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Halloween Horror: Avoiding Common Trading MistakesAs Halloween approaches, it’s the perfect time to reflect on the common “frights” that can scare traders away from success. Just like ghosts and ghouls lurking in the shadows, trading mistakes can be sneaky and unexpected. This post will highlight some of the most common trading mistakes, drawing parallels with Halloween themes, and provide strategies for avoiding these pitfalls. 🎃Fear of Missing Out (FOMO) Many traders experience FOMO, which can lead to impulsive decisions, such as chasing after rapidly rising stocks or jumping into trades without proper analysis. This behavior often results in buying at peak prices and facing losses when the stock inevitably corrects. Set Clear Entry and Exit Points: Establish specific criteria for entering and exiting trades to avoid emotional decisions. Stick to Your Plan: Have a trading plan that includes risk management strategies. Review your plan regularly, especially in volatile market conditions. 👻 Overtrading In an attempt to capitalize on every opportunity, some traders overtrade, leading to excessive fees, emotional fatigue, and ultimately poorer performance. Overtrading can resemble a Halloween party gone wild, with too many participants causing chaos. Limit Your Trades: Set a maximum number of trades per week or month. Focus on quality over quantity. Take Breaks: Allow yourself time away from the screen to recharge and refocus. This helps in making more rational decisions. 🕷️Ignoring Risk Management Trading without proper risk management is akin to wandering through a haunted house without a flashlight. You’re likely to encounter unexpected dangers. Failing to set stop-loss orders or to size positions appropriately can lead to catastrophic losses. Implement Stop-Loss Orders: Set stop-loss orders at a predetermined level to limit potential losses. Diversify Your Portfolio: Spread your investments across different asset classes and sectors to mitigate risk. 👺 Emotional Trading Trading decisions driven by emotions such as fear, greed, or panic can lead to disastrous results. Emotional trading is like letting a ghost dictate your path through a dark forest—it's unpredictable and often leads to mistakes. Keep a Trading Journal: Document your trades, including the reasoning behind them and your emotional state at the time. This will help you identify patterns and triggers in your decision-making process. Practice Mindfulness: Incorporate techniques like meditation or deep breathing to remain calm and focused during trading hours. 🦇Neglecting Research and Analysis Many traders skip the crucial step of research and analysis, relying instead on tips or rumors—much like believing in urban legends without questioning their validity. This can lead to uninformed trades and unexpected losses. Conduct Thorough Analysis: Use both technical and fundamental analysis to make informed trading decisions. Stay updated on market news and trends. Leverage Trading Tools: Utilize platforms like TradingView to access charts, indicators, and community insights. [b 🕸️Chasing Losses After experiencing losses, some traders attempt to "revenge trade," trying to quickly recover their losses by taking high-risk trades. This often results in deeper losses and a vicious cycle of frustration. Accept Losses as Part of Trading: Understand that losses are inevitable. Learn from them rather than trying to immediately recover. Take a Step Back: If you find yourself in a negative trading streak, consider taking a break to reassess your strategies and mental state. 👽 Not Adapting to Market Conditions The market is constantly changing, and clinging to outdated strategies can be dangerous. This is similar to wearing the same costume year after year—eventually, it becomes stale and ineffective. Stay Flexible: Be willing to adapt your trading strategies based on current market conditions. Regularly review and refine your approach. Educate Yourself: Continuously seek knowledge through courses, webinars, and market analysis to stay informed about new trends and strategies. As the Halloween season creeps in, it’s time to face the spooky realities of trading! By identifying and confronting common trading frights, you can transform potential pitfalls into stepping stones for success. Remember, every trader encounters challenges, but preparation, discipline, and continuous learning are your best defenses against the ghouls of the market. So, this Halloween, don’t let fear haunt your trading journey. Embrace the tricks of the trade, sharpen your skills, and turn those frights into fruitful opportunities! Here’s to a successful and spooktacular trading experience!🎃👻🕸️
Education
by HexaTrades
HOW And WHY The Markets MoveIn this video I explain HOW and WHY the markets move. At it's core, trading is a zero-sum game, meaning that nothing is created. There must always be a counter-party to any trade, after all it is called "trading". Because of this, liquidity is the lifeblood of the market and it is what is required by all participants, albeit more for the larger entities out there. In order for these larger entities to trade, they must do so in stages of buying and selling, and not all in one single position like we do as retail traders. They buy on the way down, and sell on the way up, throughout many different time horizons. Therefore, they require price to be delivered efficiently in order to sustain this working machine. I hope you find the video somewhat insightful. Regardless of your beliefs, I think it can be agreed that these two principles are what drives the marketplace and it's movements. - R2F
OANDA:WTICOUSDEducation
by Road_2_Funded
7
Open Interest ExplainedOpen interest (OI) is a critical concept in the world of trading, particularly in the futures and options markets. It represents the total number of outstanding contracts that have not been settled or closed. Understanding open interest can provide valuable insights into market sentiment, liquidity, and potential price movements. In this article, we will explore what open interest is, how it affects trading, and what traders should consider when analyzing it. What is Open Interest? Open interest is defined as the total number of outstanding derivative contracts—such as futures and options—that have not yet been settled. Each time a new contract is created (when a buyer and seller enter into a new agreement), the open interest increases. Conversely, when a contract is settled or closed, the open interest decreases. For example, if a trader buys a futures contract, open interest increases by one. If another trader sells the same contract to close their position, open interest decreases by one. Why is Open Interest Important? Open interest provides insights into market activity and can indicate the strength of a price trend. Here are some key reasons why open interest is important for traders: Market Sentiment: Open interest can help traders gauge market sentiment. Rising open interest, especially alongside rising prices, suggests that new money is entering the market and that the bullish trend may continue. Conversely, increasing open interest with falling prices may indicate that bearish sentiment is growing. Liquidity Indicator: Higher open interest generally indicates greater market liquidity. This means that traders can enter and exit positions more easily, which is especially important for large institutional traders who need to manage large orders without significantly impacting the market price. Potential Price Movements: Analyzing open interest trends can help traders predict potential price movements. For instance: - Increasing Open Interest + Rising Prices: This combination suggests that new bullish positions are being established, indicating a potential continuation of the uptrend. -Increasing Open Interest + Falling Prices: This scenario may indicate that new bearish positions are being taken, suggesting a potential continuation of the downtrend. -Decreasing Open Interest: A decline in open interest, particularly in conjunction with rising prices, may suggest that traders are closing their positions, which can signal a weakening trend. How to Analyze Open Interest When analyzing open interest, traders should consider several factors: [ b]Contextual Analysis: Always consider open interest in conjunction with price movements. Relying solely on OI without considering price action can lead to misleading interpretations. Volume Comparison: Compare open interest with trading volume. High volume alongside increasing open interest is generally a positive sign for a trend, while high volume with decreasing open interest may signal trend exhaustion. Market Events: Be aware of upcoming economic reports, earnings announcements, or other events that may impact market sentiment and influence open interest. Different Markets: Open interest can behave differently across various asset classes. For example, in commodity markets, high open interest might reflect hedging activity, while in equity options, it could indicate speculative interest. Open interest is a valuable tool for traders to assess market sentiment, liquidity, and potential price movements. By analyzing it alongside price action and volume, traders can gain deeper insights into market trends and make more informed trading decisions. However, like any trading indicator, it works best when combined with other forms of analysis for a well-rounded strategy.
