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Risk Management

🚨 Dangers Out There For NEW TRADERS 🚨 Risk management has to be top priority of every trader. better to know more about risk management as early as possible otherwise, After taking tons of losses trader understands importance of risk management. Next up - we have lack of a proven strategy. There are a number of decent strategies out right now, but none come close to the simplicity and effectiveness of our proven and test proprietary strategy. Following those, out next issue is brokers! Let me clarify: A certain broker WILL NOT make you a better trader than any other broker. Once you have the knowledge and skill set, you can use any broker that you like! But- Whether it be high commissions or the tools that are being offered, not all brokers are created equal!
BITSTAMP:BTCUSDEducation
by mbn_global
1
📜 Trading Rules for Beginners:Remember guys a trader doesn’t predict the future, a trader reacts to the market following a strategy. A winning strategy is to outline all the possibilities and have a plan for each of them!!! Always have a strategy and a plan before entering any position in the market! A profitable trade that doesn’t follow your plan can’t be considered a good trade, by contrast a lose trade that sticks to your plan, still a good trade! Stick to your plan and you will be a winner in the long term!!! .
BITSTAMP:BTCUSDEducation
by mbn_global
1
Weekly Trading Recaps: AUDJPY, XLMUSD, SUGAR, BTCUSD Jan 24 2021Hello everyone Welcome back to another quick weekly trade recap video on the positions. I am currently in the mountains (lol) so may not get to my usual weekly outlook stream due to internet. But hopefully still update analysis :) AUDJPY - Second position got out for BE. Currently in the third position in. XLMUSD - Took out for a 1% loss. BTCUSD - Still Holding, currently @ 3% profit. SUGAR - Still holding, currently @ 2.5% profit. Any questions, comments, or feedback welcome to let me know below. Thank you
BITSTAMP:BTCUSDEducation
by jojofang0901
18
[Risk Management trick] Tilting the "Math" in your favor!We all try to find the strategies which offer best possible win probabilities. Yet, we often overlook another crucial component of increasing your odds of winning => risk management. Today, I am going to show you how you can use a simple risk management trick to tilt the "Math" in your favor. Would you like to increase the output of your strategy by 25% without doing anything extra? Imagine a 3R win suddenly increasing to 3.75R with no change in the strategy at all. Consider this trade... We are trying to setup a sell trade with a very defined -1R risk and +3R profit. If we were to loose this trade, we will loose 1% of our capital - and if we win, we will make 3% in return (3RR). Here, we assumed that we'll exit the trade when price moves -1R completely against us. What if, we pivot our thinking and assume the trade is lost when price has moved -0.8R : because if the trade goes that much against you, there's a very high probability that it'll hit your stop loss too. There is no reason to pretend that it can still turn around at the last moment. Murphy's law truly applies here - "Anything that can go wrong will go wrong". If we do really pivot our thinking, lets see how it works in our favor! The Stop loss is now updated and set at -0.8R So a win will still give us the same 3%, but the loss will only wipe out -0.8% from our account. Now because our profit targets are still setup as per the original 1% trade, you can now see that we now get this extra reward if our trade hits its original 3R target The moment we draw 3R as per our new -0.8R stop loss, we get this - You can see how the 3R with -0.8R stop loss is achieved much before than the 3R with -1R stop loss (obviously)! That means, the extra reward you got when the trade reached your original 3R - is additional profit which you now have - without ever changing your trading strategy! 3/0.8 = 0.75 (which is 25% of your original 3R target) 0.75/3 = 25% You now have extra an 25% reward for free! New RR = 3.75 This is a very beautiful math equation for yet another reason! Imagine you lost your trade with a -0.8R => the additional 0.75R you will achieve (for free) from another trade will extremely quickly cover up anything you lost. As you can see, we can really use sound risk management techniques & Math to our benefit. This is called : Tilting the "Math" in your favor!
Education
by makuchaku
155
Futures Vs Forex Platforms Same instrument different levels of risk permitted. That can make or break a trader by over leveraging an account, and not applying proper risk management. Able to risk 2% or less and the ability to scale in for more profit without having to compromise your risk percentage is the key advantage in a forex platform. I was able to enter the same trade on a forex platform and bailed that same trade on a futures platform all because the risk was too high.
