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Understanding Trend Reversals: Switch Levels & Peak Formations E As traders, one of our biggest challenges is identifying the trend and recognizing when it's rolling over to form a peak formation. In this video, I’ll give you a quick yet powerful introduction to the theory behind switch levels and peak formations — key concepts for understanding trend strength, spotting reversal zones, and determining when a high or low is potentially locked in. Whether you’re a beginner or refining your strategy, this video will help you better develop your bias by recognizing when a trend is losing momentum. 📌 Topics Covered: What are Switch Levels? Identifying Peak Formations How to Confirm a Locked-In High or Low Reading Trend Strength and Shift Signals

Education

09:52

Accurate Price Model for Trading Smart Money Concepts SMC (= If you trade Smart Money Concepts SMC, there is one single pattern that you should learn to identify. In this article, you will learn an accurate price model that you can use to predict a strong bullish or bearish movement way before it happens. Read carefully and discover how to track the silent actions of smart money on any market. The only thing that you need to learn to easily find this pattern is basic Structure Mapping . After you map significant highs and lows, you will quickly recognize it. This SMC pattern has 2 models: bullish and bearish ones. Let's start with a bearish setup first. Examine a structure of this pattern it should be based on 2 important elements. The price should set a sequence of equal lows. These equal lows will compose a demand zone. The area where a buying interest will concentrate. The minimum number of equal lows and lowers highs should be 2 to make a model valid. Exhausting of bullish moves will signify a loss of confidence in a demand zone . Less and less market participants will open buy positions from that. At some moment, a demand zone will stop holding. Its bearish breakout will provide a strong bearish signal , and a bearish continuation will most likely follow. This price model will signify a market manipulation by Smart Money. They will not intentionally let the price fall, not letting it break a demand zone. A buying interest that will arise consequently will be used as a source of liquidity. Smart money will grab liquidity of the buyers, silently accumulating huge volumes of selling orders. Once they get enough of that, a bearish rally will start, with a demand zone breakout as a trigger. Though, the chart model that I shared above has a strong bullish impulse, preceding its formation, remember that it is not mandatory. The price may also form a bearish impulse first and for a pattern then. Each bullish movement that initiates after a formation of an equal low should be weaker than a previous one. So that the price should set a lower high every time after a formation of an equal low. Look at a price action on USDCHF forex pair. Way before the price dropped, you could easily identify a market manipulation of Smart Money and selling orders accumulation. A breakout of a horizontal demand zone was a final bearish confirmation signal. Let's study its bullish model. It has a similar structure. The price should set a sequence of equal highs, respecting a horizontal supply zone. Each bearish move that follows after its test should have a shorter length, forming a higher low with its completion. This model will be also valid if it forms after a completion of a bearish impulse. Weakening bearish movements will signify a loss of confidence in a supply zone, with fewer and fewer market participants selling that. Its bullish breakout will be an important even that will confirm a highly probable strong bullish continuation. Smart Money will use this price model to manipulate the market and accumulate buying orders, not letting the price go through a supply zone. They will grab a liquidity of the sellers each time a bearish move follows from a supply zone. When they finally get enough of a liquidity, a bullish rally will initiate and a supply zone will be broken , providing a strong confirmation signal. That price model was spotted on GBPJPY forex pair. Smart Money were manipulating the market, not letting it continue rallying by creating a significant horizontal supply zone. Selling orders that were executed after its tests provided a liquidity for them. A bullish breakout of the underlined zone provides a strong bullish confirmation signal. A breakout and a future rise could be easily predicted once this price model appeared. Why they do it? But why do Smart Money manipulate the markets that way? The answer is simple: in comparison to retail traders, they trade with huge trading orders . To hide their presence and to not impact market prices much, they split their positions into a set of tiny orders that they execute, grabbing the liquidity. The price model that we discussed today is the example how they do it. The important thing to note about this pattern is that it efficiently works on any market and any time frame. You can use that for scalping, day trading, swing trading. And it can help you find great investing opportunities. ❤️Please, support my work with like, thank you!❤️ I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.

Education

by VasilyTrader

From Fakeout to Takeoff: How the V-Pattern REALLY Works Ever seen a support level break, only for the price to rocket back up in a V-shape? That’s the V-Pattern in action! In this post, Skeptic from Skeptic Lab breaks down the step-by-step mechanics of this powerful setup. From the fakeout that traps short sellers to the surge of buy orders from liquidations, you’ll learn exactly how buyers flip the script and create explosive reversals. Perfect for traders looking to spot high-probability setups. Join me to decode the markets—check out the steps and level up your trading game!

Education

03:32

Corrective Dip or New Downtrend on the S&P 500 Futures?🟣 1. Impulses vs. Corrections – The Classical View When price trends, it doesn't move in a straight line. Instead, it alternates between directional movements called impulses and counter-directional pauses or retracements known as corrections. Most analysts define an impulse as a sharp, dominant move in the direction of the trend—typically accompanied by rising volume and momentum indicators. Corrections, on the other hand, tend to be slower, overlapping, and often occur with declining volume. Common methods to identify impulses vs. corrections include: Swing structure: Higher highs and higher lows suggest impulse; overlapping lows suggest correction. Fibonacci retracements: Corrections often retrace up to 61.8% of a prior impulse. Moving averages: Price above a rising MA is often viewed as impulse territory. Volume analysis and oscillators such as RSI or MACD are used to confirm price behavior. Despite the abundance of methods, the distinction between impulses and corrections often remains subjective. That’s where the Directional Movement Index (DMI) provides an objective lens—especially when paired with price action. 🟣 2. Rethinking Impulses with the DMI Indicator The Directional Movement Index (DMI), developed by J. Welles Wilder, offers a quantitative way to assess the strength and direction of price movement. It breaks down market activity into three components: +DMI (Positive Directional Movement Index): Measures the strength of upward movements. −DMI (Negative Directional Movement Index): Measures the strength of downward movements. ADX (Average Directional Index): Quantifies overall trend strength but is optional in this discussion. The key to applying DMI lies in the crossover between +DMI and -DMI: When +DMI > -DMI, upward price moves dominate—suggesting bullish impulses. When −DMI > +DMI, downward moves dominate—suggesting bearish impulses. Calculation is based on a comparison of successive highs and lows over a specific lookback period—commonly set to 14 or 20 periods. While EMAs track trend direction and momentum, DMI helps dissect who’s in control. This makes it a powerful filter when evaluating whether a breakdown or breakout is likely to become an impulsive trend—or just another correction in disguise. 🟣 3. Case Study – Two Breakdowns, Two Outcomes Let’s apply this logic to two recent moments on the E-mini S&P 500 Futures (ES) daily chart. 🔹 Feb 21, 2025 Breakdown Price broke sharply below the 20-period EMA. At first glance, this looked like a potential trend reversal. The DMI confirmed this suspicion: −DMI surged above +DMI, signaling downside impulses were in control. The market followed through with a clear downtrend, confirming the move was not just a pullback—it was a shift in market structure. 🔹 Aug 1, 2025 Breakdown A similar sharp break below the 20 EMA just occurred again. However, this time +DMI remains above −DMI, despite the bearish price action. This divergence tells a different story: the breakdown may not be impulsive in nature. Instead, it's likely a corrective dip within a broader uptrend, where buyers are still the dominant force. This is a textbook example of how a moving average crossover without DMI confirmation can mislead traders. By combining these tools, we’re able to make more informed decisions about whether price action is signaling a true shift—or just a pause. 🟣 4. CME Product Specs – ES vs. MES Traders can express directional views on the S&P 500 using two primary CME futures contracts: the E-mini S&P 500 Futures (ES) and the Micro E-mini S&P 500 Futures (MES). Both track the same underlying index but differ in size, capital requirement, and tick value. ✅ E-mini S&P 500 Futures (ES) Symbol: ES Contract Size: $50 x S&P 500 Index Tick Size: 0.25 index points Tick Value: $12.50 Initial Margin: Approximately $21,000 (varies by broker and through time) Market Hours: Nearly 24/6 ✅ Micro E-mini S&P 500 Futures (MES) Symbol: MES Contract Size: $5 x S&P 500 Index Tick Size: 0.25 index points Tick Value: $1.25 Initial Margin: Approximately $2,100 (varies by broker and through time) The Micro contract provides access to the same market structure, liquidity, and price movement as the E-mini, but with a fraction of the exposure—making it ideal for smaller accounts or more precise position sizing. 🟣 5. Risk Management Matters Understanding whether a market move is impulsive or corrective isn’t just academic—it’s the difference between positioning with the dominant flow or fighting it. Traders often get trapped by sharp moves that appear trend-defining but are simply noise or temporary pullbacks. Using tools like DMI to confirm whether directional strength supports price action provides a layer of risk filtration. It prevents overreaction to every EMA crossover or sudden price drop. Stop-loss orders become vital in both impulsive and corrective conditions. In impulsive environments, stops help lock in profits while protecting from reversals. In corrective phases, they act as circuit breakers against breakouts that fail. Moreover, knowing the product you're trading is critical: A single ES contract controls ~$320,000 of notional value. An MES contract controls ~$32,000. This disparity means poor sizing on ES can magnify errors, while proper sizing on MES can offer flexibility to test, scale, and hedge with tighter capital control. Whether you're reacting to price or preparing for continuation, risk management is the only constant. It’s what turns analysis into disciplined execution. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.

