their unique educational journeys, fostering a sense of ownership and curiosity. The future of e-learning promises a world where education is not confined to the classroom but extends beyond, seamlessly integrating into our daily lives.
In conclusion, let us champion e-education as the harbinger of a brighter, more accessible future of learning. Together, let us strive to harness the potential of technology to shape a world where every child, regardless of their circumstances, can embark on a journey of discovery and knowledge. Thank you.
Learn What is FOREX Market. Trading Volumes & Market Participant
Forex - foreign exchange market, is a location where international currencies are bought and sold by economic participants at various exchange rates.
Forex market is the biggest market in the world, reaching on average 6 trillion dollars trading volumes daily.
Forex market is a vital element for a global economy because it provides capital exchanges between the countries.
The main market participants of forex market are central banks, commercial banks, commercial companies, hedge funds and investors.
🕰In order to grasp how big is that market, take a look what is happening on that just in 60 seconds:
📎Total transactions value reaches 3.52 billion US dollars.
📎 1.15 billion dollars of spot transactions.
📎 1.65 billion dollar of exchange swaps.
📎 Total transactions value involving USD reaches 3 billion US dollars.
📎 Total transactions value involving EURO reaches 1.1 billion US dollars.
📎 Just one single EUR/USD pair accumulates 812 million US dollars transactions value.
It is hard to imagine how such big amounts are rolling with such a frequency and how insignificant are the orders of individual traders.
Range Bar Chart, Line Chart & Candlestick Chart - Everything You
Hey traders,
In this post, we will discuss 3 most popular types of charts.
We will discuss the advantages and disadvantages of each one, and you will decide what type is the most appropriate for you.
📈Line Chart.
Line chart is the most common chart applied by analysts. Reading financial articles in different news outlets, I noticed that most of the time the authors apply line chart for the data representation.
On a price chart, the only parameter that the one can set is a time period.
Time period will define a time of a security closing price. The security closing prices overtime will serve as data points.
These points will be connected with a continuous line.
Line charts are applied for displaying an asset's price history, reducing the noise from less volatile times.
Being simplistic, they can provide a general picture and market sentiment. However, they are considered to be insufficient for pattern recognition and in depth analysis.
Above, a line chart is applied for analysis of a long-term trend on Gold.
📏Range Bar Chart.
In contrast to a line chart, a range bar chart does not consider time horizon. The only parameter that the one can set is a price range.
By the range, I mean a price interval where the price moves. A new bar will be formed only once the prices passes the desired range.
Such a chart allows to completely ignore time variable, focusing only on price movement and hence reducing the market noise.
The chart will plot new bars only when the market is volatile, and it will stagnate while the market is weak and consolidating.
Accurately setting a desired price range, one can get multiple insights analyzing a range bar chart.
In the example above, one range bar represents 10 pips price range on EURUSD.
🕯Candlestick Chart.
The most popular chart among technicians and my personal favorite.
ith just one single parameter - time period, the chart plots candlesticks.
Each candlestick is formed as a desired time period passes.
It contains an information about the opening price level, closing price, high and low of a selected time period.
Candlestick chart is applied for pattern recognition and in-depth analysis. Its study unveils the behavior of the market participants and their actions at a desired time period.
Each candle stick represents a price action within 4 hours on AUDUSD chart above. (time frame is 4H)
Of course, each chart has its own pluses and minuses. Choosing its type, you should know exactly what information do you want to derive from the chart.
What chart type do you prefer?
🧿How to be a Trader, not a Gambler⛔Hi.
✅Using technical analysis and fundamental analysis at the same time:
By combining technical and fundamental analysis, you pay attention not only to the patterns and behavior of price action traders in the past, but also to the fundamental and economic factors that act as the driving engine of market movements (macroeconomics). Together, these two approaches provide greater ability to understand market fluctuations and also create a harmonious relationship between charts and economic factors active in the market, allowing you to determine more effective entry and exit points and make your decisions using Take a more comprehensive and principled view.
✅Mastery of a strategy
A strategy for a trader is like a guide to a lost traveler. A trading style helps you stay on track and achieve your long-term goals.
With the strategy in sensitive market conditions, you will not get confused and incur irreparable losses. You also analyze your transactions more accurately.
There are different strategies in forex, but it is better to have a strategy that you completely trust and that is very efficient and profitable.
✅Accuracy of transactions with risk to reward greater than 1 :
A gambler doesn't care when it's the right time to enter a trade. Sometimes the markets do not have the conditions to enter into the transaction and they do not give you a good reward for the risk. Once you have analyzed the market as a professional trader and your entry triggers are activated, you actually have to wait until you can implement the rules of capital management.
