USDCAD Analysis and Trade IdeaSell to buy idea.
I am looking at near term bearishness, followed by longer term bullishness.
Leave a like and a comment for this idea! And thank you for watching!
Learntotrade
What is Trading Plan? Detailed Example
A short ⚠️disclaimer before we start:
the rules that will be discussed in this post are applicable only for technicians - traders that are relying on price action/structure/etc.
Also, we assume that structure levels do work and for us, key levels are considered to be the safest trading zones/points.
In order to increase the accuracy of your predictions analyzing different financial markets, you must learn to identify the direction of the market.📈
The identification of the market trend must be based on strict & reliable & testable rules.
It can be based on technical indicators or price action
Personally, I prefer to rely on price action.
There are three main types of market trends:
Bullish Trend
Bearish Trend
Sideways Market
Depending on the current direction of the market, on the chart, I drew a flow chart✔️ that will help you to act safely.
➡️Sideways market signifies consolidation & indecision. Usually being in such a state the market tends to coil in horizontal ranges.
To trade such a market safely, the best option for you will be to wait for a breakout of the range & wait for the initiation of the trend.
➡️Once you spotted a bullish market, do not rush to buy.
Your task will be to identify the closest strong structure support .
You must be patient enough to let the price reach that support first (and by the way, there is no guarantee that it will happen) and then you must wait for a certain confirmation.
Only once you get the needed confirmation you can buy the market.
➡️The same strategy will be applicable to a bearish market.
Spotting a short rally it is way early to just sell the asset from a random point.
You must find the closest strong structure resistance and wait for the moment when the price will approach that.
Then your task will be to wait for a confirmation and only when you got the reliable trigger you short the market.
🦉Try to rely on this flow chart and I promise you that you will see a dramatic increase in your trading performance.
And even though it may appear to you that this flow chart is TOO SIMPLE, in practice, even such a set of rules requires iron discipline and patience.
Thank you so much for reading this article,
I hope you enjoy it!
Let me know, traders, what do you want to learn in the next educational post?
Steps to Becoming a Profitable Trader
This is a roadmap to becoming a profitable trader. Follow these steps to avoid wasting time and bouncing around from idea to idea. We start with a basic strategy idea we like, then build off it. We MAKE it profitable by following the steps outlined.
1. Focus on One Idea or Strategy
Focus on one specific idea.
An idea is not “price action” or “technical analysis”. That is too broad.
But you could start with the idea of day trading an 8 and 21-period moving average crossover.
Or MACD signal crossovers on a 1-minute chart.
Or the rounded top or bottom or pattern, or triangles, or Keltner channel bounces off the center line in strong trends.
Basically, you need an idea and a time frame (1-minute chart, daily chart, etc).
2. Define the Strategy
Since you have your idea, you already know the basic concept of the strategy. If you don’t have a strategy yet, that’s where a bit of research comes in: finding something you like the idea of. There are loads of free strategy articles on this site, in the courses offered, and from other sources such as books, Youtube, etc.
Whatever strategy you decide on, it needs to include these key components:
A trade setup. The trade setup is what needs to happen for us to even consider a trade. It could be a specific chart pattern, moving average crossover, price action signal, etc.
Where, when, and why we enter
A trade trigger is a precise event that tells us to get into the trade. When the “trigger” event occurs, it turns a possible trade setup into an actual trade.
Where, when, and why we exit profitable trades
Where, when, and why we exit losing trades
If and how we trail a stop loss.
3. Polish Your Strategy
Keep practicing. Keep improving your strategy.
Try that on different markets, under different circumstances.
Make it better and better till it starts making money.
Keep it simple and focused on one trading idea.
Get better and better at that idea. Keep refining and building your confidence in the method.
We gain confidence by seeing something work and being able to implement it. And that’s what all these steps are about.
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Learn 4 Classic Trade Confirmations
"Look for a confirmation!"
"Wait for a confirmation!"
When I was learning how to trade and when I was watching and reading different trading educators, these words naturally pissed me off. What the hell are you talking about? What confirmation?
It was a full-blown mystery...🤯
Then, once I started to mature in trading and trade full-time, I became an author on TradingView.
Posting my forecasts and trading setups, I frequently mentioned the confirmation.
And now the newbies that are reading me and learning from me are pissed off...🤬
That is so funny I guess.
But the truth is that the confirmation must become a fundamental part of your trading strategy. It is your key to successful trading.
What exactly is the confirmation?
It depends on many many different things, in this article I will discuss with you the 4 main types of confirmation and give you detailed examples.
1️⃣ - PRICE ACTION CONFIRMATION
That is actually what I prefer.
Analyzing different markets and searching for decent trading opportunities often times we find some peculiar instruments to watch.
