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HOW TO INCREASE TRADING EDGETrading in the financial markets is a highly competitive and ever-changing landscape, where the difference between success and failure can be razor-thin. To succeed as a trader, you need to have a trading edge, which is essentially an advantage that gives you a higher probability of success in the markets. In this post, we will discuss three ways to increase your trading edge. ✳️ Define Your Trading Strategy If you want to up your trading game, there are a few things you can do to improve your approach. First off, make sure you take the time to define your trading strategy. This means getting a clear understanding of the markets you'll be trading in, the timeframes you'll be working with, and the trading styles you'll be using. By doing this, you can focus on the markets that work best for your approach and avoid making rash trades based on emotions or incomplete information. But that's not all. Having a solid trading strategy is just one part of the equation. You also need to have a solid risk management plan in place to help you manage your risk and protect your capital. This can include setting stop-loss orders to limit your downside, keeping tabs on your trades to catch any potential issues early, and adjusting your position size based on market volatility to stay on top of market movements. There are also some other things you can do to give your trading edge a boost. For example, doing some in-depth market research can help you stay up-to-date on the latest trends and developments. You could also invest in some advanced trading tools and software to help you make better decisions. And don't forget about tapping into the knowledge of other traders and industry experts by networking, attending trading seminars or workshops, or getting some guidance from a professional trading coach or mentor. In the end, there are loads of ways you can improve your trading edge. By taking a comprehensive approach that includes strategy, risk management, research, and ongoing learning and development, you can set yourself up for long-term success in the markets. ✳️ Stay Informed and Educated The second way to increase your trading edge is to stay informed and educated about the markets. You need to have a deep understanding of the factors that affect the markets you trade, such as economic data, geopolitical events, and market sentiment. Keeping up to date with financial news and events will help you to make informed trading decisions and adjust your strategy accordingly. Moreover, you need to invest in your education and continuously improve your trading skills. Read trading books, and follow trading blogs and maybe forums. By doing so, you will learn from experienced traders, gain insights into market trends, and develop new trading strategies. ✳️ Keep a Trading Journal There are several ways you can improve your trading edge, and one of the most effective is to keep a trading journal. By maintaining a record of your trades, including the reasons for entering and exiting each trade, the market conditions at the time, and the outcome of each trade, you can gain valuable insights into your trading patterns and behavior. In addition to helping you identify patterns and learn from your mistakes; a trading journal can also help you develop discipline and consistency in your trading. By reviewing your journal on a regular basis, you can identify areas where you need to improve and adjust your strategy accordingly, ultimately leading to better trading results. But the benefits of a trading journal don't stop there. By keeping a detailed record of your trades, you can also track your progress over time and monitor your overall performance. This can be especially helpful when evaluating the effectiveness of a new strategy or approach to trading. In short, if you're serious about improving your trading edge, keeping a trading journal is a must. It's a simple yet powerful tool that can help you gain a deeper understanding of your trading habits and ultimately make better, more informed trading decisions. ✅ Conclusion To succeed as a trader, you need to have a trading edge, which is essentially an advantage that gives you a higher probability of success in the markets. In this post, we have discussed three ways to increase your trading edge. By defining your trading strategy, staying informed and educated about the markets, and keeping a trading journal, you can improve your chances of success in the financial markets. Remember, trading is a journey, and the key to success is to keep learning, adapting, and improving your skills.
Education
by DeGRAM
4
HOW WILL AI AFFECT FINANCIAL MARKETS?Artificial Intelligence (AI) is revolutionizing the financial markets, with its algorithms and automated systems allowing for faster and more accurate trading decisions. AI technology has already seen success in stock market trading, but it is now being used to analyze data from all areas of finance, including banking and investments. In this article, we will explore the advantages and challenges posed by AI-based trading systems, as well as potential opportunities for AI in the future of financial markets. Finally, we will provide guidance on how to prepare for the impact of AI on financial markets. 1. Understanding AI and its Impact on the Financial Market Artificial Intelligence (AI) is an advanced technology that has been used in a variety of industries to automate tasks and make decisions. In the financial markets, AI can be used to analyze large amounts of data quickly and accurately. It can recognize patterns, identify trends, and even predict outcomes in order to generate trading signals for investors. The potential implications of AI in the financial markets are vast. AI-based systems can be used to streamline trading processes, reduce risk, and increase profitability. However, there are also drawbacks associated with using AI in finance that must be considered. For example, AI systems may lack the human intuition needed to make sound decisions during volatile market conditions or when dealing with complex security types. AI-based systems have already demonstrated their ability to recognize certain trends and patterns in financial data. For instance, AI has been used successfully by traders to detect price movements before they occur and capitalize on them accordingly. Similarly, these systems can also identify correlations between different asset classes or sectors over time, allowing investors to diversify their portfolios more efficiently. Finally, there are a number of examples of successful applications of AI in finance already taking place around the world. Hedge funds have adopted machine learning algorithms for portfolio optimization; banks have leveraged natural language processing (NLP) technologies for customer service; and stock exchanges have implemented automated surveillance solutions for fraud detection. All of these examples demonstrate how powerful AI can be when it comes to making decisions within the financial markets. 2. Advantages of AI in Trading AI has the potential to revolutionize how trading is conducted in financial markets. By leveraging the power of AI, traders can gain an edge in the markets and improve their chances of success. Here are some of the main advantages of using AI in trading: 1. Quick and Accurate Analysis: AI-based systems are capable of quickly analyzing large amounts of data and providing accurate market insights. This helps traders make faster, more informed decisions about when to buy or sell a particular asset. It also reduces the risk associated with manual analysis, as there is less chance for human error to enter into decision making processes. 2. Identifying Profitable Opportunities: AI-based systems are able to identify profitable opportunities that may otherwise be overlooked by manual analysis. This allows traders to capitalize on positive trends and maximize returns from their investments. 3. Identifying Risks: AI-based systems can also help identify risks associated with certain trades or investments, allowing traders to mitigate these risks before acting on them. This helps reduce losses and improves overall profitability for investors and traders alike. 4. Automated Decision Making: AI-based systems can automate certain aspects of trading decisions, eliminating the need for manual input or assistance from a human trader/investor. This reduces errors associated with manual decision making processes, while increasing efficiency and accuracy when it comes time to execute trades or invest in assets. 5. Lower Overall Costs: Finally, using an AI-based system helps reduce overall costs associated with trading due to its ability to automate certain processes and eliminate errors associated with manual decision making processes. This can help improve profitability for investors/traders over time by reducing expenses related to trading activities such as commissions, fees, etcetera 3. Future Opportunities for AI in Financial Markets The potential of Artificial Intelligence (AI) in the financial markets is immense. It has the power to revolutionize how traders and investors make decisions, identify new opportunities, and reduce risk. AI-based systems are able to automate processes and improve accuracy in decision making - providing a competitive advantage to those who utilize it. Additionally, algorithmic trading can give an extra edge by increasing efficiency when predicting market trends and stock prices. Synthetic assets are another way that AI is being employed in the financial sector. These products can provide investors with exposure to investments not typically offered on traditional markets or products. Furthermore, AI helps organizations create effective risk management strategies by recognizing potential risks quickly and offering guidance on how to prevent them from occurring. AI has already been utilized by some of the world's largest banks as a way to gain insight into the complexities of financial markets; giving businesses access to innovative investment strategies and new growth prospects within their organization. As this technology develops further, now is the perfect time for corporate entities to prepare for its impact on their operations so they can take full advantage of its many advantages when they arise. In summary, AI offers a great opportunity for traders and investors alike in terms of achieving higher returns while minimizing losses through improved decision making processes, enhanced analysis effectiveness, and more precise predictions about stock prices and market trends. With its rapid evolution continuing apace, it’s essential for companies operating in the financial industry to start preparing now for what lies ahead so they can capitalize on all that this powerful technology has to offer them in future years! 4. Challenges Faced by AI in Financial Markets AI is a powerful tool for understanding and predicting financial markets, but it does come with certain challenges that must be addressed in order for it to become a viable tool. Below, we will explore the five main challenges facing AI when applied to financial markets. Developing Reliable Algorithms: Developing reliable algorithms is essential for successful AI trading systems. It is important to ensure that investors are not exposed to unnecessary risks due to inaccurate predictions or unreliable models. In order to minimise such risks, developers need to carefully tweak existing AI algorithms and develop new ones that can accurately predict market outcomes. This requires complex mathematical models as well as an in-depth understanding of the data being analyzed. Ensuring System Security: Financial markets involve sensitive information which needs to be kept secure at all times. As such, security should be one of the top priorities for any organization utilizing AI in finance. Strong passwords and authentication protocols should be implemented and regularly tested, while any vulnerabilities should be actively monitored and patched immediately. Additionally, organizations should use encryption techniques such as Secure Socket Layer (SSL) or Transport Layer Security (TLS) whenever possible when transmitting or storing data on their servers or networks. Predicting Ethical Implications: The ethical implications of using AI in finance also need to be considered before integrating these technologies into existing systems and processes. This includes analyzing how decisions made by these systems could affect individuals or groups of people – both positively and negatively – as well as exploring potential legal ramifications of using AI-based trading systems. Organizations must consider these issues carefully before deploying any new technology in their operations and ensure they have the necessary safeguards in place if needed. Responding To Unstructured Data: Another challenge associated with using AI in finance is its ability to handle unstructured data accurately in real-time. Unstructured data can come from sources such as news stories, social media posts, customer feedback surveys etc., all of which can offer valuable insights into current market trends and conditions that may not otherwise be apparent from structured numerical data alone. As such, developing algorithms which can effectively interpret this type of data is an important area of research for financial institutions looking to utilize the power of AI in their operations. Exploring Long-Term Implications: Finally, organizations must consider the long-term implications of utilizing AI technologies when making decisions related to their financial operations. This includes considering whether there will be any unintended consequences associated with relying too heavily on automated decision making processes; whether there are sufficient safeguards against manipulation by malicious actors; and whether there are strategies in place which enable companies to remain competitive over time without sacrificing customer privacy or other ethical considerations.. Ultimately, organizations need to think carefully about how they integrate AI into their existing infrastructure before taking action so they can make informed decisions about how best utilize this technology going forward 5. How to Prepare for the Impact of AI on Financial Markets As AI continues to gain prominence in financial markets, companies must be proactive in understanding the risks and benefits of incorporating it into their trading strategies. To get ready for the impact of AI on financial markets, a strategic approach is necessary that includes comprehending how regulatory bodies interact with this technology, identifying potential partners who can help navigate its complexities, and remaining aware of advancements with AI. Here are several tips to prepare: 1. Assess Risks & Benefits: Investigate current trends in AI to detect both possibilities and drawbacks. Additionally, familiarize yourself with rules or laws related to using AI in finance industries so you can ensure following regulations while still gaining from its benefits. 2. Design Strategies: Develop tactics that maximize advantages while minimizing risks. This may include automating processes or creating algorithms that enable you to recognize opportunities quickly and make wise decisions faster than before. Consider partnering up with experts who understand integrating AI into existing infrastructure and procedures. 3. Stay Updated: Companies running finance businesses must be cognizant of new technologies like artificial intelligence so they remain competitive without compromising customer privacy or other ethical standards--this entails subscribing to industry news sources, attending conferences such as FinTech Connect Live!, reading industry blogs such as FintechToday or TechCrunch’s Fintech section among other options! 4. Analyze Regulatory Bodies: Organizations operating within the finance sector should have an idea on how regulatory bodies view machine learning applications when it comes to making decisions within the organization--this data will help them stay compliant without sacrificing customer confidentiality or other moral considerations by providing guidance on acceptable usage policies or suggesting alternate options if one is disapproved by a certain body plus researching various jurisdictions' regulations depending where services need be offered globally.. 5. Find Partnerships: Experienced partners may be essential when introducing artificial intelligence into your operations--not only they provide technical support but also share advice on merging machine learning applications into existing infrastructure and processes as well as helping produce suitable usage policies meeting all applicable regulation standards across global locations.. Cooperating allows leveraging resources more efficiently plus benefiting from shared experiences thus increasing success chances! By taking these steps, companies operating within financial sectors can benefit from any opportunities presented by artificial intelligence while avoiding associated risks—ensuring their compliance is met without endangering customer confidentiality or other ethical issues along the way! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
