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How to create chart art, infographics, and custom visualsThere are two things you have to master to create the best chart art: 1. The drawing tools available to you 2. Your chart settings In this video, we show you how to create a blank canvas for chart art, infographics, and custom visuals. The first step to getting started is understanding how you can turn your chart into a blank canvas. Open your chart settings to get started. In your chart settings you can control the look and feel of your chart including the ability to hide everything, even the price line, and draw on an open canvas. You can also control the background, scales, and color of the price line to create something totally unique to you. The simplest way to create a blank canvas is to uncheck each box in the chart settings and adjust the background color of the chart including the vertical and horizontal grid lines. Once you've created your blank canvas, you have the freedom to create and draw anything you want. You can use this canvas to make flow diagrams, pictures, and more. It's really up to you and your level of creativity. Here are some recent examples that convey interesting educational lessons or trading concepts: How to manage risk What is growth investing How to think about the long term The trader's journey The final step to creating the best chart art and custom visuals, is to make sure you master your drawing tools, which are located on the left-side of your chart. You can use them to draw anything that comes to mind. It could be a flow chart, a cartoon or even a picture. You will want to make make the brush tool your best friend. It's how you draw freely across your chart as if you were holding a pen or a paint brush in your hand. We hope this video tutorial helps you get started and we look forward to seeing the work you create. Please leave any questions or comments below. In addition you can ask for product features or product requests and we will share them with the team.
NYSE:TWTREducation
by TradingView
30
Documenting Your Trades (For Fun and Profit)How do you document your trades? In a spreadsheet? In a trading journal? Directly on the chart? How much is too much? How little is not enough? I say you need to document enough to tell the story properly. Every trade tells a story. As with all good stories you have a protagonist and an antagonist. Good guys and bad guys. The hero and the villain. And then, there's the journey. In the markets you are the hero and the market is the villain. One way I make trading "fun" and what helps me "tell the story of the trade" is to "Trade Like a Pirate" and use the vocabulary of Jack Sparrow. I have already written on this topic when it comes to analyzing profit targets (seizing treasure and plunder) but let's look at how we learn what we did on a trade by trade basis. When you do an after-the-trade analysis (what I call a postmortem) you should be able to see what you did right, what you could have done better, but most importantly, what you may have done wrong; not to beat yourself up, but to make sure that you *never* make that mistake or repeat that behavior again. (Fool me once, shame on you... fool me twice, shame on me!) For instance, I once lost three trades in a row and asked "How the heck did that happen?" and later when I looked at the actual trade screenshots I realized that both my trading timeframe and trend timeframe was the same! Somehow instead of having my charts on the 60-15 minute charts they were *both* 15 and I realized if I had my chart timeframes right I would have never entered those particular trades, saving me from experiencing those losing positions. Thanks to those trades, though, and thanks to my post-mortem analysis, the first item on my "pre-flight checklist" is now "Verify Trade Timeframes." Thanks to journaling and the postmortem process I'm *never* going to make *that* mistake again. But what about the *psychology* of the trade? *Why* did you enter it, *what* were you thinking once you were in it, *why* did you adjust your stop, *why* did you choose your target, *what* might you have done out of fear that got you out of the trade early or prevented you from realizing as much profit as you could have? Journaling your trade, or documenting the trade *properly* will help you with that. In the example above you can see a recent trade that presented itself to me and my pirate "Crew" in the Gasoline Futures market. I talk about the "weather conditions" before getting into the trade (the wind and the tide), other environmental factors like the "shark feeding frenzy area" helping me decide where I will target my profit (there be treasure *here*), what was going on when the trade actually entered, and finally, managing the trade to my target. In addition, during the postmortem I found an opportunity where if I had used a trailing stop, I could have gotten an additional 42% profit, or 'treasure'. As I mentioned in my Backtesting series, one of the reasons you backtest is that through repetition, you can often find patterns in your system that will prompt you to tweak it to either *improve* results or *eliminate* inefficiencies. In this same manner, through repetition in documenting your trades you may very well find a pattern of behavior that is holding you back from your full potential. For example, In the trade above, after securing 3R, (the minimum I am willing to take in a trade), if I followed price using my trailing stop strategy instead of a target, I found that I could have made an additional 2-3R profit. What if after documenting 20, 30, 40+ trades I find a similar pattern, that I am often "leaving money on the table"? I can then test several exit strategies to see which ones would give me the biggest bang for my buck and increase my R per trade. The other big benefit of having your trade journal "tell a story" rather than "state facts" is you begin to *personify* the market and see it as someone who exhibits certain behavior patterns, and that is what the markets present to us every day: PATTERNS. And if you can determine someone's patterns, you can predict their behavior. If I know that whenever my wife is browsing through a jewelry catalog and consistently goes "ooh" or "aah" over earrings with blue stones in them, I can guess with a high degree of accuracy that if I buy her a set of sapphire earrings she (and consequently*I*) will be a happy person. Likewise, if I can predict with a high degree what "Mister Market" is going to do based on certain patterns, I can keep setting sail, with confidence, day after day and see gains in my trading account (which makes me, my crew, and most importantly the missus, HAPPY! (Because when momma's happy, everybody's happy!). Trade well! (And Journal Well!) PS: Let me know how your journaling journey goes in the comments! I'd love to know how it "upped your trading game!" You can only improve what you analyze! -Anthony
NYMEX:RBF2021Education
by ocaptain
8
Is it cheap? Why "dilution" is a concept you NEED to understandMany newbie investors get in trouble because they don't understand the relationship between share price and share count. If you're new to investing and you've never heard of "dilution," it's very important that you keep reading this post. If I look at a standard chart of Spirit Airlines's share price, such as a upper chart above, I might conclude that the stock is cheap right now. Spirit shares are trading well below the price they've traded at for the last five years. This is an illusion. The valuation of a company is its share price times the number of shares outstanding. When a company runs low on cash, it sometimes issues and sells new shares. This "dilutes" the ownership percentage of existing shares. Imagine I have a pie, and I've invited you and two other people over for a piece. We're each going to get a quarter of a pie-- a really big slice! But then you decide to invite a friend. The size of the pie doesn't change, so now we have to cut it in fifths so your friend can have a slice. Each of us will get a smaller piece. Issuing new shares works the same way. Since the beginning of the Covid-19 pandemic, Spirit Airlines has issued 29.14 million new shares, increasing its share count by 42.5%. That means that each share now represents a much smaller proportion of the company than it used to. The shares have been "diluted." Because of dilution, looking at a chart of the price of a single share doesn't tell you how "cheap" or "expensive" a company is compared to its historical valuations. Fortunately, there's a quick and easy way to chart a company's actual valuation. Share price multiplied by shares outstanding equals the company's total price tag, its "market capitalization" or "market cap." To chart market cap on TradingView, find and click the button labeled "fundamental metrics for stocks" at the top of the chart. Type "market" in the search box, and TradingView will narrow the list of metrics down to the one you want. Clicking on "market capitalization" will add a time series of the stock's market cap to your chart. When we look at market cap for Spirit Airlines, it doesn't look cheap anymore. Spirit is trading within its price range of the last four years, even though the company is now financially worse off in every way. With earnings negative and sales nearly cut in half, Spirit is priced as if the pandemic had never happened. By charting market cap, you've adjusted for dilution and gained a much better understanding of the asking price.
SEducation
by ChristopherCarrollSmith
52
HOW-TO: Backtest Your Forex Strategy & Increase Your Win-RateIn my earlier article, " Proving Your Trading System with Backtesting ", I demonstrated how, in the Futures market, you could backtest your trading system, see what works and what doesn't, change your variables, and rinse & repeat until you have a winning trading formula. You GET this winning formula by torture-testing (ahem, *back*testing) your system under every market condition. My last video backtested Futures as an example and I received dozens of requests to demonstrate and develop a similar system using Forex, so here it is! This video will show you HOW you can backtest your own Forex Trading system over time, determine its results, and refine it until it is bulletproof (or marketproof!). All you need is a Trading System, a Spreadsheet, and a great trading platform (ahem, like TradingView) :-) Trading can be the most rewarding of careers, but only after putting in the hours of hard work. And like everything else in life, if you don't put in the work, you won't get the results. And if you put in the work AHEAD of time, you won't have to put a DIME of your hard-earned capital into the market until you are CONFIDENT that your system will multiply that money in your account rather than feed the market monster. I hope you enjoy the video... but more importantly I hope it will help you become a better trader. If this was beneficial to you please feel free to leave a like, a follow, or a comment... I'd love to hear from you and stay in touch as we all move forward in our trading journeys! Trade hard, and trade well! -Anthony
Education
by ocaptain
29
How to Spot Blow-off Tops - ES1!Here are 3 blow-off tops and 1 failed attempt which all occurred in the last 7 months. Successful completions are marked in solid black. The failed attempt is shown in dotted black. On all 4 attempts, the price accelerated upwards to different degrees. Each target can be roughly measured based on the price move. Notice how the failed blow-off begins closer to a price bottom than the successful ones did. Volume was either steadily increasing or declining during successful blow-offs, compared to the unsuccessful attempt when volume was not clearly trending. ROC (momentum) was increasing with all 4 attempts. The blow-offs were successful when momentum was at 0 or positive at the start of each blow-off. Disclaimer: This is my opinion. This is not advice. Trading involves risk.
