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5 Key Advices To Share With Trader Who Is Struggling In TradingHello everyone: Lately many of you have messaged me about getting FOMO and entering trades without confirmations. In addition you can't seem to “not” enter trades when the market hasn't shaped up to your strategy and entry criteria. I am hoping in today’s educational video it can help some of you guys to get back on track. I want to share 5 main pieces of advice that can help out traders who are currently struggling. These are experiences and lessons that I accumulate throughout the 8 years of trading and in hope to help some of you who are struggling in your current journey of trading. 1. Do “NOT” think about get rich quick in trading -Trading is a marathon, not a sprint -90-95% traders fail due to a combination of: Greed, FOMO, mindset/emotion, risk management, trading psychology. -Trading is not a get rich quick scheme, but it can produce consistent, sustainable passive income if you can put in the time and effort -Most try to jump to the result right away, without going through the journey, that is not how life works. 2. No trading strategies, style, method can give you 100% strike rate -Trading is probability, not right or wrong. -Understand you can have the best strategy in the world, and still not be profitable. - Technical, Fundamental, Algo, EA...etc can all not work. This is why risk management is important to not over risk, over trade, over leverage your trading account 3. Backtest and journal -Backtest your strategy so your brain acknowledges and recognizes it over and over again. -Slowly build up confidence in your strategy and method. IT will come to you like second nature -Journal all your wins and losses so you can review them. Work on them, accept your mistakes to grow and improve. 4. Control your EGO -Human beings have ego to prove others are wrong and they are right -We refuse to admit we made the error/mistakes, and blame others/external as the cause. -Acknowledge that in trading, stop blaming the market, the broker, the mentor, the strategy...etc. -Don't take things personally and be offended by it. 5. Never Give Up -I blew several accounts in the beginning of trading career, gave up and quit trading multiple times -I always ended up coming back to trading. After taking time off. Whether that is weeks or months in the beginning journey. -No one is born into a trader, just like no one is born into a doctor, lawyer. -If trading was that easy, then everyone would be rich. -Success is measure by how many times you get back up when you failed I hope these pointers can help you guys to get more focus and get back on track in trading. Any questions, comments or feedback welcome to let me know, thank you Jojo Below I will share others educational videos that have direct relations to the topics above: Trading Psychology: How to deal & manage losses/consecutive losses in trading ? Trading Psychology: Revenge Trading Trading Psychology: Fear Of Missing Out Trading Psychology: Over Leveraged Trading Trading Psychology: Is there Stop Loss Hunting in Trading ? How to deal with it ? Prevent Blowing an account by backtesting: Risk Management 101
BITSTAMP:BTCUSDEducation
by jojofang0901
43
How to analyze the market from scratch (Impulse & Correction)Hello everyone: Many have asked me about demonstrating how to analyze the chart from complete scratch. When looking at my chart and educational video, it all seems very simple, but many are telling me they are struggling to identify the market. Today I will go over how I analyze the chart, from the Higher time frame down to lower time frame by using multi-time frame analysis, top down approach. Specifically by identifying price action, impulse and correction phases of the market. 1. Start from the Higher Time Frame (HTF): HTF can be any time frame higher than the daily chart, such as monthly, weekly, daily. Personally I like to use daily as a go to time frame as it is widely used by traders. 2. Identify the impulse phase of the market. Understand the impulse phase is a period of fast momentum, price is either pushing up or down very aggressively, and not much consolidation visible on the HTF. 3. Identify a period of consolidations. Using trendlines, connect the swing highs and lows of the price. This is to identify the correction/consolidation phase of the market. Which is the most important aspect in price action analysis. You will need to be very knowledgeable on the type of continuation, reversal correction patterns/structures the market usually will form. (I will share many price action patterns/structures that I identify and use in the market below) 4. Once you identify the HTF phase of the market, you will then go down to the Lower time frames (LTF). LTF can be anything under 2/1 HR, 30/15 Min charts. It's not a specific time frame, rather “Multi time frame analysis”. You will also identify the impulse phases & Correction phases on the LTF and use trendlines to connect the swing highs and lows of the correction/consolidation phase, just like what we did on the HTF. 5. Now that you have both the HTF and LTF charts drawn out, the key here is to have both the HTF and LTF tell you the same direction/bias. They should align up and have the same bullish/bearish bias. This will strengthen your probability of success. I always make sure when I am about to enter any trades, I want the multi-time frames all telling me the same story. Same bias, same direction. 