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People don't like the truth! Let's be honest, people don't like honesty. They prefer ideas that affirm their own beliefs. When I read articles and posts from newer traders, it's often from a place of "all in" diamond hands and the notion that things go up forever. I've been a trader for over 25 years now, and the game isn't about making a quick buck, it's about making money over and over again. This got me thinking, the issue is when you deal with a small account you require leverage, small timeframes and of course the "shit" or bust mindset. If you lose a thousand dollars, $10,000 even $100,000 - what does it matter? That's no different than a game of poker in Vegas. The idea of being 80% in drawdown, is alien to me. The idea of one trade and one win is also a crazy notion. Instead of playing with the future, there is an easier way to work. This isn't about slow and boring, it's about psychology and discipline. 10% returns on a million-dollar account isn't all that difficult. Instead of aiming for 300x returns on an alt coin (due to the account size being tiny) You can make less of a percentage gain with a larger account size. In terms of psychology - the word " HOPE " is used, way too often, it's used when you hope a stock or the price of Bitcoin goes up, it's used when you hope the position comes back in your favour, it's used when you want your 10,000 bucks to double. This isn't trading, it's gambling. The truth is, it's not the winners that make you a good trader. It's the way you deal with the losses. Once you learn proper risk management, a downtrend in a market move is a 1-2% loss coupled with a new opportunity to reverse the bias. As a disciplined trader, the game is played differently. Let's assume you don't have $100k spare - prop firms are a great option, OPM = other people's money. Remove the risk and increase the leverage, all whilst trading with discipline. The market goes through many phases, cycles and crashes. You don't always need something as catastrophic to take place, but if you are all in on a position. You need to understand that losses can be severe and long-lasting. When everyone sees an oasis in the desert, it's often a mirage. You only have to look at the Japanese lesson in 1989, when the Nikkei was unstoppable-until it wasn't. For that short space in time, everyone was a day trader, housewives to taxi drivers. Everyone's a genius in a Bull market. Then comes the crash. The recovery time on that crash? 34-years!!! I have covered several aspects of psychology here on TradingView; When it comes to trading, if you are able to keep playing. It's a worthwhile game. If you are gambling, it's a game whereby the house often wins. Right now, stocks are worth more than their earnings. Gold is up near all-time highs, crypto, indices the same. All I am saying is if you are all in. Be careful! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principal trader has over 25 years' experience in stocks, ETF's, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
FOREXCOM:SPX500Education
by Mayfair_Ventures
Market Travel: An Adaptive Framework for Tracking Structure🧭 Understanding Market Travel: An Adaptive Framework for Tracking Structure Manually Market structure can be one of the most challenging patterns to read. There are tools and methods to help interpret it, but none are absolute. As market speed and volatility shift, so does its behavior. That’s why it’s important to move beyond rigid definitions and start understanding how price travels through the market. What Is Travel? “Travel” is a concept I developed through personal study and chart work. As price moves, it naturally forms pullbacks—temporary dips toward the weak side—and breaks—moves that close beyond the strong side. These are the two critical phases that form the backbone of market structure. While most people focus on static patterns, I’ve found more value in learning how price travels through its pullbacks and breaks. These movements aren’t random—they follow clear behavioral patterns. Once you learn to identify these, structure becomes easier to read across timeframes. The Three Modes of Travel I've observed three types of travel that occur between the dip and the break: 1. Pure Sentiment Travel This is the cleanest and most decisive form of travel. Price moves in one dominant direction with little to no opposing candles. For example, in a daily uptrend, the pullback might consist entirely of bearish 4H candles. As soon as a strong bullish candle appears, that typically signals the return toward the trend’s strong high. 2. Stacking Travel Stacking is more nuanced. Price moves with alternating bullish and bearish candles, but the dominant sentiment stays in control. Let’s say price is dipping in a daily uptrend. On the 1H chart, you may see a bearish sequence that includes a few bullish candles. These bullish candles don’t invalidate the bearish structure because they fail to close above the pivot high formed between the last bullish leg and the beginning of the bearish move. As long as that high is respected, the bearish stacking is valid. Once price breaks that high (or, in a bullish stacking case, breaks the pivot low), the stacking order is broken, and that signals a reversal back toward the dominant direction. 3. Shifting Travel Shifting travel looks similar to stacking but is constantly flipping between bullish and bearish stacking. Each shift creates a new high or low within the shifting structure. These micro-structures form lower lows or higher highs as sentiment switches back and forth. Once price breaks its own shifting structure (e.g., breaks a bearish sequence with a bullish close), this typically signals the end of that leg of travel and a reversal toward the dominant higher timeframe trend. How to Apply Travel Across Timeframes These three types of travel operate in a hierarchy: - Shifting travel (LTF) respects stacking travel (MTF) - Stacking travel (MTF) respects pure travel (HTF) - Pure sentiment travel (HTF) is the master mode that resets the others When you identify a new pure sentiment shift on the higher timeframe, that becomes your reset point. From that candle forward, you should begin fresh stacking and shifting analysis on your lower timeframes. Workflow example: 1. Spot a pure sentiment shift on the HTF (e.g., bullish daily candle after a clean bearish pullback) 2. From that pivot low, begin tracking stacking travel on the MTF 3. Use shifting travel on the LTF to navigate inside the stacking structure If stacking or shifting behavior breaks unexpectedly, that usually means market speed is changing—and you may need to reassign which timeframes serve as HTF, MTF, and LTF. Why This Works This framework gives you a fixed point of structure—the dip and the break—but allows you to adapt to the behavior in between. Instead of just reacting to breakouts, you're learning how price moves to get there. That’s what gives you the edge: not just reading where price is, but how it’s traveling to get there. Final Thoughts This adaptive travel model helps break down market structure into something both trackable and flexible. Try observing these travel types in real time and let me know how it works for you. Tools & Resources If you’d like to access my Pure Order Flow indicator and more exclusive tools, visit my TradingView profile: @The_Forex_Steward I’ve built an arsenal of indicators designed to support this framework across different markets and styles. If this breakdown helped, don’t forget to boost the post so others can benefit from it too!
Education
by The_Forex_Steward
8
The Empirical Validity of Technical Indicators and StrategiesThis article critically examines the empirical evidence concerning the effectiveness of technical indicators and trading strategies. While traditional finance theory, notably the Efficient Market Hypothesis (EMH), has long argued that technical analysis should be futile, a large body of academic research both historical and contemporary presents a more nuanced view. We explore key findings, address methodological limitations, assess institutional use cases, and discuss the impact of transaction costs, market efficiency, and adaptive behavior in financial markets. 1. Introduction Technical analysis (TA) remains one of the most controversial subjects in financial economics. Defined as the study of past market prices and volumes to forecast future price movements, TA is used by a wide spectrum of market participants, from individual retail traders to institutional investors. According to the EMH (Fama, 1970), asset prices reflect all available information, and hence, any predictable pattern should be arbitraged away instantly. Nonetheless, technical analysis remains in widespread use, and empirical evidence suggests that it may offer predictive value under certain conditions. 2. Early Empirical Evidence The foundational work by Brock, Lakonishok, and LeBaron (1992) demonstrated that simple trading rules such as moving average crossovers could yield statistically significant profits using historical DJIA data spanning from 1897 to 1986. Importantly, the authors employed bootstrapping methods to validate their findings against the null of no serial correlation, thus countering the argument of data mining. Gencay (1998) employed non-linear models to analyze the forecasting power of technical rules and confirmed that short-term predictive signals exist, particularly in high-frequency data. However, these early works often omitted transaction costs, thus overestimating potential returns. 3. Momentum and Mean Reversion Strategies Momentum strategies, as formalized by Jegadeesh and Titman (1993), have shown persistent profitability across time and geographies. Their approach—buying stocks that have outperformed in the past 3–12 months and shorting underperformers—challenges the EMH by exploiting behavioral biases and investor herding. Rouwenhorst (1998) confirmed that momentum exists even in emerging markets, suggesting a global phenomenon. Conversely, mean reversion strategies, including RSI-based systems and Bollinger Bands, often exploit temporary price dislocations. Short-horizon contrarian strategies have been analyzed by Chan et al. (1996), but their profitability is inconsistent and highly sensitive to costs, timing, and liquidity. 4. Institutional Use of Technical Analysis Contrary to the belief that TA is primarily a retail tool, it is also utilized—though selectively—by institutional investors: Hedge Funds: Many quantitative hedge funds incorporate technical indicators within multi-factor models or machine learning algorithms. According to research by Neely et al. (2014), trend-following strategies remain a staple among CTAs (Commodity Trading Advisors), particularly in futures markets. These strategies often rely on moving averages, breakout signals, and momentum filters. Market Makers: Although market makers are primarily driven by order flow and arbitrage opportunities, they may use TA to model liquidity zones and anticipate stop-hunting behavior. Order book analytics and technical levels (e.g., pivot points, Fibonacci retracements) can inform automated liquidity provision. Pension Funds and Asset Managers: While these institutions rarely rely on TA alone, they may use it as part of tactical asset allocation. For instance, TA may serve as a signal overlay in timing equity exposure or in identifying risk-off regimes. According to a CFA Institute survey (2016), over 20% of institutional investors incorporate some form of technical analysis in their decision-making process. 5. Adaptive Markets and Conditional Validity Lo (2004) introduced the Adaptive Markets Hypothesis (AMH), arguing that market efficiency is not a binary state but evolves with the learning behavior of market participants. In this framework, technical strategies may work intermittently, depending on the ecological dynamics of the market. Neely, Weller, and Ulrich (2009) found technical rules in the FX market to be periodically profitable, especially during central bank interventions or volatility spikes—conditions under which behavioral biases and structural inefficiencies tend to rise. More recent studies (e.g., Moskowitz et al., 2012; Baltas & Kosowski, 2020) show that momentum and trend-following strategies continue to deliver long-term Sharpe ratios above 1 in diversified portfolios, particularly when combined with risk-adjusted scaling techniques. 