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AUDIO/USDT Psychology. Accumulation. Distribution. Local fractalOne of many such cryptocurrencies whose price makes a huge profit from early accumulation. If you want to earn from a distance—buy and accumulate positions before the "promising crowd hype" or when working on similar instruments skillfully limit your potential losses. Coin Market: Audius AUDIO It's worth noting that a local fractal (the smart ones sell to the stupid ones) is forming in the distribution zone, which could potentially work (repeat). To sell it is necessary to make an "interest to earn" (to attract the less clever "traders"), in other words, waves to the growth of +500% on the secondary trends to attract attention. It is possible to make money on this, but with the condition of limiting potential losses. On such coins and at such values, it is rational to use stops, even at the "bottom" of the channel, if the price falls there. It's worth noting that you shouldn't trade marginally (including shorting) on such coins with such liquidity and price. The liquidity allows you to manipulate both ways making margin calls. Locally, this potential reversal zone looks as follows (the marker shows the direction of price movement) . Coin as an example. There are many of these. As a rule, people notice such coins when investors need to get rid of them rather than buy them. Greed and people's cloned mental behavior do the trick. New market entrants buy, old market entrants sell and then buy at a higher price (typical hamster behavior) or wait for even higher profits. Since people sometimes write to me asking me to consider such hamster coins when HYIP (the news "diarrhea" phase for selling promising coins) is going on, I decided to consider. Again, make money on this by "trading local price movements". One must work as a trader and not buy because of news background, promising super profits in distribution and expecting "cosmic targets". You need to limit your losses from the start and not be greedy. Coin as an example. The name of the crypto coin and the legend from the creators doesn't matter much. It's all the same and created for the same thing (earning from speculation). Always when trading an old/new instrument, you need to understand where the accumulation is, where the distribution is. And also, where the price is in the main trend.
by SpartaBTC
18
ACCUMULATION/DISTRIBUTION INDICATOR ✴️ Accumulation/Distribution (A/D) is a standard pack of technical analysis tools of many trading platforms. Today we will get to know this tool in detail and see how it works on Forex. This indicator can be especially interesting for supporters of the VSA method, as it takes into consideration trading volumes in its analysis. The author of the tool, world-known theorist and practitioner of technical analysis of stock markets Mark Chaikin, managed to describe the market phases with the help of volumes and price behavior: Accumulation - purchases of shares by investors and speculators; Distribution - sales of stocks at fixation of income. The forex market looks somewhat different: the accumulation or growth phase is interpreted by the A/D curve as an increase in the strength of the bulls, while the distribution or decline is perceived as an increase in the pressure of the bears' positions. ✴️ How indicator works Accumulation/Distribution is considered a technical tool for confirming or rejecting a trend. The growth or fall of prices on the chart must necessarily coincide with the direction of the indicator curve. All divergences are interpreted in the direction of A/D, i.e. any divergence is considered as a signal of the soon reversal of the currency pair. Indicator divergences from price are the most popular signals in technical analysis, but only A/D indicators have a high leading predictive accuracy. The indicator formula uses real volume indicators compared to price range changes, thanks to which Chaikin has achieved the best algorithmic display of VSA theory principles on the chart. ✴️ How to use the indicator in trading The most common strategy for applying Accumulation/Distribution is considered to be the oscillator method proposed by the author himself. It consists in finding the difference between two exponential moving averages with a period of 3 days and 10 days, taken from A/D values. Due to the settings of A/D to generate leading signals of trend change, the Chaikin oscillator (CHO) indicator has an important feature of signals synchronized with the current change in prices, despite the use of exponential averages, which traditionally lag due to averaging the result of calculations. The strategy of trading on the oscillator signals is to open positions: Long - the CHO curve crosses the zero line from bottom to top; Short - the CHO curve falls below the zero line. M. Chaikin suggested using divergence signals, divergence of tops and bottoms of the chart and oscillator trends as a trade filter, interpreting them in favor of CHO. The chart above shows how an uptrend is not confirmed by the next top of the curve, which means that we open a Short position at the zero line crossing from top to bottom. The situation is similar with a falling trend: if it is not confirmed by new CHO lows, we open a Long position after the indicator crosses the zero line. Positions are closed by reversal on the reverse signal, it is possible to insure the open order with a stop-loss moved to the breakeven zone. At the first opening of the trade, it is located at the nearest maximum or minimum, usually coinciding with the top CHO. Some traders who trade exclusively counter-trend divergence signals choose Accumulation/Distribution. As soon as a divergence is identified on the chart - a pending order is placed: Sell limit at the maximum not confirmed by the A/D indicator; Buy limit at the minimum at which the A/D divergence occurred. In other cases, the Accumulation/Distribution indicator is used as part of trading systems as an overbought/oversold oscillator filter. The picture below shows a simple MA + RSI strategy, where one of the conditions for a sell signal is the A/D divergence in the overbought zone. Having confirmed the trend reversal in this way, the trader waits for the prices to cross the MA and opens a Sell order on the market. ✴️ In conclusion Accumulation/Distribution is a sample of perfect synchronization of trading volume indicators with the dynamics of market quotes. The indicator is easy to interpret and use, it will not cause problems with its application even for a beginner, as it has no settings that would have to be selected. Like any other tool of the chanalysis, A/D indicators are better used as a part of trading systems or together with other developments of Mark Chaikin. They are published on the Chaikin Analytics website, repeatedly recognized as the best portal for quantitative analysis of financial markets.
Education
by DeGRAM
2
CONTRACTING AND EXPANDING TRIANGLESTriangle patterns are powerful technical indicators that provide traders with valuable insights into potential market trends and price movements. Among the various types of triangle patterns, horizontal triangles, contracting triangles, and expanding triangles are widely recognized for their reliability and effectiveness. Horizontal triangles, also known as symmetrical triangles, occur when the price consolidates between two converging trendlines. These trendlines are drawn by connecting a series of lower highs and higher lows. Horizontal triangles signify a period of indecision in the market, as buyers and sellers battle for control. There are two types of horizontal triangles: Contracting Triangles and Expanding Triangles. Contracting Triangle: Contracting triangles, also known as descending or ascending triangles, are characterized by converging trendlines with one trendline slanting upward or downward. These patterns indicate a gradual decrease in price volatility and suggest an imminent breakout. Characteristics: 1. Converging Trendlines: One trendline is drawn horizontally, acting as support or resistance, while the other trendline slants in the opposite direction. 2. Decreasing Range: The price range between the trendlines gradually narrows as the pattern progresses. 3. Breakout Anticipation: Traders expect a breakout in the direction opposite to the slant of the converging trendlines. Entry and Exit points 1. Entry Point: Wait for a confirmed breakout above the upper trendline (in descending triangles) or below the lower trendline (in ascending triangles) to enter a trade. 2. Stop-Loss Placement: Set a stop-loss order slightly outside the triangle pattern to mitigate potential losses if the breakout fails. 3. Target Price: Measure the height of the triangle pattern and project it in the direction of the breakout to determine a potential target price. Expanding Triangle: Expanding triangles, also known as broadening triangles, are characterized by diverging trendlines, indicating increased volatility and uncertainty in the market. These patterns often precede significant price reversals. Characteristics: 1. Diverging Trendlines: The upper and lower trendlines move in opposite directions, creating a widening pattern. 2. Increasing Range: The price range between the trendlines expands as the pattern develops, reflecting growing market volatility. 3. Breakout Anticipation: Traders anticipate a breakout in the direction opposite to the widening of the triangle pattern. Entry and Exit points 1. Entry Point: Wait for a confirmed breakout above the upper trendline or below the lower trendline to initiate a trade. 2. Stop-Loss Placement: Set a stop-loss order slightly outside the triangle pattern to limit potential losses if the breakout fails. 3. Target Price: Measure the height of the triangle pattern and project it in the direction of the breakout to determine a potential target price. Horizontal triangle patterns offer traders valuable insights into potential market trends and price movements. By understanding the characteristics and formation of these patterns, traders can effectively identify entry and exit points, set appropriate stop-loss orders, and determine target prices. However, it is essential to combine triangle patterns with other technical analysis tools and indicators for a comprehensive trading strategy. With practice and experience, traders can harness the power of triangle patterns to enhance their trading decisions.