CME_MINI:ES1!Education
by ValkyrieBlue
Forex Pairs Correlation: Avoiding Contradictory TradesHello, in this post I will be talking about Forex Pair Correlations. A problem new traders frequently find themselves in is opening/having positions that are contradictory. I will elaborate on that but for now, let's understand first what correlation is. A correlation is a statistical relationship which means that when A moves a certain way, B will move a certain way. The stronger the correlation, the more likely that the price will move along with each other/opposite of each other. There are 2 types of correlation; Positive correlation which is A and B will move together, and negative correlation which is A and B will move opposite of each other. Now that we understand what correlations are, I can address the problem that new traders have. Contradictory positions: For example, having a long position in GPBUSD and a short position in GBPJPY is contradictory since these 2 pair has a 87.5% correlation which means 87.5% of the time, it will move together. As you can see in the graph, when the GPBUSD (Blue) moves up, GBPJPY (Orange) moves up and vice versa. This applies to moving down as well. GBPUSD (Blue) and AUDNZD (Yellow) is an example of a negative correlation (-69.7%). My recommendation to avoid having these problems is if you do not yet have an understanding of which pairs will move up and down together, check this website: www.myfxbook.com This website will show you every pair and its correlation. Of course, there are some exceptions to when contradictory trades are fine like when hedging against each other or when 1 trade is short-term/intraday/scalping, looking at the smaller trends and the other one is swing trading/position trading looking at the bigger trend. However, I do not recommend new traders to hold/open contradictory trades until they have some confidence in what they are doing. Main points: 1. A correlation is a statistical relationship which means that when A moves a certain way, B will move a certain way. 2. Positive relationship = Pairs will move the same way. 3. Negative relationship = Pairs will move the opposite way. 4. New traders should avoid contradictory trades. 5. Website for checking correlations: www.myfxbook.com Please give a thumbs up if you agree with the educational post and if there are any questions, feel free to comment down below.
Education
by AresFx
2
How to use Fibonacci correction levelsHello, Traders! Most of you have heard about Fibonacci Retracement, some of you saw it and some even tried to use it on their own charts. So today I am going to explain how to use this instrument correcly. Traders use the Fib Retracement tool in order to determine the nearest correction levels on the chart,. If your task is to find out the nearest correction levels of upward movement, the level of 1.0 Fib Retracement. should be at the beginning of the movement and the level of 0 Fib Retracement at the end of it. In simple words: if you are looking for upward motion correction, then 1.0 should be at the bottom and 0 at the top. If you are looking for a downward correction, then the opposite is 1.0 at the top (start of movement) and 0 at the bottom (end of the movement). There are three types of correction by Fibonacci levels : 1. Bullish to levels 0,236 and 0,382. 2. Normal correction to the levels 0.50 and 0.618. 3. Bearish correction to 0.786 and 0.860. When the movement is sharp, most often the correction will be minimal and will end at levels 0.236-0.382. When the movement is corrected for a longer time, the correction comes to the levels of 0.50-0.618. If the movement breaks down, the correction ends at levels 0.786-0.860. In other words, in order to continue upward movement, as in the current BAND chart, we will be interested in levels of at least 0.236-0.318 and 0.50-0.618. Near level 0.618, it is beneficial to catch the sharp impulses that occur due to the stops of market participants. If the price movement comes to the level 0.786-0.860, then most often it is already its conclusion and it is dangerous to buy at such levels. At the current bullish rally, the use of correctional Fibonacci levels will bring good results. Share your setups in the comments and I would help you understand if you used it correctly!
Education
by UnknownUnicorn10064030
3
Backtesting Part 2: Testing Your Trading System in 3 Easy StepsIn my earlier article, " Proving Your Trading System with Backtesting ", I outlined the HOWs and WHYs of backtesting. Does your trading system work under all conditions? Under what conditions might it *not* work? Can you remove those instances from your plan? Under what conditions might you *improve* your win rate? In another article, " The Unexamined Trader ", Just as an unexamined life is not worth living, the unexamined trader should not be trading a system that has not been tested under every market condition (and I mean TORTURE tested under HUNDREDS of trades). This video will show you HOW you can backtest your own system over time, determine its results, and refine it until it is bulletproof (or marketproof!). All you need is a Trading System, a Spreadsheet, and a great trading platform (ahem, like TradingView) :-) It will take some time and effort, but like everything else in life, if you don't put in the work, you won't get the results. And if you put in the work, you won't have to put a DIME of your precious capital into the market until you are CONFIDENT that your system will multiply that money in your account rather than feed the market monster. I hope you enjoy the video... but more importantly I hope it will help you become a better trader. If this was beneficial to you please feel free to leave a like, a follow, or a comment... I'd love to hear from you and stay in touch as we all move forward in our trading journeys! Trade hard, and trade well! -Anthony
CME_MINI:ES1!Education
by ocaptain
171
Proving Your Trading System with BacktestingWouldn’t it be great to see the future? To see where turning points in price will occur with a high degree of accuracy? To see if a trading system that you developed or bought or learned actually works? Well, you can, with a method called BACKTESTING.  Backtesting performs three important functions: 1: It helps you IDENTIFY the reliability / win rate of your trading system over time. 2: It helps develop and reinforce the muscle memory you need to EXECUTE opportunities in your trading strategy 3: It helps you continually REFINE / improve your strategy as you observe it work against price action, ultimately increasing your "hit rate" as a professional trader. The first requirement of a trading system is that it works via RULES. There are no 'hunches' in the market... the market has *specific* behavior patterns and our job as traders is to recognize those patterns and *capitalize* on them. Backtesting has three important requirements: The first requirement is that your trading platform supports backtesting. Can you go back "x" amount of time and look at the timeframe(s) you need to make the decisions you would have made if you were "in the moment" in an efficient manner in order for you to simulate hundreds of trade setups? The second requirement is that *you* are willing to put the energy and work into testing your trading system within an inch of its life before you risk a single penny of your trading capital. You need to know WHEN the system works, WHERE the system fails, and WHY the system worked and failed when it did, and that takes hundreds (if not thousands!) of simulated trades to do so. As you are observing the system in action you will begin to "see" the patterns in a new light. It will become more and more intuitive and you will find opportunities to 'tweak' the system as you go along. You will identify patterns when trades fail and stop trading that pattern. You will see opportunities that got away and you can 'tweak' your system to take advantage of those opportunities. Most importantly, you will see whether the system even works reliably at all and ditch it if it doesn't. It may be frustrating to decide to do so, but the good news is you will not have lost a single penny trading a faulty system to begin with! TRACKING YOUR TRADING SYSTEM To track the accuracy of your trading system you will need to setup a spreadsheet that will record the important variables you want to track. For example, you may want to include the headers, Asset / Date / Time In / Time Out / Long or Short / Reward to Risk Ratio / Gain or Loss / Account Balance The "Reward to Risk Ratio" column is the most important. If you read my previous column, "Trade Like a Pirate" ... ... I discuss that you need to think in terms of Percent Risk per trade ("R") and not Dollars. This will show you how well your strategy works. For Example, if after tracking 100 trades you find out that your system has a 33% success rate, your account will grow by 1% for every three trades if you follow a minimum 3:1 Reward to Risk Ratio (3 -1 -1 = +1). If you find on average 6 trades per day, your account can potentially grow by 2% per day. Under the "Account Balance" column, if you add the trade's win/loss to your previous account balance you can determine how long it would take to get 'x' amount of money from where you started (or how long it will take and inferior system to lose it all as well!) Testing your trading system also shows you how many opportunities present themselves per day / per hour and when the best time is to go 'fishing' for trades. Backtesting might tell you that you need to wake up 2 hours earlier (and go to bed 2 hours earlier) if you want to achieve the goal of replacing your car in 6 months. Or fire your boss in 24 months. Or pay off the mortgage in 3 years. Having a plan to *make* money should also include your plans on how and when you want to *spend* that money - how you will 'pay yourself'. Socrates famously said “The unexamined life is not worth living.” Likewise the unexamined trading system is not worth putting your hard earned money into. The more you backtest your system, the more you will gain (or lose) confidence in the system which will ultimately determine the actions you will take. Another happy by-product is that not only will you be able to refine your trading system, but you yourself will be continually refined in the fire of the market, exercising your mental muscles looking for opportunities that meet your particular trading system. For instance, by analyzing all my losing trades in my first batch of 100, I was able to identity a pattern in the formations common to all failing trades but not winning trades. I then modified my trading system to exclude trades which showed that pattern, increasing my success rate by 30% in the next 100 trades I tested with the new system. Not happy with that, I went through my losing trades from Round 2 and found another common pattern among them. Eliminating those, I modified my system and increased my success rate by yet another 20%. Finding what works is often a product of finding out what doesn't work, and just stop doing that! If you need advice on how to stop a bad habit, just listen to Bob Newhart: www.youtube.com Finally, just as any athlete will you tell you that you should "Warm Up" before performing any strenuous exercise, one thing my backtesting system has taught me is that I need to spend the first 30 minutes of my trading day "warming up" by finding all the opportunities that presented themselves in the Futures market during the overnight session and log them in my spreadsheet. Likewise at the end of the day I look at all opportunities I might have missed so I can reduce the likelihood of missing them again. The original title of this article was "Backtesting to the Future" which reflected this habit: by 'warming up' before actually trading I got my mind prepared to "see the opportunities" for the future day ahead, and I identified these patterns a lot better than I would have if I entered the pool cold and experienced the 'cramp' of a losing trade. Admittedly, backtesting a highly visual concept, so I will be following up this article with a video showing an example of my backtesting strategy and how you can model my system to meet the needs of *your* system. As I love to say, "Good artists copy, great artists steal." Likewise, "Good traders copy... Great traders steal." I hope you can steal some of these ideas and have them help improve your trading game! Share your thoughts and success below! As always, I'd love to hear if this has helped you become more confident and profitable in your trading. Like and Follow if you haven't already and you will be alerted to when I post the followup video! Trade hard and trade well!