Education

Turning Stock Declines Into Your Best Trading Opportunity Turning Stock Declines Into Your Best Trading Opportunity When stocks fall dramatically, many investors panic. But what if those drops were actually the set-up for some of the most lucrative opportunities? In this article, you’ll discover why sharp declines can set the stage for outsized gains, how the mathematics of recovery works, and how to use classic technical patterns to identify the ideal entry points. And the most important, how to do it easily on Tradingview! The Power of Recovery: Why a Drop = Big Upside Every percentage drop in a stock’s price requires a much larger percentage gain to return to its previous high. Recognizing this simple truth can turn “market fear” into “trader’s opportunity.” Here’s exactly what a stock would need to climb, after various drops, to reclaim old highs: | Drop (%) | Required Gain to Recover (%) | |----------|-----------------------------| | 10 | 11.1 | | 20 | 25.0 | | 30 | 42.9 | | 40 | 66.7 | | 50 | 100.0 | | 60 | 150.0 | | 70 | 233.3 | If a top-quality stock drops 50%, it needs to go up 100% just to get back, so smart entries after steep drops can double your money on a bounce. When These Pullbacks Are Opportunity: The Case of Market Leaders Stocks like Eli Lilly, UNH, Novo Nordisk, ASML, AMD, or Lululemon are examples of quality growth companies that sometimes undergo sharp, hype-driven sell-offs. Recent history shows: - Eli Lilly, UNH or Novo Nordisk : Leaders in innovative health solutions, frequently see pullbacks despite strong demand in their sectors. 💊 NYSE:LLY (Down up to 30%) Most analysts are highly bullish on Eli Lilly , with most giving it a "Strong Buy" rating. The 12-month consensus price target ranges between $956 and $1,016 , suggesting a 25–32% upside from current levels . Optimism is driven by strong momentum in its obesity and diabetes drug pipeline, especially GLP-1 treatments like orforglipron. Risks include high valuation and dependence on future drug approvals. Technically speaking, Eli Lilly is currently trading within a channel , also known as a flag pattern when it forms during a bull trend. There are two common ways to trade this setup: You can either wait for the price to drop to the bottom of the channel for a lower-risk entry, or wait for an upside breakout to join the rally at its strongest point. Both approaches are considered low-risk, high-reward trades. However, entering a position right now is not ideal , as there is still room for the price to decline before a potential breakout in this premium stock. 💊 NYSE:UNH (Down up to 60%) The Analysts are generally positive on UnitedHealth Group , despite recent challenges like CEO changes and regulatory concerns. Most believe the company has strong fundamentals and expect it to recover over time. The average 12-month price target ranges from $380 to $400, which suggests a potential upside of over 60% from current levels . While a few firms have lowered their outlook, the majority still recommend buying the stock. Technically speaking , the price dropped after breaking below its support zone (red). It briefly paused in a first support area (blue), where some optimistic buyers stepped in, but eventually continued down to a more important zone. The green area marks the main trading zone from before COVID , with high volume and strong interest, this is where many institutional investors are likely to see value and start buying this premium stock again . Interestingly, analysts’ average price targets are below the previous support, suggesting a possible pullback to that area. If this happens, it could mean a 60% to 90% rally for UNH from current levels (though some further decline within the green zone is still possible and as we saw at the start, even more profits!). 💊 NYSE:NVO (Down up to 70%) Analysts have a cautious but constructive outlook on Novo Nordisk, with an average 12‑month price target of around $80. While some firms maintain buy ratings, many have recently lowered their views amid mounting competition from Eli Lilly and concerns over copycat semaglutide products depressing growth. A few stronger bulls still point to the long-term potential in obesity and diabetes markets as reasons for future upside. Others see significant headwinds, noting falling demand for legacy drugs and disappointing trial outcomes such as CagriSema setbacks. Overall, most analysts expect a recovery from current levels. Technically speaking , the price dropped after breaking below a Head and Shoulders pattern , which led to a sharp decline in Novo Nordisk's stock. The price has now reached a key previous support zone, where the Volume Profile (VRVP) shows significant activity, this often suggests institutional investors may start buying again, viewing the current levels as a bargain. While it's wise to be cautious ahead of tomorrow’s earnings report, the overall downside risk appears limited, given the company’s strong cash flow and solid product pipeline. That said, investor expectations around obesity and diabetes treatments are no longer as optimistic as they were a few years ago, which could weigh on future growth. Still, from a technical and fundamental standpoint, this area may offer an attractive entry point to sell at $80 for a 70% profit! Other well-known stocks that could present an amazing opportunity soon include NASDAQ:LULU , EURONEXT:ASML , NYSE:MRK , NASDAQ:PEP , SPOT NYSE:SPOT or $NYSE:PFE. Right now, I don’t see strong patterns in these charts , but they’re approaching interesting buy zones. I’ll be keeping a close eye on them, just in case a setup starts to form. These tickers, as of August 2025, stand well below consensus price targets, so a recovery from current levels toward analyst consensus highs could deliver powerful returns. ⚠️ An example of previous opportunities I like to understand the past before trying to predict the future , so it’s fair to show some previous examples of stocks that were "on sale." The first example is NASDAQ:META A well-known premium stock that experienced a massive crash during 2021 and 2022 due to the failure of its metaverse strategy. The stock lost more than 75% of its value , a truly astonishing drop. During this period, a falling wedge pattern formed on the chart , indicating that bearish sentiment was fading. After confirming the pattern, the stock went on to rally more than 700% , yes, you read that right, a 700% rally followed. Later, another crisis, this time triggered by Trump, hit the stock, causing a sharp 35% drop in just a few weeks. Eventually, the price reached a strong buy zone (high VRVP and previous important supports), and in the weeks that followed, we’ve seen a 63% rally that is still unfolding. During 2025 , we’ve also seen NASDAQ:NVDA fall 35%, only to come back with a 110% rally . NASDAQ:MSFT dropped 25% and then delivered an impressive 60% gain afterward. NYSE:ORCL lost 40% in just a few months, and now we’re seeing a massive rally, up 120% , even outperforming NVDA. Simply amazing. 🚀 Finally, some previous published ideas based on the same principle: ⭐ Buying COINBASE:XRPUSD after a large decline (Yes, the methodology also work for other assets!) ⭐ Buying NASDAQ:DLTR at the bottom, after a 65% decline to enjoy a (for now) 90% rally. ⭐ Buying AMEX:GROY after doing two Double Bottoms and breaking the resistances for a 25% rally. You can find more Ideas on my profile, always based on Chart patterns with low risk and high returns profile . ⏳ Entry Timing: Rely On Technical Patterns, Not Indicators The key to entering these stocks efficiently isn’t about moving averages, RSI, or fundamentals. It’s about reading price action, volumes and technical chart patterns that reflect buyer behavior and sentiment shift. Some famous examples: - Double Bottom : Two clear lows near the same support zone, signaling sellers are losing strength and buyers may take control. The breakout above the intermediate high is usually a decisive signal of a trend reversal. I have published multiple ideas with double bottoms recently. - Hammer Candle at Support : After a strong decline, a single candle with a short body and a long lower wick near a known support. This shows aggressive intraday buying, hinting that the sell-off momentum is vanishing. - High Volume at Support: While volume isn’t a classic “indicator,” a surge in transactions as price holds support often marks institutional buying, confirming higher conviction in a potential bottom. Also the VRVP lateral indicator is a great help to know price levels with masive volume. Spotting these technical structures on stocks deeply “on sale” lets you step in with a skewed risk/reward: your downside is defined (below support), your upside is open (toward recovery), and your edge comes from patient pattern recognition, not luck. The TradingView screener is a great tool for finding “on-sale” stocks by filtering based on % Change. Pro Tip : The % Change is set to 1-day by default, but you can adjust it to show up to 1 month using the blue dropdown at the top. After that, you have pattern recognition indicators like double bottoms or the VRVP for volume zones which are both AMAZING. 🔍 Visualize the Opportunity Here’s your roadmap : 1. Scan for sharp declines in leading names, ideally those with price objectives far above current prices. 2. Strong technical pattern (double bottom, hammer on support, high-volume reversal days). 3. Wait for confirmation of pattern completion with renewed bullish price action or buy in the support, that is risky, but gives a unique risk reweard ratio when it works! 4. Act decisively when patterns confirm, your entry is efficient, your risk controlled, and your recovery math is in your favor. > Remember : Technical patterns are your best ally for timing entries during periods of panic-driven price drops. Used well, they help you capture robust returns with clear risk management, making market sell-offs a trader’s opportunity, not a threat. It seems that this August is a good month to start practicing finding bargains. 💬 Does this post helped you? 🚀 Hit the rocket if this helped you spot the opportunity and follow for more clean, educational Chart Patterns trade ideas!