Education
by UnknownUnicorn15614419
4
WHAT EXACTLY IS A TRADING EDGE?In the world of the forex market, having a trading edge can make all the difference between success and failure. A trading edge refers to a set of unique advantages or strategies that give us an increased probability of making profitable trades. It is the secret weapon that separates the winners from the losers in the highly competitive trading arena. In this post, we will explore some key elements that contribute to a trader's edge and how they can be effectively utilized. One of the crucial components of a trading edge is the ability to identify and execute high-probability setups. These setups are specific market conditions or patterns that have historically shown a higher likelihood of resulting in profitable trades. Traders with well-defined setups can quickly assess the market and take advantage of favorable opportunities. However, having a setup alone is not enough; we must develop a comprehensive strategy to guide our decision-making process. A trading strategy encompasses our overall approach to the market, including entry and exit rules, risk management parameters, and trade management techniques. A well-thought-out strategy provides a systematic framework to follow, reducing emotional decision-making and increasing consistency. To maximize our trading edge, we must pay attention to both pre-market and post-market analysis. Pre-market analysis involves evaluating market conditions and news events before the opening bell. This allows us to anticipate potential price movements and adjust our strategy accordingly. Post-market analysis helps review trades, identify strengths and weaknesses, and make adjustments for future trades. Keeping a trading journal is another essential tool for enhancing our trading edge. A journal serves as a record of all trades, including entry and exit points, reasons for entering the trade, and lessons learned. By regularly reviewing the journal, we can identify patterns in the decision-making process and refine our strategy accordingly. The market itself plays a significant role in our trading edge. Understanding the overall market sentiment, trends, and key levels of support and resistance can provide valuable insights for making informed trading decisions. Traders who stay informed about market dynamics are better equipped to adapt their strategies to changing conditions. The time of day and time frame chosen for trading can also contribute to our trading edge as well. Different trading strategies may work better during specific times of the day (sessions) or on particular time frames. Some traders prefer short-term intraday trades, while others focus on longer-term swing trades. Identifying the most suitable time frames and trading hours can significantly increase our chances of success. News events are another factor that can impact a trader's edge. Economic releases, corporate earnings announcements (for stock traders), and geopolitical developments can cause significant market volatility. Traders who stay updated on news events and understand their potential impact on the market can adjust their strategies accordingly or even capitalize on these events. Effective money management and risk management are vital aspects of maintaining a trading edge. Money management involves determining the appropriate position sizing and risk per trade, ensuring that losses are controlled and profits are maximized. Risk management techniques, such as setting stop-loss orders and trailing stops, help protect against excessive losses and preserve capital. Our first job is not to make a profit but to preserve our capital. Establishing a routine and following specific rituals can also contribute to our trading edge. A routine helps to maintain discipline and consistency in trading. Routines, such as reviewing charts, analyzing news events, and mentally preparing before each trading session, can help us get into the right mindset for making sound decisions. What do you do in the morning after waking up? Go straight to the chart? Meditate for 15 minutes? What are you going to do if a family incident occurs or if the power goes out? Creating a watchlist and trade plan is the final piece of the puzzle for enhancing our edge in the markets. A watchlist consists of potential trade opportunities that meet our setup criteria. By having a pre-defined list of stocks or forex pairs to focus on, we can avoid being overwhelmed by numerous options. A trade plan outlines the specific steps to be taken for each trade, including entry and exit points, risk management parameters, and profit targets. In conclusion, a trading edge is a combination of various elements that contribute to our success in the financial markets. By developing a set of high-probability setups, implementing a well-defined strategy, staying informed about market dynamics and news events, and effectively managing money and risks, we can gain a significant advantage in the markets. Maintaining a routine, following rituals, and having a watchlist—all of these become part of the trade plan that gives us an edge in the markets. And if we apply discipline and consistency to it, we have a much higher chance of being successful in trading. Traders, if you liked this educational post, give it a boost and write in the comments.
Education
by Lingrid
13
TradingView Masterclass: How To Use The Top ToolbarIn this guide, you’ll learn about all the different tools that are available to you on the chart. Specifically, we’ll be looking at the toolbars that are located at the top, bottom, left and right of the chart: To summarize the chart above, the breakdown looks like this: Top toolbar: Chart tools Left-side toolbar: Drawing tools Right-side toolbar: Community tools Bottom toolbar: Advanced tools Now, let’s dive into each one starting with the top toolbar where you’ll find many of the most important chart tools for all your research needs. Keep in mind that we’ve ordered each item below as if we are moving from the furthest point at the top left to the furthest point to the top right. Let’s begin! Symbol Search (Keyboard shortcut: type the ticker) Open the symbol search at the top left-hand corner to access over 100,000 global assets across equities, forex, crypto, futures, and more. You can find them by their ticker (e.g., type NVDA for NVIDIA Corporation) or by their description names (e.g., type the name Apple to find AAPL stock). It’s also possible to find your favorite symbols with partial searches, that is, to write part of the ticker or description name and then select the corresponding asset in the search results. If you want to filter by asset type, you can select one of the following: Stocks, Funds, Futures, Forex, Crypto, Indices, Bonds and Economy (economic indicators). Time Intervals (Keyboard shortcut: press ,) Select the time interval for the chart. For instance, say you’re looking at a candlestick chart and you choose a daily chart. That means each trading day will be represented by 1 candle. The most common time intervals are: 1m, 5m, 30m (intraday setups) 1h, 4h (swing trading setups) and 1D, 1W and 1M (long-term trading setups). Traders can create custom intervals as well by clicking on the Time Interval arrow and then selecting the specific parameters needed. Don’t forget to add it to your favorites if you want it to be featured in the Quick Access toolbar. Chart types We have more than 15 chart types available to analyze all price movements, including the new HLC area, Line with markers and Step line. Most traders prefer to use Bars, Candles and Area charts, but everyone has a different approach to markets. Be sure to find the chart type that fits your style. Indicators, Strategies, and Metrics (Keyboard shortcut: press /) Indicators, Strategies, and Metrics are designed to provide additional insight and information that may otherwise be difficult to see. We have over 200 technical and financial indicators while also supporting over 100,000 custom scripts coded by our community. The best way to get started here is to start exploring the Indicators, Strategies, and Metrics menu as soon as possible. Indicator Templates Here, you can save your custom indicator setups so that you can load them at any point in time. This tool is essential if you utilize different forms of analysis. For example, if you chart technicals and fundamentals, you can make two separate templates that can be loaded at any point depending on your need. Alert (Keyboard shortcut: Alt + A) Alerts are used to create custom price alerts. Instead of watching markets 24/7, go ahead and create an alert at a precise level and then wait for that alert to trigger. Let our alerts do the heavy lifting. They’re always watching markets for you. It is also possible to configure them different notifications so that you can be alerted through email, our free app or with a webhook. Bar Replay Bar Replay is a powerful, yet simple tool for backtesting. All experience levels can use Bar Replay for backtesting, practicing or learning about price history. To get started, click the Bar Replay button and then select a historical moment to rewind the chart backward to that point in time. Then, you can press play or pause, and retrade that moment to see how your strategy performs. Undo/Redo Scroll (Keyboard shortcut: Ctrl + Z / Ctrl + Y) Any changes made to the charts such as drawings or indicators can be deleted or recreated. This works just like a Word document you might create on Microsoft or Google. Use the keyboard shortcuts to quickly undo or redo specific actions. Multi-chart Layout If you have an Essential, Plus, Premium, or Ultimate plan, you can analyze multiple charts on your screen at the same time. Simply choose one of the available layouts from the menu to get started. You can also synchronize symbols, intervals, crosshairs, time and data ranges with the selected layout. Manage Layouts Create, rename and load all the layouts that you save. You can also share your layout and enable the autosave option, which is very handy so that all of your work is saved automatically. Managing your layouts is an essential part of your analytical process because it enables multiple different chart layouts to be accessed as quickly and easily as possible. Quick Search Need to find a function or tool on your chart? Open and use Quick Search to do that. The name of the tool is just as it can be used: quickly search for the things you need to edit, add or remove on your chart, and do it in a flash. Chart Settings This is where you can customize all of the fine details about your chart. The Chart Settings menu has everything from the chart color, to the gridlines and labels, the text of the scales, and more. Fullscreen Mode (Shift + F) When this is enabled, you will see only the chart. To exit Full screen mode, click ‘Esc’. Snapshot and Publish Here you can download your charts as images, copy links, share tweets, publish ideas, create live streaming video content, and comment on assets with our latest feature Minds. If you want to share your expert analysis or get feedback from others, you’ll surely want to learn how these social tools work. Go ahead and give it a try - join our community of traders. Thanks for reading and we hope this post helps all traders and investors. Whether you’re an experienced professional or someone just getting started, we plan to create more guides like this to ensure you know how to maximize the features on our platform. Next week, we’ll share part two of this series, and cover the drawing tools menu on the left-side of the chart. - Team TradingView
NASDAQ:NVDAEducation
by TradingView
40
A Simple Method Of Evaluating Trade Setups For Everyone - PART IThis is a simple example of how anyone can attempt to understand price action, trade setups, and determine if the current trade setup is valid for any trading action. Unless you have a trading system that helps you identify highly successful trade setups, most people struggle to find opportunities before they turn into breakout trends (up or down). Ideally, most traders want to get into trades before the big breakout, or breakdown, happens. This video, part I of an extended series, will help you learn to use simple tools to identify qualified trade setups from invalid setups. You can trade whatever you want. But remember, the trend is your friend, and learning to understand price theory, trends, channels, and support/resistance is all you need to make better decisions. Watch this video to see if it helps you. Over the next few weeks, I'll create more videos highlighting simple techniques to help you become a better trader. I'll review dozens of charts and highlight what works and what doesn't. Trading is a matter of managing risks while attempting to generate profits. This will be a great way for me to share my thoughts with all of you while trying to help you learn techniques to help you build solid skills. Hope you enjoy this first video.