Education
by ocaptain
105
4 simple steps to create your perfect strategyHello traders, Introduction How many times did you find a perfect strategy giving great results in backtest but wasn't working for LIVE trading? This effect is due to "overfitting" your past signals giving great historical results in a past environment. Overfitting means you're forcing the results to look great; hence not realistic; knowing the historical price action. Unfortunately, new traders don't know how random financial markets could be. Then, a backtest with very controlled and precised conditions is often irrelevant for real/live trading. Building a trading system is like solving a puzzle. We don't define the entries and exits separately - entries are defined relative to the exits and vice-versa. Imagine a RubixCube where solving one face of the cube could mess up with the other faces of that cube. Step 1 - Define your entries Finding entries is the easiest step. Most indicators on a big timeframes give great entries but poor exits. I appreciate low timeframes a lot as it gives me a better control of my RISK. Thinking that low timeframes require more reactivity is a myth... If we use the standard values from our trading indicators - yes sure, we often enter/exit dozen of times before the real move happens - and when it happens we're too exhausted to trade it well. This is weird that many traders use common indicators with their standard values regardless of the timeframe. Think about using the MACD with the 12/26/9 or RSI with a 14 period for example. Using indicators with low values doesn't work neither for manual or automated trading. The new traders wreck themselves either via exhaustion (manual trading) or with paying too many fees (both manual and automated trading). If your high timeframes trades get invalidated/stopped-out, the drawdown is painful - and you really feel the pain if you use a big position size or a too high leverage... (please don't). What I'm going to say is going to shock a lot of our readers I know. Entries don't matter by themselves. If your exits are not well-thought, you're guaranteed to lose regardless of how great your entries are. Step 2 - Define your exits A strategy without exits (Stop-Loss for example), gives a win-rate by design of 100%. This is the most-common mistake apprentice quant traders make: they think first about PROFIT when actually they must think about the RISK first. How much you can lose is more important than how much you can win (by far). If you don't think about your RISK first, I tell you what's going to happen Maybe you would have predicted the correct directions, but the unrealized drawdown + trading fees + funding will get you bankrupt before the move. Anyone else already experienced this? Step 3 - Backtest From here, you don't even need to use a backtest system. What I do is setting my chart days/weeks before the current date and then scrolling-right from there until the current date. The goal is visually checking a few crucial things (in that order exactly): A) Are my entries early enough? B) If stopped-out how much do I lose in average? C) What's the average profit I can make per trade? per day? per week? You probably noticed that I don't mind the statistical data like win-rate, profit-factor, etc - I don't mind them because they're not relevant. A backtest with a high win-rate, high profit-factor, high EVERYTHING could still not perform well for LIVE trading if the system is "overfitted". Let's dig-in quickly into those 3 steps. A) Are my entries early enough? There is nothing worse than entering too late - this is obvious because it increases your drawdown if any and reduces your potential profit. B) If stopped-out how much do I lose in average? The most important item of the list If your entries are late, we get now that your stops are painful for your capital and psychology. Even early entries could have terrible exits - and you may still lose I don't use a price/percentage level stop-loss. This is too subjective and to speak frankly... not working. There is a great chance to get filled because of slippage even if the candles never hit your stop-loss order level and then we .... cry and rage because we predicted the correct direction but not the correct potential drawdown. I'm 100% convinced it happens too often (to be profitable) for all traders using those stop-losses. I won't say it enough... Use a hard-exit for your stop-loss - it could be an indicator or multiple indicators giving an opposite signal. Of course, it should be based on candle close - not candle high/low to remove almost completely the slippage risk . For the take-profits, that's exactly the same concept. I don't use price/percentage levels but a combination of Simple Moving Average(s), Traditional Pivots and Fibonacci Pivots C) What's the average profit I can make per trade? per day? per week? The goal of any trader: making money and quitting their jobs... I know. That's why we shall not forget about the average profit we can make per trade and per period (day, week, month, ...). Here it's important to have written goals and stick to them. Assuming I want to make 500 USD a day, then I build a system giving me in average 500 USD a day with the lowest risk possible. Step 4 - Rinse and Repeat Creating your strategy is a continuous process - not a one step and you're "done". After the previous step, you may notice some irregularities, some errors, some disturbing elements. If my entries are late, or exits are late/too big then I go back to the first step and repeat the whole process. With some experience, building a successful model for the asset and timeframe you want to trade shall take you no more than a few hours. This is quite fast by the way and you'll already be ahead of most traders out there. Conclusion Building your perfect strategy becomes easier with experience and after a lot of trials. There is no shortcut for becoming rich - you have to put up the work and be/stay focused. Dave
Education
by Daveatt
16
Trading strategy using the DeMarker indicatorThe DeMarker indicator, also known as DeM, is a technical analysis tool that compares the most recent maximum and minimum prices to the previous period's equivalent price to measure the demand of the underlying asset. From this comparison, it aims to assess the directional bias of the market. It is a member of the oscillator family of technical indicators and based on principles promoted by technical analyst Thomas DeMark. The DeMarker indicator helps traders determine when to enter a market, or when to buy or sell an asset, to capitalize on probable imminent price trends. It is considered a “leading” indicator because its signals forecast an imminent change in price trend. This indicator is often used in combination with other signals and is generally used to determine price exhaustion, identify market tops and bottoms and assess risk levels. Although the DeMarker indicator was originally created with daily price bars in mind, it can be applied to any time frame, since it is based on relative price data. Unlike the Relative Strength Index (RSI), which is perhaps the best-known oscillator, the DeMarker indicator focuses on intra-period highs and lows rather than closing levels. One of its main benefits is that, like the RSI, it is less prone to distortions like those seen in indicators like the Rate of Change (ROC), in which erratic price movements at the start of the analysis window can cause sudden shifts in the momentum line, even if the current price has barely changed. How does the indicator itself work? When the curve line moves below 0.7 from top to bottom it means that we are in a overbought zone and we have a potential sell scenario. When the curve line moves trough the minimum 0.3 level from bottom to top it means we are in oversold zone and we may have a potential buy opportunity. But! There is a catch. It is not recommended to short or buy aggressively when the curve crosses both of the levels for the first time. Usually when the curve crosses from the top the 0.3 level, indeed, it means we are heading to oversold zone, but there is going to be additional sell impulse. That's why the curve can have readings above 0.7 or below 0.3. I personally use DeM on the daily chart and this is my only oscillator. Usually Demarker indicators are payed and are very expensive. The free versions of the indicator which are massively distributed are not truly mathematically perfect, but they do fine job. Here with USD/CAD example I have placed my DeM on the daily chart for the pair. I will highlight the period from September till now with the latest signals.
Education
by DailyChartist
3
Using Customer Indicators to find SuperPerformance StocksOne of the BEST parts of TradingView is ALL the thousands of free and paid indicators you can add to your charts to try and find your own unique style and what works best for you. I made a video a couple of days ago where I showed how you can use the built-in TradingView stock screener to find stocks in a nice steady uptrend using moving averages and some filters. One of the disadvantages of that approach is while it shows you stocks in a steady uptrend, it doesn't tell you anything about how volatile they are or have been while they are making their move up. This is where custom indicators can come in and add to the story. With help I created one called the SuperTrail which is a percentage based ATR indicator which simply means it looks at the "average true range" of a stock over time. It is super simple, intuitive and highly visual and by setting it to a default value like 20% I can quickly skim through a list of stocks and find ones where I can buy and in theory hold them longer term because they are less volatile than other similar stocks in the same market - but still making the same or even better gains. Once I have created a short list of these stocks I can then go through them and choose which ones I want to buy, and what the correct "range" is I want to apply as a stop loss to help protect my profits when the trend changes or eventually ends. In this video I show you how I can find stocks that have made 100%+ type gains over the last 12 months without too much volatility and might be worth keeping an eye on. You can find more information and videos on the SuperTrail and what else it can do via the link in my signature. It's pretty cool (I think). If you ever wanted to create your own indicator, this is the place to do it!