CME_MINI:ES1!Education
by OpeyemiJonah
The Broker Awards - Bringing More Transparency to MarketsOur first-ever Broker Awards are here. Together, we can bring more transparency to financial markets. Connect a broker of your choice to your TradingView account, research markets, and manage orders seamlessly based on your research. Then rate, review, and follow your favorite broker. Your reviews will help others find a perfect broker for their needs whether it's equities, forex, futures or crypto. Visit our Top Brokers page to see all of the brokers available. We launched our Broker Awards to congratulate the best brokers based on your reviews. Real traders who write and rate brokers with verified reviews. We're creating a marketplace that brings more transparency to financial markets. By building this marketplace we can reduce bad experiences, give people a chance to share their opinions, and connect customers with the perfect broker for them. Remember - these awards are based on a combination of your reviews, ratings, comments, and overall usage. Now let's get to the awards! 🎉 Drum roll please... 🥁🥁🥁🥁 Broker of the Year : TradeStation Connect your TradingView account to TradeStation and access their ultimate trading services across equities, equity/index options, futures, and cryptocurrencies markets. Follow them here. Most Popular Broker : OANDA Founded in 1996, OANDA is a leading online trading broker, regulated in all key global markets. Specializing in Forex and CFD trading, OANDA offers tight pricing on a full portfolio of products. Follow them here. Social Champion : FXCM FXCM's purpose remains unchanged over its 20-year history. FXCM is a leading provider of online foreign exchange trading. Follow their social posts here. Most Innovative Tech : TradeStation For those who connect their TradingView account to TradeStation, you've noticed the upgrades and made that clear in your reviews. Best Multi-Asset Broker : TradeStation Crypto, equities, options, and futures are all available to you with a single connected account. Best Futures Broker : Tradovate Tradovate is a modern, cloud-based futures broker offering unlimited, commission-free trading for a flat price. No per-trade commissions, platform licensing fees or order routing fees. Follow them here. Best Forex Broker : OANDA With nearly 6,000 verified reviews, your votes made it clear about who you wanted to nominate as the best forex broker. Read every review here. Best Crypto Broker : Gemini Gemini offers an industry-leading suite of crypto-native products and advanced tools for individuals and institutions. Buy, sell, and store cryptocurrency with world-class security. Follow them here. Congratulations to the winners! Special thank you to all of the brokers who work with us and the community of traders who rate and review their broker. We believe this level of transparency will help more people find the perfect broker for their needs. Let's keep it going and please remember to rate and review your broker. Your reviews make a difference. ⭐️⭐️⭐️⭐️⭐️ If you would like to request a broker to add to TradingView, please write the name in the comments below and also send them a message. Your support will help us get in contact with them and let them know this is an important connection. Once again, thank you to our broker partners and the community for writing their reviews.
Education
by TradingView
51
WHY TRADERS LOSE THEIR MONEY?Hi every one this article is about why people lose money on trading platforms such as forex and crypto and stock markets: 1- Not having clear strategy: +{You need to have one or more specific strategies and act on them! You should prepare a checklist for each strategy, and this checklist should include tools specific to that strategy And when trading, follow your strategy and the tools in your strategy} 2- Not taking lessons from their mistakes: +{If you lose in a deal, see what you did wrong and investigate and learn from it so it doesn't happen again} 3- Not sticking to risk management rule: +click it A simple explanation of money management! 4- Don t cut your profit: +{Limit your losses and let your profits run} 5- Don t over trade: +Excessive trading has two important problems: A-{causes a lot of stress and excitement} B-{You have to pay more commission} 6- Don t force yourself to make money 7- change your mindset from gambling and making a million over a night +{Forget the mentality of getting rich overnight ,Those who are patient win and those who are not patient lose} 8- make a responsible mindset and report to someone. 9- Don t trade when you are emotional. 10- Don t try to beat the market just follow the market +{We should not move ahead of the market, we should follow the market trends, whether ascending or descending} 11- this is a serious business don't play with your money for excitement. please take note of this article so that you would be successful in your trading life.
COINBASE:BTCUSDEducation
by CobraVanguard
36
How I trade Head and Shoulder Price Action Pattern/StructureHello everyone: In this quick educational video, I will go over how I utilize Head and Shoulder Pattern/structure in the market. Specifically, how I identify reversal price action from a Head and Shoulder Pattern. It's important to understand that Head and Shoulder Is a reversal structure in the market. When we identify these patterns, they are usually at the top or the bottom of the over price action, and its signaling a bullish or a bearish trend may be exhausted, and a reversal trend may begin. Typical H and S will have a bullish move up, followed by a continuation correction (Left Shoulder), and move up again. At the peak (Head) , instead of a continuation to push up further, we then see a reversal bearish push down. Then, we see price form that bearish continuation correction (Right Shoulder) now, looking to push the price back lower. Just like any other price action structures/patterns that I have been talking about, these structures/patterns will appear in any time frames, any market. So it's important to understand multi-time frame analysis and top down approach. A 5 min H and S pattern may not be that strong reversal to give you 100 plus pips because the HTF is showing us different bias. From my experiences, a H and S pattern works best when we spot on the LTF price action. When we have a clear bias on the HTF for a potential bearish reversal, we go down to the LTF to look for confirmation and entry. Remember a H and S pattern will not always be “textbook” perfect like you will learn from various courses/lessons. The market itself is not perfect, so remember that when you analyze the market. Last but not least, and inverse H and S is just a mirror of a typical H and S. It's just now you are spotting them at the bottom of the overall price action, and rather to reverse into a bullish trend. As always, any questions, comments or feedback please let me know. Thank you Jojo
OANDA:XAUUSDEducation
by jojofang0901
58