NASDAQ:CSCOEducation
by BradMatheny
19
Learn To Trade Breakout/Flags More Efficiently - Part IIn my first tutorial, I tried to show how price channels can be used to identify and validate strong trade setups. Additionally, I attempted to show you how to identify better trade setups from what I consider invalid trade setups. Understanding and maintaining at least a 2:1 Reward-to-risk factor for any trade you consider taking is essential. Secondly, it is essential to understand and use proper allocation levels for trades. The simple way to understand allocation levels is to focus on the RISK amount. If your trade risks $5 per share and you can't afford to risk $500 on this trade, then you should NOT attempt to trade 100 shares of this stock. Set your risk level based on how much you intend to risk for the trade - nothing more. If you can only risk $250, then you would only trade 50 shares. If you can only risk $125, then you would only trade 25 shares. Learning to find and identify proper trade setups on Daily and Weekly charts is critical for success in the long run. I firmly believe price tells us everything we need to know about a chart, and indicators reflect price. As you continue to learn some of the techniques I use in various price chart setups, I hope you can refine your techniques to become better traders. I will likely create a PART II and PART III version of these types of advanced trade setups. Hope you enjoy.
AMEX:SSOEducation
by BradMatheny
CHECKLIST AS PART OF THE TRADING PLANHello, friends! We all know that it is important to have a trading plan and a profitable strategy, and, of course, to follow them. Now, the issue of discipline and following your own trading rules is where most of the problems start. However, there is one simple tool, literally a piece of paper, that can help you significantly improve your discipline in trading and, as a result, your key performance indicators and profits. With that simple tool being the checklist. In this article we will talk about why it is important, why it is important for a trader and how to properly compile and apply it. Why do traders plan their trades? Great traders and world-famous investors plan how, when and why they are investing. They realize that to achieve their ultimate goal, they need a map outlining the route of their trading plan that will help guide them to make the right decisions at the right time. A trading plan will provide you with structure and help you develop discipline in your trading actions. It will help you track your trading process, assign responsibility and measure your success. It will provide you with a framework to clearly visualize your current situation at any given time, and will help you identify your goals, outline your strategy, and determine your risks and returns. Whether you are an experienced trader or just a beginner, a well thought out trading plan is sort of the vehicle you need to get to your destination. Not only is it important to have your trading plan, but it is equally important to stick to it. Some of us easily stick to it, while others are in a constant struggle with their concept and the reality of carefully following the rules, they have defined in their strict trading plan. Do you really have a trading plan that you would follow by properly executing your market entries and exits? I'm a big advocate that we should all have a clear system to support our decision making that will help us remain objective and unbiased about when to buy and sell. However, should any good system that you should follow be so unambiguous? Should you trust it or doubt it? Your discipline and commitment to your trading plan can be measured, reviewed and improved. You can incorporate key performance indicators into your trading strategy and determine how closely you follow your rules and trading plan. The number of mistakes you make based on aspects such as noise, emotion or oversights can be counted and questioned - as a result, you can improve your trading plan. Identify your mistakes by comparing when your system gives you a buy or sell signal, when and why you actually executed it. If most of your trades are not executed according to your system or rules, you may be managing your positions intuitively rather than following the rules. This approach to trading lacks consistency and will negatively impact your returns in the long run. At the same time, there are cases where trading based on emotion will minimize losses and lock in profits, but only a narrow range of professional traders have intuitively mastered this ability on a consistent basis. In the end, for the remaining traders, emotion-based trading does not work because it cannot be replicated, and it only leads to insolvency and frustration. What may work today will not work tomorrow and always. In addition, this kind of trading increases stress and creates bad habits for repeated indecision. If your trading plan is solid most of the time, then it is worth sticking to it. Thus, it is important to make an effort to check the reliability and stability of your trading plan before you start trading or increase your risks. Traders often abandon their plans when they do not have enough personal experience to follow the plans and thus naturally lack confidence. What would make it easier to follow your plan? So how do you follow your plan? One of the things that gets in our way is, oddly enough, our brain. We think and guess too much. From this we can assume that if we reduce the activity of our wandering mind and leave only logic, efficiency will increase. A good way to accomplish this is to make and print out a checklist for entering and exiting trades. What is a checklist? A checklist contains a number of necessary items for any work. In our case for trading. The checklist is used to check if all the conditions are in line with your market entry strategy. You tick each of the conditions, if at least one of them is not fulfilled, do not enter the market. Everything is very simple. Suppose your strategy is based on two indicators combined with support/resistance levels, you trade intraday, one of these indicators is a trend indicator and the other is an oscillator. Then your checklist could look like this: 1) Now American / London session? - Yes/No 2) Is there an entry signal on the X indicator? - Yes/No 3) Is the Y indicator in agreement with the signal of the X indicator? - Yes/No 4) Does the signal have a level support? - Yes / No 4) Isn't there another level in the way of the proposed trade, which will prevent it from reaching the target? - Yes / No 5) Is there no important news coming out in the next half an hour? - Yes / No 6) Am I feeling well right now (i.e. I am not sick, depressed, tired)? - Yes / No You run through this list and mark the items with a pencil. If the answer to all questions is YES then enter the trade. If there is at least one NO do not enter. Everything is so simple and you do not need to think. By thinking I mean the wandering mind mode, which leads to unnecessary trades, early entries/exits, etc. The checklist removes these mental "what ifs", "I guess", "it seems", etc. All items on the checklist match - enter. If at least one item doesn't match - don't enter. How to Make a Checklist for Your Strategy How to make a checklist? Very simple. Take the rules of your strategy and reduce them to a list of items so that against each item you can put a check mark, if the conditions on the chart correspond to it, or answer one-word Yes / No. I also advise you to include a point about your current moral state, because it is not worth trading when you are tired, sick, depressed, etc. Conclusion A checklist is essentially a checklist of items from your trading strategy and trading plan. Its purpose is to reduce the influence of a "wandering mind" on your trading. Also, the checklist helps you not to forget about anything. Every time, before opening a trade, run through each point on your list: if even one item does not correspond to the current situation - do not enter the market. And may the profit be with you!
Education
by DeGRAM
3
A Simple Method Of Evaluating Trade Setups For Everyone - IIIMore examples of trade setups and how I use my custom algos to help identify stronger trade opportunities from other symbols. In this example, near the end of this video, I review the QLD chart (Daily) which provides a very clear example of major trend vs. intermediate trend. It is very important trader learn to see these opportunities from all aspects. Please pay very close attention to the details I'm sharing related to trading concepts and theory. I'm trying to teach all of you to see charts in a different way. See PRICE as the driver of trends, and counter-trends, as Fibonacci Price Theory describes. Basic Rules of Fibonacci Price Theory: 1. Price is ALWAYS seeking new highs or new lows - ALWAYS. 2. Failure to establish a new high means price will attempt to retest/break recent/new lows. 3. Ultimate HIGH/LOW levels are critical to understanding major trends vs. intermediate trends. 4. If you have trouble identifying a clear trend on a Daily chart, try Weekly or 240 min as an alternative. 5. If you still can't identify trend clearly, wait it out. Price will ALWAYS attempt to make new highs/lows. Sometimes, you have to be patient and wait for consolidation trends to work themselves out. My objective is to show you how I look at charts and identify trade opportunities. Simply put, I just trying to help you see and understand simple TA theories and to help you learn to identify great trade opportunities. Hope you enjoy.