SP:SPXEducation
by Lingrid
14
DEVELOPING A CONFIDENT TRADING MINDSET✳️ One of the key ingredients to successful trading is confidence, but many people lack it. Why? I'll be talking about this in this post. Having a plan is the fundamental cornerstone of confidence. Fear and hesitation are caused when you are unsure about what to do. I'm surprised by how many traders just work without a defined strategy. Your trading plan should be written down as the first phase. It should be as simple as, "If A occurs, I will do B; if B does not occur, I will do C." You must eliminate every assumption. This is the strength of pre-established rules, and after they have been tested and proven, they will support your future confidence and discipline. ✳️ Backtesting and optimization of the system You won't have any confidence moving forward if you haven't tested your plan, established its historical viability, and optimized it to the best of your ability using the data. This is because you need to know what you're doing and what to anticipate. Your confidence will be built on the basis of a strategy's study, testing, and optimization steps. By missing this step, you are demonstrating a lack of dedication to your trading business and, thus, are not treating it like a business. Starting with the company comparison. Would you launch a company and sell a random product before spending the time and effort to demonstrate its viability? Obviously not. And it needs to be similar to trading. If you don't test, you simply don't want it badly enough, and I encourage you to stop right away. There is no fast way to success; you must be prepared to put in the time to test, develop, and comprehend all of the system's elements. ✳️ The source of confidence is the outcome Results provide extra confidence, so you must see your strategy in action before you can follow it. As a result, you must be able to stick to your method until you have a large enough sample size to notice the benefits. You must proceed gently and progressively raise your exposure as your method establishes itself. This is one way to build confidence, but how will you get there if you give up after a couple of losses, particularly big losses, all because you got into live trading too much early on? So, this is an important one thing: you must let the strategy show you that it works. As the method works, gradually increase the exposure. You want to start live trading with the smallest amount affordable. My advice is to increase up in increments of 0.05% 0.10% 0.25% 0.5% 0.7% every time the technique produces X- Amount, for example, 10%, and so on until you find the risk that you are most comfortable with trading. Remember that the ultimate amount should be one that you can afford to lose no matter how much you lost. You should be able to get a good night's sleep. Confidence is gained gradually through testing and allowing the system to give proof, as well as gradually increasing exposure to your acceptable risk limit. Taking the right risk that will not cause you feelings of anxiety is critical to maintaining your confidence. If you lose 50% of the amount you have in a single losing trade, you're unlikely to be very confident, and if you're diving into trading with full risk, it's an indication of a lack of emotional control and an attempt to speed up the process. You must ask yourself why. And how badly do you want to be a trader? Because failing to complete the homework indicates a lack of dedication. ✳️ Evidence gives you confidence in trading Starting into trading with no past performance or live data is one of the main reasons most people lack confidence. However, if you go in with a well-researched and tested plan, you will have something to refer to in your live trade. Are you experiencing a drawdown? So, what does my data indicate? Oh, that's completely typical. Okay, keep going. Instead of rejecting the plan or altering the system, as 95% of people do. Instead, you are now confidently pushing forward because you have the data and statistics to back you up. Once you have the statistics, you will have confidence, and when you are going through a difficult period, such as a drawdown, you will only have to ask yourself these two questions. ▶️ Am I sticking to the trading plan? ▶️ Am I controlling my risk? If you can respond yes to both questions, you are safe. Continue your trading journey.
Education
by DeGRAM
5
What is Price Action Analysis?Price action analysis is a trading methodology that involves analyzing the price movement of a financial instrument, such as a stock, currency pair, or commodity, to make trading decisions. It relies on the observation of price charts and the interpretation of price patterns, trends, and support and resistance levels. Price action traders believe that all the necessary information about a market is reflected in its price movement, and that by focusing solely on price, they can avoid the noise and confusion caused by other indicators and trading strategies. Some common techniques used in price action analysis include chart patterns such as triangles, head and shoulders, and double tops and bottoms, trend lines, candlestick charts, and moving averages. Price action traders also pay attention to key levels of support and resistance, as these levels can indicate where buying or selling pressure may be concentrated. Overall, price action analysis is a popular approach among traders who value simplicity, clarity, and flexibility in their trading strategies. What are the types of price action analysis? There are several types of price action analysis that traders use to analyze market movements and make trading decisions. Here are some of the most common types: Candlestick chart analysis: This involves analyzing the patterns formed by candlesticks on a price chart. Candlesticks provide information on price movements, including the opening price, closing price, high price, and low price, and can help traders identify potential trends and patterns. Support and resistance analysis: This involves identifying key levels of support and resistance on a price chart, which represent areas where buyers and sellers have previously entered or exited the market. Traders can use these levels to make trading decisions, such as setting stop-loss orders or placing trades at key levels. Trendline analysis: This involves drawing trendlines on a price chart to identify trends in the market. Trendlines can help traders identify potential trading opportunities, such as buying when the price is in an uptrend or selling when the price is in a downtrend. Breakout analysis: This involves looking for patterns where the price breaks through a key level of support or resistance. Traders can use breakouts to identify potential trading opportunities and set stop-loss orders to limit their risk. Price pattern analysis: This involves analyzing patterns such as head and shoulders, double tops, and triangles, to identify potential trading opportunities. Traders can use these patterns to enter trades with a higher probability of success. These are just a few examples of the types of price action analysis that traders use. Ultimately, the key is to use a combination of different techniques to gain a more complete understanding of the market and make more informed trading decisions
Education
by PriceActionAnalysis
What influences the price of OIL?In today’s volatile global market, the price of oil can be affected by a variety of factors. From wars and international trade agreements to financial market dynamics and global economic outlook, understanding what influences the price of oil is essential for both governments and individuals alike. In this post, we will look at how geopolitical factors, financial market dynamics, the global economy, oil producers’ strategies, and weather events all play a role in determining the cost of one of our most valuable resources. By examining each factor in turn, we can gain insight into why prices fluctuate so drastically over time and how to respond appropriately when they do. Read on to learn more about what influences the price of oil. Geopolitical Factors: Geopolitical factors have a major impact on oil prices, as the global demand for oil is heavily influenced by political events and decisions. The instability of certain regions and countries can reduce their production levels, leading to a rise in prices. International trade agreements can also affect oil prices: the recent US-China trade war has had a significant impact on oil markets, with supply chain disruptions causing uncertainty and increased volatility. The presence or absence of certain governments in oil-producing nations can also influence prices dramatically. For example, the toppling of Muammar Gaddafi's regime in Libya caused a sharp spike in global crude prices due to its immediate effect on oil production levels. Similarly, political unrest in Iraq and other Middle Eastern countries have resulted in supply disruptions that have pushed up prices. Lastly, global political events such as wars, coups, and other acts of aggression can disrupt the production of oil and drive up its price. For instance, when the US imposed sanctions on Iran following its nuclear program activities, it caused an immediate jump in crude prices due to fears about potential supply disruptions from Iran’s fields. In addition to these direct effects on production and supply levels, geopolitical events often lead to market speculation which further drives up prices even if there is no actual disruption to supplies. Supply and Demand The balance between global supply and demand for crude oil plays a key role in determining the price of oil. Changes in global supply can cause shifts in prices, such as when OPEC (Organization of the Petroleum Exporting Countries) countries agree to reduce production, or natural disasters affect output from offshore rigs or refineries. On the other hand, changes in global demand can also have an impact on oil prices. For example, economic booms can cause an increase in demand for fuel, while recessions tend to weaken it. When demand is high and supply is low, then oil prices tend to be higher as customers are willing to pay more for limited resources. Conversely when supplies are plentiful and demand is low, then prices decrease as suppliers compete with each other by offering lower rates. The interplay between these two factors is what drives the price of oil. It's important to note that both short-term and long-term forces influence the price of oil; geopolitical events may create temporary disruption but underlying trends are always at play too. For instance, if there's a sudden increase in production due to new technologies used by producers or a drop in consumption due to changing energy needs, then this could result in long-term changes to the price of crude oil. In addition to this kind of market fundamentals affecting the cost of oil on a macro level, some countries may choose to manipulate their own domestic supplies which can have significant implications on regional markets as well as global ones. Some governments even use subsidies or taxes on petroleum products as part of their fiscal policy strategies – practices which can help cushion consumers against fluctuations in international markets but could also lead to imbalances over time if left unchecked. Overall, understanding how supply and demand dynamics interact with one another helps explain why prices may go up or down depending on current events and market conditions – knowledge which provides valuable insight into how companies should approach pricing strategies for their goods and services around energy costs. Economic Sanctions Economic sanctions are a strategic tool wielded by governments to implement international law or force compliance. This approach can take the form of trade restrictions, investment prohibitions, financial transaction limitations, travel bans and technological access constraints. The application of economic sanctions can have a major effect on global oil prices - as evidenced in 2018 when US-imposed sanctions caused Iranian exports to plunge, with an ensuing surge in oil prices across the world. Similarly, US-driven sanctions against Venezuela had a similar effect on pricing the following year. It is not only reductions in production that influence price movement; sentiment can also play a role. Sanctions against Iran saw market sentiment affected, resulting in increased volatility and more expensive oil for consumers. If an embargo were imposed on a major producer such as Saudi Arabia or Russia there could be widespread disruption to supplies and increased pricing for everyone involved. Even if production isn't hit directly by particular sanctions then long term trends may still be affected: An embargo on Saudi Arabia would likely lead to reduced crude inventories over time as production levels adjust accordingly causing higher prices across the board down the line. This could stimulate demand for renewable energy sources like solar or wind power which would decrease global demand for fossil fuels while bringing down crude costs overall. Overall it is clear that economic sanctions can have both short term and long lasting effects on global oil prices - depending upon their scope, duration and severity. Therefore businesses tied up with energy trading or others parts of the industry should stay vigilant regarding these types of events so they are prepared for any disruptions that may arise from them ahead of time. Political Unrest Political turmoil can have a significant influence