Identifying the market trend and key levels we find the potential spots to trade from.
But do we just open the trade once the "ZONE" is spotted?
I wish it could be that simple...
Trading just the zone, without additional clues brings very negative figures. We definitely need something else.
Price action & candlestick patterns can be those clues.
Accurate reflection of the current local market sentiment makes the patterns a very reliable confirmation.
Dodji's, pin bars, double tops/bottoms ...
Proven by history, the skill of identification & reading the patterns will pay off quickly.
Being in some sense the language of the market, the patterns are the fundamental part of my trading strategy.
2️⃣ - FIBONACCI LEVELS
Fibonacci levels are a very popular technical tool. Being applied properly it helps the trader to confirm or, alternatively, disqualify the identified "ZONE".
With multiple different methods like confluence trading, fibs are applied in hedge funds and various banking institutions.
The main problem with the fibs, however, is complexity and a high degree of subjectivity. Meeting different traders and watching different posts on TradingView I noticed that all traders tend to have their own vision. There is no universal system to apply here, a proper fib.confirmation technique can be built only with long-lasting backtesting and practicing.
3️⃣ - FUNDAMENTAL NEWS
The figures in the economic calendar, news, tweets. Actual fundamental news can become your best confirmation tool.
However, the main obstacle right here is the promptness, validity and reliability of the data that you get.
The information shouldn't be delayed and it must be objectively true.
The search for such a source is by itself is a very time-consuming and labor-intensive business not even mentioning its potential costs.
And that is not all. Knowing how to make sense of that data, its proper perception, and understanding requires a solid economical and financial background and experience.
At the end of the day, becoming an expert in fundamental analysis , the trader can easily sort the trading zones and trade only the ones that are confirmed by a decent fundamental trigger.
4️⃣ - TECHNICAL INDICATORS
I believe all the traders apply some indicators. From a simple moving average to some complex composite algorithms, indicators play a very important role in trading.
Being 100% objective and providing up-to-date real numbers and figures, they are our allies in a battle against subjectivity.
For many traders, the various signals from indicators are considered to be accurate and reliable confirmations.
Many algotrading solutions are operating simply relying on such signals and being able to bring consistent profits proves the power of technical indicators.
What confirmation type should you rely on?🧐
I guess the main rule right here is that the confirmation must MAKE SENSE to you. You should feel the logic behind that. It must make you confident in your action, even in case of the occasional losses, it must keep you calm and humble.
Let me know in a comment section what confirmation do you prefer!
💝Please, support my work with like and comment!
Thank you for reading.
Let me know, traders, what do you want to learn in the next educational post?
Investment Risk Scale
When investing funds in any format, you need to understand the
investment approach and risk involved in the planning you undertake.
Example investment risk categories when investing capital or income are as follows:
1-2
Lowest Risk
Very Cautious Risk
You are not prepared to accept any exposure to investment loss although you
are aware that any investment has some possibility of loss, for example if a bank
holding your money was to collapse. The value of your money may also fall in
real terms if inflation exceeds the return that your investment achieves. You
accept that the returns from your investments are likely to be low compared to
the potential returns from investments that have a higher risk rating.
3-4
Cautious Risk
You are prepared to accept a higher risk of capital loss in return for the
opportunity to earn more than from deposits and low risk type investments but
do not wish to take as much risk as with a medium risk strategy. While there can
be no guarantee, investments in this category are not likely to fluctuate in value
as sharply or as quickly as a portfolio largely made up of equity investments.
5-6
Balanced Risk
You are prepared to accept that the value of your investments will fluctuate
with the aim of achieving higher returns in the medium to long term. You accept
that there is an increased risk of capital loss over investing in more low risk
investments. Medium risk investments can fluctuate in value more rapidly and
quickly over a short periods of time than more low risk investments.
7-8
Adventurous Risk
You are prepared to accept fairly high levels of risk with your investments,
with the aim of achieving higher investment returns in the longer term. You
accept that this may mean that the value of your investments may fluctuate
considerably over a short periods of time and that there is an increased risk of
capital loss compared with a lower risk investment strategy.
Therefore, you may consider investments mainly in equities/shares and is likely
to involve investment in various overseas markets as well as UK markets. This
increases risk because of currency fluctuations as well as investment risk. Risk
can be reduced by diversifying your investments across sectors and markets
9-10
Highest Risk
Very Adventurous
Risk
You are prepared to accept high levels of risk with your investments, with the
aim of achieving higher investment returns in the longer term. You accept that
this may mean that the value of your investments may fluctuate significantly
over a very short periods of time and you could lose a significant proportion
(possibly all) of your investment.