AMEX:QLDEducation
by BradMatheny
A Simple Method Of Evaluating Trade Setups For Everyone - IIThis second video reinforces the concepts supporting my simple method of validating or invalidating trade setups using price channels, Fibonacci price theory, Stochastics, RSI, and simple price metrics. Anyone can do this - it just takes a little patience and learning. The trick to the ENTRY is to WAIT to see how price reacts near support/resistance. REJECTION is very important in terms of seeing price REJECT near the price channels and near support/resistance. Learn to use these techniques to help you learn to become a better trader. Hope you enjoy.
NYSE:FEducation
by BradMatheny
UNDERSTANDING DIVERGENCEWhat is divergence? Divergence in trading is one of the key tools used by us traders to analyze the market and make decisions about entering or exiting trades. It is based on observing differences between two different indicators such as price and oscillator. The advantage of using divergence in trading is that it allows us to identify possible market reversals in advance and take measures to protect positions. It can also be used to confirm other signals such as support and resistance levels or trend lines. However, it should be noted that divergence is not always a sufficient signal to enter or exit a trade. It should be confirmed by other tools and market analysis. It is also important to remember that divergence can be false and signal of a temporary deviation from the main market movement. We’ll explain it later below. How can we identify a divergence? We will use a bearish divergence as shown above as an example. A bearish divergence occurs when the price makes a new high, but the oscillator does not confirm this movement and makes a higher high. This indicates that the strength of buyers is weakening and a bearish trend is possible. We can use various oscillators such as RSI (Relative Strength Index), MACD (Moving Average Convergence/Divergence) or stochastic oscillator to identify bearish divergence. We have to observe the price movement and the oscillator values. If the price forms a new high but the oscillator forms a lower high, this could be a bearish divergence signal. However, for the divergence to work it must be at significant levels as mentioned earlier. We use market analysis techniques such as support and resistance, trend lines or trading volume if you trade stocks. This will help us to make sure the signal is reliable and make an informed trading decision. Types of divergences There are usually 2 types of divergence that can be used by traders to analyze the market: Trend Reversal Divergence and Trend Continuation Divergence . 1. Trend Reversal Divergence. This is the most common type of divergence that occurs when the price of an asset forms a new high or low and the oscillator does not confirm this movement and forms a lower high or higher low. That is, the price moves in one direction, but for example RSI in another direction as if hinting that this price movement does not have the strength that it had before. 2. Trend Continuation Divergence. This type of divergence occurs during a correction in a major trend. It can indicate that the primary trend may continue after the pullback is complete. If we have a market in moving against the main trend, this pullback should also have the strength/momentum that it should end. For example, if the price makes LL then HL, and RSI makes LL then another LL, it is a sign that the bearish movement (pullback) has no strength to move lower. There are several forms of divergence that can indicate different trend strength. Let's look at bearish divergence as an example: 1. Strong Divergence. In this case, the price forms a new high and the oscillator forms a much lower high. This is considered the most reliable bearish divergence signal and can indicate strong buyer weakness and the possible onset of a bearish trend. 2. Medium Divergence. Here the price barely makes a new high or turns into a double top and the oscillator on another hand makes a lower high. There is no super strong divergence in this case, it may indicate a less strong and weakening of the buyers and a possible trend shift. 3. Weak Divergence. In this case, the asset price forms a new high and the oscillator also forms a lower high, but the difference between the two is minimal. This can be a less reliable signal of a bearish divergence and in many cases, it can be a signal of trend strength. That is, we can expect a possible small pullback. Below you can see that UKOIL has made new highs but the RSI barely made lower high which confirms the strength of the trend. Example of hidden divergence In conclusion, divergence in trading is a powerful tool for analyzing the market. It allows traders to detect possible market reversals and make appropriate trading decisions. it is important to note that divergence can be a warning signal of a possible trend change, but it does not guarantee it. We should use additional tools and analysis methods to confirm the signal and make an informed trading decision.
Education
by Lingrid
15
PRICE ACTION: DOJI PATTERNWhat to do with Doji? Beginning forex traders, having come across the candlestick pattern Doji, get lost and start making rash actions. They close and open positions, change stop-loss, etc. Naturally, such rush leads to losses. So how to be with doji, what to do when such a candlestick appears on the chart? What is Doji? A doji is a candlestick that has equal or almost equal opening and closing prices. There should also be shadows on both sides of the candlestick that are about the same size. A doji indicates an agreement between buyers and sellers, or the absence of players, or a testing of a level. This formation can either be a reversal formation or it can lead to a continuation of the trend. We can say that the Doji is the yellow color of a traffic light. How to trade the Doji? The Doji candlestick pattern can be taken as a reversal signal only in one case. If the following conditions are met (simultaneously): • Doji was preceded by a strong, and clearly visible extended trend. • Before the doji there was a full-body candlestick of medium or large size (relative to the current chart) in the direction of the trend. • There is a confirmation, i.e. after the doji there was a candle opposite to the dominant trend. • Only if these three conditions are present, we can consider an entry against the trend after the doji appears. In all other cases, the doji is simply ignored. Stop Loss is placed behind the doji's extreme point, Take Profit at the nearest support/resistance level. Since the doji pattern is not strong, we do not take big targets. Important Points • It is highly desirable to have a support/resistance level as well as for any Price Action setup. • The doji maximum is a level, the break of which will mean that the trend is still in force. • Other timeframes should not be overlooked • On timeframes less than H1 the doji means NOTHING. • Always wait for confirmation • If the market is moving sideways, just ignore the doji. • Only the FIRST doji is important • Short shadows are desirable for a reversal UKOIL EURUSD Conclusion The Doji pattern is mostly just a confusing trading pattern. In 95% of cases, it should simply be ignored. You can only trade the Doji if you fulfill 3 conditions at the same time: a clear trend, a full-body, non-small candlestick in the direction of the trend before the Doji, and a confirming candlestick against the trend after the Doji.