Education
by HexaTrades
5 Common Mistakes New Traders Must Avoid Trading in the financial markets can be an exciting journey, but it's not without its challenges. Many new traders often make common mistakes that can lead to losses and frustration. Understanding these mistakes is essential for developing a successful trading strategy. In this idea, we will discuss the top five mistakes new traders make and provide practical tips on how to avoid them. By being aware of these pitfalls, you can improve your trading skills and work towards achieving your financial goals. 1. Lack of a Trading Plan Mistake: Many new traders dive into trading without a well-defined plan. They often trade based on emotions, tips from friends, or market hype, which can lead to inconsistent results and unnecessary losses. Solution: Develop a comprehensive trading plan that outlines your trading goals, risk tolerance, entry and exit strategies, and criteria for selecting trades. A good plan should also include guidelines for risk management, such as how much capital you are willing to risk on each trade. Stick to your plan, and avoid making impulsive decisions based on market fluctuations or emotions. Key Elements of a Trading Plan: -Objectives: Define what you aim to achieve (e.g., short-term gains, long-term investment). -Risk Management: Determine how much you are willing to lose on a single trade and set stop-loss orders accordingly. -Trading Strategies: Decide on the type of analysis you will use (technical, fundamental, or a combination). 2. Ignoring Risk Management Mistake: New traders often underestimate the importance of risk management, leading to excessive losses. They may over-leverage their positions or fail to set stop-loss orders, which can result in significant financial damage. Solution: Implement strict risk management rules. A common rule of thumb is to risk no more than 1-2% of your trading capital on a single trade. This approach allows you to withstand several losing trades without depleting your account. Use stop-loss orders to limit your losses and consider using trailing stops to protect profits as trades move in your favor. Tips for Risk Management: -Position Sizing: Calculate the appropriate size of your trades based on your risk tolerance. -Stop-Loss Orders: Always set a stop-loss order to exit a trade if it moves against you. -Diversification: Avoid putting all your capital into a single trade or asset. 3. Overtrading Mistake: In an attempt to make quick profits, new traders often engage in overtrading. This can result from the desire to recover losses or the excitement of seeing trades executed, leading to poor decision-making and increased transaction costs. Solution: Set specific criteria for entering and exiting trades, and resist the urge to trade more frequently than necessary. Focus on quality over quantity. It's better to wait for high-probability setups than to force trades that don’t meet your criteria. Strategies to Avoid Overtrading: - Limit Trading Frequency: Define a maximum number of trades per day or week. - Review Trades: After each trading session, review your trades to assess whether they adhered to your trading plan. - Take Breaks: If you find yourself feeling overwhelmed or impulsive, take a break from trading to reset your mindset. 4. Emotional Trading Mistake: Emotional trading occurs when traders let their feelings dictate their decisions. Fear, greed, and frustration can lead to impulsive trades, often resulting in losses. Solution: Practice emotional discipline. Recognize that emotions can cloud your judgment and lead to poor trading decisions. Use techniques such as journaling to reflect on your trading experiences and identify emotional triggers. Techniques to Manage Emotions: -Set Realistic Expectations: Understand that losses are a part of trading, and not every trade will be profitable. -Develop a Routine: Establish a pre-trading routine to calm your mind and focus on your trading plan. -Mindfulness Practices: Consider techniques such as meditation or deep-breathing exercises to manage stress and maintain focus. 5. Neglecting Market Research and Education Mistake: New traders sometimes jump into trading without sufficient knowledge about the markets, trading strategies, or economic indicators. This lack of understanding can lead to poor decision-making. Solution: Commit to continuous learning. Take advantage of the wealth of educational resources available online, such as webinars, articles, and trading courses. Stay updated with market news and analysis to understand the factors influencing price movements. Steps for Education: Read Books: Invest time in reading books on trading, market psychology, and investment strategies to deepen your understanding and broaden your knowledge base. Practice with a Demo Account: Before trading with real money, use a demo account to practice your strategies in a risk-free environment. Join Trading Communities: Engage with other traders on platforms like TradingView, where you can share insights and learn from each other. Follow Experts: Subscribe to trading blogs, YouTube channels, or podcasts from experienced traders. Trading is a journey that requires discipline, patience, and a commitment to continuous learning. By avoiding these common mistakes and implementing effective strategies, new traders can enhance their trading skills and improve their chances of success in the financial markets. Remember, every trader faces challenges, but those who learn from their experiences and adapt will ultimately thrive.
NASDAQ:AAPLEducation
by HexaTrades
This One Emotion Could Be Destroying Your Trading ProfitsIn the world of trading, emotions play a pivotal role in shaping decision-making, and one of the most powerful and potentially dangerous emotions traders face is GREED . Greed, when left unchecked, can lead to impulsive decisions, high-risk behaviors, and significant losses. On the flip side, mastering greed and learning to manage it can make you a more disciplined and successful trader. In this article, we will explore what greed in trading looks like, how it affects performance and practical strategies for managing it. Greed in Trading? Greed in trading is the overwhelming desire for more – more profits, more wins, more success – often without regard to risk, logic, or a well-structured plan. It can manifest in different ways, such as overtrading, chasing unrealistic returns, holding on to winning positions for too long, or abandoning a proven strategy in the hope of making quick gains. How Greed Manifests in Trading: 📈Overtrading: A greedy trader may take on far more trades than necessary, often without proper analysis or risk management, simply to increase exposure to potential profits. Overtrading increases transaction costs, dilutes focus, and leads to emotional burnout. 🏃‍♂️Chasing Profits: Greed can cause traders to chase after price movements, entering trades impulsively based on fear of missing out (FOMO). This often leads to poor entry points, increased risk, and diminished returns. ⚠️Ignoring Risk Management: A greedy trader might ignore risk parameters like stop losses or over-leverage positions, believing they can maximize profits by taking on more risk. This is a dangerous path, as a single market movement in the wrong direction can wipe out large portions of capital. ⏳Failure to Exit: Holding on to winning trades for too long is another sign of greed. Instead of securing profits according to a trading plan, traders might hold positions with the hope that prices will continue to rise indefinitely, only to see their gains evaporate when the market reverses. How Greed Affects Trading Performance Greed can distort your decision-making process. It leads to overconfidence and clouds judgment, causing you to believe that the market will always behave in your favor. This overconfidence pushes traders to abandon their strategies or take unnecessary risks, resulting in: Emotional Trading: The trader begins to react emotionally to every small market movement, making decisions based on feelings rather than rational analysis. Impaired Risk Management: Greed often blinds traders to the importance of managing risk, which is the backbone of long-term trading success. A single high-risk move inspired by greed can erase months or years of gains. Missed Opportunities: By focusing on unrealistic gains or trying to squeeze every bit of profit from a trade, a trader may miss more reliable and smaller, but consistent, opportunities. The Psychology Behind Greed Greed is rooted in our psychology and is amplified by the very nature of the financial markets. Trading offers the possibility of instant gains, which triggers a dopamine response in the brain, making us feel rewarded. The lure of quick profits encourages traders to take greater risks or deviate from their trading plans in pursuit of bigger wins. However, the emotional high from successful trades is often short-lived. Traders can become addicted to this feeling, pushing them to take on more trades or stay in positions for longer than they should. Eventually, this leads to bad habits and unsustainable trading practices How to Manage Greed in Trading While greed is a natural human emotion, it can be controlled with the right mindset and strategies. Here are some practical ways to manage greed in trading: 1. Set Realistic Goals The first step in managing greed is setting clear, realistic trading goals. Rather than aiming for massive, one-time profits, focus on steady, consistent returns. Define what "success" looks like for you on a daily, weekly, and monthly basis. Having measurable goals helps anchor your trading behavior and keeps you grounded. Example: Instead of aiming for a 100% return in a short period, set a more achievable target like 5%-10% monthly. This may not sound as exciting, but it's more sustainable in the long term. 2. Stick to a Trading Plan A well-defined trading plan is your safeguard against impulsive decisions driven by greed. Your plan should outline entry and exit points, stop-loss levels, and risk-reward ratios. By adhering strictly to your plan, you can resist the temptation to hold on to trades longer than necessary or jump into trades impulsively. Key elements of a good trading plan include: -Entry and exit criteria are based on analysis, not emotion -Risk management rules (like how much to risk per trade, stop-loss settings) -Profit-taking strategy, deciding when to lock in gains 3. Use Risk Management Techniques Effective risk management is the antidote to greed. By setting strict risk parameters, you limit the impact of poor decisions driven by emotions. Always use stop-loss orders to protect yourself from significant losses, and never risk more than a small percentage of your trading capital on any single trade (example 1-2%). Avoid over-leveraging, as leverage amplifies both profits and losses. While it may be tempting to use high leverage to chase bigger gains, it significantly increases the risk of catastrophic losses. 