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SPX. The Certainty Trap ‘Never’ &‘always’ have no place in MKTS!Just passing this cool info written by a guy called Ben Carlson. - Ben discusses the differences between probability and certainty: "There are two arguments I see on a regular basis that show up as a result of data overload: …because that’s never happened before. …because that’s what’s always happened before. -The problem with this line of thinking is that it can lead investors to fall into what I like to call the certainty trap. It’s this all-or-nothing line of thinking that causes so many to constantly attach extremes to every single market move or data point they see. The beginning of the recovery or the end of the world is always right around the corner. The assumption is that we’re always either at a top or a bottom when most of the time the markets are probably somewhere in the middle." -The reason the investing certainty trap is so easy to fall for is because historical data can feel so safe and reassuring. Look here, my data says that this has never (always) happened in the past. Surely this trend will continue. I’ll just sit here and wait for my profits to start rolling in. -‘Never’ and ‘always’ have no place in the markets because no one really knows what’s going to happen next. ‘Most of the time’ is a much more reasonable goal, because nothing works forever and always in the markets. If it did everyone would simply invest that way. I think a much more levelheaded approach is to follow the Jason Zweig 10 word investment philosophy: -Anything is possible, and the unexpected is inevitable. Proceed accordingly.
SP:SPXEducation
by samitrading
2
MARKET CONDITIONS Hello everyone! We continue the series of training articles. Today I want to touch on the topic of MARKET CONDITIONS . Go. What is the market like? As you know, the market does not move only up or only down. The price always makes fluctuations of a wave nature. What does it mean? BEARISH TREND This trend is characterized by the fact that the price updates the previous lows, but cannot update the previous highs. If you look at the monthly chart, such a movement may consist only of falling candles. In fact, if you switch to a smaller timeframe, you can see corrective movements. And this can be observed on all movements. In a bearish trend, it is best to open short positions. A good moment to open a position can be the end of the correction, which confirms that buyers are not able to update the maximum, which means that the downtrend is still strong. RANGE This period of the market is the most boring, because the price is not particularly moving anywhere. In fact, there is an accumulation of large positions. But boring does not mean that it is impossible to make money on it. The simplest trading tactic under such conditions is to sell from the resistance level and buy from the support level. Do not forget to put a stop loss, because sooner or later there will be a breakdown. BULLISH TREND This trend is characterized by an increase in price, an update of the highs and the inability to update the lows. The fact that sellers cannot push the price below the previous minimums tells us that the strength is on the buyers' side. It is best to open long positions and press the updates of the highs. STRUCTURE This structure or model: BEARISH TREND - RANGE - BULLISH TREND, will occur very often. This is exactly how the trend is changing. At first, the price is controlled by one star, it can be bears and then there will be a downtrend, it can be bulls and then there will be an uptrend. At some point, the dominant force loses power over the price, and the opposite one gains momentum, at such moments the range begins. There is a struggle going on here and whoever wins will rule the price. Sometimes it also happens that after the range, the previous trend continues, which means that the opposing force did not have enough power to change the trend, be prepared for this. CONCLUSIONS Do not think that the trend will continue forever. Do not believe that you know the future and the price will go exactly where you predicted. Be objective and study the market. 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
13
THE MOST TRADED CURRENCIES IN THE WORLDHello everyone! Today we will touch upon an interesting and important topic of the forex market. There are enough opportunities in the world to trade currencies of all countries, but most of the trade volume is occupied by the main ones. Let's figure out which currencies are traded by traders more than others. US Dollar The most important currency on the planet is the US Dollar. There is nowhere without it: most of the operations on the market take place through the American dollar. In addition, the United States is currently the largest economy on the planet. A huge part of world trade is concentrated in the USA or occurs through the USA. The dollar itself is the reserve currency in the world, central and commercial banks hold large reserves of dollars in their accounts to make international transactions. Yes, Gold, Copper, Oil and much more are valued in dollars. Wherever you look, there is a dollar everywhere and everyone uses it. Because of these factors, the dollar is No. 1 in terms of volumes with an average daily volume of 2.9 trillion US dollars. Euro The second largest trading currency in the world. The main reason is the scale of the economies of the countries that are part of the eurozone. Currently, the eurozone unites 20 countries. Countries such as Germany, France, Italy have quite large economies, in total, together with other European countries, the euro accounts for 20% of world reserves. The average daily volume is almost 1.1 trillion US dollars Japanese Yen Over the past decades, the Asian region has developed strongly. Countries improved and increased production, which eventually led to the fact that Asian countries are now of great importance in the global economy. Japan's manufacturing sector has a strong influence on the world and on the yen. Therefore, when export figures increase, the yen rises. The Japanese yen currently ranks third in terms of trading volumes in the world, with an average daily volume of 554 billion US dollars. Since China is a key competitor of Japan in the industrial goods market, the weakening of the Chinese yuan has a detrimental effect on the yen, because then the export of Chinese goods will become more attractive. In addition to China, the yen is also affected by the price of oil, since Japan is a major importer of this raw material. Pound Sterling The official currency of the United Kingdom and its Territories is the Pound sterling. The economy of the Kingdom is of great importance for the entire world economy, since England is one of the main financial centers of the world. In terms of volume, the pound sterling ranks fourth in the world with an average daily volume of almost 422 billion US dollars. The share of this currency accounts for about 4.5% of world reserves. The main indicator of the strength or weakness of the currency is the UK. The monetary policy of the Bank of England, the GDP of England has a strong influence on the currency. The exit of England from the European Union also had a strong impact. It is the Pound Sterling that closes the four largest volumes of the planet. Then there are such currencies as the Australian dollar, Canadian Dollar, Swiss Franc, Chinese Yuan. All of them in total, of course, lose to the big four listed above, but these currencies also have sufficient volume, which makes it possible to trade pairs with these currencies quite profitably. Volatility Given the volume of a particular currency in the global economy, we can understand which currency pair will have greater volatility and which will not. If you are a trader who wants to make a profit quickly, then the EURUSD pair is suitable for you – the two largest economies in the world. Next comes – USDJPY. The economies of these countries are in first and third place, respectively, which means greater volatility. If you need something in between, then you should pay attention to such currencies as – AUDUSD, USDCAD, NZDUSD. These currencies are linked to the first economy of the world, which will give sufficient volatility, while the second currency in these pairs does not have a huge volume, so price movements will not be so dangerous for a conservative trader. You can also pay attention to pairs where countries with a smaller global volume are involved. Movement in these pairs will be slow and sometimes even boring, but definitely very safe. Conclusion Knowing which currency is strong on the world stage and which is not is very important for choosing a pair for trading. Knowing what affects a particular currency helps to understand the future price movement. Professional traders understand these issues and choose currency pairs suitable for their style. Beginners trade everything in a row. Do not be lazy to study and then the profit will come to you. 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
14
BUYERS vs. SELLERSHello everyone! Who are the stronger sellers or buyers right now? The one who finds out the answer will be able to earn a lot. Over time, one side weakens, the other gains strength. It is not easy to catch this moment, but there are several methods for determining a possible change in the dominant force in the market. Japanese candles, namely their bodies, can help us with this. The body shows how strong or weak one or the other side is. The body shows whether buyers are losing strength and whether sellers are gaining strength. Are buyers or sellers strong? By looking at a particular candle and its body, we can understand what was happening in the market in a given period of time. If we see a full-bodied green candle that has no shadows, then we can say with confidence that buyers are winning. The point is that buyers were able to push the price up after the opening and until the closing, which sellers could not resist. On the other hand, if we see a full-bodied candle of red color, we can say that the sellers won. Without much resistance, sellers pushed the price down from the beginning to the end and were able to close at the very bottom of the candle. Full–bodied candles speak of enormous strength, they can appear confirming the trend or starting it, in any case - this is a strong sign. Still strong, but… If you see a green candle with a long body and small, short shadows on the chart, then you can say that buyers dominate the market. But what are these shadows? These shadows remind us that sellers, although losing heavily, still did not give up. It's the same with candles that have long red bodies and short shadows. Sellers are strong, but buyers are still here, as the shadows remind us. Seeing such shadows, you should not be afraid and open positions in the opposite direction, no. It's just a reminder. The fight is getting harder. A candle with a small green body, which is located at the top, shows us that buyers have taken over the market, but the victory turned out to be very difficult. The long shadow under the body indicates to us the rage of the sellers, who dragged the price down for a very long time, but still lost in the end. Maybe it was the last impulse of buyers? This fight was almost on an equal footing, but the victory remained with the buyers. In such situations, you can ask the question - Will there be a U-turn? Red body on top, with a long shadow. The sellers won here, but the buyers fought with dignity. Depending on the context, this figure can serve as a signal of an imminent reversal. After all, sellers were able to push the price very deep, but buyers did not give them a foothold there. The last push? The short body is green, and above it is a long shadow. The victory remained with the buyers, but was it easy? No. Perhaps it was the last rush of buyers, after which there is no strength to fight anymore. Maybe the price will not turn right away, because the buyers have won and they still have strength, but their strength is clearly running out. The same is the case with candles, whose bodies are red, indicating the victory of sellers, but long shadows over the body indicate the strength of buyers. The forces of buyers were able to push the price, but not to fix it. This signal is even more bearish, because the price closed below the opening. Conclusion Each candle is important, but the context is more important. Candles help to get the first signals if you are able to understand them correctly. The shadows of candles are the story of a struggle that usually escapes the eye, but at the same time carries a lot of information. Be careful and don't stop learning. 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
10
GUIDE TO JAPANESE CANDLESHello everyone! Today we will discuss JAPANESE CANDLES! Let's try to understand what they mean and how to use this information in your trading. LET'S GO! Bullish and Bearish PIN BAR A bullish pin bar is a candle with a long shadow, the body of which is located at the top of the candle. Such a candle was formed under the pressure of sellers who were able to push the price down, after which buyers turned on, who pushed the price above the opening and were able to gain a foothold there. This strength of buyers signals to us that sellers are losing dominance in the market and a trend reversal is possible soon. A bearish pin bar has a mirror structure relative to a bullish pin bar. Buyers can't keep the price high, and sellers take up the trend. At these points, we can expect the early completion of the previous impulse and a possible trend change. Bullish and bearish harami Bullish harami consists of two candles: the first is a long full-bodied candle, the second is small with a small body. After a strong downward impulse (the first candle), a sharp reversal begins (the second candle). At the same time, the second candle often opens with a gep. The momentum of the first candle is the last spurt of the market, after which buyers take over the market. The gap in the opening of the second candle and the closing of the first confirms the strength of buyers. Bear harami has a similar structure, but a mirror movement. The last impulse of buyers, was replaced by the gep of sellers. This sign indicates a possible reversal. Bottom and top tweezers These Japanese candles are characterized by two long full-bodied candles. After the first strong impulse, there is a sharp reversal in the opposite direction. This reversal has a huge force, as it is able not only to turn the price against the main trend, but will immediately gain a foothold low. This figure is called tweezers, as the price pierces the level and abruptly returns back. A very strong signal for a reversal. Conclusion These patterns are very popular and useful. The ability to use them correctly in trading can bring significant profits. These patterns help to determine the price reversal, which contributes to a better entry into the position. 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
12
💨 Elliott Wave Pattern: Single Zigzag 🌊 ❗❗ 𝙍𝙪𝙡𝙚𝙨 ● A zigzag always subdivides into three waves. ● Wave Ⓐ always subdivides into an impulse or leading diagonal. ● Wave Ⓒ always subdivides into an impulse or ending diagonal. ● Wave Ⓑ always subdivides into a zigzag, flat, triangle or combination thereof. ● Wave Ⓑ never moves beyond the start of wave Ⓐ . ● Wave Ⓑ always ends within the price territory of wave Ⓐ . ● Wave Ⓒ almost always ends beyond the end of wave Ⓐ . (failure to comply with this requirement is called «truncation»)* *guideline, but should be followed as a rule ❗ 𝙂𝙪𝙞𝙙𝙚𝙡𝙞𝙣𝙚𝙨 ● Wave Ⓒ should not fail to reach the end of wave Ⓐ by more than 10% of the length of wave Ⓐ . (Q&A EWI) ● In a zigzag, the length of wave Ⓒ is usually equal to that of wave Ⓐ , although it is not uncommonly 1.618 or .618 times the length of wave Ⓐ (rarely 2.618). ● Wave Ⓑ typically retraces 38 to 79 percent of wave Ⓐ . ● If wave Ⓑ is a contracting triangle, it will typically retrace 38 to 50 percent of wave Ⓐ . ● If wave Ⓑ is a running contracting triangle, it will typically retrace between 10 and 40 percent of wave Ⓐ . ● If wave Ⓑ is a zigzag, it will typically retrace 50 to 79 percent of wave Ⓐ . ● In a zigzag, if wave Ⓐ is a leading diagonal, then we would not expect to see an ending diagonal for wave Ⓒ . ● A line connecting the ends of waves Ⓐ and Ⓒ is often parallel to a line connecting the end of wave Ⓑ and the start of wave Ⓐ . (Forecasting guideline: Wave Ⓒ often ends upon reaching a line drawn from the end of wave Ⓐ that is parallel to a line connecting the start of wave Ⓐ and the end of wave Ⓑ .) ● Waves Ⓐ and Ⓒ within the zigzag often appear in the form of impulses, but more often alternate according to the type of motive waves: if wave Ⓐ is an impulse, expect wave Ⓒ in the form of a diagonal, and vice versa. It is much less common to find waves Ⓐ and Ⓒ in the form of diagonals, but in this case they will alternate in form: contracting / expanding, and vice versa. (TWEWA) ● If a similar amplitude and duration of waves Ⓐ and Ⓒ within a single zigzag is expected, the line passing through the top of Ⓐ , which is parallel to the line connecting the beginning of wave Ⓐ and the end of wave Ⓑ , often turns out to be the level of completion of wave Ⓒ . In case of a extended wave Ⓐ within a single zigzag, expect the wave Ⓒ to reach the middle line of the channel, and in case of signals in favor of a extended wave Ⓒ , it is worth resorting to the technique of doubling the channel to determine potential support or resistance. (TWEWA) __________________________ 🔗References: Elliott Wave Principal 2005 Trade Waves / Elliott Waves Analysis (TWEWA) 📚 Elliott Wave Guide & Ellott Wave Archive ⬇️⬇️
BITSTAMP:BTCUSDEducation
by TradeWaves-EWA
2
ETC/USDT Main trend. Triangle (pennant). Psychology. Pamp.The coin is the "parent" of the expensive ethereum. Coin in the coenmarket : Ethereum Classic Major trend. Which has formed a large upward channel. Timeframe 1 week. Huge pump (fractal repeat of 2017 May). Pullback. Which formed a triangle (potential upward pennant canvas) in case of a breakout of resistance and the price going up to the upper limits of the channel. Zones of levels to work showed on the chart. Hamsters and "experts" recommend to buy now and even before the decision of the local trading situation on the triangle. After all, the price is now about +1500% of the average accumulation price, and from the bottom of the channel more than +2000%. This is the best time to buy "Hold" and it is very important, if the triangle will be broken through and the price will grow to the resistance of the outer channel, then in no case do not sell, otherwise the main postulate of hamsters and expert bloggers will be broken: [BUY IN THE MAXIMUM, AND SELL MUST ON THE LOW IN THE POCKET!!! . There are two potential position reset zones. The price is in just one of them right now. But that does not mean that there will not be waves. For example, on DOGE the position is reset with a partial payoff (pours when holding zones), but the price is growing and significantly. But this is relevant for traders (real, not imaginary), people who are good at risk management and know how to work on the situation, and not the situation leads their emotional decisions and unpreparedness if the price goes against their expectations. My previous work on this coin. Posted when the price was in accumulation before this pumping. Working in and out of a horizontal channel. Not a public trading idea. Published 09 26 2020. ETC/USD Local work. Potential entry points Press play on the chart, press the left button and pull the chart up, you will see the exact level of the first reset of the hamsters position 43,221. The price at the pumpe is pushed much higher (no sellers, all liquidity and sales are absorbed at the lower values, usually near the accumulation resistance zone up to +100% of it), so weak market participants are not afraid to buy "cheap" when they see the previous price. The more expensive the price, the more willingly the weak (stupid, lazy) market participants buy the asset for the long term. Most people are afraid to buy cheap and without a team. Everything cheap to them is scam, but if scam goes up in price, it is whitened in the eyes of stupid market participants. It becomes no longer a scam. There is already a cult of believers in the next crypto phantom of promise. They foam at the mouth to defend their stupidity. Admitting their mistakes confirms the former stupidity of man. Not everyone is capable of this. A foolish person does not see what was in the past, but only what he has fantasized about. Consequently, he only sees the potential very expensive price, but doesn't see what the price was in the accumulation just 1-2 months ago before pumping. Buying +1500%-2000% is common for the likes of him. It's useless to prove it. The programmed man of the crowd thinks only by its opinion, single conscious thoughts with a difference from the main mass will be crushed in a moment by "experience and expert opinion of the majority". The man does not trust himself, he trusts the majority. The crowd always loses. The rare win is nothing more than a planned tactical move to direct the game background of the characters to shape the reality of the players in their game. Play with dignity, think for yourself. Don't be background characters and "stock players" in someone else's game. Even your erroneous self-made decision is true, at least at the time it is made for you, even if it ultimately turns out to be not quite right. Of your many truths right and wrong is not an easy path to truth. Publication 10 01 2021 Non-Public Work. ETC/USD Mid-Term Work +3100% from accumulation lows/maxims. Over +1000% profit in areas of acceptable liquidity. Local work. This triangle on a large scale . ETC/USDT Secondary Trend Pivot Area Triangle 327 In order to make money in the market, you need someone to give you money all the time. If no one is giving, no one is making money! The cryptocurrency market is super profitable, so giving money away is a super fantastic percentage. I've attached my previous work on this trading pair over the past 3 years under the idea.