Education
by DeGRAM
4
MYFXBOOK TRADER VERIFICATIONIn the world of forex trading, Myfxbook has become a popular platform for traders to share and analyze their trading results. However, as with any online platform, there is a risk of encountering fake or fraudulent accounts that mislead users. It is crucial to be able to spot these fake Myfxbook accounts to ensure credibility and make informed decisions when following or investing in traders' strategies. In this article, we will discuss how to identify potential fake accounts and ensure the validity and reliability of Myfxbook traders. 1. Unrealistic returns One of the first signs of a fake Myfxbook account is consistently high and unrealistic returns. While it is possible to achieve high profits in forex trading, one must be cautious when faced with accounts that consistently generate unrealistically high returns without any significant losses or drawdowns. Without a capital growth chart of a trader on Myfxbook, it is impossible to draw clear conclusions about his trading results. A capital growth chart allows you to see how a trader manages his trades and how his account rises or falls over time. Also look at the difference between gains and absolute gains, as these two parameters, can be confusing to most traders. It can be used by scammers to trick traders. Scammers can increase a small account by 100% and then deposit an additional $20,000 to make it appear as if all profits were made in a larger trading account. The main difference between the two is that: gains show growth from initial deposits, while absolute gains show growth from current and subsequent deposits. 2. Absence of fluctuations and drawdowns Genuine trading accounts usually show ups and downs, periods of profit and drawdowns. If a Myfxbook account shows a steady uptrend without any significant fluctuations or drawdowns, this may be an indication of a fake account. Real traders experience moments of losses and corrections that are reflected in their trading history. No trader, no matter how experienced, can completely avoid losing trades. A red flag is an account at Myfxbook that does not have a single losing trade or negative pips. Realistically, losses are part of trading and a true account should reflect both winning and losing trades. If the chart shows constant growth without natural drawdowns, it may indicate that the trader may be using for example a martingale system (or other martingale variants), which will eventually lead to a capital loss. It is important to pay attention to the stability of capital growth, the absence of sharp jumps or declines, as well as the general trend of growth. 3. Abnormal trading duration Pay attention to the duration of trades displayed on your Myfxbook account. If trades consistently last only a few seconds or minutes, this may indicate a scalping technique that can be difficult to execute profitably. Although some traders specialize in scalping, it is important to check the consistency and effectiveness of such strategies. Also note whether the Myfxbook account has been recently updated and whether there are signs of active trading. If the account is not active for a long time, it may indicate that most of the open trades were losing or the strategy is no longer working. But the trader can all show a graph of the yield curve before and deceive newbies. 4. Suspicious trading history Carefully examine the trading history presented on the Myfxbook account. Look for any irregular patterns or actions that seem too good to be true. Several winning trades in a row without a loss or a high volume of trades made within a short period can be potential signs of a fake account. A trader with a long history and consistent profits may be more reliable than someone with limited data. But since trading is about probability rather than certainty, past performance is no guarantee of future results. Note whether a backtest or a real trading strategy has been downloaded. Many traders may upload a backtest to show the amazing results of a trading strategy in order to lure new traders. 5. Verification through Myfxbook If strategies are to be made public or used for business and advisory purposes, they must be verified. Without verification, the user may not know if the strategy is reliable or if it is a scam. One of the most reliable ways to verify the reliability of a Myfxbook account is through the Verified Track Record feature. It requires account verification with partner brokers and adds an extra layer of verification of the account and trading results. If most of the information is hidden it is 100% scam, as a common method used by scammers is the martingale trading strategy. It involves taking a risk with a huge transaction size that covers all costs and losses for a certain period of time, that is, if it succeeds. And scammers have to hide it. As forex trading continues to gain popularity, it's important to be careful and vigilant when encountering traders on platforms like Myfxbook. Identifying fake or fraudulent accounts is necessary to protect yourself from potential fraudulent activities and misrepresentation. By looking for signs of unrealistic returns, analyzing fluctuations and drawdowns, verifying them with Myfxbook's verification feature and being cautious about suspicious trading histories, you can make sure that the Myfxbook accounts you follow or invest in are reliable and trustworthy. Remember, doing thorough research and due diligence is key to making informed decisions in the forex market.
Education
by UnknownUnicorn15614419
8
HIGHER HIGH AND LOWER LOW STRATEGYHello, fellow forex traders! Today we are going to learn about a strategy called HIGHER HIGH AND LOWER LOW. It is quite possible that the strategy is known to you under a different name, as it belongs to the classic ones. The strategy is based on Price Action, i.e. on the price movement and no indicators are required. Nevertheless, indicators can be used for better clarity and to simplify the search for setups. What is the essence of this strategy? In any strategy there must be some basis on which it should work. When creating your own strategy, you also need such a foundation, for example, some inefficiency of the market, or its regularity, and on this basis, you can build points for entry-exit and correction of the position. First of all, let's remember the classical definition of a trend. An uptrend is a series of successively rising highs and rising lows. That is, each high (H) is higher than the previous one and each low (L) is higher than the previous one. The opposite is true with a downtrend. In a downtrend, the highs consecutively decline and the lows also decline. Perhaps you have already guessed what kind of structure we will be looking for on the chart. That is, what is the very first sign that will allow us to understand when we should pay attention to the market and wait for a possible entry point. Let's assume that we have an uptrend. We have point H, followed by a correction at point L. This is followed by a higher high, labeled in this strategy as HH (Higher High). Then, as soon as we see a break in the trend structure, i.e. a lower low LL (Lower Low), we get ready to look for a sell point. Similarly, with the downtrend. First, we determine the low L, then the high on the correction H, the lower low LL and finally the higher high HH. This means that the structure of the downtrend is broken. We pay attention to this situation and wait for a possible entry point to buy. Let's start by considering a sell entry. We enter on the pullback to point H. This structure works because there are big players in the market, and big players need liquidity. That is, in order to make a large sale they need a large number of buy orders to " dump" the currency. The zone between H and HH is a zone of high liquidity. Accordingly, there are many people willing to buy here, as they hope for the continuation of the uptrend. You can enter with a pending order; in which case the sequence is as follows. We wait for the formation of the LL point (trend break). Then set Sell Limit at level H. As in the case of selling, in the reverse pattern we have a zone of increased liquidity between points L and LL. There are many people who want to sell here, those who hope for the continuation of the downtrend. Someone bought too early, someone panics and closes positions, also many people may have stop-losses in this zone. Accordingly, it is a good opportunity for a big player to buy, and we enter the market together with it. We are waiting for the formation of the HH point. Then set Buy Limit at the level of L. Risk management We place the stop loss behind the extreme point of the high liquidity zone. HH - in case of sells, LL - in case of buys. Stop-loss is placed at the points where we can say for sure that we are wrong. We have two targets. For sells, the first target is at the L level, the second at LL. For buying, on the contrary, we take the first profit from H, the second from HH. If the distance between the target 1 and 2 is too small, it makes sense to take only the first target. In other cases, you can take the average value between the two points to set take profit. Some examples Let's look at an example. Here we see the formation of a low, correction H and a lower low - LL. Then the price draws a zigzag without going beyond the boundaries of the points we have marked. For clarity, don't forget to draw levels. You can ignore the zigzags inside the levels. When there is a higher maximum - HH, that is, the structure of the downtrend is broken, we start looking for buys. In this case, we need a pullback to the L point. After the formation of the HH point, we set Buy Limit at the L level and wait. In this case, the price reached our order and then went up. The entry point can be quite far away from the set-up that was formed. In this case, we had an upward trend. First we mark the first high, then the low and the higher high - HH. Then, following the ZigZag clues, we find the lower low LL, which is quite far away. The entry point for selling will be located at the H level. At this level we are looking to sell. At first glance, the distance is large. Accordingly, the price subsequently bounces from the level marked by us. We place the stop-loss slightly above the extreme point - HH. In this case, the take/stop ratio is very good. As you may have already guessed, this strategy combines the theory of support/resistance levels. Candlesticks with large shadows in the rebound zone show how the big players gained positions by destroying the buys. Accordingly, the price then went down, reaching our take profit. Summary Try not to look for setups in price chaos that are not there. Trade only the right setups with a good ratio of profit to risk. This method I find great for reversal at supply and demand zones. Also, this strategy can be used in combination with other strategies. In general, it is a good foundation for your development as a trader.
Education
by Lingrid
11
PRICE ACTION: PIN BARSThe pinbar setup is a popular candlestick pattern that is widely used by traders in the forex market. It consists of a single candlestick with a small body and a long shadow, which resembles a pin. This pattern often indicates a potential reversal or continuation of a trend. In this post, we will discuss the best methods to trade the pinbar setup at key levels, trendlines, moving averages, and Fibonacci levels, accompanied by examples for better understanding. ✴️ 1. Key Levels: Key levels are certain prices at which strong support or resistance is expected. They can be used to determine entry and exit points for trades. For example, if the price reaches a support level and forms a pinbar, it can be a buy entry signal. On the other hand, if the price reaches a resistance level and forms a pinbar, it could be a signal to enter a sell trade. Psychological levels and open interest levels can also be used to identify key levels. ✴️ 2. Trend Lines: Trend lines are used to determine the direction of a trend. They can be drawn by connecting two or more high or low points on a chart. An uptrend is characterized by consecutive high and low points, a downtrend is characterized by consecutive low and high points, and a sideways trend is characterized by horizontal lines. Pin bars can be used to confirm or deviate from trend lines. For example, if price reaches a trend line and forms a pinbar, this can be a signal to enter a trade in the direction of the trend. ✴️ 3. Moving averages: Moving averages are used to determine trend direction and the smoothness of price movements. A simple moving average (SMA) is calculated by summing the prices for a certain period and dividing by the number of periods. An exponential moving average (EMA) pays more attention to more recent data. Pinbars can be used in conjunction with moving averages to confirm or deviate from a trend. For example, if price crosses a moving average from top to bottom and forms a pinbar, this can be a signal to enter a sell. ✴️ 4. Fibonacci Levels: Fibonacci levels are horizontal lines that are used to determine support and resistance levels. They are calculated based on Fibonacci numerical sequences and can be used to identify possible price reversal points. For example, if the price reaches a Fibonacci level and forms a pinbar, this can be a signal to enter a trade. Different Fibonacci levels such as 38.2%, 50% and 61.8% can be used to identify possible support and resistance levels. ✴️ Conclusion Pinbar forex trading using key levels, trendlines, moving averages and Fibonacci levels can be an effective method for identifying entry and exit points for trades. It is important to remember that no single indicator or strategy is a guarantee of success, so a strict approach to risk management and the use of additional tools and analysis to confirm pinbar signals is essential. I hope this post will help you develop your own strategy for trading pinbars in the Forex market.