on the cost of oil, producing instability in the market and creating price volatility. Elections, uprisings, strikes or civil wars can cause disruptions to supply chains, resulting in higher costs for purchasers. Additionally, alterations to United States foreign policy and government regulations can also affect the oil industry. For instance, when the US exited the Iran nuclear deal in 2018 and placed sanctions on Iranian oil exports, international petroleum prices rose significantly. Oil is traded globally so unrest in one country may cause an impact on oil costs around the world. In 2019, demonstrations against fuel tax hikes precipitated a global crude oil increase due to worries about supply interruptions from Total SA's leading refinery in France. Similarly, Yemen’s civil war has caused upheaval across the globe - with Saudi Arabia stopping most of its crude shipments via the Red Sea due to safety issues connected to Houthi rebels. Political turbulence could also lead to a decrease in investment into energy infrastructure projects such as pipelines or refineries - meaning that even if there is demand for petroleum products they might not reach customers because of logistics issues. This could result in shortages of certain goods and consequently greater fees for buyers. Overall it is evident that political unrest has wide-reaching consequences for the price of oil both locally and internationally. It is crucial for businesses working within this sector to keep up with current events so that they are better prepared for any potential disturbance or cost variations that may occur as a result of political instability around the world. Financial Market Dynamics: Financial markets play an important role in influencing the price of oil. Large institutional investors, such as pension funds and hedge funds, often make decisions based on short-term trends in the energy sector. When these investors buy or sell futures contracts for oil, it can affect the supply and demand balance of crude oil and thus its price. The futures market is another factor that affects the price of oil. Futures traders purchase contracts to buy or sell oil at a later date, which impacts crude supply and demand levels. Speculation on OPEC production cuts can also have an effect on oil prices, as can political unrest or economic sanctions against certain countries. Weather and natural disasters are another important factor to consider when discussing financial market dynamics. In some cases, extreme weather conditions can lead to disruptions in production, supply chain issues, or increased demand due to cold snaps or heatwaves. Natural disasters such as hurricanes or floods can also cause major disruption to infrastructure and temporarily reduce supplies of certain commodities including crude oil. Finally, global economic outlooks may influence both investor sentiment and consumer spending patterns which could lead to changes in demand levels for commodities like oil over time. As such it is important for businesses in the energy trading industry to stay up-to-date with global developments so they can make informed decisions when it comes to pricing strategies related to energy costs. Hedge Funds and Speculators Hedge funds and speculators are influential participants in the energy market. They are responsible for buying and selling oil contracts as well as futures to take advantage of price fluctuations. By doing so, they can make profits from their trades but also assume risk if markets turn against them. Moreover, their activities may be affected by external developments such as geopolitical events or economic sanctions imposed by governments. Therefore, it is important for investors to keep a close eye on these factors in order to make informed decisions about pricing strategies for oil-related goods and services. Futures Markets Futures markets are an important factor in influencing the price of oil, as they can provide a platform for buyers and sellers to make profits or protect against price fluctuations. A futures market is a type of financial market that enables participants to buy and sell commodities, such as oil, at predetermined prices for delivery on a future date. In the energy sector, large institutional investors and hedge funds use futures markets to speculate on the direction of oil prices. By buying contracts today with an expectation that prices will rise in the future, these investors can increase their profits from rising oil prices. On the other hand, hedgers use futures markets to protect themselves from unexpected drops in price by locking in current prices for delivery at a later date. Speculative activity in futures markets can lead to large swings in the price of oil because participants have greater influence on pricing than actual demand and supply. This means that speculation can cause oil prices to move independently of actual supply shortages or excesses. Regulatory bodies also use futures markets to set limits on trading and production levels, which impacts prices and volatility levels. For businesses involved in energy trading it is important to keep track of developments in futures markets as these movements can have significant impacts on pricing strategies. Businesses should also be aware of speculation by large institutional investors who are looking to profit from changes in oil prices over time. Understanding how these activities are impacting market sentiment will help businesses make informed decisions about pricing strategies related to energy costs. Global Economy: The global economy is a major factor in the fluctuating price of oil. Investor confidence, currency values, GDP growth and trade disruptions all have an impact on pricing. Additionally, as alternative energy sources become more accessible and affordable they can contribute to a decrease in demand for traditional fossil fuels such as oil. Companies involved in energy trading must stay informed of these developments to ensure their goods and services related to energy costs remain competitively priced. Currency Values The value of a country’s currency can have a direct impact on the price of oil, with fluctuations in exchange rates influencing import costs and buying power. A stronger currency will enable an importing nation to buy more oil for less money, whereas a weaker currency will require more of the local currency to purchase the same amount of oil from other countries. Currency devaluation can also affect the cost of imported goods, as it reduces the buying power of a nation’s citizens and businesses. This means that each dollar or euro is worth less on the global market and makes it more expensive to purchase foreign-made goods, including oil. If countries devalue their currencies, they may have to pay higher prices for imports, which could cause oil prices to rise as well. On the other hand, when a country’s currency appreciates in value, it can help reduce import costs and increase buying power. This makes imported goods cheaper for consumers and businesses alike, which could lead to lower prices for oil in those countries. In addition, appreciation of a nation’s currency can make its exports more attractive to foreign buyers who can now obtain them at relatively lower prices than before. This could help drive up demand for domestically produced crude oil and result in increased revenues for exporting nations. When considering how currency values can influence the price of oil, it is important to remember that these effects are often short-term in nature and only apply when purchasing from abroad. Furthermore, changes in exchange rates are not necessarily an indication that domestic production costs have changed significantly - rather they reflect shifts in market sentiment towards one particular currency compared with all others around the world. Therefore companies should remain aware of current exchange rate trends while also monitoring their own costs over time so they are able to adjust pricing strategies accordingly depending on changing market conditions Oil is now the biggest staple on the world stage. Its importance is difficult to overestimate. The entire economy is based on indicators related to oil. But time passes and the economy changes its face and new favorites enter the arena. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
TVC:UKOILEducation
by Lingrid
10
Price Action: How to Trade ReversalsTrading on key levels is one of the basic principles of Price Action trading in the financial markets. There are two main ways to trade on levels: on the breakout and on the reversal. How to distinguish a correct signal to enter the market from a false one, how to set stop-losses and take-profits and what other nuances should be considered when trading in this style? 🔷 Specifics of trading from levels Key price levels are present in any financial market, including Forex. Often, these horizontal lines act as either support or resistance to further price movement, which is why traders are so interested in them. These key lines are formed due to the large accumulation of buy and sell orders. When the price reaches such a congestion, the current strength of the trend, as a rule, is not enough to close all these orders and move the price further. Therefore, if the movement does not get support, the price will turn in the opposite direction. If there are new volumes that are able to break through a great accumulation of orders, it is likely to happen that the trend strength is enough for the further movement, i.e. a strong breakout level will occur. Of course, events do not always develop only according to these scenarios, but these are the two most likely variants. There are big players at the market whose orders influence the price due to big volumes. Because of this, experienced traders only need to correctly identify such levels and signals that the price is most likely to reverse. The classic level is an area based on the opening or closing candlestick prices (not the high/low), which the chart has already touched before. That is, if the chart, having risen to a certain level, rolled back and then approached that level again, the price value at the extreme point will be that level. 🔷 Entering the market The main condition for entering the trade at the reversal from the level, it is necessary to make sure that it is exactly the reversal. If the price is just approaching the key level, it is too early to open a trade. The trader must form a reversal pattern of Price Action in order to be sure that the position opening is correct. It may be the following patterns: 1. A Pinbar (a candlestick with a long shadow, level breakout and a small body); 2. Engulfing (the next candlestick is directed in the opposite direction, its body and shadows are bigger than those of the previous candlestick); 3. Tweezer top/bottom pattern (alternation of bullish and bearish candlesticks with the same lows and highs); Once the pattern is formed, a trade can be opened. For example, the screenshot above shows a pin bar with a large upper shadow breaking through the resistance level, then rolls back down and the candle closes in bearish status. At the opening of the next candle you can enter the sell trade. 🔷 Setting Stop Losses and Take Profits Stop Loss should be set in such a way that a random movement against the direction of the trade, such as a level retest with a false breakout, does not knock the trader out of the market. It is impossible to set a specific value (e.g. 10 pips) for this trading style, the stop should be set based on the chart and "tails" of the candles in the visible proximity. As for take profit, there are no strict rules for its setting. You can use the standard technique, multiplying the value of the stop-loss by 3 or 4 and set a TP on the resulting distance. This is correct from the money management point of view. However, in each situation there may be conditions for greater profits than the standard stop-loss. For example, you can focus on the next key level in the direction of the trade. However, unlike a stop, a TP should be set so that the price is guaranteed to hit it when approaching the key level. 🔷 Important points 1. It is worth paying attention to the strength of the level and the likelihood that it will break or hold. There is a common misconception that the more price reversals from a level, the more likely it is that the level will remain intact. In fact, if the price keeps testing a certain level over and over again without going into the opposite trend, it means that it is likely to be broken. In practice this means that it is better to skip the third and the next attempts of a level bounce, trading on the second one only. 2. One should not draw a distinction between a classic reversal from a level and a retest of the level after it has been broken, when, for example, support becomes resistance. Such a retest is an even stronger signal than a simple reversal. The probability of a successful trade is even higher if we obtain a clear signal for reversal after an unsuccessful attempt to break through the level in the opposite direction. 3. The probability of a reversal or breakout of the level can be assessed based upon the movement towards the key level. If the previous candlesticks were small and differently directed, but the price has still reached the level, a breakout is quite probable. If the trend was strong and confident and the level was reached in just a few candles, but was not broken through, most likely, it won't be broken through. This phenomenon can be explained by the fact that market makers are trying to mislead small traders, playing on visual triggers. Seeing a strong movement, the trader unconsciously waits for a breakout and as a result suffers losses giving his money to the market maker. According to this logic, the conclusion can be made that if a big candle has reached a level, stopped in it, and closed without breaking through it, a breakout will probably never happen. But if a powerful candle has broken through the level, passed some more points (or tens of points), and closed on the other side, the breakout can be considered to have taken place. 4. When opening a trade, attention should be paid to the extrems of the nearest candlesticks. If the maximums (when testing the resistance) are approximately equal, or differ by 1-2 points, this supports the signal for the reversal and the pullback. The same is true for candlestick minimums when testing support. 🔵 Conclusion All other things being equal, a reversal of the level is more probable than its breakthrough. Such statistics gives a trader the reason to count on more signals and following the strategy rules will ensure profitable trading. However, one should keep in mind that trading from levels is a tactic that requires a trader's experience to be able to make decisions according to the situation. Despite the presence of rules, there is no clear algorithm that would regulate the actions in any situation. And due to this, a trader who uses the analysis of levels in his trading system, can count on the success of his trade. Most trading systems, allowing to open trades on an automatic basis, very quickly lose their validity, as well as trading robots based on these algorithms. The market is constantly changing, and only the ability to adjust to these changes and make decisions depending on the situation provides professional traders with a stable and high income.