4. Take Profits Regularly One way to counteract greed is to develop a habit of taking profits regularly. When you set profit targets ahead of time, you can ensure that you lock in gains before they evaporate. Don’t wait for an unrealistic price surge. Exit trades once your profit target is reached, or scale out by selling a portion of your position as the trade progresses. 5. Practice Emotional Awareness Being aware of your emotional state is crucial in trading. Take the time to self-reflect and recognize when greed is influencing your decisions. Keep a trading journal to track not just your trades, but also your emotions during the process. This will help you identify patterns and emotional triggers that lead to poor decisions. Example: After a series of winning trades, you may feel overconfident and tempted to take bigger risks. By noting this in your journal, you can remind yourself to remain disciplined and not deviate from your plan. 6. Focus on Long-Term Success Trading is a marathon, not a sprint. Focus on the long-term process rather than short-term profits. Greed often leads traders to forget that consistent, small gains compound over time. By shifting your mindset to long-term wealth-building, you’re less likely to take excessive risks or engage in reckless behavior. Greed is a natural emotion in trading, but it can be highly destructive if not managed properly. The key to success lies in discipline, risk management, and a well-structured trading plan that aligns with your goals. By understanding the psychological drivers of greed and taking proactive steps to control it, traders can make more rational decisions, protect their capital, and increase their chances of long-term success.
CRYPTO:BTCUSDEducation
by HexaTrades
Patience Pays Off: Key Strategies for Long-Term InvestorsInvesting is a fundamental pillar in building wealth and securing financial stability. Among the myriad strategies available, long-term investing stands out as one of the most reliable and rewarding. Unlike short-term trading, which seeks to capitalize on price fluctuations over days or weeks, long-term investing focuses on holding assets for several years, or even decades, to allow for substantial growth. This approach is deeply rooted in the principle of patience, which enables investors to navigate market volatility, leverage compounding returns, and achieve their financial goals. Patience is more than simply waiting; it requires discipline, confidence, and the ability to withstand short-term market turbulence. For long-term investors, patience plays a key role in benefiting from compounding returns, reducing transaction costs, and minimizing tax liabilities. The patience-driven investor is less prone to impulsive decisions and is better positioned to reach financial success over time. Understanding Long-Term Investing Long-term investing involves purchasing and holding assets like stocks, bonds, mutual funds, or real estate for extended periods—typically five years or more. The main objective is to benefit from the growth of the investment over time, whether through capital appreciation, dividends, or interest. Unlike short-term strategies, which aim for quick profits, long-term investing emphasizes steady and sustainable growth. Key to this approach is the power of compounding. Compounding occurs when earnings from investments are reinvested, generating additional returns. Over time, this snowball effect can lead to exponential growth. Long-term investing also benefits from lower transaction costs, as frequent buying and selling of assets is avoided. Furthermore, long-term capital gains are taxed at lower rates than short-term gains, offering additional financial advantages. While long-term investing still carries risks, particularly during market downturns, it provides the potential for recovery and continued growth. In contrast, short-term investors may face higher volatility and risk due to frequent trades and quick shifts in market sentiment. S&P500 from 1980 monthly chart Advantages of Long-Term Investing The long-term investing approach comes with several compelling advantages: Compounding Returns: The most powerful advantage of long-term investing is the compounding effect, where reinvested earnings generate additional returns. The longer the investment period, the more significant the compounding becomes. Even modest returns can lead to considerable wealth over time. Lower Costs: With fewer trades, long-term investors incur significantly lower transaction fees and commissions. This not only preserves capital but also enhances overall returns. Tax Efficiency: Long-term capital gains are generally taxed at a lower rate than short-term gains, leading to more favorable after-tax returns. The buy-and-hold strategy reduces the frequency of taxable events. Reduced Stress: Long-term investing minimizes the need for constant market monitoring, providing peace of mind. Investors don’t need to react to daily market swings, allowing them to remain focused on their long-term financial goals. Alignment with Financial Goals: Long-term investing is well-suited for achieving major financial milestones, such as funding retirement, education, or home purchases. It provides a structured and systematic approach to accumulating wealth over time. GC1! GOLD FUTURES From 1980 Monthly Chart Why Patience is Essential in Long-Term Investing Patience is the cornerstone of long-term investing, as it helps investors remain focused on their goals despite market fluctuations and emotional pressures. Here are key reasons why patience is critical: 1. Navigating Market Volatility Financial markets are inherently volatile, with asset prices fluctuating due to economic data, geopolitical events, and shifts in investor sentiment. While short-term investors may react to these movements, long-term investors recognize that volatility is part of the market cycle. Patience allows them to ride out these fluctuations, avoiding impulsive decisions and giving their investments time to recover and grow. By not panicking during downturns, long-term investors can stay committed to their strategy and avoid selling assets at a loss. 2. Compounding Returns Patience is vital in maximizing the benefits of compounding. Compounding requires time to work its magic, as reinvested earnings generate further returns. The longer an investor remains in the market, the greater the potential for compounding to significantly boost their wealth. Even modest annual returns can accumulate into substantial wealth over decades. 3. Behavioral Finance and Emotional Control Investing often involves emotional decision-making driven by fear, greed, and market noise. Behavioral finance studies show that emotions like panic during market downturns or overconfidence during rallies can lead to poor investment decisions. Patience helps investors manage these emotions by keeping their focus on long-term goals rather than short-term market movements. Investors who remain patient and disciplined are more likely to make rational decisions that align with their overall strategy. NDX Nasdaq 100 Index Monthly Chart Strategies to Cultivate Patience in Investing Maintaining patience as a long-term investor requires a combination of strategies that foster discipline and reduce emotional reactivity: 1. Set Realistic Expectations Establishing clear, realistic financial goals helps investors stay grounded. Understanding that markets fluctuate and that significant returns take time can reduce impatience. Setting specific goals, such as saving for retirement over a 20- or 30-year period, provides a long-term perspective and a framework for measuring progress. 2. Regular Monitoring Without Overreacting While it's important to monitor your portfolio, it’s equally important to avoid overreacting to short-term market moves. Periodic reviews, such as quarterly or annual check-ins, allow investors to assess performance without being influenced by daily volatility. By maintaining a big-picture view, investors can avoid impulsive decisions and stay on track with their goals. 3. Diversification Diversification spreads risk across various asset classes, sectors, and regions, helping to reduce the impact of poor performance in any single investment. A well-diversified portfolio provides a smoother experience, allowing investors to remain patient even during periods of underperformance in certain areas. 4. Continuous Learning and Education Staying informed about market trends and investment strategies helps investors feel more confident in their decisions. The more knowledge an investor has about market behavior, historical trends, and the benefits of long-term investing, the more patient they can remain during challenging times. Education empowers investors to understand that short-term volatility is part of the process. Case Studies and Historical Examples Several well-known examples illustrate the power of patience in long-term investing: Warren Buffett: One of the most famous proponents of long-term investing, Warren Buffett has built his wealth through patience and disciplined investing. His purchase of Coca-Cola shares in 1988 is a prime example. Despite periods of market volatility, Buffett held his shares, allowing the company's growth and compounding returns to generate significant wealth. KO Coca-Cola Monthly Chart Index Funds: Index funds, which track major market indices like the S&P 500, demonstrate the benefits of long-term investing. Over decades, these funds have delivered solid returns, often outperforming actively managed funds. Investors who stay invested in index funds, even during market downturns, benefit from overall market growth. Common Pitfalls and How to Avoid Them While patience is key, there are common mistakes that can derail long-term investing: Panic Selling: Investors who panic during market downturns often sell at a loss, only to see the market recover later. Staying patient and focused on long-term goals helps avoid this costly mistake. Trying to Time the Market: Attempting to predict market highs and lows is a risky strategy that often leads to missed opportunities. Staying invested allows investors to benefit from overall market growth without the risk of mistimed trades. Overtrading: Frequent buying and selling erode returns through higher transaction costs and taxes. A buy-and-hold approach helps preserve capital and reduces unnecessary trading. Conclusion Patience is not just a virtue in long-term investing—it is a necessity. By maintaining discipline, staying focused on long-term goals, and avoiding emotional reactions to market volatility, investors can harness the full potential of compounding returns and achieve financial success. The strategies of setting realistic expectations, diversifying, and staying informed provide the foundation for a patient, long-term approach to wealth building. Through patience, long-term investors can navigate the ups and downs of the market and emerge with a stronger financial future.