Education
by DeGRAM
4
ELLIOTT WAVE CORRECTIVE PATTERNS Elliott Wave corrective movements are deviations from the main trend and serve to correct errors or imperfections that occurred during the formation of an impulse movement. These corrective movements are defined by complex wave structures that can be repeated in different variations and combinations. The wave structure consists of two types of movements - impulsive and corrective. An impulsive movement is directed in the main direction of the trend, while a corrective movement is the opposite of this direction. Correction waves are the inverse of impulse waves, and they are executed as three-type structures. Elliott described 21 correction patterns of ABC type. There are three main types of Elliott Wave corrective movements. All of them are quite simple and consist of only three patterns. - Zig Zag - Sideways or flat - Triangles 1. Zigzag Corrections: This type of corrective movement consists of three waves, with the second wave diverging in the opposite direction from the trend in the first wave and the third wave returning to the main trend. Zigzag corrections can be either upward or downward. 2. Non-wave-like (Flat) Corrections: In this case, the corrective movement is a sideways movement in which the second wave deviates from the main trend and the third wave returns to it. Non-Waveform corrections can be flat or complex, depending on the structure and duration. 3. Triangular (Triangle) Corrections: In this case, the corrective movement is a triangle formation, which consists of five small waves connected to each other by triangle diagonals. Each wave of a triangle correction can be impulsive or corrective in nature. Elliott Wave corrective movements can be combined and repeated in different ways to form complex and interesting wave structures. Studying and understanding these corrective movements allows traders and investors to predict future price movements and make appropriate market decisions. Corrective movements of Elliot waves are important for analyzing past, current and upcoming market cycles. They allow to determine possible entry and exit points of trades. However, it is worth remembering that financial markets are complex and subject to various factors, so the analysis should be done with caution and taking into account other factors and analysis tools.
Education
by Lingrid
4
IMPORTANCE OF COMBINING TIMEFRAMESA trader usually works on a strategy that is strictly tied to one timeframe. This timeframe is used to determine the trend direction and search for strategy signals. Alexander Elder proposed to perform additional analysis and confirm the trend movement on two more timeframes of higher order. This technique was first described in his work, called "Elder's Three Screens". Combining timeframes was designed to: • Increase the winrate • Improve the accuracy of entries Alexander Elder suggested adding one more chart with a higher timeframe to the trading timeframe to get an overall picture of the trend and determine its direction. And to look for entry points into trades on the third screen with the smallest timeframe. Theoretically, the trend matching on two higher timeframes increases the percentage of profitable trades. Moving the strategy algorithm to a smaller timeframe reduces the size of stop-loss and recorded losses. For example, a trader analyzes the general trend on a daily chart and determines its direction. Let's assume that the currency pair is growing the price is above the moving average MA (200). According to the rules of the strategy, it is necessary to go to the 4-hour chart and wait for the confirmation of the trend on this timeframe. The currency pair price should also rise above the MA (200). After the combination of trends on D1 and H4, it is necessary to wait for a similar signal on M15 or M5. Then it will be possible to look for an entry point into a trade to buy according to the strategy. The practical results of combining timeframes according to Elder's strategy are of little value. Even if the general trend on the daily chart is upward, different price movements can occur on a lower timeframe, for example, on a 15-minute or 5-minute chart. Despite the global trend of the oldest American stock index, only 50% of days over the last 30 years closed above the closing price of the previous day. It turns out that the ever-growing Dow index has an even distribution of positive and negative days. In the Forex market, in general, we can also expect a roughly even distribution, especially if we take into account the range nature of the currency market, i.e. the accuracy of the Elder filter from the higher timeframes works 50/50. Therefore, relying only on the trend of the higher timeframe is not recommended for intraday traders (day traders). However, if this kind of signal filtering gives you psychological confidence, you can use this tactic. Psychology and emotional comfort are an important component of trading. ✴️ How To Reduce Stop-loss And Increase The Efficiency Of Trading Strategy By Combining Timeframes There is another approach of combining timeframes in trading, which is found in the works of Tom Dante. This tactic is based on Dante's work and allows you to combine several timeframes using structural analysis of price movement. Instead of simply filtering signals, the trader looks for matching patterns on different timeframes, which can indicate more reliable entry points into the trade. Increasing winrate and reducing stop-losses can be achieved by using a strategy that works equally well on different timeframes. For example, Price Action is ideal for these requirements. As in the classic Elder strategy, everything starts with analyzing the general trend on the D1 chart. Only the trader is busy looking for support/resistance levels, key candlestick formations and other Price Action signals. In the example below, there is a level breakout on the D1 chart. If the trader decides to go short, the stop loss should be behind the candlestick high or at the nearest resistance level from the broken line. Then you can move to the 4-hour chart and look for structural support or resistance levels that can confirm the overall trend. And on the H1 chart, you can look for confirmations to enter the trade in the form of candlestick formations or other technical indicators. This way, you combine information from multiple timeframes to more accurately determine when to enter the market. It is not recommended to go below the hourly chart if D1 has become the starting point for combining timeframes. A trader can also simplify the combination strategy to two timeframes, for example, D1 and H1. In the example above, the H1 chart shows a bounce from a broken level, which can be used as a signal to open a short. In this case, the stop loss will be just above the local maximum of the hour candles, which is much smaller than the stop loss on D1. ✴️ Combining the D1 timeframe with H1 enables the trader to: • Reduce stop loss and increase the order lot; • Increase profit by using take profit to close the position, which is set on the D1 chart. Stop Loss on H1 allows you to increase the profit/risk ratio by times when trading on D1. Without combining timeframes, risk and profit would be 1 to 1 or at least 2 to 1. ✴️ Let's summarize the simple rules of structural analysis of the strategy of combined timeframes: 1. Find a pattern on the D1 timeframe 2. Move to H4/H1 and wait for a signal using the same strategy 3. Open a trade according to the rules of the strategy on H4/H1 4. Set Stop Loss on H4/H1 5. Set take profit on D1 ✴️ Conclusion It is worth noting that the proposed strategy will require additional Price Action skills. Searching for patterns requires great attention and patience to wait for confirming signals on each timeframe. However, this approach can improve the accuracy of entries and reduce the probability of false signals. Risk management is the most important aspect of timeframe combinations. When using lower timeframes, you can determine more accurate stop loss and take profit levels based on the higher timeframes. This helps to reduce risk and increase potential profits. Like every new strategy, the idea of combining structural market analysis requires practice on a demo account to find more appropriate trading systems and to practice correlating signals.