Five Tips for New Traders and InvestorsWhether you are new or have been trading for 20+ years, this post is a reminder about having realistic expectations when it comes to markets. Patience, the desire to learn, and a positive outlook toward the future, especially over the long run, will help you on your journey. Here are some tips to get you started! 1. Code the markets Financial markets attract smart people who run strategies, indicators, and analytics to make better decisions. The Pine Script community is a perfect example of this - head over to the Pine Script Editors' Picks page to see for yourself. With Pine Script, you can code and create your own indicator or strategy. More importantly, you can learn the intricacies of price action and the underlying mechanics of specific indicators. 2. Paper Trade to test your ideas All members have access to our free Paper Trading tools. This means you can trade, invest, and study your ideas in a simulated environment. Do you think you can outperform the market? Open a chart on your desktop, click Trading Panel at the bottom, and connect your account. Place trades and study your performance over the next several days, weeks or months. Let's see how good you really are before risking any real money. 😁 3. Follow others, use chats, and be open minded Traders and investors from around the globe share ideas here. They also participate in chats and the comment sections. This is not only an opportunity to learn and meet others, but it is also a reminder of who else is participating in markets. You can get instant feedback by asking questions, following their profile or contributing to various chats. It's never been easier to network and work with others to learn about the markets. It's also a reminder that markets are competitive. So get started by exploring the community, meeting others, and learning new concepts. 4. Backtest, backtest, backtest The Strategy Tester makes it easy to backtest your trades over a period of time. You can test different strategies in the Public Library by opening the indicators menu and selecting a strategy. Strategies are shown with a down red arrow and an up green arrow at the end of its title. It will look something like this: "Momentum Strategy 🔻▲." Add a strategy to your chart and use the Strategy Tester to follow its performance. For those looking for a simpler way to backtest, the Bar Replay tool can take you back in time to test your ideas on a specific ticker. Press the Rewind ⏪ button on the top of your chart. 5. Make a plan Many new traders and investors forget to make a plan. Instead, they start trading without testing their ideas or learning from others. Use the tools available to you and make a long-term plan! Draw your plan directly on the chart, use the Text Notes tool located at the bottom of the chart as a personal blog or diary, create indicator layouts, save specific chart layouts to never lose your plan, and create alerts for quick reminders. All of these tools can enhance your process and long-term plan. Visit our Help Center to learn more and everything available to you including any questions you may have about your account. We hope you enjoyed this post and please leave any questions or comments below! Our team is always reading for your feedback. Stay tuned, we have more posts like this coming.
BITSTAMP:BTCUSDEducation
by TradingView
94
HOW-TO The Pip offset to use with Forex trade entriesIn this help Tutorial we take a look at the Pip offset to use in the MTPredictor Trade (and Advanced) Setups Scripts. With Forex, and particularly with shorter term Forex, it is a good idea to give the Trade a bit more "wiggle room". For this we suggest increasing the trade entry Pip offset to 2 Pips, and the Stop Pip offset to 3 Pips. Please see the Video. This just gives a little more wiggle room on the entry and particularly on the Stop level to help avoid being stopped out inadvertently. Please note: this is not a trade recommendation, you should all perform your own Analysis. Losses can and will unfold when Trading, please always use Stops and keep your losses small.
Education
by MTPredictor
Do This Before You Think About Making Profit!Hi Traders. Today's topic is something you must experience in the path to consistent profitability. How many times have you allowed big winners rolled into a losers or break-even? If you're still having the mindset of "at least I get the direction correct", It is time for you to truly reflect on your performance and psychology, and I hope this post would give you an 'Aha moment'. Why is trade management so crucial? Believe or not, majority of traders do get their entries correct, but because of the way they manage their positions, it eventually creates frustration and lack of confidence (self-sabotaging). So, what is considered to be a proper trade management? 1. Trading plan - Majority of us jumped into the market before having a strategic plan to attack the market in a consistent approach. To be consistently profitable, you cannot allow yourself to have different perspective every time you look at the charts. A good trading plan should consists of the instruments you're trading, strategies (back-tested), entry criteria, exit plan, max daily loss, max drawdown, session & timeframe, the lists goes on. Always follow a process, if you do not have a fixed plan, you'd never have consistent action and result. You must give it enough time to develop and allow your edge to play out. 2. Emotional detachment - By managing your positions in a systematic approach, you're not getting involved too much psychologically. Execute a setup according to your checklist, if its right its right, if its wrong its wrong. The market is never against you! To be consistently profitable, you need to remain neutral bias and respect the market, and trade what you see, not what you think. The best traders out there do not have much opinion in the market, simply because they respect the market and they know the market can do whatever it wants. If your exit plan signals you that the market is not going according to your plan, cut it off without hesitation, there's no point letting it runs and drains your energy. "Markets can remain irrational longer than you can remain solvent" - John Maynard Keynes. 3. Confidence - I have received plenty of DMs regarding how to build up their trading confidence. Hesitation comes from fear, if you are hesitating before pressing that buy & sell button, simply do not trade it because you are unprepared. Practice more, appreciate your losses. Personally, I've learnt more on my losses than wins, someday when you look back at all those stupid mistakes you've made, you will realize how much you've grown as a trader and human being. Losses are nothing but a small tuition fees, stay positive. As long as the risk is well-defined, you will survive in this business. Build up the discipline to strictly comply to your trading plan, journal them, and allow the expectancy to work out. Always be confident! Trade safe. Do follow my profile for daily fx forecast & educational content
KRAKEN:BTCUSDEducation
by TraderNeoh
10