SP:SPXEducation
by FOREXN1
4
A Detailed Guide for New Traders!Technical Analysis: A Detailed Guide for New Traders Technical analysis (TA) is a trading method used to evaluate and predict the future price movements of assets like stocks, cryptocurrencies, commodities, or forex, by analyzing past market data, primarily price and volume. It differs from fundamental analysis, which looks at financial metrics like earnings, revenue, and overall economic conditions. For beginners, here’s a breakdown of technical analysis and its essential tools and concepts: 1. Price Charts: The Foundation of TA Price charts are visual representations of an asset’s price over a specific period. There are different types of charts, but the most common are: Line Charts: Show the closing prices over time. Bar Charts: Display the open, high, low, and close prices (OHLC) for each period. Candlestick Charts: Similar to bar charts but more visually intuitive, displaying the same OHLC data with colored “candles” for up or down movements. Candlestick charts are the most popular among traders because they provide more information and are easier to interpret visually. 2. Key Concepts in Technical Analysis a. Trends A trend is the general direction in which the price of an asset is moving. Understanding trends is crucial in technical analysis because traders aim to follow the market’s momentum. There are three types of trends: Uptrend: Prices are generally increasing, making higher highs and higher lows. Downtrend: Prices are decreasing, making lower highs and lower lows. Sideways Trend (Range): Prices move within a specific range without a clear upward or downward direction. b. Support and Resistance Support: A price level where an asset tends to stop falling due to increased buying demand. Resistance: A price level where an asset tends to stop rising due to increased selling pressure. These levels are essential for identifying potential entry and exit points for trades. c. Moving Averages Moving averages (MAs) are a simple way to smooth out price data over a specified time period to identify trends more easily. There are two main types: Simple Moving Average (SMA): The average price over a set number of periods (e.g., 50-day or 200-day SMA). Exponential Moving Average (EMA): Gives more weight to recent prices, making it more responsive to new information. Traders use MAs to determine the overall trend, and crossovers (e.g., when a short-term MA crosses a long-term MA) are often seen as buy or sell signals. 3. Indicators and Oscillators Indicators and oscillators are tools derived from price and volume data to help identify potential trends, reversals, and overbought or oversold conditions. a. Relative Strength Index (RSI) The RSI measures the magnitude of recent price changes to evaluate whether an asset is overbought or oversold. It ranges from 0 to 100: Above 70: Overbought (price might be too high, possible reversal). Below 30: Oversold (price might be too low, possible reversal). b. Moving Average Convergence Divergence (MACD) The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of an asset’s price. It helps traders identify changes in the strength, direction, and momentum of a trend. MACD Line: The difference between the 12-day and 26-day EMA. Signal Line: A 9-day EMA of the MACD Line. Histogram: Shows the difference between the MACD Line and the Signal Line. A crossover between the MACD Line and the Signal Line can signal buying or selling opportunities. c. Bollinger Bands Bollinger Bands consist of a moving average (middle band) and two outer bands that are two standard deviations away from the middle. The bands expand and contract based on market volatility. When the price moves toward the upper band, the asset might be overbought, and when it moves toward the lower band, it might be oversold. 4. Chart Patterns Chart patterns are formations created by the price movement of an asset, and traders use them to predict future price movements. Some common patterns include: Head and Shoulders: A reversal pattern that signals a change from bullish to bearish or vice versa. Triangles (Ascending, Descending, Symmetrical): Continuation patterns that suggest the price will break out in the direction of the current trend. Double Top and Double Bottom: Reversal patterns indicating that the price may reverse its current trend after testing a support or resistance level twice. 5. Volume Analysis Volume refers to the number of shares, contracts, or lots traded during a particular period. It can confirm trends or warn of potential reversals: Rising volume during an uptrend confirms the strength of the trend. Decreasing volume in a rising trend can indicate a weakening trend and potential reversal. Volume spikes often occur at trend reversals. 6. Risk Management No trading strategy is foolproof, and technical analysis is not a crystal ball. To succeed, you must manage your risk: Stop-Loss Orders: Automatically sell a position if the price moves against you by a certain amount, limiting your losses. Risk-Reward Ratio: Determine the amount you're willing to risk for a potential reward. A typical ratio is 1:2, meaning for every $1 risked, you aim to make $2 in profit. Position Sizing: Only risk a small percentage of your total capital (e.g., 1-2%) on a single trade to prevent significant losses. 7. Combining TA with Fundamental Analysis While technical analysis is valuable, many traders combine it with fundamental analysis to get a complete picture. For instance, in the stock market, technical analysis might show that a stock is oversold, but if the company’s fundamentals (earnings, revenue) are strong, it could be a buying opportunity. 8. Conclusion Technical analysis is a powerful tool for traders to predict price movements and make informed trading decisions. However, it requires practice and patience. Start with the basics, use demo accounts to test your skills, and never forget to manage your risk. For beginners, mastering the key concepts like trends, support and resistance, moving averages, and common indicators like RSI and MACD will set you on the path to becoming a successful trader. Like and follow if you found this helpful! #Crypto #Bitcoin #bullrun
Education
by CRYPTOMOJO_TA
2
Why Large Language Models Struggle with Financial Analysis.Large language models revolutionized areas where text generation, analysis, and interpretation were applied. They perform fabulously with volumes of textual data by drawing logical and interesting inferences from such data. But it is precisely when these models are tasked with the analysis of numerical, or any other, more-complex mathematical relationships that are inevitable in the world of financial analysis that obvious limitations start to appear. Let's break it down in simpler terms. Problem in Math and Numerical Data Now, imagine a very complicated mathematical formula, with hundreds of variables involved. All ChatGPT would actually do, if you asked it to solve this, is not really a calculation in the truest sense; it would be an educated guess based on the patterns it learned from training. That could be used to predict, for example, after reading through several thousand symbols, that the most probable digit after the equals sign is 4, based on statistical probability, but not because there's a good deal of serious mathematical reason for it. This, in short, is a consequence of the fact indicated above, namely that LLMs are created to predict patterns in a language rather than solve equations or carry out logical reasoning through problems. To put it better, consider the difference between an English major and a math major: the English major can read and understand text very well, but if you hand him a complicated derivative problem, he's likely to make an educated guess and check it with a numerical solver, rather than actually solve it step by step. That is precisely how ChatGPT and similar models tackle a math problem. They just haven't had the underlying training in how to reason through numbers in the way a mathematics major would do. Financial Analysis and Applying It Okay, so why does