Education

by TopChartPatterns

From Execution to Adaptation: Enter Dynamic Probabilities In the previous article , we looked at a real trade on Gold where I shifted from a clean mechanical short setup to an anticipatory long — not because of a hunch, but because the market behavior demanded it. That decision wasn’t random. It was based on new information. On structure. On price action. It was based on something deeper than just “rules” — it was about recognizing when the probability of success had changed. That brings us to a powerful but rarely discussed concept in trading: 👉 Dynamic probabilities. ________________________________________ 📉 Static Thinking in a Dynamic Market Most traders operate with static probabilities — whether they realize it or not. They assign a probability to a trade idea (let’s say, “this breakout has a 70% chance”) and treat that number as if it’s written in stone. But markets don’t care about your numbers. The moment new candles print, volatility shifts, or structure morphs — the probability landscape changes. What once looked like a clean setup can begin to deteriorate. Conversely, something that looked uncertain can start aligning into high-probability territory. Yet many traders fail to adapt because they’re emotionally invested in the original plan. They’ve already “decided” what the market should do, so they stop listening to what the market is actually doing. ________________________________________ 🧠 Dynamic Probabilities Require Dynamic Thinking To trade dynamically, you must be able to update your internal odds in real time. This doesn’t mean constantly second-guessing or overanalyzing — it means refining your bias based on evolving context: • A strong breakout followed by weak continuation? → probability drops. • Price holding above broken resistance with clean structure? → probability increases. • Choppy pullback into support with fading volume? → potential reversal builds. It’s like playing poker: you might start with a good hand, but if the flop goes against you, your odds change. If you ignore that and keep betting like you’ve got the nuts, you’re not being bold — you’re being blind. ________________________________________ 📍 Back to the Gold Trade In the Gold trade, the initial short was based on structure: broken support turned resistance. The entry was mechanical, the reaction was clean. All good. But then: • Price came back fast into the same zone. • Sellers failed to defend it decisively. • The second leg down was sluggish, overlapping, and lacked momentum. • Compression began to form. That’s when the probability of continued downside collapsed — and the probability of a reversal increased. The market had changed. So did my bias. That’s dynamic probability in action — not because of a feeling, but because of evolving evidence. ________________________________________ 🧘‍♂️ The Psychological Trap Many traders intellectually accept the idea of being flexible — but emotionally, they cling to certainty. They fear being “inconsistent” more than they fear being wrong. But in a dynamic environment, consistency of thinking is not about repeating the same action — it’s about consistently reacting to what’s real. True consistency is not mechanical repetition. It’s mental adaptability grounded in logic. ________________________________________ 🧠 Takeaway If you want to trade professionally, you must upgrade your mindset from fixed-probability execution to fluid-probability reasoning. That doesn’t mean chaos. It means structured flexibility. Your edge isn’t just in spotting patterns — it’s in knowing when those patterns are breaking down. And acting accordingly, before your PnL does it for you. Disclosure: I am part of TradeNation's Influencer program and receive a monthly fee for using their TradingView charts in my analyses and educational articles.

Education

Chart Breakdown – Smart Money Concept in Action This chart showcases a textbook example of a bearish setup based on Smart Money Concepts (SMC): BOS (Break of Structure) at the left confirms a shift in momentum. A strong engulfing candle pierces into a supply zone, setting the stage for a potential reversal. Price forms an FVG (Fair Value Gap) and returns to fill the imbalance, offering a high-probability entry within the Bearish Order Block (OB). A clear CHoCH (Change of Character) signals a bearish trend shift, validated by the second BOS. The trade targets Sell Side Liquidity, resting below the recent lows—just where smart money aims. 🎯 This setup combines precision, patience, and the power of understanding institutional moves.

Education

The Great Trap: How Billionaires Are Winning, and You're Not!The Great Crypto Trap: How Billionaires Are Winning—And You're Not The ETFs, Saylor, and all of Trump's billionaire friends are getting richer—thanks to crypto. Meanwhile, most retail traders are just trying to stay above water. Leverage trades are wiped out, charts feel rigged, and the market makes you feel like you're swimming against a riptide. Why? Because these rich guys have a plan: manipulate you and take your money. That’s how they stay rich. Understanding their strategy is the first step to stop being their exit liquidity. 🧠 The New Battlefield Crypto is no longer a playground for cypherpunks and tech rebels. It’s fully institutional now. We're not just trading against whales—we're fighting the same entities that own the media, control Wall Street, and write the rules. So forget the old ways of thinking. The tables have turned. 🗓 The Sunday Rekt Routine To maximize destruction, they need to avoid friendly fire. So they pump on the weekend when retail is free and optimistic, then dump on Monday to close the CME gap—like clockwork. The playbook: Weekend: Pump. Trap your long. Monday: Dump. “Fill the gap.” Liquidate everyone. Response: Don’t fall for weekend FOMO. Exit Sunday afternoon. Wait until Tuesday to re-enter, once Monday’s high and low are set. Trade smart, not emotional. 📈 Top-of-the-Market FOMO You’ve seen it before. Just before the crash, the media frenzy begins. Influencers say “Don’t miss this pump!” or “99% will miss the next big move!” The ETF gods hint at new inflows. It's a setup. They're not hyping it for your benefit—they're offloading their bags in your face. Just look at the charts: BlackRock bought billions to drive BTC to 121K. Then, in 72 hours, they dumped billions. Saylor? Silent. No new buys. That’s not coincidence—it’s coordination. Response: Check the MACD, RSI, and Stochastic RSI on daily or weekly timeframes. If they're maxed out and the influencers are screaming green—it’s probably too late. When they stop buying, the dump is already planned. 🧰 How to Outsmart Them Watch the MACD for crossovers and divergence. Monitor RSI zones—don’t long into extreme overbought conditions. Use Stoch RSI to anticipate momentum shifts. Rule: When everything is overheated, and FOMO is peaking—step back. Let them dump into each other. You’ll get your entry later, cleaner and cheaper. ⚔️ This Is War Make no mistake: this is a war for your money. They want yours. You want theirs. Only the smart survive. To be continued. DYOR.

Education

by CryptoNikkoid

Risk Capacity: The Real Reason Traders Blow Accounts | Ep. 4 In this pre-recorded video, I unpack one of the most overlooked reasons why traders blow their accounts over and over again, and it’s not about your system, strategy, or signal. It’s about risk capacity, the internal threshold your nervous system can handle before fear, greed, or shutdown kicks in. This is part of my ongoing series on YouTube “Rebuilding the Trader Within”, where I reflect on the emotional and psychological dimensions of trading that no indicator can fix. If you've ever found yourself repeating the same mistakes, feeling stuck at the same equity level, or losing composure in high-stakes trades... this might be the pattern underneath it all. I'm still learning too, and I’d love to hear your thoughts. Drop a comment — let’s grow together. #RiskCapacity #TradingPsychology #TraderMindset #RebuildingTheTraderWithin #ForexMentorship #TraderGrowth #InnerWork #ForexPsychology