Which Trader Are you?Hello Traders, here is an educational Traders Profile Know your Profile! Before we start - Let me know if you have any comments or questions, Your Support is Appreciated!! Which Trader Are you?? TRADER PROFILES & TRADE TYPES Trader profiles are very different and will dictate what type of trader are you going to become her with Global Fx Education © THE SCALPER – the scalper, often keeps trades open for a brief period and trades the market in times of very high volatility. THE DAY TRADER – the day trader closes all positions at the end of every day, with each day as a different trading day. THE SWING TRADER – this swing trader will keep trades open for days at a time and makes a profit from wide swings in the market. THE POSITION TRADER – The position trader who holds positions open the longest of all traders. Once an investment is made, the position could be kept open for months or even years. Let me Explain In Detail here : EXPLAINED 👇🏻👇🏻 THE SCALPER : Scalping is high risk, high reward trading strategy used by expert traders. The trading day is full of volatile periods which requires scalpers to continually monitor the charts for a good time to exit the trade. It is very high pace trading, with many small trades opening and closing all the time. Scalpers usually trade the openings of major markets. THE DAY TRADER : Day trading is slightly less risky than scalping and ideal for those who like to see their profit at the end of every day. This strategy is not for newcomers, and not for traders who hope to leave their trades unattended while at work. This option is also good for traders who can not trade every day of the week but can still commit a full day to their trading. THE SWING TRADER : Swing trading is a better setup for the beginner trader. Progress will be visible in your account over a couple of days. Swing trading is an opportunity for a trader to set up fewer but better trades, which suits a trader who is still learning. If you are making longer trades, hoping to make a profit from swings in the market, make sure you have a well-funded account so you don’t get a margin call by your broker at a time when closing your trade could mean a loss on your account. THE POSITION TRADER : Position trading is for someone who has limited time, and more ideal for those who spend long hours commuting that can be used for research. The downside of position trading is that much of the time your capital is going to be locked up in trades, so it limited your ability to jump on explosive trends to make a quick profit. Much Love! #education #gfx #tradewise
TVC:DXYEducation
by Global_Fx
9
In depth look at continuation bull/bear flag structures/patterns Hello everyone: Welcome back to another quick educational video on price action structures/patterns. Today let's go deeper into the continuation correctional structure. Specifically, the continuation bull/bear flag structure. First it's important to understand that a bullish/bearish flag is a continuation correction. They are representing a correctional phrase of the price action, before resuming the previous impulse phrase. As price action traders, we must be able to identify what correction we are seeing. This will allow you to get ahead and make your forecasting so you are prepare to any potential entries Second, bullish/bearish flag correction will appear in any time frames, any markets, and in different sizes. Typically a flag correction will have at least 2 swing highs and 2 swing lows and relatively even and proportion in angle or length. They can be slightly slanted or very parallel to each other. Remember the market is not perfect, it wont always present us picture perfect, textbook structures. Thirds, So its important to understand multi-time frame analysis, top down approach. A LTF bullish/bearish flag may or may not have the potential to start taking off massively due to the higher time frame showing us a conflicting bias. So its important to add as much confluence to your trade as possible. As always, any questions, feedback or comments please let me know :) See you all in my next weekly outlook stream. Thank you
BINANCE:XLMUSDEducation
by jojofang0901
18
Why Should You Avoid News Scalping?Hi traders. I've been receiving messages recently requesting for more educational content especially for people who are fairly new to trading. If there's only one emphasis to remind myself back then as a beginner trader, it'd definitely be risk management. So why is it so important to avoid scalping the news especially when you just got into the trading world? 1. Unusual spread & undefined risk - Regardless of how many winning streaks you had previously using certain news scalping strategy, there will be one time where the market catches you onto the wrong direction if you are unprepared. The typical news scalping strategy where majority of the new traders were introduced are the buy limit & sell stop (pending orders) strategy, it's basically setting both pending orders above and below the current market price, approximate 3-5 minutes before major events announcement betting the market to run aggressively into either side. Do not get me wrong, there are professionals who are successful using this system, but bare in mind that your capital is not protected due to the wide spread (up to 20 - 50 pips) and slippage, trust me there will be time where the market swings both ways aggressively triggering both orders sabotaging your account. Avoid the sense of urgency to notice a steep growth in your equity curve, begin focusing on long-term profitability instead. Protecting your capital should be your number one goal. 2. Lack of emotional control (greed & fear) - I've seen traders who had 10R of profits refusing to close out their scalp position due to greed, only to watch their profits run into red zone. In contrast, there are traders who refuse to cut their losses due to fear, only to watch half of their account being wiped out, or at worst, receive a margin call. Scalping is intense, it requires a high level of emotional detachment and patience, these traits are not often found in new traders due to the lack of experience. Successful traders are very patient with their winners and extremely impatient with their losers, always cut your losses without hesitation when things are not going according to your plan. Trading is a game of getting an edge out of uncertainty, to succeed in this game you MUST be very strict on yourself and extremely discipline. 3. Lack of knowledge - I've noticed majority of the traders choose to scalp because of the belief of 'fast money'. The more eager you want to make money quick, the higher tendency you will enforce your will into the market, the more risk you are involved, which is self-sabotaging. You do not need to put your hard earned capital at high risk in order to achieve high returns, treat trading like a marathon not a sprint. Spend more time on developing strategies/ systems that generate consistent returns, you only need a slight edge in the market to be consistently profitable. Be consistent with your action, profits will come. Success is not far away from you if you're constantly putting in consistent actions. Trade safe. Do follow my profile for daily fx forecast & educational content.