this matter for financial analysis? Suppose you were engaging in some financial analytics on the performance of a stock based on two major data sets: 1) a corpus of tweets about the company and 2) movements of the stock. ChatGPT would be great at doing some sentiment analysis on tweets. This is able to scan through thousands of tweets and provide a sentiment score, telling if the public opinion about the company is positive, negative, or neutral. Since text understanding is one of the major functionalities of LLMs, it is possible to effectively conduct the latter task. It gets a bit more challenging when you want it to take a decision based on numerical data. For example, you might ask, "Given the above sentiment scores across tweets and additional data on stock prices, should I buy or sell the stock at this point in time?" It's for this that ChatGPT lets you down. Interpreting raw numbers in the form of something like price data or sentiment score correlations just isn't what LLMs were originally built for. In this case, ChatGPT will not be able to judge the estimation of relationship between the sentiment scores and prices. If it guesses, the answer could just be entirely random. Such unreliable prediction would be not only of no help but actually dangerous, given that in financial markets, real monetary decisions might be based on the data decisions. Why Causation and Correlation are Problematic for LLMs More than a math problem, a lot of financial analysis is really trying to figure out which way the correlation runs—between one set of data and another. Say, for example, market sentiment vs. stock prices. But then again, if A and B move together, that does not automatically mean that A causes B to do so because correlation is not causation. Determination of causality requires orders of logical reasoning that LLMs are absolutely incapable of. One recent paper asked whether LLMs can separate causation from correlation. The researchers developed a data set of 400,000 samples and injected known causal relationships to it. They also tested 17 other pre-trained language models, including ChatGPT, on whether it can be told to determine what is cause and what is effect. The results were shocking: the LLMs performed close to random in their ability to infer causation, meaning they often couldn't distinguish mere correlation from true cause-and-effect relationships. Translated back into our example with the stock market, one might see much more clearly why that would be a problem. If sentiment towards a stock is bullish and the price of a stock does go up, LLM simply wouldn't understand what the two things have to do with each other—let alone if it knew a stock was going to continue to go up. The model may as well say "sell the stock" as give a better answer than flipping a coin would provide. Will Fine-Tuning Be the Answer Fine-tuning might be a one-time way out. It will let the model be better at handling such datasets through retraining on the given data. The fine-tuned model for sentiment analysis of textual stock prices should, in fact, be made to pick up the trend between those latter two features. However, there's a catch. While this is also supported by the same research, this capability is refined to support only similar operating data on which the models train. The immediate effect of the model on completely new data, which involves sentiment sources or new market conditions, will always put its performance down. In other words, even fine-tuned models are not generalizable; thus, they can work with data which they have already seen, but they cannot adapt to new or evolving datasets. Plug-ins and External Tools: One Potential Answer Integration of such systems with domain-specific tooling is one way to overcome this weakness. This is quite akin to the way that ChatGPT now integrates Wolfram Alpha for maths problems. Since ChatGPT is incapable of solving a math problem, it sends the problem further to Wolfram Alpha—a system set up and put in place exclusively for complex calculations—and then relays the answer back to them. The exact same approach could be replicated in the case of financial analysis: Once the LLM realizes it's working with numerical data or that it has had to infer causality, then work on the general problem can be outsourced to those prepared models or algorithms that have been developed for those particular tasks. Once these analyses are done, the LLM will be able to synthesize and lastly provide an enhanced recommendation or insight. Such a hybrid approach of combining LLMs with specialized analytical tools holds the key to better performance in financial decision-making contexts. What does that mean for a financial analyst and a trader? Thus, if you plan to use ChatGPT or other LLMs in your financial flow of analysis, such limitations shall not be left unattended. Powerful the models may be for sentiment analysis, news analysis, or any type of textual data analysis, numerical analysis should not be relayed on by such models, nor correlational or causality inference-at least not without additional tools or techniques. If you want to do quantitative analysis using LLMs or trading strategies, be prepared to carry out a lot of fine-tuning and many integrations of third-party tools that will surely be able to process numerical data and more sophisticated logical reasoning. That said, one of the most exciting challenges for the future is perhaps that as research continues to sharpen their capability with numbers, causality, and correlation, the ability to use LLMs robustly within financial analysis may improve.
CRYPTO:BTCUSDEducation
by C_Cosmin_C
Hidden Costs of Trading You Must Know In this educational article, we will discuss the hidden costs of trading. 1 - Brokers' Commissions Trading commission is the brokers' fee for opening a trading position. Usually, it is calculated based on the size of the trade. Though most of the traders believe that trading commissions are too low to even count them, the fact is that trading on consistent basis and opening a couple of trading positions weekly, the composite value of commissions may cut a substantial part of our profits. 2 - Education Of course, most of the trading basics can be found on the Internet absolutely for free. However, the more experienced you become, the harder it is to find the materials . So you typically should pay for the advanced training. Moreover, there is no guarantee that the course/coaching that you purchase will improve your trading, quite often traders go through multiple courses/coaching programs before they become consistently profitable. 3 - Spreads Spread is the difference between the sellers' and buyers' prices. That difference must be compensated by a trader if one wished to open a trading position. In highly liquid markets, the spreads are usually low and most of the traders ignore them. However, being similar to commissions, spreads may cut the substantial part of the overall profits. 4 - Time When you begin your trading journey, it is not possible to predict how much it will take to become a consistently profitable trader. Moreover, there is no guarantee that you will become one. One fact is true, you should spend a couple of years before you find a way to trade profitably, and as we know, the time is money. More time you sacrifice on trading, less time you have on something else. 5 - Swaps Swap is the fee you pay for transferring a position overnight . Swap is based on a difference between the interests rates of the currencies that are in a pair that you trade. Occasionally, swaps can even be positive, and you can earn on holding such positions. However, most of the time the swaps are negative and the longer you hold your trades, the more costly your trading becomes. The brokers' commissions, spreads and swaps compose a substantial cost of our trading positions. Adding into the equation the expensive learning materials and time spent on practicing, trading becomes a very expensive game to play. However, knowing in advance these hidden costs, the one can better prepare himself for a trading journey.