6. Now all that comes down to is forecasting the possible entries, which I have made many videos on this topic and I will share some below. Understand you would always want to make sure you are either entering during the impulse phase on the LTF, or the price is about to start the impulse phase to gain the upper hands in the market. You do not want to enter when the price is in a consolidation which is why many traders end up losing money, stuck in the correction and price isn't moving too much, rather just sideways. 7. Continue to work on analyzing the chart from scratch, get comfortable at identifying the impulse phase in the market, and do backtesting continuously so you identify the corrections in the market. This will make you see the chart and the market completely different than before, and you will have a much better probability of entering trades that work out in your favour. Any questions, comments or feedback welcome to let me know. Jojo Below I will share many educational videos that will help you to understand more on price action analysis, impulse/correction phase, entry, forecasting, backtesting and more. Continuation and Reversal Correction Identify a correction for the next impulse move in price action analysis Multi-time frame analysis Continuation Bull/Bear Flag Parallel Channel (Horizontal, Ascending, Descending) Reversal Ascending/Descending Channel Reversal Rising/Falling Wedge Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Continuation/Reversal Expanding Structure/Pattern Risk Management: 3 different entries on how to enter the impulsive phrase of price action Risk Management: How to Enter and set SL and TP for an impulse move in the market Risk Management: When/How to move SL to BE and to profit in a running trade ? How forecasting can benefit your trading journey Backtesting & Chartwork on Forex Market Backtesting & Chartwork on Indices Market Backtesting & Chartwork on Crypto Market How & Why I backtest:
OANDA:XAUUSDEducation
by jojofang0901
40
When/How to move SL to BE and to profit in a running trade ?Hello everyone: Today I want to discuss a topic in Risk Management, specifically on when and how to move your STOP LOSS to BREAKEVEN or in PROFIT when you have a running profit trade/position. In an impulsive phase of the market, we want to make sure to protect our entry as well as secure profits. In this example of EURUSD, I managed to get 2 entries in, and manage it to my best ability and secure profits Trade close down for +7.9% profit Original Trade Forecast and Analysis: This is a topic that will have various answers across traders, as this is certainly up to each individual trader’s strategy, style, and management approach. So understand there is no right or wrong, “holy grail” kind of decision. It's up to you individually as a trader. I will share my management, and why I choose to go with these types of approaches, and you can certainly use them to your advantage to tweak/modify them to fit your strategy. Few things to keep in minds are: 1. Moving the SL to BE or/and in profit is a way to protect your entry, as well as secure profit. 2. Sometimes moving the SL too early may “choke” the price, and you can get stopped out for BE or small profit. Then watch the price take off in your desired direction, which can create negative emotion. 3. Whereas sometimes if you don't move SL to BE or in profit, you can watch a trade that hits 3:1 RR or more, end up reversing down, passing your entry point and to your actual SL of -1%, which can also create negative emotion. 