Education
by TraderNeoh
2
HOW-TO If you get two MTP Setups on the same BarIn this help Tutorial, I would like to cover what to do if you get two different MTPredictor Trade Setups on the same Bar. As explained in the video, this can arise sometime because we have two Scripts, one containing our Standard MTP Trade setups, the other containing our Advanced MTP Trade Setups. We have had to code two Scripts to overcome Pine Coding limits. In the video, I cover 3 possible trade management strategies, based on how experienced or aggressive a Trader you are. Every Trader is different, and will have a different Trading Plan that is individual to them. The first strategy is for the more conservative, or risk adverse, Trader who may look to consider the neatest Profit Target to look to come out of the market earlier. The second, more aggressive, Trader may wish to look to use a further out Target of the Wave 3 swing as calculated in the MTP Advanced Trade setup Script. The last option is to use the Higher Time Frame Chart, which in this case would be the Daily DP support zone. As you can see, there is no "one size fits all" in Trading, we are all different and have different levels of experience as well as different risk profiles. As such, it is important that we develop our own, and unique, Trading Plan that fits us, only then can we apply it time and time again in the markets. I hope this video has helped and given some guidance as to how to handle the situation if you get two different MTPredictor Trade Setups on the same Bar. Please note: this is not a trade recommendation, you should all perform your own Analysis. Losses can and will unfold when Trading, please always uses Stops and keep your losses small.
Education
by MTPredictor
How Much BTC Do You Need to Create Generational Wealth?Hi Tradingviewers, in this article I am going to break down this question into smaller items and try to give a concrete answer to the question: “How Much BTC Do You Need to Create Generational Wealth?” First, we’ll have to define what ‘wealth’ means. Then we need to define how we look at the ‘generational’ part. Lastly, we also need to take into consideration long term outlooks on Bitcoin. Let’s try and put some actual numbers on this and see how much BTC you would actually need. I’ve been on Twitter a lot lately (putting some more effort into my account!) and got inspired to answer this question as this was a very common topic on Twitter. The interesting thing is that I saw a lot of people talking about this, but nobody actually made an effort to go through the math. Without further ado, let’s dig into the numbers. First let’s look into some options to define wealth. Using data from the World Inequality Database and Statistics Canada), it takes about $488,000 to be considered part of the top 1% in the U.S in 2019. Let’s assume that this applies to the number needed in a family/household. Let’s make ~$500,000 our first option, I’d say belonging to the top 1% in the US would be a pretty fair definition of wealth. If we look further than the US, we can also use this same 1% methodology to define wealth on a global scale. In that case you would need at least $744,400 in combined income, investments, and personal assets according to the global wealth report from the Credit Suisse Research Institute. A slightly more ambitious goal compared to our first option but we could define this as ~$750,000. Another option to look at wealth is to look at financial independence . My preferred way to define financial independence is to have enough wealth such that you can completely live off the dividends. A common rule used by the FIRE community (Financial Independence, Retire Early) is the 4% rule. The 4% can be summarised as a safe withdrawal rate that will not lower your total wealth over the long run. Even when there are temporary downturns in the global economy. This assumes you invest all your money in the stock market. The median household income in the US is $61,937 per year. We could consider a passive income of the median household income as wealthy. If we divide $61,937 by 4% from the safe withdrawal rate above we get to a total of $1,548,425. So using this logic you would need roughly ~$1.5M in total assets in order to be considered wealthy. Now, let’s discuss the generational part. Honestly, I was surprised when I found the exact definition: “ generational wealth represents assets passed down from one generation to the next. If you can leave behind a notable inheritance to your descendants, that constitutes generational wealth. These assets can include real estate, stock market investments, a business, or anything else which contains monetary value. I had somehow expected it would be something more ambitious such as that for x generations they would all have to be considered “wealthy too”. Achieving generational wealth would then be relatively easy given method one and two. You would just need to make sure something is left of your $500,000 or $750,000 respectively. Option three even has it implied. The whole idea behind option three is to never actually spend any of your wealth, you’re simply living off the dividends. This leaves us with the most difficult one: how much Bitcoin would you need? The first and most obvious approach is to directly calculate the amount of bitcoin that represents our different definitions of wealth given the current price. If we take a Bitcoin