NEducation
by zAngus
14
The major Exchange Traded DerivativesChina continues to privatize companies, open its markets to foreign investors, and develop relations around the future silk road. In 1 month China is launching its international Copper future. It sounds interesting but I do not know if individual investors care enough for this future to be available with my broker, maybe IG will have it. As the USA declines (and perhaps Europe), China might become the "hub" for commodity derivatives (thinking of industrial metals and agri), if this is the case I expect retail traders and their brokers to catch up in only a decade or two (seriously). For this occasion let's look at the most traded derivatives around the world. 1- Agriculture *It is a non-profit, self-regulating and membership legal entity established on February 28, 1993 (when China opened itself to the free markets and emerged out of poverty). Non-profit because that's evil capitalism. Nothing is free though. So who pays? The average chinese factory worker? Haha! Back in 2018 they started opening up to foreign investors (Iron Ore, a little after their Oil contract that was the first one ever open to foreigners), the exchange also has an english website: www.chinadaily.com.cn **The Zhengzhou Commodity Exchange (ZCE) is China's first futures exchange,   Zhengzhou Airport Economy Zone is China's first Airport Economy Zone.   Zhengzhou is not a SPECIAL economic zone, it is only an economic zone. Unsurprisingly China is not big on "financial" products (interest rates & equity index) but they are big on more basic things: Agriculture & Mining. 2- Energy So ye Moscow, NYMEX (CME), and London ICE mostly. 3- Metals 4- Equity Index How many contracts would you want? Yes. India and Brazil are at the top of the list. India is famous for its overvaluations and many gambling bagholders, and Brazil for its large numbers of gambling day traders. Stocks and stock indexes (and ETFs) have by far the most individual investors, as those are supposed to be more noob friendly due to having a much lower skill floor. Think of it (lol players) as Yasuo, Master Yi and Volibear mains. For HOMM the equivalent is 3 months afk farm Necro on a giant map. They have been convinced that it was a positive sum game where everyone can make easy money. There are 2 major categories of retail investors: bagholders & day gamblers. They both consistently lose. Due to the power of compounding day gamblers lose money much faster than bagholders, which is why people advise individual investors to stick to bagholding. Bagholding also gives people more time to think it through and quit with some of their money left, while day gamblers will have lost most of their money before the initial excitement has waned off. 5- FX 6- Rates 7- Other No idea what all of this mess is. For my part I only trade a couple of those: 3 grains, 2 metals (Gold Copper), Texas Oil & NatGas, all on the CME (7 total, with some correlations). Sometimes I look at softs on the ICE and Nickel on the LME but I don't really touch them much. Rarely will get into indices, I do follow where they are going from far away. I actually am active in the smallest derivatives that make 7.4%, 5%, 4.9%, 1.6% and 1% while avoiding equities that make 50% :D But I do Forex alot, got around 10 currencies in my watchlist. With correlations and everything I would say FX is about twice to thrice as big as commodities for me. There is already plenty to do and plenty of good uncorrelated opportunities to go for. With on top of that the occasional Bitcoin or major indice or stock bet, I'd say that's about as far as someone can push it with just being coinflipping. I know that professionals hold stocks for quarters or years, Forex for a few days or a few weeks, retail just day trades everything, and I do not know for indices and commodities and rates. But I know commodities sort of behave much more like FX than equities and open interest fluctuates similarly so I would say we are looking at weeks to month in my opinion, for professionals of course, retail just day trades everything they'd day trade overnight swaps and EOD indexes if they found a way. There are alot of those futures. More than enough to have your hands full. Might have some bubbles in China in the future and if this is the case I'll be the first to know way before mainstreet gets all excited and rushes in at the top (and push it higher) as they often do. In July 2019 ZCE Apples (bigger than CME Corn) gapped down by 40%. I am not ready for this. Unless they have some "fair and profit-free" options :D I wouldn't mind getting some surprise 40% infinite gains with tiny limited losses. I guess they are not big on "evil profit driven too abstract for me to understand" speculation. Haha so how are their behinds after that 40% gap with no speculator to absorb the risk? 😉 There HAS to be broken flaws to exploit in the future. Maybe when that happens they will rollback all trades "for fairness" silly commies. Well too early to tell, we will see.
COMEX:HG1!Education
by MrRenev
2
Book Review: Price Action Breakdown by Laurentiu DamirWhen I started trading I was extremely excited about the possibilities that lay before me… The dream of changing your work ethic from “working for your money” to “putting your money to work for you” was intoxicating. I took every class, read every book, followed every “guru” I thought would help me get that ‘edge’, that secret sauce, to make me a great trader. Once I discovered what actually worked, and actually *did* the work of putting that knowledge into practice, I found that trading, like so many other things, follows an 80/20 rule, where 80% of your results come from 20% of your actions. I asked myself what was really important in trading, and I distilled it down to 2 points: Psychology, and Price Action. Notice, I put Psychology first. After reading about, backtesting, sim trading, and live trading so many techniques by so may experts I have distilled (culled?) the instruments in my trading toolbox to a select few. Like that scene in Gran Torino when Clint Eastwood is teaching his young asian friend how to “be a man” and learn to fix things, he gives him Duct Tape, WD-40, a pair of pliers, and said “This will help you fix half of your problems.” www.youtube.com Similarly, I now only have 2 books that I read or listen to a LEAST once per quarter. This advice in them takes care of 90% of my trading needs. This also helps me stick to the basics. Repetition is the mother of skill and we need to constantly be reminded of (and practice) those basics. Today I wanted to share with you one of those two books: Price Action Breakdown, by Laurentiu Damir. This book is going to put you to work. Trading, like any other skill, is something you learn by DOING. You can’t learn carpentry by simply reading a book. You can’t learn painting by only reading a book… you have to take a chisel to wood or a brush to canvas to put that theory into PRACTICE. Likewise, Laurentiu puts you to work trading, lesson by lesson, concept by concept. He simply and demonstrably shows the aspiring trader that all the information we need to decide to buy or sell is right there on the chart. No indicator, oscillator, or other doo-dads are needed. As he puts it, "The best indicator you can have is your brain analyzing the raw price movements.” He breaks down the specific patterns that we as traders need to look at to “see the opportunity” on the screen, notably value areas, excess price, control prices, and rejection areas. There is no mention of chart patterns (head and shoulders, triple bottom, cup and handle, ascending triangle, blah, blah, blah…) or candlestick patterns (bearish engulfing, dojo, shooting star, hammer…) - It’s all about price action. When you look at a chart and see who is buying what and where, you can make an educated decision on where to buy and sell right alongside the institutional market makers who are moving price. Quote: "Throughout this book, whenever I will discuss about buyer and seller behavior, I am talking about the long term traders. They are the ones who move the markets, it makes all the sense in the world to study their behavior, observe how price moves as a result of their actions, and formulate concepts, rules and strategies to follow what they do, to be in the same boat as them. We have to discover their footsteps and follow them." I’m a Kindle guy, and my trading partner bought the hardcopy on my recommendation. The hardcopy is a unique piece of work in terms of its layout, font choice, and stark coloring. I don’t know if it was intentional, but the fact that it is so physically *different* from other books almost makes you give what you are reading that extra bit of attention. My friend, too, owes much of his success to the techniques in this book so I never hesitate to recommend it. I hope if you decide to get this book that you will put all the necessary WORK in that is required to put concepts into practice… to imbed it into your nervous system so you can “see the money” on the chart just like Neo could see The Matrix and easily defeat what was previously an undefeatable opponent. youtu.be In a later article I will talk about backtesting - something that every trader needs to do to build up his skill, to test a trading methodology (such as price action!), and to help keep you “in the zone” (teaser for my next book review!) so as you develop and hone your trading skills, that you will keep that skill and sharpen your trading saw day by day and enjoy the benefits of being a professional financial trader. I would say 'good luck', but luck has nothing to do with developing the skill of trading just as it wasn't 'luck' that made Michael Jordan the best basketball player or Tiger Woods the golfer in the world. It was perseverance, grit, and repetition. Happy trading! smile.amazon.com
Education
by ocaptain
21
Sandwiches and LolliesRemember to not only keep an eye on the chart above, but also on the related BTC chart. Money Man has been, as you know, watching ETH move compared to BTC and realized that we are waiting for a correction that would see ETH not fully hitting targets. This got him thinking of how, think it was Rockefeller - please correct me, said that he loves selling before others do. Leaving money on the table is not that bad an idea. Basically, what he was doing was only eating the sandwich’s filling and leaving the bread for others to squabble about. Now probably had positions so big that he had to scale in and out. Both ETH and BTC has offered lolly trades lately. Ones where traders could ‘eat the whole thing’ (bar a couple of wicks especially on ETH). This also made me think of nagihatoum (a trader on here) who has a quote by Mark Twain / The Big Short on his status bar: “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so”. Excuse the metaphor but insisting on eating lollies and not only the filling in the sandwich, if you go trade by trade and not scaling in, could get you into trouble. The reason for Money Man bringing this up is because he sees a bit of a trend on how people interact with his ideas thread. It has become clear that most viewers are solely focused on the one analysis and so not bother to do due diligence and look at previous ones. There are a select few who do look at previous analysis, leaving their footprints with comments on ‘old analysis’ as well. Money Man likes likes, comments and follows as much as the next guy, but that is not why he brings it up – he can clearly see what most traders are focused on – the next trade and a lolly at that. All or nothing. Please read “On Edge” if you are not sure what he is trying to do. The related BTC post (linked below) is related to his ideas on what to do if you end up in a storm and need to steady the boat. Think about your style of trading. There are no ‘correct answers’. Do you want to pre-empt the decisions of the market and trade within patterns; do you prefer confirmations and breakouts; etc. Conclusion: ETH tends to end up at targets once BTC has settled and decisive actions on BTC causes fear and greed on the ETH chart. Look at previous analysis and see how ETH and BTC interact. Do not simply look at somebody else’s analysis and trade on the lines they drew – that will not develop your trading. Very important to me: Please like if you appreciate the effort, please comment to develop this further and Please follow if you think this might go somewhere that you would like to know about.