Education
by DeGRAM
42
USA vs. ChinaA new and dangerous phase of relations between China and America can bring a lot of problems for the world economy and not only. After the removal of restrictions on the coronavirus, China opened up and became accessible to the world economy again. Everyone was waiting for this event and hopefully expected that the global crisis would end and new growth would begin, but China is not so simple. Tensions between China and the rest of the world are only growing , because China sees the weakness of America and Europe, in addition, China feels pressure from America, which does not want to put up with a new big rival and wants to destroy it. America is not ready to just give away the title of economy No. 1. President XI has won the election again and is hostile to America, which means a difficult future for the countries' economic relations. Xi is starting to establish contacts with neighbors and with political allies. Xi's recent meeting with Putin confirmed the strength and cohesion of China and other countries. In response, America is trying to restrain China by force, increasing military tension in the Asian region. America imposes strict restrictions on products from China, while not yet able to replace vital parts, America is trying to build new production in other countries. In turn, China is increasing military spending and is not going to give up power in Asia, demanding to take its hands off Taiwan. All this leads to possible conflicts and a downturn in the economy. A drop in global GDP to an alarming 7% is possible. Last year, America imposed a ban on the sale of some semiconductors and equipment that is manufactured in China. This event increases the gap in the economies of both countries, because now not only China will not receive money, but the United States will not receive important components. In the US Congress, a complete ban on TikTok is on the agenda. This platform generates billions of dollars and its complete closure will lead to big problems. As noted in a recent article by Alan Wolf, Robert Lawrence and Gary Hufbauer of the Peterson Institute for International Economics, the growing hostility to trade in the United States risks negating the achievements of the last nine decades of extremely successful policy. A new World Bank book highlights that the long-term prospects for global economic growth are deteriorating. One of the reasons is the slowdown in global trade growth after the global financial crisis of 2007-09, exacerbated by the turmoil after the Covid pandemic and the rise of protectionism. Among other things, as noted in the book, trade “is one of the main channels for the dissemination of new technologies.” In addition, it should be noted that a more protectionist world will have a lower elasticity of supply and, consequently, a greater propensity to inflationary shocks. From all sides, countries are trying to aggravate the situation. Chinese investment in the US economy is at a minimum, investments from the US are no longer directed to China. China, in turn, wants to make the yuan the number one currency and create a union within which all payments will not be made in dollars. All this can have a detrimental effect on the dollar. The future is foggy as never before. The US is printing more and more money, causing more and more problems. China is a dangerous rival that is gaining strength. What will happen next? What do you think? Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Short
by Lingrid
11
10 Common Technical Indicators Simply Explained for Easy TradingTrend Indicators: 1. Moving Average (MA): The Moving Average is a popular trend-following indicator that smooths out price data by creating a constantly updated average price. The MA is used to identify the general direction of a trend, as well as potential support and resistance levels. The most commonly used MA types are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). Short-term traders often use shorter MAs, such as the 10-day or 20-day MA, while longer-term traders may use the 50-day or 200-day MA. 2. Moving Average Convergence Divergence (MACD): The MACD is another trend-following momentum indicator that shows the relationship between two moving averages of a security's price. The MACD consists of a fast line (12-day EMA), a slow line (26-day EMA), and a signal line (9-day EMA). The MACD is used to identify trend reversals and momentum shifts. When the fast line crosses above the slow line, it is considered a bullish signal, and when the fast line crosses below the slow line, it is considered a bearish signal. Momentum Indicators: 3. Relative Strength Index (RSI): The RSI is a popular momentum oscillator that measures the velocity and magnitude of price movements. The RSI compares the average gains and losses over a specific period of time to determine whether a security is overbought or oversold. The RSI typically ranges from 0 to 100, with readings above 70 indicating overbought conditions and readings below 30 indicating oversold conditions. The RSI can be used to confirm price trends and to identify potential trend reversals. 4. Stochastic Oscillator: The Stochastic Oscillator is another momentum oscillator that compares the closing price of a security to its price range over a specific period of time. The Stochastic Oscillator consists of two lines: %K and %D. The %K line is the main line, and the %D line is a moving average of the %K line. The Stochastic Oscillator is used to identify overbought and oversold conditions and potential trend reversals. When the %K line crosses above the %D line, it is considered a buy signal, and when the %K line crosses below the %D line, it is considered a sell signal. Volatility Indicators: 5. Bollinger Bands: Bollinger Bands are a popular volatility indicator that consists of three lines: a moving average, an upper band, and a lower band. The upper and lower bands are typically set two standard deviations away from the moving average. The bands expand and contract as volatility increases and decreases. When the price is at the upper band, it is considered overbought, and when it is at the lower band, it is considered oversold. Bollinger Bands can be used to identify potential trend reversals and to confirm price trends. 6. Average True Range (ATR): The ATR is a volatility indicator that measures the average range of a security's price over a specific period of time. The ATR is typically used to identify potential breakout opportunities and to set stop-loss orders. High ATR readings indicate high volatility, while low ATR readings indicate low volatility. Oscillator Indicators: 7. Commodity Channel Index (CCI): The CCI is an oscillator indicator that measures the difference between a security's price and its average price over a specific period of time. The CCI typically ranges from -100 to +100, with readings below -100 indicating oversold conditions and readings above +100 indicating overbought conditions. The CCI can be used to identify potential trend reversals and to confirm price trends. 8. Relative Vigor Index (RVI): The RVI is another oscillator indicator that measures the strength of a security's price relative to its closing price range over a specific period of time. The RVI typically ranges from 0 to 100, with readings above 50 indicating bullish conditions and readings below 50 indicating bearish conditions. The RVI can be used to identify potential trend reversals and to confirm price trends. Volume Indicators: 9. On-Balance Volume (OBV): The OBV is a popular volume indicator that measures the buying and selling pressure of a security based on its volume. The OBV adds the total volume of a security when its price increases and subtracts the total volume when its price decreases. The OBV can be used to confirm price trends and to identify potential trend reversals. 10. Chaikin Money Flow (CMF): The CMF is another volume indicator that measures the buying and selling pressure of a security based on its volume. The CMF takes into account both the price and volume of a security to determine its overall buying and selling pressure. The CMF typically ranges from -1 to +1, with readings above 0 indicating buying pressure and readings below 0 indicating selling pressure. The CMF can be used to confirm price trends and to identify potential trend reversals. In conclusion, technical indicators are essential tools for traders to analyze securities and make informed decisions about buying and selling. Each indicator has its own strengths and weaknesses, and traders often use a combination of indicators to confirm their trading decisions. By understanding how these indicators work and what they measure, traders can gain a deeper insight into the behavior of the markets and potentially improve their trading performance.
