Capital Management - Pyramiding. Coin for pumping. Matic.Money Management Method - Pyramiding in action online on a pump coin. Matic / btc .
Big profits are minimal risk. Smart trading.
Stop Loss showed where to place and by what principle they move because all the zombies want to see them.
Stop Loss takes place when you are not in control of a position for a long time. But you must clearly understand where you should go when the price goes against you, and no retention of a losing position, in case, "what if the price comes back."
Always adhere to your strategy and plan, but at the same time, be flexible and have all the scenarios in advance. Be smarter for other market participants.
Matic / btc pyramiding in profit figures now:
1 entry point for $ 1000 + 177% $ 2700 (net $ 1700).
2 entry point for $ 1000 + 135% $ 2350 (net $ 1350).
3 entry point for $ 1000 + 90% $ 1900 (net $ 900).
4 entry point for $ 1000 + 35% $ 1350 (net $ 350).
The total profit at the moment from 4 entry points with a minimum risk of $ 4000 becomes $ 8350 (net $ 4300).
There is one thing, but the profit is much larger, as the trade was conducted in the accumulation channel with a price step of + 77%. Trading was carried out by 30% of the accumulated position, increasing it with complex%.
Trading in the channel will allow you to advance to a specific profit before the channel breakthrough. It will also help minimize its risks in case the uptrend support of the accumulation channel is broken down. As you would already be in profit from trading in the channel in 77% increments, at least cover Stop Loss loss. It is clear that the movement of 77% of the channel will not come out each time, like the entrance and exit when confirming the price reversal from support / resistance. But 30-40% can be obtained, but not always. This also needs to be understood.
Also no need to be afraid to buy at prices at a higher price. Sometimes buying at slightly higher prices is much safer than buying at the bottom, which may not be the bottom. The most important thing is the correct entry and exit point.
The entry point should be with a potential big profit and minimal risk.
What else does trading in the accumulation channel give you? You need to understand what could have been so (it is unlikely, but this should not be ruled out) that the price channel would have broken down and fixed under it. If you were “Waiting” like everyone else, it would mean a losing trade. And a loss in the amount of your Stop Loss according to your strategy. And if you have a big position, but not a lot of liquidity in a coin? As a rule, such coins are so, then there are situations when a breakthrough of support creates a panic-drain in the market, which goes to a large percentage of the price movement. Here, in this case, the extra earned profit up to the input amount helps.
Another addition in such coins in most cases is not possible to become short, therefore trading in two directions will not work. This must be understood in advance and taken into account in your trading strategy!
It is also important that someone thinks that he would just enter the breakout zone of the downtrend and take the same + 100% without these games and complexity. This is so if you have a small input, let's say $ 500-1,000 is not a problem, but if the amount is larger, this will cause difficulties to enter not noticeably and not provoke a premature price increase. You need to understand that at important pivot points you are not the only ones who want to enter the market, and in some coins the liquidity is low. And an entry instead of a step of + 2-3% can provoke a price increase of 10%. You can just trigger a panic buy.
Another option, for example, you bought 50% of the coins for the planned amount. Further you see that a further purchase will provoke an increase in the price by an unacceptable%. You can use your purchase to keep the price from rising and force other market participants to sell you and thereby gain the remaining 50% of the planned position. This works if you know how to work with a glass and a ribbon of sales and purchases, well hiding the actions made in advance. After all, you need to understand that not only hamsters are on the market, and there are traders who not only look at charts, and therefore are more informative in what is actually happening.
But all this only works in ordinary situations. At important points in the price reversal, your walls will be eaten up, you will give someone a gift allowing them to buy a large position without slipping the price. Just ask yourself a question, and you wouldn’t do it if someone gave you such a gift?
It is easier to work on TOP coins with this management method due to the greater liquidity and greater predictability of the price movement, but the profit there is many times smaller and more time-stretched.
Time is money. The liquidity of TOP coins allows you to work in large amounts, and there will always be enough liquidity for a short Stop Loss, which can not be said about pump coins. It is worth mentioning that you can work short on top coins if the price goes against you, therefore there is less risk due to greater plasticity for the trading instrument. But once again I’ll remind you the profit is much less, a long extended time interval and a small selection of trading tools.
I showed in more detail about this method of money management on TOP coins using the example of LTC / USD in these trading ideas:
EDUCATION Pyramiding How to earn 52000 with a risk of 5% from 10000 1part
EDUCATION Pyramiding money management. 2 part. Short LTC/USD
The trading idea for this coin for 13 11 2019 is before pumping and leaving the accumulation zone.
MATIC at the breakout zone of the downtrend Great growth potent
Tutorial
How is pumping coins done. Example of working on an ENJ +90-600%ENJ Mechanics of win-win work on coins for pumping. The accumulation channel is 45%. The potential at the exit from the accumulation channel is up to + 600%!
