Here is an example of how to determine Bias for the day, or the open. Using the Open and Low or Open and High of the Daily candle in conjunction with the midnight opening price, we can easily determine Bias for the day, or for placing orders during the NY open. This example is shown on CL (Oil Futures) for a LONG BIAS. Just reverse for Short Bias. ( I mistakenly...
Here is an example of how it is important to check the daily Bias on DXY if you are trading NQ or ES futures. DXY is predominantly inverse the futures. Knowing the daily bias and tracking DXY can give additional confluence to your bias/ direction for NQ & ES. You can easily determine Bias for DXY and futures with the previous tutorial/ Tip I posted. I hope you...
Introduction Behavioral finance is a captivating field that explores how human psychology affects financial decision-making. Traditional finance models assume investors are rational beings, making logical choices to maximize wealth. However, behavioral finance acknowledges that emotions, cognitive biases, and herd mentality often lead individuals to deviate from...
Causes of overconfidence bias In order to define overconfidence bias, it is important to understand some of the causes. These could include: Doubt avoidance. Very often, people don’t like moments of ambiguity or doubt. Overconfidence could work as a solution, with the overconfident person feeling confident in their abilities to feel sure, even in a situation...
Confirmation bias is a self defeating attempt to impose one's own bias on the market. This most often results in pre-trade chart blindness. When we analyze the market with a preset bias, we will only see confluences, patterns, price action, and setups that confirm our bias. This is the human flaw of needing to be correct. The need to be correct will cause traders...
In this educational article, we will discuss one of the most common cognitive errors of newbie traders - a confirmation bias. In order to better understand that term, I want to start with the example: Let's say that after doing some research, you are highly convinced that Bitcoin is bullish and that it is a decent investment. You decide to buy that from...
A basic concept in price action trading is that when it comes to the analysis process of price, some candles are more valuable than others. By "more valuable" I mean, some candlesticks have more weight in the analysis process of price than others. Before I explain which candles have more inherent value, let me explain a bit of price action philosophy. When it...
Hello Traders! Do you ever wonder, "When is the trend ending?" or "When should I change my directional bias?" Many traders find it hard to figure out not only how to choose a directional bias for the day, or how to change their bias if they are on the wrong side of the trade. In this educational video tutorial, I provide simple confirmations to discern when...
In this video idea, I discuss the idea of how to check for bias in recent events in an indicator by requiring that X of the last Y candles meet a certain condition. It is common to refer to recency bias as something that can skew your view on things based on recent events. In this case, I am referring to applying a bias to our indicator based on recent...
There are no promises, guarantees or predictions in this. The Aussies have been flattening out at a top - it appears - at this time. There are only two directions for price - nothing new in that. What happens in situations like these is: 1 - either price collapses. 2 - it rockets north. You can imagine what bulls and bears would say to each of the above....
I don't use indicators, they're not my style, they lag, they repaint; and in my opinion they don't work. The 200 EMA on DAILY can be useful because of how slow it is. We can use it to filter the direction of which way we trade. Price ABOVE 200 ema = ONLY BUY Price BELOW 200 ema = ONLY SELL Then drop timeframes for your entries via your strategy whatever that...
Hope this idea will inspire some of you ! Don't forget to hit the like/follow button if you feel like this post deserves it ;) That's the best way to support me and help pushing this content to other users. Kindly, Phil
Everybody - I mean everybody - who is actively trading has to make decisions. Entry points, exit points, trailing stops, stop-losses and so on - they all involve decisions. But what affects the integrity of our decision-making ? Some say we don't need to make decisions, once we follow a mechanical trading plan. I disagree 100%. If everybody could follow a...
Many a trader will have made their best analysis based on information at the time and then taken an entry position, only to find that the market does something unexpected. Price may move violently in the wrong direction i.e. not the favoured direction and comes close to a stop loss or actually stopping out the position for a loss. Now with hindsight a trader feels...
Market develops in FRACTALS. Understanding how each timeframe is developing is important in timing our trade entries. When we decide to take any trade, we now have a better understanding and expectation of our trades. Practical Exercise 1) Find an example where the two timeframes' bias are aligned. 2) Find another example where the two timeframes' bias are...
There is an extremely famous psychology paper written by Daniel Kahneman and Amos Tversky named ‘Judgement Under Uncertainty: Heuristics and Biases’ (psiexp.ss.uci.edu) (Kahneman won a Nobel Peace Prize in 1992 for his work in the field, specifically on prospect theory) which explores the decision making process. As trading requires decisions to be made...