price of $30,000 that would give 16 bitcoin for option 1, 25 bitcoin for option 2 and 50 bitcoin for option 3. Now let’s bring in some of the nuance. First of all if you’re expecting to live off your dividends you cannot have all of your wealth be in bitcoin itself as it doesn’t pay any dividends directly. Normally the wealth would be in the stock market or in real estate. Also, if you assume that the value of bitcoin will keep rising you would obviously need far less bitcoin today to achieve generational wealth later. For example, Bloomberg analysts have predicted a price target of $50,000 for Bitcoin in 2021, implying a $1 trillion market cap for just this cryptocurrency. JP Morgan analysts estimate the price of Bitcoin to grow more aggressively, as they estimate a value of $650,000 by the end of 2022. Let’s be more conservative on the date, but keep an aggressive price target for the sake of the argument here. If we take a $300,000 price target by the end of 2031 how much bitcoin would you need today to achieve generational wealth? This would give us 1.6 bitcoin for option 1 2.5 bitcoin for option 2 and 5 bitcoin for option 3. Specifically for option three it would still mean though that you would have to cash out all your crypto assets and convert them into dividend generating assets instead. Also, with a possibility to see hyperinflation later given that 35% of all dollars in existence have been printed during the last 10 months it is questionable whether thinking of generational sustainable health should even be expressed based on dollar figures to begin with. I wouldn’t know how to express it in any other way, but am really curious to hear if anyone has good alternatives on this point. I am really curious to hear your views on this. I used many assumptions here, how would you have approached this? Are there any flaws you see in my logic? Feel free to comment on anything, and please feel free to absolutely destroy it! I’d love to have the discussion. Just to summarize, based on this you would need today: 16 bitcoin to be considered among the top 1% wealthiest in the US 25 bitcoin to be considered among the top 1% wealthiest in the world 50 bitcoin to achieve generational financial freedom Trading-Guru p.s. You might have seen a few reposts of this article as Tradingview was struggling with a faulty spam detector. The moderators kindly helped blocking and unblocking some posts. Thanks @scheplick!
BITSTAMP:BTCUSDEducation
by Trading-Guru
11
HOW-TO Losses can and will unfoldIn this video, we take a look at losses. Losses, or losing trades are important, because every trading system will have losses. I just think it is important that vendors talk about losses to make it clear to everybody that no matter how good a system looks or appears to be, it will have losing trades. In the video we take a look at our "History Triangles" (which are the small green triangles on the chart), these show trade setups that would have been printed on the chart at the time, and would have been filed on the next bar, but would have been recalculated if the market moves through the setup without enough Bars having unfolded to create a new swing Pivot . These are not always losing trades, as they can also appear at double tops/bottom (where the stop level would not have been breached), but are usually losses. Position Sizing is used to keep these losses small, at just -1R, or 1 risk unit. I hope you all enjoyed this video, as it is an important reminder, that all systems have losses and it is important that vendors talk about losses in their posts.
Education
by MTPredictor
1
The ABCs of risk management. How to calculate risk and stop-lossHello, Traders Today we are going to explore risk management. First of all, risk management is what keeps traders alive! 1. First of all - it’s very risky to get into a single trade with more than 20% of your trading deposit. 2. To begin with, you need to calculate the percentage of risk you plan for each trade. To simplify, it’s an amount of money you’re willing to lose if something goes wrong - and if the losses are equal to that amount, you get out of the trade automatically. The stop-loss needs to be calculated with consideration of your tolerated risk. Let’s say your trading deposit is 20000$. The risk for one trade is 1% of your deposit, in our case it’s 200$. If you make a trade for 10% of your deposit (20 000$), then the position size should be 2000$. The tolerated risk, in this case, is 200$ (10% of your trade amount). Therefore your stop loss for the trade should be 10%, after which the position will be closed. If your position is equal to 20% of your deposit (20000$), then the position size should be 4000$. The loss you’re willing to tolerate here is 200$ (5% of 4000$). That’s your maximum stop-loss. 3. It's very important to understand that you have to make trades with a good risk/return ratio. The recommended minimum is 2 to 1, but 3 to 1 is better. You have to calculate that in order to remain profitable, otherwise, you can end up having losses executing lots of trades. For example, if the R/R ratio is 1 to 2, and you succeed in 4 of 10 trades with an estimated 20% profits and close 6 of your positions with a stop-loss of 10%, you’ll have 4*20% (80% profit) minus 6*10% (60% loss) and that’s still 20% profit. So you get 20% profit even if only 40% of your trades are profitable. Good luck and watch out for the market!