In these cases, you should watch until the market gives you a risk to reward of 1 to 2 or 3 and the entry is allowed.
✅Capital management
As a trader, it is necessary for you to have risk management in trading to preserve your capital. Not using capital management may empty your entire financial account. Gamblers do not care about capital management and they may invest their entire assets in one trade. Therefore, it is better to determine the amount of your loss in each trade and exit when the trade does not go according to your expectations. Of course, loss is an inseparable part of the trading system; If the loss is small, a lesson will be learned from it and it will be helpful in the future.
🔔In the end, regardless of the above, like a gambler, your percentage of success versus loss is 50-50 in each trade, but if you follow the above, you can increase your win-to-loss percentage.
__ _______ _____ _________ _______ ______ ______ ______ ______ _____ _________ ________
❤️If this text was useful for you, please like it and share it with your friends
Happy New Year 2024| Learn Our Methods | Read Description|Happy New Year Everyone 2024:
Let's first talk about CHFJPY then we will talk about how you can improve and learn some tips.
CHFJPY in last six or seven months price overbought heavily due to JPY poor performance and government's zero intention to interfere in the market. However, many reports suggests that JPY will likely to be rebound in first quarter of 2024 in this case we can see a strong shift in price characteristics. Our first entry indicates, that we should expect price to continue the bearish momentum and drop from current area of the price. However, as we will having NFP in the first week of the month, it is likely to see some unexpected movement in the market. Second entry, is when price fill the gaps in the market and then drop smoothly, we will keep you updated.
We want all of you to succeed in the forex or commodities trading.
Here how you can improve:
Firstly find one or two pairs that suits you: meaning if you focus on every single instruments available to trade in the market, you will never succeed instead focus on one or two pairs and master them, know how and when these pairs move, what factors influence them in the market and trade swing highs and lows.
Secondly, use longer time frames to have a better vision, have a longer vision which will help you catch the big moves, yes, it is time consuming but if you are beginner then focus first in this and then along the way you will learn intraday trading.
Lastly, learn more about consolidation, accumulation and distribution: before the big reversal, price first will consolidate then accumulate and distribute, you should be looking to enter in phase of accumulation and take every enter when price consolidate which leads to a breakout.
If you learn above information in details and practice, your chances of becoming a successful trade increase. There is no overnight success, it is all hard work, if you believe in your self and focus on above things you will one day be proud of yourself.
Happy New Year and Trade Safe 2024.
We wish all of you all the best.
Team Setupsfx_
The Good the Bad and the Neutral scenarioLet's all wish a happy new year!
Let's all see the ads for the super products
don't worry if you don't .. the company knows how to do it!
* Let's remember those in our local area who need to sell their products (or online) and buy some (good scenario)
* Let's see more ads without buying nothing (Bad scenario for now)
* Let's see what our favourite people do with smoke signals until the market gives us the up or down signal
If you liked this idea or if you have your own opinion about it, write in the comments.
Thanks for reading!
What is the ( Flag pattern) ?A flag pattern is a technical analysis chart pattern that can be observed in the price charts of financial assets, such as stocks, currencies, or commodities. It is considered a continuation pattern, indicating that the prevailing trend is likely to continue after a brief consolidation or pause.
The flag pattern is formed by two main components:
Flagpole : The first part of the pattern is a strong and sharp price movement, either upward (bullish flag) or downward (bearish flag). This initial move is known as the flagpole and represents a strong surge in buying or selling activity.
Flag : Following the flagpole, there is a period of consolidation where prices move in a rectangular or parallelogram-shaped pattern. This consolidation phase is referred to as the flag. The flag is characterized by decreasing volatility and typically forms a channel or a rectangle.
There are two types of flag patterns:
Bullish Flag: The flagpole is an upward price movement, and the flag is a downward-sloping consolidation. This pattern suggests a temporary pause in the upward trend before a potential continuation.
Bearish Flag: The flagpole is a downward price movement, and the flag is an upward-sloping consolidation. This pattern indicates a temporary pause in the downward trend before a potential continuation.
Traders often look for flag patterns as they may provide insights into the market sentiment and offer potential trading opportunities. The breakout direction (up or down) from the flag pattern is considered a signal for the potential future price movement. However, it's important to note that not all flags result in a continuation of the previous trend, and traders often use other technical indicators and analysis to confirm signals and manage risk.