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Parabolic SAR From ScratchHi, traders! Today we’ll continue our series of educational articles. We hope you enjoyed the previous one and found it useful. We have already told about the necessity of identifying a trend . Most of freshmen and even experienced traders find it really difficult. There is even more difficult problem, though. Finding the most profitable points of entrance and exit is very complicated task for anybody. However, technical analysis gives traders some tools and techniques that simplify this task greatly. Today we’ll talk about Parabolic SAR (PSAR) , one of the best indicators for identifying trend reverses. Let’s have a look at it. PSAR is the line of dots which is plotted below or above the price candles. When the trend is bullish the dots are below the candles, when the trend is bearish they are above. PSAR calculation is rather difficult and we don’t want to bore you. One you should know is the main parameters – step and maximum step (default 0.02 and 0.2). When you increase this values, you increase the sensitivity of indicator, but at the same time sacrifice its precision, cause it starts catching lots of false signals. Whereas we decrease these values sensitivity becomes less, but signals are more accurate. Thus, it’s very important to find balance , in order to minimize lagging and get accurate signals.
Education
by Skyrexio
Gbpjpy - buyPrice is still in an uptrend, I just realized that price didn't retest a structure it broke in the past. Recently price broke structure and formed a double top but price never confirmed that structure as it fell and ended up retesting the double bottom it formed on the 2nd of March. Price got to that structure and retested it, before it reversed it formed a morning star then fully formed a double bottom and took off to where price is now. Its Possible price can get to 153.750 next. GJ is still in a uptrend due to it not breaking major levels of structure and not retesting it as it did reverse.
Long
by pmgai
XLM / USD + 600% Symmetrical triangle. On this coin, in a secondary trend that has formed an upward channel with an impressive step of more than 100%, a symmetrical triangle is formed near its base of the trendline. The price is clamped. Let me remind you that the "radiant cryptocurrency" made exactly + 600% from the breakout of the resistance level of 0.08572 to 0.59. These are not random numbers. The support level that is currently held is the 0.4 zone. There will be a denouement in the near future. Think about what action is causing the formation of such a pattern on the chart. This will give you an understanding of the ongoing processes of "interaction" and possibly with the correct application and profit. For more clarity of two of the processes taking place in the market now, see my old training / work ideas attached below this idea, which by the way I did on the example of the same XLM coin: 1) "Big secret" 2) XLM / USD Secondary Trend Financial markets are a psychological game of manipulating people's behavior with the help of the weak link of the bulk of people, that is, money (a resource for the embodiment of material desires), the final result is to achieve the required goal through the embodiment / non-embodiment of the desires of controlled people.
Education
by SpartaBTC
13
LTC / BTC Positional trading in the channel. Working on a coinI made an addition to the previous trading idea of ​​working / learning on this instrument as the price broke through the support of the inner channel and the downtrend developed. Entry # 2 into a short position after breaking the support of the inner channel was confirmed. Trading with the trend. I have shown potential reversal areas in an existing trend on the chart. The ideal long entry point would be a breakout or pullback after a downtrend line breakout. Please note that there is 1 month on the chart. The reversal will be more clearly visible on the weekly timeframe. I have shown a monthly chart so that it contains the entire trading history and shows the essence of the work. ______________________________ I chose the LTC / BTC pair as an example for positional trading. This coin works perfectly technically. To Bitcoin , the coin is held in a horizontal channel from the very beginning of trading. I think you understand that this is not an accident. In the crypto market of several thousand scam coins there are several such technical highly liquid reliable coins. Litecoin is one of them. It is the impressive profit for those who work in large sums. The ideal ratio of profit and risk. Clear trade. It is easy to predict further price movements. Positional trading is suitable for those who have already traded an impressive depot and are already tired of staring at the monitor and burning their time, spoiling their eyesight. For those who no longer get high from the excitement of management and so on. Because a large depot can in most cases be dispersed only by such