BITSTAMP:ETHUSDEducation
by Rule72
7
Keep Calm and Carry OnKeep an eye on the chart above. Again, the planned thread of ed posts are interrupted by an idea that is more pressing. See it as a bit of relevant escapism if you will. Not that Money Man is a guru, but he has been asked many times by fellow traders how to get out of a tight spot they were finding themselves in. Now we all know that giving financial advice, especially for a character without official identification, is not encouraged. There is a reason for this that we will touch on later. Reading his previous ed posts should give a fairly comprehensive idea as to how traders end up in these situations. But ‘bringing it back here’, the first time Money Man was asked such a question was, I think in 2017 (he did not exist then in this form, but I am having him earn his keep). It was something like a listing on Coinbase of some cryptos that caused a serious rally in price. Followed by a steep correction. The trader frantically wanted to know if s/he should bail or stick in it. Once a trader starts asking, “what should I do?” or desperately looking for somebody to tell them where the price is definitely going next, the trader has lost control as price has gone outside of his tolerance. Money Man foolishly advised the trader that the price would go to the level the exuberance started from. He was ridiculed straight away as trying to be a guru. Price luckily did return to that level and he was hailed as a guru. What was foolish about that advice then? The problem with it was that it was one trader, publicly on an exchange chat, telling another exactly how to trade. Money Man has evolved since those days and hopefully grown wiser. He came to realize that his answer then could have been much better. For one, he offered his take as a solution to somebody else’s problem. It was done in arrogance, thinking he knew the unknown with inevitability. Putting himself at risk of causing harm to somebody else through maybe understanding the problem but not knowing the person having the problem and what their goals were, or what their tolerances were. Also, why did the trader ask the question? Because they were outside of their comfort zone / tolerance and could not get to clear thinking. It was not good for anybody to offer such a specific answer, even though it worked out. By doing that he chipped away at that trader’s sense of competence and confidence. Getting to know how valuable your sense of self is, should get you to realize how important it is to stay humble, for your own sake and the sake of others. People are vulnerable when their emotions take over and prevent them from thinking clearly – why there is a legal attempt to prevent possible charlatans from getting control of the mind of others when vulnerable (more on vulnerability and emotions in the PS). They start to look outside themselves for answers and neglect what they already have. Here lies the kicker: you have to plan and trade yourself out of the situation. You are capable. Your emotions incapacitate you, so get rid of them. How? Money Man advises that you take the chart and look at decision levels, patterns, trends, or whatever your trading is based on (if it is simply based on hunches – you are in serious trouble). Take your calculator, work out what all the eventualities would mean and decide what is within your tolerance. Put your orders in (not market, but limit orders and conditional orders. How many times have you already felt negative emotions about market orders?). Now you have built your acceptance into the eventualities. Put alerts on (Trading View has great alerts), to reassure yourself that the sky will not fall without you knowing and then walk away for a set amount of time. Go do what will get your mind away and quill your emotions and make you feel good about yourself. Indulge in a little escapism. When you get back to the screen again, do the same as above until you feel back in control. Accept whatever happens. Accept that you will never be 100% right, but you steadied the ship yourself. Through this you will retain your confidence, not be vulnerable, and learn things which are worth the money (possibly lost) paid to learn. Conclusion: Prevent yourself from losing control in the first place – have a read of previous ed posts to see Money Man’s ideas on this. Make sure that you know your tolerance and build it into your trades. Be kind to yourself, you are human. All traders end up finding themselves trading in discomfort every so often, so figure out what makes it more comfortable for yourself. Very important to me: Please leave a like if you appreciate the effort, please leave a comment to develop this further and Please follow if you think this thread is leading somewhere that you would like to know about. PS We all know advertising is built on playing on your emotions. What a successful industry that is? It targets your vulnerabilities – your emotions. Fear, greed, lust, etc, etc are well known negative emotions and mindsets, but there are positive emotions too: empathy, respect, humility, etc. These are what make humanity collectively stronger. They are not self-centred but build community. They build you up when you build others up. Help me here, but I think they all could be described as wisdom (a hard word to use when talking about trading as it requires a rewiring of the mind and sounds ‘guru-ish’). Trading is not a zero-sum game, nor is life a competition. Doing it well is the goal.
COINBASE:BTCUSDEducation
by Rule72
11
How much to risk per trade? Returns and drawdowns.Between 1990 and June 2000 the median hedge fund (there are not that many that started in 1990) had an annual return of 16.3% and max drawdown of 28.5% according to MORGAN STANLEY. Keep in mind the 2/20 destroys profits. (16.3%*1.25)+2% =  22.4%, and 28.5-2 = 26.5%. So what the median fund actually did I I did not mess it up was get 22.4% return a year and a max drawdown of 26.5%. Of course that drawdown is the worst over a 10 year period. The S&P 500 has an annual return of 17.2% and max drawdown of 15.4%. What is interesting is to look at the details, for example the few specialist credit between 90 and 00. The smallest return one had this to show: 11.5% annual, -4.9% max down. The biggest return one had this to show: 17.4% annual, -19.4% max down. More returns but with much more drawdown. Here is the paper: www.morganstanley.com A portfolio of hedge funds, since they're not all completely correlated, would do much better than the S&P500 in particular on the drawdown side. Renaissance says their medaillon fund uses an average of 12.5 leverage and takes 8000 trades at the same time 4000 short & 4000 long to reduce risk even more. If this is true it means going in each position with 0,15% of their account. Not sure how far their stop is but has to be less than 10% of a share price, this means a risk of 0.015% per trade at most, now since there are 8000 at the same time it would be 8000 times more than this, but since there are shorts and longs it sorts of evens out and who know what their real risk is? All we know is it is very small that's for sure. But leverage costs money, and what RenTec did was since their risk was so small and they do a ton of volume, they partnered with banks that offer them extremely cheap leverage. And then they averaged 66% a year in the past 30 years, with a fund capped at 10 billion. The secret is diversification, it reduces dramatically risk which allows for better returns. But we have to come up with this diversification, not easy to find another good place to invest in, another good uncorrelated strategy. And when we find those additional sources, we are not RenTec we have to pay a big price for leverage so we cannot just scale it hard. Certain "strategies" will help reduce risk but they also cap returns much and leverage is not free so it might not be worth it depending on the person. I just want to take a look at a few non-managed "low fee" "safe" no brain funds. Examples for the 10-year period ending January 31, 2017: Vanguard LifeStrategy Growth Fund (MUTF:VASGX) has a Maximum Drawdown of 47.6% and annual return of 4.7%. UBS Global Allocation Fund (MUTF:BPGLX) has a Maximum Drawdown of 48.7% and annual return of 2.6%. This fund has the rather unappetizing combination of low return and a large Maximum Drawdown. LoL this is so bad. And all the grandpas are loving it, they think they found the holy grail and pat each other on the back. Add to this the fact that most people withdraw at the worse time... Over the same 10 years period the S&P500, returned an annualized 7.024% dividends reinvested (4.8% otherwise) with a max drawdown of 57.8% From 2000 to 2020 (september) it had annualized returns of 6.23%. From 1871 to 2019 it returned about 9% (dividend reinvested) - 6.8% if we adjust for inflation, with a max drawdown of Adolf Hitler & Auschwitz the ultimate price. So we're about in the average with 6%. Growth is slowing down (demographics, tech limits, earth limits...) so we will probably average less than 6% in the future. From 2007 to 2017 the top strategic DIY portfolio recipes had returns of ~typically 11% with max drawdowns of also about 11%. Ray Dalio pure alpha 2 has returned 11.5% / yr in the last 20 years and max drawdown I'm not sure I think it was 8% recently and much less before that. Those numbers are hard to find seriously... But well we get an idea of how far it can get pushed. An article from 2017: "Investors earned an average of 4.67% on mutual funds over the last 20 years (Source: www.creditdonkey.com)" of course there is no mention of drawdown because who cares am I right? Mutual funds are not for the best & brightest of investors. Big risk is not a magic trick. "Big risk" does not mean "big return but with big risk". It means NO returns. It means losing with a winning strategy 😂.