The coin, due to its over greed and aggressive manner of squeezing money out of the crowd by the market maker, goes hundreds of percent from the accumulation zone. Now the coin is in the accumulation phase.
Trading in a horizontal channel in increments of 45%.
All pivot points on which this or that movement depends and the trend is shown on the chart . It is also worth noting that there is no clear number of waves that should be in the accumulation channel. The main thing is complete control and understanding of the work on the coin. Entry / exit to the market depending on the reaction of support / resistance levels.
If you do not control the price, but adapt, there are two options for entry:
1) Entrance at the bottom of the channel with confirmation of support. The potential profit in the channel + 45 %.
2) Entrance during the breakthrough of the channel. The first target + 90%. Then, how does the price react to the level of resistance and whether the fixation wakes above it. If the price continues to rise, then sales should be made at key resistance levels. Potential from +90 -600%.
It is worth noting that in such coins there is often no rollback after a breakout, you yourself can see it on the chart, that's why I wrote - the entrance is at the breakthrough of the resistance of the accumulation channel. But you need to understand that a false breakthrough can occur. But observing the exchange book of orders and the buy / sell ribbon gives a clearer picture or a breakthrough, real or potentially false. This is just an experience.
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In the history of the coin, I showed the cyclica l repetition of the sequence of phases of the instrument.
It can be divided into several phases:
1) Set of coin position.
2) Raising the price and selling at affordable prices.
3) Lower prices for a new set of positions.
How to manage the price of the coin and the entire sequence of work in these 3 phases, I described in great detail in the Russian version of this trading idea. Google translator to help you!
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Be not theoreticians, but practitioners. Only the weight of your deposit matters, not the memorized information about trading from many books.
Pyramiding money management. 2 part. Short LTC/USD This is the second part of the training material on the method of capital management - pyramiding or scaling as it is also called. Let me remind you once again in the first part of working long with an uptrend, we earned $ 20,000 - $ 52,000 time.
Read more about the process of working in long in this trading idea: Pyramiding How to earn 52000 with a risk of 5% from 20000 1part
After the breakthrough of the upward channel and exit from a long position, a downtrend and a downtrend are formed for us on the LTC / USD pair.
Here is my idea for June before breaking through the rising channel.
LTC / USD June
The trend is broken. A downtrend and a downtrend formed. Here is my trading idea for August:
SHORT LTC uptrend is broken. Trading in the downward channel.
LTC / USD August
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Let's go back to our example of LTC / USD money management by pyramiding in a downward channel. When working long in an uptrend, we earned $ 52,000 on this coin from an initial deposit of $ 20,000 . Round up to $ 50,000.
Divide the amount into 3 parts of the entrance. A less risky entry point is the first, like a coin at the beginning of its downtrend and a big profit from the uptrend. Therefore, the first purchase will be a large amount.
First purchase - $ 30,000
Second purchase - $ 10,000
Third purchase - $ 10,000
Stop loss is always 5% and moves behind the price of a downtrend. Stop loss should always be behind the downtrend line. (outside the upper boundary of the downward channel). Breaking it will mean a potential change in trend.
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As a result of currently open trading deals, we have a profit:
1 purchase for $ 30,000 + 42% = $ 42,600 (net profit $ 12,600)
2 purchase for $ 10,000 + 19% = $ 11,900 (net profit of $ 1900)
3 purchase for $ 10,000 + 0% = as soon as we opened a deal (there is now an option to break the downtrend).
The risk is always 5%
The total net profit of work in the downward channel is currently + $ 14,500
$ 6,400 total position
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If all 3 sales target work out as planned, then the potential from the entry point:
1 purchase - $ 53400 (net profit of $ 23,400).
2 purchase - $ 17,000 (net profit of $ 7,000).
3 purchase - $ 16,200 (net profit of $ 6,200).
Total short profit: $ 86,600 (net profit $ 36,600).
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If we take into account the work in an uptrend that we started with $ 20,000, then the net profit is $ 66,600 and this is on the same coin with a 5% risk and during this period we will only make 8 transactions. This is not fantasy, this is reality. I worked like this for more than a year on the ETH / USD pair in the downstream channel, all the ideas and work in the channel were published in my chat, also partially had ideas here, for example this one for December 2018 I complicated the work a little, but I increased my profits several times, I worked from trending channels. Also, most of the trading transactions were made from the trend lines of the internal channel.
This trading idea for December 2018, but I started trading this downward channel from March 2018.
ETH / USD
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Money management by pyramiding or scaling.
The pyramiding method of money management (scaling) today is very popular among traders with experience. The essence of this method is the sequential opening of several transactions on the trend. We increase our position as profit grows, not loss.