Education
by UnknownUnicorn10064030
9
In depth look into double tops/bottoms price action structures Merry Christmas everyone: Hope everyone is well and healthy, and enjoy the holiday season as much as we can :) Back here with another quick educational video on price action structures/patterns. I am going to go into detail on double tops/bottoms type of price action. Many of you have asked me to elaborate more on what double tops/bottoms truly mean, and they sometimes get confused with a support/resistance. I will go into more detail on this topic to clarify the differences. In addition, I will bring out some different examples in the market, and demonstrate how I see double tops/bottoms the way that works for my trading and its analysis. How I confirmed what a true double tops/bottoms is, and how to look for potential entries once you see them form. Understanding that multiple time frame analysis, nature of the market plays a big role to determine if the double tops/bottoms are “valid” and to give us more confidence to enter a position. The higher the time frame, the more significant it is to that double tops/bottoms and the potential reversal move from it. As always, any questions or feedback please let me know. Merry Christmas and happy new year everyone :) Thank you Jojo
OANDA:US30USDEducation
by jojofang0901
12
Trader Profile - Asking Yourself The Right Questions1. YOUR TRADER PROFILE The first thing most traders will have to do is build a portfolio, this process is more complex than just choosing what assets to trade, and in order to build a good portfolio you will need to find your trader profile, which can be determined by asking yourself the following questions: What is your initial capital? What is your targeted return rate? What is your risk aversion? What is the investment horizon? What is your availability? All these questions are related to each other, and as such, it can be difficult to find non-conflictive answers to them. The following sections give information about the theme of each question so that you may more easily identify your trader profile. 1.1 Initial Capital The initial capital you are willing to invest is an important matter, again we could ask ourselves various questions to determine it, but let's go with a simpler approach. A low capital can have a wide variety of effects. Capital is directly related to buying power, and a low buying power will result in the trader being unable to trade certain assets, but more importantly, it comes with a reduced ability to diversify a portfolio, and as a result, makes traders unable to lower their risk level. Leverage can increase buying power without having to have higher capital but it involves significantly increased risk. Having a low capital also means potentially reducing the lifetime of your portfolio since you won't be able to tank more losses, thus conflicting with your investment horizon target. Certain markets are more accessible than others for traders with low capital, this is the case of the forex and cryptocurrency markets that offer high leverages compared to the stock markets. 1.2 Risk/Returns Risk/returns are two correlated concepts, the more returns you expect from an investment, the more risk you are taking, an investment with large potential profits and low risk does not exist. Knowing your risk aversion is crucial if you want to build a good portfolio, and you will need to choose this level in coherence with the other aspects of your trader profile. Financial instruments all have a different risk/return ratio, and it is important to choose them wisely based on your profile. It is also possible to mix various financial instruments in your portfolio, this is a good way to reduce risk, as such you can have a portfolio consisting of 60% derivatives (futures, options...) and 40% bonds. 1.3 Investment Horizon Your investment horizon will be a huge factor of your success in trading, certain traders focus on long term trading, holding positions for years, and will use the buy and hold strategy. Others might hold a position from several days to several months, they are often defined as "swing-traders". Finally, some traders might open and close positions within one trading day, and as such are named "day-traders", a particularly well-known type of day-traders are scalpers, who usually hold positions for only several minutes. Most beginners in trading will start day-trading, and a lot will try scalping, however, it must be noted that the shorter your investment horizon is, the more difficult it will be to be consistently profitable. This has various reasons, one of them is that shorter-term investments require more precise timing, also you are expecting smaller profits than ones you would get using longer-term investments, thus encouraging a trader to use higher leverage, thus maximizing risk, also opening a high number of positions will mean you will lose more from frictional costs (commission, spread...), and since your profits will mostly be smaller, frictional costs will have a higher impact on your profit margin. We strongly advise beginners to stay away from scalping. 1.4 Availability Trading requires time and effort, and it is impossible not to be involved with your positions (even when everything is automated). However, some users will still have more time than others. Traders will have to do certain tasks: Monitor existing positions Execute orders Research for information Users who can allocate a majority of their time to trading will be able to build & update more advanced portfolios and do shorter-term trades, however, traders with less time will often have to seek longer-term trading styles such as swing trading. Conclusion Trader profiles will vary across every trader and understanding the importance of asking yourself the right questions to identify your own trader profile will likely help you overall increase your chances of success in trading. Thank you for reading!
BNC:BLXEducation
by LuxAlgo
7
10 reasons why being an active investor surpasses buy & holdMum and dad buy & hold (also known as "buy & forget" and "buy & hope") gets heavily promoted as some holy grail. Take advantage of the market rewards with the least effort, stress, and without having to pay fees to money managers, fees that will eat your retirement. To Bitcoin holders this is the greatest thing and they dream of wealth, they think they found the ultimate "best performing asset". But professionals don't really care about crypto, and anyone that is able to be somewhat competitive sees it as really bad. 1- The front page of this idea. Bitcoin holders are at 1.75R. In 3 years. 2- The risk adjusted returns are terrible. UBS Global Allocation Fund (buy & hold everything) has a max drawdown of close to 50% for a yearly return of something like 2.5%. The S&P averages about 7% a year and has drawdowns of 30%, 50%, and so on. Bitcoin has gone up 500% since september 2017, as well as march 2019, but it casually gets 85% drawdowns. Managed funds typically provide small returns for small risk, for example 5% annual returns and a max drawdown of 5%. Quants via ultra diversification (on assets and in time) get only green months, very little drawdowns and decent returns. Active traders, if they are good, get small volatility and consistent slow and steady growth. 