Education
by Julien_Eche
2
How Much Time Do You Need For Trading?Hello trader! How much time do you usually need to spend studying charts and watching the currency markets? I'm sure many of you at the beginning of your trading career literally stuck to your computer screens for days on end, obsessing over charts, drinking large amounts of coffee and constantly placing orders throughout the day, but is this the only, realistic approach we have? In this post, I will show you an alternative way to track your charts, using various methods and tools to develop a much more nimble, calm and productive approach to trading. I will show you that you shouldn't be stuck at your computer screens all day, while still using your time rationally. ✳️ Timeframes and Currency Pairs The timeframes that you use when trading determine the frequency with which you check the charts. So, it goes without saying that if you trade on a 5-minute chart, you have to check the charts much more often than if you trade on a daily timeframe. Your workload is also affected by the number of currency pairs you trade, i.e. the more currency pairs you will use to trade, the more charts you have to analyze. This does not mean that you cannot trade on 20 currency pairs or more, it simply means that you have to have a ready-made system in which you can monitor each currency pair effectively. Say, when trading on M15 it is difficult to keep track of 20 currency pairs, but when you work on D1 it is quite convenient. ✳️ Analysis Over time, you will develop your own expertise and confidence in being able to analyze markets consistently and quickly. Knowing where and when to "hunt" for a trade and when to properly use lower timeframes will help you save a tremendous amount of time for looking at charts. Having a clear idea of where you will look for price signals to open positions will allow you to plan ahead and choose your desired positions, and will prevent you from having to constantly monitor the markets. On the other hand, traders who monitor the markets carefully and for long uninterrupted periods of time can fall prey to opening positions that they probably tend to find unreasonable, this may be due to the fact that traders feel pressure: because they HAVE to open a position to justify their time sitting behind the monitor. So, you need to know where and when to look for trading signals. For example, if you trade the cross of the 200th Average, of course, if the price is very far from this average, you understand that the next ten candles do not make sense to look into the terminal. And you do not waste your time and attention. ✳️ Price Alerts and Pending Orders Price alerts play a great role in saving the time needed for analyzing charts. The way they work is very simple: as soon as you have analysed every currency pair you wish to trade, you can set up an alert signal at a price level you think is good for opening a position in that particular pair. When the price reaches the desired level, a price alert is triggered and you are notified by email or text, after which you can check the pair for any price movement signals. Trading signals also play a role in position management: you can set alerts for stop loss level, entry level, profit taking, which means that you can leave your position and make changes to it only when the price reaches your targets. ✳️ Trading on the go Before the rise of smartphones and tablets, trading on the go was not an option, however, modern technology and communication tools make trading on the go very easy. The ability to open and close positions or reduce a stop loss wherever you are generally meaning that you don't have to stick to your computer screens to trade. As a result, this has led to traders being able to trade almost anywhere they like from now on. Getting all the latest information and staying up to date with current market movements, thanks to advances in technology and global access to the Internet, has freed traders from their screens and given them a degree of freedom that we all long for. Due to the fact that each broker offers its own application for trading, which you can download to your phone or tablet, trading has now become a fairly universal and accessible business, which can be engaged anywhere. ✳️ Have a trading routine If you treat trading like a real business, you'll find that an important and necessary issue is having a set routine and appropriate working hours, as well as understanding when to work and when to rest. It is very easy to get caught up in the markets and feel as if you have to monitor the charts 24/7 so that you don't miss a single trade. This is a dangerous habit to develop because getting too involved in the markets will burn you out and exhaust you very easily. If you find that the markets are starting to dictate your lifestyle (a classic example is when you stay up all night just to catch a good time to enter the market), then you've gotten too deep into trading. You should know when to turn off the trade, be able to turn off the charts, and get a good night's sleep. Be reasonable, set your own working hours and stick to them, even if trading is your main occupation, set aside a certain amount of time every day during which you would have worked in the markets and try to stick to it consistently. ✳️ Take a day off Once a week you should take a day off from trading. No reading on forums, no studying strategies, no browsing charts, no testing Expert Advisors. Nothing related to trading at all. The best thing would be to go to the nature, go for a walk in a strange place, read a fiction book, visit the theater, spend time with family or friends. Such "days of unloading" help our brain to rest, process the accumulated information and experience to work more productively in the future. ✳️ Do you spend too much time analyzing charts? The purpose of this post is to show you how flexible trading can be and that you don't have to be glued to your computer monitor working 24/7 to get results. Even if trading is your main occupation, it can be scheduled in parallel with your other activities. It shouldn't look like an all-or-nothing proposition, because the forex market allows us to choose when to trade, so you can appropriately structure your trading hours to suit your own needs. You can't get around the fact that you need to spend a tremendous amount of time constantly learning the aspects of forex trading in order to execute effective trading, but once you have accumulated the necessary skills and confidence in your own skills, you will actually need a much smaller amount of time needed to directly trade. Trading may even seem like something boring to you, but that's only because you just understand and accept what the markets really are, realizing that it's not a game, but just a business. The main goal that attract people to trading is the promise of financial freedom and an attractive lifestyle, but trading can have the opposite effect and can sometimes become an obsession that completely drains the trader. You must know when to work and when to play. Setting in place a set order/trading clock brings into your daily life the routines every trader needs to maintain a healthy and productive workload. Time is a very valuable commodity, in our modern lives the day is already filled to the brim with so many other commitments and activities, and managing it wisely is key to success. So, if you find yourself spending too much time on charts, there are things you can do to reduce your trading load, it will give you the freedom to step away from your screens. These include the following: 1. Using price alerts and pending orders, which are probably the biggest time-saving factor. 2. Focusing on higher timeframes while carefully using lower timeframes as well. 3. Having a fixed schedule of trading hours which you should stick to. 4. Using trading applications that allow you to stay connected when you are away from your computer. Applying these recommendations to trading will allow you to stay in contact with the markets without physically sitting in front of charts for days on end. What is the point of looking at charts if currency pair prices are not in a zone where you are not waiting for a signal? Why waste your time watching the price movements, if you are not going to trade any time soon anyway? Instead, let price do its thing, and on occasion enter the market in the area where you are waiting for a signal, that would be exactly the time when you should switch to the charts and hunt for pips. Remember, you are the main figure (not the markets!) and you are the one who keeps the trading procedure consistent and tight, be patient.
Education
by DeGRAM
6
How are you, Twitter?On April 25, 2022, Elon Musk bought Twitter for an incredible 43 million dollars. Musk immediately promised to make Twitter better for humanity and has already managed to do a lot. How did Ilon's actions affect and what to expect in the future? Let's try to figure it out. Buying Twitter is a grand bargain, but the impact of Twitter on people is even grander. Musk knew this and his main goal was to make Twitter better. Innovations From the very beginning, Musk voiced the idea of making Twitter more open and less dependent on politics. Musk managed to restore some blocked users, for example, Trump and Kanye West. In addition, Max began to disclose documents confirming the influence of political forces on Twitter. According to these documents, many people were blocked whose statements were not liked by the US government. A large number of bots have been removed and now to confirm that the account is real, you need to buy a verification tick. The biggest change was the mass dismissal of Twitter employees. Elon Musk informed the employees that there will be an inspection of everyone's work and mass layoffs of those who do not meet the company's standards. As promised, Musk bought all the shares of the company and now it is not traded on the stock market. The reason for the purchase, experts say, was the desire to avoid market manipulation of the company's value and thereby avoid panic. Problems Not all innovations were liked by people, which had a bad effect on the company's profit and popularity. The biggest problem was the refusal of cooperation from a number of companies that did not like the new policy introduced by Elon Musk. These companies brought big profits, because they bought advertising on Twitter, but now there is no money. According to the WSJ, Twitter's revenue and net profit in December 2022 fell by 40% compared to the same period in 2021. And according to CNN, from October 2022 to January 25, 2023, Twitter's advertising revenue fell by more than 60%. The platform started to malfunction. Innovations require code changes, which inevitably leads to disruptions of some functions. These problems are usually solved quickly, but users don't like this. Due to a paid subscription, a new policy and disruptions, users began to leave Twitter. This is a serious problem for the social network, leading to a loss of funds. All these losses do not help the work of Twitter and rumors have already spread that Elon Musk is looking for new investors and trying to attract new funds. Musk's fortune is estimated by various sources at more than $200 billion, but this does not mean that Elon has this money on hand now, that is, even the richest person on earth sometimes needs investors' money. Elon Musk became famous for creating several truly grandiose companies. All of these companies were doing poorly at the beginning, but Musk was able to make a profitable business out of them, which is only growing every year. This is Musk's first year at the head of a new company, which still has a lot of problems from the old owners, but Elon does not give up and promises to make Twitter the number one platform. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
TLong
by Lingrid
9
PULLBACK TRADINGTrading on a pullback is one of the options for trading in Price Action patterns. Like trading on a breakout, this style implies the use of pending orders. Trading on a pullback is more popular than on a chart breakout. If Price Action signals are used correctly, it can bring more profit with less risks. 🔵 Characteristics of the strategy of trading on a pullback This strategy, as well as all other trading strategies based on Price Action, is considered universal and multicurrency, suitable for any asset and timeframe. However, it is recommended to trade on liquid currency pairs, such as EURUSD or GBPUSD on hourly or four-hour charts. The daily D1 is also suitable for trading. When trading on a pullback, traders place limit orders (as opposed to a breakout, where stop orders are used). 🔵 The principle of trading on a pullback and the algorithm of placing orders The basic idea of the strategy is that the price, before it goes in the necessary direction after the formation of the pattern, usually pulls back, and if you catch the moment trend continuation, you can enter the same trade on more favorable conditions, with a smaller stop-loss and larger take-profit. Trading on a pullback is performed as follows: 1. A Price Action pattern appears on the chart. This can be a pattern of engulfing, a doji candle on a trend reversal, etc.; 2. At the opening of the next candle, a Limit pending order is placed (to buy, if an uptrend is expected, and to sell, if a downtrend is in progress). The order is placed approximately in the middle of the signal candle; 3. Stop Loss is set a few points beyond the extremum of the signal candlestick (below the minimum if trading to buy, above the maximum if trading to sell); Take Profit is set at trader's discretion. As an alternative, you can multiply the value of a stop-loss by 3 or 4, or set the take profit at the next key level, so that the price is guaranteed to catch it when it reaches this level. 🔵 Example of pullback trading As an example, we will consider trading on a pullback on the hourly chart of the EURUSD in detail. As an alternative, we will also consider the variant of opening a breakout order in this situation and compare the results. Events have developed as follows: 1. After a bullish move, a bearish doji candle was formed, signaling at least a correction; 2. At the opening of the next candle a Sell Limit order was placed (in this case the order was opened at the market, since the price at that moment was at the level of the supposed pending order); 3. Stop Loss is set above the maximum of the signal candle, Take Profit - in the area of the nearest support level; 4. The stop loss ratio is approximately 1:2.5, which provides a positive mathematical expectation of the trade; 5. After 6 hours the deal closed in profit. In this case both trades would be profitable, but profit on breakout of the support level would be almost twice less, and the stop/stop profit ratio would be 1,5:1 not in favor of take profit, which is considered inappropriate from the money management viewpoint. 🔵 Additional details of pullback trading Despite the fact that, in the example above, trading on a pullback was more profitable than trading on a breakout, it cannot be argued that this style is absolutely better. There are drawbacks to trading on a pullback as well. Unlike trading on a breakout which can be applied to all possible Price Action patterns, limit trading is not possible in every situation. Due to this the number of signals and possible transactions is reduced, and therefore the potential profit will also be less. In spite of the fact that as a rule the take profit at breakthrough trading is less than at limit trading. As we have more trades during the same test period, trading on the breakout can bring more profit. For example, the screenshot above shows the trend continuation pattern of an inside bar. When trading on the breakout, a pending order is placed above the maximum of the parent bullish candle which opens after several hours and the trend goes upwards, bringing profit to the trader. There are no reasons for the limit trade in this situation. It is impossible to place a pending order in the middle of the inside bar, and there is no logical reason to place it in the middle of the mother candle. It happens that the signal not to open a trade on a pullback on the limit order does not work, even when there are all the conditions for it. For example, during the formation of an engulfing pattern on the screen above placing a limit order in the middle of this pattern was quite logical. However, the signal candle turned out to be too strong, the pullback movement has not reached the pending order placed and the trade was not opened. In the same situation when trading on the breakout the trade would have been opened on the next candle, and in a few hours the trader would have fixed the profit. 🔵 Conclusion Trading by Price Action on a pullback has both advantages and disadvantages. On the one hand, this style allows you to make more profits with less risk in the same situation, when trading on the pullback shows less attractive dynamics. On the other hand, not all price action patterns are suitable for this style, in addition even suitable signals sometimes do not work, leaving the trader without profit. The choice of trading style largely depends on the trader's temperament. The pullback method suits the patient and conservative traders who are willing to wait for the signal for days and even weeks. As a result, such waiting will be rewarded with high profits on each of trades. More aggressive traders would be better suited to trading on the breakout which allows them to enter the market more often compensating the small profit and probable losses with the number of profitable trades.