Education

15:04

Inside a Candle: How to Read Hidden Order Flow Without a DOM Difficulty: 🐳🐳🐳🐋🐋 (Intermediate+) This article is for traders who want to understand the “story” behind a candle’s shape — and learn to spot aggressive buying/selling, absorption, and traps without needing footprint or order book tools. 🔵 INTRODUCTION Most traders see candles as static shapes — green or red, big or small. But each candle is a battlefield of orders . Even without access to a DOM or volume footprint, you can still extract valuable information from just the candle's body, wick, and context . 🔵 ORIGINS: WHERE CANDLESTICKS COME FROM Candlestick charts trace back to 18th-century Japan, where rice traders needed a way to visualize price movements over time. A legendary trader named Munehisa Homma , who traded rice futures in Osaka, is credited with developing the earliest form of candlestick analysis. Homma discovered that price wasn’t just driven by supply and demand — but also by trader psychology . He created visual representations of market sentiment by tracking: The opening and closing price of rice The highest and lowest price reached during the session This system became known as the “Sakata rules,” and it laid the foundation for many patterns still used today — such as Doji, Engulfing, and Marubozu. Western traders only began using candlesticks widely in the 1990s, when analyst Steve Nison introduced them to the broader financial world through his book Japanese Candlestick Charting Techniques. Today, candlesticks remain one of the most powerful and intuitive ways to visualize order flow, momentum, and market psychology — even without a Depth of Market (DOM) or depth of book. In this article, you’ll learn how to read hidden order flow by analyzing: Wick length and positioning Body-to-range ratios Candle clustering and sequences 🔵 HOW A CANDLE FORMS Before you can read a candle, you need to understand how it comes to life . A single candle represents the full auction process during its time window. Here’s how it builds, step by step: Candle opens — this is the open price . As price moves up during the session → the high] updates. As price moves down → the low] updates. The final traded price when the time closes → this becomes the close price . The wick = price areas that were tested but rejected The body = where the majority of aggressive trades occurred If buyers push price up quickly but sellers slam it down before the close — the candle will have a long upper wick and close near the open, revealing seller absorption. Understanding this flow helps you recognize traps, fakeouts, and reversals in real time. 🔵 CANDLE BODY: WHO'S IN CONTROL The body of the candle reflects the result of the battle between buyers and sellers. A wide body with minimal wicks means dominance and commitment. Big body, small wick → clear conviction In an uptrend: buyer aggression In a downtrend: panic or aggressive selling Small body, long wicks → indecision, absorption, or trap Often appears near tops/bottoms Indicates both sides were active but neither won clearly www.tradingview.com 🔵 WICKS: THE SHADOWS OF REJECTION Wicks are not just “leftovers” — they show where price was rejected after being tested. Long upper wick = seller presence or absorption at highs Long lower wick = buyer defense or trap spring Double wick = liquidity sweep / false breakout Use wick direction to spot: Failed breakouts Smart money traps Exhaustion candles 🔵 HIDDEN ORDER FLOW PATTERNS 1️⃣ Absorption Candle A large wick with little movement afterward — shows that big orders absorbed market pressure. 2️⃣ Trap Candle A candle that sweeps above/below a key high/low and closes opposite — classic smart money fakeout. 3️⃣ Imbalance Candle Large-bodied candle that closes near the high/low with no wick on the other end — implies one-sided aggression (and often leaves an imbalance). 🔵 CLUSTERING & SEQUENCES MATTER Never read a candle alone. The sequence of candles tells the full story: 3+ rejection wicks near resistance? Liquidity building before breakout or trap Bearish engulfing after long upper wick = smart money selling into retail buying Tight-range dojis + volume spike = compression before expansion Context + volume + structure = hidden flow decoded. 🔵 PUTTING IT TOGETHER: A REAL EXAMPLE Price breaks above previous high Candle closes with long upper wick and smaller body Next candle opens, dumps fast, leaving imbalance behind Buyers trapped — move likely to continue down This is how you read order flow from candle anatomy . 🔵 TIPS FOR MASTERY Use a lower timeframe (1M–5M) to see microstructure Watch how wicks behave near S/R or OBs Confirm with volume spikes or delta-style indicators Use replay mode to slow down the story and study cause/effect 🔵 CONCLUSION Every candle is a message. You don’t need expensive tools to read order flow — just your eyes, context, and curiosity. Learn to see candles not as symbols, but as evidence of behavior . Absorption, imbalance, and traps are all visible if you look closely.

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Wedge Pattern: A Key to Trend Reversals and Continuations 📈 Wedge Pattern: A Key to Trend Reversals and Continuations A wedge pattern is a technical chart formation that signals a potential reversal or continuation in the market. It’s formed when price moves between two converging trendlines — either sloping upward or downward — creating a narrowing range over time. There are two main types of wedge patterns: 🔻 Falling Wedge (Bullish) Formed during a downtrend or as a correction in an uptrend. Characterized by lower highs and lower lows, with the slope of the support line steeper than the resistance line. Typically signals a bullish reversal as momentum builds for a breakout to the upside. ✅ Confirmation: Break above the resistance line with volume surge. 🔺 Rising Wedge (Bearish) Appears during an uptrend or as a correction in a downtrend. Shows higher highs and higher lows, but the support line is steeper than the resistance line. Often leads to a bearish reversal, especially when volume declines into the pattern. ⚠️ Confirmation: Break below the support line with increasing volume. 🧠 Key Characteristics Volume tends to decrease as the pattern forms, indicating a pause in momentum. The breakout direction (up or down) determines whether it’s a continuation or reversal signal. Wedges can appear on any time frame and are useful for both day traders and long-term investors. 📊 Trading Tip Always wait for confirmation of the breakout before entering a trade. False breakouts can be common, especially in low-volume environments

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by ProfessorSingapore

Smart Liquidity in Trading Introduction: What Is Smart Liquidity in Trading? Liquidity is the backbone of financial markets—it refers to how easily assets can be bought or sold without causing drastic price changes. But as markets have evolved with the rise of algorithmic trading, decentralized finance (DeFi), and AI, a more sophisticated concept has emerged: Smart Liquidity. Smart Liquidity isn’t just about having buyers and sellers in a market. It’s about efficient, dynamic, and intelligent liquidity—where technology, data, and algorithms converge to improve how trades are executed, how markets function, and how risks are managed. Whether in traditional stock markets, forex, or blockchain-based platforms, smart liquidity is now central to modern trading strategies. Chapter 1: Understanding Traditional Liquidity Before diving into smart liquidity, let's revisit the basics of traditional liquidity: Bid-Ask Spread: A narrow spread indicates high liquidity; a wide one shows low liquidity. Market Depth: The volume of orders at different price levels. Turnover Volume: How frequently assets are traded. Price Impact: How much a large order moves the price. In traditional finance, liquidity providers (LPs) include: Market makers Banks and financial institutions High-frequency trading firms Exchanges Liquidity ensures: Stable pricing Smooth trade execution Lower transaction costs Chapter 2: The Evolution Toward Smart Liquidity What Changed? Algorithmic Trading: Algorithms can detect, provide, or withdraw liquidity in milliseconds. Decentralized Finance (DeFi): Smart contracts offer on-chain liquidity pools without intermediaries. AI & Machine Learning: Predictive models can identify where liquidity is needed or likely to shift. Smart Order Routing (SOR): Optimizes trade execution by splitting orders across multiple venues. These technologies gave rise to “smart liquidity,” where liquidity is not static but adaptive, context-aware, and real-time optimized. Chapter 3: Components of Smart Liquidity 1. Liquidity Intelligence Advanced analytics track: Market depth across exchanges Order flow trends Latency and slippage statistics Arbitrage opportunities This helps institutions dynamically manage their liquidity strategies. 2. Smart Order Routing (SOR) SOR systems: Automatically split large orders across venues Route based on fees, liquidity, latency, and execution quality Reduce market impact and slippage SOR is key in both equity and crypto markets. 3. Algorithmic Liquidity Providers Market-making bots adjust quotes in real-time based on: Volatility News sentiment Volume spikes Risk exposure They enhance liquidity without manual intervention. 4. Automated Market Makers (AMMs) Used in DeFi: No traditional order book Prices determined algorithmically via a liquidity pool Traders interact with pools, not people Popular AMMs: Uniswap, Curve, Balancer. Chapter 4: Use Cases of Smart Liquidity 1. HFT Firms and Institutions Use predictive liquidity models Deploy SOR to reduce costs and slippage Balance exposure across markets 2. Retail Traders Benefit from tighter spreads and faster execution Use platforms with AI-driven order matching 3. Decentralized Finance (DeFi) Anyone can provide liquidity and earn fees Smart liquidity enables 24/7 trading with no intermediaries New protocols optimize capital allocation via auto-rebalancing 4. Stablecoin & Forex Markets Smart liquidity ensures 1:1 peg stability Algorithms prevent arbitrage imbalances Chapter 5: Key Metrics to Measure Smart Liquidity Metric Description Slippage Difference between expected and actual execution price Spread Efficiency How close bid-ask spreads are to theoretical minimum Fill Rate How much of an order is filled without delay or rerouting Market Impact Price movement caused by a trade Liquidity Utilization How efficiently capital is allocated across pairs/assets Latency Time taken from order input to execution These metrics help evaluate the quality of liquidity provided. Chapter 6: Risks and Challenges of Smart Liquidity Despite its benefits, smart liquidity isn’t perfect. 1. Flash Crashes Caused by sudden withdrawal of liquidity bots Example: 2010 Flash Crash in U.S. equities 2. Manipulation Risks Predatory algorithms can spoof or bait other traders "Liquidity mirages" trick algorithms 3. Smart Contract Failures (DeFi) Vulnerabilities in AMMs can drain entire liquidity pools Hacks like those on Curve and Poly Network show smart liquidity can be fragile 4. Impermanent Loss (DeFi) LPs may lose value if asset prices diverge significantly Complex math and simulations needed to manage it 5. Regulatory Uncertainty Especially in crypto, regulators still debating on decentralized liquidity protocols Conclusion Smart liquidity represents the next evolution of market infrastructure. It's not just about having capital in the market—it's about how that capital moves, adapts, and executes. From hedge funds deploying intelligent routing systems to DeFi users earning yields through AMMs, smart liquidity touches every corner of modern finance. As technology continues to mature, expect liquidity to become even more predictive, responsive, and intelligent—unlocking a new level of speed, precision, and access for traders around the world.