6. The Role of Transaction Costs Transaction costs represent a critical variable that substantially alters the net profitability of technical strategies. These include: Explicit Costs: Commissions, fees, and spreads. Implicit Costs: Market impact, slippage, and opportunity cost. While early studies often neglected these elements, modern research integrates them through realistic backtesting frameworks. For example, De Prado (2018) emphasizes that naive backtesting without cost modeling and slippage assumptions leads to a high incidence of false positives. Baltas and Kosowski (2020) show that even after accounting for bid-ask spreads and market impact models, trend-following strategies remain profitable, particularly in futures and FX markets where costs are lower. Conversely, high-frequency mean-reversion strategies often become unprofitable once these frictions are accounted for. The impact of transaction costs also differs by asset class: Equities: Higher costs due to wider spreads, especially in small caps. Futures: Lower costs and higher leverage make them more suitable for technical strategies. FX: Extremely low spreads, but high competition and adverse selection risks. 7. Meta-Analyses and Recent Surveys Park and Irwin’s (2007) meta-analysis of 95 studies found that 56% reported significant profitability from technical analysis. However, profitability rates dropped when transaction costs were included. More recent work by Han, Yang, and Zhou (2021) extended this review with data up to 2020 and found that profitability was regime-dependent: TA performed better in volatile or trending environments and worse in stable, low-volatility markets. Other contributions include behavioral explanations. Barberis and Thaler (2003) suggest that TA may capture collective investor behavior, such as overreaction and underreaction, thereby acting as a proxy for sentiment. 8. Limitations and Challenges Several methodological issues plague empirical research in technical analysis: Overfitting: Using too many parameters increases the likelihood of in-sample success but out-of-sample failure. Survivorship Bias: Excluding delisted or bankrupt stocks leads to inflated backtest performance. Look-Ahead Bias: Using information not available at the time of trade leads to unrealistic results. Robust strategy development now mandates walk-forward testing, Monte Carlo simulations, and realistic assumptions on order execution. The growing field of machine learning in finance has heightened these risks, as complex models are more prone to fitting noise rather than signal (Bailey et al., 2014). 9. Conclusion Technical analysis occupies a contested but persistent role in finance. The empirical evidence is mixed but suggests that technical strategies can be profitable under certain market conditions and when costs are minimized. Institutional investors have increasingly integrated TA within quantitative and hybrid frameworks, reflecting its conditional usefulness. While TA does not provide a universal arbitrage opportunity, it can serve as a valuable tool when applied adaptively, with sound risk management and rigorous testing. Its success ultimately depends on context, execution discipline, and integration within a broader investment philosophy. References Bailey, D. H., Borwein, J. M., Lopez de Prado, M., & Zhu, Q. J. (2014). "The Probability of Backtest Overfitting." *Journal of Computational Finance*, 20(4), 39–69. Baltas, N., & Kosowski, R. (2020). "Trend-Following, Risk-Parity and the Influence of Correlations." *Journal of Financial Economics*, 138(2), 349–368. Barberis, N., & Thaler, R. (2003). "A Survey of Behavioral Finance." *Handbook of the Economics of Finance*, 1, 1053–1128. Brock, W., Lakonishok, J., & LeBaron, B. (1992). "Simple Technical Trading Rules and the Stochastic Properties of Stock Returns." Journal of Finance, 47(5), 1731–1764. Chan, L. K. C., Jegadeesh, N., & Lakonishok, J. (1996). "Momentum Strategies." Journal of Finance, 51(5), 1681–1713. De Prado, M. L. (2018). Advances in Financial Machine Learning, Wiley. Fama, E. F. (1970). "Efficient Capital Markets: A Review of Theory and Empirical Work." Journal of Finance, 25(2), 383–417. Gencay, R. (1998). "The Predictability of Security Returns with Simple Technical Trading Rules." Journal of Empirical Finance, 5(4), 347–359. Han, Y., Yang, K., & Zhou, G. (2021). "Technical Analysis in the Era of Big Data." *Review of Financial Studies*, 34(9), 4354–4397. Jegadeesh, N., & Titman, S. (1993). "Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency." *Journal of Finance*, 48(1), 65–91. Lo, A. W. (2004). "The Adaptive Markets Hypothesis: Market Efficiency from an Evolutionary Perspective." *Journal of Portfolio Management*, 30(5), 15–29. Moskowitz, T. J., Ooi, Y. H., & Pedersen, L. H. (2012). "Time Series Momentum." *Journal of Financial Economics*, 104(2), 228–250. Neely, C. J., Weller, P. A., & Ulrich, J. M. (2009). "The Adaptive Markets Hypothesis: Evidence from the Foreign Exchange Market." *Journal of Financial and Quantitative Analysis*, 44(2), 467–488. Neely, C. J., Rapach, D. E., Tu, J., & Zhou, G. (2014). "Forecasting the Equity Risk Premium: The Role of Technical Indicators." *Management Science*, 60(7), 1772–1791. Park, C. H., & Irwin, S. H. (2007). "What Do We Know About the Profitability of Technical Analysis?" *Journal of Economic Surveys*, 21(4), 786–826. Rouwenhorst, K. G. (1998). "International Momentum Strategies." *Journal of Finance*, 53(1), 267–284. Zhu, Y., & Zhou, G. (2009). "Technical Analysis: An Asset Allocation Perspective on the Use of Moving Averages." *Journal of Financial Economics*, 92(3), 519–544.
SP:SPXEducation
by EdgeTools
80% Of Time - A Trading Edge You Don't Want To MissDo you want to know why trading with median lines, also known as pitchforks, can be so successful? It’s simple: Prices swing from one extreme back to the middle. From the middle, they often swing to the other extreme. What do we see on the chart? - The upper extreme - The center - The lower extreme So far, so good. Now let’s follow the price and learn a few important rules that belong to the rulebook of median lines/pitchforks, and with which you can make great trades. Point 1 The price starts and is sold off down to… Point 2 ...and from there starts to rise again, up to… Point 3 ...which is the center. And here we have a rule that is very important and one that you need to be aware of in trading to be successful: THE PRICE RETURNS TO THE CENTER IN ABOUT 80% OF ALL CASES If we know this, then we can stay in a trade with confidence. Point 4 The price climbed even higher but missed the upper extreme. This is the “Hagopian Rule” (named after the man who discovered it). And the rule goes: If the price does not reach the next line (upper extreme, lower extreme, or center), then the price will continue moving in the opposite direction from where it originally came. Phew...that’s a mouthful ;-) But yes, we actually see that the price does exactly this. From point 4, where the price missed the upper extreme, the price not only goes back to the center but continues and almost reaches the lower extreme! Now if that isn’t cool, I don’t know what is! And what do we have at point 5? A "HAGOPIAN"! What did we just learn? The price should go higher than the center line. Does it do that? Oh yes! But wait! Not only does the Hagopian Rule apply. Remember? "The price returns to the center line in about 80% of the cases." HA! Interesting or interesting? So, that’s it. That’s enough for now. Now follow the price yourself and always consider which rule applies and whether it’s being followed. How exactly do you trade all this, and what are the setups? ...one step at a time. Don’t miss the next lesson and follow me here on TradingView. Wishing you lots of success and fun!
COINBASE:BONKUSDEducation
by HowToChart
7
Altcoin Season:It All Comes Down to One Thing—Liquidity RotationHello Traders 🐺 Let’s be real—everything about “altcoin season” comes back to one key concept: liquidity rotation. You’ve probably heard that term thrown around, but what does it actually mean ? And more importantly, how do we use it? No matter what market cycle we’re in—bullish or bearish—each cycle is made up of several internal phases. And during those phases, tracking where smart money is flowing becomes crucial. But let’s break it down even further. Take a look at the chart. Before the last altcoin season kicked off, something interesting happened: the Bitcoin Dominance Index (BTC.D) had a significant rally. As the name suggests, this index tracks Bitcoin’s share of the overall crypto market cap. So when CRYPTOCAP:BTC.D is rising, that means Bitcoin is sucking up a larger share of the liquidity—smart money is flowing into BTC first. This is critical to understand, because Bitcoin Dominance is one of the clearest indicators to tell you which phase of the cycle we're in and where the money is heading next. Now here’s the key question: Why do we associate a drop in BTC Dominance with the start of altcoin season? It all goes back to the literal meaning of Bitcoin Dominance. If BTC.D is approaching 100%, nearly all the money is concentrated in Bitcoin alone. But when this dominance starts dropping, it signals that capital is beginning to rotate out of BTC and into altcoins. And here's where it gets spicy: When BTC.D approaches a key resistance level—like it's doing right now—and at the same time we see bearish divergences across multiple timeframes... that’s our cue. Combine that with technical analysis, and suddenly you've got yourself a roadmap most beginners are completely blind to. That’s why 80% of traders end up feeding the profits of the other 20%. The harsh truth? Markets are wealth transfer mechanisms—from the impatient to the patient. Every bad entry, every panic sell, ends up padding the wallet of someone who planned the rotation in advance. Let’s not complicate things too much though. Just look at what’s happening right now: BTC Dominance hit a major resistance level, showed strong bearish divergences (as I mentioned in earlier posts), and what happened next? Boom—altcoins started pumping hard this past week. To everyone who stayed with me through this phase and positioned themselves early—congrats. You earned this. But here’s the bigger picture: We're still at the beginning of the altcoin cycle. Like I explained before, it all happens in phases: Bitcoin Season – Smart money enters Bitcoin first. Ethereum Season – Then liquidity flows into ETH. Large-Cap Altcoins – After that, big-name altcoins start moving. Altcoin Season (Full Risk-On) – Finally, capital floods into low-cap alts—the wild phase. And that last phase? That’s when things get crazy. That’s where irrational exuberance lives. That’s where dreams are made—or broken—depending on your timing and plan. So yeah, buckle up. We're not done yet. And as always remember : 🐺 Discipline is rarely enjoyable , but almost always profitable. 🐺 🐺 KIU_COIN 🐺
CRYPTOCAP:BTC.DEducation
by Kiu_Coin
6
HOW-TO: Auto Harmonic Screener - UltimateXHello Everyone, In this video, we have discussed on how to use our new Auto Harmonic Screener - UltimateX. We have covered the following topics. Difference between Auto Harmonic Screener - UltimateX (Current script) and Auto Harmonic Pattern - UltimateX and how to use both the scripts together Difference between Auto Harmonic Screener - UltimateX (Current script) and the existing screener Auto Harmonic Pattern - Screener which is built on request.security calls. We have discussed how the limitations of old script and how using the new script with Pine screener utility will help overcome those problems. We have gone through the indicator settings (which are almost similar to that of Auto Harmonic Pattern UltimateX Short demo on how to use the script with Pine Screener Also check our existing video on How to use the new Pine Screener Utility.