Education
by DeGRAM
13
Banks are falling, what will happen to EUR/USD?The American economy is currently in a state of financial turmoil, with the banking system on the brink of bankruptcy. This has had a major impact on the US dollar and its value against other currencies, such as EURUSD. In this blog post, we will explore the causes and effects of the US financial crisis on EURUSD, identify strategies for trading during a bankruptcy, and analyze what potential long-term impacts may arise. We will also discuss how current economic conditions in the US have affected currency pairs such as EURUSD, so that investors can make more informed decisions when investing in foreign currencies. Overview of the Financial Crisis in the United States The 2008 financial crisis in the United States has had a profound effect on global markets, with far-reaching implications for investors worldwide. To gain insight into this crisis, it is essential to understand how the US banking system works and its connection to major bankruptcies. The country’s banking system consists of two tiers – commercial banks and investment banks. Commercial banks provide customers with services such as loans, mortgages, checking accounts, and saving accounts whereas investment banks specialize in underwriting stocks and bonds for companies who need capital or advice on mergers and acquisitions. Unfortunately, many of these investment banks were forced into bankruptcy due to their risky investments in mortgage-backed securities. This left US-based investors exposed to great losses resulting from stock market declines while global investors endured unfavourable currency exchange rate fluctuations due to the weakened value of the US dollar compared to other currencies like the euro. As a result of this financial crisis, traders should be cognizant of potential long-term effects when trading EURUSD during times when bankruptcy is imminent. Strategies must be put in place to minimize risk throughout this process. The current state of the US economy continues to be precarious following the 2008 financial crisis with ongoing issues that have not been resolved yet. With this being said, understanding how America’s banking system operates and its connection to large bankruptcy cases can help investors make informed decisions when facing these scenarios so they can protect themselves financially going forward. The Impact of Bankruptcy on the US Dollar The US banking system plays a critical role in the US economy, and when banks fail it can cause ripples of disruption throughout society. The recent bankruptcies of some large US banks have had an especially noticeable effect on the American dollar, causing its value to fall sharply against other major currencies. The Federal Reserve has taken action to restore confidence in the currency by lowering interest rates and pumping money into the economy. However, this may not be enough to prevent further devaluation if additional financial institutions go under; furthermore, the size of a particular bank's bankruptcy could influence how hard or soft its impact is on exchange rates. A lack of liquidity can also follow a bankruptcy as lending falls off due to decreased competition among lenders. This makes it more difficult for businesses and individuals alike to find sources of financing which can stifle economic activity and lead to further devaluation of currencies like the US dollar. Moreover, higher interest rates are likely when there are fewer banks around competing for customers; this means credit becomes more expensive or harder to access, leading people away from borrowing and towards saving instead - thus slowing down economic growth even further. Overall, it is essential that investors understand how an event such as a US bank failure would affect their investments in currency pairs such as EURUSD before they consider trading during turbulent times like these. What EURUSD Traders Need to Know The current economic situation in the United States is volatile and can have a dramatic impact on the EURUSD exchange rate. Bankruptcy proceedings could lead to tighter borrowing restrictions, slower economic growth and increases in tariffs or other regulations related to international trade. These factors can cause fluctuations in currency values, meaning investors must be aware of potential changes when trading during times of financial instability or bankruptcy proceedings. At the same time, there are potential opportunities for savvy traders to capitalise on when investing in EURUSD during periods of bank failure due to increased consumer spending that could result from positive changes following bankruptcy proceedings. In order to take advantage of these chances, investors must carefully analyse market conditions and put effective risk management strategies into place. In conclusion, trading EURUSD requires an understanding of how US financial developments may affect exchange rates as well as the ability to identify investment opportunities arising from bankruptcies or other economic downturns. Risk management is essential for success when trading currencies at times like this, so investors should ensure they have appropriate strategies in place before entering any trades. Analyzing the Impact of Bankruptcy on EURUSD As the US economy faces challenges, investors must consider the impact of a potential bankruptcy of a major bank on their investments in currency pairs such as EURUSD. Short-term effects may include a fluctuating exchange rate and resulting risk-aversion among investors, while longer-term impacts can be mitigated by Federal Reserve action, or balanced by other countries' economic downturns. It is thus essential for traders to assess possible outcomes before entering into any trades, alongside having an appropriate risk management strategy in place. Strategies for Trading EURUSD During a Bankruptcy As the US banking system continues to face bankruptcy risk, investors must be mindful of how their investments will be affected. The EURUSD currency pair is particularly vulnerable to instability in the US economy, as it is directly linked to the value of two currencies. In this section, we’ll explore strategies for trading EURUSD during a bankruptcy. First and foremost, it’s important to understand the relationship between bankruptcy and currency devaluation. When a country is facing financial difficulties, its currency can become weaker relative to other major currencies as investors lose confidence in it. This can have an impact on EURUSD exchange rate, so it’s important to monitor news updates related to the financial crisis before trading. It’s also essential that investors diversify their portfolios in order to manage risk during a bank bankruptcy. By investing in multiple asset classes such as stocks and bonds, you can reduce your exposure should one particular asset class decline significantly in value. You may also want to consider investing in non-currency assets such as gold or commodities that are not as affected by currency devaluation associated with bank failures. In addition, automated trading strategies may provide an additional layer of protection from volatility associated with a US financial crisis. Automated trading relies on predetermined algorithms rather than human judgment when making decisions about what trades to make; this reduces potential losses due to human error or emotion-driven decision-making which can lead to poor investment decisions. Finally, monitoring news updates related to the US economy and any potential changes that could affect EURUSD exchange rate is key for staying ahead of market developments and protecting your investments during times of uncertainty. While no one knows exactly how events may unfold following a US bank failure, being informed about changes in interest rates or government policies can help you make better decisions about when and where you invest your money. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
by Lingrid
21
Trend Channels, One of the best trading strategy 🤓The channel is a powerful chart pattern for trading. Channels combines several forms of technical analysis to provide traders with entry and exiting points as well as risk control. In this training, I will explain one of the simplest trading strategies called " Trend channel trading strategy ". Please note, this post is a summary of this strategy and I only mention its main points. 😏 Types of channels and best for this strategy A channel consists of at least four contact points because we need at least two low points to connect to each other and two high points to connect to each other. In general, there are three types: Channels that are angled up are called ascending channels. Channels that are angled down are descending channels. Channels in which the trendlines are horizontal are called horizontal channels, range channels, trading ranges, rectangle channels. The channels are also divided into three categories according to the time periods who make the price range : Macro channels , which are made with 12-Hour time frame, daily time frame and above. Mini channels , which are made with a time frame from 1-Hour to a maximum of 12-Hour. Micro channels , which are made with time frames of less than 1-Hour. **Tips: 1- Macro channels are made of Mini channels, and Mini channels are made of Micro channels, However, it is only an estimate and may not always be accurate, and they are Not the main rules and condition for Identifying channels or drawing them. 2- There is no special formula or law for naming the channels according to their time frames with these names (Macro, Mini and Micro) and you can use any time period for any type of channel. Trade Reliability Conformations represent the number of times the price has hits the channels trend lines and rebounded from the top or bottom of the channel. These are the important confirmation levels to remember: 1-2: Weak channel (not tradeable) 3-4: Adequate channel (tradeable) 5-6: Strong channel (reliable) 6+: Very strong channel (more reliable) **these numbers are just for each one of trend line (up line or down line of channel). I will write the continuation of this tutorial in the comments of this post. 😎
Education
by Arash-RK
WHAT ARE THE FIBONACCI LEVELS? 🔵 We are not going to focus on the Golden Ratio and the Fibonacci sequence in nature or around us. You can read about it in various books or on the Internet if you are interested. We will find out how these numbers can help in forex trading. Now, let's talk about Fibonacci retracement levels. Now let's get straight to the point. Fibonacci retracement levels look like this: 0.236, 0.382, 0.500, 0.618, 0.764 The Fibonacci extension levels are as follows: 0, 0.382, 0.618, 1.000, 1.382, 1.618 And these are the extension levels used in forex to set orders like "take profit". In other words, according to them, the price often reaches these levels, which should be taken into account in the analysis. Let us agree that Fibonacci levels are an instrument for trend analysis and are not suitable for consolidation. The point is that when the trend is upward, Similarly, for a down trend and support. We find the lower swing levels, then the upper swing levels, and draw a grid between them. 🔵 Fibonacci in a downward trend Let's act in the same way and draw the grid between the two candlestick patterns-swings, but downwards. The chart of EUR/USD, 4-hour timeframe. The assumption is that as the price rebounds upwards, it will hit one of the Fibonacci resistance levels, since the general trend is very strong downwards. Let's see what happened next. The pullback really came and the market slowed down below 0.382, an early hint of exhaustion of the bulls' forces. Finally, at 0.500 the bulls ran out of steam and the level worked as a resistance. And these two levels, 0.382 and 0.500, interact with each other. Their main purpose is as temporary support and resistance. We all know about the resistance and support, so do not expect the price to bounce from these levels. No. These are, first of all, the zones of trader's interest. Therefore, the price at these levels likes to consolidate into micro-channels before it moves on. As you well know, price can break both support and resistance. That means it will similarly break through Fibonacci levels. So, these levels are a guideline, but not an absolute guarantee of pullbacks and reversals. Sometimes levels are broken through, sometimes instead of 0.500 a bounce occurs from 0.618 and lots of other examples. Sometimes the price doesn't care about these levels. The price, as such, moves between levels, and some levels are more significant for it at a certain moment in time, and some are less significant for it. So, in using Fibonacci levels, you will benefit from all the tools in your arsenal that we already know about. The tools we use to filter inputs from support and resistance levels, whether it's Fibonacci or conventional. Say, oscillators with their divergences, price action patterns and more. In fact, let's combine Fibonacci levels with support and resistance. 🔵 Fibonacci retracement with support and resistance levels We have already learned that Fibonacci retracement levels are quite subjective. Like everything in technical analysis, we shouldn't just use them. In this case, we need a level enhancer. This is when ordinary support or resistance is well combined with Fibonacci retracement levels. An uptrend, so many green candles. it's all very nice, but where to enter? Especially since the price clearly went with low volatility. We use the Fibo and let's add a mirror level, where resistance has become support. It can be seen very well. Notice how it combines with the 0.5 level. Now we have to wait for the price to interact with this level. As you can see, the price really respected that level, it worked as support and did not let the price go further up. As you understand, support and resistance are, first of all, the zones of interest. The area that triggers the maximum reaction of the price. Not the least of the reasons is that everyone uses these levels. And, consequently, the more institutional traders apply Fibonacci levels, the more these levels influence price behavior. There is a direct correlation. This is why simple support and resistance levels also work. Of course, there's no guarantee that these levels will bounce the price, but we don't need guarantees, because we don't know that they don't exist in trading, do we? We know very well. But here is the zone where the price should be watched closely Fibonacci levels are quite suitable for that. 🔵 Fibonacci levels and trendlines Another way to apply Fibonacci levels is with another basic technical analysis tool. And what tool comes after support and resistance? That's right trendlines. Many traders use Fibonacci retracement levels exactly in an uptrend or downtrend, so combining them with trendlines makes confluence. Let's take a look at the next chart. We should take a trade, if such a situation arises, let's say, when the price touches the trendline. However, let's add Fibonacci retracement levels and see what happens. And we will get a more accurate entry zone. Let's use two swing values and watch what happens. We are especially interested in the levels of 0.500 and 0.618. Here we have it, the level 0.618 (61.8%) worked out as support, and it is right on the trendline. It's time to enter to further increase the trend. Two simple tools sometimes give equally simple results. Similarly, you can use the Fibonacci levels with horizontal support and resistance. In this case, Fibonacci will act as another way to filter entries at support and resistance levels. ✅ Conclusion Keep in mind that Fibonacci levels should not be used alone, you will lose everything. They should be combined with other elements of technical analysis, such as indicators, trend lines, Price Action patterns, etc. They are auxiliary tools and you should always remember about it.