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The Two Types of Risk Management PlanHello traders,
1) Fixed Risk
Calculates position size for next trade as a percentage of account depend on how much risk you willing to take every time every trade you taking you need to use fixed risk for every trade like for example 1% risk per trade so in this type of risk management plan we should require 100 losing trades in a row to blowing out our account a lot of people just using this simple method and this is very easy and understandable.
2) Cutting the Risk :
In this method cutting the risk we just normally trade 1% risk per trade but if we lose that trade so we just cut the risk to half for example if i trade with 1% risk and i lose so now the next second trade which i am taking i will be using 0.5% risk in that trade if i lose then i will be just keep using the same risk 0.5% some traders are are keep reducing the risk size like they come all the way to to 0.25% maybe they work for it but in our scenario if we keep losing we will be not reducing more than 0.5% risk per trade and when win comes then after our winning trade we will be back to the normal risk which is 1% risk per trade and keep trading with 1% risk per trade so short summary is if we lose cut the risk to half if we when if we win back to the normal risk if we win again stay with same normal risk but if lose then reduce the risk to half.
The reason behind that is in the fixed risk you have 100 traders to blowing out your account means 100 chances but in cutting the risk now we just calculate if we lose 100 trades in a row like fixed risk we would not blow out our account,, let's say we take our first trade and we lose now we are in -1% then another trade we will be taking with 0.5% per trade risk so here is 0.5% × 100 trades = 50 means if we continue to lose in a row after 100 trades we will be facing -50 draw down, so cutting the risk to half after lose trade is the safest method who wants to play safe and more chances to survive in the market.
I wish you good luck and good trading.
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One Trade Does Not Define Your Trading Performance...
Hey traders,
👨🏻💻I am trading forex for more than 8 years.
During the last 5 years, I am actively posting my analysis & trades on TradingView.
Growing my audience, it was very peculiar for me to contemplate the reaction of my followers to my trading performance.
(by the way, we must say thanks to tradingview where the posting system does not allow to delete the posted trades so that each and every author is easily backtestable).
👩👩👧👧👨👨👧👧Those who follow me at least a half a year know that occasionally I have winning streaks when 9 out of 10 of my forecasts play out nicely. Sometimes, however, I face the drawdowns and catch a sequence of losing trades.
And sometimes the performance is mixed with the probabilities being on my side slightly.
🥇While the reaction to winning streaks is quite predictable:
I am praised by the members and get nice tips.
The reaction to losing streaks is worth discussing in detail.
It turned out that quite a huge portion of a trading community has a completely wrong understanding of a trading nature.
🤬The single loss is considered by them to be a failure, a mistake.
Facing the sequence of losses, they quickly become negatively biased to the person that they have just recently praised.
With the continuation of a drawdown, they blame the analyst and launch a barrage of criticism towards him.
🔍Then they are in a search again. They are looking for a trader that will be constantly right. Catching the new one during a winning streak, the cycle repeats.
At some moment such people become disappointed in trading and drop this business...
❗️Losses, losing streaks and negative days/weeks/months are inevitable. If you want to become a full-time trader, you must be prepared for the fact that trading won't give you a stable income.
Your equity curve will be in constant fluctuation.
Your goal in this game is simply to lose less than you make.
You must become disciplined enough to keep following the rules of your trading strategy no matter what.
You must learn to be consistent in your actions.
You should learn to perceive losing trades not as a failure but simply as the moment when the market takes its share.
Feeding you, giving you the opportunity to make money out of thin air,
the market definitely has a right to claim its dividends from you.
⭐️Change your mindset, learn to lose and the magic thing will happen.
Let me know, traders, what do you want to learn in the next educational post?
MACD Indicator | How Does It Work? | Definition & Examples
MACD is a technical indicator designed to help investors identify price trends, measure trend momentum, and identify acceleration points to fine-tune market entry timing (whether you’re buying or selling).
How does MACD work?
The MACD indicator has many moving parts and functions, but it’s made up of three general components: the MACD line, which is the difference between two moving averages; a signal line, which is a moving average of the MACD line; and a histogram.
MACD takes the moving average concept a step further. It’s one thing to compare a fast and a slow moving average, but for MACD, that’s only the beginning.
First, the MACD line is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA (i.e., fast minus slow). Why? The calculation is designed to show the relationship between the two averages, and it does so in a way that places emphasis on more recent price data.
The signal line is a 9-day (or 9-period) EMA of the MACD line. In other words, it’s a moving average of the difference between two moving averages, or a “slower” version of the difference between a fast and a slow moving average.
Why use a moving average of two other moving averages? The signal line calculation “smooths out” the MACD line, creating an even slower moving average that serves as the faster MACD line’s counterpart.
How do you read the MACD?
Pay attention to the moving averages—the MACD and the signal line—and their relation to the histogram.