Education
by DeGRAM
5
How to create trading strategy and use the Omega ToolkitThe Omega Toolkit has been designed and created in order to make traders better understand and respect their trading style. I have created this toolkit as a former technical financial analyst (certified by S.I.A.T.) to give access to anyone at a low cost to highly effective trading tools that can be used to create a lot of trading strategies that suit any style of trading. Each strategy that you know or ever will apply to the markets is a combination of different variables, commonly known under the name “checklist”. Unfortunately, many traders use in their trading strategy a lot of different tools that answer the same question or analyze the same data, that’s why I have created the Omega Toolkit, to classify and organize the best tools for every checklist point. These variables can be categorized into 4 main points: 1. The first one is the Trend parameter, this point answers the question “buy or sell”, long story short it provides the direction of the trade you’re looking to. Usually, for this point, many traders like to use the 200 period moving average, others like to use the market structure, and others use more advanced tools like the volume profile, but at the end of the day, they all answer the same question and use multiple tools that answer to the same question can lead to an analysis that overvalues some price data and undervalues some others. Many traders like to use also fundamental analysis to determine the trend parameter, with macroeconomics data or another type of analysis just like the seasonality. 2. The second one is the Location point, this variable aims to make the trader buy low and sell high, and the main purpose is to provide the risk-to-reward asymmetry. One general rule to follow regarding this aspect is to decide with attention to your entry and exit points. To decide that, keep in mind that you want the price to have the most amount of resistance (or support) between your entry point and your stop loss, while you want the price to have a “clear path” from your entry price level until your previously decided to take profit. To answer this point, many traders like to use the standard Fibonacci retracement or the Smart money concepts technique, but in reality, any tool or analysis can be used as long as it provides a clear price level that can be used to determine whenever the price is in a discount zone, in a premium zone or in his fair price value. 3. The third one is the Signal point, which is used to determine the exact moment to enter the trade you already have programmed. This point is very important because it gives us confirmation of the fact that the short-term trend is aligned with the long-term trend. An essential tip about this is that no strategy is effective on the market if the strategy starts from the signal or is based on that. 4. The fourth and last point is the Filter, which aims to increase the win rate of the strategy by giving an additional confirmation to the trade you have found thanks to the Trend and the Location parameters. An important information about this variable is that in order to be effective it should analyze a different kind of data compared to the other three parameters. For example, if you have chosen to utilize all only-price variables as analysis for the Trend, Location, and Signal points, you should use something different just like an indicator that analyzes volume, momentum, volatility, or strength in his data. In order to have a good strategy your checklist should have at least one point for every categorization. Having more than one can lead to an increase in performance and also a huge decrease in the overall trade number. Here, with the Omega Tools, I provide 3 tools that can be used to create some effective trading strategies using both statistics and logic. The Omega Toolkit is created to work all together, even if you don’t want to use all three tools, your strategy in order to be optimal has to cover the other previously described points. With the Omega Trend, I provide an indicator that contains a lot of features both for the Trend parameter and the Signal one. The overlay indicator can be used for assistance both in the Trend and Location points, meanwhile, the candle coloring aim to be the ultimate indication of the trend direction, including in the formula a lot of different indicators that analyze both the price, the volume, and other variables. The signal, displayed as small points over or below the candle is a great tool to find the optimal entry and exit points once found the trade you want to take. The Omega Analyst contains many tools chosen to be highly effective to determine the Location point (even if some of them can be used also as a Trend point). To have the best risk-to-reward ratio, you should be looking for a below-average or discount situation if you’re looking for a buy, and an above-average or premium situation if you’re looking to sell the asset. The Omega Oscillator is the last tool of the Omega Toolkit and contains various tools that can be used mainly as filters for your trade, but you can also use it as a Signal or Location point. The oscillator you want to use, and the condition that the oscillator should have in order to verify the trade, should be determined previously and precisely in order to not make mistakes and have an objective analysis. Summing all what has been said, the procedure to find a trade can go like this: 1. You find the direction of the trade thanks to the Trend point and your general technical analysis or smart money concepts analysis. 2. You identify the main level or zone to enter into the position 3. Once the price is in the zone or touched the level and respected the condition you previously identified, you wait for the signal. 4. Once the signal has been plotted (at candle closed) you verify the trade with your Filter parameter previously chosen. 5. If confirmed, you chose your entry point (or enter with a market order) and your exit points (both take profit and stop loss) that can be either fixed or dynamic and trailing. The Omega Toolkit has a very big feature, customizability: thanks to this, you can (and should) adapt the parameters of the indicators to the market conditions. These conditions are the kind of asset you’re trading, the market condition, the time frame, and even the period of the year you’re currently in. It’s not the tool that you chose to use that creates your strategy, it’s the way to use them in order to determine if you should enter the market or not; many tools can be used for different purposes, for example, you could use the seasonality of an asset both for the trend parameter to determine the direction or as a filter to increase the win rate, you could use the price relation to a moving average to analyze the direction of the trend or to identify the retracement levels, and I could continue for almost any tools available for technical analysis. If you have any suggestions or anything you’d like to say, just leave a comment down here and we’ll talk about it!
Education
by OmegaTools
3
TRADING IN PRICE CHANNELSPrice spends most of its time in trading ranges. On the chart, this results in the formation of a horizontal, ascending or descending trading channel. Trading channels are one of the most common and important chart patterns. Indeed, in most cases, price tends to consolidate in a limited range, which is a manifestation of buying activity by market participants. What is a Trading Channel? A trading channel, whether upward or downward, is simply the range in which price moves. It creates areas of resistance and support in the market where buy and sell orders cause a rebound to the center of the range itself. Building a trading channel is very simple. Just draw a trend line, then project a parallel one. Once a trading channel is formed, you can enter the market whenever price touches one of the channel boundaries. This approach works best inside horizontal trading channels. If you are in an ascending or descending trading channel, I suggest you only trade in the direction of the main trend. How to use trading channels to determine the best entry points into the market? Let's discuss the subtleties of this trading style. We will talk about how to build a trading channel, what are the pros and cons of trading in these channels. The Idea of Trading in Price Channels The price of a pair on the currency market fluctuates within a certain corridor, which can be represented as a channel. Moving price in the channel is the main principle on which all channel trading strategies are built. Trading in the price channel brings profit in case of a clear definition of the channel in which the price moves. For this purpose, a certain timeframe is taken, and on it the levels, to which the price reached but did not cross them, are determined. These levels are the upper and lower boundaries of the corridor. And herein lies the main problem for many traders - the correct building of the price channel. In fact, a regular chart building is enough for trading, and a regular chart corridor is already the simplest trading strategy that does not require additional tools for confirmation. Nevertheless, many traders find it necessary to use a variety of ways to confirm the signal. These can be candlestick patterns, various level indicators, divergences, etc. Two Situations Are Considered In Trading In Channels: price has broken the channel border; price did not break the channel border. At the same time, each strategy has its own breakout criteria and its own rules for opening positions. In addition, the type of channel used for trading plays a very important role. The most common types of channels are ascending and descending channels. The Advantages Of Including Channels In Your Trading Arsenal: - low trading risks; - simple rules, understanding of which will not be a problem for a beginner; - high profitability. However, like any other method, the trading in the channels requires clear adherence to the rules of opening positions and compliance with money management. There Are A Number Of Key Points To Keep In Mind When Trading In Channels: - the best timeframes for trading are M30 and higher; - positions are opened at bounce from the borders inside the channel; - the channel is built in the direction of the trend: upward - by two minimums and one maximum, downward - vice versa; - a position is opened only after the price reaches the channel boundary; - it is allowed to place a pending order outside the channel in case of its breakout. In many cases, the effectiveness of trading signals in the trading channels depends on the stability of the channel. If there are signs of a trend change or the end of the channel, it is better not to trade. If the price breaks the channel border and goes outside of it, in most cases, the price movement will be approximately equal to the width of the previous corridor. This gives the trader an opportunity to plan and open a trade in time. The efficiency of trading in channels increases if you use oscillators, with the help of which you can determine price reversals. As well as the validity of the breakdown of the corridor boundaries. Some examples: One recent example is gold. Gold is in a descending channel. And it was possible to sell when the price reached the upper border of the descending channel. The upper border of the channel coincided with resistance, which was a double confirmation. Let's also focus on the oil. The price has formed a beautiful channel. The price bounced from round levels and from the channel border. In the article about demand and supply I mentioned that the price is at the supply zone and it can bounce from the zone and the price did go down breaking the ascending channel which can be a sign of a trend reversal. On the New Zealand dollar, we had two beautiful selling opportunities. Here too, as in gold, the channel border coincides with resistance, which gives additional confidence in the trade.