Education
by MrRenev
1
Learn how to use the head and shoulder pattern in TradingViewIntroduction of Head and Shoulders Pattern Technical analysis is a necessary thing to select the positions of perfect entry and exit. For that, There are many patterns available for trading, the head and shoulders pattern is one of them. This article is all about the head and shoulders pattern. In simple words, this pattern includes three triangles. The first triangle is on the left side, and the second one is on the right side, the last one is in between these two. This, the last triangle is the highest in the height, which is called the head, the other two are called the shoulders. What’s Head and Shoulders? There will be three vertices or bottom points in a certain price area, but the second apex or bottom point is higher or lower than the other two vertices or bottom points. This type is called the head and shoulders type. One with top and two shoulders is head and shoulder top; one with two shoulders is head and shoulder bottom type. However, sometimes there may be more than three vertices or bottoms. If there are one or two heads (or bottoms), two left and right shoulders, it is called a compound head and shoulder top (or compound head and shoulder bottom). The W bottom pattern is an important pattern in morphology, and its trend looks like the English letter "W". The W bottom pattern is a mid-term bottom pattern. It usually occurs at the end of a swing downtrend, and generally does not appear in the middle of a market trend. A mid-term short market must correspond to a mid-term bottom, that is, a W The brewing time of the bottom has its minimum period rule, so the shaping period of the bottom W is a necessary condition for judging the authenticity of the shape. The components of the bottom W have the following two conditions: There must be at least a relatively long distance between the first low point and the second low point of the bottom of W. Sometimes there will be short-term double bottoms in the market. This cannot be regarded as a bottom of W, but only a small market. Rebound at the end, and it is often a trap. The transactions at the first low point are relatively active, while the transactions at the second low point are extremely dull. Moreover, the appearance of the second low point is usually slightly arc-shaped. Therefore, the W bottom pattern has the characteristics of a left-pointed right circle. The formation of the bottom W pattern is due to the fact that after the long-term price decline, some investors who are optimistic about the market outlook believe that the price is already very low and has investment value, and the anticipatory buying is active, and the price will naturally rise, but this will affect the large investment institutions to absorb low-cost chips. Therefore, under the pressure of large investment institutions, the price has returned to the first low point, forming support. The fall this time hurt the enthusiasm of investors, and the shape was arc-shaped. There are two low points and two rebounds in the bottom W pattern. From the first high point, horizontal neckline pressure can be drawn. When the price breaks upward again, it must be accompanied by active transactions before the bottom W is officially established. If the upward breakthrough is unsuccessful, the exchange rate must continue to be adjusted horizontally. After the exchange rate breaks through the neckline, the neckline pressure becomes the neckline support, and the exchange rate will retreat at this time. The exchange rate temporarily retreats to the vicinity of the neckline. After the retreat ends, the exchange rate begins to rise in waves. Generally speaking, the second low point of the W bottom pattern is better than the first low point, which can create a bottom-breaking atmosphere and let retail investors out, thus forming a relatively concentrated bottom of chips to facilitate the pull of large investment institutions. Head and shoulders are the reversal patterns. That includes the concept of the bearish and bullish trend. In this pattern, there would be a one trend line, reacts as support, all three triangles are connected with that, called a neckline. If the trend crosses the neckline, there will be a change in the trend. By this, we can decide the trend (upward or downward). The next is the bearish head and shoulders (top reversal) and the bullish head and shoulders (bottom reversal). Bullish Head and Shoulders (Figure B): In this, the trend enters by falling. And makes the head and shoulders pattern by breaking the neckline. Then it will jump and make an uptrend by crossing the neckline in an incremental way. Bearish Head and Shoulders (Figure A): The trend initials in the uptrend further it crosses the neckline and makes the Head and Shoulders pattern and then after, by breaking the neckline, it will fall. It calls Top reversal, too. In-depth Description of Head and Shoulders Pattern: ============================================== The reversal pattern refers to the pattern formed by the reversal of the stock price trend, that is, the signal that the stock price turns from an uptrend to a downtrend, or from a downtrend to an uptrend. 1. The pattern analysis The head and shoulders trend can be divided into the following different parts: (i) The left shoulder part-lasts a period of ascending time, the trading volume is very large, in the past, people who bought at any time were profitable, so they started to get Profit-selling caused a short-term decline in the stock price, and the turnover was significantly reduced when it reached its peak. (ii) Top, After a short period of time, the stock price rose again strongly, and the transaction also increased. However, compared with the left shoulder part, the highest point of trading volume has significantly decreased. The stock price rose above the previous high and then fell again. The trading volume also decreased during this down period. (iii) The right shoulder part-the stock price fell to close to the last down low point and then gained support to rebound. However, the market investment sentiment was significantly weakened, and the turnover was significantly reduced compared with the left shoulder and the head, and the stock price could not reach the head high The point fell back, and the right shoulder part was formed. (iv) Breakthrough, Fall from the top of the right shoulder and break through the bottom neckline connected by the bottom of the left shoulder and the bottom of the head. The extent of the breakthrough of the neckline must exceed 3% of the market price. Simply put, the shape of the top of the head and shoulders presents three distinct peaks, one of which is in the middle is slightly higher than the other two peaks. As for trading volume, there was a cascading decline. 2. Market meaning The head and shoulders is a technical trend that cannot be ignored. From this pattern, we can observe the fierce competition between the poor and the weak. At the beginning, the optimistic forces continued to push the stock price up, the market investment sentiment was high, and a large number of transactions occurred. After a short-term downturn adjustment, those who had experienced the last uptrend of germanium bought during the adjustment period, and the stock price continued to rise. At the second high point, the market appears to be healthy and optimistic on the surface, but the transaction has been much lower than before, reflecting the weakening of the buyer's power. Those who did not have confidence in the prospects and missed the last high point and profit-taking, or those who bought at the falling low point for short-term speculation all sold, and the stock price fell again. The third rise provides an opportunity for those investors who later realized that they missed the opportunity of the last rise, but the stock price is unable to rise above the previous high, and when the trading volume drops further, it is almost certain that the past bullish optimism is almost certain The mood has been completely reversed. The future market will be weak and weak, and a sharp drop is about to come. The analysis of this pattern is: (i) This is a turning pattern of a long-term trend, which usually appears at the end of a bull market. (ii) When the trading volume of the most recent high is lower than the previous high, it implies the possibility of head and shoulders; when the stock price cannot rise to the previous high for the third time, trading will continue When it drops, experienced investors will seize the opportunity to sell. (iii) When the head-shoulders-top-neckline breaks, it is a real sell signal. Although the stock price has fallen by a considerable amount from the highest point, the decline has only just begun. Investors who have not shipped yet continue to sell. (iv) When the neckline breaks below, we can predict which level the stock price will fall to according to this type of measurement method of least drop. The method of this measurement is to draw a vertical line one by one from the highest point of the head to the neckline, and then start at the point where the right shoulder breaks through the neckline, and measure the same length downwards. The price thus measured is the stock price. The smallest drop. 3. Tips (i) Generally speaking, the height of the left shoulder and the right shoulder are roughly equal, and the right shoulder on the top of the head and shoulders is lower than the left shoulder. But if the height of the right shoulder is higher than the head, the pattern cannot be established. (ii) If its neckline slopes downward, it indicates that the market is very weak. (iii) In terms of trading volume, the left shoulder is the largest, followed by the head, and the right shoulder is the smallest. However, according to some statistics, about one-third of the head and shoulders have more turnover on the left shoulder than the head, one-third of the turnover is roughly equal, and the remaining one-third have more turnover on the head than the left shoulder. . (iv) When the neckline breaks, there is no need to increase the turnover. If the turnover increases sharply when the break, it shows that the selling power of the market is very strong, and the stock price will decline more rapidly as the turnover increases. (v) After breaking the neckline, there may be a temporary rebound (post-draw). This situation usually occurs when a break of low volume occurs. However, the temporary recovery should not exceed the neckline level. (vi) The head-and-shoulders top is a very lethal form, and its drop is usually greater than the smallest drop measured. (vii) If the stock price finally rebounds at the neckline level and is higher than the head, or if the stock price drops below the neckline and then rises above the neckline, this may be a failed head and shoulders and should not be trusted. Reversal pattern-head and shoulders bottom =+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+= 1. The shape analysis [ Figure B ] is the same as the shape of the head and shoulders, except that the whole shape is reversed, also known as "inverted head and shoulders". When the left shoulder is formed, the stock price drops and the trading volume increases, followed by a secondary increase with a small volume. Then the stock price fell again and fell below the lowest point of the last time, and the trading volume increased again with the decline, which was more than the trading volume during the rebound phase of the left shoulder-forming a head; when it rebounded from the lowest point of the head, the trading volume was May increase. The volume of the entire head is more than that of the left shoulder. When the stock price rebounded to the last rebound high, there was a third fall. At this time, the trading volume was obviously less than that of the left shoulder and head. When the stock price fell to the level of the left shoulder, the decline stabilized, forming the right shoulder. . Finally, the stock price formally instigated an upward trend, and accompanied by a large increase in transactions, when the neckline resistance broke through, the transaction increased significantly, and the whole pattern was established. 