Note that when the MACD line (the faster moving average) is above the signal line, the bars in the histogram are above the zero line, which is a bullish signal. When the MACD line is below the signal line, the histogram bars are below the zero line, which is generally bearish.
What do you want to learn in the next post?
Learn Top 4 Price Action Pattern to Trade Reversals
Hey traders,
In this article, I will share with you the list of 4 best reversal price action patterns.
📍Ascending & Descending Triangles
The main element of the ascending triangle as the REVERSAL pattern is the BEARISH impulse leg, preceding the formation of the pattern.
The pattern consist of 2 main elements:
a horizontal neckline based on the equal highs,
a rising trend line based on the higher lows.
❗️The trigger is a bullish breakout of a neckline of the pattern and candle close above.
📈The position is opened on a retest.
🔴Stop loss is lying at least below the level of the last higher low.
🎯Take profit is the next historical resistance.
——————
📍The main element of the descending triangle formation as the reversal pattern is the BULLISH leg, preceding the formation of the pattern.
The pattern consist of 2 main elements:
a horizontal neckline based on the equal lows,
a falling trend line based on the lower highs.
❗️The trigger is a bearish breakout of a neckline of the pattern and candle close below.
📉The position is opened on a retest.
🔴Stop loss is lying at least above the level of the last lower high.
🎯Take profit is the next historical support.
📍Rising & Falling Wedges
What makes a rising wedge pattern a reversal pattern?
Before the formation of the pattern, the price should form a strong bullish impulse and trade in a bullish trend.
The pattern consists of 2 contracting, rising trend lines based on the higher highs and higher lows.
❗️The trigger is a bearish breakout of a support of the pattern and candle close below.
📉The position is opened on a retest.
🔴Stop loss is lying above the high of the pattern.
🎯Take profit is the closest horizontal support.
——————
What makes a falling wedge pattern a reversal pattern?
Before the formation of the pattern, the price should form a strong bearish impulse and trade in a bearish trend.
The pattern consist of 2 contracting falling trend lines based on the lower lows and lower highs.
❗️The trigger is a bullish breakout of a resistance of the pattern and candle close above.
📈The position is opened on a retest.
🔴Stop loss is lying below the low of the pattern.
🎯Take profit is the closest horizontal resistance.
📍Double Top & Bottom
Double bottom pattern usually forms at the end of a bearish trend.
After a strong bearish impulse, the price retraces, sets a lower high and retests the current low.
Instead of going lower, the price retraces one more time, retests the level of the last lower high and breaks it.
Such a formation confirms a bullish reversal.
❗️The trigger is a bullish breakout of a neckline of the pattern and a candle close above.
📈The position is opened on a retest.
🔴Stop loss is lying below the lows of the pattern.
🎯Take profit is the closest horizontal resistance.
——————
Double top pattern usually forms at the end of a bullish trend.
After a strong bullish impulse, the price retraces, sets a higher low and retests the current high.
Instead of going higher, however, the price retraces one more time, retests the level of the last higher low and breaks it.
Such a formation confirms a bearish reversal.
❗️The trigger is a bearish breakout of a neckline of the pattern and a candle close below.
📈The position is opened on a retest.
🔴Stop loss is lying above the highs of the pattern.
🎯Take profit is the closest horizontal support.
📍Head & Shoulders Pattern & Inverted One
Inverted H&S pattern usually forms at the end of a bearish trend.
The price forms a zig-zag movement with 3 main elements:
the left shoulder with a lower low, the head with a new lower low, and the right shoulder with a higher low.
While the price sets multiple lows, it keeps setting the equal highs, composing a so-called horizontal neckline.
A bullish reversal becomes confirmed once the price breaks and closes above the neckline.
❗️The trigger is a bullish breakout of a neckline of the pattern and a candle close above.
📈The position is opened on a retest.
🔴Stop loss is lying below the lows of the pattern.
🎯Take profit is the closest horizontal resistance.
——————
Head & Shoulders pattern usually forms at the end of a bullish trend.
The price forms a zig-zag movement with 3 main elements:
the left shoulder with a higher high, the head with a new higher high, and the right shoulder with a lower high.
While the price sets multiple highs, it keeps setting the equal lows, composing a so-called horizontal neckline.
A bearish reversal becomes confirmed once the price breaks and closes below the neckline.
❗️The trigger is a bearish breakout of a neckline of the pattern and a candle close below.
📈The position is opened on a retest.
🔴Stop loss is lying above the highs of the pattern.
🎯Take profit is the closest horizontal support.
In order to increase the accuracy of trading these patterns, I would recommend trading them only if they are formed on key levels:
Bearish patterns on key resistances and bullish patterns on key supports.
Also, higher is the time frame where you spotted the patterns, higher is the chance that it will give a valid reversal signal.
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Forex market players: Who trades Currencies and Why?