methods. A person must have iron patience and an understanding of the market cycles. Because profits need to wait a long time. As you can see from the graph, for example, only one trend can last up to a year. Positional trading is the work on the trend on a long-term basis, on charts covering a large time scale. For its implementation, fundamental and technical analysis is often used. Position trading is suitable for all types of markets: cryptocurrencies, stocks, goods, Forex. In other words, position trading refers to a relatively long-term holding of a position in the direction of a global trend. Thus, position trading is an independent style, significantly different from others. Market participants can use this approach to hold short-term and long-term positions. Maintaining a position in the trend, and not work on small weekly fluctuations. This is the main difference from swing, which involves working on the basis of market cycles of several days. In positional trading, you can hold a trade for months or even a year or more (Dow Jones index), it all depends on the trend. Coins for positional trading are selected very carefully, they must be reliable, be closer to TOP or be this top as an example of Litecoin. There should be a real development of the project in the long term, with a strong team that really does something, and not only has a promise legend. It is very important that the coin you choose for positional trading be highly liquid. You can work (or rather need) as in long and short. In any direction the price you earn. If you are not working in short, then most of the position is HOLD on a WALLET! In such a trade where transactions are conducted 1-2 times a year, it makes no sense to risk a huge amount and keep coins on the exchange. Even if you are doing risk diversification through several liquid exchanges. Only the large time frame is important, we do not pay attention to small price fluctuations. The purchase / sale of an asset is made only upon confirmation of a change in trend. No hai and loy! Minimum prices and maximums will be left for hamsters. ______________________________ Position Trading Rules: 1) A signal to enter a position is the beginning of a trend on a large timeframe (with a timeframe of 1 day or 1 week). 2) Exit from the transaction is carried out only if there are sufficient grounds for the end of the trend (trend change). 3) No lows and highs of the price when trading! Let's leave this occupation to stupid hamsters! ______________________________ The advantages of positional trading. 1) Does not take into account small price changes, that is, does not require constant monitoring of the situation. 2) There is no need to be near the computer all the time. In positional strategy, the most important thing is a deep and thorough analysis, on the basis of which a further decision is made. 3) An open position simply needs to be monitored if there is a situation that can change the position or price. Positional trading strategy is an analysis of daily, weekly and monthly timeframes; holding an open position for at least a few days to several months. In simple terms, positional trading is a meaningful and balanced entry into a transaction based on holding a position in a trend. _______________________________ The disadvantages of positional trading. 1) a long expectation of results that can actually be measured only after months or years; 2) high responsibility for each forecast and analysis, since it can take many days and weeks to hold the wrong position; 3) slow progress in trading (holding positions is good if the trader already has experience, but you won’t be able to gain it quickly by opening deals once a year); 4) the need for significant investment (you can get a tangible income from position trading only if you have a decent amount of money in the account). As a result, holding a position in certain cases is a significant advantage for an experienced trader, but fatal for beginner speculators.
Education
by SpartaBTC
6
SPX (1D) 2007 VS 202107/08 VS 21, looks pretty much indentical, and if there is something about charts it is that they almost always repeat themselves over and over again, we've seen it numerous times, and its how i myself even trade on a daily basis. Now you may be wondering why? Well let me tell you, chart patterns work by representing the market's supply and demand. This causes the trend to move in a certain way on a chart and forms a pattern. Another factor that helps with building patterns is algorithems, many of them are built to trade of patterns (less complex ones) thus selling and buying on price action creating patterns. But always have in consideration that news is almost always the biggest factor for patterns not moving as planned. That being said, dont go full on bearish bcs of a pattern, I recommend doing fundamental analysis, techincal analysis & macro, a pattern may never always be spot on and alot of the times scare people out just before it melts up or down.