Pyramiding method of money management is perfectly combined with a positional trading strategy. Also, this method increases the deposit well when a trader trades in upward (long work) and downward channels (short work).
Pyramid trading is a strategy that involves adding a new position to an existing profitable position. In other words, these are purchases or sales in order to add to an existing position, after the market has developed movement in a profitable direction for you. You are increasing your position. At the same time, the size of each next transaction may change taking into account the result of the previous one, that is, the position increases when you make a profit in the previous transaction to increase the deposit at a faster pace or after receiving a loss to accelerate the exit from the drawdown.
This is the main advantage of using pyramiding in trading. If you did everything right, then do not expose your trading capital to additional risk. In fact, you reduce risk as the market moves in a profitable direction for you. The main thing is to correctly determine the trend and "sit" on it. The most difficult moment is to determine the beginning of a trend.
On a bull trend it is better to always work on the bull side; on a bearish trend , on a bearish side. Always follow the trend!
However, just as pyramiding can be profitable, it can also be dangerous if used improperly. The main thing is to determine the trend correctly.
Many experienced traders consider this method the only possible way to quickly disperse the "deposit". One well-defined trend lasting only 1-2 weeks can double, triple the deposit with the right approach. Moreover, the risk is only 2% -5%.
It is very important, do not confuse averaging and pyramiding, since these two approaches are completely different. Averaging occurs when the price goes against our position. And pyramiding is the other way around when the price is in your favor.
Pyramiding allows you to achieve a super effective profit / risk ratio by transferring stop loss as the trend moves in your favor.
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How to carry out a set of positions according to the trend, when to enter.
Another important issue in pyramiding is: when do you actually enter a deal, gain a position more? The answer to this question can be divided into several approaches. Each of them has its pros and cons and in different situations will give different results. Just who is comfortable and who is more used to what they trade.
Entrance to the transaction during the construction of the "pyramid":
1) On kickbacks.
2) On signs of continued movement. For example, it can be a powerful volume entry or a hammer candlestick pattern.
3) During the breakdown of important levels.
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How to use stop loss when building a "pyramid".
Naturally, with pyramiding, stop loss is used. It is recommended to use a separate stop for each entry (to buy the position). As the trend develops, it should be pulled up.
For example, I use 2 stop loss. Regardless of how much I had as the trend of inputs on kickbacks grew. The first is the top, which is about 30% of the entire position. As a rule, it is equivalent to the stop loss level of the last entry (buy by trend). The second is 70% of the position, this is when the trend breaks. Both stop losses are tightened as the trend grows.
It is logical to use stop loss outside of some important levels. The trader as a whole should decide on the overall risk that he is ready to bear. For example, it is 3% -5%. Therefore, it is necessary to calculate the following positions in such a way that, taking into account the profit of the previous steps, compensate for the loss of the subsequent ones and keep within 3% -5%.
You need to understand that with the correct determination of the trend, and the correct scaling of the pyramid, a loss of 3-5% is purely arbitrary, as long as you have a stop knocked out, you can already double or triple the total profit. The main thing with the price increase is not to forget to tighten the stop loss. And so put so that they are not knocked ahead of time. As a rule, I go out when stop loss is touched, just two, as the first one can knock out, and the price can go up further.
It is also worth adding that sometimes on some coins due to their volatility , their feet are knocked out by 5%, so that this does not happen, the size of the stop is not so important as the moment of entry.
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Profit taking.
How to take profit when managing money using the pyramid method? There are several different methods of closing positions:
1) According to the planned profit. For example, you planned to take profit + 100% from this tool. You have reached your take profit. We left the position, took profit and forgot about this tool.
2) With a slowdown in profit growth. For example, you have already doubled the profit on this trend and this is quite enough for you. The trend has moved in a lateral movement, profit is not growing, or growing slowly. It is more advisable for you to close this profitable deal and transfer the profit to the trend that is emerging, thereby building a new "pyramid" on a more rapidly growing trend.
3) At the first sign of a trend reversal. Not breaking through important resistance levels, reversal patterns, breaking the trend line .
4) By tightening stop loss. Knocked out stop loss. Depending on which stop loss ordering technique you use, either single or fractional for each entry separately. Stopped, took profits and forgot about this trading tool. They began to search for a new instrument with a good entry point at the stage of trend emergence. Started the construction of a new "pyramid".
In my opinion, a reasonable solution is to partially take profit at some maximum levels with the trend growing. I am also part of the position about 30% aggressively trading increasing the asset. An important point at local maximums I sell these 30% almost completely, I already shop a large amount of assets from the support if I trade in an uptrend. As the trend progresses, I constantly pull up the lower stop loss (main position). 70% of the position is exited when the trend unfolds completely.
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Benefits of money management by pyramiding or scaling.
Pyramiding works well with strong steady trend movements.