2. Market meaning The analytical significance of the head and shoulders bottom is no different from that of the head and shoulders top. It tells us that the past long-term trend has been reversed. Stock prices have fallen again and again, and the second low (head) is obviously lower than the previous one. The price was low, but it quickly turned around and bounced back. The next fall, the stock price fell to the last low level and has gained support and rebounded, reflecting the optimistic forces that are gradually changing the market’s past weakening situation. When the high resistance line (neckline) of the two rebounds breaks, it shows that the optimistic side has completely knocked down the weak side, and the buyer replaces the seller to completely control the entire market. 3. Tips (i) The shape of the top of the head and shoulders is similar to that of the bottom of the head and shoulders. The main difference lies in the volume. (ii) When the head-shoulders-bottom-neckline breaks, it is a real buy signal. Although the stock price has risen by a certain amount compared with the lowest point, the upward trend is only just beginning. Investors who still suggest buying should continue to chase. The method of measuring the least increase is to draw a vertical line from the lowest point of the head to intersect the neckline, and then start at the point where the right shoulder breaks through the neckline, and measure the same height upwards. The measured price is that the stock will rise. The smallest amplitude. In addition, when the neckline resistance breaks, there must be a surge in volume, otherwise it may be a wrong break. However, if the transaction gradually increases after the breakthrough, the pattern can also be confirmed. (iii) Generally speaking, the head and shoulders pattern is relatively flat, so it takes a longer time to complete. (iv) After breaking through the neckline, there may be a temporary fall back, but it should not fall below the line. If it falls below the neckline, or if the stock price falls back at the neckline level, the neckline resistance cannot be broken, and it falls below the head, this may be a failed head and shoulders pattern. (v) Head-and-shoulders bottom is one of the most predictive patterns. Once confirmed, the increase will mostly exceed the minimum increase. Reversal pattern-compound head and shoulders =+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+= 1. [ Figure A & B ] Shape analysis The compound head and shoulders type is the deformation trend of the head and shoulders (head and shoulders top or head and shoulders bottom), and its shape is very similar to the head and shoulders, except that the shoulder, head, or both appear more than once at the same time, roughly It can be divided into the following categories: (i) One-head and two-shoulder style: One head has two left and right shoulders of the same size, and the left and right shoulders are roughly balanced. More often is a pair of right shoulders. When the first right shoulder is formed, the stock price does not immediately fall below the neckline, but instead turns to rebound, but the rebound stops below the right shoulder height, and finally the stock price continues to follow the original The trend is down. (ii) One-head and multiple-shoulder style: The general head-and-shoulder style tends to be symmetrical, so when two left shoulders are formed, it is likely that one shoulder will also be formed. Except for the volume, the left and right half of the graph is almost identical. (iii) Long-headed and multi-shouldered pattern: During the formation of the head, the stock price has risen again and again, and it has risen to the same high level as last time before falling back down, forming two obvious heads. Trend. One thing must be noted: the volume of the second head tends to decrease compared to the first one. 2. Meaning market analysis significance complex head and shoulders patterns and common type of head and shoulders patterns as when appears at the bottom, it means that a longer-term rising market around the corner; if appear at the top, that the market will become more fall. In the initial stage of forming a compound head and shoulders pattern, the volume may be irregular, making the pattern difficult to identify, but after a while, it is easy to see that it is exactly the same as the head and shoulders pattern. Many people overestimate the expected rise (or fall) power of the compound head and shoulders pattern. In fact, the power of the compound head and shoulders pattern is often weaker than the ordinary head and shoulders pattern. When a mid-term trend appears, the compound head-and-shoulders pattern completes its minimum increase (or decline) and then no longer continues, while the increase (or decline) of the ordinary head-and-shoulders pattern is often the most measured big. 3. Key points (i) The minimum increase/decrease measurement method of the composite head and shoulders pattern is the same as that of the ordinary head and shoulders pattern. (ii) It is difficult to draw the neckline of the composite head-and-shoulders pattern, because each shoulder and the falling part of the head (the bottom of the composite head and shoulders is the rising part), not all fall on the same line. Therefore, the two most obvious short-term lows (compound head and shoulders are short-term rebound highs) should be connected to form a neckline. In addition, it may be connected to the neckline at the level where the price has fallen (or rebounded) the most times. Reversal pattern-single-day (double-day) reversal =+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+ 1. Pattern analysis [ Figure B ] When a stock continues to rise for a period of time, the stock price is suddenly and unusually pushed up on a certain trading day, but it is immediately under strong selling pressure, and all the gains of the day are completely reduced. If you fall more and close at the lowest price of the day (or close to the lowest price of the day), this trading day is called the top one-day reversal. Also when it fell, the stock price suddenly fell sharply on a certain trading day, but it was immediately supported by strong buying. All the declines of the day may be increased, and the highest price of the day (or close to the highest price of the day) Price) closes, this is the bottom one-day reversal. The two-day reversal is a deformation of this pattern. In the process of rising, the stock price of the stock rose sharply on a certain trading day and closed at the highest price of the day. However, after the stock price opened at yesterday’s closing price on the next day, the price continued to fall throughout the day. It is the closing of the lowest price of the previous day, and the performance of this trend is called the top two-day counter. Also when it fell, the stock price suddenly fell sharply on a certain trading day, but the following trading day completely recovered the lost ground and closed at the highest price of the day, which is the bottom two-day reversal. 2. Market implications Let us take the bottom one-day reversal as an example to explain the cause of this phenomenon. During the downward phase, as the stock price continued to fall, more and more investors were unable to bear greater losses, so they stopped loss and sold. Their selling further pushed down the stock price, and the lower price made them more eager to sell, which caused the price to fall sharply that day. When they finished selling, the selling pressure suddenly disappeared. Other investors tried to buy because of the lure of new low prices and immediately made profits. Therefore, more investors joined the ranks of buying. The order has been completely digested, so the buying order quickly pushed up the stock price, bringing back all the prices that fell that day. The market meaning of the one-day reversal pattern has at least two points: (i) The market temporarily peaks (when the top one-day reversal occurs) or bottoms (when the bottom one-day reversal occurs). The top one-day reversal usually occurs in the late period of a consumable rise; the bottom one-day reversal occurs at the end of the panic selling. (ii) This is not a signal of a long-term trend reversal. It usually appears at the top of the consolidation pattern, although it may also appear at the peak (or bottom) of the long-term trend. 3. Key points revealed (i) On the day of the single-day reversal, the transaction volume suddenly increased, and the price fluctuation range was very large, both of which were significantly larger than usual. If the trading volume is not high or the price volatility throughout the day is not large, the pattern cannot be confirmed. (ii) The volatility of the stock price within one or two hours may be greater than the volatility of the usual three or four trading days. When the top one-day reversal, the stock price opened a lot higher than the previous trading day, but the situation quickly reversed, the price quickly moved in the opposite direction, and the closing price of the last day was almost nothing compared to the previous trading day Variety. The bottom one-day reversal situation is exactly the opposite. (iii) Generally, 15 minutes before the market closes, there is a sudden increase in trading and the price quickly moves in the opposite direction. (iv) The volatility of the two-day reversal of the transaction and price is also huge. The top two-day reversal completely falls back to the previous trading day's gain on the second trading day; while the bottom two-day reversal fully returns to the previous trading day's decline. IF YOU LIKE MY ARTICLES, PLEASE SHOW YOUR LOVE TOWARDS MY ARTICLES BY GIVING LIKES AND COMMENTS. The analysis and discussion provided are for your education and entertainment only. If you have any concerns or questions, DM me.
CME_MINI:ES1!Education
by forextidings
Trade Like a Pirate: Ye needs the aRRR!!!!One of the amazing things about trading the financial markets is that it is the only industry where we “common folk” have the potential to EXPONENTIALLY grow our income day after day, week after week, year after year. All our lives, from opening up our first lemonade stand to landing our first job, we are taught to make LINEAR income: to exchange TIME for MONEY. We are told that we must work “X” amount of hours per day, and you can earn “Y” amount of money. If you want more money, you simply have to work longer and harder: work overtime, work a second job, or start a "side hustle", and though it is true you can increase your earning power through multiple income streams or by climbing the corporate ladder, you are always going to be limited to the amount of money you can make because there are only so many hours in a day that you can work. As Al Pacino said in Scarface, "Say hello to my little friend…” May I introduce to you, “R”, which stands for “Return”. There are two powerful paradigms that you, Dear Trader, have access to in our glorious financial markets, and our primary goal needs to be that we MAXIMIZE all we can from them. Paradigm Number One is a popular reason that we enter the fray: Instead of "working for our money” we trade so that we can "make our money work for us." Instead of clocking into a job where are are assigned duties where we will earn our daily bread, we take our “bread" and we assign it to a company, a commodity, or a currency in the stock, options, futures, and forex markets. We aim to hit “X” dollars per day or “Y” PIPs per day and call ourselves successful traders. Paradigm Number Two is where the magic is, and is the topic of this article: let's “kick it up a notch” as Emeril likes to say. Instead of trying to earn "so many dollars per day," let us instead set our sights on achieving a certain “R” per day. “R" is a measure of *return* based upon the amount of ‘risk’ we are willing to take on any trade. A good rule of thumb is that with any trade, you should never risk more than 1% of your account equity and you should never get into a trade without at *least* a 3-to-1 expectation of Reward if you are correct. This is known as the "reward-to-risk ratio”, or “R”. The working principle behind this is that we want to keep our risk *small* (i.e. you won’t blow up your account with a bad trade) and our reward *large*, where your winning trades will give you a minimum of three times what you are risking. In