by SpartaBTC
7
Pitchforks Follow Normal DistributionPitchforks are a very popular TA tool and easy to use. However the fundamentals are often glossed over. For example, many beginners and vets don't know that it is based on Normal Distribution which has 3 Sigma Limits . This is commonly referred to as a "Bell Curve" . It's a natural rule of thumb used in Statistics and Probability Theory, for all manner of sciences. The 3 Sigma Limits are 3 Standard Deviations from the median line, which is located in the center of the mean distribution of data. For us, this data is price action. The 3 Standard Deviation on a fork are: 1st STD DEV from -0.5 to +0.5 2nd STD DEV from -1.0 to -0.5 & +0.5 to +1.0 3rd STD DEV from -1.5 to -1.0 & +1.0 to +1.5 The 3 Sigma Limits Rule is also known as the 68-95-99.7 Rule. What this means is, while in a trend, natural price action will: 1) Remain within the 1st STD DEV 68% of the time. 2) Remain within the 1st & 2nd STD DEVs 95% of the time. 3) Remain within all 3 STD DEVs 99.7% of the time. What about the remaining .3%? Usually breaking out of the 3rd standard indicates the trend is done, however .3% of the price action can fall outside of the 3 STD DEVs and still continue the trend! This is a rule of thumb for natural law, but stock market price action can be manipulated! If the price action doesn't fit the Normal Distribution model, then it is likely unnatural. Also, since our data never stops coming, the mean can move over time, while staying in the same general trend; making the previous median lines invalid. If a unnatural amount of your price action is falling outside of the 1st STD DEV, then your original median line is likely invalid. A new pivot should show itself to correct the median. That could be what's happening here on the chart, if the bear trend continues back into the fork, with so much price action outside of the 3 STD DEVs. You can draw a new pitchfork on the pivot from June to August which would include more price action. I will include that below.
CME_MINI:ESU2022
by Nicklaus68
31
Wyckoff Madness: A guide for the average JoeWyckoff Madness: A guide for the average Joe Table of Contents I. Introduction Definition of the Wyckoff Pattern Brief background on its creator, Richard D. Wyckoff II. Overview of the Wyckoff Pattern Description of the four stages: accumulation, markup, distribution, and markdown Explanation of how these stages repeat in a cyclical manner III. The Accumulation Stage Characteristics of this stage (low volume, narrow price range) Role of professional traders (smart money) in buying up securities Stages of Accumulation Indicators The Golden Rules IV. The Markup Stage Characteristics of this stage (increased volume, widening price range) Involvement of the public in pushing prices higher V. The Distribution Stage Characteristics of this stage (decreased volume, narrowing price range) Professional traders selling positions to the public at higher prices VI. The Markdown Stage Characteristics of this stage (further decreased volume, widening price range) Public panic selling causing prices to drop VII. Key Principles of the Wyckoff Pattern Concept of supply and demand Use of chart patterns to confirm trade signals VIII. Benefits and Applications of the Wyckoff Pattern Particularly useful for long-term investors Can be applied to different time frames (daily, weekly, monthly charts) XI. Limitations and Risks X. Mastering the Wyckoff Pattern: A Five-Step Approach to Stock Selection and Trade Entry" I. "Step One: Market Analysis for Dummies" II. Overview of the Wyckoff Method's Five Steps Determine market trend and direction using bar and Point and Figure charts Decide whether to enter market and take long or short positions III. "Stocks That Aren't Total Duds" Choose stocks that are stronger in uptrends and weaker in downtrends Use bar charts to compare individual stocks to relevant market index IV. "Setting Goals for Your Stocks" Identify price targets using Point and Figure projections for long and short trades Choose stocks under accumulation or re-accumulation with sufficient "cause" to meet objectives V. "Is Your Stock Ready to Move Its Ass?" Use nine tests to determine readiness to buy or sell Use bar and Point and Figure charts to assess individual stocks VI. "Let the Market Carry You to Victory" Three-quarters or more of individual stocks move with the overall market Use Wyckoff principles to anticipate market turns and put stop-loss in place Trail stop-loss until closing out position. I. Introduction Wyckoff Pattern in trading - The Wyckoff Pattern is a trading strategy that was developed by Richard D. Wyckoff, a Wall Street trader and analyst who lived in the late 19th and early 20th centuries. The Wyckoff Pattern is based on the premise that market trends, whether bullish or bearish, follow a similar pattern of development. Traders may use the Wyckoff Pattern to identify market trends, determine the best times to enter or exit positions, and set price targets for their trades. It can also be used to identify market manipulation and understand the behavior of larger market participants, such as institutional investors. The Wyckoff Pattern can be applied to various financial markets, including stocks, cryptocurrencies, and commodities. It is a widely used and well-respected trading strategy that can be a valuable tool for traders looking to improve their trading performance.. This pattern includes four macro stages: accumulation, markup, distribution, and markdown. II. Overview of the Wyckoff Pattern The accumulation stage is characterized by low volume and narrow price ranges. During this stage, professional traders, also known as "smart money," are quietly buying up a security in large quantities. The markup stage is marked by an increase in volume and a widening of the price range. This is the stage where the public becomes aware of the security and starts to buy it, pushing the price up further. The distribution stage is characterized by a decrease in volume(after a heavy increase) and a narrowing of the price range. During this stage, the professional traders start to sell their positions to the public at increasingly higher prices. The markdown stage is marked by a further decrease in volume and a widening of the price range as the security's price starts to fall. This is the stage where the public starts to panic and sell their positions, causing the price to drop further. The Wyckoff Pattern is based on the idea that these four stages are repeated in a cyclical manner, and that traders can use this knowledge to make informed decisions about when to buy and sell a security. This strategy is particularly useful for long-term investors, as it allows them to take advantage of the natural ebb and flow of the market. One of the key principles of the Wyckoff Pattern is the concept of supply and demand. The accumulation and markup stages represent a surplus of demand, while the distribution and markdown stages represent a surplus of supply. By understanding these trends and analyzing the volume and price action of a security, traders can get a sense of where the market is in its cycle and make informed decisions about their trades. Another important aspect of the Wyckoff Pattern is the use of chart patterns to confirm and validate trade signals. The most common chart patterns used in conjunction with the Wyckoff Pattern are the flag and the wedge. These patterns help traders identify key support and resistance levels and confirm whether a trade signal is valid or not. In this article, we will thoroughly discuss the Wyckoff Method. By understanding the principles of supply and demand as they apply to long-term investing, traders can use the Wyckoff Method to make informed decisions about when to buy and sell securities. III. The Accumulation Stage The accumulation stage is an important part of the Wyckoff Pattern, a trading strategy developed by Wall Street trader and analyst Richard D. Wyckoff. The accumulation stage is characterized by low volume and narrow price ranges, and it is during this stage that professional traders, also known as "smart money," quietly buy up a security in large quantities. The accumulation stage is typically marked by a lack of interest or attention from the general public, as prices remain relatively stable and volume remains low. This is the stage where professional traders, who are often better informed and have access to more resources, take the opportunity to accumulate positions in a security. The accumulation stage is an important indicator of the potential future trend of a security, as it signals that professional traders believe the security is undervalued and has the potential to rise in price. By analyzing the volume and price action of a security during the accumulation stage, traders can get a sense of the strength of the "smart money" buyers and make informed decisions about their trades. Disclaimer: It is important to note that the accumulation stage is just one part of the Wyckoff Pattern, and traders should always consider the overall market trend and use other indicators and studies in conjunction with the Wyckoff Pattern to make informed trades. However, understanding the characteristics and importance of the accumulation stage can provide valuable insight for traders looking to make long-term investments. To recognize accumulation on a bar chart, traders should look for the following characteristics: Low volume: During the accumulation stage, volume should be relatively low as professional traders quietly accumulate positions in a security. Narrow price range: The price range, or the difference between the highest and lowest prices during a given time period, should be relatively narrow during the accumulation stage. Stable or rising prices: Prices should remain stable or gradually rise during the accumulation stage, as professional traders believe the security is undervalued and has potential for future price appreciation. Bullish chart patterns: Traders may also look for bullish chart patterns, such as uptrends or higher highs and higher lows, as these can indicate that professional traders are accumulating positions and expect the security to rise in price. When it comes to identifying accumulation in a stock, forex or other asset, it is important to consider both the long-term trend and short-term price action. One way to determine if a security is being accumulated is to look for signs of a long-term uptrend, such as higher highs and higher lows on the price chart. However, it is important to note that this is not always a clear-cut indication, as there can be periods of consolidation or correction within an uptrend. In addition to considering the long-term trend, traders can also look for specific candlestick patterns or technical indicators that may indicate accumulation. For example, a security with a rising on-balance volume (OBV) or accumulation/distribution (A/D) line may be a sign that professional traders are accumulating positions in the security. It is worth noting that accumulation is not always a straightforward process, and there may be periods of confusion or conflicting signals. To make the most informed decisions, traders should consider a variety of indicators and factors, such as market trends, volume, and price action, and always use sound risk management practices. Review: The accumulation phase is characterized by a sideways and range-bound period that follows a prolonged downtrend. During this phase, larger players, also known as "smart money," try to build positions in a security. This is typically done quietly, with low volume and narrow price ranges. Stages of Accumulation: There are six distinct parts to the Wyckoff accumulation phase, each with an important function. The first part is the "Preliminary Support," which is the initial phase of the accumulation process. This is when smart money begins buying up the security, often at lower prices. The second part is the "Selling Climax," which is characterized by a sharp price decline and high volume. This is a sign that the larger players are aggressively selling their positions, likely in an effort to shake out weaker hands. Following the Selling Climax is the "Automatic Rally," which is a short-term price increase that occurs as the smart money starts buying back their positions at lower prices. This rally is typically marked by increased volume and a narrowing of the price range. The fourth part of the accumulation phase is the "Secondary Test," which is a retest of the previous low prices. This is a key moment in the accumulation process, as it allows the smart money to gauge the strength of the security and make any necessary adjustments to their positions. The fifth part of the accumulation phase is the "Spring," which is a strong price move higher that is often accompanied by high volume. This is a sign that the smart money is aggressively buying the security, likely in anticipation of a larger price move higher. The final part of the accumulation phase is the "Last Point of Support," also known as the "Back-up" and "Sign of Strength." This is the final phase of the accumulation process, in which the smart money continues to buy up the security, pushing the price higher and establishing a new uptrend. The "Preliminary Support" (PS) Occurs after a prolonged down move Signs of high volume and spreads widening Indication that the selling may be coming to an end as buyers begin to show up The "Selling Climax" (SC) PS fails, and price begins to violently sell off Panic selling phase Prices may jump by more than their norm and spreads may widen to extremes Price often closes far from the low and candlestick chart displays a large wick The automatic rally (AR) Late sellers punished as buyers cause price to reverse with same intensity as SC but in opposite direction Result of short sellers covering positions High of this point often defines upper range extreme for consolidation that follows The secondary test (ST) Price revisits lows of structure but in a controlled manner Volume should not increase from sellers Multiple secondary tests common The spring Hard test of low to mislead participants into believing trend is resuming downwards Equivalent to a "swing failure pattern" or shakeout May not always be required Price should quickly reclaim prior structural level after spring Last point of support, back up, and sign of strength (LPS, BU, SOS) Clear shifts in price action from prior activity into beginning of range Price begins to reclaim microstructural pivot points established earlier Sign of strength may occur immediately after spring Rapid, one-sided move that signifies buyers in total control Volume at end of range should be high and result in significant ground covered Marks the beginning of the mark up phase, where larger players take supply from smaller players. Volume Use Indicators There are several indicators used on the TradingView platform that can be used to help assist in identifying accumulation. Some examples include: On-Balance Volume (OBV): The OBV indicator uses volume data to measure buying and selling pressure. A rising OBV line can indicate accumulation, as it suggests that there is more buying than selling and that professional traders are accumulating positions in the security. Chaikin Money Flow (CMF): The CMF indicator uses both price and volume data to measure buying and selling pressure. A positive CMF value can indicate accumulation, as it suggests that there is more buying than selling and that professional traders are accumulating positions in the security. Accumulation/Distribution (A/D): The A/D indicator uses price and volume data to measure the flow of money into and out of a security. A rising A/D line can indicate accumulation, as it suggests that there is more buying than selling and that professional traders are accumulating positions in the security. The Golden Rules The market and individual securities never behave in exactly the same way twice, and the significance of price movements can only be understood in the context of past price behavior. Context is everything in the financial markets, and the best way to evaluate current price action is to compare it to what has happened in the past. Analyzing a single day's price action in isolation can lead to incorrect conclusions. In addition to these rules, Wyckoff also identified three types of trends - up, down, and flat - and three time frames - short-term, intermediate-term, and long-term - and observed that trends can vary significantly depending on the time frame being analyzed. These rules can be used to help traders identify and analyze trends and make informed trading decisions. IV. The Markup Stage The markup stage is a crucial part of the Wyckoff Pattern, a trading strategy developed by Wall Street trader and analyst Richard D. Wyckoff. The markup stage is characterized by an increase in volume and a widening of the price range, and it is during this stage that the public becomes aware of a security and starts to buy it, pushing the price up further. The markup stage typically follows the accumulation stage, during which professional traders, also known as "smart money," quietly accumulate positions in a security. As the professional traders start to build their positions and the security's price begins to rise, the public becomes aware of the security and starts to buy it as well. This increased buying activity drives the price up further and widens the price range. One way to identify the markup stage on a price chart is to look for an increase in volume and a widening of the price range. This can be a sign that the public is becoming more interested in the security and is starting to buy it, pushing the price up further. The markup phase can be further measured by the slope of the new uptrend, with pullbacks to new support offering potential buying opportunities known as throwbacks, similar to modern buy-the-dip patterns. Re-accumulation phases may also interrupt the markup phase with small consolidation patterns, while steeper pullbacks known as corrections can also occur. It is important to note that the markup stage is just one part of the Wyckoff Pattern, and traders should always consider the overall market trend and use other indicators and studies V. The Distribution Stage The distribution stage is characterized by a decrease in volume and a narrowing of the price range, and it is during this stage that professional traders start to sell their positions to the public at increasingly higher prices. The distribution stage typically follows the markup stage, during which the public becomes aware of a security and starts buying it, pushing the price up further. As the price continues to rise, professional traders begin to sell their positions to the public at increasingly higher prices. This selling activity leads to a decrease in volume and a narrowing of the price range. One way to identify the distribution stage on a price chart is to look for a decrease in volume and a narrowing of the price range. This can be a sign that professional traders are selling their positions to the public and that the security's price may be reaching a peak. There are five parts to the