Education
by Lingrid
11
ORDER FLOW SIMPLIFIED✴️ What is Order flow in trading? In brief, it is the flow of trades of a major player. Order flow is searched for after liquidity has been captured or if the price enters the area of interest. Price is fractal and therefore the same areas of interest can be applied to different timeframes. The Order Flow trading method allows you to enter a trade even if you missed the original entry into the position. ✴️ How order flow is applied in trading A large market participant is able to create a zone of interest in any market, and when the price goes to this zone - it places a large flow of buy and sell orders to move the price in one or another desired direction. When the price reaches the area of interest, the large participant will start putting pressure with orders. For example, if the price comes to the sell zone of interest, a large player may start spamming sell orders, which will rebalance the orders and force the price to move in the desired direction. A trader who takes order flow into account is able to determine the direction in which the large player is pouring orders. This will allow you to enter trades in the direction of the current pressure of the large market participant, and reduce your risks. When the bearish order flow is working, the minimums are being reprinted. The situation is the opposite with a bullish order flow. ✴️ How the order flow works - So, the order flow is a manipulation of a large market participant for a position set and price movement in the desired direction. That is, we distinguish the entire momentum without pullbacks as order flow. - Very often a large player holds two trades simultaneously, one of which is a deceptive position in order to gather liquidity from the crowd. - It is difficult to enter from Order Flow point by point; it is much more effective to find an order block. - Price most often tests the Order Flow zone. - The Order Flow zone works only for one touch, you should remember that! You should not trade Order Flow when re-entering it, the efficiency will be much lower. - On higher timeframes, Order Flow looks like an order block. ✴️ How the order flow is formed To find a sell order flow, you need to check the following signs: - A structure has broken down, or there has been a liquidity grab - Liquidity has been taken - A new low has been formed, below the previous low. Confirmation of bearish order flow comes when the price touches the sell zone of interest, confirming the interest of a major market participant. Here's what to look out for to find bullish order flow: - The downward structure has been broken - Liquidity has been taken - A higher price high has been formed. In the case of a bearish confirmation, everything is exactly the same as with a bullish confirmation, only it is the other way around. When the price starts to come back after an unclosed trade of a big player and touches the bullish interest zone, leaving the order flow zone, this is the entry point. ✴️ Bearish Order Flow When a bearish order flow of a major market participant is functioning the price falls below the previous lows. During the correction we will be able to catch the entry point to buy, at the moment of liquidity refresh, when the price will recover to the orders of a large player. The price follows liquidity. Of course, it is possible that the structure will break and there will be no new lows, but statistically most often we will see movement in the past direction of the downtrend. Our goal with bearish order flow is to open smart short positions. Ideally, we should wait for a liquidity update and a test of the zone of interest. Just don't put stops too close, because close stops are often a delicious target for large market players. It is more reasonable to put a stop where the whole downtrend pattern will be broken for sure. A stop that is too close is likely to be hit by the price and you will take a loss. ✴️ Bullish Order Flow Bullish order flow occurs when asset prices rise and exceed previous highs. During correction periods, price will take liquidity off sellers. Our objective here is to catch the correction to the zone of interest to enter long positions as carefully as possible. Our priority is long trades after the test of the zone of interest and taking out the sellers' liquidity. The main thing, as in the previous case, is not to put a stop too close. Remember that stops right behind the zone will be a target for big players. According to market mechanics, large market participants need liquidity to fill their positions to one side or the other. If you want to enter a trade very precisely - it is worth paying attention to the zone of interest itself, for example, an imbalance or a order block. ✴️ Conclusions Order Flow is the traces of a major player on the price charts. When we retest from the money flow zone, we are waiting for a pullback from it in the direction of the major trend. It is more reasonable to enter pointwise from the order blocks because it is very difficult to put a short stop on the Order Flow zone and a long stop is not so favorable for us in the long term. Also, a good entry point can be an imbalance to buy or sell in imbalance points concentrated large aggregate demand or supply. The order flow in this situation will act as the main complementary indicator for entering a position.
Education
by DeGRAM
9
DOUBLE BOTTOM FORMATIONThis model is a W-shaped pattern. It is formed at the "bottom" of the market. It serves as a reversal model. When identifying a double bottom formation, look for price patterns that occur when a price has reached a support level twice and failed to break through it. For example, consider a chart with two distinct lows, with a trough in between. The price may then make a sudden upward movement, which would be followed by two more lows. More on this below: Set entry and exit points: Once the double bottom pattern has been identified, it's important to set entry and exit points. The entry point should be when the market breaks above the high between the two bottoms. The stop loss should be placed below the lower bottom and the take profit should be placed a few pips above the high between the two bottoms. There are 3 methods of entry on it. 1. On the breakout of the neck level. - The breaking candle should not be a candle of indecision, even if it closes above/below the neckline. The breakout candle should be without big spikes. 2. On a pullback to the broken neckline. - Signals from price action like (Pinbar, Inside Bar, PPR, etc.) should appear. Without them, in fact, just on the bounce from the level, you should not enter, there is a big risk. 3. On the 2nd peak level (the riskiest method). - Candlestick patterns or built-in price action formations should be formed. Built-in formations are the pattern that formed inside some more significant pattern. That is, we have a W-shaped pattern. The price makes the second peak and another pattern can be formed on this second peak. It can be 1-2-3 formation or Head and Shoulders, etc. Monitor the trade carefully. Monitor the trade closely and adjust the stop loss and take profits as necessary. If the double bottom pattern fails and the price breaks below the lower bottom, close the trade and re-evaluate the market. If the double bottom pattern fails, it is important to re-evaluate the market, because this could mean the end of the current trend.
Education
by UnknownUnicorn15614419
8
IMPULSE AND CORRECTIVE MOVEMENT What is an impulsive price movement? This is a situation when the market moves with great force in one or another direction, passing large distances in a short period of time. What is a corrective price movement? It is a price stop. After an impulsive movement, the price needs a rest. Unlike an impulsive movement, a corrective movement lasts long enough and is often just in consolidation (sideways movement). There are exceptions, when the price after a strong movement is not in a sideways, but rather in a microtrend against the main movement with a weak price impulse and goes a short distance up\down (depends on the trend direction). On the chart you can see the descending price channel, I have marked the important places. Next, I will describe everything in order. First, I will tell you how to determine a true or false breakout of a level in the trend and how to work from these levels using impulses (these levels are called mirror levels (swing) that change their level from resistance to support). A: there was a break of the support level with good momentum, up to this point there was a bullish movement and sideways movement. The break of level A broke the rising highs and we can already say that there was a trend reversal. Where we will proceed from the mirror levels of the trend. A mirror level is a level that from support became resistance and vice versa. After breaking the level, a corrective movement to the same broken level began. Do you remember what I was talking about in the beginning? About the fact that the price does not always go sideways after the breakout, it can also go against the general movement, but with less impulse. But in this case as you can see price went sideways after it broke through the level, then slowed down and started to roll back to the broken level, this is exactly the place where we can look for an entry into the trade. B : As I said, there was an impulsive break of the level and then a corrective movement against the main downward movement, after which the price approached the broken support level and broke it again. Most likely, the breakout was due to some news, most often the price makes a reversal without such sharp movements. This is the place where all candlesticks are filtered and decisions are made. Pay special attention to what candles are formed at such levels. Ideally, it should be like this: candles decrease in size and form dojis (i.e. candles of uncertainty). You can expect a pinbar or maribose in such places. Now remember the 2 types of corrective movements: - price moves against the main direction, but with less momentum - price is in consolidation after the breakout In this example the price is just in a sideways movement and does not make impulsive movements, it is simply resting after breaking another support level in place. In this case we also have 2 moments to enter. 1. When approaching the broken support level, which is now a resistance level. We have all the right conditions for entry: the price has no momentum, respectively, it will most likely bounce off the resistance level and continue moving downwards; uncertainty candlesticks have appeared (in this case they were dojis); and the last criterion is the appeared Outside bar setup (B point). 2. In the second case, the entry is made on the breakout of the support C Unlike the place where the price goes against the movement, in our case (sideways) the price after the breakout can go further without correction to the broken level, but there are also criteria for this: the candle that breaks through the C level should be without big spikes; the price must breakout with good momentum (notice how the price stopped out at the support level, so we should expect a true breakout with good momentum, as was the case in this example) Next example when the price rolled back immediately after breaking out of a level without sideways move at the D point. Pay attention to how the price gives signals that it has no strength to move further. These are small candles that were then engulfed by one big red candle and the price made an impulsive movement downward. Impulse and corrective moves: conclusions Impulse movement • Candlesticks have large bodies. • Price moves a long distance in a short period of time. • Each subsequent candle closes higher/below the previous one (a clear sign of a good impulse). • Candlesticks have the same color and sentiment (In a bullish trend is green/blue candlesticks. In a bearish trend is red/black. Well, or any other colors that you use). A corrective movement • Candlesticks have small bodies. • Candles of uncertainty are formed (dojis, haramis). • Price moves small distances over a long period of time. • Candlesticks have a combined color (different colors). When the price approaches the support and resistance levels or trend line borders, you should pay attention to these factors and, if they are met, you can enter the trade.
Education
by Lingrid
16