Education
by Trendoscope
10
SYM Trade Breakdown – Robotics Meets Smart Technical's🧪 Company: Symbotic Inc. ( NASDAQ:SYM ) 🗓️ Entry: April–May 2025 🧠 Trade Type: Swing / Breakout Reversal 🎯 Entry Zone: $16.28–$17.09 ⛔ Stop Loss: Below $14.00 🎯 Target Zone: $50–$64+ 📈 Status: Strong Rally in Motion 📊 Why This Trade Setup Stood Out ✅ Macro Falling Wedge Reversal After nearly two years of compression inside a falling wedge, price finally tapped multi-year structural support and fired off with strength. This wasn’t just a bottom — it was a structural inflection point. ✅ Triple Tap at Demand Zone Symbotic tapped the ~$17 area multiple times, signaling strong accumulation. Volume and momentum picked up with each successive test, showing institutional interest. ✅ Clean Break of Trendline Price broke through the falling resistance trendline decisively, confirming the bullish reversal and unleashing stored energy from months of sideways structure. 🔍 Company Narrative Backdrop Symbotic Inc. isn't just any tech stock. It’s at the forefront of automation and AI-powered supply chain solutions, with real-world robotics deployed in major retail warehouses. That kind of secular growth narrative adds rocket fuel to technical setups like this — especially during AI adoption surges. Founded in 2020, Symbotic has quickly become a rising name in logistics and warehouse automation, serving the U.S. and Canadian markets. With robotics in demand and investors chasing future-ready tech, the price action aligned perfectly with the macro theme. 🧠 Lessons from the Trade ⚡ Compression = Expansion: Wedges like this build pressure. When they break, the moves are violent. 🧱 Structure Never Lies: The $17 zone was no accident — it was respected over and over. 🤖 Tech Narrative Boosts Confidence: Trading is easier when the fundamentals align with the technicals. 💬 What’s Next for SYM? If price holds above the wedge and clears the $64 resistance, we could be looking at new all-time highs in the next cycle. Watching for consolidation and retests as opportunity zones. #SYM #Symbotic #Robotics #Automation #AIStocks #BreakoutTrade #FallingWedge #SwingTrade #TechnicalAnalysis #TradingView #TradeRecap #SupplyChainTech
NASDAQ:SYMEducation
by Adlercon333
Angle of Ascent: what it means, how to use it.Angle of Ascent is a visual pattern that forms on a chart when stocks are running with momentum or velocity. Drawing a line along an up trending price action helps you see the Angle of ascent. Also Chaikins Osc and EMA MFI indicators are extremely helpful in warning a day ahead of time that the Angle of Ascent is too steep to sustain. This is an exit signal for profit taking at or near the highest high of a swing style run. Angle of Ascent is also used on Weekly Charts to determine how far a stock can run before resistance from previous highs will stall that stock and cause a minor to intermediate correction. Recognizing when an angle of ascent has become too steep to sustain and using these indicators will help you hold a swing run but also help you exit before a retracement or correction starts. The professional side of the market uses penny spreads, millisecond routing to the ques of the market, and can easily front run retail traders orders. Reminder: retail brokers are required to light your order before sending to the PFOF Payment for Order Flow Market Maker of their choice. The Digital Stock Market moves at a much faster pace with subtle nuances such as Angle of Ascent. As you become an advanced level trader to a semi-professional trader, or potentially a full time professional trader, these details matter more than when you are just learning stock trading. Trade Wisely Martha Stokes CMT
NYSE:CATEducation
by MarthaStokesCMT-TechniTrader
2
Blueprint to Becoming a Successful Gold Trader in 2025🚀 Blueprint to Becoming a Successful Gold Trader in 2025 A strategic, step-by-step plan to master gold trading by combining institutional concepts, cutting-edge automation, and the best prop funding opportunities for XAUUSD. ________________________________________ 🏦 Broker Selection (Gold-Specific) • 🔍 Choose Brokers Offering Raw Spread XAUUSD Accounts: Seek brokers with raw/zero spread gold trading or tight gold spreads (0.10-0.30 average) with deep liquidity. • ⚡ Prioritize Ultra-Fast Execution for Metals: Confirm broker servers are in NY4/LD4 and latency is optimized for gold volatility spikes. • 🛡️ Verify Regulation & Execution: ASIC, FCA, FSCA preferred; check for proof of XAUUSD execution quality (Myfxbook/FXBlue verified). • 📊 MetaTrader 4/5 Gold Support: Ensure MT4/5 platform offers tick-chart precision for gold and supports custom EAs/indicators. • 💳 Flexible Withdrawals/Payouts: Crypto, Wise, and Revolut compatibility for fast, secure funding. ________________________________________ 🎯 Gold Trading Strategy (ICT + Supply/Demand Zones) • 🧠 Master Gold-Adapted ICT Concepts: o Liquidity runs and stops at London/NY session highs/lows o XAUUSD-specific Order Blocks (OBs), FVGs, and Market Structure Breaks (MSB) • 📍 Map Institutional Supply-Demand Zones: Gold reacts violently to these—align SD zones with ICT Order Blocks for best confluence. • 📐 Precision Entries: Only enter after liquidity sweeps at key XAUUSD levels (H4/D1), avoiding choppy retail entries. • 📈 Time & Price for XAUUSD: Focus exclusively on London Open (8:00 GMT) and NY Open/Gold Fixing (13:20 GMT)—peak volatility windows. • 📆 Weekly Preparation: Annotate D1/H4 gold charts every Sunday with clear OBs, liquidity points, and SD zones for the week. ________________________________________ 💰 Prop Funding for Gold Trading • 🥇 Select Firms Offering XAUUSD with Tight Rules: Choose FTMO, The Funded Trader, MyFundedFX, or similar with high leverage and XAUUSD trading enabled. • 📑 Pass Evaluation with Gold-Only Strategy: Use high-probability, low-frequency XAUUSD trades—1-3 setups per week, strict risk parameters. • 🎯 Risk Management: Max 1% risk/trade, stop trading after 2 consecutive losses—protect account and pass evaluations. • 📊 Analytics Monitoring: Use prop dashboards (FTMO Metrics, FundedNext stats) to review XAUUSD trade stats and adjust. • 📚 Diversify Funded Accounts: Split funded capital among multiple firms to hedge against firm-specific risk and maximize payouts. ________________________________________ ⚙️ Automating Gold Trading (MT4/5 EAs & Bots) • 🛠️ Hire MQL4/5 Developers for XAUUSD EAs: Code bots focused on gold-specific ICT (OBs, FVGs, London/NY volatility). • 🤖 Develop EAs for Gold: o OB/FVG/Market Structure detection on XAUUSD o Supply/Demand zone algo entries o Gold breakout EAs for session openings • 📌 Trade Management Automation: o Entry, stop loss, partial TP, BE, trailing for gold’s high volatility o Dynamic lot-sizing by daily ATR • 📡 VPS Hosting Near Broker’s Gold Server: Use NY4/LD4 VPS for lowest latency (ForexVPS, Beeks). • 📈 Quarterly Forward-Testing: Optimize EAs in demo before live trading, retest on every major gold volatility shift (FOMC, CPI). ________________________________________ 📲 Leveraging Bots & AI in 2025 • 📊 Integrate with MT4/5 Analytics Tools: Use myfxbook, QuantAnalyzer for detailed gold trade breakdowns. • 🔮 AI-Based Gold Forecasting: Layer in machine learning models (e.g., TensorTrade, TradingView AI) to anticipate session volatility and direction. • 🔔 Real-Time Alert Bots: Set up Telegram/Discord bots for instant notification of ICT-based XAUUSD signals. • 🧑‍💻 Manual Oversight: Always review high-impact news (NFP, CPI, FOMC) and override automation when macro risk spikes. • 🔄 Continuous Bot Updates: Retrain your EAs monthly on latest XAUUSD price action to maintain edge. ________________________________________ 🗓️ Daily Gold Trader Routine • 🌅 Pre-Session (30 mins): Review annotated gold charts, key session highs/lows, OB/FVG/SD levels, and upcoming news. • 💻 During Session: Monitor bot execution, validate setups manually, manage risk during NY/London overlap. • 📝 Post-Session (15 mins): Journal gold trades, note reasoning for entry/exit, emotional state, and lessons learned. • 📆 Weekly Review: Assess overall gold trading stats and EA performance, adjust strategy as needed. • 📚 Continuous Learning: Stay updated on ICT, gold market fundamentals, and new trading tech. ________________________________________ 📌 Final Success Advice for 2025 • 🔍 Specialize in XAUUSD/Gold—Don’t Diversify Randomly: Depth > Breadth—become a true gold trading expert. • 🚩 Keep Adapting Your Gold Trading EAs: Markets change—so must your bots and playbooks. • 🧘 Stay Patient, Disciplined, and Selective: Gold rewards precision and patience, not overtrading. • 💡 Embrace AI & Automation: Leverage every tool: AI, analytics, and custom EAs for a real 2025 trading edge.