Wyckoff distribution phase: the "Preliminary Supply," the "Buying Climax," the automatic reaction, the secondary test, and the spring. The "Preliminary Supply" is the first sign that professional traders are starting to sell their positions. This is typically marked by an increase in volume and a widening of the price range. The "Buying Climax" is a sign that the public is becoming aware of the security and is starting to buy it. This is typically marked by a further increase in volume and a further widening of the price range. The automatic reaction is a short-term pullback in the security's price as professional traders continue to sell their positions. This is typically marked by a decrease in volume and a narrowing of the price range. The secondary test is a retest of the low of the automatic reaction. This is typically marked by a further decrease in volume and a further narrowing of the price range. The spring is a sharp, low-volume move up in the security's price as professional traders start to accumulate their positions again. This is typically marked by an increase in volume and a widening of the price range. The Wyckoff distribution phase also includes three important terms: SOW, LPSY, and UTAD. SOW stands for "supply over whelming demand," LPSY stands for "last point of supply," and UTAD stands for "upthrust after distribution." These terms refer to specific points in the distribution phase where professional traders are particularly active in selling their positions. The Distribution cycle is characterized by dominant traders selling off their positions when the price is high The Distribution cycle has five phases: Preliminary Supply (PSY), Buying Climax (BC), Automatic Reaction (AR), Secondary Test (ST), and Sign of Weakness, Last Point of Supply, Upthrust After Distribution (SOW, LPSY, UTAD) The Preliminary Supply phase occurs after a significant price rise and is marked by dominant traders selling off large portions of their positions The Buying Climax phase is characterized by retail traders buying up positions, causing the price to continue rising The Automatic Reaction phase is marked by a decrease in the number of traders buying up positions, resulting in a drop in price to the lower boundary of the Distribution cycle The Secondary Test phase sees the price rise back to the range of the Buying Climax, as traders test the balance of supply and demand The final phase, Sign of Weakness, Last Point of Supply, Upthrust After Distribution (SOW, LPSY, UTAD), is characterized by the asset's price falling near or below the initial boundaries of the Distribution cycle, indicating price weakness. The LPSY phase sees traders testing the support of the asset's price at these lower levels, and the UTAD phase, if it occurs, is marked by increased demand and a push to the upper price boundary of the entire cycle. VI. The Markdown Stage The markdown period, also known as the distribution stage, is a crucial part of the Wyckoff Cycle. It follows the markup stage, during which professional traders, or "smart money," start to build their positions and the security's price begins to rise. As the price continues to rise, the public becomes aware of the security and starts to buy it as well, driving the price up further and widening the price range. However, as the price reaches its peak and the professional traders start to sell off their positions, the markdown period begins. This is characterized by a decrease in volume and a narrowing of the price range, as the professional traders sell off their positions to the public. It is important to note that the markdown period is just one part of the Wyckoff Cycle, and traders should always consider the overall market trend and use other indicators and studies in conjunction with the Wyckoff Pattern to make informed trades. However, understanding the characteristics and importance of the markdown period can provide valuable insight for traders looking to make long-term investments. VII. Key Principles of the Wyckoff Pattern The Wyckoff Method, a trading strategy developed by Wall Street trader and analyst Richard D. Wyckoff, is based on three fundamental laws that provide insight into market trends and help traders make informed decisions. These laws are: the law of supply and demand, the law of cause and effect, and the law of effort vs. result. The law of supply and demand is one of the most basic principles of financial markets, stating that prices rise when demand is greater than supply, and drop when the opposite is true. This law can be represented by the following equations: if demand is greater than supply, the price will rise; if demand is less than supply, the price will drop; if demand is equal to supply, there will be no significant price change (low volatility). Many investors who follow the Wyckoff Method use price action and volume bars to visualize the relationship between supply and demand and gain insights into potential market movements. The law of cause and effect states that the differences between supply and demand are not random, but rather the result of specific events or periods of preparation. In Wyckoff's terms, a period of accumulation (cause) eventually leads to an uptrend (effect), while a period of distribution (cause) eventually results in a downtrend (effect). Wyckoff developed methods of defining trading targets based on periods of accumulation and distribution, allowing him to estimate the probable extension of a market trend after breaking out of a consolidation zone or trading range. The law of effort vs. result states that the changes in an asset's price are a result of an effort, as represented by the trading volume. If the price action is in harmony with the volume, there is a good chance the trend will continue. However, if the volume and price diverge significantly, the market trend is likely to stop or change direction. For example, if the market experiences high volume but low volatility during a consolidation phase, this may indicate that the trend is coming to an end and a reversal is imminent. In terms of benefits and applications, the Wyckoff Pattern is particularly useful for long-term investors who are looking to take advantage of the natural ebb and flow of the market. It can also be applied to different time frames, such as daily, weekly, or monthly charts. However, it is important to note that the Wyckoff Pattern is not without its risks and limitations. As a standalone strategy, it may not always provide reliable signals and should be used in conjunction with other indicators and studies. One indicator that traders can use to help identify the markdown period is the relative volume indicator. This indicator compares the current volume of a security to its average volume over a certain period of time, helping traders to identify unusual changes in volume that may be indicative of a change in the market trend. To use the relative volume indicator in TradingView, first select the security you are interested in and then click on the "Indicators" tab. From the list of indicators, select the "Volume" category and then choose the "Relative Volume" indicator. You can then customize the settings for the indicator, including the period of time over which you want to compare the volume. Once the relative volume indicator is applied to the chart, you can use it to identify changes in volume that may be indicative of a change in the market trend. For example, if the relative volume is significantly higher than normal, it may be an indication that the markdown period is beginning, as professional traders start to sell off their positions. On the other hand, if the relative volume is significantly lower than normal, it may be an indication that the markdown period is coming to an end, as the professional traders have finished selling off their positions. The Volume indicator in Tradingview is a useful tool for analyzing the volume of a security or asset over a specified time period. To access the Volume indicator in Tradingview, simply click on the "Indicators" tab in the chart menu and select "Volume" from the list of available indicators. Once you have added the Volume indicator to your chart, you can customize its appearance and settings to suit your needs. For example, you can adjust the length of the moving average applied to the volume data, as well as the color and style of the volume bars. To turn on the internal moving average for the Volume indicator, simply click on the "Settings" button in the indicator menu and check the box next to "Show MA." From here, you can also specify the length of the moving average by entering a value in the "MA Length" field. Using the Volume indicator with an internal moving average can be helpful in identifying trends in volume over time. For example, if the volume is consistently rising over a period of several days or weeks, this may be a sign of increased interest in the security or asset. On the other hand, if the volume is declining over time, this could indicate a decrease in interest or liquidity. In addition to the Volume indicator, you can also use the relative volume indicator in Tradingview to compare the volume of a security or asset to its average volume over a specified time period. To do this, simply add the relative volume indicator to your chart and customize its settings as needed. Overall, the Volume and relative volume indicators can be valuable tools for traders and investors looking to analyze the volume of a security or asset and identify trends in liquidity over time. One of the best tools I have personally found, created by LUXALGO (Thank you humbly for this!) The Smart Money Concepts indicator is a technical analysis tool developed by Luxalgo that is used to identify the behavior of professional or "smart money" traders in the market. It is based on the principles of the Wyckoff Method, which suggests that market trends follow a similar pattern of development that includes four stages: accumulation, markup, distribution, and markdown. To use the Smart Money Concepts indicator in Tradingview, follow these steps: Open the Tradingview platform and select the asset you want to analyze. Click on the "Indicators" tab in the chart toolbar and select "Add Indicator." In the search bar, type in "Smart Money Concepts" and select the indicator from the list. Adjust the indicator's settings to your preference. You can choose the length of the moving average, the color of the lines, and whether you want to show the accumulation and distribution lines on the chart. Click "Apply" to add the indicator to your chart. Once you have the Smart Money Concepts indicator on your chart, you can use it to identify the behavior of smart money traders. The accumulation line represents the buying activity of professional traders, while the distribution line represents their selling activity. When the accumulation line is above the distribution line, it indicates that professional traders are buying more than they are selling, which may be a sign of bullish sentiment. Conversely, when the distribution line is above the accumulation line, it indicates that professional traders are selling more than they are buying, which may be a sign of bearish sentiment. The SMC is designed to help traders accurately identify liquidity and find optimal points of interest in the market. It does this by displaying real-time market structure, order blocks, premium and discount zones, equal highs and lows, and more on the chart, allowing traders to automatically mark up their charts with widely used price action methodologies. One of the key features of the SMC indicator is its ability to label internal and swing market structures in real-time, including Break of Structure (BOS) and Change of Character (CHoCH). These structures can provide insight into the behavior of institutional market participants and help traders determine where buy and sell side liquidity may be located. The SMC indicator also includes alerts for the presence of swing structures and other relevant conditions, as well as options for styling the indicator to make it easier to display these concepts. It allows users to select between historical and present modes, and offers customization options for things like internal structure, swing structure, equal highs and lows, and fair value gap detection. One of the benefits of using the SMC indicator is its ability to help traders filter out non-significant internal structure breakouts and fair value gaps using its confluence filter and auto threshold settings. It also allows users to display previous highs and lows from different timeframes, such as daily, weekly, and monthly, as significant levels. You can also use the Smart Money Concepts indicator in combination with other technical analysis tools, such as trend lines and chart patterns, to help you make more informed trading decisions. For example, if the accumulation line is trending upwards and you see a bullish chart pattern forming on the chart, it may be a good time to consider entering a long position. For more information and use cases please refer to the authors page: Accumulation and Distribution Review and Memorization Tactic: For the accumulation phase: "P-S-C-A-R-S-L" Preliminary Support (PS) Selling Climax (SC) Automatic Rally (AR) Secondary Test (ST) Spring (S) Last Point of Support, Back Up, Sign of Strength (LPS, BU, SOS) For the distribution phase: "P-B-A-S-S" Preliminary Supply (PSY) Buying Climax (BC) Automatic Reaction (AR) Secondary Test (ST) Sign of Weakness, Last Point of Supply, Upthrust After Distribution (SOW, LPSY, UTAD) Reminder! Review the GOLDEN RULES ABOVE! Finding Patterns The key principles of the Wyckoff Pattern involve understanding the concept of supply and demand and using chart patterns to confirm trade signals. When it comes to understanding supply and demand, the Wyckoff Pattern is based on the idea that prices rise when demand is greater than supply and drop when the opposite is true. This is one of the most basic principles of financial markets and is a central concept in the Wyckoff Method. By analyzing price action and volume bars, traders can get a better sense of the relation between supply and demand and gain insight into potential market movements. In addition to understanding supply and demand, traders using the Wyckoff Pattern also rely on chart patterns to confirm trade signals. Some of the most common chart patterns used in conjunction with the Wyckoff Pattern are the flag, the wedge, and the head and shoulders pattern. Two of the most common chart patterns used in conjunction with the Wyckoff Pattern are the flag and the wedge. These patterns are typically formed when there is a sudden and sharp price move followed by a period of consolidation. The flag pattern is formed when the price of an asset makes a sharp move in one direction, followed by a period of consolidation in a narrow range. The consolidation period is often referred to as the "flag" because it appears as a rectangular shape on the chart. The flag pattern is typically seen as a bullish pattern, as it suggests that the asset is likely to continue its uptrend after the consolidation period. To identify the flag pattern, traders should look for a sharp price move followed by a period of consolidation in a narrow range. The wedge pattern is similar to the flag pattern, but it is formed when the price of an asset makes a sharp move in one direction followed by a period of consolidation in a gradually narrowing range. The consolidation period is often referred to as the "wedge" because it appears as a triangular shape on the chart. The wedge pattern can be either bullish or bearish, depending on the direction of the initial price move. To identify the wedge pattern, traders should look for a sharp price move followed by a period of consolidation in a gradually narrowing range. Note that the flag and wedge patterns are just two of many chart patterns that traders can use in conjunction with the Wyckoff Pattern. Other common chart patterns include the head and shoulders, the double top and bottom, and the triangle. Traders should always consider Head and Shoulders: This chart pattern is characterized by a series of three peaks, with the middle peak (the head) being the highest and the two peaks on either side (the shoulders) being lower. This pattern is often seen as a bearish reversal, indicating that the trend is likely to reverse from an uptrend to a downtrend. Double Top: This chart pattern is characterized by two consecutive peaks at approximately the same price level, with a valley in between. This pattern is often seen as a bearish reversal, indicating that the trend is likely to reverse from an uptrend to a downtrend. Double Bottom: This chart pattern is the opposite of the double top, and is characterized by two consecutive valleys at approximately the same price level, with a peak in between. This pattern is often seen as a bullish reversal, indicating that the trend is likely to reverse from a downtrend to an uptrend. Triangle: This chart pattern is characterized by a series of peaks and valleys that converge towards a point, forming a triangular shape. There are three types of triangles: ascending, descending, and symmetrical. The direction of the breakout from the triangle can be used to confirm the direction of the trend. Pennant: This chart pattern is similar to the triangle, but is characterized by a smaller price range and a faster time frame. It is typically seen as a continuation pattern, indicating that the trend is likely to continue in the same direction. It is important to note that chart patterns should not be used in isolation, and should always be used in conjunction with other indicators and studies to confirm trade signals and make informed investment decisions VIII. Benefits and Applications of the Wyckoff Pattern The Wyckoff Pattern is a well-respected and widely-used trading strategy that has been used by traders for decades. It is particularly useful for long-term investors who are looking to make informed decisions about the direction of a security's price. Here are some of the benefits and applications of the Wyckoff Pattern: Provides insight into market trends: The Wyckoff Pattern is based on the premise that market trends, whether bullish or bearish, follow a similar pattern of development. This pattern includes four stages: accumulation, markup, distribution, and markdown. By understanding these stages, traders can gain insight into the direction of a security's price and make informed trades. Can be applied to different time frames: It can be applied to different time frames, such as daily, weekly, and monthly charts. This allows traders to use the pattern in conjunction with their preferred time frame and trade accordingly. Helps traders confirm trade signals: Wyckoff can be used in conjunction with other chart patterns, such as flags and wedges, to confirm trade signals. By using multiple indicators, traders can increase the likelihood of making successful trades. Useful for long-term investors: The Wyckoff Pattern is particularly useful for long-term investors who are looking to make informed decisions about the direction of a security's price. By