The foreign exchange market is used by banks, investment companies, companies and even individuals who want to either cover themselves against the risk of foreign exchange fluctuations or to speculate in hopes of making a profit. 95% of all forex transactions are purely speculative in nature. Only 5% of all forex transactions result from international companies who need to convert their money back to the company's main operating currency.
Commercial banks are the main participants in the forex market, but their "market share" is slowly shrinking. Currently, 43% of all transactions pass through the interbank market, as opposed to 63% in 1998 and 53% in 2004. In terms of forex trading activity, the main role of banks is to serve as middlemen for the other market participants. Their objective is to make profits through "market making", which means that they offer their clients a "buy" price and a "sell" price.
Institutional investors are the second biggest players. They include investment and insurance companies, pension funds and hedge funds. They participate in forex trading in order to cover their stock, bond and currency portfolios and they represent 30% of all foreign exchange transactions.
Central banks intervene to manage their stock of currency and state money. Their transactions represent 5% to 10% of all forex trading volume. The central banks can also intervene in order to defend their respective currencies and to adjust economic or financial inbalances.
Brokers allow private individuals to access the forex market by transmitting their clients' orders to commercial banks or to trading platforms. They get paid from the spread or by charging a commission on each transaction.
Multinational companies participate in forex trading in order to convert their money during import or export activities. Their transactions represent approximately 5% of all global forex transactions. Some companies even have their own trading floors, with traders speculating in order to make profits and to reduce the risks related to exchange rate fluctuations.
Private investors/individuals have recently been trading the forex market as well, thanks to the internet, which allows them to have real-time access to currency exchange rates. Today, their transaction volume adds up to over 5% of all forex transactions.
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Xen(Xen Crypto) Get ready for more action to the downsideBased upon what the charts are suggesting looks like Xen is coming down. A huge diamond pattern on the 1h timeframe plus over 3 additional Layers of confluence supporting the following measured moves, the first projection 0.00000219, 0.0000019, then 0.00000175..Stay tuned..
Learn The Most Accurate Price Action Pattern
Hey traders, We must admit that it is phenomenally difficult to become a consistently profitable trader.
This journey requires years of practicing and training, constant losses, and nervous breakdowns.
If you are a struggling trader, if you are still looking for your way to succeed in this game, here is the formula that will help you to chase consistent profits.
💰Consistent profits = 📝Trading Strategy + 🤬Emotions + 📈Market Sentiment
Let's discuss each element separately.
📝Trading Strategy:
To be in profit in a long run requires an understanding of what do you actually trade.
You must have strict and objective entry conditions.
You must rely on the objective & verifiable rules for the execution of market analysis.
You must have a plan to follow.
A plan that is backtested and proved its efficiency.
🤬Emotions:
Even the best trading plan, the most accurate trading strategy can be easily beaten by emotions.
Emotional decisions such as revenge trading and early position close
can easily blow the account of any size in a blink of an eye.
The most disappointing thing to note right here is the fact that you can be taught how to execute technical analysis but you can not be taught to control your emotions.
Your main enemy here is yourself and being in a constant battle with your greed and fear it is very easy to go broke.
Only by being humble, disciplined and patient, you can successfully apply a trading strategy.
📈Market Sentiment:
Mastering your emotions and having studied a trading strategy, it looks like it is finally the time to make money.
However, occasionally the market tends to be irrational.
Being chaotic and unpredictable, sometimes the market neglects every technical and fundamental rule.
Crisis, euphoria: the reasons can be different.
The fact is that such things happen.
And it is your duty to learn to deal with unfavorable market conditions.
💰To become a consistently profitable trader, you must become the master of these three elements.
Only then the doors to freedom and independence will be opened to you.
Let me know, traders, what do you want to learn in the next educational post?
Scalping vs Day Trading vs Swing Trading | Learn What is Best
Knowing which trading style suits you best is a difficult question to answer, but the choice you make is not permanent. In fact, many novice traders will experiment with some or all of the various styles before settling on a method and strategy that suits their lifestyle and the funds they have to risk.
Scalping
The first trading style of this guide is called "scalping". Scalping is a form of trading where traders aim to achieve profits from relatively small price changes.
Scalpers enter and exit the financial markets within a short time-frame, which is usually a matter of a few seconds, or minutes (but the maximum is a few hours) and are known to use higher levels of leverage.
Day trading
Many traders think that day trading and scalping are similar. Although both trading styles do take place within one trading day, there are important differences that we need to highlight. Day traders open and close substantially less setups compared with scalpers. These traders sometimes open one setup a day, and often not more than a couple per trading day.
Although they both trade intraday, the day trader's strategy is to focus on the best opportunities of the day, and to hold on for a larger profit target. Therefore, a day trader usually holds on to a trade for several hours but not more than one full trading day.