OANDA:XAUUSDEducation
by VasilyTrader
5
How to Identify Candlestick Strength | Trading Basics Hey traders, In this educational article, we will discuss Please, note that the concepts that will be covered in this article can be applied on any time frame, however, higher is the time frame, more trustworthy are the candles. Also, remember, that each individual candle is assessed in relation to other candles on the chart. There are three types of candles depending on its direction: 🟢 Bullish candle Such a candle has a closing price higher than the opening price. 🔴 Bearish candle Such a candle has a closing price lower than the opening price. 🟡 Neutral candle Such a candle has equal or close to equal opening and closing price. There are three categories of the strength of the candle. Please, note, the measurement of the strength of the candle is applicable only to bullish/bearish candles. Neutral candle has no strength by definition. It signifies the absolute equilibrium between buyers and sellers. 1️⃣ Strong candle Strong bullish candle signifies strong buying volumes and dominance of buyers without sellers resistance. Above, you can see the example of a strong bullish candle on NZDCHF on a 4H. Strong bearish candle means significant selling volumes and high bearish pressure without buyers resistance. On the chart above, you can see a song bearish candle on EURUSD. Usually, a strong bullish/bearish candle has a relatively big body and tiny wicks. 2️⃣ Medium candle Medium bullish candle signifies a dominance of buyers with a rising resistance of sellers. You can see the sequence of medium bullish candles on EURJPY pair on a daily time frame. Medium bearish candle means a prevailing strength of sellers with a growing pressure of bulls. Above is the example of a sequence of medium bearish candles on AUDUSD pair. Usually, a medium bullish/bearish candle has its range (based on a wick) 2 times bigger than the body of the candle. 3️⃣ Weak candle Weak bullish candle signifies the exhaustion of buyers and a substantial resistance of sellers. Weak bearish candle signifies the exhaustion of sellers and a considerable bullish pressure. Usually, such a candle has a relatively small body and a big wick. Above is the sequence of weak bullish and bearish candles on NZDCHF pair on an hourly time frame. Knowing how to read the strength of the candlestick, one can quite accurately spot the initiate of new waves, market reversals and consolidations. Watch how the price acts, follow the candlesticks and try to spot the change of momentum by yourself.
OANDA:XAUUSDEducation
by VasilyTrader
9
Profitable Triangle Trading Strategy Explained Descending triangle formation is a classic reversal pattern . It signifies the weakness of buyers in a bullish trend and bearish accumulation . In this article, I will teach you how to trade descending triangle pattern. I will explain how to identify the pattern properly and share my trading strategy. ⭐️ The pattern has a very peculiar price action structure : 1. Trading in a bullish trend, the price sets a higher high and retraces setting a higher low . 2. Then the market starts growing again but does not manage to set a new high, setting a lower high instead. 3. Then the price drops again perfectly respecting the level of the last higher low, setting an equal low . 4. After that, one more bullish movement and one more consequent lower high , bearish move, and equal low . Based on the last three highs , a trend line can be drawn. Based on the equal lows , a horizontal neckline is spotted. ❗What is peculiar about such price action is the fact that a set of lower highs signifies a weakening bullish momentum : fewer and fewer buyers are willing to buy from horizontal support based on equal lows. 🔔 Such price action is called a bearish accumulation . Once the pattern is formed it is still not a trend reversal signal though. Remember that the price may set many lower highs and equal lows within the pattern. The trigger that is applied to confirm a trend reversal is a bearish breakout of the neckline of the pattern. 📉Then a short position can be opened. For conservative trading, a retest entry is suggested. Safest stop is lying at least above the level of the last lower high. However, in case the levels of the lower highs are almost equal it is highly recommendable to set a stop loss above them all. 🎯For targets look for the closest strong structure support. Below, you can see the example of a descending triangle trade that I took on NZDCAD pair. After I spotted the formation of the pattern, I was patiently waiting for a breakout of its neckline. After a breakout, I set a sell limit order on a retest. Stop loss above the last lower high. TP - the closest key support. 90 pips of pure profit made. Learn to identify and trade descending triangle. It is one of the most accurate price action patterns every trader should know.
OANDA:XAUUSDEducation
by VasilyTrader
1
Mastering Elliott Waves: Key Rules You Can't IgnoreEducational Idea : Understanding Key Principles of Elliott Wave Theory Introduction Elliott Wave Theory is a powerful tool used by traders to analyze market cycles and forecast future price movements. Understanding its core principles can help you make more informed trading decisions. In this article, we will delve into three fundamental principles of Elliott Wave Theory that cannot be violated. Remember, this video is purely for educational purposes and not intended as trading advice or tips. 1. Wave 2 Can Never Retrace More Than 100% of Wave 1 The first principle of Elliott Wave Theory is that Wave 2 can never retrace more than 100% of Wave 1. In other words, Wave 2 cannot go below the starting point of Wave 1. If it does, it invalidates the wave count and suggests that the initial impulse wave (Wave 1) was incorrectly identified. This rule ensures that Wave 2 is a correction wave within the larger trend and not a reversal of the trend itself. Example Illustration: - If Wave 1 starts at 100 and peaks at 150, Wave 2 can retrace to any level above 100, but not below it. 2. Wave 3 Can Never Be the Shortest Among All Three Impulse Waves (1-3-5) The second principle states that Wave 3 can never be the shortest among the three impulse waves (Waves 1, 3, and 5). Typically, Wave 3 is the longest and most powerful wave, characterized by strong momentum and volume. If you find that Wave 3 is shorter than either Wave 1 or Wave 5, the wave count is incorrect, and you need to re-evaluate your analysis. Example Illustration: - If Wave 1 is 50 points and Wave 3 is only 30 points, while Wave 5 is 40 points, this violates the rule as Wave 3 is the shortest. 3. Wave 4 Cannot Enter the Territory of Wave 1 (Except in Diagonals & Triangles) The third principle asserts that Wave 4 cannot enter the price territory of Wave 1. This means that the lowest point of Wave 4 should not overlap the highest point of Wave 1. An exception to this rule occurs in diagonal and triangle patterns, where some overlap is permissible. This rule helps maintain the integrity of the impulse wave structure. Example Illustration: - If Wave 1 peaks at $150 and Wave 4 retraces to $145, this overlaps and invalidates the wave count unless the pattern is a diagonal or triangle. Conclusion By following these principles, you can ensure that your Elliott Wave analysis remains robust and accurate, helping you navigate the complexities of the financial markets with greater confidence. Understanding and applying these key principles of Elliott Wave Theory can significantly enhance your market analysis and trading strategies. Keep these rules in mind as you study and apply Elliott Wave Theory in your trading journey. Remember, this video is purely for educational purposes and not any kind of trading advisory or tips. This content is for educational purposes only and should not be considered as financial advice. Always do your own research before making any trading decisions. I am not Sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses. Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Feel free to share your thoughts or questions in the comments below. Happy trading! Hope this post is helpful to community Thanks RK💕 Disclaimer and Risk Warning. The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
NSE:IRFCEducation
by RK_Chaarts
13
why you should avoid trading after a trending marketHello traders, I saw This learning post today in the London session(24-7-24). you can go for 5 minutes to understand this concept better, you can see a clear pattern on the chart, trending -> sideways/choppy -> trending -> sideways/choppy. in the trending market, you see fast movement; in the choppy market, you see lots of SL hunting and wicks. try to avoid such a market so you can make money in trending. Note : not a finance advice
FX:XAUUSDEducation
by BlockchainAndPips
Learn How to Apply Top-Down Multiple Time Frame Analysis In this article, we will discuss how to apply Multiple Time Frame Analysis in trading . I will teach you how to apply different time frames and will share with you some useful tips and example of a real trade that I take with Top-Down Analysis strategy. Firstly, let's briefly define the classification of time frames that we will discuss: There are 3 main categories of time frames: 1️⃣ Higher time frames 2️⃣ Trading time frames 3️⃣ Lower time frames Higher Time Frames Analysis 1️⃣ Higher time frames are used for identification of the market trend and global picture. Weekly and daily time frames belong to this category. The analysis of these time frames is the most important . On these time frames, we make predictions and forecast the future direction of the market with trend analysis and we identify the levels , the areas from where we will trade our predictions with structure analysis . Above is the example of a daily time frame analysis on NZDCAD. We see that the market is trading in a strong bullish trend. I underlined important support and resistance levels. The supports will provide the safest zones to buy the market from anticipating a bullish trend continuation. Trading Time Frames 2️⃣ Trading time frames are the time frames where the positions are opened . The analysis of these time frames initiates only after the market reaches the underlined trading levels, the areas on higher time frames. My trading time frames are 4h/1h. There I am looking for a confirmation of the strength of the structures that I spotted on higher time frames. There are multiple ways to confirm that. My confirmations are the reversal price action patterns. Once the confirmation is spotted, the position is opened. Analyzing the reaction of the price to Support 1 on 1H time frame on NZDCAD pair, I spotted a strong bullish confirmation - a triple bottom formation. A long position is opened on a retest of a broken neckline. Lower Time Frames 3️⃣ Lower time frames are 30/15 minutes charts. Even though these time frames are NOT applied for trading, occasionally they provide some extra clues . Also, these time frames can be applied by riskier traders for opening trading positions before the confirmation is spotted on trading time frames. Before the price broke a neckline of a triple bottom formation on an hourly time frame on NZDCAD, it broke a resistance line of a symmetrical triangle formation on 15 minutes time frame. It was an earlier and riskier confirmation to buy. Learn to apply these 3 categories of time frames in a combination. Start your analysis with the highest time frame and steadily go lower, identifying more and more clues. You will be impressed how efficient that strategy is.