The advantages of pyramiding:
1) the bistro is increasing the deposit.
2) minimal risks, and with the development of a trend, there are no risks.
3) psychologically comfortable trading due to the absence of great risks.
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Disadvantages of money management by pyramiding or scaling.
As you already understood, pyramiding works well in the trending market. If the market turns into a flat or a trend movement is accompanied by deep pullbacks, then the pyramid can be destroyed very quickly. On few liquid, weak instruments, this method does not work! On cryptocurrencies, this method only works on TOP. Coins such as BTC , LTC, ETH.
This method does not work:
1) In lateral flat movement.
2) With a weak trend.
3) In a trend with deep pullbacks, in which there will be uncertainty about further movement and they will knock out stops.
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We all heard the well-known trade axiom: reduce your losses, and give the opportunity for profit to grow. This is the aspect of money management in your trading system that issues major winners. Money management throws aside the subjective sensations present in people.
Richard Dennis
Pyramiding How to earn 52000 with a risk of 5% from 10000 1partPyramiding. How to earn $ 52,000 with a risk of 5% from 10,000 1 part. LTC/USD Jobs in Long.
Money management by pyramiding or scaling.
When building a "Pyramid" from money using the pyramid method - your foundation of the pyramid is knowledge and experience.
One of the main features of this method is minimal risks with high rates of income.
In let's look at an example on the chart. LTC is a strong uptrend. Entering a transaction is not from the bottom of the price itself, but when the trend is confirmed. Trading only according to the trend, exit of the price for trend aisles - means exit from the position. Stop loss is always 5% below the uptrend line that you are trading. As the price rises, the stop loss pulls up. This is very similar to positional trading. But unlike position trading, you buy an asset as the trend develops, thereby increasing the position.
From the example, we see that $ 20,000 is allocated for the coin. They are broken into at least 3 parts. 1 entry is the largest at the beginning of the trend-$ 10,000. The next 2 entries as the uptrend develops for $ 5,000. Risk is absolutely always observed 5% of the position. Breaking the uptrend line means a complete exit from the long market position. If you are not sure that the trend has finally reversed, you can exit part of the position.
In this example, the profit was $ 52,000 + $ 32,000 net. I also want to emphasize, we did not buy at the very lowest prices and did not sell at the very peak of the price, 2 transactions were done quite already at an expensive price. The main thing is to follow the plan, understand what you are doing and what is happening. It is necessary to kill the “herd instinct” in oneself, try to buy the cheaper, sell the more expensive, buy for good luck, work without a strategy and plan. You work like everyone else - it will be like everyone else - nothing!
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Pyramid mechanics in numbers.
The amount allocated for this coin is $ 20,000. Broken into 3 parts $ 10,000, $ 5,000, $ 5,000.
Profit from purchase №1 of $ 10,000 + 225% = $ 32,500 (net $ 22,500).
Profit from purchase №2 5000 $ + 145% = $ 12,250 (net $ 7250).
Profit from purchase No. 3 of $ 5000 + 45% = $ 7250 (net $ 2250).
Total profit for all 3 purchases $ 52,000
Net profit $ 52,000-$ 20,000 = $ 32,000
The risk has always been 5%
Next, I will describe in more detail this method and all the nuances.
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Money management by pyramiding or scaling.
The pyramiding method of money management (scaling) today is very popular among traders with experience. The essence of this method is the sequential opening of several transactions on the trend. We increase our position as profit grows, not loss.
Pyramiding method of money management is perfectly combined with a positional trading strategy. Also, this method increases the deposit well when a trader trades in upward (long work) and downward channels (short work).
Pyramid trading is a strategy that involves adding a new position to an existing profitable position. In other words, these are purchases or sales in order to add to an existing position, after the market has developed movement in a profitable direction for you. You are increasing your position. At the same time, the size of each next transaction may change taking into account the result of the previous one, that is, the position increases when you make a profit in the previous transaction to increase the deposit at a faster pace or after receiving a loss to accelerate the exit from the drawdown.
This is the main advantage of using pyramiding in trading. If you did everything right, then do not expose your trading capital to additional risk. In fact, you reduce risk as the market moves in a profitable direction for you. The main thing is to correctly determine the trend and "sit" on it. The most difficult moment is to determine the beginning of a trend.
On a bull trend it is better to always work on the bull side; on a bearish trend, on a bearish side. Always follow the trend!
However, just as pyramiding can be profitable, it can also be dangerous if used improperly. The main thing is to determine the trend correctly.
Many experienced traders consider this method the only possible way to quickly disperse the "deposit". One well-defined trend lasting only 1-2 weeks can double, triple the deposit with the right approach. Moreover, the risk is only 2% -5%.
It is very important, do not confuse averaging and pyramiding, since these two approaches are completely different. Averaging occurs when the price goes against our position. And pyramiding is the other way around when the price is in your favor.