SP:SPX
by Oerhortbegovad
11
XRP Geniuses of the game Triangle + Head and ShouldersThe price is at the breakout of resistance. The chart shows the current situation. Appreciate the genius of the people who control the price. This is aerobatics. By combining formations and selecting them for certain types of charts, each trader above the average level sees what he wants to see. Namely, they can affect the price now or in the future. We do not take into account the bulk of the crowd, as it does not affect the price, it is only directed as fuel to "make the price." Confusion is instilled in the managed and a sense of uncertainty, but the whole game is played with extreme precision to the point of inadequate madness. It is important to honestly beat everyone. Pay attention to the numerical value of the levels and squeezes. Think about why such a huge squeeze was needed when pumping + 200% "wallstreetbets" on a 1D timeframe. What thanks to this see some and other traders, how this squeeze is displayed on the line chart, which determines the trend. This is how traders using a line chart see the chart. This is the daily timeframe. Consider who most of the time uses a line chart for their analysis. The bulk of the crowd uses Japanese candlestick charts. Do you think these compressions ruined the graph or not? will they be able to beat traders who are smart and have big money Do you know the exact future local trend? They are not. Globally yes, locally no. The general picture of the development of the situation with a high degree of probability and the estimated price (which is not particularly important at the moment) before the public alleged planned announcement has long been known and was announced publicly. But, reality consists of many factors from which the desired ultimately can be quite different from what is being realized. The most important thing is not to be in the main stream of "givers" and not be interested in FUD news. And if you're interested, read between the lines. Much has been written there lately about fossil and non-fossil natural resources. Remember what was said to everyone except "pumping the FUD" when "pumping the pump group" in public. Maybe they weren't lying when they said buy and forget to buy no matter what? Or they lied to make money locally on extrusion. From the call to buy and hold a month ago, what is the price now? Give the fool any amount, large or small, then the desire to have even more, thanks to the combination of greed and stupidity, he will certainly zero it. The only question is when it will happen in the "hamster" space of time.
BITFINEX:XRPUSD
by SpartaBTC
16
BINANCE COIN! A defined Setup with Huge Risk:Reward!BINANCE:BNBBTC 🚨PLEASE LIKE AND SHARE IF YOU FIND IT USEFULL🚨 Some of you liked the way I explained my procedure for enteering a trade and calculating position size in my EOS/USD swing trade, so today I'll try to replicate it with this new BNB/BTC setup that I found. ** This analysis is ment for educational purposes, not financial advice. Trade at your own risk ** 🟠 ¿WHY AM I ENTERING THIS BNB/BTC TRADE? The first thing to consider is that there is clear evidence that the 2019 highest weekly close is acting as support after breakout. The previous two candles have long wicks down that immediately show rejection and return above 0.00456. Context is also important and should be considered, especially since cryptocurrencies show the highest correlation of any market. In the lower right graph we see Bitcoin in the daily time frame, which is currently breaking out from it's all time high of $57,500. As explained with red lines, a continuation after a daily close happens above is pretty likely. Keep in mind that the only reason you want to buy an Altocin instead on Bitcoin in this case, is if you expect it to go higher percentage wise. Assuming that BTC continues to rise after this breakout, altcoins will rise in a similar way, unless they have a particular setup as is this case. In the upper right graph we see Binance Coin against the US dollar, which is currently in an area with a confluence of two types of support: 1. Horizontal Support at $255 derived from the highest daily close of the first of March. 2. Trendline support from extending the broken triangle formation. With this in mind and considering the three relevant graphs, I believe that Binance Coin will rise against Bitcoin in a way similar to the last Leg Up of more than 200%. Not only that, but I also believe that Bitcoin wil rise as well, compounding the efect of your gains against the US Dollar. I believe that it will also happen in a more predictable way, allowing traders to use much larger positions without risking a larger amount by having a stop so defined and so close to the entry. 