This question is quite scary, but if you are a novice and see this question, congratulations, you are on the right path of trading. The most important lesson to learn before entering the financial markets is risk expectation. You can ask yourself, how much money do you want to make from trading? Is your goal asset appreciation, or a small fortune? If a trade...
If you don't use your fibb tool much, (save your settings as a template first if you do) or for just a quick check to see if there is enough reward for the risk in the trade, you can set up your Fibonacci in increments of 1 (2.5 is 1:1.5) Do this as far as you like. You can extend lines left or right to check if the R Ratio you are looking for will fit this market...
Anchoring is a heuristic in behavioral finance that describes the subconscious use of irrelevant information, such as the purchase price of a security, as a fixed reference point (or anchor) for making subsequent decisions about that security. Thus, people are more likely to estimate the value of the same item higher if the suggested sticker price is $100 than...
Gold has long been a darling of investors. Its holders - whether households or central banks - seek refuge in the yellow metal in times of crisis. Gold is a resilient store of wealth, offers durable portfolio diversification, exhibits lower volatility relative to equities & bonds, and serves as an inflation hedge. But it has a big downside. As mentioned in our ...
AI and Algorithmic Trading #1 - Introduction to AI and Algorithmic Trading In recent years, algorithmic trading has become increasingly popular in the world of finance. Algorithmic trading refers to the use of computer programs to automate the trading process, including the analysis of market data, the identification of trading opportunities, and the execution...
Whether you are just getting started or you’ve been on your journey for a while now, you’ve probably discovered that day trading is not easy. You’re putting your hard-earned money on the line and facing new challenges daily. That said, every challenge you conquer takes you one step closer to your ultimate goal. Small behavioral changes can have profound...
It may not seem like it is very critical, but let's use two traders as an example. Trader #1 on the left uses targets. They know the move may be way bigger than what they target, but every time they close a position, they can re-enter again, keeping a small risk for consistent reward. Trader #2 on the right wants a home run every trade, and they do not use...
Take profit and stop loss are one of the most important links in the entire trading system. After studying this article, you will be able to thoroughly understand the stop loss method. You can bookmark it before reading it. If you feel that you have gained something, you can like it, thank you. 1. 6 stop loss methods Stop loss means that when our order loss...
"The ones who make the most money lose the least when they are wrong" Let's use a scalping trading style for example Say you have a set risk reward ratio of -10 pips for being wrong +30 pips for being right Start trading Loss Loss Loss Win Loss Loss Loss Loss Loss Win Loss Loss Loss Win Win Loss Loss Win Loss Loss Wow, a lot of losses, but...
The reward to risk ratio (RRR, or reward risk ratio) is maybe the most important metric in trading and a trader who understands the RRR can improve his chances of becoming profitable. Basically, the reward risk ratio measures the distance from your entry to your stop loss and your take profit order and then compares the two distances. Traders who understand this...
⚛️The world of trading is full of myths and misconceptions. We often hear stories of overnight successes and devastating losses. It can be difficult to separate truth from fiction when it comes to trading. In this article, we will debunk some of the most common trading myths and provide the facts to help you make better investment decisions. ❌Myth: Trading is...
Introduction Trading can be a profitable venture, but it also comes with its fair share of risks. In order to succeed as a trader, it is important to have a solid risk management plan in place. In this article, we will discuss key risk management strategies that every trader should know. These include determining your risk tolerance, using stop loss orders,...
In this educational article, I will teach you how to properly plan your trading week. Sunday. While the markets are closed, it is the best moment to prepare the charts for next week. First of all, charts should be cleaned after the previous trading week: multiple setups and patterns become invalid or simply lose their significance and their stay on the charts...
First of all, let us clarify, that what we mean by a "bad trade" is simply a transaction that was unsuccessful . There are no "good" or "bad" trades as the whole system of trading is random and unpredictable. In other words, if we knew how to differentiate between bad and good trades, then technically, we would always choose to enter good trades, right? Or should...
In order to consistently make money in the markets, traders need to learn how to identify an underlying trend and trade around it accordingly. Multiple time frame analysis follows a top-down approach when trading and allows traders to gauge the longer-term trend while spotting ideal entries on a smaller time frame chart. After deciding on the appropriate time...
Introduction When starting out as a trader or investor, it is important to be aware of the mistakes that can be made. Mistakes are common, and even experienced traders and investors make them from time to time. However, new traders and investors are particularly vulnerable to making mistakes, which can lead to significant losses. In this article, we will discuss...
2 Free Online Games that Have Helped Me Become a Better Investor. So Im in the middle of reading the " A Man of for All Markets" by Edward O. Thorp, and its fascinating. Hes a mathematician who proved there was a potential edge in blackjack (21) based on the cards that were left in the deck. He also went on to be investing fund manager who focused on covered...
Hey traders, In this educational post, we will discuss the relation of risk to your trading style. 1️⃣ High Frequency Trading (HFT) It is a complex algorithmic approach that is used to operate on second(s) time frames. Such a style is considered to be the riskiest one. With a very high frequency of order execution and sophisticated strategies, it requires...