Education
by DeGRAM
1
banks are on fire again...The banking system is bursting at the seams again. It all started with the recent series of bankruptcies of several American banks at once and it happened in just a week, which was an echo of the problems of the 2007 crisis, which, as people hoped, we were able to solve. The main signal of the disaster was a sudden failure in the Silicon Valley bank. On March 9, people's deposits disappeared, losses totaled an incredible $42 billion, which brought out an underestimated risk in the system. The problem was hidden in long-term bonds, in which the bank invested during a period of low interest rates and high asset prices, and when the Federal Reserve System sharply raised rates, the bank began to have problems. As a result, the bank was left with huge losses that were not previously recognized due to the fact that American capital rules do not require most banks to report a drop in the price of bonds that they plan to hold to maturity. 620 billion dollars – that's how many unrecognized losses were in the entire banking system of America at the end of 2022. To understand how much it is: this amount is equal to about a third of the total capital stock of American banks. The pandemic has brought even more problems to the economy, and the banking system has become even more shaky. A large volume of new deposits poured into banks, and the Federal Reserve's stimulus measures pumped cash into the system. These deposits were directed by banks to purchase long-term bonds and government-guaranteed mortgage-backed securities, and all this increased the risk of ruin in the event of an increase in interest rates. Having bought bonds with depositors' funds, the bank essentially used other people's funds, but the problem was not that, but that holding bonds to maturity requires matching them with deposits, and as rates rise, competition for deposits increases. At large banks, such as JPMorgan Chase or Bank of America, rising rates tend to increase their earnings thanks to floating-rate loans. However, in about 4,700 small and medium-sized banks with total assets of $10.5 trillion, rising rates tend to reduce their margins, which helps explain why stock prices of some banks have fallen. Another problem for banks is the risk that depositors will start withdrawing their deposits during the crisis, which will force the bank to cover the outflow of deposits by selling assets. If this happens, the bank's losses loom, and its capital stock may look comforting today, but most of its filling will suddenly become an accounting fiction. That is why the Federal Reserve System acted this way last weekend, being ready to provide loans secured by bank bonds. By providing loans with good collateral to stop the flight, the Fed is right, but such easy conditions come with certain costs. By creating the expectation that the Fed will take on the risks of interest rate changes in a crisis, they encourage banks to behave recklessly. The coming year requires regulators to make the system safer and less risky for the people. It is necessary to abolish some strange rules that do not require reporting and answers for increased risks that relate to small and medium-sized banks, Now the government has announced its intention to rescue depositors of the Silicon Valley Bank, which indicates that such banks carry a systemic risk and they need to be rescued in order not to destroy the entire economy of the country. But saving depositors is only half the job, in order to eliminate the repetition of today's and past problems, it is necessary to introduce the same accounting and liquidity rules that big banks follow, as is the case in Europe, and will have to submit plans to the Fed for their orderly resolution if they fail. These decisions and actions concern not only the United States, these rules should require the entire banking sector to recognize the risks associated with an increase in interest rates. Unrealized losses carry the risk of bankruptcy and banks with such losses should be confirmed by more thorough control and verification than those who do not have such losses. Timely testing will help to avoid bankruptcy, which would simulate a situation in which the bank's bond portfolio is released to the market, while rates rise even more. After that, it would be possible to determine whether the system has sufficient capital to avoid bankruptcy or not. Banks, of course, will resist additional control, increasing capital reserves, but all this will help to improve the quality of system security. Depositors and taxpayers around the world face intense fear, and they should not live with the fear and fragility that they thought had gone down in history many years ago.
SEducation
by Lingrid
7
BTC/USD Just comparing % with the fall in 2013-2015I just compared the % with the fall in 2013-2015. A structure that is currently being formed on a large time frame in a secondary trend. Logarithmic graph. Percentages are retained for clarity, as in 2014-2015. Earn money in the market does not allow banal greed. Almost everyone suffers from this disease. Therefore, your freedom from greed gives an unthinkable superiority over the patients of the “devil”. Secondary downtrend. 2013 – 2015 Percentage price reduction from key areas. "Removal of Passengers" Secondary downtrend of 2013-2015 and super “takeaways” in it. Then the pedestrian goes sideways (accumulation)—with similar “discharges of extra passengers." Pay attention to the % reduction and zone. The “terrible prices” of which after the cycle were the price of dreaming of "more than one stream of hamsters." The market shapes people's behavior. What is displayed on the price chart. Never try to catch highs or lows, work in parts. Disconnect from the majority controlled mindset of society. Main trend. Line chart. Logarithm. Term 1 month BTC/USD Secondary trend cycles and BTC halvings. The same, but on a candlestick chart. BTC/USD Main trend. % Secondary Trend Highs Secondary trend (part). Work zone. BTC/USD Secondary trend (part). Local work. The basis of profit/loss is who you are here and now. Your knowledge and experience are projected onto the graph. The symbiosis of these two parameters, implemented in practice, will earn or lose money.