understanding the different stages of the pattern, long-term investors can make informed decisions about when to buy and sell a security. Can be used in conjunction with other strategies: It can be used in conjunction with other trading strategies, such as technical analysis and fundamental analysis. By combining multiple strategies, traders can increase their chances of making successful trades. Overall, the Wyckoff Pattern is a useful tool for traders looking to make informed decisions about the direction of a security's price. By understanding the different stages of the pattern and using it in conjunction with other chart patterns and trading strategies, traders can increase their chances of making successful trades. IX. Limitations and Risks While the Wyckoff Pattern can be a valuable tool for traders looking to make long-term investments, it is important to note that it is not without its limitations and risks. One potential limitation of the Wyckoff Pattern is that it is based on historical price and volume data, which may not always accurately predict future market movements. This means that traders should always consider other factors, such as economic news and analysis, when making investment decisions. Another risk to be aware of when using the Wyckoff Pattern is the possibility of price manipulation. As mentioned earlier, traders should be aware of the potential for "pump and dump" schemes, in which unscrupulous traders or groups artificially inflate the price of a security through deceptive marketing tactics and then sell their positions at a profit. To protect themselves, traders should thoroughly research a security before buying and be aware of any red flags or warning signs that may indicate manipulation. Additionally, the Wyckoff Pattern is a long-term investment strategy, which means that traders may have to hold their positions for extended periods of time. This can be risky, as market conditions can change quickly and traders may not always be able to exit their positions at the optimal time. Finally, it is important to note that the Wyckoff Pattern is just one of many tools that traders can use to make informed investment decisions. While it can be a valuable resource, it should not be relied upon as a standalone strategy. Traders should always consider a variety of factors and use a variety of tools when making investment decisions. X. Mastering the Wyckoff Pattern: A Five-Step Approach to Stock Selection and Trade Entry" I. "Step One: Market Analysis for Dummies" Mastering the Wyckoff Method requires a combination of technical analysis skills, market knowledge, and experience. Here are some tips on how to improve your Wyckoff identification skills: Start by learning the basic principles of the Wyckoff Method. The Wyckoff Method is a technical analysis strategy developed by Richard D. Wyckoff in the early 20th century. It is based on the premise that market trends follow a similar pattern of development, including four stages: accumulation, markup, distribution, and markdown. Understanding these stages is essential to identifying Wyckoff patterns in the market. Practice chart analysis. The Wyckoff Method relies heavily on analyzing price and volume charts to identify market trends and patterns. Therefore, it is important to develop your chart analysis skills. Start by familiarizing yourself with different chart types and indicators, such as moving averages and relative strength index. Practice analyzing charts for different assets and timeframes, and compare your analysis with real market movements. Learn to identify key chart patterns. There are several chart patterns that are commonly used in conjunction with the Wyckoff Method, such as flags, wedges, and head and shoulders. Practice identifying these patterns on different charts and learn to recognize their characteristics and implications for market trends. Use relative volume indicator. The relative volume indicator is a helpful tool for identifying Wyckoff patterns, as it shows the volume of a particular asset relative to its average volume. By comparing the current volume to the average volume, you can identify whether there is an unusual increase or decrease in volume, which can be a sign of accumulation or distribution. Look for changes in market structure. The Wyckoff Method emphasizes the importance of market structure, or the relationship between supply and demand. Pay attention to changes in market structure, such as the formation of new support and resistance levels, and use this information to identify II. Overview of the Wyckoff Method's Five Steps Mastering the Wyckoff Method also involves a five-step approach to stock selection and trade entry. The first step is to conduct market analysis in order to determine the trend and direction of the market. This can be done using bar charts and Point and Figure charts to visualize the supply and demand dynamics in the market. The second step is to select stocks that are stronger in uptrends and weaker in downtrends, using bar charts to compare individual stocks to the relevant market index. The third step in mastering the Wyckoff Method is to set goals for your stocks. This involves identifying price targets using Point and Figure projections for long and short trades, and choosing stocks that are under accumulation or re-accumulation with sufficient "cause" to meet these objectives. The fourth step is to determine whether a stock is ready to move, using nine tests to assess its readiness to buy or sell. These tests include evaluating the stock's market structure, volume, and price action, as well as its relationship to the overall market. The final step in mastering the Wyckoff Method is to let the market carry you to victory. This involves recognizing that three-quarters or more of individual stocks move with the overall market, and using Wyckoff principles to anticipate market turns and put stop-loss in place. It is also important to trail stop-loss until closing out a position. III. "Stocks That Aren't Total Duds" Choose stocks that are stronger in uptrends and weaker in downtrends Use bar charts or range candles to compare individual stocks to relevant market index In the Wyckoff Method, it is important to choose stocks that are strong in uptrends and weak in downtrends. This means that when the overall market is trending upwards, these stocks will tend to outperform and when the market is trending downwards, these stocks will tend to underperform. One way to identify these types of stocks is by using bar charts to compare the performance of individual stocks to a relevant market index. To do this in TradingView, you can start by creating a chart of the market index you want to compare your stocks to. For example, you may choose to compare your stocks to the S&P 500 index. Once you have the chart of the market index, you can add the individual stocks you are interested in to the same chart using the "Compare" feature. This will allow you to see how the performance of the individual stocks compares to the market index. In addition to using bar charts to compare the performance of individual stocks to a market index, you can also use other technical indicators to help identify strong stocks. For example, you may want to look for stocks that are consistently above their moving averages, which can be a sign of strength. You can also use indicators like the relative strength index (RSI) to help identify stocks that are overbought or oversold. It is important to keep in mind that no single indicator or analysis technique is perfect, and it is always a good idea to use multiple tools and approaches to help identify strong stocks. By using a combination of chart analysis and technical indicators, you can improve your chances of identifying stocks that are likely to perform well in different market environments. Overall, the key to success in using the Wyckoff Method is to be proactive and disciplined in your approach to stock selection and trade entry. By following a structured process and using the right tools, you can improve Using the number of stocks in the S&P 500 index that are above or below their 20-day and 50-day moving averages on larger time frames can be a useful tool for identifying potential trading opportunities. When the number of stocks above their 20-day moving average is increasing, it may indicate that the overall market trend is bullish and that there are more buyers in the market. On the other hand, if the number of stocks above their 50-day moving average is decreasing, it may signal that the market trend is bearish and that there are more sellers in the market. Traders can use this information to make informed decisions about their own trades. For example, if the number of stocks above their 20-day moving average is increasing and the number of stocks above their 50-day moving average is also increasing, it may be a good time to consider taking a long position in the market. Conversely, if the number of stocks above their 20-day moving average is decreasing and the number of stocks above their 50-day moving average is also decreasing, it may be a good time to consider taking a short position in the market. In addition to providing information about the overall market trend, tracking the number of stocks above or below their 20-day and 50-day moving averages can also help traders identify potential trading opportunities within individual stocks. For example, if a stock is consistently above its 20-day moving average but below its 50-day moving average, it may be a good candidate for a long trade. Similarly, if a stock is consistently below its 20-day moving average but above its 50-day moving average, it may be a good candidate for a short trade. Overall, using the number of stocks in the S&P 500 index above or below their 20-day and 50-day moving averages on larger time frames can be a useful tool for identifying potential trading opportunities in both the overall market and individual stocks. By tracking this information and making informed decisions based on it, traders can potentially improve their chances of success in the markets. IV. Setting Goals w/ X’s and O’s, I love you! The Wyckoff Method emphasizes the importance of setting clear goals for your trades, as this can help guide your decision-making process and increase your chances of success. One way to set goals for your stocks is by using Point and Figure projections. Point and Figure charts are a type of technical analysis tool that plot price movements without taking time into consideration. They are created by marking up a chart with X's when the price increases and O's when it decreases. These charts can be used to identify potential support and resistance levels, as well as to project potential price targets for long and short trades. To use Point and Figure projections for setting goals, you first need to determine the current trend of the market and the direction in which you want to trade. If you are looking to take a long position, you will want to identify a target price that is above the current market price. On the other hand, if you are looking to take a short position, you will want to identify a target price that is below the current market price. Once you have identified your target price, you can use Point and Figure projections to determine the likelihood of the stock reaching that price. This involves analyzing the number of X's and O's on the chart and identifying patterns that may indicate a potential trend. For example, if the chart shows a series of higher highs and higher lows, this may be an indication that the stock is in an uptrend and is likely to continue moving higher. In addition to using Point and Figure projections, it is also important to choose stocks that are under accumulation or re-accumulation with sufficient "cause" to meet your objectives. "Cause" refers to the underlying factors that may be driving the stock's price action, such as changes in the company's financial performance or shifts in market conditions. By choosing stocks with strong "cause," you can increase your chances of success and achieve your price targets more easily. Overall, setting clear goals for your trades and using Point and Figure projections and "cause" analysis can help you make more informed decisions and increase your chances of success in the market. By following the Wyckoff Method's principles for setting goals and identifying trade opportunities, you can improve your stock selection and trade entry strategies and achieve your financial objectives. IV. "Setting Goals for Your Stocks" By using Point and Figure projections, traders can establish realistic and achievable goals for both long and short trades. There are a few key considerations to keep in mind when setting price targets using Point and Figure projections. Firstly, it is important to understand the underlying trend of the stock. Is the stock in an uptrend or a downtrend? This will help to establish the likely direction of price movement and inform the target levels you set. In addition to the trend, it is also important to consider the current phase of the Wyckoff Cycle. Is the stock in an accumulation phase, where larger players are building positions? Or is it in a distribution phase, where larger players are selling off their positions? Choosing stocks that are in accumulation or re-accumulation phases with sufficient "cause" can help to increase the chances of meeting your objectives. Another key factor to consider when setting price targets is the strength of the stock. Are there any clear levels of resistance or support that the stock is likely to encounter on its way to your target price? Understanding the stock's underlying strength can help you to refine your target levels and increase the chances of success. Overall, setting price targets using Point and Figure projections is a key aspect of the Wyckoff Method. By carefully considering the trend, the phase of the Wyckoff Cycle, and the strength of the stock, traders can increase their chances of success and achieve their objectives. To customize the stock scanner in TradingView to find stocks above/below the 20 day and 50 day moving averages: Go to the stock scanner page in TradingView. Under the "General" tab, select "Simple Moving Average" from the "Indicator" dropdown menu. In the "Condition" field, choose "crosses above" or "crosses below" depending on your desired criteria. In the "Value" field, enter the desired moving average value (e.g. 20 or 50). Repeat steps 2-4 for the other moving average value. Click the "Add Condition" button to add another condition. Under the "Market" tab, select the desired market (e.g. S&P 500) from the "Market" dropdown menu. Click the "Scan" button to run the scan. To compare the findings to the heatmap using relative monthly volume as the sorting method: Go to the heatmap page in TradingView. Under the "Sort by" dropdown menu, select "Relative Monthly Volume". In the "Group by" dropdown menu, select "Market". Click the "Apply" button to update the heatmap. Compare the stocks in the scan results to the heatmap to see which ones have relatively high monthly volume and are in the desired market. www.tradingview.com V.”is your stock ready to move its ass?” The Wyckoff Method includes nine tests to determine whether a stock is ready to move in a particular direction, either upwards or downwards. These tests can be used in conjunction with bar and Point and Figure charts to assess the readiness of a stock and make informed trade decisions. Trend: The trend of a stock should be evaluated to determine whether it is moving upwards or downwards. This can be done using bar charts or Point and Figure charts. Volume: The volume of a stock should be analyzed to determine whether it is increasing or decreasing. Increasing volume can indicate that the stock is ready to move, while decreasing volume may indicate that the stock is not ready to move. Range: The range of a stock, or the difference between its high and low prices, should be evaluated to determine whether it is expanding or contracting. Expanding ranges can indicate that the stock is ready to move, while contracting ranges may indicate that the stock is not ready to move. Reactions: The reactions of a stock to price changes should be evaluated to determine whether it is moving in a bullish or bearish direction. Bullish reactions can indicate that the stock is ready to move upwards, while bearish reactions may indicate that the stock is ready to move downwards. Tests: Tests of previous highs or lows can indicate whether a stock is ready to break out of its current range. A successful test of a previous high or low can indicate that the stock is ready to move in the opposite direction. Stops: The placement of stops, or points at which traders will exit their positions if the stock moves in an undesirable direction, can indicate the readiness of a stock to move. If a large number of stops are placed at a particular price level, this can indicate that the stock is ready to move in the opposite direction. Distribution: The distribution of a stock, or the process of selling off a large portion of a position, can indicate that the stock is ready to move in the opposite direction. Accumulation: The accumulation of a stock, or the process of buying a large portion of a position, can indicate that the stock is ready to move in the same direction. Selling Climax: A selling climax, or a period of panic selling, can indicate that the stock is ready to move in the opposite direction. By carefully evaluating these nine tests, traders can make informed decisions about the readiness of a stock to move in a particular direction and take appropriate action. VI. "Let the Market Carry You to Victory" The Wyckoff Method emphasizes the importance of understanding market trends and identifying when a stock is ready to move. In order to maximize profits and minimize risk, it is essential to have a clear understanding of the market's direction and to know when to enter and exit a trade. One key principle, as said before, of the Wyckoff Method is the idea that approximately three-quarters of individual stocks move with the overall market. This means that it is important to pay attention to the overall market trend and to use Wyckoff principles to anticipate market turns. This can help you determine when it is a good time to enter or exit a trade, and it can also help you set appropriate stop-loss levels. To put stop-loss in place and trail it until closing out a position, it is important to use the Wyckoff Method's nine tests to determine readiness to buy or sell. These tests include analyzing the stock's price and volume patterns, as well as considering its trend, relative strength, and other factors. By carefully analyzing these factors, you can make informed decisions about when to enter and exit trades and minimize risk. Overall, the Wyckoff Method's emphasis on market analysis and understanding market trends can be a valuable tool for stock traders looking to maximize profits and minimize risk. By following the principles of the Wyckoff Method, you can make informed, strategic decisions about when to enter and exit trades and take advantage of market trends.