this scenario of 3:1 you don’t have to be the best of traders to be a profitable trader. Say you do 3 trades per day and you were a mediocre trader, where you are only batting one out of three. You can only have a 33% hit rate, only winning one of every 3 trades, and if that were the case you would win 3%, lose 1%, and lose 1%, netting 1 “R" for the day. (3-1-1 = 1) "1R? What good is that?" you might ask? Well here’s where we start talking about the *miracle* of compounding. On Day 1 with a $10,000 account you would look at risking $100 per trade to win $300. If you lost 2 and won 1, your account now has a value of $10,100. So on day 2 you aren’t risking $100, but $101. Every day you place 3 trades and win at least 1, your account grows not linearly, but *exponentially*. Each week you are making more and more money EVEN THOUGH YOU ARE DOING THE SAME AMOUNT OF WORK. By week 34 you are risking $500 to make $1,500. At the end of the year, (theoretically of course) that $10,000 could be worth over $120,000 - Your account has now grown in an order of *magnitude* from where you started. And all you are doing is placing 3 trades per day. Day in. Day out. Do it again for year 2 and see what you come up with! Every day you are doing the same amount of work, but every day you are generating an increasing amount of cashflow as the 1% you are risking grows each and every day. What does it take to get these kind of results? First, it takes a system of trading that you can follow that can give you at least a 1-in-3 success rate. Second, (and this is the hard part...) it’s all about YOU. Every day you don’t trade is anther day your net worth doesn’t grow… another day you will have to WAIT to achieve your dreams, whatever reason it was that you decided to become a trader. But once you start realizing the power of R you will NEVER want to trade time for money again: you will want to increase your net worth by 1R, 2R, 5R per day until you reach that Magic Number you need to say “I’m done… I’ve got all the money I need to live as long as I need to enjoy the lifestyle I desire.” TradingView makes it super-simple to put this philosophy into practice. Using the Long & Short Position tool, you can map out your trade, right-click the tool, select “Create Limit Order” and then change the “% Risk” field to 1%, 0.25%, or whatever your trading plan requires. (My personal “R” is one quarter of one percent, .025). For stock trading, the tool then automatically fills in the number of shares that will satisfy your risk percentage. For futures, it automatically calculates the number of contracts, and for Forex (most brilliantly!) it will automagically perform the necessary currency conversion and calculate the number of Units you can trade. THIS FEATURE ALONE is why I became a Premium subscriber to TradingView to trade through my Forex and Futures brokers - no more position sizer spreadsheets! If you are not using the Long and Short position tool to place your orders you are missing out on a great resource. I will leave a link to a TradingView blog post on how to use it below. A great exercise to get you excited about trading like a pirate is to create your own trading spreadsheet and calculate like a Pirate: Calculate your “aRRRRRRR” in multiple scenarios. There are 250 trading days per year give or take. What if you grew by 1R per day and you traded every day? What if you grew by 3R per day but you only traded 2 days per week? What if you were an options trader and you only traded on Mondays but you gained 7R per week? What if you threw in a home-run 20R trade every 3 weeks? (Yes, they do happen!) What’s your end retirement goal? $2 million? $7 million? When can you calculate that you will get there? By estimating your exponential growth you will be able to estimate the you will reach your life target. Although these scenarios are idealized (we’re not *always* going to have a “Green Candle Day”) we need to have a PLAN for our trading activity. Having a *plan* and matching that with a *vision* will give you a *passion* to DO what you need to do so you will GET what you want to get. As Louis Carrol said, “If you don’t know where you are going, any road will get you there.” And as Norman Vincent Peale said, "Shoot for the moon. Even if you miss, you'll land among the stars.” Make you plan, and work your plan. And having an exciting Vision will help you wake up early, stay up late, and stay on track. I hope this lesson helps you bring out your inner pirate… I’ll see you on the high seas of the financial markets! Trade Hard, and trade well… Till next time… -Anthony www.tradingview.com
Education
by ocaptain
54
Learn the "Gann Fan" in just 3 StepsGann theory has been widely used in various fields of finance. To learn to apply the Gann angle line, two problems need to be solved, namely, point selection and volatility. The question about volatility is in the Gann angle line. This article will mainly talk about the problem of selecting points. The selection point of the Gann angle line is generally selected from the important top and bottom. When selecting, you can judge which point to choose based on your actual operating experience. But depending on the long-term trend, you can choose the Gann angle line starting from zero, which will play a very important role in future predictions. We took NASDAQ as an example. In the chart, We have learned how to apply the Gann fan to a chart or the trend. It's complicated, but I tried to make it easy to understand and easy to apply. I have used only 2 to 3 things to perfectly apply the Gann Fan. Gann fan is useful to all the traders, It can be applied to all the time frame. In the investment process, Many investors like to buy bottoms. This is everyone's ultimate pursuit. That's because every market has important tops and bottoms. Analysis of this position is to make your own funds safer, with minimal risks and greater profits. These will use the Gann angle line confluence position. The force formed at the intersection of the rising angle line and the falling angle line can often form a reversal trend. In " Financial Analysis Trends ", the grades are divided as follows: 1×1 intersects with 1×1 1×2 intersects with 2×1 1×3 intersects with 3×1 1×4 and 4×1 intersect 1×1 intersects with 1×2 or 2×1 1×1 intersects with 1×3 or 3×1 1×1 intersects with 1×4 or 4×1 1×2 intersects with 1×4 or 4×1 Above is the information about the Gann fan for education purposes only.
CME_MINI:NQ1!Education
by forextidings
11
Are you "The Unexamined Trader"?Socrates famously said “The unexamined life is not worth living.” Why do we do what we do, why do we feel the way we feel about something, or what is our purpose in life? These questions brought about generation after generation of journals, diaries, and random thoughts from some of our greatest thinkers from Socrates himself, to Jonathan Edwards in early America, and maybe even yourself. If we look at the information, meditate on it, we *should* take future actions that will be purposeful and not live day-to-day mundane lives. We want lives of purpose, of meaning, and of growth and satisfaction. The same thing goes for our trades. So many of us trade willy-nilly, never looking back as to WHY we took a trade, what was the PURPOSE of the trade, what did we LEARN from that trade, and what are we NEVER going to do again or what will I CONTINUE to do in my future trades? Just as an unexamined life is not worth living, the unexamined trader should not be trading. “Why do I keep making the same mistakes?” “How come I let my emotions get the best of me?” “Why do I always seem to miss out on best trades with the monster returns?” Ask yourself, do you examine each and every one of your trades? At the end of each trading day, do you look for patterns of profit and signs of “The Suck” that draws your account down day after red-candle day? Can you look at the psychology, feel the emotion of why you planned a trade, why you got in a trade, how were you feeling during a trade, and why did you get out of a trade when you did? After that, did you ask “What did I learn?” “What will I continue to do?” and “What mistake will I eradicate from my mindset and NEVER do again?” There are three kinds of people: Those who make things happen, those who watch things happen, and those who ask “What happened?” The same goes for trading. If you never look back at the trades you took, especially the ones that were losers, you will consistently ask “What happened? Why am I always a loser?” If you watch things happen *plus* examine all the factors that went on during the process, your trading ability will grow inch by inch, yard by yard, which will turn you into one of those top traders who MAKE things happen. You will be able to *see* the money on the chart. And once you learn to identify patterns by analyzing trade after trade after trade, you find there are *limitless* opportunities to make money. (I paraphrased that last sentence from Mark Douglas, Trading in the Zone, which I highly recommend.) All that said, DO YOU JOURNAL? The trade journal is often the most overlooked tool in the trader toolbox. There are several ways to do so, and there are a plethora of traders on YouTube who share their ideas on how to journal your trades, and I recommend that you try several methods to find what’s right for you. The method I like is to screenshot of my trade and document the fool out of it right there on the chart. Then I “tell the story” via text boxes and arrows, and I number each one of them to walk myself through the story. Yes, each trade has a *story* to tell. I include the FACTS of the trade (the levels of Supply and Demand, the RSI, the trend, whatever factual decisions that went into the trade), the PSYCHOLOGY of the trade (how did I feel when price started going sideways right when price went to 2/3 towards my target?) and the results of the trade (what did I learn, what did I do great that I will continue to do, and what did I not do well that I should remove from my plan or my psychology). The proof is in the puddin’ as they say… The Covid lockdowns of early 2020 were the "best worst thing" to happen to my trading career. I was a Covid Casualty, as my employer shut down in part as a result of the Covid lockdown requirements. I was mad, upset, depressed, that I couldn’t go out to a coffee shop, bar, or cigar lounge. My friends all hunkered down in their domestic bunkers and wouldn’t come out. After 6 weeks of feeling sorry for myself I had had enough and decided to backtest / backtest / backtest and journal / journal / journal for 8+ hours per day for 30 days. I backtested the top 2 Futures contracts by volume in each category on the 15 minute chart. (2 metals, 2 indexes, 2 meats, 2 energies, etc.). 300-some-odd trades later, I felt like Neo when he woke up out of the Matrix and saw Cypher looking at all the green gobbledygook on the screens … instead of a nonsense of symbols Cypher told Neo that now he could see “Blondes, Brunettes, and Redheads” in the patterns. After 300 trades, simulating, backtesting, and journaling, I could “see” the money on the chart… the patterns of cashflow… the areas of value traded by the big institutional traders so I could follow them in their footsteps. I went from backtesting to forward testing, testing with live data in a simulated account using everything I had learned, and three weeks in a row I had a green week. And then I went live. Do this yourself and I promise, it will be like taking the Red Pill. You will never see the Matrix, you will never see the charts, in the same way. Instead of blondes, brunettes, and redheads, you will see opportunities, traps, and the footprints left by the market makers… And we can then *follow* in their footsteps. I leave you with a screenshot of one of my trades from last week… I hope it will inspire you to do the same. If you are not yet a consistent, profitable trader, learn to “see through the noise’ by journaling. If you want to see the scene I referenced from the Matrix, click here and enjoy! (And clicking the ‘Like’ and “Share” buttons wouldn’t hurt either if this article was edifying to you!) If you like it, I’ll write some more! If you want to show off your journaling prowess, leave a comment with a picture! Trade hard, trade well...
COMEX:GCZ2020Education
by ocaptain
19