OANDA:XAUUSDEducation
by VasilyTrader
17
Liquidity is KEY to the MarketsIn this video I go through more about liquidity and why it is important. The markets move because of liquidity. Without liquidity, there is no trading. The larger the trader, the larger the liquidity required. Understanding the concept of liquidity and the fractal nature of price, trading becomes very interesting. A whole new world opens up to you and you no longer have to keep guessing where price is going. You no longer have to keep chasing candles. I hope you find this video insightful. - R2F
OANDA:XAUUSDEducation
by Road_2_Funded
1
The Wisdom of Pro Traders vs. Newbie Naivety Hey traders, In this article, we will discuss the perception of trading by individuals . We will compare the vision of a professional trader and a beginner - trading vs gambling. Most of the people perceive trading performance incorrectly. There is a common fallacy among them that win rate is the only true indicator of the efficiency of a trading strategy. Moreover, newbies are searching for a strategy producing close to 100% accuracy. Such a mindset determines their expectations. Especially it feels, when I share a wrong forecast in my telegram channel. It immediately triggers resentment and negative reactions. Talking to these people personally and asking them about the reasons of their indignation, the common answer is: "If you are a pro, you can not be wrong". The truth is that the reality is absolutely different. Opening any position or making a forecast, a pro trader always realizes that there is no guarantee that the market will act as predicted. Pro trader admits that he deals with probabilities , and he is ready to take losses . He realizes that he may have negative trading days, even weeks and months, but at the end of the day his overall performance will be positive. Remember, that your success in trading is determined by your expectations and perception. Admit the reality of trading, set correct goals, and you will take losses more easily. I wish you luck and courage on a battlefield.
OANDA:XAUUSDEducation
by VasilyTrader
3
The Famous Monkey Story in Every Markets!The Famous Monkey Story in Every Market! Once upon a time, a rich man from the city arrived in a village. He announced to the villagers that he would buy monkeys for $100 each. The villagers were thrilled, as there were hundreds of monkeys in a nearby forest. They caught the monkeys and brought them to the rich man, who paid $100 for every monkey they gave him. The villagers began making a living by capturing monkeys from the forest and selling them to the rich man. Soon, the forest began to run out of monkeys that were easy to catch. Sensing this, the rich man offered $200 for each monkey. The villagers were ecstatic. They went back to the forest, set up traps, caught more monkeys, and brought them to the rich man. A few days later, the rich man announced he would pay $300 per monkey. The villagers started climbing trees and risking their lives to catch monkeys and bring them to the rich man, who bought them all. Eventually, there were no monkeys left in the forest. One day, the rich man announced he would like to buy more monkeys, this time for $800 each. The villagers couldn’t believe their luck. They desperately tried to catch more monkeys. Meanwhile, the rich man said he had to return to the city for some business. Until he returned, his manager would handle transactions on his behalf. Once the rich man left, the villagers were unhappy. They had been making quick and easy money from selling monkeys, but now the forest had no monkeys left. This is when the manager of the rich man stepped in. He made an offer the villagers could not refuse. Pointing to all the caged monkeys, he told the villagers he would sell them for $400 each. They could sell them back to the rich man for $800 each when he returned. The villagers were over the moon. Buy for $400 and sell for $800 in a few days—they had found the easiest way to double their money. They collected all their savings and even borrowed money. There were long queues, and within a few hours, almost all the monkeys were sold out. Unfortunately, their happiness did not last long. The manager went missing the next day, and the rich man never returned. Many villagers kept the monkeys, hoping the rich man would come back. But soon, they lost hope and had to release the monkeys back into the forest, as feeding and caring for the noisy monkeys became extremely difficult. This is exactly what happens when you buy low-quality companies in the stock market. There will be a low-priced stock that no one is interested in buying. A few rich men will suddenly start buying it. The stock price will rise because there are suddenly many buyers and very few sellers—a classic case of huge demand and no supply, like the monkeys in the forest. The stock gets plenty of coverage on business channels and newspapers. These rich men will also use tricks like sending out bulk SMS messages, asking people to buy the shares for huge returns, and giving free tips. New and inexperienced investors, hoping to double or triple their investment, get lured in. Finally, the big players who bought the stock early when no one wanted it sell it back to inexperienced investors at high prices. Don’t be greedy—there is no quick money in the stock market or in life. It takes time and effort to become wealthy, and there are no shortcuts. Hit that like button if you like the story. Follow my profile for more content.
Education
by CRYPTOMOJO_TA
12
The ONLY Strategy You Need to Identify The Market Trend In this article, we will discuss a proven price action based way to identify the market trend . ❗️And let me note, before we start, that no matter what strategy do you use in your trading, you should always know where the market is going and what is the current trend . Your judgement should be based on strict and objective rules that proved its accuracy. There are a lot of ways to identify the market trend. One of the simplest and efficient ones is price action based method . This method relies on impulse legs . The market never goes just straight up or down, the price action always has a zigzag shape with a set of impulses and retracements. The impulse leg is a strong directional movement , while the retracement is the correctional movement within the boundaries of the impulse. UPTREND 📈The market is trading in a bullish trend if 3 conditions are met: 1️⃣the price forms an initial bullish impulse , 2️⃣ retraces , setting a higher low , 3️⃣then starts growing again and sets a new high with the second bullish impulse . Once these 3 conditions are met, we consider the market to be bullish, and we expect a bullish continuation in such a manner. Take a look at a price action on USDCAD. According to the trend-analysis rules, the pair is trading in a bullish trend. DOWNTREND 📉The market is trading in a bearish trend if 3 following conditions are met: 1️⃣the price forms an initial bearish impulse , 2️⃣ retraces , setting a lower high , 3️⃣then drops lower and sets a new low with the second bearish impulse . Once these 3 conditions are met, we consider the market to be bearish, and we expect a bearish trend continuation. According to the rules, NZDUSD is trading in a bearish trend on the chart above. CONSOLIDATION ➖The third state of the market is called consolidation . The market is trading in a consolidation if the conditions for bullish or bearish trend are not met . The price chaotically forms bullish and bearish impulses, usually trading within the range . Above is the example of a sideways, consolidating market, where the price sets equal or almost equal highs and lows and conditions for bullish/bearish trend are not met. Knowing the current trend, one always knows whether a current trading position is trend-following or counter trend, or it is a sideways consolidation trade. Learn these simple rules and try to identify the market trend with them.