Pyramiding allows you to achieve a super effective profit / risk ratio by transferring stop loss as the trend moves in your favor.
______________________________________________________
How to carry out a set of positions according to the trend, when to enter.
Another important issue in pyramiding is: when do you actually enter a deal, gain a position more? The answer to this question can be divided into several approaches. Each of them has its pros and cons and in different situations will give different results. Just who is comfortable and who is more used to what they trade.
Entrance to the transaction during the construction of the "pyramid":
1) On kickbacks.
2) On signs of continued movement. For example, it can be a powerful volume entry or a hammer candlestick pattern.
3) During the breakdown of important levels.
___________________________________________
How to use stop loss when building a "pyramid".
Naturally, with pyramiding, stop loss is used. It is recommended to use a separate stop for each entry (to buy the position). As the trend develops, it should be pulled up.
For example, I use 2 stop loss. Regardless of how much I had as the trend of inputs on kickbacks grew. The first is the top, which is about 30% of the entire position. As a rule, it is equivalent to the stop loss level of the last entry (buy by trend). The second is 70% of the position, this is when the trend breaks. Both stop losses are tightened as the trend grows.
It is logical to use stop loss outside of some important levels. The trader as a whole should decide on the overall risk that he is ready to bear. For example, it is 3% -5%. Therefore, it is necessary to calculate the following positions in such a way that, taking into account the profit of the previous steps, compensate for the loss of the subsequent ones and keep within 3% -5%.
You need to understand that with the correct determination of the trend, and the correct scaling of the pyramid, a loss of 3-5% is purely arbitrary, as long as you have a stop knocked out, you can already double or triple the total profit. The main thing with the price increase is not to forget to tighten the stop loss. And so put so that they are not knocked ahead of time. As a rule, I go out when stop loss is touched, just two, as the first one can knock out, and the price can go up further.
It is also worth adding that sometimes on some coins due to their volatility, their feet are knocked out by 5%, so that this does not happen, the size of the stop is not so important as the moment of entry.
________________________________________________
Profit taking.
How to take profit when managing money using the pyramid method? There are several different methods of closing positions:
1) According to the planned profit. For example, you planned to take profit + 100% from this tool. You have reached your take profit. We left the position, took profit and forgot about this tool.
2) With a slowdown in profit growth . For example, you have already doubled the profit on this trend and this is quite enough for you. The trend has moved in a lateral movement, profit is not growing, or growing slowly. It is more advisable for you to close this profitable deal and transfer the profit to the trend that is emerging, thereby building a new "pyramid" on a more rapidly growing trend.
3) At the first sign of a trend reversal. Not breaking through important resistance levels, reversal patterns, breaking the trend line.
4) By tightening stop loss. Knocked out stop loss . Depending on which stop loss ordering technique you use, either single or fractional for each entry separately. Stopped, took profits and forgot about this trading tool. They began to search for a new instrument with a good entry point at the stage of trend emergence. Started the construction of a new "pyramid".
In my opinion, a reasonable solution is to partially take profit at some maximum levels with the trend growing. I am also part of the position about 30% aggressively trading increasing the asset. An important point at local maximums I sell these 30% almost completely, I already shop a large amount of assets from the support if I trade in an uptrend. As the trend progresses, I constantly pull up the lower stop loss (main position). 70% of the position is exited when the trend unfolds completely.
_______________________________
Benefits of money management by pyramiding or scaling.
Pyramiding works well with strong steady trend movements.
The advantages of pyramiding:
1) the bistro is increasing the deposit.
2) minimal risks, and with the development of a trend, there are no risks.
3) psychologically comfortable trading due to the absence of great risks.
_____________________________________________________________
Disadvantages of money management by pyramiding or scaling.
As you already understood, pyramiding works well in the trending market. If the market turns into a flat or a trend movement is accompanied by deep pullbacks, then the pyramid can be destroyed very quickly. On few liquid, weak instruments, this method does not work! On cryptocurrencies, this method only works on TOP. Coins such as BTC, LTC, ETH.
This method does not work:
1) In lateral flat movement.
2) With a weak trend.
3) In a trend with deep pullbacks, in which there will be uncertainty about further movement and they will knock out stops.
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To be continued...
Simultaneously Figures Inverted Dragon and DragonOn the graph you can see how one figure goes into another and all goals are fully fulfilled.
The figure of the technical analysis "Inverted Dragon " all the description, lines, goals on the graph are yellow.
The figure of the technical analysis " Dragon " all the description, lines, goals on the chart are blue.
In trading such figures, the most important thing is the trend lines ("Dragon Ridge"). In this example, "Inverted Dragon" has an upward trending white color. And the figure "Dragon" has a downtrend in purple.