3- It is what gets advised to noobs in investing as well as other competitive activities, like esports. Warren Buffett advises "just buy and hold". There is an equivalent. The game league of legends is popular so I think most people will get it. Players at the top say to poor players desperate to climb "just pick annie and roam", play an easy champion and rinse & repeat something simple. But no one is seeing armies of Annie one tricks in the higher elos. It's stupid advice that does not work. And if it does it's really the worse, second hand, "better than nothing" thing to do. 4- "Buy & Hold" is a one size fits all method, but there is no one size fits all opportunity. First an exception. People looking to pay their children university, or retire, have a 1 size fits all opportunity: fixed income. There are so many bonds and other contracts with all kinds of maturation dates, it's impossible to not find something right. Kid goes to uni in 10 year: Find a safe decent 10Y bond (still have to hedge currency risk if it is foreign...), collect some interest every year and get the entire amount in 10 years. So here you already see what can go wrong. What if you needed your money in March 2020? Bitcoin is down 80%. Sell? What if you bought and held Japan stock market and by the time you retire it's down in the gutter? Wait 30 years or more? 5- Some of the favored tools of passive investors do NOT buy & hold themselves. The vast majority US stocks go to zero. The S&P 500 which is buy & holders favorite itself does not buy & hold, performant stocks are added all the time, and poor ones are removed. So there is a fundamental flaw. And the S&P 500 strategy is as dumb as it gets, it simply buys winners sells losers. What if growth gets more volatile? It will be buying and selling all the time, or if there is a rule not to sell too often, hold losers too long and miss winners too. Besides the S&P 500 is only for the US and no matter what you think bull or bear it is basically betting on 1 single economy so still a simple buy & hold on a single thing (even with all the adding winners and removing losers). 6- Number 6 is abstract. Max simplicity and a total lack of effort and risk management cannot possibly create a reward. One cannot help but to think nothing can be free, there is no magical energy well, matter does not pop out of thin air, and in the same way there is no magical trick to get money without doing anything. Every critter on this planet needs to work to get something in return. In other activities being passive leads to no result. Do nothing, nothing happens. Why would this be different? The power of greed? Losing or gaining weight requires some action, magic trick special diets still do not work, buildings don't build themselves even government contractors have to work at some point. 7- No one successful does it. There might be a few lucky exceptions, but never lucky enough to really get to the top. George Soros was or is active, Buffett is active, every billionaire and centamillionaire on the planet is active. I have never heard of passive buy & holders that happily retired. The only "retired" passive novices are the ones that got lucky, bought dot coms before they went ballistic, bought Bitcoin early enough... 8- You'll miss out on great opportunities Giant contangos, mispricing, very underpriced stocks... Imagine being underwater rather than full of cash when a certain investment is super undervalued. And look at Bitcoiners, rushing in to buy "the dip" in january 2018 and laughing at me when I suggested a price decline and being patient as I thought there would be opportunities. They end up holding some $16000 BTC, then add more as the price goes down because let's risk everything. Each $16000 Bitcoin they have is 4 $4000 Bitcoin they did not buy. After 3 years BTC made it to 22000 wow fantastic! From 16k to 22k. If they "risked missing out", did something else with their cash, and bought $5000 BTC this year they'd have more than quadrupled their money. When BTC makes it to 20k then drops to 3000 it easily has much more upside than downside. I always said I would not short under 5000 even when I said it will eventually go to zero (it 100% will). Buying a coinflip ultra risky casino chip with no stop loss when it is close to ath. Just so bad. There is a difference between timing every top and bottom which only twitter crypto traders do, and avoiding really stupid actions. 9- "Buy & Hold" is a hoax perpetrated on credulous retail investors to milk them. You know what reduces risk and adds liquidity in the market? Dumb money consistently throwing money in the pot. Institutional investors that are happy to promote this hoax sell when they consider prices to buy too high, we witness phenomenal crashes, and why would anyone choose to not sell high prices and just hold the bag? Institutions are literally dumping on willing dumb money that has no idea how low prices will go and how long the drawdown will last. While they recommend to "just buy and hold" their own holding periods have never been shorter. And many of the professionals that buy and hold are just getting more AUM out of it. We know for a fact they are scamming energy ETF "investors" (USO), day traders, Robinhood "investors" From Jim Cramer: “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.” Like institutions cannot wait 9:30 to buy their shares, no no they are in a hurry they have to get in at terrible prices in the pre-market. Hedge funds are happy to rob dumb money. No matter how, no matter the time horizon. 10- I have no crystal ball do you? This scam summed up: "Hello individual investors. Today, based on available info, try guessing what will happen in the quarter century, and then for the next 25 years discard any new info". Emotions & logic are on a spectrum, and this idea is not on the more logic side of it. It makes less sense than buying a lottery ticket. At least the ticket buyer can say he is having fun, a sort of little adrenaline rush, and lottery ticket buyers can use flawed logic saying they only pay little and in their lives they'll never pay as much (not even close) as what the reward is. But buy & holders cannot even say they are having fun. What fun? Fun forgetting about something? "I'm having fun being passive sitting on a bench and not playing basketball and not even watching it". See it makes no sense. Or fun watching your money disappear while you do nothing maybe? And I don't see how they could use flawed logic here "ye so I make a bet on the future with limited info and as more info becomes available I put my fingers in my ears and go lalala".
Education
by MrRenev
3
#1 Trading Psychology : Accept Losses Its Part of the Process.I'm sure many of you have experienced this before. Me included. The market moves against you, so you extend your stop loss. The market moves against you again, so you extend your stop loss again, thinking that the market will reverse in your favor. We all know what happened next. The market never reversed and you lost a huge chunk of your capital. It is very important to respect your stop losses and let the market take you out so that you will not have to take the mother of all losses.
Education
by mbn_global
6