BITFINEX:BTCUSD
by SpartaBTC
39
Timeline for an ideal trading dayEvery day, traders around the world wake up and begin their day with the same goal: to make money. But how do they go about doing that? What is the ideal timeline for a trading day? In this blog post, we'll outline the perfect day for a trader, from start to finish. Wake up It's no secret that successful traders need to be up bright and early to get a jump on the day's market action. But what many people don't realize is that there's more to it than just setting an alarm clock and getting out of bed. To start the day off right, it's important to do some light exercises to get the body moving and the blood flowing. A quick jog or some simple calisthenics can make a big difference in terms of energy levels and mental acuity. Just as important as physical activity is eating a healthy breakfast and drinking plenty of coffee. Breakfast provides the body with much-needed nutrients after a long night's sleep, while coffee helps wake up the mind and get those creative juices flowing. So there you have it: the perfect way to start your day as a trader. By following these simple tips, you'll be well on your way to making money in the markets. Check the news As a trader, it's important to start your day by checking the news for any major announcements or news stories that could affect the market. You should find a reputable source for business news and look for any breaking news stories that could impact the stocks on your watchlist. This will help you be more informed and prepared when making trades throughout the day. Make a watchlist When making a watchlist of stocks to trade, there are a few key things to look for. First, you want to find stocks that are trading at new 52-week highs or lows. This can be a good indicator of a stock that is starting to move in a particular direction and could be worth watching. Another thing to look for is stocks that have unusual volume. This could be an indication that something is happening with the stock and it is worth keeping an eye on. Additionally, you want to look for stocks that are making large percentage moves. This could be an indication that there is some momentum behind the stock and it could be worth taking a closer look at. Finally, you want to identify stocks that are breaking out of chart patterns. This could be an indication that the stock is about to make a move and it would be wise to keep an eye on it. Plan your trades When planning your trades, the first thing you will need to do is take a look at your watchlist and identify which stocks look like they are ready to make a move. You can use a variety of indicators to help you with this, such as 52-week high/low, unusual volume, large percentage moves, or breakouts from chart patterns. Once you have identified which stocks look promising, you will then need to review your charts for those stocks and identify potential entry and exit points. Once you have found potential entry and exit points, you will then need to calculate the risk/reward ratio for each trade. This will help you determine whether the trade is worth taking. To calculate the risk/reward ratio, you will need to find out how much you are willing to lose on the trade and how much you think you can gain. For example, if you are willing to lose $100 on a trade but think you could gain $200, then the risk/reward ratio would be 1:2. After calculating the risk/reward ratio, you will then need to decide which trades you are going to make. You should always consider your risk tolerance when making trading decisions. Once you have decided which trades to make, you will then need to place your orders. Execute your trades When it comes time to execute your trades, there are a few things you need to keep in mind. First, you need to find a stock that you want to buy or sell. You can do this by researching the stock and watching for market trends. Once you have found a stock that you want to trade, you need to place an order with your broker. Your broker will then execute the trade on your behalf. Once the trade is executed, you will have a position in that stock. You can then exit your position by placing another order with your broker. It is important to remember that you should only trade with money that you can afford to lose. Trading is a risky investment and there is always the potential for loss. Before making any trades, be sure to do your research and understand the risks involved. Review your trades As a trader, it is important to review your trades at the end of the day. This will help you learn from your successes and failures, and make better trades in the future. When reviewing your trades, there are a few things you should keep in mind. First, consider whether you made the right decision in entering the trade. If not, what could you have done differently? Second, think about whether you exited the trade at the right time. Did you give the trade enough time to play out? Were there any warning signs that you missed? Finally, reflect on what you learned from the experience. What went well? What could have been done better? Taking the time to review your trades at the end of each day is an important part of becoming a successful trader. By learning from your mistakes and celebrating your successes, you will be able to make more informed and profitable trades in the future. End of day As the end of the day approaches, it is important for traders to take some time to review their trades and assess their performance. This process allows traders to determine what they did well and what they can improve on. It also helps traders organize their thoughts and trading strategies for the next day. Taking the time to review your trades at the end of each day is an important part of becoming a successful trader. When reviewing your trades, you should consider factors such as whether you made the right decision in entering the trade, whether you exited the trade at the right time, and what you learned from the experience. By taking the time to review your trades on a daily basis, you will be able to learn from your successes and failures and become a better trader. After you have reviewed your trades, it is also important to take some time to relax before going to bed. This will help you be fresh and ready to start trading when the markets open. Trading is a demanding activity that requires focus and concentration. If you are not well-rested, you will not be able to perform at your best. So make sure to take some time to wind down before bed so that you can be ready to start fresh tomorrow. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
11
WHAT YOU NEED TO KNOW ABOUT TRADING FOREX ON FRIDAY🔵 Friday is a relaxed day with the weekend ahead, followed by a working Monday. How does this affect the market? How do the big players behave on this day? Who holds positions over the weekend, taking risks? Today we will figure out what to keep in mind when trading Forex on Friday, why this day's candle is important, what tips can be extracted from the price direction on this day, and consider a few more important nuances that you are unlikely to think about. ▶️ The Friday news and the NonFarm. Also, newbies should remember that Friday in America on the dollar there are often significant news releases, such as non-farms, which can really shake the market. So, on Friday, don't forget to check the economic calendar. Notice if there are any significant news marked with three red dashes on the calendar. So, there is no point in trading or following the market today. You can calmly leave it and go have a rest. ▶️ The direction of the movement in the second half of the day is the key to the momentum on Monday. The next thing you need to pay attention to is the movement in the second half of Friday and up to the market close. If the price is steadily moving up in that period, we should expect it to continue on Monday. Correspondingly, if the price is steadily going down, we can expect this impulse to go on at least during the first half of Monday. And we are interested in a clear and directed movement. Why it happens, I think, is clear: the big players are buying without fear that something will happen over the weekend. In other words, they are confident in the absence of news, they confidently buy or confidently sell and this means that on Monday we can expect the momentum to continue. ▶️ Weekly candlestick formation In general, the market does not like to change the shape of the weekly candlestick on Friday. Therefore, looking at the chart on the W1 timeframe, and looking at the practically formed weekly candlestick, we can assume what the movement will be at the end of the day. For example, this Friday, at noon on the EURUSD chart, the weekly candlestick has a rather long tail, which indicates that the bulls have already been taken out. Plus, a pretty deliberate downward price move. Even if you take into account the non-farms, often they only take out the stops and then the price recovers in just a couple of hours. So, most likely, the downside movement will continue till the end of the day or the price will stay at the same level. But we should not expect any appreciable rise. Or the weekly candlestick by 12:00-14:00 GMT on Friday is full-body bullish, or full-body (large body, small shadows) bearish, you should not expect a significant price movement in the opposite direction till the end of the day. Accordingly, in this case, if you trade within the day, it makes no sense to look for sell trades, if the weekly candlestick is obviously bullish. Of course, if the weekly candlestick is indistinct, for example something like a doji, the price may go in any direction, and it is difficult to predict anything reliable by such a candlestick. But a solid weekly candlestick allows to rather accurately predict the market behavior on Friday afternoon: a bearish one is down, and a bullish one is up. Or almost no change, which happens more often than we'd like. ▶️ Why is Friday so significant? A huge amount of forex trading is intraday trading. High-frequency and intraday traders account for up to 80% of transactions in the market. And they all get out of the market before Monday. So, who are they those people who open positions on Friday and leave them for the weekend? After all, anything can happen over the weekend. They are the big traders, various serious institutions who have more information than us or the media. At the same time, they agree to the risk of transferring trades through the weekend, they pay swaps. That is, these are very significant traders and the direction of their positions is worth watching, at the very least. Therefore, what happens on Friday often has a significant impact on the further price movement, and can give an impulse for Monday and the whole next week. In addition, according to statistics, Friday is often the minimum or maximum point of the weekly candle. For this reason, we should expect the continuation of the directional movement of the price, if it is present in the weekly candlestick. If you take a single Friday candlestick of D1, in the case if it has any of the signals by your trading system, or by Price Action in general, it is worth paying close attention to it. ▶️ When to open a position with a signal on D1, on Friday or Monday? When it is better to open a position in the presence of a signal on D1 at market closing on Friday evening or at market opening on Monday? The answer is simple: we open positions at market opening on Monday. If there is a gap, we trade it, and if there is no gap, we trade our set-up. Because if you open a position on Friday night, a huge gap can simply take your stops out on Monday and you will make a loss (plus your order may slip). Therefore, if you see any signal on Friday night, you better open positions on Monday. ✅ Conclusion. In addition to the above, we should not forget that many traders close trades and fix profits on Fridays, not wanting to roll over positions through the weekend. This can be due to a possible gap, as well as with the desire to exit the position and quietly go to the weekend. So at the very end of the day if there was a clear bullish trend, price rolls back a bit (bulls fix profit), if there was clearly a bearish trend - price moves a bit higher (bears close positions).
Education
by DeGRAM
2
Gongmyeong's Knowledge Sharing - Step 5 < Let's just watch it for three minutes! Zhuge Gongmyeong's Knowledge Sharing > Step 5. Types of bearish candles Let's talk about the types of bullish candles yesterday and the types of bearish candles today. Likewise, let's classify the types based on the shape. First, the hanging candle. It's a candle that went down to a low price and then went up a little. It's a bearish candle with a tail at the bottom. The shorter the torso and longer the tail, the more likely the next movement is to rise. Next is 'meteoric candle'. It's a candle that goes up once and then rolls down all the gains and then goes down further. Because both the torso and tail contain the drop, the longer the torso and tail, the greater the influence. If these cans appear at the high point, they are likely to turn downward. Lastly, "long stick - bearish candle". The properties are similar except for the pole bullish candle and the bearish/bullish. It's a light stick candle with only the body without a tail up and down. In general, there is a very strong downward trend in the process of these cans appearing, and the longer the torso, the more the amount of decline, so it exerts a greater influence. Today, we've looked at the typical types of bearish candles. Likewise, when you look at the shape of the candle on the actual chart, let's review it so that the characteristics of the candle come to mind!
Education
by Gongmyeong
why DCA is the best strategy for trading?Today I’ll be talking about what is Dollar Cost Averaging (DCA) and how is it used in trading. i will also shine a light on what importance it holds What is dollar-cost averaging (DCA): It is an investment strategy in which you invest a fixed small amount of money at regular intervals. This allows you to take benefit of a market bearish without risking excess funds Allowing you to keep up with greater liquidity and take benefit of market bullish. let's show that with examle : Let's imagine that there is a person called Cecilion and he invests in filusdt with a fixed amount of $ 20 every month. let's imagine the price of that currency in March was $ 5 Then Cecilion will have 4 pieces of filusdt in March. And in April, the value of filusdt fell to $4, and Cecilion bought it for the same amount ($20) to have 4 + 5 = 9 pieces of filusdt in april. And in May, the value of filusdt fell again to $2, and Cecilion bought it for the same $20 , so that he owned 4+5+10 = 19 pieces of filusdt in May. And in the following month, the price of filusdt raise to $10, and Cecilion bought it for the same $20, so that he owned 4+5+10+2=21 pieces of filusdt in June. let's do some math to show the efficiency of this strategy: - Cecilion invested $80 in 4 months and owned 21 pieces of filusdt to be The average purchase price is 80/21 = $3.8 - Let's imagine that Cecilion did not use this strategy and bought filusdt for $80 at once in March when its price was $5 Then a cecilion would have 80/5 = only 16 pieces of filusdt instead of 21 pieces. hope this article was useful to you and appreciated ur support with likes , comment and follow for more.🎯
Education
by ceciliones
23
Gongmyeong's Knowledge Sharing - Step 4 < Let's just watch it for three minutes! Gongmyeong's Knowledge Sharing > Step 4. Types of bullish candles We've looked at the composition of the candles in the previous sections. Today, we're going to classify the types of bullish candles based on their shapes. First, it's a hammer-type candle. It's a candle that went down to low prices and then went up. The shape has a tail only on the bottom. If these candles came out of the low point, you can expect a trend shift to an upward trend. The shorter the body and the longer the tail, the more reliable the candle is. Next is the reverse hammer type candle. Although it is a bullish candle, it is a candle that is bent at the end and left the upper tail. The shorter the torso and longer the tail, the higher the probability that the next move will be a drop. Conversely, the longer the torso and shorter the tail, the stronger the upward force, so the next is the higher the probability of ascending. The length of the tail and body is important. Lastly, it's "a long-stick candle". The shape itself is simple, but it's a beekeeping candle with only the body without the top and bottom tails. In general, there's a very strong upward trend in the process of these cans appearing, and the longer the torso, the greater the amount of upward movement, so it exerts a greater influence. Today, we've looked at a typical type of bullish candle, and the shape of the candle is very important because it represents the power to move up and down. When you look at the shape of the candle on the actual chart, let's review it so that the characteristics of the candle come to mind!
Education
by Gongmyeong