NASDAQ:AAPL
by OccamsPhazer
2
GOLD in 2023Hello everyone! Today I want to try to analyze the factors that will affect gold in the new year. We will try to understand what to expect from gold and where the price may end up. The difficulty of predicting GOLD prices Predicting a possible future is a difficult and thankless task for itself. Predicting the future price of gold is also difficult, because gold is an independent asset and it can be perceived as a separate currency. At the same time, if currencies can be tied to the economies of countries, then what should GOLD be tied to? The main indicators for gold are the volume of its purchases, the volume of invested funds of gold mining companies and the cost of gold production in general. Since gold is used in the jewelry industry, it is possible to predict the future price movement of an asset if you understand the future demand for jewelry, which is very difficult to do. With economic growth, people become richer and buy jewelry, which increases demand. Moreover, during economic downturns, it increases the amount of money invested in gold, so people try to escape from inflation and loss of money in a crisis. It is difficult to compare all these data with each other, because there is a lot of uncertainty in them, which is why the forecast for gold is a difficult matter. Profitable? Historically, gold is constantly growing. Since 2000, the price of gold has increased 6 times. Since 1970, gold has grown 51 times. Does this mean that it will grow next year as well? No. Such a large historical period gives us an idea of the direction of the main trend. 2023 The World Bank has made a forecast for the next year, which indicates that the price of gold will fall. But don't blindly believe other people's analytics. For example, the World Bank in 2018 predicted that in 2021 the price of gold will be equal to $ 1,247. Now we know that the price in 2021 was in the range from 1676 to 1950. You always need to conduct your own analysis and draw your own conclusions. Now let's try to understand what will happen in 2023. There are several main factors that point to the growth of gold next year: 1. Low interest rates 2. Raising inflation expectations 3. Higher oil prices 4. Increased demand from institutional investors 5. Devaluation of currencies of emerging economies Low interest rates The yield on 10-year Treasury bonds is at a historically low level. Now investing in such bonds will bring you 1.5% per year. That is very little and investors will look for alternative sources of income. Since the stock market is overheated, investing in gold looks like an attractive option. A large amount of investment funds will push up the price of gold. Rising inflation expectations Inflation is accelerating already this year and the US Federal Reserve predicts an increase in inflation in 2023. Inflation is growing every year and in 2022 it amounted to more than 4%. Inflation, as you know, devalues the currency, which increases the value of gold. The amount of gold that you could buy for $ 1,000 a few years ago is already worth more, and it will no longer be possible to buy the same amount for the same money, and this trend is expected to continue. Higher oil prices Historically high oil prices contribute to an increase in the value of gold. This can be explained by the fact that oil is an important factor in increasing inflation, the growth of which, as we noted above, weakens the currency, which positively affects the price of gold. Everything that makes the currency weaken makes gold only stronger. In 2023, according to analysts' forecasts, the price of oil will rise, respectively, we can expect an increase in gold. Increased demand from institutional investors In 2022, the record for the volume of gold purchases was updated. Central banks bought 400 tons of gold worth $ 20 billion, which is the highest figure in half a century. And there is an explanation for this: low interest rates and currency printing leads to currency depreciation. Banks need to somehow avoid losses. The stock market is overheated, and bonds give too small a percentage of profit, which, according to expectations, will not help to avoid even inflationary risks, and what remains? The market correction forces Central banks to buy huge volumes of gold, which inevitably pushes the price. Conclusions These are not all factors that may affect the growth of gold next year. In addition, the world is extremely volatile and there is a possibility of factors that will push the price down, for example, an increase in interest rates or other drastic changes related to inflation and, for example, the adoption of cryptocurrencies by world banks. Unexpected and drastic political decisions and the actions of some countries have already been able to affect the global economy this year. That is why long-term forecasting of such an important asset for the global economy as gold is extremely difficult. It is necessary to be objective in the analysis, open to the possible emergence of new factors and soberly assess the real situation. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
FOREXCOM:XAUUSD
by Lingrid
14
Trading with Candlesticks Harmony - Above 80% Win RateIn this video I discuss how to use simple wave-analysis and how to use candlesticks harmony in 5 or 15 minutes time-frames to trade with success. This sterategy even works on 1 minute time-frames for some forms of countable harmonies... --- Gerald Mann was born Mr. Peiman Ghasemi on February 16, 1988. He got deported from Turkey to Iran where he is exit banned now. Alongside trading, he is also wishing to gain the freedom to leave the country. On the other side the silence of the related governmental departments of the U.S. is obvious. There is no answer.
SP:SPXEducation
by GeraldMann
ANALYSIS OF THE BULLISH MOVEMENTHello everyone! Today I want to discuss with you the bullish movement or bullish momentum. The topic is interesting, and most importantly profitable! Beginning of observations To begin with, we need an uptrend. If you open long positions when there is an uptrend in the market, you will make a profit more often. The best entry point will be a reversal, after correction. This is the moment we are waiting for. The beginning of the correction will be marked by the renewal of the lows and the scrapping of the upward trend. An imbalance appears on the chart, usually in the area of the level breakout.. Reversal+position opening The beginning of an upward movement begins to emerge when the price cannot update the minimum and begins to form each new minimum above the previous one. In addition, the structure breaks down and an imbalance appears in the area of breaking the level up. Long positions can be opened at these points. If you did not have time to open a position or want to wait for a conservative opportunity to enter, you can open a long position when the price returns to the previously broken level and tests it again. Goals Previous highs may be the targets. This price movement pattern is observed on all timeframes every day. With the correct use of this method, if you have trained well and learned how to correctly identify these points, you will be able to earn. Train, study and earn . Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
11
Everything you need to know about order block 5 RULES | TUTORIALToday we're going to talk about orderblocks. Very simply, an orderblock is the support and resistance of big players. It is stronger and more important than what you draw on a chart expecting a price reaction by classical technical analysis. This works absolutely everywhere in cryptocurrency, forex, and the stock market. I have deduced for myself 5 rules of confirmation, and now we will go over each of them. Let's start with schemes and end with an example on a chart. Orderblock is a candlestick that shows purchases or sales of large capital. When a bullish orderblock is formed, an accumulation or reaccumulation takes place in order to further markup the asset. When a bearish orderblock is formed, a short position is accumulated or reaccumulated. With the purpose of further asset markdown. The first rule is liquidity. We have a zone from which the price gets a reaction and goes in the opposite direction. This forms a support zone for those who trade classic technical analysis. Traders place their orders in this zone, which is what the big capital hunts for. Accordingly, this level is pierced by the flow of orders, which activates these stops. This is how liquidity is removed from the area. The last bearish full-body candle will be our orderblock. It is important that it updates past lows. An analogy would be the wicks of candle, which removes liquidity from past lows. The wick of a candle in this case is an orderblock on a lower TF. The second rule is confirmation After withdrawal of liquidity we expect confirmation of this orderblock - that is absorption and movement in the opposite direction. The confirmation should be impulsive. That is, we should not see how the price is stuck in this confirmation. It concerns the absorption (updating) of the order block. It is possible inside the candle (orderblock). But personally, I try to take the "book variant". Local consolidations can indicate the weakness of the movement. It doesn't mean that the orderblock will not work out in the end, but the probability decreases. The third rule is structure breaking (bos) One of the key points is the breakdown of structure that this orderblock provides. This is how we can understand the mood of the market and the intentions of big capital. In this example, we can highlight the main structure with the yellow line. It is after updating a significant structural element that we can be almost sure of the truth of our orderblock. If we don't see a break in structure, then this movement may just be a correction within a downtrend. So keep an eye on this one. The fourth rule is the law of force (momentum) After confirming our orderblock, we can see a prolonged correction in the OTE (make a Fibo). That is, we should see an impulse and after it a slow sluggish movement downwards, which will also form liquidity behind each local high. This is not a necessary factor, but if it is present, the probability of a trend reversal will increase many times over. The fifth rule - the volume and spread of candles The candlesticks should be full-bodied with increased volumes. It will be important to monitor the "distance" that the price has done. All these factors will also indicate the veracity of the movement. This recommendation concerns more about swing trading, moments when the price is in a trend for a long time without a serious correction and test of the formed order block. Examples on the chart On the daily TF I marked a Sell to Buy move. I marked it this way because there were no warrant blocks to satisfy me on the higher timeframe. This area will act as a zone of interest. The structure on the Hourly TF looks like this. Consequently, we expect a confirmation of our orderblock through a break of the structure. The price entered the sell to buy zone and tested the order block, which was formed from the wick of the candle. We saw an impulse exit and watch the price go up sluggishly, forming liquidity behind each low. Therefore, we expect an orderblock test. I recommend backtesting on chart history to better understand how order block works. Thank you for your attention, I hope it was useful
Education
by Patronofbargain
5
THE HISTORY OF FOREXHello everyone! Today I want to dive into the history of the Forex market. Knowing history is useful, because sometimes history repeats itself. The one who knows history will not make the mistakes of the past. The beginning of the story With the advent of markets, the question arose how to pay for the goods. In ancient times, the first way was barter. People exchanged some goods for others. This method developed and at some point salt and spices became popular means of exchange. In the 6th century, people realized that they needed to come up with something universal, so the first gold coins came to replace spices as payment. Gold coins differed from spices and other trading methods in important features: portability, durability, divisibility, uniformity, limited supply and acceptability. The Gold Standard For a long time, gold coins were used as payment. The problem was that they weighed a lot and it was extremely inconvenient to carry them in large quantities. So, in the 1800s, countries adopted the gold standard. The idea was that the government promised to redeem paper money if someone decided to exchange it for gold. The amount of gold is limited and its extraction costs money and time, in difficult times it has become difficult to get enough gold to print a new volume of paper money. During the First World War, countries had to suspend the gold standard, because more money was needed to wage war, and right now. The Bretton Woods system After the Second World War, representatives of the United States, Great Britain and France to create a new world order. The whole of Europe suffered from the war and only the United States was able to emerge victorious, because the dollar had only become stronger by that time. The adoption of the Bretton Woods Agreement was aimed at creating a regulated market with a currency peg. A regulated fixed exchange rate is an exchange rate policy in which a currency is fixed against another currency. All countries fixed their exchange rate to the dollar, and the dollar was pegged to gold, since after the Second World War, the SS owned the largest reserves of gold. In the end, the old gold problem loomed over the market again. More money was needed, and there wasn't enough gold for that. Therefore, in 1971, Richard M. Nixon put an end to the Bretton Woods system, which soon led to the free floating of the US dollar against other foreign currencies. The beginning of a free-floating system European countries were not happy with the dollar peg, so in 1972 an attempt was made to get rid of the dollar. The agreements created by the Europeans, like the Bretton Woods Agreement, collapsed in 1973 and all this led to the transition to a free-floating system. Plaza Accord In the 1980s, the dollar rose strongly, exporters did not like it. In the early 1980s, the dollar rose strongly against other major currencies. It was hard for exporters and the subsequent US balance of payments. The US dollar weighed on third world economies and led to factory closures. In 1985, a secret meeting was held between representatives of the largest economies, but information about the meeting leaked to the media, which forced the countries to make a statement encouraging the strengthening of non-dollar currencies. This event was called "Plaza Accord", after which the dollar began to fall sharply. EURO The Second World War broke up the countries of Europe, creating many economic problems for the region. Wanting to save the region, many treaties were concluded, but the most fruitful was the 1992 treaty called the Maastricht Treaty. The introduction of the euro has given European banks and businesses a clear benefit from eliminating currency risk in an ever-globalizing economy. Online trading In the 1990s, the world began to develop rapidly. What used to require more time and human resources was now being done faster and cheaper thanks to the Internet. Money began to flow quickly from hand to hand, between continents, volumes grew rapidly. The fall of the Berlin Wall and the collapse of the Soviet Union made the world open, there was an opportunity to trade Asian currencies that were previously inaccessible to traders. Online trading has started to reach a new level. Liquidity has increased dramatically due to the congruence of markets, spreads have decreased due to the competition of online brokers and new technologies. The time has come when anyone could enter the forex market and try to make money. The volume of funds in the market grew at an incredible rate. The future of the Forex market The forex market is growing from year to year. Volumes are increasing. There are more and more opportunities. Trading is evolving, as is the currency, which has led to the creation of cryptocurrencies and the crypto market, the development of which is striking in its rapidity. Never in history has a person had such an opportunity to earn a lot of money sitting at home. But do not forget about the risks, study the market and trading methods and then you will be able to grab your piece of the big pie. Good luck! Traders, if you liked this idea or if you have an opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