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by TechnicalExpress

Determining HTF Bias For Next Candle (CRT)The image shows candlestick patterns for determining HTF bias for the next candle based on close and wick positions relative to price levels: 1. Close Above - Higher Price: White candle closing above a key level (bullish bias, suggests upward continuation). 2. Close Below - Lower Price: Black candle closing below a key level (bearish bias, suggests downward continuation). 3. Wick Above - Lower Price: Long upper wick rejected above a level (bearish bias, indicates seller control). 4. Wick Below - Higher Price: Long lower wick rejected below a level (bullish bias, indicates buyer support).

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Chart Patterns - How to read them like a Pro Chart patterns are visual formations on price charts that help traders anticipate potential market movements. These patterns fall into three main categories: bullish , bearish , and indecisive . --- 1. Bullish Chart Patterns Bullish patterns often signal that price is likely to move upward. 1.1 Bull Flag * What it looks like: A sharp upward move followed by a small downward-sloping rectangle (the flag). * Meaning: After a strong rally, the price consolidates briefly before continuing higher. * Key insight: A breakout above the flag typically signals a continuation of the trend. 1.2 Pennant (Bullish) * What it looks like: A strong upward move followed by a small symmetrical triangle. * Meaning: Similar to the bull flag, but the consolidation takes a triangular form. * Key insight: Once price breaks above the pennant, the uptrend often resumes. 1.3 Cup & Handle * What it looks like: A “U”-shaped curve (the cup) followed by a small downward drift (the handle). * Meaning: This pattern suggests a period of accumulation before price breaks higher. * Key insight: A breakout above the handle signals the beginning of a new bullish leg. 1.4 Inverse Head & Shoulders * What it looks like: Three low points, with the middle low being the deepest. * Meaning: This reversal pattern appears after a downtrend and signals a potential change to an uptrend. * Key insight: A breakout above the “neckline” confirms the reversal. --- 2. Indecisive Chart Patterns These patterns show market hesitation, where neither bulls nor bears are clearly in control. 2.1 Consolidation Channel * What it looks like: Price moves within a horizontal channel. * Meaning: Market is moving sideways with no strong trend. * Key insight: A breakout in either direction often leads to a significant move. 2.2 Symmetrical Triangle * What it looks like: Two converging trend lines forming a triangle. * Meaning: This is a neutral pattern that can break out in either direction. * Key insight: Traders wait for a breakout before taking a position. --- 3. Bearish Chart Patterns Bearish patterns signal a high probability of downward price movement. 3.1 Bear Flag * What it looks like: A sharp decline followed by a small upward-sloping rectangle. * Meaning: After a strong drop, price consolidates before continuing lower. * Key insight: A breakout below the flag suggests a continuation of the downtrend. 3.2 Pennant (Bearish) * What it looks like: A sharp downward move followed by a small symmetrical triangle. * Meaning: Similar to the bear flag, but the consolidation takes a triangular form. * Key insight: A breakout downward typically resumes the bearish trend. 3.3 Inverse Cup & Handle * What it looks like: An upside-down cup with a small upward drift forming the handle. * Meaning: Indicates weakness after an uptrend, often followed by a drop. * Key insight: A break below the handle usually signals a strong bearish move. 3.4 Head & Shoulders * What it looks like: Three peaks, with the middle one being the highest. * Meaning: A classic reversal pattern that indicates a potential shift from an uptrend to a downtrend. * Key insight: A break below the “neckline” confirms the bearish reversal. --- How to Use These Patterns * Combine pattern recognition with support/resistance, volume, and indicators for stronger confirmation. * Always wait for breakouts and avoid acting too early. * Manage risk with stop-loss orders.

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Fibonacci Arcs in Stock Trading Fibonacci Arcs in Stock Trading Fibonacci arcs, derived from the renowned Fibonacci sequence, offer a compelling blend of technical analysis and market psychology for traders. By mapping potential support and resistance areas through arcs drawn on stock charts, these tools provide insights into future price movements. This article delves into the practical applications of Fibonacci arcs in trading, their interplay with market psychology, and best practices for effective use. Understanding Fibonacci Arcs The Fibonacci arc indicator is a unique tool in technical analysis derived from the famed Fibonacci sequence. It’s crafted by drawing arcs at the key Fibonacci retracement levels - 38.2%, 50%, and 61.8% - from a high to a low point on a stock chart. Each curve represents potential support or resistance areas, offering insights into the stock’s future movements. The art of arc reading, meaning interpreting these curves, is crucial for traders. When a stock approaches or intersects with an arc, it reflects a significant reaction level. For instance, if a stock price touches or nears an arc, it could face arc resistance, indicating a potential halt or reversal in its trend. Applying Fibonacci Arcs in Trading In the stock market, these arcs serve as a guide for traders seeking to anticipate future price movements. When applied correctly, they can provide critical insights into potential support and resistance levels. Here's a step-by-step look at how you may use them effectively: - Identifying High and Low Points: Begin by selecting a significant high and low point on the stock's chart. In an uptrend, it’s the most recent swing high to a previous swing low, and vice versa. These are the anchor points. - Drawing the Arcs: Once the points are selected, draw the arcs at the Fibonacci retracement levels of 38.2%, 50%, and 61.8%. They radiate from the chosen low point to the high point (or vice versa), cutting across the chart. - Interpretation: Watch how the stock interacts with these lines. When the price approaches an arc, it might encounter resistance or support, signalling a potential change in trend or continuation. - Timing Entries and Exits: Traders can use the arcs in the stock market as a tool to time their trading decisions. For instance, a bounce could be a signal to enter a trade, whereas the price breaking through might suggest it's time to exit. Fibonacci Arcs and Market Psychology The effectiveness of Fibonacci arcs in trading is deeply intertwined with market psychology. They tap into the collective mindset of traders, who often react predictably to certain price levels. The Fibonacci sequence, underlying this tool, is not just a mathematical concept but also a representation of natural patterns and human behaviour. When a stock nears a curve, traders anticipate a reaction, often leading to a self-fulfilling prophecy. If many traders make an arc stock forecast, they might sell as the price approaches a certain point, causing the anticipated resistance to materialise. Similarly, seeing support at an arc can trigger buying, reinforcing the tool’s power. This psychological aspect makes Fibonacci arcs more than just technical tools. They are reflections of the collective expectations and actions of market participants, turning abstract mathematical concepts into practical indicators of market sentiment and potential movements. Best Practices Incorporating Fibonacci arcs into trading strategies involves nuanced techniques for better accuracy and efficacy. Here are some best practices typically followed: - Complementary Tools: Traders often pair this tool with other indicators like moving averages or RSI for a more robust analysis. - Accurate Highs and Lows: It's best to carefully select the significant high and low points, as the effectiveness of the curves largely depends on these choices. - Context Consideration: Understanding the broader market context is crucial. Traders usually use Fibonacci arcs in conjunction with fundamental factors to validate their analysis. - Watch for Confluence: Identifying areas where Fibonacci levels converge with other technical signals can provide stronger trade setups. - Practice Patience: Traders typically avoid making hasty decisions based solely on Fibonacci levels. It's usually better to wait to see additional confirmation from the price action. Advantages and Limitations of Fibonacci Arcs Fibonacci arcs are a popular tool in technical analysis, offering distinct advantages and some limitations in analysing stock movements. Understanding these can help traders leverage the tool more effectively. Advantages - Intuitive Nature: The Fibonacci sequence is a natural pattern, making the tool intuitive for traders to understand and apply. - Dynamic Support and Resistance Levels: They provide dynamic levels of support and resistance, unlike static lines, adapting to changing market conditions. - Versatility: Effective in various market conditions, the arcs can be used in both trending and sideways markets. Limitations - Subjectivity in Selection: The effectiveness largely depends on correctly identifying the significant high and low points, which can be subjective. - Potential False Signals: Like all technical tools, they can generate false signals, especially in highly volatile markets. - Requires Complementary Analysis: To maximise effectiveness, these curves are usually used alongside other technical indicators, as they are not infallible on their own. The Bottom Line Fibonacci arcs are invaluable tools in stock analysis, providing insights into market trends and potential price movements. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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Trailing Stops:Let trades develop Trailing stops are one of the most underused tools in a trader’s playbook. Most traders spend hours obsessing over entries, but then wing the exit or bail too early the moment a red candle appears. That’s where trailing stops come in. They give your trades room to breathe, while gradually reducing risk as price moves in your favour. If you’ve ever caught a good move and felt unsure about how long to hold it, this one’s for you. Here are three practical ways to trail your stop, stay in the trade, and help manage profitable trades objectively. 1. Trail Behind Structure This is the simplest and most intuitive method. As the trade moves in your favour, you move your stop just behind the most recent swing high or low. In a long trade, that means raising your stop to sit just below the latest higher low. In a short, you drop it just above the most recent lower high. This approach works best in clean, trending conditions. It gives the trade room to develop naturally without forcing you to guess the top. You won’t capture the absolute high, but you’ll often stay in the move longer than most. It also keeps you in rhythm with the market. If the structure is broken, it’s a pretty good sign that the trend is changing or stalling and that’s a logical place to step aside. Example: Here’s a clean example of using structure to trail stops on a momentum trade. The entry came on a break and retest of resistance, with the initial stop placed just below the retest level. As the trade moved higher, a series of higher swing lows developed, providing clear reference points to adjust the stop. It’s not designed to catch the exact top and that’s fine. The goal is to follow price action with minimal lag, using objective structure rather than guesswork. EUR/USD Hourly Candle Chart Past performance is not a reliable indicator of future results 2. Use Moving Averages Trailing stops don’t have to follow every single swing. Sometimes, a smoother option is better, especially if you want to stay in a move that’s trending hard. That’s where moving averages come in. A short-term exponential moving average like the 9 or 21 EMA can act as a dynamic trailing stop. As long as price remains above the average, the trend is intact and you stay in. If price closes below the EMA in a long trade, or you get a crossover in the opposite direction, that can signal an exit or at least a scale-down. This method works best in fast, directional markets. It won’t suit every condition, but when the move is strong, letting a trade run along the moving average keeps things simple and stress-free. Example: In this short-term 5-minute chart example, the 21 EMA acts as a dynamic trailing stop. There are two common approaches. You can wait for a candle to close below the 21 EMA, or use a crossover trigger where the 9 EMA crosses under the 21 EMA. The choice depends on how tightly you want to manage the trade and how much room you are willing to give it. S&P 500 5min Candle Chart Past performance is not a reliable indicator of future results 3. Volatility-Based Stops (ATR) When the market gets fast and messy, a fixed stop can either get hit too easily or feel too far away. That’s where volatility-based stops come in. The most common tool for this is the Average True Range (ATR). Instead of using swing points, you trail your stop a set number of ATRs behind the current price. If ATR is rising, your stop gives the trade more room. If volatility shrinks, the stop tightens naturally. It’s an adaptive approach that works well in conditions where price is expanding or moving fast. A popular setting is to use two times the current ATR value, but you can adjust it to suit your timeframe or risk tolerance. Example: This is a classic wedge breakout setup in gold. A trailing stop set at two times the ATR helps manage risk while giving the trade enough room to breathe. As price moves in your favour, the stop tightens automatically based on volatility. It’s worth remembering that trailing stops are only adjusted in one direction. Once set, they follow the move but are never loosened, which means the stop will eventually take you out as momentum fades or the market turns. Gold Daily Candle Chart Past performance is not a reliable indicator of future results Decide on Your Technique BEFORE You Place the Trade There’s no perfect way to trail a stop. Each method has its strengths. Structure-based stops keep you aligned with price action. EMAs are smooth and simple. ATR lets volatility do the work for you. The most important thing is to make a decision before you place the trade. Know whether you’re using a manual swing method or a dynamic indicator. Know what would trigger a move in your stop, and what would keep it steady. Avoid changing the plan just because the trade gets emotional. Trailing stops give you freedom. They let you step back, protect your capital and give your best trades a real chance to develop. Used properly, they enhance trade management consistency. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 85.24% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