4. No perfect scenario or management when it comes to the aspect of trading, as every trade is unique, and different outcomes may happen, since the market itself is not perfect, and can do whatever it wants to do. Now, I will explain my own management when it comes to moving SL to BE or/and in profit. Certainly this is NOT the only way, nor it will be the best way, but over the years of backtesting & chartwork have given me reassurance on these types of management ways. I will then show some real live examples on the trades that I closed down, and how I manage them as well. CADJPY - Original Trade Forecast and Analysis: GBPJPY - Original Trade Forecast and Analysis: CHFJPY - Original Trade Forecast and Analysis: NASDAQ - AUDNZD - Original Trade Forecast and Analysis: First, a general rule of thumb for me. IF the price has hit about 1:1 RR or so, and has broken past the previous recent lows, I will move my SL to BE. There is no exception in this rule. Again, I explained earlier that sometimes this will help you to protect your entry when price reverses, and sometimes it will choke the price. In this case, I would rather take a BE first, and re-look for entry again in the same position, as long as the bias and the price action is still valid on both the higher time frame and lower time frame. Second, once the entry is in some profit, say 2:1 or higher, I generally will move the SL up to about +0.5% profit or so. Just want to secure a little profit while not choking the price entirely. Third, once the entry is in 3:1 profit, then I will move my SL to +1% profit. This is where I generally will decide whether I should take full profit here, or hold the trade for a mid-long term if the higher time frame has given me the bias. Fourth, since the trade has already been in 3:1 profit or higher, generally we can expect a continuation correction to form now after the impulse phase. If it's a smaller correction and price isn't reversing up sharply right away, I will move my SL to about +1.5% profit, set my alert above the continuation correction and observe the development of the correction. This is generally a point where I can decide to hold the trade longer, or if it reverses up from the continuation correction, then exit the trade for profit. Fifth, if we start to see a possible reversal development, then I will move down my SL to the recent swing highs/lows, or just above the reversal correctional structure, and will let the trade tag me out for profit if it reverses. Any questions, comments or feedback welcome to let me know :) If you enjoy these contents, and the educational lessons are helpful, please press like, subscribe and follow for more. Jojo
Education
by jojofang0901
89
Candle stick every beginners should know . ( part 4 )today i'll share with you the most famous candlestick pattern everyone should know. part 4 we will start with the Rising Three Methods Pattern . It is a five candlestick pattern observed during a bullish rally and its indicates that bullishness would further continue in the market . second , Falling Three Methods Pattern It is a five candlestick pattern observed during a bearish rally. This pattern indicates that bearishness would further continue in the market. third the dark cloud cover appear in the uptrend and It indicates the possibility of a price reversal ( short ) . please support me with like and follow me for more ideas
Education
by Diamond_Chart
2
✨ The Dejavu Effect ✨What is Dejavu? Dejavu is a term used to describe a feeling that one has lived through the present situation before. How does this tie in with the markets? Technical analysis is based on patterns repeating itself over and over again. Technical analysts believe past trading activity and price action can be valuable indicators to future price movement. How can we prepare ourselves? Some of the ways we can prepare ourselves is by doing the following: - Learning patterns that reoccur over and over again such as bull flags, wedges etc. - Identifying candlestick formations and understand what they mean e.g. shooting star candles means there’s a possible trend reversal from bullish to bearish - Learning to identify structure levels where price can react in the future - Understanding fibonacci and learning how to use it effectively. [Once we’ve identified a possible market dejavu moment, what next? Following identification, the next step is confirming whether this is in fact a similar move to historic price movements. The types of confirmations that can be used are the following: - Trendline breakout - Fibonacci rejection - Lower timeframe patterns - Moving average strategies __________________________________________________ EURUSD - The Dejavu Effect 1. Bullish Correction. We identified a falling wedge which resulted in price moving higher. 2. Bear Correction. The bullish move was short lived with a bearish correction which resulted in… 3. Three Wave Falling Wedge. This falling wedge pushed price up to the double top region. 4. Ascending Correction. The move up to the double top could be monitored using an ascending trend line to monitor the correction. 5. Minor drop. Once price broke down, we had a minor drop. 6. Major drop. After another small correction we had a major drop. Notice how we didn’t specify whether we were talking about the Blue phase or Red red phase… Dejavu.