Swing trading
The last trading style of our guide is called swing trading, which is a style in which traders enter and exit sporadically, holding trades over a few days or weeks. Swing trading is a system whereby traders are aiming for intermediate-term trading opportunities, and is significantly different to long-term trading.
Whichever trading style applies to you, it's important to find out, as the trading style you choose will have a profound effect on your trading outcomes and your ultimate profitability.
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THE TYPICAL WEEK OF A TRADER 🗓
In this educational article, I will teach you how to properly plan your trading week.
Sunday.
While the markets are closed, it is the best moment to prepare the charts for next week.
First of all, charts should be cleaned after the previous trading week: multiple setups and patterns become invalid or simply lose their significance and their stay on the charts will only distract.
Secondly, key levels: support and resistance, supply and demand zones and trend lines should be updated. Similarly to patterns, some key levels become invalid after a previous week, for that reason, structures should be reviewed.
Monday.
Analyze the market opening, go through your watch list and check the reaction of the markets.
Flag / mark the trading instruments that you should pay a close attention to. Set alerts and look for trading setups.
Tuesday. Wednesday. Thursday.
If you opened a trading position, keep managing that.
Pay attention to your active trades, go through your watch list and monitor new trading setups.
Friday.
Assess the entire trading week. Check the end result, journal your winning and losing trades. Work on mistakes.
Decide whether to keep holding the active position over the weekend or look for a way to exit the market before it closes.
Saturday.
Stay away from the charts. Meditate, relax and chill while the markets are closed.
Trading for more than 9-years, I found that such a plan is the optimal for successful full-time / part-time trading. Try to follow this schedule and let me know if it is convenient for you
❤️Please, support my work with like, thank you!❤️
Learn The Most Accurate Price Action Pattern
Hey traders,
If you are learning price action trading, you definitely must know a double bottom pattern.
Double bottom is a reversal pattern.
It is applied to spot early market reversal clues and catch the initiation of a new bullish trend .
Preconditions for a double bottom:
1️⃣ The market must trade in a bearish trend .
2️⃣ After a formation of the last lower high, the price must set equal low.
3️⃣ The price must return back to the last lower high level.
✅Once these conditions are met the pattern is considered to be completed.
The formation of the pattern is considered to be a ⚠️WARNING sign.
Even though many traders buy the pattern once it is completed,
for me it is not enough.
❗️Remember that the price can easily start to consolidate and form a horizontal channel for example.
The trigger that we will look for is the breakout (candle close above) the last lower high level (based on a wick and its highest candle close) - the neckline.
Being broken to the upside, the market sets a new higher high.
It signifies a violation of a current bearish trend .
⬆️Attempting to catch an initiation of a bullish trend , we will buy the market with a buy limit order on a retest of a broken neckline.
❌Safest stop will lie below the lows of the pattern.
💰Your reward must be at least 1.5 of your risk.
Following these simple rules, you will be impressed by how accurate this pattern is!
Let me know, traders, what do you want to learn in the next educational post?
MUST READ:ETHUSDT CURRENT VIEWAs ETHUSDT broke the latest level which was @ 1778 which created a new Higher High @ 1841 Which shows that ETHUSDT is currently in an uprend Trend /Is Bullish we must take buying opportunities.ETHUSDT strongest level is marked as a Demand zone @ 1677
Scalper, Day Trader & Swing Trader | Choose Your Path
There are thousands of different ways to trade the market.
During the last 100 years, various trading strategies and techniques were invented.
One of the ways to categorize them is to split them by types of traders.
Such a category type will lean on 2 main elements:
trading frequency and time frame selection.
1️⃣ - Scalper
I guess 99% of newbie traders start from scalping.
Trying to catch quick market moves and become rich quick,
newbies are practicing different scalping strategies.
What is funny about scalping is the fact that such a trading style is considered to be the easiest by the majority while remaining one of the hardest in the view of pros.
The main obstacle with scalping is a constant focus and rapid decision-making.
Scalpers usually open dozens of trading positions during the trading session, most of the time being in front of the screen constantly.
Paying huge commissions to the broker and dealing with complete chaos on lower time frames, the majority simply can't survive the pressure and drop, leaving the pie to true gurus.
2️⃣ - Day Trader
Day trading or intraday trading is the most appealing to me.
Staying relatively active, the market gives some time for the trader for reflection & thinking.
Opening and managing on average 1-2 trades per trading session, the intraday trader is granted a certain degree of freedom.
However, with declining volatility , quite ofter intraday traders get a relatively low risk/reward ratio for their trades,
3️⃣ - Swing Trader
Swing trading is the best choice for traders having a full-time job.