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HOW TO TRADE 'BIG CANDLE"This is an educational video showing a trade set up based on big candles. This video is for information/education purpose only. you are 100% responsible for any actions you take by reading/viewing this post. please consult your financial advisor before taking any action. ----Vinaykumar hiremath, CMT

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09:39

How to Trade the Commitment of Traders Report Part 3 Hey Traders so today in part 3 final video will explain how to use this data for trend following and as contrarian style. Enjoy! Hope This Helps Your Trading 😃 Clifford

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13:12

by TradeTheIndex

Quick Lesson: How to Identify Trend Reversal Knowing when to enter the market can mean the difference between making a profit and incurring a loss. The chart above clearly compares two similar-looking scenarios with very different outcomes: the one you should aim for and the one you should avoid. - On the left , we see a textbook example of a bullish reversal. After a significant downtrend, the market prints higher lows and begins forming an ascending support. This signals that selling pressure is fading and buyers are stepping in. Notably, there are usually lots of unfilled bags — latecomers who show strong demand below the current price level but never get their orders filled, and who then just hit the 'market buy' button, which adds fuel to the fire of pump. - In contrast, the right side shows a very similar pattern — a downtrend followed by consolidation, but with crucial differences. Here, all prior liquidity zones have already been filled, meaning there is less incentive for buyers to support the price. The “same vector” suggests price action hasn’t changed direction, and a common short squeeze traps late buyers before resuming the decline. This is a common bull trap , where a temporary price pump gives false hope before another leg down. To sum up , a REAL REVERSAL builds on structure, accumulation, and higher lows—whereas a FALSE BOTTOM is often characterized by brief rallies, exhausted liquidity, and no change in vector trend. Experienced traders wait for confirmation and accumulation before entering a position, not just a temporary pause in a downtrend.

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by RobertMercer

ETH - BTC ETF News: What It Means for the Market+ China Rumors 🚨 ETH - BTC ETF News: What It Means for the Market + China Rumors 💥🌐 July just ended with a crypto bombshell 💣 — and the market is barely reacting. Let’s break it down: 🧠 One part hard news. 🌀 One part geopolitical smoke. 🎯 All parts worth watching if you care about macro market shifts. 🏛️ SEC Approves Real BTC & ETH for ETF Flows (July 29) Say goodbye to the cash-only ETF model. The SEC now allows direct in-kind creation/redemption of Bitcoin and Ethereum in ETFs. That means providers like BlackRock, Fidelity, VanEck can now use actual BTC/ETH, not just synthetic tracking. ✅ Bullish Impact: 💰 Real Spot Demand: ETF inflows = real crypto buying 🔄 Efficient Arbitrage: No middle step via cash = faster flows 🧱 TradFi + Crypto Merge: ETFs now settle with crypto — not just track it 🎯 Better Price Accuracy: Spot ETFs reflect true market value more cleanly 📉 The market reaction? Mild. But don’t get it twisted — this is a structural reset, not a meme pump. ⚠️ But There’s a Bearish Angle: 🏦 Centralized Custody: Crypto now lives in Coinbase, Fireblocks vaults ⚠️ Network Risks: ETF performance now tied to ETH/BTC uptime 🧑‍⚖️ Regulatory Overreach: More hooks into validator networks, MEV relays 🌊 Volatility Risk: Panic redemptions = real BTC/ETH sold into open markets Still, this is good news for Ethereum in particular. Why? Because ETH isn’t just money — it’s infrastructure. And now Wall Street is finally using it, not just watching it. 🇨🇳 And Then There’s China… Rumor or Tumor? Crypto Twitter is swirling with unconfirmed whispers from July 29 that China may be prepping a major Bitcoin statement ahead of the BRICS summit. But let’s be clear: 🚨 It’s a rumor. Or a tumor. 🧠 And like many tumors in crypto — there’s a 40% chance it brings bad news. 🤕 Still, here’s what’s being floated: 🧠 Speculations Include: 🔓 BTC re-legalization in “special finance zones” (HK-style) 🏦 BTC in national reserves (!) 🤖 CBDC integration or smart contract interoperability ⚒️ Return of official state-backed Bitcoin mining 🧯 But no official sources. Just geopolitics + timing. China’s FUD/FOMO pattern is Bitcoin tradition — don’t get trapped by hopium. But if even half of it is true... buckle up. 📈 Ethereum Leads the Charge — But Watch These Alts: If ETFs go fully crypto-native, some sectors light up 🔥 🔹 1. Ethereum Layer 2s (ARB, OP, BASE) → ETF gas pressure = L2 scaling demand 🔹 2. DeFi Protocols (UNI, AAVE, LDO) → TradFi liquidity meets on-chain utility 🔹 3. ETH Staking Derivatives (LDO, RPL) → Institutions want yield = LSD narrative grows 🔹 4. Oracles (LINK) → ETFs need trusted on-chain data = Chainlink shines 🔹 5. BTC on ETH Bridges (ThorChain, tBTC) → If BTC flows into ETH-based ETFs, bridges light up 🚫 What I will Avoid: ❌ Memecoins – zero relevance to ETF flows ❌ GameFi – not part of TradFi’s roadmap ❌ Ghost Layer 1s – no users, no narrative, no pump 🧠 My Take: ETH is building momentum toward $4,092 — the third breakout attempt on your 1-2-3 model. 🔥 The fuse is lit. Target? $6,036 Timing? Unknown. But structure is in place. Meanwhile, Bitcoin Dominance is rising. ETH is shining. Solana — while powerful — continues paying the price for memecoin madness 💀 We’re entering a new phase — where ETFs settle with real crypto , China watches the stage, and macro money is warming up behind the curtain. So stack smart. Study the flows. Don’t let silence fool you — the biggest moves come after the news fades. One Love, The FX PROFESSOR 💙 Disclosure: I am happy to be part of the Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis. Awesome broker, where the trader really comes first! 🌟🤝📈