Education
by WicktatorFX
18
Elliot wave with Diagonal Ending Elliott Wave Count in Bitcoin Daily Chart In most cases, if wave 5 is formed as a diagonal triangle, it will cause severe falls after the end of the process. So after recognizing these diagonal triangles in wave 5 - you can close your long trades at the right point and make good profits from short trading in corrections waves. Please like our tutorial and follow us ------------------------------------------------------------------------------------------------------------------------------------------ You can see our analysis and signals in the following links :
Education
by HamidMojarrad
10
How to use trendline to identify price action structure/patternHi everyone: Many have asked me about how to properly use trendlines to identify price action structures and patterns. So in today’s educational video, I will go over this topic in more detail. First, I use the trendline as a “frame” to identify structures and patterns, and NOT use it as a Support/Resistance. What I do is to put in the trendline for the highs and lows of the price action that can help me to pinpoint what the price is doing, what kind of a correctional structure that it is currently in. Typically after an impulse phase of the market, then we start to identify a structure/pattern by connecting the swing highs and lows. Second, as I always point out in my videos/streams, a structure/pattern needs at least 2 swing highs and lows to classify as a structure. Certainly more swing highs and lows are good, but it's not necessary. Often I get asked about the “third touch” or more. To me it's not necessary, but if price does form the third touch, I would proceed the same as the price has a second touch. Third, we are identifying the price action correctional structure, and sometimes the market is not perfect, it will not give you a textbook looking bullish flag as an example. Hence the backtesting and chartwork from each trader is important to get your mind familiarized with the market and its “imperfect” development of the price action. After identifying the impulse phase, then look to see what the market is doing. Is it falling into a consolidation ? Not much movement except sideway price action, or ascending/descending like consolidation will give you a clue on whether the price is correcting to continue, or correcting to reverse. Take a look at the educational videos I have made in the past regarding the type of correctional structures we typically see in the market. All the videos are down below. Continue to backtest and do chart work to get familiar with drawing in the structures/patterns. The more you do these, the better and easier it is for you to identify them in your trading journey. Remember, the market is not perfect, so not all the structures/patterns will be “Textbook” like on the real, live market. Learn to deal with the “imperfect” market, so you can better utilize price action analysis to your advantage. Any questions, comments or feedback welcome to let me know :) Thank you Below are all my price action structures/patterns videos on different type of corrections. Continuation and Reversal Correction Identify a correction for the next impulse move in price action analysis Impulse VS Correction Multi-time frame analysis Continuation Bull/Bear Flag Parallel Channel (Horizontal, Ascending, Descending) Reversal Ascending/Descending Channel Reversal Rising/Falling Wedge Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Continuation/Reversal Expanding Structure/Pattern
OANDA:XAUUSDEducation
by jojofang0901
61
Best Candlestick Patterns Long Wick (Shadow) Candle: Buyers or sellers tried to push the price further but failed The inside bar: After a long wick could mean price change Also engulfing is a reversal signal. Momentum candle: Multiple rejections: Good resistance and sign of price rejection and reversal Shrinking candles: Loss of momentum 3 consecutive candles in the same colour: indicate the start of a new trend. Big red candle: bearish Doji: Open and close are similar and we have shadows on both sides. Can be a signal for reversal if the next candle shapes in a different colour from the previous one. Hammer: bullish Inverted hammer: bearish
Education
by apadanaforex
Closer look into Rising/Falling Wedge, Reversal Price Action Closer look into Rising/Falling Wedge, Reversal Price Action structures/patterns Hi traders: Today I will go more in detail on rising/falling wedge correction in price action structures/patterns. You might have already heard about these types of correctional structures, and many traders who utilize them. Certainly there are many ways of traders identifying them and taking advantage of these kinds of price action, so it's ideal for you to understand them in your analysis. We first need to understand that a rising/falling wedge is a REVERSAL price action. Meaning when the correction completes, there's a higher probability of the price to reverse. You might have already seen multiple price action videos from me that go over all sorts of continuation and reversal price action (I will share links below), and I always talk about when combining multiples of different price action structures/patterns will give you a better edge at entering positions that work out in your favor. Same idea here, so let's take a look at how rising/falling