11
XLM/BTC Position Trading. Zones. Money management. PsychologyLogarithm. Time interval—1 month. The main trend since the beginning of trading. Coin in coinmarketcap: Stellar. Top trading pairs to bitcoin have significant liquidity. In position trading, you need to work in portions from support/resistance level zones with a predetermined size distribution. Unlike pairs to the dollar, pumps/dumps are smaller in % ratio due to the % rise/fall of bitcoin itself. If bitcoin is cashed in the market, profits remain the same. Hence, the smaller % is illusory in nature. BTC instead of stabelcoins . In such pairs, the “money” is bitcoin. Consequently, even premature selling (there shouldn't be any, since the position is allocated in advance) forgives mistakes, since you get bitcoins instead of USD or stabelcoins. Currently, many stabelcoins are losing their $1 peg, meaning they are devalued. Trading in a bitcoin pair reduces that risk. Work on such pairs is suitable foremost for medium and large participants of the market. It is not rational to work with a small amount in such a time/profit perspective. Money (crypto assets) security Money management. This is key. You don't need to hold a large position on the exchange for this kind of trading! Why keep coins or stabelcoins on exchange if you make transactions quite rarely, only large movements. You understand beforehand when it will happen and in what price zone you are going to buy/sell. That's what all the big market participants who don't take part in price formation do. When you need to buy or sell, you transfer the assets to the exchange and sell or buy on the market. You withdraw right away. If the amount is large enough, you should do this procedure in installments, preferably on several exchanges. At one time I worked for a long time (several years) on DOGE/BTC pair, when this coin was (scam, joke coin) nobody was interested in it, unlike the current time of hype. There is a trading idea of the principle of this work in Russian 2019. In this work, you work only in the secondary trend, from the main support/resistance zones, considering the development of the trend. You absolutely do not need to be interested in crypto news, the opinion of the majority and so on. You can look at the chart even once every few months. What's more, you also don't need to know the future highs and lows of the next cycle (though for traders, they are easily identifiable). You work piecemeal from the zones. You know in advance where and by how much you buy or sell. Locally you can trade 20-30% of your coins, so you will have extra profit. But you don't have to. The price goes down — good for you. The price goes up — good for you. Trading is guessing market probabilities of price movements. Algorithmic thinking according to a trading strategy, devoid of any emotion, makes money. Anything else loses it in any market. In other words, you must initially be prepared for more likely (in your opinion) and less likely outcomes. Know under what conditions you buy and under what conditions you sell. Buying/selling in portions of coins according to predetermined zones. You work from the average recruitment price and from the average selling price in portions, similar to how large market participants work on the BTC/USD pair. You never go completely into cache or similarly into coins. Only the % ratio of coins to money changes depending on the market cycle. Work from the average buy/sell price (of money and coins) on a global scale (large time frame), without any "what if this time will be different". If it does, it's none of your business. Know in advance where you will buy more in case of drawdown, and where you will sell in case of pumping. Again, without the "It could be different this time" and emotional component. Sell and buy assets a little bit before everyone else in the market in installments, "not knowing the exact future," even if you think you know it. This will keep you from making mistakes. Coin trading in the local trend. By trading part of a position locally, you will always have money from profits to buy (averaging the main position) in case of so-called local "black swans". This work is not mandatory, but desirable. It helps some people a lot psychologically, especially if the initial entry into the asset was erroneous and the price dropped significantly. By increasing the number of coins of local work, you thereby reduce your previous losses or even come out in profit over time. Again, you don't have to work this way, but it is advisable. The smaller goals you set, the more you end up earning on the distance . An untouchable supply of coins and cache in case of market force of circumstances . Always keep in mind the possibility of a “black swan,” even if it seems impossible. You always have 20-30% of your position depending on the cycle (money/coins) in case of force of circumstances. Bearish—a “black swan” sell-off under the channel support zone (happens very rarely). Bullish—the final hammer madness over the channel resistance (happens very rarely just in pairs with bitcoin because in a bull cycle bitcoin grows 5-8 times on average). Remember that in the accumulation phase in most cases there is a residual price zone of capitulation, super fear. It is usually accompanied by a “black swan. When everyone gets rid of their assets out of fear. You, on the contrary, buy with a grid of orders with a large range, without emotion. Consequently, always have a pre-allocated cache (or from the profits of a local trade) if such a trading situation is realized in the market. Turn someone else's negative emotions into your own profits. You should always act according to your trading plan and be ready for any market situation, even an extremely unlikely one. bull market highs zone (channel resistance). At the peak of the market, you should already have more than 60-70% in bitcoin (cache) for the next market cycle. 10-20% of the rest of the position should be in a stop loss to protect profits. This is more rational if the last spurt occurs. Coins sold for bitcoin can be held in bitcoin in a cold wallet (not rational if the overall market trend has reversed). You can also similarly sell on the market for cash (be sure to withdraw from the exchange), or put a stop-loss to protect profits, in case the market makes another spurt (additional profit on the BTC/USD pair). Always sell when the price rises significantly (pumping). Protect your profits with a stop. Always sell a substantial portion of your coins with a grid of pending orders during an active pumping phase. Another option is not to sell, but to protect your profits with a stop loss. Bear market minima. (lower channel zone). In a bear market, the lower the price falls, the more market participants wait even lower. Everything is similar to the distribution, only mirrored in the opposite direction. This illogical inadequacy of people is especially noticeable at the "peak of fear." Before that super minimum (there may not be one), you need to gain most of the coin position in advance, but be prepared for anything... Again, you must know in advance where and for what % of the allocated amount you buy coins and under what conditions. There must be discipline in everything and determine in advance what your further actions will be in accordance with your trading algorithm, rather than an emotional component. Always have a certain percentage of money that is comfortable for you in any dominant trend and phase of the market. Bull Market . In a bull phase, you should accumulate a large percentage of cache (stabelcoins) at the expense of profits. Bear market . In the bear phase (altcoins from -90% and below) you should accumulate in portions of cryptocurrencies you are interested in. I'm sure most people have it the other way around. In a bullish phase, most collect promising cryptocurrencies bought near price highs (hype, everything goes up in value). In the bear phase, on the contrary, most market participants load most of their trading depots into staplecoins (fear, everything is falling in price, expectation of inadequate floor prices). They are driven by the desire to buy back the lowest price of the trend, right before the reversal. The lower the market falls, the more most go from fear to stablcoins. Trade market cycles, not individual cryptocurrencies. Because their price strictly follows market cycles, but not the other way around. Options for the development of price movement on the pair XLM/BTC. . I will show the percentages of the following 3 zones of this channel, depending on where and under what conditions the reversal of this secondary trend will occur (a downward wedge is formed). 1 variant of reversal. Candlestick chart. Butterfly formation, the wedge is not embodied. 1 reversal variant. Line chart. 2 reversal variant. Candlestick chart. Version 2 of reversal. Line chart. 3 reversal variant. Candlestick chart. Full formation of the descending wedge on the classic TA. 3 reversal variant. Line chart. Be aware of trends and accumulation/distribution zones . Remember that a bear market, like a bull market, will not last forever. Where there is supposedly an end, there is always a new beginning. Everything is subject to cycles. This is especially true of financial markets. Every cycle is the same to the point of triviality. Be guided by trends, that is, by accumulation/distribution zones, when they start and end. Bitcoin⁣ — as more than a decade of cycle history shows, this is from -70-82% of the secondary trend high. This does not mean that the subsequent cycle will have the same percentage trend value, but there is a possibility. Alts average -90-96% and lower depending on the liquidity of the crypto coin. The lower the liquidity (people involvement), the higher the risk. You should also understand that the lower the liquidity, the higher the slippage at “peak fear” can be. Many altcoins, especially those with low liquidity, do not survive to the next cycle. Also be aware of market capitulation shocks as a consequence of so-called “black swans.” It won't necessarily happen, but the possibility always exists. The price of something that is worthless can be turned into absolutely anything on the market, to the point of inadequacy. It's not a real commodity whose value people understand. Psychology. Indicators of distribution/accumulation zones in cycles. Allocation zones ⁣—resetting to “hamsters” (fools or inexperienced market participants) is expensive. In a bull market, the higher the price rises, the higher the expectations. Up to inadequacy in the last reset zone in the distribution. “Hamsters” buy very expensive “promising coins” near trending price highs (marketing, information noise) and wait even higher. Accumulation Zones⁣ — Large market participants buy on the cheap from “hamsters”, constantly scaring them with various bikes and imitations. There is a massive build-up of negative news. Hamsters sell cheap and wait for an even lower price. No matter how low the price is, it cannot satisfy people like them. In other words, their thinking is sharpened to the opposite. Projecting onto trade what they are in life. Anything to do with money reinforces this effect. Buy expensive, sell cheap. Don't inherit this tendency of those who lose money in the market. As a rule, most people don't buy at flea markets; they are afraid. They wait for those who should be selling to them to say, "Fools, it's time to buy in the very expensive.") What matters is how much you earn when you're right, and how much you lose when you're wrong. You should know these potential values initially before you make a deal. If you can't determine them, or the risk is too high — refrain from trading. Immunity to guessing lows and highs . Most fools do this in all cycles. Forget the hamster concept of selling at the peak or buying at the low. Leave it to those who are destitute and will be even poorer because of it. Again, it's all in the head. What a person is like in reality is what a person is like in trading. Kill your greed. For example, in all bitcoin cycles (I have my third), the so-called hamsters (fuel) and pseudo traders (fuel) always want to guess the highs and lows of the price. The question is, why do we need to do this? The answer lies in the thinking of the poor and lack of understanding of simple logical things. The ability to wait for your goals. Be patient. Cycles, both local and global, tend to recur with their own time interval, which cannot be identical to the previous one. Consequently, only the patient earns. Learn to be out of the market, In areas of uncertainty, if the market doesn't let you make money, why burn time in vain? This time can be used with benefit both for yourself and for others. Take a rest, read an interesting book, go somewhere, do something useful. The main thing is not to immerse yourself on the Internet. It is important how much you earn when you are right and how much you lose when you are wrong. Initially, before entering a trade, you should know these potential values. If you can't determine them, or the risk is too high, then refrain from trading. Treat the numbers on the screen as numbers, not as money. No equation with the value of "what you can buy with that amount of money on the screen." That is, you have to identify with the percentage of profit/loss, not the money — the amount of profit/loss. When -5% to $100 is $5, and you are not afraid of such a loss. But, for example, when your balance is over $10 million, then -5% would be $0.5 million. For a fat hamster, that's a tragedy. For a big trader, it is a calculated risk. The drawdown can be much more significant, but the risk is always considered and accepted in advance. In the end, the profit more than compensates for such a drawdown. I think you understand the logic. It allows you to understand whether you are ready to work with large sums or not. I purposely wrote a large amount as an example to provide a clear contrast because everyone is ready to lose temporarily, namely temporarily $5? But $500,000 is an unimaginable amount for most people. But to be ready to work with big sums, you need that discipline and attitude towards money at the very beginning of your hobby of trading. Everyone wants to work with large sums in the future when they trade, or am I wrong? As a rule, most market participants cannot overcome this barrier because of their "lust for money" and identification: the numbers on the screen are real money, not just profit/loss % figures. A trader's behavior in the market is a result of his thinking. Your way of thinking affects your habits, and your habits are what makes or loses money in the market. Margin is bad . The exception (not necessarily) is an adequate short position with minimum leverage and risk limitation. If you want to steadily earn in the market and never get nervous - don't use margin at all. Absolutely never. As a rule, the poor use margin, and the poorer they are, the higher the leverage. Perhaps that is the secret of their poverty. I'm not talking about margin in the first place, I'm talking about the mindset that generates higher margin leverage, driving the risk/profit ratio to idiocy, but that's the way it is. Exchanges don't like those who make money and adore those who might lose money trying to get rich. Margin trading with leverage is only for experienced traders. It should be taboo for novice traders. Diversification of storage and trading places . This is very relevant to position trading. I wrote about it above. Don't trade or store your coins in one place. "Russian or South Korean hackers attacked a top exchange, all cryptocurrency stolen." This is sarcasm, but this is exactly the kind of FUD for fools you will see when they just steal cryptocurrency from exchanges under the guise of such a tale. The made-up story doesn't matter, what matters is that the people behind the cryptocurrency exchanges will steal cryptocurrency from you, wearing the skin of an injured sheep). The safety of your money (including cryptocurrencies) depends only on you, not on chance. Anything that seems random is not. If you always rely on chance instead of your mind, you are doomed. The will of chance will shadow you and haunt and empty your pocket time after time. You will always be at the forefront of the victims of your carelessness and self-confidence. Always keep some of your positions in cold storage . Keep some of your