OANDA:XAUUSDEducation
by ProjectSyndicate
35
Volume Gaps and Liquidity Zones: Finding Where Price Wants to GoDifficulty: 🐳🐳🐳🐋🐋 (Intermediate+) This article is best suited for traders familiar with volume profile, liquidity concepts, and price structure. It blends practical trading setups with deeper insights into how price seeks inefficiency and liquidity. 🔵 INTRODUCTION Ever wonder why price suddenly accelerates toward a level — like it's being magnetized? It’s not magic. It’s liquidity . Markets move toward areas where orders are easiest to fill, and they often avoid areas with little interest. In this article, you’ll learn how to identify volume gaps and liquidity zones using volume profiles and price action. These tools help you anticipate where price wants to go next — before it gets there. 🔵 WHAT ARE VOLUME GAPS? A volume gap is a price region with unusually low traded volume . When price enters these areas, it often moves quickly — there’s less resistance. Think of a volume gap as a thin patch of ice on a frozen lake. Once the market steps on it, it slides across rapidly. Volume gaps usually show up on: Volume Profile Fixed Range Volume tools Session or custom volume zones They’re often created during impulsive moves or news events — when price skips levels without building interest. 🔵 WHAT ARE LIQUIDITY ZONES? Liquidity zones are price areas where a large number of orders are likely to be sitting — stop losses, limit entries, or liquidation levels. These zones often form around: Swing highs and lows Order blocks or fair value gaps Consolidation breakouts Psychological round numbers When price approaches these areas, volume often spikes as those orders get filled — causing sharp rejections or breakouts. 🔵 WHY THIS MATTERS TO TRADERS Markets are driven by liquidity. Price doesn’t just move randomly — it hunts liquidity, clears inefficiencies, and fills orders. Your edge: By combining volume gaps (low resistance) with liquidity zones (target areas), you can forecast where price wants to go . Volume gap = acceleration path Liquidity zone = destination / reversal point 🔵 HOW TO TRADE THIS CONCEPT 1️⃣ Identify Volume Gaps Use a visible range volume profile or session volume. Look for tall bars (high interest) and valleys (low interest). 2️⃣ Mark Liquidity Zones Use swing highs/lows, OBs, or EQH/EQL (equal highs/lows). These are magnet areas for price. 3️⃣ Watch for Reactions When price enters a gap, expect speed. When it nears a liquidity zone, watch for: Volume spike Wick rejections S/R flip or OB retest 🔵 EXAMPLE SCENARIO A strong bearish move creates a volume gap between 103 000 – 96 000 Below 96 000 sits bullish order blocks — clear liquidity Price enters the gap and slides fast toward 96 000 A wick forms as buyers step in, volume spikes — the reversal begins That’s price filling inefficiency and tapping liquidity . 🔵 TIPS FOR ADVANCED TRADERS Use higher timeframes (4H/1D) to define major gaps Look for overlapping gaps across sessions (Asia → London → NY) Align your trades with trend: gap-fills against trend are riskier Add OB or VWAP as confirmation near liquidity zones 🔵 CONCLUSION Understanding volume gaps and liquidity zones is like reading the market’s intention map . Instead of reacting, you start predicting. Instead of chasing, you’re waiting for price to come to your zone — with a plan. Price always seeks balance and liquidity . Your job is to spot where those forces are hiding. Have you ever traded a volume gap into liquidity? Share your setup below
Education
by BigBeluga
20
Fibonacci Retracement: The Hidden Key to Better EntriesIf you’ve ever wondered how professional traders predict where price might pull back before continuing... the secret lies in Fibonacci Retracement. In this post, you’ll learn: What Fibonacci retracement is Why it works How to use it on your charts (step-by-step) Pro tips to increase accuracy in the market 🧠 What Is Fibonacci Retracement?: Fibonacci Retracement is a technical analysis tool that helps traders identify potential support or resistance zones where price is likely to pause or reverse during a pullback. It’s based on a mathematical sequence called the Fibonacci Sequence, found everywhere in nature — from galaxies to sunflowers — and yes, even in the markets. The Fibonacci sequence is a series of numbers where each number is the sum of the two preceding ones, starting with 0 and 1. The sequence typically begins with 0, 1, 1, 2, 3, 5, 8, 13, and so on. This pattern can be expressed as a formula: F(n) = F(n-1) + F(n-2), where F(n) is the nth Fibonacci number. The key Fibonacci levels traders use are: 23.6% 38.2% 50% 61.8% 78.6% These levels represent percentages of a previous price move, and they give us reference points for where price might pull back before resuming its trend and where we can anticipate price to move before showing support or resistance to the trend you are following. 💡Breakdown of Each Fib Level: 💎 0.236 (23.6%) – Shallow Pullback What it indicates: Weak retracement, often signals strong trend momentum. Buyers/sellers are aggressively holding the trend. Best action: Aggressive entry zone for continuation traders. Look for momentum signals (break of minor structure, bullish/bearish candles). Stay out of the market until you see more confirmation. 💎 0.382 (38.2%) – First Strong Area of Interest What it indicates: Healthy pullback in a trending market. Seen as a key area for trend followers to step in. Best action: Look for entry confirmation: bullish/bearish engulfing, pin bars, Elliott Waves, or break/retest setups. Ideal for setting up trend continuation trades. Stop Loss 0.618 Level 💎 0.500 (50.0%) – Neutral Ground What it indicates: Often marks the midpoint of a significant price move. Market is undecided, can go either way. Best action: Wait for additional confirmation before entering. Combine with support/resistance or a confluence zone. Useful for re-entry on strong trends with good risk/reward. Stop Loss 1.1 Fib Levels 💎 0.618 (61.8%) – The “Golden Ratio” What it indicates: Deep pullback, often seen as the last line of defense before trend reversal. High-probability area for big players to enter or add to positions. Best action: Look for strong reversal patterns (double bottoms/tops, engulfing candles). Excellent area for entering swing trades with tight risk and high reward. Use confluence (structure zones, moving averages, psychological levels, Elliott Waves). Wait for close above or below depending on the momentum of the market. Stop Loss 1.1 Fib Level 💎 0.786 (78.6%) – Deep Correction Zone What it indicates: Very deep retracement. Often a final “trap” zone before price reverses. Risk of trend failure is higher. Best action: Only trade if there's strong reversal evidence. Use smaller position size or avoid unless other confluences are aligned. Can act as an entry for counter-trend trades in weaker markets. Stop Loss around 1.1 and 1.2 Fib Levels ⏱️Best Timeframe to Use Fibs for Day Traders and Swing Traders: Day trading: Day traders, focused on capturing short-term price movements and making quick decisions within a single day, typically utilize shorter timeframes for Fibonacci retracement analysis, such as 15-minute through hourly charts. They may also use tighter Fibonacci levels (like 23.6%, 38.2%, and 50%) to identify more frequent signals and exploit short-term fluctuations. Combining Fibonacci levels with other indicators such as moving averages, RSI, or MACD, and focusing on shorter timeframes (e.g., 5-minute or 15-minute charts) can enhance signal confirmation for day traders. However, relying on very short timeframes for Fibonacci can lead to less reliable retracement levels due to increased volatility and potential for false signals. Swing trading: Swing traders aim to capture intermediate trends, which necessitates giving trades more room to fluctuate over several days or weeks. They typically prefer utilizing broader Fibonacci levels (like 38.2%, 50%, and 61.8%) to identify significant retracement points for entering and exiting trades. Swing traders often focus on 4-hour and daily charts for their analysis, and may even consult weekly charts for a broader market perspective. 🎯 Why Does Fibonacci Work?: Fibonacci levels work because of: Mass psychology – many traders use them Natural rhythm – markets move in waves, not straight lines Institutional footprint – smart money often scales in around key retracement zones It's not magic — it's structure, and it's surprisingly reliable when used correctly. 🛠 How to Draw Fibonacci Retracement (Step-by-Step): Let’s say you want to trade XAU/USD (Gold), and price just had a strong bullish run. ✏️ Follow These Steps: Identify the swing low (start of move) Identify the swing high (end of move) Use your Fibonacci tool to draw from low to high (for a bullish move) The tool will automatically mark levels like 38.2%, 50%, 61.8%, etc. These levels act as pullback zones, and your job is to look for entry confirmation around them. 🔁 For bearish moves, draw from high to low. (I will show a bearish example later) Now let’s throw some examples and pictures into play to get a better understanding. 📈 XAU/USD BULLISH Example: 1.First we Identify the direction of the market: 2.Now we set our fibs by looking for confirmations to get possible entry point: Lets zoom in a bit: Now that we have a break of the trendline we wait for confirmation and look for confluence: Now we set our fibs from the last low to the last high: This will act as our entry point for the trade. 3. Now we can look for our stop loss and take profit levels: Stop Loss: For the stop loss I like to use the fib levels 1.1 and 1.2 when I make an entry based upon the 0.618 level. These levels to me typically indicate that the trade idea is invalid once crossed because it will usually violate the prior confirmations Take Profit: For the take profit I like to use the Fib levels 0.236, 0, -0.27, and -0.618. This is based upon your personal risk tolerance and overall analysis. You can use 0.236 and 0 level as areas to take partial profits. Re-Entry Point Using Elliott Waves as Confluence Example: This is an example of how I used Elliott Waves to enter the trade again from the prior entry point. If you don’t know what Elliott Waves are I will link my other educational post so you can read up on it and have a better understanding my explanation to follow. After seeing all of our prior confirmations I am now confident that our trend is still strongly bullish so I will mark my Waves and look for an entry point. As we can see price dipped into the 0.38-0.5 Fib level and rejected it nicely which is also in confluence with the Elliott Wave Theory for the creation of wave 5 which is the last impulse leg before correction. 🔻 In a downtrend: Same steps, but reverse the direction — draw from high to low and look to short the pullback. XAU/USD Example: As you can see the same basic principles applied for bearish movement as well. ⚠️ Pro Tips for Accuracy: ✅ Always use Fib in confluence with: Market structure (higher highs/lows or lower highs/lows) Key support/resistance zones Volume or momentum indicators Candle Patterns Elliott Waves, etc. ❌ Don’t trade Fib levels blindly — they are zones, not guarantees. 📊 Use higher timeframes for cleaner levels (4H, Daily) 💡 Final Thought Fibonacci retracement doesn’t predict the future — it reveals probability zones where price is likely to react. When combined with structure and confirmation, it becomes one of the most reliable tools for new and experienced traders alike. 🔥 Drop a comment if this helped — or if you want a Part 2 where I break down Fibonacci Extensions and how to use them for take-profit targets. 💬 Tag or share with a beginner who needs to see this!