wedges are, how to identify them, and how to effectively use them in your analysis. Rising/falling wedge, just as the name suggests, is an ascending/descending type of correction where the price is getting squeezed into a “wedge”. As the price gets narrower and narrower, there's a higher probability of the price to “reverse” from the wedge. Now about entries, certainly many traders have their own method of entering, so I will share my point of view and the way how I like to enter them. Any questions, comments or feedback welcome to let me know :) Thank you Risk Management: 3 different entries on how to enter the impulsive phrase of price action Multi-time frame analysis Identify a correction for the next impulse move in price action analysis Continuation and Reversal Correction Continuation Bull/Bear Flag Parallel Channel (Horizontal, Ascending, Descending) Reversal Ascending/Descending Channel Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Continuation/Reversal Expanding Structure/Pattern
TVC:DXYEducation
by jojofang0901
47
Continuation & Reversal Correction in price action structures In-depth look at Continuation & Reversal Correction in price action structures/patterns Hi everyone: Today I want to revisit the fundamental aspect of trading impulsive and corrective phases in Price Action Analysis. As you all know I focus on multi-time frame analysis and forecasting/anticipating the next impulsive move in the market. To me, the most important part of identifying the next impulsive phase of the market, is to understand how correction works. An impulse phase usually happens after a correction has finished correcting, so the key is to identify and understand how a corrections structure will complete so we anticipate the next impulsive move. You may have seen my videos on this topic, but today I will go more in detail on this, and explain the 2 types of correctional structure the market can create. The market can only be in 2 phases, impulsive phrase or corrective phrase. In addition, the corrective phrase can only be continuation, or reversal. So to fully have an edge in the market, is to understand what the correctional structure the price is currently making, whether a continuation/reversal, then forecast the possible price outlook, and go down to the lower time frames for possible entries. Now, it's important to understand that different traders/strategies/styles will call these patterns/structures in varies names. What they are called or identify isn't important, but the important aspect is to understand whether they are continuation, or they are reversal. In addition, simply seeing price action structures/patterns by itself, is not a good enough entry criteria for me. You want to combine multi- time frame analysis, top-down approach, and with multiples of these price actions all happening so it adds extra confluence for you to enter a particular trade. Seeing a H and S pattern, on a 5 minute chart, without considering the overall HTF and other factors, will not be a consistent move in the long run. Continuation Correctional Structure/Pattern Bullish/Bearish Flag Bullish/Bearish Pennant Parallel Channel Reversal Correctional Structure/Pattern Ascending/Descending Channel Rising/Falling Wedge Double Top/Bottom Head & Shoulder Pattern/Inverse H and S “M” and “W” style pattern Reversal Impulse Price Action I will forward all the price action structures/patterns videos I have made in the past to help you understand each of the structures more. Impulse VS Correction Multi-time frame analysis Identify a correction for the next impulse move in price action analysis Continuation Bull/Bear Flag Parallel Channel (Horizontal, Ascending, Descending) Reversal Ascending/Descending Channel Reversal Double Top/Bottom Reversal Head & Shoulder Pattern Reversal “M” and “W” style pattern Reversal Impulse Price Action Continuation/Reversal Expanding Structure/Pattern Any questions, comments or feedback please let me know. :) Thank you Jojo
Education
by jojofang0901
40
How to manage & deal with consecutive losses in trading ? Trading Psychology: How to manage & deal with losses/consecutive losses in trading ? Hi everyone: Today I want to go over a very key trading psychology lesson on how to deal with losses, especially consecutive losses. This is bound to happen to any traders, whether you are new or experienced. ITs something all professional traders will have to deal with on a regular basis. Understand that, dealing with losses psychologically is the key factor in the success of a trader. This is because losses are inevitable, and trading is a probability, which trades that you take will end up both in wins and losses. However, traders usually can not accept losses, due to their ego, greed and other emotional factors. Aside from having a good risk management, trading plan, and trading strategies, traders can still experience the psychological emotions of losing. This is due to the fact that we are humans and we are an “emotional” animal. We don't want to be wrong, at all. Taking a loss is like getting slapped in the face by the market, which we have egos to fight against. What ends up after taking losses or consecutive losses, it puts traders at a disadvantage where their emotion is high, and likely to “revenage” trade to chase back losses, which end up in a deeper hole. To deal with