🟠 ENTRY (0.00457) For this swing trade it does not matter much if we place the entry right in the highest weekly close of 2019. Price is currently just where we want it to be, so in my case I will enter with a market order at the current 0.00457 price. 🟠 STOP LOSS ( 0.003975) As explained on my previous idea, the distance between your entry and your stop loss is what should define your position size, not random numbers or a percentage of your account balance. However, you shouldnt try to place your stop randomly close to your entry either, but at a place where you feel like the price reaching it invalidates the whole setup. In this case I will use 0.003975 as a stop loss, because I think it is far enough apart to withstand a flash crash if it happens, but not so far that it affects my position size too much. Aditionally, any weekly close below the level of support, would also be an early sign for exiting the trade, even if the stop loss hasnt been reached. 🟠 TAKE PROFIT Defining take profits in an all time high is one of the most challenging things in formulating this type of setup, mainly because there are no areas of horizontal resistance that you can plot forward. That is why in my opinion, as long as you know that your probable take profit is at a reasonable distance that meets your R:R tolerance, you can eventually decide based on analyzing market conditions as a whole. Knowing your take profit isnt necessary to calculate position size, which is also why I think it is less important than the price of entry or your stop loss definition. 🟠POSITION SIZE Looking back to that EOS / USD trade, you can see that Position Size is calculated by dividing the risk ammount (What you are willing to loose if this doesn't work) by the distance in percentage from the entry to stop loss. In this case I buy at 0.00457 and my stop loss is 0.003975, which is -13.3% below. Let's do an example with $100 risk ammount. POSITION SIZE = (RISK AMMOUNT) / (DISTANCE TO STOP LOSS) POSITION SIZE = ($100) / (0.133) = $751 This means that with a -13.3% distance to stop loss and a risk ammount of $100, my position size will end up being $751.00. If the ammount you get is bigger than the value of your portafolio, use leverage. :) Thank you very much for your time and for sharing. I'll continue to update this idea as it develops, so feel free to follow me to get notifications on any news. Feel free to post your comments or questions in the comment section. All positive feedback is well recieved.
Long
by JRuiz000
3
GBPUSD MY OWN TRADE #1we are launching a new concept on our richmonstocks tradingview page. 1- we will share our own trade that we take with entry and stop loss (not sizing this is again all about your risk mannagement.) 2-give you all kinds of trades, from 15 min to monthly charts for long therm investor. 3- providing full wave count with fractal. in this set up , we want to long the gbp/usd on the 15 min chart. playing the bounche of the wave. our stop loss and take profit is set to give you the best probability but also providing you enough lequidity so you might just survive on this market.
Long
by RICHMONSTOCK
Tezos (XTZ)/USDT Market Cycles Pivot points (zones) PsychologyI have combined the idea of learning by cycles and pivot points (zones) with an actual trading idea for positional work using the example of the Tezos (XTZ) coin paired with USDT (USD). According to Dow theory, there are 3 types of trends: 1) main (long-term). 2) minor. 3) insignificant (small). 3) Phases of trends. In turn, each trend has the following phases: 1) phase of accumulation (set of position). 2) the phase of public participation (trend development) 3) panic phase (reset position). 4) the phase of price reduction (dump). 1. The phase of accumulation. (position set). This stage occurs after the market has finished the downtrend and the dump is stopped. The price has formed a "bottom", in slang they say "bottom". It is at this stage that traders and investors enter the market, which can rightfully be called professional. They have the greatest amount of information (often internal - insiders) about the current state of the market and are the first to start active actions. The rest of the market participants do not realize at this time the state and direction of the market. Of course, the accumulation phase is not easy to detect. It often follows a downtrend. And it can be, in turn, just a minor trend in the general downtrend. As a result, instead of a new trend, only a temporary pullback is obtained. From a technical point of view, the beginning of a new trend is always accompanied by a period of consolidation. This is when the market goes sideways and then starts to show an uptrend. 