FOREXCOM:XAUUSDEducation
by WrightWayInvestments
Mastering supply and demand zones - how to use it in trading?Supply and demand zones are key concepts in technical analysis used by traders to identify potential price reversal areas on a chart. They are based on the idea that prices move due to an imbalance between buyers (demand) and sellers (supply). ------------------------- What will be discussed? - What are supply and demand zones? - How to detect supply and demand zones? - Examples from supply and demand zones? - How to trade using supply and demand zones? ------------------------- What are supply and demand zones? Supply and demand zones are areas on a price chart where the forces of buying and selling are strongly concentrated, causing significant movements in price. In simple terms, a supply zone is an area where selling pressure exceeds buying pressure, often leading to a drop in price. It usually forms when price moves upward into a region where sellers begin to outnumber buyers, pushing the price back down. On the other hand, a demand zone is a region where buying pressure exceeds selling pressure, typically resulting in a rise in price. This occurs when price moves downward into a region where buyers see value and begin to outnumber sellers, causing the price to increase again. These zones reflect areas of imbalance in the market. In a supply zone, sellers are more eager to sell than buyers are to buy, often due to overbought conditions, news, or fundamental changes. In a demand zone, buyers are more eager to buy than sellers are to sell, often because the price has become attractive or undervalued. Traders look for these zones because they provide clues about where price may reverse or stall, offering potential entries or exits for trades. ------------------------- How to detect supply and demand zones? Identifying supply and demand zones involves analyzing price action on a chart, typically using candlestick patterns. A common way to detect a supply zone is to look for a sharp upward move followed by a sudden reversal or strong drop in price. The area where the price stalled before falling sharply is likely to be a supply zone. This zone includes the highest candle body or wick before the drop, and a few candles before it that mark where the selling pressure began. To identify a demand zone, you would look for a sharp drop in price followed by a strong rally upward. The area where the price paused before rising significantly can be considered a demand zone. Like with supply zones, the demand zone includes the lowest candle before the price reversed and a few candles leading up to it. These zones are not exact price levels but rather ranges. Price does not have to touch an exact line to react; it often moves within the general area. For more accuracy, traders often refine their zones by identifying them on higher time frames such as the 4-hour or daily chart, then adjusting them slightly on lower time frames like the 1-hour or 15-minute chart. ------------------------- Examples from supply and demand zones: ------------------------- How to trade using supply and demand zones? Trading supply and demand zones involves anticipating how price is likely to behave when it returns to one of these key areas. A common method is to wait for price to enter a zone and then watch for confirmation that it is going to reverse. For example, if price rises into a supply zone, you might look for signs like a bearish candlestick pattern, a drop in volume, or a rejection wick to signal that sellers are stepping in again. This would be an opportunity to enter a short trade with the expectation that price will fall. Conversely, if price falls into a demand zone, you would wait for bullish signals—such as a strong bullish candle, a double bottom pattern, or clear rejection of lower prices—to confirm that buyers are returning. This would be a potential setup for a long trade, expecting the price to move up from the zone. Traders often place stop losses just beyond the zone to limit risk in case the level fails. For a supply zone, the stop loss would go just above the zone, while for a demand zone, it would go just below. Targets can be set at recent support or resistance levels, or by using risk-reward ratios like 1:2 or 1:3 depending on the trader’s strategy. Patience and discipline are important when trading these zones. Not every zone will lead to a reversal, and false breakouts can occur. Therefore, combining supply and demand analysis with other tools such as trendlines, moving averages, or indicators can improve the chances of a successful trade. In summary, supply and demand zones help traders understand where large buying or selling forces are likely to influence price. By learning to identify these zones and waiting for confirmation signals, traders can enter high-probability trades with clear risk and reward levels. ------------------------- Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis. Thanks for your support. If you enjoyed this analysis, make sure to follow me so you don't miss the next one. And if you found it helpful, feel free to drop a like and leave a comment, I’d love to hear your thoughts!
TRADENATION:BTCUSDEducation
by Youriverse
81
The only key levels you need - DITCH THE INDICATORS- Previous day high/Low - Weekly high/low - Session high/low - Closing Price In this specific example on OANDA:AUDUSD we have a day 3 Tuesday breakout fail reversal setup on the backside of a previous weeks expansion. Fridays closing price was plotted going into Monday day 2 on the backside of a new week. Once the initial high low was set on day 2 below the previous weeks high and closing price we than look for short opportunities going into day 3 Tuesday. In this case day 2 Ny session high acted as the reversal point staying below Friday closing price below the high of the previous week. The Asia/London session printed a beautiful high/low range reversing at near the midpoint of the previous days range (50% retrace.) A great opportunity for a projected range expansion presented with confluence at a previous days low giving a solid set and forget trade with little to no stress or heat. This parabolic opportunity took place in the NY session below Fridays closing price to a previous weeks LOD level. - Mondays High (Stop) - NY session High, Fridays Close (Entry) - Wed Low, Range expansion (Target) KEY NOTES: It is very important to keep your trading simple. As a newer trader I filled my chart with as many indicators as possible trying to find a "signal" because I lacked the patience for the market to give me a setup over multiple days. Now as a more experienced trader I sit back on higher time frames (1H/15M) TO WAIT FOR THE DAILY LEVELS TO PRINT. Avoiding trading inside a range on a low time frame. Lower time frames are only to decrease risk and increase position accuracy already derived from higher time frames. It is key to understand when higher time frame traders are triggered into a market and to understand there are only two main plays from key levels. Keep it simple, find the scalable setups, AND PUT THE SIZE ON WITH CONFIDENCE.
Education
by GiancarloZacc
Earnings HFT gapsThe gaps that form during earnings season on or the next day after the CEO reports the revenues and income for that past quarter are always HFT driven. The concern over the past 2 previous quarters was the fact that the High Frequency Trading Firms were incorporating Artificial Intelligence into their Algos to make automated trading decisions on the millisecond scale. These small lot orders fill the ques milliseconds ahead of the market open in the US and any huge quantity of ORDERS (not lot size) causes the computers of the public exchanges and market to gap up or gap down, often a huge gap. This can be problematic for those of you who use Pre Earnings Runs to enter a stock in anticipation of a positive to excellent earnings report for this upcoming quarter. The HFT algos had several major flaws in the programming that did the opposite: The AI triggered sell orders rather than buy order causing the stock price to gap down hugely on good earnings news. Be mindful that normal gaps due to a corporate event are far more reliable and consistent. When you trade during earnings season, be aware that there is still added risk of an AI making a mistake and causing the stock to gap and run down on good news. It is important to calculate the risk factors until it is evident by the end of this earnings season that the errors within the AI programming have been corrected and that the AI will gap appropriately to the actual facts rather than misinterpreted information.
NASDAQ:PLTREducation
by MarthaStokesCMT-TechniTrader
Deep Dive Part III – The Next BIG Whale Play UnfoldsDeep Dive Part III – The Next BIG Whale Play Unfolds 📍In Parts I & II of this Deep Dive, we broke down the psychology of whale behavior — from “Buy the Rumors, Sell the News” to the critical breakout zones that echoed historical patterns. 🐋 Back then, we spotted the whales' playbook early. The strategy was simple: Buy the Rumors – Sell the News. 🧠 But now, the script has changed. “The trap is where you’re most bored… 🌴📵 Their exit — on your liquidity — comes when you’re least ready. 💰🏄‍♂️💼” Let’s break this moment down into what’s really unfolding. We are officially entering the next stage of the cycle — not just in price, but in psychology. This is no longer just about charts. This is about human behavior on autopilot. Here’s what I see happening right now — broken into three truths: 1️⃣ People Are On Holiday 🌞 From my community to the broader market, the energy is low. People are either sunbathing on a beach or mentally checked out. The focus is not there. The reflex to take action is dulled. 📉 The trap is where you’re most bored… 🌴📵 💰 Their exit — on your liquidity — comes when you’re least ready. 🏄‍♂️💼🚀 We’re seeing it unfold now: 1. Set the Bear Trap 2. Trigger the FOMO (will be down the road, yes) 3. Exit on Liquidity (the closing act of the play) 🕶️ But when everyone is away or asleep, that’s when the trap is laid. It’s during these quiet, lazy days that the big moves get built. 2️⃣ This is a Disbelief Rally 🎢 The market trained everyone with a rhythm: pump ➝ dump, pump ➝ dump, pump ➝ dump… So what happens now? People don’t trust the breakout. They’re frozen. “We’ll dump again,” they say. Except… what if this time, we don’t? That disbelief becomes fuel. It becomes hesitation — and hesitation becomes missed opportunity. 3️⃣ Bears Are Shorting Into Strength 🧨 This is key. While retail is confused, the bears are pressing in hard. Their shorts are adding fuel to the pump they don’t see coming. That’s why I posted recently: “Shorting isn’t the problem. Being a psycho bear is.” It’s not about being bullish or bearish — It’s about timing , discipline , and narrative awareness . Whales love this moment. They lure in shorts, set the trap, then ignite the breakout straight into FOMO. 🧠 The Game: Set the Trap → Trigger the FOMO → Exit on Liquidity 💥 This is what you’re seeing on the chart. Not just price action — psychological choreography. 🕰️ In 2020–2021, we saw the exact same structure. Part I warned about early accumulation and baiting behavior. Part II showed how whales manipulated expectations with layered waves of doubt. Now in Part III — the explosion few are ready for. Zoom into the chart and it’s all there: The curve, the trap, the trigger… and yes — the Final Boss. 🎯 The Final Boss: 6.51T That’s the ultimate liquidity zone. If this cycle plays out, we’re headed toward it. “Sell the Rate Cuts” will be the new “Sell the News.” It’s not the headlines that matter — it’s who’s left holding the bag. 🔚 Final Thought The real exit — the one that traps most of retail — will come not when you’re euphoric, but when you’re still saying: “Surely we must dump now…” So stay sharp. Trade the chart — but don’t forget to read the behavior. One Love, The FXPROFESSOR 💙 Part1: Part2:https://www.tradingview.com/chart/idea/VgMBPsp3/ The Bear Trap: 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! 🌟🤝📈
CRYPTOCAP:TOTALEducation
by FX_Professor
6