such psychological phenomena, take a step back and observe your situation: First, did you follow your trading plan/strategy on how to enter, set SL/TP, and management ? Second, did you take an emotional trade due to greed or fear of missing out ? Third, have you journal down your losses and review them to make sure they are trades you really want to risk your capitals on ? By now you will see why we need to review these. Trading is a probability, not right or wrong. It's a random variable that you are putting your $ at risk. So if you understand the rules and plans that you follow and execute a trade accordingly, then there should NOT be any negative emotions towards the outcome of the trades, whether they are winners or losers. When I discuss the trades I entered every week in my trade recaps videos, I am always happy to enter a position, even if it goes to a loss. This is because I have done enough backtesting, chart work, and plan to enter a position. I understand strictly from a probability point of view, I could have a higher strike rate, and more often the trades will end up as a winner rather than a loser. However, I also understand and acknowledge that some trades will end up in a loss, disregard mine technical analysis or other’s fundamental analysis. It is what trading is all about. When I have consecutive losses, I will always review the 3 points I mentioned above and make sure they are all valid for me. Then I simply will take 1 day off from the market, chart, phone, and just get your mind clear. Come back strong after 1-2 days of rest, and have a positive mindset. What traders often do when they have consecutive losses is to right away re-enter back into the market and try to chase back their losses. This has always been the downfall of losing and it creates anxiety in traders’ minds. Such a negative experience is going to stay in the traders’ mind longer and deeper, compared to consecutive winners. So wise we understand that is the case how our brain is "programmed” into thinking, then it's up to us to do the opposite, and fight the urge to “revenge” our losses. At the end of the day, no one is trading your trading account, except yourself. Taking ownership of your account, learning to control our emotions, understanding the probability side of trading, and learning to let go, drop our ego will help us in the long run in this industry. I hope these pointers can help some traders who are still struggling with this concept. It's impossible not to take losses, but professional traders deal with it on a regular basis and still remain consistent in the long run. Thank you I will forward some Trading Psychology educational videos below on some of the topics explained today. Trading Psychology: Revenge Trading Trading Psychology: Fear Of Missing Out Trading Psychology: Over Leveraged Trading Trading Psychology: Is there Stop Loss Hunting in Trading ? How to deal with it ?
BITSTAMP:BTCUSDEducation
by jojofang0901
58
BEST pattern BTCThis is the strongest Bitcoin Pattern. Its called the Ladel Pattern, and it Starts when BTC reaches All-time high. The Ladel pattern has been consistently appearing at every major all-time high of BTC. And the accuracy of this pattern is pretty high as you’ll see in this video. People are used to “One Size Fits All Patterns”. The ladle pattern is proof that each Currency/Stock does have their own unique patterns that cannot be found in the traditional textbook pattern list. I also mention in this video that BTC likes to fall 80% from all-time highs. This is also a strong indication that BTC might go back down to the $10k-$15k range. Many new traders/investors are tunnel-visioned on the current price. They forget to take a step back and look at the big picture. I’ve met BTC traders who said that BTC never fell more than 50% in its lifetime. Those are the traders that never looked at BTC chart before 2020.
BITSTAMP:BTCUSDEducation
by MoonBets
24
How to read a Chart - Part IV: Perspectives on PoIPoints of Interest Introduction One of the most common mistakes in trading ist the trading somewhat somewhere in the nowhere, which in general results in a bad trade location, wide stops, being stopped out very often or being right while being wrong. Thus, in trading it is paramount to wait patiently for your setup to appear, and not every setup is of the same quality. Even though high quality setups are not appearing on a 1-minute-, 5-minute- or 60-minute-basis, waiting will actually not only save you money, but also result in higher profits, higher trading confidence and less stressful decision-making. Even if you’ve already heard of the basic principles, they are just right. A. Highs and lows As I’ve pointed out in my previous article “How to Read a Chart Pt. III”, the highs and lows on a daily chart are building the overall structure. Don’t get me wrong: the weekly has some nice perspectives too, but you should watch it if you are an investor going in for 10+ years. The highs and lows on a weekly chart still do have importance on lower time frames, but you shouldn’t make a decision on trading entries for a plus 5 years investment opportunity on a 1-minute- or even a 1-second chart. Why are highs and lows important? They are used as reference for past and thus future resistance. Does this always apply? No for sure, that's why structure is important. So