Education

13:09

by FX_Professor

Wedge Pattern — A Key to Trend Movements 📐 Wedge Pattern — A Key to Trend Movements 📈 🔍 Introduction The Wedge is a chart pattern that represents a phase of directional consolidation following a trending move. It can act as a continuation 🔄 or a reversal 🔃 signal, depending on the context. The structure consists of two converging trendlines, both sloping in the same direction. 🧩 Pattern Description Unlike the Flag pattern 🚩, the Wedge has no flagpole and doesn’t depend on the direction of the previous move. The direction of the wedge body determines its type: A falling wedge ⬇️ is bullish 🟢 (buy signal) A rising wedge ⬆️ is bearish 🔴 (sell signal) The breakout is the key point to watch. The two trendlines slope in the same direction but at different angles, causing them to converge. This reflects a loss of momentum ⚠️ and typically indicates that buyers or sellers are preparing to take control. This pattern can act as: A continuation signal 🧭 — appearing at the end of a correction A reversal signal 🔄 — forming at the end of a strong trend 📉 Volume is usually low during the wedge and rises on breakout. A low-volume breakout increases the risk of a false breakout ❗. Often, price retests the breakout level 🔁, giving traders a second chance to enter. 🎯 Entry & Stop-Loss Strategy 📥 Entry: On breakout confirmation 🛑 Stop-loss: Below the pattern’s low (bullish) or above its high (bearish), or under/above the most recent local swing point 🎯 Target: Project the height of the widest part of the wedge from the breakout point. Alternatively, use key price levels 📊 or a trailing stop 🔂 to lock in profits. 💡 My Pro Tips for Trading the Wedge ✅ Pattern Criteria Two converging trendlines ➡️➕➡️ Clearly defined structure ✏️ Prior trending move before the wedge 🚀 Low volume within the wedge 📉, high volume on breakout 📈 Retest of breakout level = confirmation 🔁 🔥 Factors That Strengthen the Signal Breakout on strong volume 📊💥 Appears after an extended trend 🧭📉📈 More touches = stronger pattern ✍️ Breakout occurs close to the apex 🎯 ⚠️ Factors That Weaken the Signal Low volume on breakout 😐 Poorly defined trendlines 🫥 Few touches on lines Early breakout (too far from apex) ⏱️ No prior trend / appears in a range-bound market 📏 ✅ Examples of My Successful Wedge Trades 📸 ❌Examples of Failed Wedge Overview 💥 💬 Do you use the wedge pattern in your trading? It’s a powerful pattern, especially when confirmed by volume and market structure. Share your favorite wedge setups or ask questions below 👇👇

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by ProfessorSingapore

How Do Traders Use the Pivot Points Indicator? How Do Traders Use the Pivot Points Indicator? Pivot points are a popular technical analysis tool for spotting areas where the price is expected to react, i.e. pause or reverse. Calculated using the previous day’s high, low, and close, they’re projected onto the current session to highlight potential support and resistance levels, especially useful for intraday traders. Alongside stock charts, pivot point levels can be used in a wide variety of markets, including forex, commodities, and cryptocurrencies*. As a versatile indicator, pivot points also come in many different types. This article breaks down the definition of pivot points, the variations traders use, and how they can fit into a broader trading strategy. A Deeper Look at Pivot Points A common question in technical analysis is, “What is a pivot point?” Pivot points trading, or pivot point theory, is a popular technical analysis concept used in a range of financial asset classes, including stocks, currencies, cryptocurrencies*, and commodities. The indicator assists traders in gauging overall market trends and determining possible support and resistance barriers. How to Read Pivot Points The pivot point indicator is static—it’s an average of the high, low, and close prices from the previous trading day. It includes three levels: pivot point (P), support (S), and resistance (R). If the price is above the pivot point, it is supposed to target resistance barriers. Conversely, if it’s below the pivot, it could move to support levels. Thus, support and resistance levels serve as targets or stop-loss zones. They remain constant throughout the period, enabling traders to plan ahead. In the EURUSD daily chart below, the price is trading above R2; therefore, market sentiment is assumed to be bullish. R3 indicates the next possible price target. Should a shift below P occur, bearishness arises, and S1 becomes the upcoming support level. Pivots are widely used with trend indicators such as moving averages and Fibonacci tools. In the chart below, Fibonacci retracements could be used to identify intermediate levels of support and resistance within widely placed pivots. How to Calculate Pivot Points? There are four key types of pivots, including standard, Woodie’s, Camarilla, and Fibonacci. While there’s no need to use a pivot points calculator—they’re calculated automatically when implemented on a price chart—it is worth looking at their formulas to understand how they differ from each other. Note the labels for the following formulas: P = pivot point H = high price L = low price C = close price Standard Pivot Points Traders commonly use standard pivot points. Traditional pivots (P) identify potential levels of support (S) and resistance (R) by averaging the previous trading period's high, low, and close prices. P = (H + L + C) / 3 S1 = (2 * P) - H S2 = P - (H - L) R1 = (2 * P) - L R2 = P + (H -L) Although they are popular among traders, they can produce false signals and lead to incorrect trades in ranging markets and during periods of high volatility. Woodie’s Pivot Points Woodie's pivots are similar to standard pivots but include a slight modification to the calculation. In Woodie's method, the close price is assigned more weight. P = (H + L + 2 * C) / 4 R1 = (2 * P) - L R2 = P + H - L S1 = (2 * P) - H S2 = P - H + L However, their extra sensitivity can make them less reliable during choppy markets or when the price lacks a clear direction. Camarilla Pivot Points Camarilla pivots use a set formula to generate eight levels: four support and four resistance. They are based on the previous day’s close and range and multiplied by a certain multiplier. The inner levels (R3 and S3) often act as reversal zones, while R4 and S4 are watched for breakouts. Still, in trending markets, the reversals can fail frequently. R4 = C + (H - L) x 1.5 R3 = C + (H - L) x 1.25 R2 = C + (H - L) x 1.1666 R1 = C + (H - L) x 1.0833 P = (High + Low + Close) / 3 S1 = C - (H - L) x 1.0833 S2 = C - (H - L) x 1.1666 S3 = C - (H - L) x 1.25 S4 = C - (H - L) x 1.5 Fibonacci Pivot Points Fibonacci pivot points are based on the Fibonacci sequence, a popular mathematical concept in technical analysis. They are calculated in the same way as the standard indicator. However, the levels of support and resistance are determined by including the Fibonacci sequence with a close monitoring of the 38.2% and 61.8% retracement levels as the primary price points. P = (High + Low + Close) / 3 S1 = P - (0.382 * (H - L)) S2 = P - (0.618 * (H - L)) R1 = P + (0.382 * (H - L)) R2 = P + (0.618 * (H - L)) Despite their popularity, Fibonacci pivots can become less reliable when the price reacts to other fundamental drivers. Trading with the Pivot Points Although every trader develops their own trading approach, there are common rules of pivot point trading that are expected to improve their effectiveness. Day Trading Day trading with pivot points is usually implemented for hourly and shorter intraday timeframes. As pivot levels are updated daily and calculated on the previous day's high, low, and close prices, this allows traders to react promptly to market changes and adjust their strategies. Some traders prefer Camarilla pivots as their calculation takes into account the volatility of the previous trading period to produce pivot levels closer to the current price. Medium-Term Trading When looking at a medium-term analysis, weekly pivot levels are added to four-hour and daily charts. These are calculated using the previous week's high, low, and close prices, which remain unchanged until the start of the next week. Long-Term Trading For longer-term analysis, traders use monthly pivots on weekly charts. These levels, gathered from the previous month's data, offer a broader picture of market trends and price movements over time. Pivot Point Trading Strategies The pivot points indicator is typically used in two ways – breakout and reversal trading. Breakout Trading Strategy The breakout approach seeks to take advantage of market momentum by entering trades when prices break above or below significant levels of support and resistance. - Bullish Breakout. When levels P and R1 are broken, and the price closes above either, it’s more likely a rise will occur. - Bearish Breakout. When levels P and S1 are broken, and the price closes below either, it’s more likely the price fall will occur. Strong momentum and high volume are two critical factors needed for a solid price movement in both cases. Trading Conditions If a breakout is confirmed, traders enter a trade in the breakout direction. A take-profit target might be placed at the next pivot level. A stop-loss level can be placed beyond the previous level or calculated according to a risk/reward ratio. Traders continuously monitor their trades and adjust their stop-loss levels to lock in potential returns if prices move in their favour. Reversal Trading Strategy The reversal strategy seeks to take advantage of a slowdown in market momentum by entering trades when prices stall at significant levels of support or resistance. - Bullish Reversal. When levels S1 and S2 are not broken and the price stalls above either, a reversal is more likely to occur. - Bearish Reversal. When levels R1 and R2 are not broken and the price stalls below either, a reversal is expected to happen. Note: Reversals are always confirmed by another indicator or a chart pattern. Trading Conditions If a reversal is confirmed, traders consider entering a trade in its direction. The next level may be a take-profit target, which might be trailed to the next level if the market conditions signal a continuation of a price move. A stop-loss level is typically placed below a swing low or above a swing high, depending on the trade direction. Pivot Points and Other Indicators While pivots show where the price may reverse, there’s nothing to say a market won’t trade through these areas. Therefore, traders typically pair them with other technical indicators and patterns. Candlestick and Chart Patterns Traders often combine levels with specific reversal candlestick formations, like three black crows/three white soldiers or engulfing patterns, to confirm a change in market movements. For example, a bullish engulfing candle forming at S1 could reinforce the idea of a reversal at that level. Moving Averages When a pivot aligns with a major moving average, e.g. the 50-period or 200-period EMA, it strengthens the area. As moving averages act as dynamic support and resistance levels, an overlap can signal a strong area where a reversal might occur. RSI and Stochastic Oscillator Momentum indicators like RSI or Stochastic help judge whether the price is likely to bounce or break through a pivot. If it hits support and RSI is oversold, that adds conviction. But if momentum is still strong in one direction, it might get ignored. Considerations Even with strong confluence, these combinations can fail. Markets don’t always respect technical alignment, especially around data releases or sharp movements in sentiment. For instance, in stocks, pivot points may be ignored if an earnings release strongly beats analyst estimates. Instead, they are believed to work when treated as one piece of a broader technical framework. Limitations Pivot points are widely used, but like any tool, they have flaws. They’re based purely on past price data, so they don’t account for news, sentiment shifts, or broader market context. - False signals in ranging markets: The price often oscillates around pivot zones in markets without a clear direction, meaning setups might not follow through. - Less reliable during strong trends: In trending conditions, the price can blow past several levels without reacting. - No built-in volatility filter: The points don’t adapt to changing volatility, so levels might be too close or too far apart to be useful. - Lag in real-time shifts: Since pivots are pre-calculated, they don’t adjust mid-session as new data emerges. Final Thoughts Pivot points are widely used in stock trading as well as in commodity, cryptocurrency*, and currency markets. While they can be useful tools, their limitations cannot be overlooked. It is essential to conduct a comprehensive analysis and confirm the indicator signals with fundamental and technical analysis tools. FAQ What Is a Pivot Point in Trading? The pivot point meaning refers to a technical analysis tool used to identify potential support and resistance levels. It’s calculated using the previous day’s high, low, and close prices, and helps traders find areas where the price may react during the current session. What Is the Best Indicator for Pivot Points? There isn’t one best indicator, but traders often pair pivot points with moving averages, RSI, or candlestick patterns to confirm a potential reversal. The most effective setup usually depends on the strategy and market conditions. What Are the Pivot Points’ R1, R2, and R3? R1, R2, and R3 are resistance levels above the central point. They represent increasingly stronger potential resistance zones where the price may stall or reverse. Which Is Better, Fibonacci or Camarilla? Fibonacci offers wider levels based on retracement ratios, useful in trending markets. Camarilla focuses on tighter reversal zones, which are mostly used for intraday strategies. Each suits different trading styles; neither is objectively better. *Important: At FXOpen UK, Cryptocurrency trading via CFDs is only available to our Professional clients. They are not available for trading by Retail clients. To find out more information about how this may affect you, please get in touch with our team. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Education