Soybeans and Rain: Moisture’s Market Impact on the Bean Trade1. Introduction: Moisture & Market Momentum Soybeans, often referred to as “the oilseed king,” are a cornerstone of global agriculture. As a leading source of protein for both humans and animals, their price fluctuations affect industries ranging from food production to biofuels. One key variable traders often monitor? Rainfall. 🌧️ Moisture plays a critical role in soybean development, influencing yield and quality from the moment the seed is sown. It’s no surprise that many market participants assume a strong correlation between rainfall and price behavior. But is that assumption truly supported by data? In this article, we analyze how varying precipitation levels impact weekly soybean futures returns. As you'll see, the results might not be as clear-cut as you’d expect—but they still offer meaningful insights. 2. Biological Realities: Soybeans’ Water Needs Soybeans thrive under specific conditions. While they’re generally resilient, rainfall—or the lack thereof—can tip the balance between bumper harvests and disappointing yields. During early vegetative stages, sufficient moisture ensures healthy root development. Later, during the pod-fill phase, rainfall becomes even more essential. Too little water at this point leads to incomplete pods or aborted seeds. On the flip side, too much rain can invite fungal diseases and delay harvests, especially in lower-lying regions. In countries like Brazil and Argentina, soybean fields often face seasonal extremes, while the U.S. Midwest typically enjoys more consistent conditions—though droughts and floods have both hit the Corn Belt in recent years. These environmental realities create natural volatility in both yield and pricing expectations. 3. Methodology: How We Analyzed Weather vs. Futures To explore the potential connection between rainfall and soybean futures prices, we collected weekly weather data for major soybean-growing cities across the globe. Each week’s precipitation was categorized using a normalized percentile system: Low Rainfall: below the 25th percentile Normal Rainfall: between the 25th and 75th percentiles High Rainfall: above the 75th percentile We then matched this data against weekly returns of standard soybean futures (ZS) and micro soybean futures (MZS), both traded on the CME Group. This allowed us to compare average price behavior in different rainfall scenarios—and test whether there was any statistically significant difference between dry and wet weeks. 4. Statistical Findings: Is There a Signal in the Noise? When examining the data, the initial visual impression from boxplots was underwhelming—return distributions across rainfall categories looked surprisingly similar. However, a deeper dive showed that the difference in mean returns between low and high precipitation weeks was statistically significant, with a p-value around 0.0013. What does that mean for traders? While the signal may not be obvious to the naked eye, statistically, rainfall extremes do impact market behavior. However, the magnitude of impact remains modest—enough to be part of your strategy but not enough to drive decisions in isolation. Soybean prices appear to be influenced by a mosaic of factors, with precipitation being just one tile in that complex picture. 5. Charting the Relationship: Visual Evidence While statistical tests gave us the green light on significance, we know traders love to “see” the story too. Boxplots of weekly soybean futures returns segmented by rainfall categories offered a subtle narrative: Low-precipitation weeks showed slightly higher average returns and tighter interquartile ranges. High-precipitation weeks had broader return distributions and more frequent downside outliers. Normal weeks exhibited relatively stable behavior, reinforcing the idea that the market reacts most during extremes. This kind of visualization may not scream alpha at first glance, but it reinforces the idea that precipitation events—particularly dry spells—tend to nudge prices upward, possibly as market participants price in production risk. 6. Trading Implications: Positioning Around Weather Here’s where things get practical. While weather alone won’t dictate every trading decision, it can be a key filter in a broader strategy. For soybean traders, rainfall data can help inform: Bias assessment: Low-precipitation weeks may suggest bullish tendencies. Risk control: Expect wider return distributions in high-precip weeks—adjust stops or contract sizing accordingly. Event trading: Pair weather anomalies with technical signals like trendline breaks or volume surges for potential setups. It’s also worth noting that weekly weather forecasts from reputable sources can serve as a forward-looking indicator, giving traders a head start before the market fully reacts. 7. Margin Efficiency with Micro Soybeans For traders looking to scale into soybean exposure without the capital intensity of full contracts, the CME Group’s micro-sized futures offer a compelling alternative. 📌 Contract Specs for Soybean Futures (ZS): Symbol: ZS Contract size: 5,000 bushels Tick size: 1/4 of one cent (0.0025) per bushel = $12.50 Initial margin: ~$2,100 (varies by broker and volatility) 📌 Micro Soybean Futures (MZS): Symbol: MZS Contract size: 500 bushels Tick size: 0.0050 per bushel = $2.50 Initial margin: ~$210 These smaller contracts are perfect for strategy testing, risk scaling, or layering exposure around key macro events like WASDE reports or weather disruptions. For traders aiming to build weather-aligned positions, MZS is a powerful tool to balance conviction with capital efficiency. 8. Wrapping It All Together Rain matters. Not just in fields, but in futures prices too. While soybean markets may not overreact to every drizzle or downpour, extreme rainfall conditions—especially drought—can leave noticeable footprints on price action. For traders, this means opportunity. By incorporating precipitation metrics into your workflow, you unlock a new layer of context. One that doesn’t replace technical or fundamental analysis, but enhances both. And remember: this article is just one piece of a larger exploration into how weather affects the commodity markets. Make sure you also read prior installments. 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.
CBOT:ZS1!Education
by traddictiv
Full Breakdown of My Trading Strategy Dow Futures DaytradingI will be detailing my strategy to both help others and to help myself fine tune my strategy. My strategy is one of market maker cycles. The end goal: to trade off of the Daily chart by drilling down to the 15 minutes for entries. Everything revolves around the Daily chart. The only indicator I use is ATR, other than that, pure price action. I use opening prices a lot in my trading. Starting with the MONTHLY chart: Every month has the following- An opening price A first trading day A last trading day These are things that ALL traders see and can't misinterpret. I will use June as the basis for my examples. I try to figure out what kind of monthly candle is likely to form. Bullish, Bearish or Doji. I use ATR to try to figure out the likely size also. For Dow Futures, a typical Monthly candle is around 3000 ticks +/- Going to the Daily chart, I mark the beginning of the month and the end of the month. The meat of the strategy, and the one quite frankly is the most difficult and the most discretionary, is reading price action on the Daily chart to determine what the next daily candle is likely to do and where it opens at. No strategy is 100% accurate and I do take losses from being wrong. With proper risk management ( I will detail my personal risk management later ) you can still make tons of money being 50% right. Not everyday is meant to be traded and quite frankly, most days are pure trash. Over 55% of all Daily candles are small, resting Doji days. You are looking for the expansion daily candles. Starting with the first trading of June: 1. May 29th, Large Doji day and and formed a mother bar 2. May 30th, another doji day and still inside the previous bar 3. June 2nd, opened up in middle of inside bar, Bias for day is Long. Buy near the bottom of the inside bar and a break of Yesterday's Low. This is an actual trade I took. Once I saw the Doji candle on the 15 minute break below yesterday's low I entered in Long. I will go over stops and targets later. For now, I am explaining how I find my bias and locations. The next day: start the process over again. Look at the Daily and the context of the bars. Look for swing points, Daily highs and lows. Key Daily bars as signals. I usually like to do this 5 minutes after Asia opens just to see where price opens at. I then mark the daily open with a cyan blue line. If I am Long bias then I want to buy under the open at key levels. I use SP as swing point, a daily high or low that has not been broken yet. Tuesday, I would have a Long bias again. Because we opened still inside of the mother bar and I see highs not broken, I want to trade in that direction. What is a key level on this Tuesday? I see the monthly open right underneath. The big question I would ask myself on this Tuesday is where in that move can I get in on a pullback for the Long trade? The market gives you an entry here. I did not take that trade, I WILL show you the trade I did take on this day. After NY opened, I saw the spike into the monthly open and a doji right ON the open. I slammed Long. Especially, the three swing points to be used as the direction. Now on to trade management. Stops, Targets. I have the same bracket for every trade, so the only variable is my entry. Once I enter, I set my ATM strategy. I use the 15 minute ATR to determine my stop loss. This part is also up to the individual trader and is discretionary. I will show you MY strategy. Take a zoomed-out view of the 15-minute chart with the 14 period ATR, mark the clusters of the peak ATR readings from NY sessions. In this case it is between 70-90. I tend to go towards the upper limit, this case 90. I then use 1.25-1.5 times of this reading based on my account and position sizing. In June AND in July, I am using 120 tick stops. My targets are all strictly 2.5 risk to reward of what my stop is plus or minus a few ticks for commissions. Since I am using 120 tick stops, my targets are therefore, 300-310 ticks. Going back to my Tuesday trade, the trade management would be a set 2.5R all or nothing. Enter the trade and walk away. Go read a book or play PS5. Go to gym. It will either hit stop, target or close out at 4pm NY close. 2 Winning trades wipes away 5 losers. I have losers all the time with a 50% win rate. I can expect 8 losing trades in a row at any given time. Something I have experienced multiple times. Now on to my money management strategy. The holy grail of this entire system. Quite frankly, how you enter and your strategy at the end of the day doesn't amount to much. How you manage your money is where professionalism is achieved. Take your starting account balance, divide it in fours. I will use a 10,000 account as simple math. 10,000 2500 Level 1 14.5R 2500 Level 2 11.5R 2500 Level 3 9.5R 2500 Level 4 8.5R I risk 1.75% per trade and each level will stay fixed until the next level is reached. In this example, Level 1 will be using $175 risk per trade and a 2.5 risk to reward, $440 reward. You will keep risking $175 per trade until you hit your $2500 profit goal to advance to Level 2. In this case this will take you 14.5R Now you are on Level 2, you find your new account balance is now $12,500. Find 1.75% of this = $220. Keep using $220 risk until you hit another $2500 in profits. This will take you 11.5R. Keep repeating these steps until you have hit all 4 profit levels and your account has doubled. Your new account balance is now $20,000. You will start this process over again. To double your account you will need a total of 44-45R. At a conservative approach of 5-7% monthly gain, you can expect to double your account in 8 months +/- depending on how good you can get. The number one major key to ALL OF THIS IS One trade per Daily candle. You lose on that day, move on and come again tomorrow All profit targets need to be hit or close out at 4pm depending on price
CBOT_MINI:YM1!Education
by Dow_Jones_Maestro
23
Sector Rotation Strategy🌐 Sector Rotation Strategy: A Smart Way to Stay Ahead in the Stock Market What Is Sector Rotation? Imagine you're playing cricket. Some players shine in certain conditions — like a fast bowler on a bouncy pitch or a spinner on a turning track. The same idea applies to stock market sectors. Sector Rotation is the process of shifting your money from one sector to another based on the market cycle, economic trends, or changing investor sentiment. In simple words: "You’re moving your money where the action is." First, What Are Sectors? The stock market is divided into different sectors, like: Banking/Financials – HDFC Bank, Kotak Bank, SBI IT– Infosys, TCS, Wipro FMCG – HUL, Nestle, Dabur Auto – Maruti, Tata Motors Pharma – Sun Pharma, Cipla Capital Goods/Infra – L&T, Siemens PSU – BEL, BHEL, HAL Real Estate, Metals, Energy, Telecom, etc. Each sector behaves differently at various stages of the economy. Why Is Sector Rotation Important? Because all sectors don’t perform well all the time. For example: In a bull market, sectors like Auto, Capital Goods, and Infra usually lead. During slowdowns, investors run to safe havens like FMCG and Pharma. When inflation or crude oil rises, energy stocks tend to do better. When interest rates drop, banking and real estate might shine. So, instead of holding poor-performing sectors, smart investors rotate into the hot ones. How Does Sector Rotation Work? Let’s say you are an investor or trader. Step-by-step guide: Track the economy and markets Is GDP growing fast? = Economy expanding Are interest rates high? = Tight liquidity Is inflation cooling down? = Growth opportunity Observe sectoral indices Check Nifty IT, Nifty Bank, Nifty FMCG, Nifty Pharma, etc. See which are outperforming or lagging. Watch for news flow Budget announcements, RBI policy, global cues, crude oil prices, etc. E.g., Defence orders boost PSU stocks like BEL or HAL. Move your capital accordingly If Infra and Capital Goods are breaking out, reduce exposure in IT or FMCG and rotate into Infra-heavy stocks. Real Example (India, 2024–2025) Example: Rotation from IT to PSU & Infra In late 2023, IT stocks underperformed due to global slowdown and US recession fears. Meanwhile, PSU and Infra stocks rallied big time because: Government increased capital expenditure. Defence contracts awarded. Railway budget saw record allocations. So, many smart investors rotated out of IT and into: PSU Stocks: RVNL, BEL, HAL, BHEL Capital Goods/Infra: L&T, Siemens, ABB Railway Stocks: IRFC, IRCTC, Titagarh Wagons This sector rotation gave 30%–100% returns in a few months for many stocks. Tools You Can Use Sectoral Charts on TradingView / Chartink / NSE Use indicators like RSI, MACD, EMA crossover. Compare sectors using “Relative Strength” vs Nifty. Economic Calendar Track RBI policy, inflation data, IIP, GDP, etc. News Portals Moneycontrol, Bloomberg, ET Markets, CNBC. FIIs/DII Activity Where the big money is going – this matters! Sector Rotation Heatmaps Some platforms show weekly/monthly performance of sectors. 