2. Phase of public participation (trend development). Participation Phase Advanced investors and traders enter the market in the accumulation phase. When the trend really reverses, the public participation phase begins. Here the crowd enters the market. As this stage progresses, more traders jump into the current move as fear of loss is suppressed by greed and fear of missing out on an opportunity. This phase is the longest of all and is also characterized by the most active movement. Highs are constantly being updated - exactly what investors have been waiting for. The trend is developing. When this stage begins to end, the "last majority" jumps into the market and trading volumes begin to increase significantly. At this point, the theory of great stupidity prevails. The price rises significantly beyond historical levels, and logic and reason give way to greed. While the majority enter the market, professional traders cut or close their trading positions. But as prices begin to level off or the rally slows down, those latecomers who stay out of the game see it as a buying opportunity and enter the market. Prices make the last parabolic move, known in technical analysis as a buying climax, when the greatest profits are often made in a short period. 3. Panic phase (reset position, distribution) This is the phase where experienced traders and investors exit the market, and less experienced ones, on the contrary, enter the market. As a result, these investors and traders are excited about buying at the peak of the trend, shortly before its spectacular fall. The same phase is also a reversal one - professional investors and traders understand that the market has exhausted itself and begin to close their positions opened in the first phase. To identify this phase, it is necessary to carefully study the signs that the market rally is complete. Moreover, the more active the market growth, the stronger the subsequent fall will be. In the third stage of the market cycle, sellers begin to dominate. This part of the cycle is identified by a period in which the bullish sentiment of the previous stage is replaced by mixed sentiment. When this stage is over, the market direction changes. Classic chart patterns such as "double and triple top" or "head and shoulder" are examples of such movements that occur during the distribution stage. The distribution stage is a very emotional period for the markets as investors are gripped by periods of complete fear, interspersed with hope and even greed, as at times the market may seem to be rising again. Panic phase in a downtrend. A similar story is when the main trend is bearish and goes down. The situation repeats itself in a mirror image, and at the implementation stage, a real panic is often formed, when many inexperienced investors and traders dump their assets and the price receives the last downward impulse before growth. 4. The phase of decline. (Dow did not separately identify this phase in his writings. In Dow's theory, this is the final stage of the distribution phase). The fourth and final stage in the cycle is the most painful for those who still believed in the price increase. Many are holding them because their assets have fallen below their original amount. It is only when the market is down 50% or more that many of those who bought during the distribution stage or early in the decline give up. "Faith is being killed!" For more experienced traders, on the contrary, it serves as a buy signal and is a sign that the formation of a bottom is inevitable. _____________________________ 4) Choice of cycle time. An intraday trader who trades relatively small amounts and uses 5-minute candles can see many full cycles per day, while, for example, a positional trader using a weekly or monthly timeframe charts can see several cycles per year (average liquid instruments) or an extended cycle for several years (highly liquid instruments). But he also works in relatively large amounts that are not comparable to a scalper trader. Your task is to learn how to correctly recognize market cycles on your working timeframe and use it in your trading. ___________________________________ 5) Points (zones) of price reversal. It is necessary to immediately clarify the point (zone) of the price reversal always remains a potential point (zone), because it can act as a continuation of the trend. It is just that in certain zones there is a greater likelihood of a change in price movement than in others. This is very important to understand. Work like a trader, not like a "successful" wang hamster with which the Internet is clogged. No one knows the exact future. You can identify potential more or less likely price movements and use this in your trading. It is also worth noting that it is not possible to predict everything. It is important that a large number of your forecasts for price movements, thanks to your experience and knowledge, are correctly determined. Theory without practice is zero! Only your knowledge, modernized to the reality of the market, can give results in practice.