positions, even if you are very actively trading, on a cold or hardware wallet (preferably several). It should be at least 30% of your total deposit. This percentage should vary during certain phases of the market. In accumulation zones, most of the position should be out of the exchanges. Diversification of stubblecoins (profits) and their blockchain storage. Very relevant because in the future, one liquid stabelcoin like UST (Luna) will be zeroed out (disposal of money on a large scale). Probably, many people have understood this for a long time, but do not believe it will be implemented. Not only that, but most altcoins will evaporate at the moment. Yes, the probability, as always, is no greater. But if that probability is there, it is rational to take steps to make sure it doesn't hurt you. Diversification as well as swift action during an event is the best defense against something like this. Stable coins are always a risk. Keep this diversification in mind, both by their own varieties and by blockchain if you are storing them on a hardware wallet. Unfortunately, this is a risk you will have to accept and live with, as using stablcoins is a component of trading. Diversify such assets not only when you are out of the market waiting to trade, but even when you are actively trading. That is, by using different stabelcoins when trading the same cryptocurrency (e.g., BTC) you reduce risk. For example, BTC/USDC, BTC /USDT or BTC/BUSD. Any stabelcoin is an altcoin whose value (stability) is based only on people's belief in its stability . Totally uninterested in the opinion of the crowd . The crowd is always wrong. The majority always loses in the market. Otherwise, it would be impossible to make money in the market. Therefore, by being interested in and listening to the trend of the opinions of most market participants, you can unnoticeably lean towards the opinion and understanding of those who initially have to lose. Are you prepared for losses? No? Then why should you be? Another option is to use the opinion of most market participants to track market trends. If you are well-versed in psychology, this will be helpful. If not, you yourself may fall prey to opinions unnoticed. Everything unpredictable is the fate of only absolutely predictable people, it always was, is and will be . Don't be interested in cryptocurrency news. The chart takes everything into account, including the release of "tales for fools." All crypto news is created for price direction and nothing more. Small-scale news for influencing fools (their logical scare/satisfaction actions) to locally influence the price. Large scale news and events to globally influence the trend and the market as a whole. If you can understand and read between the lines, understanding what the manipulator is trying to achieve, then you can use the news background in your trading strategy. If not, and you are not a good psychologist - completely ignore the flow of information. The positive and negative emotions of others in the market generate volatility, which is your earning wave. Ride it. Don't mess with anonymous fools. Appreciate your time. Don't pay attention if someone criticizes you without being constructive, or wants to impose their perspective without arguments of rightness. Such commenters are usually people with a very low social status in reality, they are trying to assert themselves through the internet in an anonymous world. Be immune to such losers, they are the ones who want you to doubt yourself and accept their perspective. The more bile, the more anonymous cries from. Understand that only such people have time to correspond and “spout bile” on the anonymous internet. As a rule, these are immature individuals or conventionally "mature," but with the mindset and interests of a teenager. Don't waste your time on the vacuous or psychological aberrations of flawed Internet characters. Make good use of your time. The behavior of people in financial markets is a projection of who they are in real life. That is, their positive and negative psychological qualities. Don't be a trading junkie. Don't waste time. Don't waste time. Both for meaningless Internet price guessing, and for round-the-clock trading. Mindless guesses. The idiocy of the crowd. Trying to guess highs or lows that are logically understandable. When all scenarios are clear and understandable. Do not turn into idiots from the "where the price of bitcoin will go" sect. Everything is always the same in every cycle. You must decide for yourself initially (after spending several hours) on what conditions and prices you will buy this or that cryptocurrency and at what prices to sell. Have a more likely and less likely scenario. Be ready for any incarnation. Do not complicate simple logical things with the stupidity of fortune-tellers mixed with your greed. The basis of trading is your trading strategy , that is, your knowledge that you put into practice in symbiosis with risk management , that is, your manner of taking on take risks in transactions and manage money. To paraphrase, initially you need to understand how much you will earn when you are right, and how much you will lose (hit stop or averaging if a less likely scenario is realized) when you are wrong. In such cases, it is absolutely not necessary to know the exact price of the low or high of the trend, leave that to the idiots. Trading 24/7. I will write short and clear. Money without life is not needed. In everything there must be adequacy. Knowing the instinctively more likely behavior of people (the psychology of mass behavior) in a given situation, as well as programming people's behavior (what is right / wrong, how to act in a given situation according to the rules) and creating the same situations, allows easy to manage "potentially uncontrollable behavioral chaos". Psychology. Be yourself - don't go against yourself. For traders Work with your trading algorithms based on your knowledge and experience, not on emotions. For those who are faced with the fact that trading constantly "hit the head" . Become an investor. Carefully study the cryptocurrencies you are interested in and decide whether to invest in them or not. Divide the money needed to invest in each cryptocurrency into several parts. Buy in areas of potential price reversal. After purchase, send your coins to a hardware wallet. Stay away from your cryptocurrencies until the new bull cycle (peak will be in 2025). Also, before the big bull cycle, there will be an intermediate one by a relatively small percentage, as in 2019-2020. Don't forget to sell some of the coins to buy them back much cheaper. It is also worth paying attention to those cryptocurrencies that are included (blockchains and protocols) in the development of CBDC and comply with the future ISO 20022 standard (already in March). XLM is one of them.
Education
by SpartaBTC
13
Develop your trading psychology There are 2 types of edges in trading, a trading strategy edge and a trading psychology edge. You need to have both to succeed. This post will focus on how to develop your mental edge, which is the more important of the 2 types. The process of developing a trading psychology edge is simple, but usually not easy. Start trading Identify your advantages and weaknesses Find solutions to your weaknesses Review your results Repeat steps 3 and 4 until you reach your goals In this post, I'll give you strategies to uncover your trading genius and overcome your biggest roadblocks. Keep reading to learn the details of each step. 1. Start Trading This step might seem obvious to some people, but it won't be to others, so I'm going to talk about it. In order to develop a mental edge in trading, you have to engage the markets on a regular basis. Even if you only demo trade, taking trades will start to expose your psychological strengths and weaknesses, within the context of trading. Here are some things that you might discover after you begin trading. You're afraid to take trades It's easier for you to follow a rules based trading strategy You have a tendency to revenge trade You're good at riding trends You take good notes You don't like backtesting You get easily discouraged after a series of losses That's just a short list of what could come up for you. But you'll only discover these things when you go through the process of taking trades and experiencing the emotional ups and downs that come with wins and losses. Once you've taken some trades, now it's time to take an inventory of your strengths and weaknesses. 2. Identify Your Advantages and Weaknesses How many times have you experienced an event with a group of people and they noticed things about the event that you missed? This is because they were aware of those things and you weren't. You also probably noticed things that they didn't. That shows that we will only notice things that we place our awareness on. So start a trading journal and write down what you're good at and what you aren't so great at, while you're trading. This is the first step to full awareness. The things you do well will give you clues as to what you should probably focus on in trading. For example, if you find it easy to follow a trend on the daily chart, then you should probably work on trading some sort of trend following, swing trading strategy. If you lose a lot of money when you day trade, then that's probably something you should avoid. Maybe you live in a timezone that makes it difficult to trade the New York Forex session. Then you could work on a strategy that trades the Asian session or the London open instead. Like with any other skill, there will be things that are optional, and there will be things that you have to change. In the case of day trading versus swing trading, you don't have to day trade. You can trade on other time frames, so being bad at day trading is not a problem. But let's say that you have a tendency to over trade and revenge trade. That's a problem that has to be fixed if you want to become a successful trader. So find ways to amplify your strengths. That's pretty easy. 3. Find Solutions to Your Weaknesses The great news is that there are a ton of solutions out there to help you overcome anything you're working on. You simply have to do the work to seek out these solutions and implement them. I cannot list all of the strategies available because there are so many of them. But I'll get you started with the 2 general categories. I believe that there are only 2 parts to the human mind, the conscious and subconscious. Yeah, you probably knew that already. However, I feel that many therapists and coaches don't understand how to apply this concept effectively. Many are trained in a particular type of treatment. Most only follow the doctrine of that modality and think that everything can be solved through that lens. Obviously, the more aware ones understand the limitations of their craft. But there are many who do not. Not entirely their fault. They don't know what they don't know. There are a lot of things that I don't know either. But I do know that it's up you to you to use your intellect to figure out what will work best for you. That said, let's take a look at a real example of why the conscious/subconscious theory is so important. I have a friend who used to smoke. If you know a smoker, or you were a smoker, you know that it can be one of the toughest habits to break. But guess how he quit? He was on a smoke break at work one day… He looked the the cigarette, and thought “This is dumb.” So he quit cold turkey, on the spot. That's it. How was that possible? I don't think that anyone knows for sure, probably not even him. But here's my theory… There's always a reason why we do things. Our actions fulfill a need or desire in our mind. Sometimes the cause of a desire sits in our conscious mind. But many times it sits in the subconscious mind. I believe that the cause of his smoking habit was in his conscious mind. So he could use a conscious thought to change the behavior. That's why it was so easy. Now if the source was in his subconscious, even though he knew that smoking was a waste of time and money, it would have been much harder to quit. So when you look for methods to help you change your behaviors, start with the conscious methods first because those will give you the easiest wins. But if you cannot change with those methods, then it's time to go deeper and dive into your subconscious. It's not always possible to figure out if a behavior is caused by a subconscious or conscious source. It can also be difficult to figure out which part of your mind a treatment will work on. That's OK. Do your best and you'll get a good feel for it after trying a few different things. What about your weaknesses? That will probably take a little more effort. Here's how to get started with overcoming them. Conscious Mind Methods Methods for changing thoughts in your conscious mind usually involve mental visualization exercises, repeating affirmations or visual cues. Neuro linguistic programming (NLP) Mind Movies Visualization Vision boards Mantras Talk therapy Subconscious Mind Methods Changing your subconscious mind is a new concept to many people and it's probably new to you too. The reason why this works may not be obvious at first. You're basically digging down into your subconscious and bringing the causes of your negative behavior to the surface. When you do this, it's much easier to resolve the issue so the symptoms never come up again. This can be very powerful stuff and you really have to experience it believe it. Subliminal recordings Hypnosis with a therapist Cloud Sound Therapy The Emotion Code Clairvision Again, this is just a short list of what's out there. But it will give you a great starting point. 4. Review Your Results Now it's time to see how you've done. Sit down on a Sunday morning with a coffee (or your favorite drink) and review your trading journal again. Did the methods you used work? If yes, then great, you're done! You can stop reading right now. However, it's more likely that you still have things that aren't completely resolved. That's just how it works. Unfortunately, modern mass marketing has given us the impression that there's always a pill or hack that we can use to instantly achieve any outcome that we want. In reality, that's rarely the case. It's like mining. Miners almost never hit gold on the first try. They usually have to do a lot of homework and drill several holes before they find a workable mine. So put down your discouragement and dig your heels in for the long haul. Your transformation could be fast, but it's more likely that it will be a process. That's how your great grandparents did it, along with every generation before them. The idea of instant results is a new and often unrealistic ideal. 5. Repeat Steps 3 and 4 Until You Reach Your Goals Instead of getting discouraged, do this: Congratulate yourself for taking action. Celebrate what did work. It's very likely that you made some progress, no matter how small. Look for the next thing to try. Assuming you gave the first thing an honest try, it just might not have been a good fit for you. I've had many cases where this has happened in my life. For example, back in the day, I used to listen to a lot of Tony Robbins recordings. He's great, I have nothing against Tony. However, I put too much faith in the idea that he had all the answers. I figured that since he had so many high-profile clients, he must have a solution that could help me. So I would listen to his tracks over and over, and implement the strategies…over and over. …and they did help a little. But they didn't create the big shifts that I was looking for. Instead of continuing to do something that didn't work, I should have reassessed my results after a few weeks, then tried something else. I just didn't know any better back then, and I'm OK with that. It literally took me years to figure out that I needed to branch out and try other things. I want you to learn from my experience. If you didn't get the results that you expected, then don't get down on yourself. Remember that one of the the most powerful tools that you can have in your trading toolbox is self-forgiveness. It will take as long as it takes for you to become successful at trading. So get back up on your horse and keep going. Of course, there can be the tendency to have “shiny object syndrome,” where you keep hopping to the next new thing. So you have to be honest and ask yourself if you've given the method an honest try, before moving on. Only you can answer that question.