Primarily being focused on daily/weekly time frames, swing trading is not demanding for a daily routine and aims at catching mid-term/long-term market moves.
With an average holding period being around 2 weeks and opening 1-2 trading positions per week, swing trading is considered to be the least emotional and involves low risk.
The main problem with swing trading is patience.
Correctly identifying the market trend and opening a trading position,
the majority tends to close their positions preliminary not being patient enough to let the price reach their target.
Which trading type do you prefer?
Let me know, traders, what do you want to learn in the next educational post?
Learn What is Confirmation Bias | Trading Psychology 🧠
In this educational article, we will discuss one of the most common cognitive errors of newbie traders - a confirmation bias.
In order to better understand that term, I want to start with the example:
Let's say that after doing some research, you are highly convinced that Bitcoin is bullish and that it is a decent investment.
You decide to buy that from 50.000 level, expecting the exponential growth.
Instead of growing, however, the market starts falling rapidly.
Rather than closing your position in loss, you decide to do a new research and execute the analysis, you start looking for the proof of your pre-existing beliefs. You completely neglect the voices of Bitcoin sceptics and ignore bearish clues on the price chart.
You consider only the facts that support a bullish outlook, not letting you accept the other point of view.
You become a victim of a confirmation bias.
Unfortunately, such a psychological trap frequently prevents a closing of a trading position in time, leading to substantial losses.
Confirmation bias is a common psychological error that makes a subject overvalue the information that upholds his existing beliefs and undervalue the opposing one.
Here are the most common symptoms of that trap:
1️⃣One is neglecting the objective facts.
2️⃣One is interpreting information in a way to support the existing beliefs.
3️⃣One is considering only the facts that conform with his point of view.
4️⃣One is completely ignoring the information that challenges his beliefs.
The only way to beat a confirmation bias in trading, is to learn to analyze the market from sellers' and from buyers' perspective. Your task is to compare the view of the 2 sides, and pick the one that is stronger, holding in mind the fact that everything can change.
You should always remember of the changing nature of financial markets and be ready to always reassess your views.
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Learning Plan: 13 Essential Topics to Study in Trading
Hey traders,
I receive dozens of questions each and every day concerning the topics to study to become an expert in technical analysis .
Here I have collected the main subjects that, in my view, are essential for successful trading.
*the order of the topics is spontaneous and there is no logical sequence
1️⃣ - Candlestick patterns
To me, candlesticks are very important for understanding market behavior. A single wick quite often can tell you a story.
Mastering different candle stick patterns, you will be impressed by how much data and information you may derive from analyzing them.
2️⃣ - Price action patterns
At first glance price chart is complete chaos.
The market looks irrational and it feels like there is no way to read it.
Price action patterns are the language of the market.
With them, the price fluctuations start to make sense.
3️⃣ - Support & resistance
All my predictions, all my trades & signals are always based on support & resistance levels.
These are the levels that make the market change its direction, they influence the market so much, therefore you should learn to identify them and constantly hold them on focus.
4️⃣ - Supply & demand zones
The only difference between support & resistance and supply & demand zones is the fact that the first ones are represented as levels while the second ones are represented as the zones.
The identification of these zones is very important for proper market analysis.
5️⃣ - Key levels
Key levels are the strongest supports and resistances.
Of course, spotting various supports and resistances on the chart,
we can not say that they all are equal in their significance.
There is a strong (however subjective) hierarchy of them.
The most significant are called key levels and from them, the most significant moves are always expected.
6️⃣ - Trend analysis
When I teach my students how to analyze the price chart,
I always start with a trend analysis topic.
Knowing where exactly the market is going,
having specific and objective rules for the trend identification
are necessary for successful trading.
7️⃣ - Top-Down analysis
Multi-time frame analysis is my passion.
I am constantly combining the signals & observations from different time frames to make my trading decision and predict future market moves.
It proved to be a very efficient method of trading various markets.
8️⃣ - Financial instruments
Though to many it may sound obvious, in practice I know that a lot of people are struggling with a simple question "What to trade?".
You must learn to properly build your watchlist and you should have strong reasoning behind the selection of each unite that is inside.
9️⃣ - Trend following trading
As we know, the trend is our friend. And even though the phrase itself is very simple and straightforward, it takes so much effort and time to learn to follow the trend properly.
1️⃣0️⃣ - Counter trend trading
Occasionally the market reverses. Properly identifying early reversal signs and then catching a sharp counter-trend move, huge profits can be made.
Even though such a style of trading is considered to be extremely risky, being applied properly will generate a lot of cash.
1️⃣1️⃣ - Risk management
Losses are inevitable.
They are part of the game and we can do nothing about that.
The only thing that we can do, however, is to control the losses.
Calculating the risk for every single transaction is essential to avoid a margin call.