Education
by SpartaBTC
8
Education - How does a bubble develop and what are the signs?Preface: This learning content or information is merely my experience, or are those techniques that I use or find useful. The beauty of technical analysis is that an analysis or forecast can be made using many different approaches. These differ in effort, approach, tools and technical approaches. However, I think one thing is important: Keep the chart as simple as possible, try to see what is obvious and work with as few tools as possible but as many as necessary. If you base your analysis on what seems obvious, it is likely that many other traders will also see it. This in turn would support a movement in the predicted direction. = Self-fulfilling prophecy -> Examples: Moving averages, Fibonacci retracements, Simple formations etc.... ________________________________________________________________________________ Remark: This is supposed to be a small help to identify signs of a bubble formation, I must absolutely note that a lot of experience and knowledge is necessary here, which I can not convey in a hurry, as this would definitely go beyond the scope. Just try to analyze the BTC rise of 2017 with the help of these signs, or even the current rise. What is a bubble ? A bubble is usually easy to recognize in retrospect, a lot of green long candles, few red candles, until usually a high point. Then lots of big and long red candles and few green :) But how do I recognize a bubble while it is forming? Important: Please read through the wave age tutorial I wrote beforehand, this understanding is needed to continue here. If a trend does not consolidate sufficiently, but on the contrary shows shorter and shorter consolidations, rises faster and faster and ideally is still fueled by media interest, then these are the first signs of a bubble. (See bar in the chart) Within a trend, the price must consolidate sufficiently after a rise (to go into this in more detail would go beyond the scope). If now the trend in the period under review over the zenith, so after eg 6 waves, a new high and then further waves, with steeper and steeper price increases, so a bubble is to be assumed. The price MUST consolidate sufficiently to be sustainable. In the weekly, we can see that the price is moving further and further away from the standard SMAs (20,50,200) until it reaches an unnatural distance, which also indicates that the market may be in a bubble. As soon as such signs appear, it is important to set very tight stops, as it can come to an abrupt end. Summary: -Ever steeper rises -Ever shorter consolidations -Distance to SMAs is becoming uncharacteristic of the market Bonus: Media coverage of the asset Annotation: Since the weekly chart is shown here, it is not possible to see how the price reversal occurred. A SKS formed in the H4 , this was the beginning of the end of the steep rise. Also today, we have the same signs as 2017, to note was the very strong and violent reaction , this does not mean that the course will now immediately sink it can go before still on 60.000 , 70.000 or even more high, from my point of view, the current consolidations were not sufficient, I have this in mind when placing a stop __________________________________________________________________________________________________________________________ If I like this kind of tutorial, so leave me a like there and follow me. If there is enough interest I will post more tutorials like this in the future Best regards and good luck DCT Trading
COINBASE:BTCUSDEducation
by SystemTrader-SNP
3
WHY PIPS DON`T MATTER#ExplanationHey tradomaniacs, ever since I`m in this business I see posts about "Profit in pips" and how important allegedly pips are. I can tell you... this is non-sense unless you trade the same PAIR with exact the SAME Risk-Reward over and over again! In this post, I want to clarify and show you that it is absolutley senseless to count the profit in pips as it says nothing about your actual profit! NOTICE: THERE IS A BUG IN THIS POST SO OPEN THE SNAPSHOTS AND CLICK ON IT AGAIN! So let`s have a look at the first chart and see what we got here... In this scenario you see two trades with exact the same risk-reward-ratio of 5:25. This means you risk 1$ for 5,25$ or can win 5, 25x more than you can lose. We assume here that we