Also, when trading and identifying a figure, zones of a trend break are very important, in this example they are indicated by red circles.
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About the figure "Dragon" I described in great detail in the article: Figure Dragon. Formation. Structure. Goals.
Read more in this tutorial.
In this article I want to describe the mirror image of the “Dragon” figure - this is “Inverted Dragon”.
The “Inverted Dragon” / “Dragon” figures got their name due to some resemblance to a fairy-tale character: he also has a head, two legs, a tail and a hump on his back.
The figure "Inverted Dragon" consists of 5 parts, formed in the following order:
1) Dragon Head - the minimum price of all parts of the figure;
2) The first paw of the Dragon is the local maximum price;
3) The Hump of the Dragon - the minimum price between its paws;
4) The second paw of the Dragon is another maximum located slightly below / above the first paw, in rare cases equal to the maximum of the first paw;
5) Dragon Tail is the target price that should bring you revenue.
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“Inverted Dragon” is a reversal pattern that indicates almost the very beginning of a trend reversal. The formation of the “Inverted Dragon” tells the trader that the mood in the market may change soon and the current trend will unfold.
The figure is a more modified version of the “Double Peak” figure, while signaling a change in the bull market to the bear market. But there is one fundamental difference from the “Double Peaks” figure.
A prerequisite for the formation of the Dragon is a trend line drawn through the head and hump of this model ("Dragon Ridge").
It is important that this trend line is clearly visible on the chart. The trend line plays an almost decisive role in the figure.
“Inverted Dragon” and “Dragon” with the correct identification and understanding of the work, you can get good profit on various time frames.
The “Inverted Dragon” shape and its mirror image “Dragon” are very similar to the “Double Peak” and “Double Bottom” figures, however, they also have significant differences, which will be described below.
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Stages of the formation of the figure.
The "Inverted Dragon" is formed on an uptrend. Its formation begins with the "Head". It represents a local minimum. After the formation of the "Head", the market continues an upward movement, as a result of which two maximums "1 paw" and "2 paws" successively appear on the price chart. (Two peaks).
The local maximum from the first test of the resistance line at the upper border of the figure forms "1 Dragon's paw." After repeated testing of the same level of resistance, "2 paws of the Dragon" is formed. The difference between the maxima of the first and second "paws" can be from a few percent to 5-10%.
Between the paws of the "Dragon" should be formed a hollow (bottom, local minimum - correction from the upward movement), which is called the "Hump of the Dragon." At its core, the formation of the “Head – Lap – Hump – Lap” ligament is a “Double Peak” reversal pattern.
The close of the formation of the “Inverted Dragon” figure is indicated by the closing of the price below the “Dragon Range” - a trend line (support) drawn along its points from the “Head” and “Hump”. This will be a signal of a trend reversal. It is advisable to wait until the candle, after crossing the line, closes below the "Hump" level (the price has fixed).
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Shape shaping and volume change.
As prices move from head to forepaws, volumes rise, confirming the uptrend that existed at that time. But already with the formation of the hump of the dragon, everything changes. Volumes begin to grow in the direction of the downtrend and decrease in the direction of the upward. This indicates an imminent change in trend.
Finally, an additional confirmation signal can be an increase in the trading volume, which should increase during the price breakthrough of the uptrend of the “Inverted Dragon” figure (support). This is a breakdown of the trend line that connects the points of the “Dragon Head” and “Dragon Hump”. And then the price drop in the direction of the dragon's tail is accompanied by a rapid surge in volume, which finally confirms the trend reversal.
True price movements are always accompanied by an increase in the volume indicator. This means that if volumes grow in the direction of the dragon's tail (the direction of the future trend) and decrease in the direction of the previous trend, then the future trend is definitely gaining strength and the “Inverted Dragon” figure is true.
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Setting targets when working with a figure.
There are two options for entering a deal:
1) Entrance when breaking the line of the "Dragon Range" of the uptrend (line- "Head" - "Hump").
2) Entrance when breaking through the level of "Hump of the Dragon.
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First target.
To be at the level of the last minimum - the level of "Hump".
The second target.
To be at the very minimum value of the figure - the level of "Head".
The third target.
In rare cases, this is the entire length of growth from the “Head” to the very top “Paw” - then from the point of breakdown of the ascending trend line (“Dragon Ridge”), we establish the entire length of the previous growth — this will be the last target of the “Dragon Tail”.
In this example, the graph shows only taking 2 goals. Only in 10% of cases, 3 is the target relevant, for this you need a very strong trend movement.
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There should be a strategy and plan. At the same time, your strategy and plan should be plastic from market situations.
Dragon figure. Formation. Structure. Targets.“Dragon” is a reversal pattern that indicates almost the very beginning of a trend reversal. The formation of the Dragon tells the trader that market sentiment may change soon and the current trend will unfold.