1️⃣2️⃣ - Leverage trading
Leverage selection, margin are the things that are tightly connected with risk management topic.
These are the terms that you must know how to operate with.
1️⃣3️⃣ - Trading psychology
Playing with real money, occasionally losing significant portions of your trading account can be a tough game.
It takes time to build a strong psyche to deal with the irrationality of the market.
Which topic to start with?
Pick any, learn it, study it.
They all are equally important so at the end of the day you need to cover them all in order to become successful.
Let me know, traders, what do you want to learn in the next educational post?
Who Moves the Forex Market | Forex Market Players
Forex is the largest market in the world, with the tremendous daily trading volumes and millions of market participants.
In this educational article, we will discuss who moves that market and who are its 6 the most significant players.
1. Governments
Governments tend to set economic goals and influence the markets with their political decision. They define the course of their nations, issuing policies and imposing regulations.
2. Central banks
Central banks implement the decisions of the governments, applying multiple instruments:
Central banks control the emission of the money, shifting the supply and demand.
They control interest rates and define the credit policies.
Central banks control the international trade and sustain the exchange rates of the national currencies by interventions and handling the foreign currencies and gold reserves.
3. Commercial banks
Commercial banks handle the international transactions.
Over 70% of total Forex Market transactions directly refers to the actives of commercial banks.
Commercial banks are also involved in speculation activities, benefiting from market fluctuations by relying on various strategies.
4. Corporations
Corporation is the business that operates in multiple countries.
With the constant capital flow between its branches and counterparts, corporations are permanently involved in a currency exchange.
Also, corporations usually hedge currency risks, storing their liquidity in particular currencies.
5. Investment funds
By investment funds, we imply the international or domestic professional money management companies. Dealing with hundreds of millions of investments, they quite often are operating on Forex market, buying foreign assets, speculating and hedging.
6. Retail traders
The main goal of retails traders and speculators is to make short terms profits from their transactions on the market.
Typically, the activities of traders constitute a relatively small portion of total trading volumes.
Knowing which forces move the forex market, you can better understand how it works. The spot prices that you see on the charts reflect the sentiment of all the above-mentioned participants.
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How Leverage Really Works | Margin Trading Explained
Leveraged trading allows even small retail traders to make money trading different financial markets.
With a borrowed capital from your broker, you can empower your trading positions.
The broker gives you a multiplier x10, x50, x100 (or other) referring to the number of times your trading positions are enhanced.
Brokers offer leverage at a cost based on the amount of borrowed funds you’re using and they charge you per each day that you maintain a leveraged position open.
For example, let's take EURUSD pair.
Let's buy Euro against the Dollar with the hope that the exchange rate will rise.
Buying that on spot with 1.195 ask price and selling that on 1.23 price we can make a profit by selling the same amount of EURUSD back to the broker.
With x50 leverage, our return will be 50 times scaled.
With the leverage, we can benefit even on small price fluctuations not having a huge margin.
❗️Remember that leverage will also multiply the potential downside risk in case if the trade does not play out.
In case of a bearish continuation on EURUSD , the leveraged loss will be paid from our margin to the broker.
For that reason, it is so important to set a stop loss and calculate the risks before the trading position is opened.
Let me know, traders, what do you want to learn in the next educational post?
🚨🚨 WARNING 🚨🚨 BITCOIN COLLAPSE 🚨🚨Imagine a world where bitcoin is back in the low three-thousands, because it is looking more probable every day.
Nowhere to hide.
When Your Trading Journey Begins...
Hey traders,
In this article, we will discuss your first steps in trading.
Being interested in financial markets and being attracted by an idea to become a full time trader, you decide to learn how to trade.
The first obstacle that you will most likely face with is a tremendous range of topics and strategies to study:
key levels, price action, technical indicators, fundamental analysis...
The problem is that there is no one single way to learn how to trade.
Each educational article, each guru on YouTube dictates their own specific path.
You will most likely feel lost, not being able to grasp what even to start with.
You will chaotically jump from one topic to another, not being able to understand which concepts do actually work.
The situation will even worsen once you decide to try to trade on real money. I do not know any trade who would not blow his first trading deposit.
Not only you will be paralyzed by the complexity of the subject, but you will also lose money simultaneously.
There will be a lot of times when you will think about leaving this game. Many times, you will consider the entire trading industry to be a scam.
That is the moment where most of the traders quit.
I am telling you all that simply because I want to show you that we all have the same path. We go through the same obstacles and we think the same way.
The only difference between a true winner and a loser, however, is that winners never give up. Winners keep working hard and stay patient. And at the end of the day, magic things happen to them.
After years of practicing and suffering, one day you will certainly realize how the things work. One day you will become a full time trade. Just don't give up, always remember, “The nearer the dawn the darker the night.”
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