📈 Sector Rotation Strategy for Traders For short-term traders (swing/intraday): Rotate into sectors showing strength in volumes, price action, breakouts. Use tools like Open Interest (OI) for sector-based option strategies. Example: On expiry weeks, if Bank Nifty is showing strength with rising OI and volume, rotate capital into banking-related trades (Axis, ICICI, SBI). Sector Rotation for Long-Term Investors For investors, sector rotation can be used: To reduce drawdowns. To book profits and re-enter at better levels. To ride economic trends. Example: If you had exited IT in late 2022 after a rally, and entered PSU stocks in early 2023, your portfolio would’ve seen better growth. Pros of Sector Rotation Better returns compared to static investing Helps avoid underperforming sectors Takes advantage of macro trends Works in both bull and bear markets Cons or Risks Requires monitoring and active management Timing the rotation is difficult Wrong rotation = underperformance May incur tax if frequent buying/selling (for investors) Pro Tips Don't rotate too fast; let the trend confirm. Use SIPs or staggered entry in new sectors. Avoid “hot tips”; follow actual price and volume. Blend sector rotation with strong stock selection (don’t just chase sector). Conclusion The Sector Rotation Strategy is one of the smartest, most practical tools used by both traders and investors. You don’t need to be a pro to use it — just stay alert to the market mood, economic cycles, and where the money is moving. Think of it as dancing with the market: “When the music changes, you change your steps.” Keep rotating. Keep growing.
NSE:BANKNIFTYEducation
by TechnicalExpress
The 3-Method Framework: Simplifying Technical AnalysisMost traders get caught up in complex indicator setups, thinking that more tools equal better results. We rely on moving averages to tell us if prices are trending up or down, and we depend on support and resistance levels to predict market movement. But what if I told you there's a simpler, more powerful way to read the market using pure price action? Today, I want to share my experience and understanding of bias and expectations for the next candle formation. This approach is refreshingly simple because we don't need to understand every single price movement - we just need to focus on what matters most. Method 1: Opening Price Comparison The first method is beautifully straightforward. For a bullish bias, the current opening price should be above the previous opening price. That's it. Sounds almost too simple, right? But simplicity often holds the greatest power in trading. For Gold yesterday, we simply needed to compare the latest opening price on the Daily timeframe with the previous opening price. It's that simple. Method 2: Mid-Level Analysis The second approach involves comparing mid-levels between candles. We compare the mid-level of the previous candle with the mid-level of the candle before that. I know it might sound a bit complicated when explained this way, but once you visualize it on your chart, the concept becomes crystal clear. Still on Gold, we just compare the 50% or mid-level of the previous candle with the candle two periods back from the latest candle on the daily chart. Method 3: Expansion Expectations The third method helps us anticipate expansion in price. Traditional complex methods require analyzing numerous factors, but this simplified approach only needs two candles before the current one. Here's how it works: we use the high and low of the candle two periods back, and the open and close (body) of the previous candle. If the previous candle's body sits within the high-low range of the two-candle-back formation, we can expect price expansion. The beauty of this method is that we don't care whether the price is bullish or bearish - we simply expect expansion to occur. Think of it like a compressed spring: when price gets squeezed within a previous range, it often seeks to break out in either direction. We're not predicting the direction, just the likelihood of significant movement. Still on Gold, I randomly selected all inside candles on the Daily timeframe. Remember, the purpose is only to expect expansion, not direction. If you want to use this for directional bias, make sure you apply the additional analysis required. Remember, there are no guarantees in trading, but this method provides valuable insight into potential market expansion. Advanced Combinations for Enhanced Analysis Combining Methods 1 and 2 creates our most accessible approach since you only need two candles. When both the opening price and mid-point from two candles ago indicate bullish conditions, we can expect the current candle to follow an OLHC bullish pattern. You can see the 3 examples I've provided in the image, and all of these are applicable across all timeframes, both daily and 4-hour. Combining all three methods offers a more sophisticated analysis, particularly useful for anticipating market reversals. This involves marking the current and previous opening prices, comparing mid-levels from the last two candles, and identifying the high/low range from two to three candles back. Now I'm adding Inside Candles from 2-3 periods back (My personal rule is maximum 3 candles before the current candle, or this analysis will lead to analysis paralysis). The Bullish and Bearish Rules Bullish Rule 1: Opening price above the previous opening price Mid-level of the previous candle above the mid-level of the previous candle before that. Inside candle formation (optional) Bearish Rule 1: Opening price below the previous opening price Mid-level of the previous candle below the mid-level of the previous candle before that. Inside candle formation (optional) The Secret Sauce: Timeframe Harmony Here's where the "devil is in the details" comes into play. You might find perfect bullish conditions on your chart, but the market still reverses. The secret lies in using this method on Daily and 4-hour timeframes simultaneously. Simply understand it from the chart. Simply understand it from the chart. If Rule 1 conditions are met on the daily chart, they must also align on the 4-hour chart. When the 4-hour contradicts the daily, follow the 4-hour signal as it might indicate a "sell on strength" or "buy on weakness" scenario. The formula is simple: must align with I've never tested this on 1-hour charts because the Daily and 4-hour combination provides sufficient accuracy for my trading approach. Enhanced Rules for Precision Rule 2 makes the inside candle formation mandatory rather than optional. Sometimes you'll encounter mixed signals where the mid-level suggests one direction while the opening price suggests another. The solution? Drop down to a lower timeframe for additional confirmation. I don't recommend using this method below the 4-hour timeframe, but you can certainly apply it to Monthly or Weekly charts for long-term bias determination. The key is analyzing both Daily AND 4-hour timeframes together, not just one or the other. When timeframes conflict, often just one key level provides the confirmation you need - typically a previous Monthly or Weekly high or low. Final Thoughts Pure price action mastery isn't about having the most sophisticated setup or the most indicators on your chart. It's about understanding the fundamental relationship between opening prices, mid-levels, and candle formations across meaningful timeframes. This approach has served me well because it cuts through market noise and focuses on what price is actually telling us. Start with these three methods, practice identifying the patterns, and gradually build your confidence in reading pure price action. Remember, consistent profitability comes from mastering simple, reliable methods rather than chasing complex strategies. Keep practicing, stay disciplined, and let price action guide your trading decisions. Good Luck! :)
OANDA:XAUUSDEducation
by agatarigan
Not All Pin Bars Are Created EqualA Two-Step Filter to Find the Ones That Actually Matter We’ve all seen them. Long wicks, tight bodies, price rejecting a level. The classic pin bar. Textbook stuff, right? But here’s the problem. Pin bars show up all over the chart. Some lead to clean reversals. Most do absolutely nothing. The trick isn’t spotting them. It’s knowing which ones to trust. This is where a simple two-step filter can help. By asking two key questions, you immediately improve the quality of your trades and cut down on the false positives. Step One: Where Did It Happen? Before you look at shape or size, ask yourself one thing. Did this pin bar form at a meaningful level? Context is everything. A pin bar that forms into thin air, mid-range or in the middle of chop might look good, but it’s rarely reliable. What you’re looking for is reaction from structure. That could mean: • A clean horizontal support or resistance level • A prior swing high or low • A daily VWAP or anchored VWAP from a key event • The edge of a range or value area • A trendline tested multiple times In short, the level gives the pin bar a reason to exist. It becomes a reaction, not a random candle. Mark the level before the candle forms. This stops you from retrofitting significance where there isn’t any. Example: Here we can see how the volume weighted average price (VWAP) can add meaningful context to a pin-bar setup. In this case, USD/CAD retraced against the prevailing downtrend and tested the VWAP anchored to the recent swing highs. At that point, price formed a clear pin-bar reversal, signalling rejection and potential continuation with the broader trend. USD/CAD Daily Candle Chart Past performance is not a reliable indicator of future results Step Two: What’s Happening Under the Hood? Once you’ve got a pin bar at a meaningful level, it’s time to look deeper. One of the best ways to do that is by dropping down to a lower timeframe, like the 5-minute chart, and replaying the session that created the candle. Why? Because daily candles can hide a lot. A clean pin bar might look like a strong rejection, but on the intraday chart, it might just be a low-volume fakeout or one impulsive move during quiet hours. On the other hand, a pin bar backed by real market structure is far more likely to hold. Here’s what to look for on the lower timeframe: • Was there a liquidity grab or stop run into the level? • Did price pause, base or reverse with intent? • Were there multiple attempts to push beyond the level that failed? • Did volume spike during the rejection? When a pin bar reflects a genuine intraday battle, not just a random wick, it often tells you more about the intentions of real participants. Example: In this example, GBP/USD forms a bearish pin-bar at a key area of swing resistance on the daily chart. Dropping down to the 5-minute timeframe helps reveal what actually happened inside that candle. On this lower timeframe we can see that price initially pushed above resistance but failed to hold, triggering a steady wave of intraday selling pressure. This move was followed by a mild pullback during the latter half of the US session and into the New York close, reinforcing the idea of rejection and offering insight into the mechanics behind the pin-bar. GBP/USD Daily Candle Chart Past performance is not a reliable indicator of future results GBP/USD 5min Candle Chart: How the Daily Pin-bar Formed Past performance is not a reliable indicator of future results Bonus Filter: What’s the Trend Context? You could also add a third layer if you want to refine even further. Is the pin bar counter-trend, or is it a pullback within trend? Counter-trend pin bars at key levels can work, but they’re lower probability and often take more time to play out. Pin bars that form as part of a pullback to structure in the direction of the prevailing trend tend to move more cleanly. This is where using something like a 20 EMA or anchored VWAP can help frame the setup. Putting It All Together Next time you see a pin bar, pause. Don’t rush in. Ask yourself: • Did this happen at a level that matters? • Does the intraday story back up the candle? If the answer is yes to both, now you’ve got something worth trading. Not just another wick in the wind. Pin bars can be strong signals, but only when they reflect real intent. This two-step filter helps you cut through the clutter and focus on the ones that do. 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.