The figure is a more modified version of the "Double bottom" or "W" shape, while it signals the change of the bear market to the bull market. But there is one fundamental difference from the “Double Bottom” figure.
A prerequisite for the formation of the Dragon is a trend line drawn through the head and hump of this model ("Dragon Ridge").
It is important that this trend line is clearly visible on the chart. The trend line plays an almost decisive role in the figure.
“Dragon” and “Inverted Dragon” with the correct identification and understanding of the work, you can get good profit on various time frames.
The figure “Dragon” and its mirror image “Inverted Dragon” are very similar to the figures “Double top” and “Double bottom”, however, they also have significant differences, which will be described below.
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There are two types of this figure, depending on the trend:
1) “Dragon” - is formed during a downtrend and signals a trend change to an uptrend;
2) “Inverted Dragon” - is formed during an uptrend and signals a trend change to a downtrend .
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The figure "Dragon" got its name due to some similarities with the fairy-tale character: he also has a head, two legs, a tail and a hump on his back.
The figure "Dragon" consists of 5 parts, formed in the following order:
1) Dragon Head - the maximum price of all parts of the figure;
2) The first paw of the Dragon - a local minimum price;
3) The Hump of the Dragon - the maximum price between its paws;
4) The second paw of the Dragon is another minimum located slightly below / above the first paw, in rare cases equal to the minimum of the first paw;
5) Dragon Tail is the target price that should bring you revenue.
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Additional signals that confirm the trend reversal and enhance the development of the "Dragon" figure:
1) The ratio of the length of the "dragon's paws" - if the "second paw" is longer, then there is more confidence in the upcoming turn.
2) When the level of the "second paw" coincides with some important level of support / resistance, already tested in the past, this also enhances the development of the figure.
3) Candles are strongly pronounced (large bodies with short shadows) that have gone in the opposite direction after the formation of the "second paw", the greater the likelihood of a change in the current trend.
4) The more a trend exists, the more likely it will end. The “Dragon” pattern is often in the 5th wave of the trend and in this case the reversal signal is very reliable.
5) An additional confirmation signal can be an increase in the indicators of the trading volume, which should increase during the break through the price of the downward trend line of the “Dragon” figure (resistance). This is the line drawn from the top of the Dragon Head to the bottom of the Dragon Hump.
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Setting goals when working with a figure.
There are two options for entering a deal:
1) Entrance when breaking the line of the "Dragon Range" of the downtrend (line- "Head" - "Hump").
2) Entrance when breaking through the "Hump of the Dragon" level.
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Now you need to decide on our targets:
The first targets will be at the level of the last maximum - the level of "Hump".
The second target will be at Head level
The third target is, in rare cases - the full length of the fall from the “Head” to the lowest “Paw” - then from the breakdown point of the downward trend line (“Dragon Ridge”) we set the entire length of the last price
See the chart above. The graph shows that it was the Third Goal that worked completely on the graph.
Making A Good Indicator DescriptionIntroduction
When posting an indicator a good concept/code isn't the only thing required in order to have a quality indicator, its description is also extremely important. Each person has its own style,
mine is pretty academic, but as long as your description respect certain criterions you are free to do as you wish.
In this post i want to help you make the best of your published indicator by introducing basic concepts in post writing.
Basic Description
An indicator description should at least explain what kind of information your indicator is giving as well as how to interpret/use it. Lets take the Supertrend indicator as example, we'll be making a brief description of it.
The Supertrend indicator is a technical indicator created by the french trader Olivier Seban that aim to detect the current market trend direction. The indicator detect an up-trend when below the market price and a down-trend when above.
This indicator posses two setting, length and mult, higher values of length/mult allow the indicator to detect trends of longer period. This indicator can also be used as trailing stop loss, it can also provide a support level when below the price or a resistance level when above.
Lets breakdown this simple description.
-"The Supertrend indicator is a technical indicator created by the french trader Olivier Seban"
If the indicator is not yours, always credit/mention the original author, this is no option.
-"that aim to detect the current market trend direction"
Aim of the indicator.
-"The indicator detect an up-trending market when below the market price and a down-trend when above."
How to interpret the indicator.
-"This indicator posses two setting, length and mult, higher values of length/mult allow the indicator to detect trends of longer period."
Always try to introduce the indicator settings and explain how they affect the indicator output.
-"This indicator can also be used as trailing stop loss, it can also provide a support level when below the price or a resistance level when above."
Alternative uses of the indicator, try to provide a graphic showing the indicator acting as mentioned, i our case we should show a graphic showing the Supertrend acting as a support/resistance.