Education
by Sahran_Mohammed
HOW TO DETERMINE THE TRENDHello everyone! Today I want to discuss with you the methods of trend identification. Finding a trend is an important task, because it is by trading according to the trend that you can earn a lot of money. PATTERNS Thanks to the patterns, you can understand where the price will go. There are many patterns confirming the trend: flag, pennant, wedge, and so on. The exit from these patterns is the confirmation of the strength of the main trend. Follow the patterns, they will help you find the trend. MA Moving Average is an important trend indicator and is quite clear and simple. The moving average is used by analysts in large banks and funds for a reason. The main trend indicator is the price rebound from the moving average. If the price bounces from the moving average towards the trend, then the trend is strong. CHANNELS The trend pushes the price in one direction and even the corrections become shorter. Under such conditions, the channel boundaries are directed towards the trend. Channel breakouts also occur in the direction of the trend, which is a confirmation of the trend. FIBONACCI Thanks to the Fibonacci levels, you can identify good entry points. It is enough to stretch the grid to the price impulse. This trend helps to open a position with a good entry point. And what methods do you use to identify the trend? Traders, if you liked this idea or if you have an opinion about it, write in the comments. I will be glad 👩💻
Education
by Lingrid
47
VIX IndexThe Volatility Index VIX is one of the most popular methods for determining stock market emotions. In full, it stands for CBOE Volatility Index, the volatility index of the Chicago Board Options Exchange. The market is an emotion, always has been, always will be. Robots? Great, but they are created by people with emotions. And a trader needs a method that allows him to identify these emotions. That's where the VIX index comes in. It is based on the volatility of options on the S&P 500 Index. Yes, yes, it's actually an index for an index, this happens in the markets. The VIX index is also known as the Fear and Greed Index. The index is expressed as a percentage and indicates the probability of the S&P 500 index moving over a period of 30 days, where the probability level is 68% (one standard deviation from the normal distribution curve, aka the Gaussian curve). Let's say that if the VIX is 15, therefore the expected change in the S&P 500 index over the course of a year, with a 68% probability, is less than 15% up or down. What does that have to do with emotion? For that, we need to understand the forces that underlie any strong market movement. Greed is the desire to possess more and more than is really needed. Whether it be money, goods, services, or any material values. According to a number of scientific studies, greed is the product of a chemical reaction in our brains that causes common sense to be discarded and sometimes causes irreversible changes in both the brain structure and the body. Perhaps someday a pill for greed will be invented, but for now, everyone is greedy without restraint. Greed is as addictive as smoking or drinking alcohol. "He has pathological greed," "he's the greediest guy the world has ever seen," are all victims of a very common mania. The average trader comes to the market and he is subjected to the strongest emotional influence, caused by the very brain "chemistry". He wants more and more and more, all the time. He wants more numbers on the account. He can't stop, he can't control himself. As the result, brokers and different near-market agents use this obsession with pleasure, exploiting his mental disease. Similar effects are associated with the emotions of "happiness" and euphoria. As a result, such traders' brains are constantly bombarded with emotional temptations and endless financial carrots, just as narcotic substances give the effect of not getting high at all but of temporary relief. The dot-com bubble This is a classic example of market greed. The Internet bubble led to millions of investors continuously pouring money into Internet companies between 1995 and 2000, despite the fact that most of them had no future. It got to the point of absurdity. Some companies were getting hundreds of millions of dollars just for creating the website "XYZ dot com". Greed bred greed, led to a colossal overestimation of assets and their real value. Investors, obsessed with making easy money, invested insane amounts of money in nothing. The inflated bubble naturally burst and took all the money of the greedy people with it. The Financial Crisis of 2008 The book "The Big Short: Inside the Doomsday Machine" by Michael Lewis (and the movie "The Big Short ") tells the story of how a few people profited from the massive greed of others. An instrument like CDS (Credit Default Swap) turned into a crazy financial pyramid scheme with a turnover of over $62 trillion. In the financial crisis of 2007-2010, the volume of this market shrank threefold another bubble driven by greed and obsession burst at the seams, and the financial world shuddered and shrank dramatically. Only a few people made a fortune as they worked against the greed of the crowd. Fear An uncomfortable state of constant stress, waiting for the worst fate and constant threat. The dot-com bubble also demonstrated this emotion well. To cope with the horrific results of the dot-com bubble, out of fear, investors took money out of the stock market and put it into the safest possible instruments, like stable investment funds or government-backed funds. These funds were not very profitable, but their main advantage in the eyes of investors was minimal risk. This is an example of how investors ruined all of their long-term investment plans because fear forced them to hide their money literally under their pillow. These assets did not generate income, but remained conditionally safe. How to read VIX The correlation between the VIX and the S&P 500 is quite clear. Let's compare the values, where the blue line is the VIX and the orange line is the S&P 500. As we can see, a decrease in the VIX corresponds to an increase in the S&P 500, while an increase in the VIX (fear) in contrast is a signal of a collapse of the S&P 500. Statistics show that there is an inverse correlation between the VIX and the S&P 500, as the VIX moved in the opposite direction from the S&P 500 more than 80% of the time between 2000 and 2012. Where the VIX peaks, there is a decline in the S&P 500 and all the associated effects that affect both the dollar and other currencies. So, if the VIX is less than 20, investors are less worried, the volatility of the S&P 500 is expected to be low. If the VIX is greater than 30, investor fear increases as option prices on the S&P 500 rise; hence, investors pay more to hedge their assets. A typical picture is, for example, the VIX is at an ultra-low 10 and the S&P 500 is breaking new growth records. This is all an indication of an impending collapse of the S&P 500. However, if the Central Banks change monetary policy accordingly, this VIX level could very well become the new "normal" value. One scenario to use is to wait for the VIX to consolidate above 30 and enter the SPX on its decline. When investors have a scare, it's an indication of a panic sell-off. Let's look at some real examples. Since the beginning of this year, the VIX Index has been hitting fear records, reaching a high of 30. In theory, this means a drop in the SPX index. Well, why in theory? In practice it worked out 100%, the SPX index really collapsed spectacularly. Conclusion As we know, the S&P 500 index, which we have already studied, is the "king" index. It not only shows the state of the U.S. economy and stock market, but also indirectly shows the state of a mass of other assets, from interrelated indices to the value of the dollar. Because of correlation, Fear and Greed indices can be adapted to everything, both indices and currency pairs. It is one of the most popular stock indicators, unique in its kind and actively used for long-term market forecasts.
CBOE:VIXEducation
by DeGRAM
24
MOMENTUMB and MARKET CORRECTIONHello everyone! Today I want to draw your attention to the momentum and price correction. In fact, any price movement consists of an impulse and a correction. You can earn money on each of these phases. Impulse An impulse movement is a strong price movement towards the main trend. As a trader, it is right that you should open positions in this direction. This movement is quite easy to identify. How correctly an impulse movement will spend less time covering a longer distance than a corrective movement. The impulse has a large force that pushes the price in the right direction, so the movement is strong and fast. Correction The corrective movement is characterized by a smaller force of movement. Very often, the correction will move in one corridor without much updating of the highs or lows. The fact is that with a corrective movement in the price, there is not enough force to update the maximum or minimum. The movement will be weak, resembling trampling on the spot. Of course, you can earn money in such a period, but it will be more difficult to do this than when trading on impulse movement. In addition , there is always a risk that the trend will pick up again and push the price against you and very quickly . You simply won't have time to close a position if you haven't set a stop loss. Support and resistance It is important to note how the level from which the price makes a reaction is first support, then resistance when breaking through. This is a frequent occurrence in all markets. The impulse conceals a force that cannot break through the level immediately, so the correction begins and the accumulation of new energy to overcome the level. After that, a breakdown occurs. At this point, support becomes resistance. The price during the correction, as we remember, does not have sufficient strength to update the maximum and the level becomes a resistance that the price cannot pass. The correction rests on the level and failed to overcome it. And this structure is quite common. Conclusions The main conclusion is simple - trade according to the trend. Learn to identify impulse movement and corrective movement, so it will be easier for you to determine the trend. Watch how the price reacts to the levels. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
13
Cycles Exchange giants FTT (FTX, Alameda Research)+BNB (Binance)Comparative analysis. The main trend of the two exchange coins BNB and Alameda Research, and yes the exchange FTX. The time interval is one month. Logarithm. Coins of two liquid exchanges: Binance and FTX . Coinmarketcap: FTX Token Coinmarketcap: BNB Here's what it looks like on a line chart of the price. Is Sam Bankman-Fried a young potential "grandpa" Warren Buffett or a fintech criminal with a life sentence? Could Alameda replicate the success of Binance, led by future PR wunderkind Sam Bankman-Fried, i.e. a young Warren Buffett? A joke? Ta, no... That's his role after his grandfather died. Or is it? Think about it... Do you think the pseudo-asset market, the various cryptocurrency scams, can be compared to the tokenized stock market ? Can you smell XRP?) Right now, in 2022, Binance is a mastodon in terms of cryptocurrency trading. Just like Poloniex in 2017). Think about who is behind companies like Alameda Research ? Why are they allowed to do what others are not? Why can some liquidate, ostensibly for their own benefit, entire projects with billions of dollars in capitalization and a community of millions of people with impunity, while others can't even breathe a breath? Who has the right to pardon or punish? Who can claim such a huge piece of the fat pie as the tokenization of stocks or the materialization of money from nothing (stabelcoins) but the state? Exchanges. Hype and liquidity. Changing market leaders. Therefore, for conservative traders and investors, it is more rational to pay attention to the non-random mastodons of the crypto market. But, keep in mind that they tend to gain or lose fat over time. I didn't write about Poloniex as an example for nothing. It's an example of hype and decline from previous times of popularity. In 2017 there was such an influx of traffic to the exchange that it was impossible to trade. Five years later, things have changed. Liquidity flowed to the new mastodon of hype, Binance. Market cycles of cryptocurrency market spikes/declines . In the price chart, I have shown the time cycles of the cryptocurrency market. This is probably the most important thing everyone wants to know. Most market participants want to scroll through money and increase the amount available "here and now in the moment" - emptying their pockets. Typically, the market of such "burps up" before the next peak in the cycle. Don't be that kind of person. Very few people draw conclusions from their previous mistakes. They admit their mistakes and look for ways to solve them, rather than cite randomness. There is no randomness in non-accidental actions. Notice how the "crypto hamster traffic" has decreased in the market nowadays. I may be writing crudely, but it's understandable. Local reversals occur at times like this. Major FTT trend FTT/USD (FTX, Alameda Research). Main Trend. This is what this zone looks like on the line price chart on a larger scale. Pay attention to what zone the price is in now and at what values of profit. Take this into account in your trading. Main trend of BNB .
FEducation
by SpartaBTC
6
Beginner's Guide To Moving AveragesMoving averages are without a doubt the most popular trading tools. Moving averages are great if you know how to use them but most traders, however, make some fatal mistakes when it comes to trading with moving averages. In this article, I show you what you need to know when it comes to choosing the type and the length of the perfect moving average and how to use moving averages when making trading decisions. What is the best moving average? EMA or SMA? In the beginning, all traders ask the same questions, whether they should use the EMA (exponential moving average) or the SMA (simple/smoothed moving average). The differences between the two are usually subtle, but the choice of the moving average can make a big impact on your trading. Here is what you need to know: The differences between EMA and SMA There is really only one difference when it comes to EMA vs. SMA and its speed. The EMA moves much faster and it changes its direction earlier than the SMA. The EMA gives more weight to the most recent price action which means that when the price changes direction, the EMA recognizes this sooner, while the SMA takes longer to turn when the price turns. Pros and cons – EMA vs SMA There is no better or worse when it comes to EMA vs. SMA. The pros of the EMA are also its cons – let me explain what this means: The EMA reacts faster when the price is changing direction, but this also means that the EMA is also more vulnerable when it comes to giving wrong signals too early. For example, when the price retraces lower during a rally, the EMA will start turning down immediately and it can signal a change in the direction way too early. The SMA moves much slower and it can keep you in trades longer when there are short-lived price movements and erratic behavior. But, of course, this also means that the SMA gets you in trades later than the EMA. What is the best period setting? When you are a short-term day trader, you need a fast-moving average that reacts to price changes immediately. That’s why it’s usually best for day traders to stick with EMAs. On the other hand, Swing traders have a very different approach and they typically trade on higher time frames (4H, Daily +) and also hold trades for longer periods of time. Thus, swing traders should first choose an SMA and also use higher period moving averages to avoid noise and premature signals. The best moving average periods for day-trading 9 or 10 periods: Very popular and extremely fast-moving. Often used as a directional filter (more later) 21 period: Medium-term and the most accurate moving average. Good when it comes to riding trends 50 period: Long-term moving average and best suited for identifying the longer-term direction The best periods for swing trading 20 / 21 periods: The 21 moving average is my preferred choice when it comes to short-term swing trading. During trends, price respects it so well and it also signals trend shifts. 50 period: The 50 moving average is the standard swing-trading moving average and is very popular. Most traders use it to ride trends because it’s the ideal compromise between too short and too long term. 100 period: There is something about round numbers that attract traders and that definitely holds true when it comes to the 100 moving average. It works very well for support and resistance – especially on the daily and/or weekly time frame. 200 / 250 period: The same holds true for the 200 moving average. The 250 period moving average is popular on the daily chart since it describes one year of the price action (one year has roughly 250 trading days) How to use moving averages Trend direction and filter you can use a fast EMA to stay on the right side of the market and filter out trades in the wrong direction. Just this one tip can already make a huge difference in your trading when you only start trading with the trend in the right direction. The Golden Cross and the Death Cross But even as swing traders, you can use moving averages as directional filters. The Golden and Death Cross is a signal that happens when the 200 and 50-period moving average cross and they are mainly used on the daily charts. In the chart below, I marked the Golden and Death cross entries. Basically, you would enter short when the 50 crosses the 200 and enter long when the 50 crosses above the 200 period moving average. the screenshot shows that during the last bitcoin cycle if you stuck to the moving averages you would have been profitable most of the time both in the long and short directions. Also please notice how when the market is moving sideways it's not favorable to use the moving averages. I will end this article here, I hope you now have a better understanding in moving averages and how to utilize them to follow the trend.
INDEX:BTCUSDEducation
by m3rr0r
5 Steps to Better TradingStart journaling This is one of the most important things in trading. You can see the numbers clearly without fooling yourself and know what's working and what's not. It also helps to start noticing the most common trading mistakes you may be making, whether you enter/exit early, whether you are better at managing trades actively or passively, the quality of your SL/TP levels and the likelihood of reaching them, etc. If you spend 20 minutes going over your log this weekend, it will give you more insight into how to minimize losses and maximize profits than anything else you can do. Stop trying to predict the market This is another big problem. Wizards effortlessly take other people's money: Casinos, they don't try to predict a player's next move, they just set up a statistical edge in their favor and watch it happen over time. This is the closest thing to the Holy Grail that will ever exist. Not opening a position is in itself a position FOMO causes traders to get into losing trades more often than anything else. Learn to be patient and just wait for quality trades, it has given me one of the biggest boosts to growth and greatly limits losses. Staying committed to a trading plan, limits the temptation to make impulsive trades. This habit will help to control the FOMO trades. be patient, be disciplined the market will always present opportunities. Solid risk-management Limiting maximum drawdown and MAE, limiting leverage (but also increasing it on high probability sets), backtesting, equity curve modeling, maintaining a good asymmetric RR, cross correlation/diversification, etc. Wait for confirmation before entering a trade. better to enter a trade late and be right, than early and be wrong. Treating trading as a job Take your work as seriously as any other important activity in your life. You should have regular trading start and end hours, and prepare very carefully for trading sessions. Also, write reports and collect statistics to document your work.
Education
by DeGRAM
7