Education
by Capital.com
8
Understanding Elliott Wave Theory with BTC/USDIntroduction to Elliott Wave Theory: Elliott Wave Theory is a popular method of technical analysis that seeks to predict the future price movement of financial markets. Developed by Ralph Nelson Elliott in the 1930s, the theory is based on the idea that market movements follow a repetitive pattern, driven by investor psychology. At the core of Elliott’s theory is the idea that markets move in a 5-wave pattern in the direction of the trend, followed by a 3-wave corrective pattern. These waves can be seen on all timeframes and help traders identify potential entry and exit points in the market. Key Concepts of Elliott Wave Theory: 1. Impulse Waves (The Trend) 2. These are the waves that move in the direction of the overall trend. They are labeled 1, 2, 3, 4, 5 and represent the price movement in the main direction of the market. * Wave 1: The initial move up (or down in a bearish market). I like to mark up the first wave how I do my Fibs, from the point where price showed a major impulse. * Wave 2: A correction of Wave 1 (it doesn’t go lower than the starting point of Wave 1). * Wave 3: The longest and most powerful wave in the trend. * Wave 4: A smaller correction in the direction of the trend. * Wave 5: The final push in the direction of the trend, which can be shorter and weaker than Wave 3. 3. Corrective Waves (The Pullbacks) 4. After the five-wave impulse, the market enters a corrective phase, moving against the trend. This corrective phase is generally a 3-wave pattern, labeled A, B, C: * Wave A: The initial correction, typically smaller than Wave 3. * Wave B: A temporary move against the correction (it often confuses traders who think the trend has resumed). * Wave C: The final move against the trend, usually the strongest and most aggressive. How to Implement Elliott Wave on BTC/USD: Let’s break down how you can apply the Elliott Wave Theory to BTC/USD using a simple example. 1. Identify the Trend 2. Start by identifying the current market trend for BTC/USD. Are we in an uptrend or downtrend? This will determine whether you’re looking for a 5-wave impulse up (bullish) or down (bearish). 3. Locate the Waves 4. Look for the five-wave structure in the trend direction. Once you identify a potential impulse move, label the waves accordingly: * Wave 1: A new uptrend starts. * Wave 2: A small pullback (usually less than the size of Wave 1). * Wave 3: A significant surge in price, often the most volatile. * Wave 4: A smaller pullback or consolidation. * Wave 5: The final push higher, which might show signs of exhaustion. 5. Corrective Phase 6. After completing the 5-wave impulse, expect a corrective 3-wave pattern (A, B, C). These corrections typically last longer than expected and can often confuse traders. * Wave A: Price starts to reverse. * Wave B: A retracement that may confuse traders into thinking the trend is resuming. * Wave C: A strong pullback that brings the price even lower. 7. Use Fibonacci Levels as confluence 8. One of the most powerful tools in Elliott Wave analysis is Fibonacci retracement levels. You can use these to predict potential levels where Wave 2 and Wave 4 could end, or where Wave C might complete the correction. Common retracement levels are 38.2%-50% for Wave 4, and 50-61.8% For Waves 2 and B but keep in mind, these wave can retrace up to 100% before the wave analysis becomes invalid. But ideally these points are where you look to make an entry. Wave 2 Example: This one hit the golden spot (0.5-0.618) perfectly and continued to push upward. Wave B and C Example: This example hit closer to the 0.786 level which is also a key level for retracement. Wave 4 Example: This one hit the golden spot (0.382-0.5) for Wave 4 perfectly before continue the bullish momentum. I try to use the RED levels below (1.1 and 1.2) as my invalidation (Stop Loss) levels and the GREEN levels (-0.27 and -0.618) as my Take Profit levels. Depending on your goals you can also use Fib Levels 0.236 and 0 as partial Take Profit levels. 9. Confirm with Indicators 10. To validate your Elliott Wave counts, use other indicators like the RSI (Relative Strength Index), MACD, or Moving Averages. For example, a Wave 3 might occur when the RSI is above 50, indicating strength in the trend. In this example you can see the RSI cross the 50 threshold and the 3rd Wave form. Continuation after the Wave is complete: Tips for Trading with Elliott Wave Theory: * Stay Flexible: Elliott Wave Theory is not set in stone. If the market doesn’t follow the expected pattern, adjust your wave counts accordingly. * Don’t Rely on One Timeframe: A 5-wave structure on one timeframe may be part of a larger wave pattern on a higher timeframe. Always analyze multiple timeframes. * Wave Personality: Waves don’t always look the same as stated earlier. Wave 2 can retrace up to 100% of Wave 1 and Wave 4 should generally not overlap Wave 1 or this may invalidate the Wave structure. * Risk Management: Always use proper risk management techniques. No theory is perfect, so make sure you have a stop-loss in place to manage your risk. Conclusion: Using Elliott Wave Theory on BTC/USD: The Elliott Wave Theory can be a powerful tool for analyzing and forecasting price movements. By identifying the 5-wave impulse and 3-wave corrective patterns, you can gain insights into potential market direction. Just remember to use it alongside other tools and indicators for confirmation, and don’t forget to manage your risk. As you apply it to BTC/USD or any other asset, remember that the market doesn’t always follow the "ideal" patterns, and flexibility is key. Practice on different timeframes, refine your skills, and use the theory as a part of your overall trading strategy. Final Thoughts: If you're just starting, don't get discouraged if you miss a wave or two. Trading is a journey, and with patience and practice, you'll begin to spot these patterns more naturally. Whether you’re analyzing Bitcoin's price action or any other asset, Elliott Wave Theory can give you a deeper understanding of market psychology. Good Luck and Happy Trading!
COINBASE:BTCUSDEducation
by WrightWayInvestments
43
A way to find Historical BottomsWhen it comes to trading stocks, one of the most powerful skills you can develop is the ability to spot historical bottoms , those rare moments when a stock finishes its downtrend and starts a new upward journey. Catching these bottoms means entering trades with low risk and high reward potential , riding the wave of a new trend from the very beginning. The Power of Double Bottoms One of the most reliable chart patterns for identifying market bottoms is the Double Bottom. This pattern acts like a springboard for price, signaling that sellers are losing control and buyers are stepping in, showing a clear floor Here’s how it works: First Bottom : The stock drops to a new low, but then buyers push it up. Second Bottom: After a short rally, the price falls again, often to a similar level as the first bottom , but this time, it doesn’t go lower. Buyers step in once more. Breakout : When the price rises above the high point between the two bottoms, it confirms the pattern and suggests a new uptrend is beginning. This structure creates a clear “floor” in the market, showing where demand outweighs supply. Traders love this setup because it gives a logical place to set stop-losses, keeping risk low. Learning from the Chart Let’s look at the provided chart of Gold Royalty Corp. (GROY) to see this in action. The chart highlights two Double Bottom patterns that formed over several months. 1st Double Bottom: Notice how the price hits a low, bounces, and then returns to the same area before bouncing again. This repeated support signals a strong bottom. 2nd Double Bottom: The pattern repeats, confirming even more buyers are entering at this level. After these patterns form, the price breaks out above the resistance level (the high between the two bottoms). This breakout is often the ideal buy zone, the moment when a new trend is likely starting, and risk is minimized because your stop can be placed just below the recent lows. Why Double Bottoms Work Double Bottoms are powerful because they reflect real market psychology: Capitulation : Sellers exhaust themselves on the first dip. Testing : The second dip tests the market’s conviction, if buyers step in again, it’s a strong sign of a bottom. Confirmation : The breakout above resistance confirms that demand is back in control. How to Trade Double Bottoms Here’s a simple, actionable approach: Identify the Pattern : Look for two distinct lows at roughly the same price level, separated by a moderate rally. Wait for Confirmation : Only enter when the price breaks above the high between the two bottoms. Set Your Stop : Place your stop-loss just below some important local low or some fibo levels that we always share in our newsletter. Target the Move: Use previous resistance levels or Fibo levels. Example from the Chart In the GROY chart, after the second Double Bottom, the price broke out and rallied strongly, hitting both target levels marked on the chart. Traders who entered at the breakout enjoyed a substantial move with limited downside. Take away Spotting Double Bottoms isn’t about predicting the future—it’s about reading the market’s story. By focusing on these patterns, you can find historical bottoms with confidence, enter trades with low risk, and position yourself to ride the next big trend. The best part? You don’t need to catch every bottom, just the clear, confirmed ones. That’s how you build consistency and success in trading. If you’re new to chart patterns, start by looking for Double Bottoms on historical charts. Practice spotting them, and you’ll soon see how they can transform your trading approach.
AMEX:GROYEducation
by TopChartPatterns
2