Once you write up your indicator description read it back several times (something i wish i could do more often) and always ask yourself if your indicator description fully describe the aim of the indicator. If you like writing you can of course add more elements, although try not to be redundant, this is really important, skip things such as :
"Yesterday i was dinning with a colleague and he asked me how to get zero-lag filters, since then i tried to..."
This is tiring for the reader and so try not including it.
More Complete Description
A more complete description introduce additional elements regarding your indicator such as your motivation behind its publishing, its calculation...etc.
Such description of the Supertrend indicator could look like this :
Detecting the current market price trend has always been a major challenge in technical analysis, systems relying on the cross between a noisy series and a certain level/indicator can produce whipsaws trades. In order to provide a solution to this problem more advanced indicators have been proposed, one of them being the Supertrend indicator developed by the french trader Olivier Seban.
This indicator aim to detect the current market trend direction, the indicator detect an up-trending market when the price is superior to the Supertrend, and a down trending market when the price is inferior to the Supertrend.
The indicator is an iterative calculation, the core element of its calculation involve creating two bands, denoted as upper/lower, calculated as follows :
upper = hl2 + atr(length)*mult
lower = hl2 - atr(length)*mult
where atr is the average true range of period length and hl2 is the median price defined as : (high + low)/2.
Higher values of length/mult allow the indicator to be less sensitive to shorter price variations, this allow to detect trends of longer period.
Apart from the basic indicator usage described above, the Supertrend indicator can also act as a :
- trailing stop loss, in this case if the closing price cross the value of the indicator, the trade will be closed.
- support/resistance level, in this case an upward movements can be expected after the low price cross the Supertrend, and a downward movement when the high price cross the Supertrend indicator.
In conclusion, the Supertrend indicator is an elegant solution when it comes to detecting the current market price trend, its ability to avoid whipsaws trades makes him a good ally for decision making.
Including Graphics
Graphics of your indicators can add more clarity to your description since visual examples are often easier to understand, the goal here is to see how your indicator interact with the market price. Try including readable graphics, this can mean charts without other indicators (except if your indicator can work in conjunction with other indicators).
However keep your main chart (your current chart layout when publishing the indicator) free of any other indicators/elements, it should only contain the price and your indicator, its the first image people we'll see and if it include other indicators then people will have an hard time telling which one is the one you are publishing.
It can be interesting to show your indicators using different settings rather than the one put by default. You can make use of figures such as arrows or crosses in order to highlight the signals made by your indicator.
Additional Advices
Use a bold text when declaring the title of a section, use italic with text that represent code, formulas, variables names.
You can first write your indicator description on a text editor.
If your code include another work from tradingview don't forget to mention it in the description, for example :
this indicator make use of the "name of the indicator" made by "name of the author" that you can find here "tradingview link of the indicator".
In this case make sure you have the consent of the author of the indicator you are using. This is no option, else you can have your indicator taken down.
Don't include bitcoin wallets/donation links in your indicator description, those go on your signature and nowhere else.
Knowing when not to make a description is important, and by that i mean knowing when not to publish, make sure to read the house rules before you are publishing an indicator.
If you are still struggling then you can try to read other indicators description on the net, if you want a deadly serious description then you can learn from the structure of research papers. For example if your indicator is similar to a moving average try reading descriptions of moving average indicators and inspire yourself from them.
Conclusion
Making a good indicator description is essential, the benefits of doing it are enormous, don't forget that scripts take space in servers. If you are publishing a script and that you know that your description is to short and doesn't explain the aim of your indicator then you are just adding more work for the moderators, its not nice.
Also great descriptions allow you to gain trust and credibility in the community, and more importantly it shows that you care about your indicator, i might be harsh but people that does not care about their indicators does not deserve to publish them (however its not case with you nice reader, right ?).
I hope i can help users with this post, its an important subject, if you have doubts about your indicator description try seeking for help in the pinescript chat, you can even contact me, i will be happy to help.
Thanks for reading, and if you plan to use those advices then thanks for caring, love u :kokoro:
A little about my trade-18 (The logic of price movement)I continue to talk about my trading principles.
A little about my trade-17 (Simplifying the trading model)I continue to talk about my trading principles.
A little about my trade-16 (Breakout to continue the movement)I continue to talk about my trading principles.
A little about my trade-15 (fixation on an impulsive level)I continue to talk about my trading principles.
A little about my trade-14 (Where to wait for the reversal!)I continue to talk about my trading principles.
A little about my trade-13(how to work with "lock" when you rol)I continue to talk about my trading principles.
A little about my trade-10 (Trend change rule of the day)I continue to talk about my trading principles.
A little about my trade-9 (Hedging risks)"Mirror" currency pairs: GBPUSD\EURGBP; EURUSD\USDMXN( USDDKK )
A little about my trade-9 (Hedging risks)"Mirror" currency pairs: GBPUSD\EURGBP; EURUSD\USDMXN(USDDKK)