Options Trading Strategies: From Simple to Advanced Part 1: The Basics of Options Before diving into strategies, let’s review the two core types of options: 1. Call Option (CE) Gives the buyer the right (but not the obligation) to buy an underlying asset at a predetermined price (strike price) within a specific time period. Bullish in nature. 2. Put Option (PE) Gives the buyer the right (but not the obligation) to sell an underlying asset at a predetermined price within a specific time period. Bearish in nature. Each option has a premium (price you pay to buy the option), and that’s the maximum loss a buyer can face. Sellers (or writers), on the other hand, receive the premium but take on higher risk. Part 2: Simple Options Strategies These are basic strategies suitable for new traders. 1. Buying a Call Option (Long Call) When to Use: If you expect the stock/index to rise significantly. Risk: Limited to the premium paid. Reward: Unlimited potential profit. Example: Stock XYZ is trading at ₹100. You buy a 105 Call Option at ₹2 premium. If stock moves to ₹115: Intrinsic Value = ₹10 Profit = ₹10 - ₹2 = ₹8 per share Why It’s Good: Cheap entry, high upside. 2. Buying a Put Option (Long Put) When to Use: If you expect the stock/index to fall. Risk: Limited to the premium paid. Reward: High if stock crashes. Example: You buy a 95 PE when stock is at ₹100, and premium is ₹3. If stock falls to ₹85: Intrinsic Value = ₹10 Profit = ₹10 - ₹3 = ₹7 per share Why It’s Good: Good for bearish bets or portfolio hedging. 3. Covered Call When to Use: You own the stock and expect neutral to moderately bullish movement. Risk: Limited upside potential. Reward: Premium + stock movement (if not called away). Example: You own 100 shares of XYZ @ ₹100. You sell 110 CE for ₹5. If stock rises to ₹110, you sell at that level and keep ₹5 premium. If it stays below ₹110, you keep the shares + premium. Why It’s Good: Generates income from stocks you hold. 4. Protective Put When to Use: You own a stock and want downside protection. Risk: Limited downside. Reward: Unlimited upside. Example: Own 100 shares of XYZ @ ₹100. Buy a 95 PE at ₹3. If stock drops to ₹85, your put becomes worth ₹10, offsetting losses. Why It’s Good: Acts like insurance on your holdings. Part 3: Intermediate Strategies Once you’re comfortable with buying/selling calls and puts, it’s time to explore neutral and range-bound strategies. 5. Bull Call Spread When to Use: You expect a moderate rise in the stock/index. Risk: Limited. Reward: Limited. Structure: Buy 100 CE at ₹5 Sell 110 CE at ₹2 Net Cost: ₹3 Max Profit: ₹10 - ₹3 = ₹7 Max Loss: ₹3 Why It’s Good: Lower cost than buying a call outright. Part 4: Risk Management Tips Never deploy a strategy you don’t understand. Use stop-loss and position sizing to avoid blowing up capital. Be aware of Greeks (Delta, Theta, Vega) — they drive profits/losses. Avoid naked options selling unless you have enough margin and experience. Always review IV (Implied Volatility) before placing straddles or condors. Understand expiry effects — options lose value faster as expiry nears. Part 5: Real-Life Example Let’s say Nifty is trading at 22,000. You expect no major movement till expiry. You execute an Iron Condor: Sell 22100 CE at ₹100 Buy 22300 CE at ₹40 Sell 21900 PE at ₹90 Buy 21700 PE at ₹30 Net Credit = ₹100 - ₹40 + ₹90 - ₹30 = ₹120 Max Loss = Spread width (200) - Net Credit = ₹80 If Nifty stays between 21900 and 22100 — all options expire worthless and you earn full ₹120. Conclusion Options trading is like a chess game — it's not only about direction, but also timing, volatility, and strategy structure. Simple strategies like buying calls and puts are perfect for starters, but intermediate and advanced strategies allow you to profit in any kind of market — bullish, bearish, or neutral. The key lies in choosing the right strategy for the right market condition, managing risks, and being patient. Whether you're hedging your portfolio, generating income, or speculating on big market moves, options provide the tools — but it’s your responsibility to use them wisely. If you’d like charts, payoff diagrams, or examples using live data (like Bank Nifty or stocks), let me know and I can include those too!

Education

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