OANDA:XAUUSDEducation
by VasilyTrader
1
Order typesIn the past, a person would typically have to go to the brokerage or another financial entity to buy or sell a security. The trade would be then settled through a personal meeting or, as technology progressed, over the phone. Nonetheless, the implementation of modern technology within the financial markets of the 21st century made placing buy and sell orders as easy as a few mouse button clicks. Nowadays, many trading platforms allow their clients to execute various types of orders beyond ordinary buy and sell orders. Key takeaways: Using limit orders is generally considered one of the safest ways to buy or sell a security. Modern technology allows placing buy and sell orders with a few mouse clicks. A stop-loss and stop-limit orders are used to protect an investor’s capital. A trailing stop locks in some of the accrued profits. Quick trade orders get instantly filled by a single or double click on a bid or ask button. Limit order A buy limit order is used to buy a security at a specified price. This type of order is executed automatically in a case when the price of a security is lower than the value of the buy limit order. A sell limit order is used to sell a security at a specified price. It gets automatically filled when the price of a security is higher than the value of the sell limit order. This design occasionally allows for the execution of the buy limit order or the sell limit order at a better price. Generally, limit orders are one of the safest ways to purchase or sell a security. Quick-trade order Some trading platforms allow the use of quick-trade orders. A quick-trade order is a type of order that is instantly filled by a single or double click on a bid or ask button in a trading platform. These orders are relatively safe to use. However, filling this type of order in highly volatile markets might be difficult due to a quickly changing price. Market order When traders choose to use a market order, they let the market set the price of security. In essence, this means that for a buy market order, a trade execution occurs at the nearest ask. For a sell market order, a trade execution takes place at the nearest bid. The use of the market order is less safe in comparison to limit order because it allows for worse filling of orders in illiquid markets and markets dominated by algorithmic trading. However, some platforms offer their clients the option to choose the tolerance threshold for such trade orders. Good ‘Til Canceled order (GTC) This type of order remains active until it is filled or canceled. Stop-loss and stop-limit orders A stop-loss order sells a position at a market price if it reaches or passes a specified price. Unlike a stop-loss order, a stop-limit order liquidates a position only at a specified or better price. These types of orders are used to protect investor’s capital before depreciation. Trailing stop order A trailing stop order trails the price as it moves in the trader’s favor. For a long position, a trailing stop moves higher with the price but stays unchanged when the price falls. Similarly, for a short position, a trailing stop moves lower with the price but remains unchanged when the price rises. The intent of a trailing stop is to lock in some of the accrued profits. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Therefore, your own due diligence is highly advised before entering a trade.
COINBASE:ETHUSDEducation
by Tradersweekly
2
From Beginner to Pro - The Evolution of a Trader Hey traders, In this educational article, we will discuss 3 stages of the evolution of a trader . Stage 1 - Unprofitable trader 😞 The unprofitable trader has very typical characteristics: -total absence of trading skills Most of the time, people open a live account simply after completing some beginners course like on babypips website. Being sure that the obtained knowledge are completely enough to start trading, they quickly face the tough reality. -no trading plan Having just basic knowledge, of course, they do not have a trading plan. Why the hell to have it if everything is so simple?! All their actions on the market is just gambling. They open the positions randomly most of the time, simply relying on intuition. -poor risk management In 99% percent of the time, the unprofitable trader does not even think about risk management. The position sizing, stop placement and target selection are completely neglected. Trading performance of the unprofitable traders is characterized by small wins and substantial losses and negatively trending equity. Stage 2 - Boom and bust trader 😶 Usually, traders reach boom and bust stage after 1-2 years of unprofitable trading. At some moment, winning trades start to compensate losing trades, brining non-trending equity. Such traders have very common traits: -not polished trading plan Being unprofitable for so long, traders start to realize the significance of a trading plan. Sticking to the set of rules, they notice positive changes in their trading performance. However, trading plan requires to be polished and modified. It takes many years for a trader to identify all its drawbacks before it starts bringing net profits. -lack of confidence When one starts following a trading system, confidence plays a substantial role. The fact is that even the best trading strategy in the world occasionally produces negative results. In order to not give up and keep following such a system, one needs to build trust in that. The confidence that after a series of losing trades, the strategy will manage to recover. Such a trust can be built after many years of trading that strategy. Stage 3 - Profitable trader ☺️ That is the final destination. After many years of a struggling trading, one finally sees positively-trending equity. Winning trades start to outperform losing ones, leading to consistent account growth. Profitable trader is characterized by iron discipline, confidence and consistency. He knows what he is trading, when and why. His trading plan is polished, he fully controls his emotions. He never stops learning and constantly develops his strategy. Knowing the 3 stages of the evolution of a trader, one can easily identify at what stage he currently is. That will help to identify the things to be focused on to move to the next stage. At what stages are you at the moment?
OANDA:XAUUSDEducation
by VasilyTrader
4
TYPES OF MARKET ANALYSIS1) Fundamental analysis. fundamental analysis focus mainly on micro and macro event that will control market situations in the present and in the future. it includes various events in economic calendar like PPI CPI NonFarm Payroll, Interest rate decisions, and geopolitical senarios like election war climate issues etc 2) Technical analysis. Technical analysis mainly focus on indicators chart analysis volume analysis, various analysis like following candle stick pattern, trading strategies based on indicators 3) Market sentiments Market sentiments focus mainly on how the crowd anticipate wheich direction will market go, like when xauusd reached at its all time top everyone believed it will have a retracement from that zone like share and follow us for more such informative contents
Education
by realmillionairefx
How Many Monitors Do YOU Need? - R2F's Professional OpinionHi everyone, I get this question occasionally, so I figured I would share my opinion on the matter. There are many misconceptions about trading or being a professional trader. One of them is, the more monitors you have, the more successful or advanced you are as a trader. That is complete nonsense. In this video I explain what I think the best number of monitors is to have, and hopefully give you some insight into what works for you. At the end of the day, trading is a personal endeavor and not a one-size-fits-all. Always start with the least, and scale from there, which is the same way you should approach the growth of your trading wealth. - R2F
Education
by Road_2_Funded
2
The 3-Step Method For High-Quality AnalysisIn this video I give you the 3-step method I use to do my analysis. By incorporating these steps, it is also how I do my top-down analysis. You can think of it as a checklist as well. First, I have my Bias, which determines where I believe price is drawn to. For example in the case of SMC/ICT Concepts, we observe where the liquidity is in the market and use that to frame where price is likely going to go to sooner or later. Secondly, I have my Narrative, which is on a lower timeframe, and paints the picture of HOW price is going to form in order to initiate the move to that price target. This usually includes more engineered liquidity on lower timeframes, and manipulation to happen. Thirdly, I have my Confirmation, which is where I want to enter a trade. This is the lowest of the three timeframes, and is the final point in which I will frame a trade setup. Usually I will look for the exact same things I look for in my Bias and Narrative, but on this timeframe. I also tend to include the factor of time, such as Killzones, Seasonality, and News Drivers. Note that the timeframes can be anything you want them to be, and you are not restricted from moving from timeframe to timeframe. But, the important thing is to be consistent with WHERE you believe price is going, HOW you think it may get there (this can change as price forms), and again WHERE you are going to enter a trade. - R2F
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by Road_2_Funded