risk 1% per trade. Scenario 1️⃣: 👉You win EUR/USD and lose USD/JPY EUR/USD: Risk: 1% Profit in pips: 68 pips Profit in %: 5,25 USD/JPY: Risk: 1% Loss in pips: -5 pips Loss in %: -1% Result in pips: 68 pips - 5 pips = 63 pips profit Result in %: 5,25% - 1% = 4,25% Scenario 2️⃣: 👉You lose EUR/USD and win USD/JPY Risk: 1% Loss in pips: 13 pips Loss in %: -1% USD/JPY: Risk: 1% Win in pips: +25 pips Profit in %: +5,25% Result in pips: 25 pips - 13 pips = 12 pips profit Result in %: 5,25% - 1% = 4,25% The real profit on your account is 4,25%, no matter which trade you`ve won and how many pips you`ve made! The pip-difference is 51 pips, but you still have these 4,25%, no matter which trade you win! Why is that? Now look at USD and at JPY-Pairs. A pip in USD, or MAJOR-PAIRS is always the fourth figure behind the komma. 👉 1,248(0)0 A pip in JPY, or JPY-PAIRS is always the second figure behind the komma. 👉 107,6(8)5 Let`s calculate the pip-difference from Entry to target for both pairs: 1️⃣ EUR/USD: Take-Profit - Entry 1,2547 - 1,2479 = 0,0068 = 68 pips 2️⃣USD/JPY: Take-Profit - Entry 107,935 -107,685 = 0,25 = 25 pips Also notice that if you lose both trades that a -5 PIP loss and a -13 PIP loss are both the same LOSS of 1 % if you stick to a consistent risk! IT DOESN`T MATTER! Okay, let`s say you trade the same pair with the fourth figure behind the comma as a pip, but you trade with different risk-rewards but a huge move you catch! In this case you trade with a different risk-reward as you need a wider stop-loss due to volatility and you want to advoid to get stopped out! You use the same strategy to follow the trend, but now we had news that pumped EUR/USD like hell! Scenario 1️⃣: 👉You lose the first EUR/USD trade and win the second EUR/USD trade EUR/USD #1: Risk: 1% Loss in pips: -13 pips Loss in %: -1% EUR/USD #2: Risk: 1% Win in pips: +140 pips Win in %: 4% Result in pips: 140 pips -13 pips = 127 pips profit Result in %: 4% - 1% = 3% profit on your account Scenario 2️⃣: 👉You win the first EUR/USD trade and lose the second EUR/USD trade EUR/USD #1: Risk: 1% Win in pips: +68 pips Win in %: 5,25 EUR/USD #2: Risk: 1% Loss in pips: -37 pips Loss in %: -1% Result in pips: 68 pips - 37 pips = 31 pips profit Result in %: 5,25% - 1% = 4,25% profit on your account Even though you`d make 127 pips in scenario 1, the real profit would be 1,25% less on your account! ERGO: More pips = Less profit So let`s head into a very extreme example of HOW pips don`t tell you a s**t about your profits! ;-D In this example we compare a GOLD-TRADE with our recent EUR/USD-TRADE. I don`t want to spamm this post with too many calculations so I try to keep it simple here. Important to notice is that the PIPS for GOLD are represented by the second figure behind the comma. In this scenario we buy Gold at 1.800$, or 1800,0(0) <- Cents A dollar change in Gold , for example 1800 to 1801, is called a POINT. A dollar change in Gold would be 100 Cents, or 100 pips! So let`s say you buy gold with a risk-reward of 2:1, means you risk 1$ for 2$ or can win 2x more than you can lose. In this case you would make 20 POINTS as the price moves from 1.800$ to 1.820$. In pips you would make 2.000 friggin pips but only 2% profit compared to your 68 pips in EURO /USD with 5,25% profit. One last example: In this scenario you win the EUR/USD trade and LOSE the GOLD-TRADE: EUR/USD #1: Risk: 1% Win in pips: +68 pips Win in %: 5,25 XAU /USD: Risk: 1% Loss in pips: -700 pips Loss in %: -1% Result in pips: +68 pips - 700 pips = -632 pips profit Result in %: 5,25% - 1% = 4,25% profit on your account You would lose -632 pips but make a real profit of 4,25% on your account! So when do PIPS really matter? If you would trade the same PAIR with the same RISK-REWARD over and over again as you would always win and lose the same amount in %. If you`d trade the same EUR/USD trade, PIPS would actually make sense to be counted. But who trades that way? Almost noone! What does that mean for your positionsize in LOT? They always VARY! Use a position-size-calculator to get your right position-size. But thats a topic for another post... :-) IF YOU WANT TO SEE MORE EDUCATIONAL CONTENT PLEASE LEAVE A LIKE AND A COMMENT.. especially when this helps you! :-) Peace and good trades Irasor Wanna see more? Don`t forget to follow me
Education
by Trading2ez
19