before we’re diving deeper into this subject, let's have a quick comparison of weekly and daily highs and lows. I’ve marked the high and low of the weekly chart in thick red, just to show that everything you might see on a weekly basis you're also able to see on a daily basis. In orange is the range of the past week and in blue the range of the current week. So in general: if we’re trading above the previous week’s range, we are in general long biased, if we’re trading below the previous week’s range, we are short biased. Does this always apply? No! But when does this apply? When the big fishes, the “whales” are showing interest in selling or buying at those specific points. Something we can derive from the chart above is the following: the previous week’s low got rejected, but the value is shifting down; this means, that if we’re trading above the current week’s high there are two scenarios: either we’re going up fast, breaking the previous weeks high or we are being rejected and shifting down again - at least to the bottom of the range. If we're going below the low, it might go quick, fast and harsh. B. High and low of the previous day Applying this principle from chapter A to intra-day trading, it goes alike: in general, if we are trading above the previous day’s high, at large we are long and if we are trading below the low of the previous day, we are short. Let’s unfold this beauty of perspectivity: In the picture above I’ve used a random high/low indicator - displaying the highs and lows of the previous day's session - as there are hundreds and hundreds to be found on @TradingView and the reason why is quite obviuos and well justified. I’ve also added “setups” to show you what to expect if you would have traded blindly every single break above the high or below the low. Even if you would have no specific view on the market, no bias or any idea of the markets direction you still would have made 4X (40 times your risk ! ) at win ratio of 56% - which most people would say is "not good". C. Ranges So what are the zones between a day's high and low? It's nothing else than the day's range. You may find ranges on bigger and smaller scales, on a 1 minute to 1 year time frame. What are these ranges? They are zones of congestion, zones of consolidation and zones of value, but mainly they are battlefields. Let's have a look on a chart: I've just plotted some of these zones to point out one thing: if you're trading within the zone, you're lost and you will most likely lose money even if you're right about the direction. You need an edge in trading, and the easiest thing is to trade from one edge to the other edge until a breakout has been confirmed. D. Big Bars / Big Fat Candles Don't mistake me: this is not about day drinking, romantic candle light dinner or something like this; it is about big fat candles on a chart and what happened there and what is likely to happen. Some should note that a range on a lower time frame is nothing else than inside bars on a higher time frame. Usually a big fat candle appears if stops have been triggered and thus the sentiment has shifted. So, somewhere within this big fat candle there is support or resistance and it depends on volume and sentiment if we're about to move further in this direction or not, but mostly it is indicating momentum. If you want to trade pullbacks, you need to figure out where the breakout has happened; usually it has happened before the top or bottom of the corresponding range. Additionally, if a big fat candle got retraced to 100 percent, something is fishy, whilst a strong breakout should indicate only a partial retracement if the traders are committed to push prices further in their direction. E. Value areas and Points of No Interest As I'm using the free version of @TradingView , I would've attached an image from my order flow software, because there is no decent free volume profile indicator displaying value areas (if I'm wrong, post a link in the comments), but it seems that the image upload didn't work, but anyway. The point I'm trying to make ist this: value areas are showing zones where price is seen as fair and thus the most volume has been traded. If you're using a market profile (tpo or monkey bars), it is showing where price has been traded most of the time. Outside of this range, price is considered unfair, and this is - exactly as ranges overall - where your edge is. Zooming out and seeing the bigger picture is extremely helpful to not get caught in war zones of higher time frames and big players. On this chart above I'm using the 200 period volume profile of @LuxAlgo ,visually a beautiful piece of art. Furthermore, it is displaying somewhat similar to a value area and - even more interesting - the valleys in the profile, also called low volume nodes. To use these valleys as reference, you should not make the mistake and look where price has not been traded at all, but where supply and demand have diminished; this is blatantly simple: if there haven't been buyers or sellers at all, price will move on; so you need at least a certain threshold of trading activity. In grey I've plotted the borders of the range. As you can see, as soon as the price has reached these areas, a reaction has happened. On the upside, it was a head fake, false breakout, emerging head and shoulders pattern or simply: no more buying interest. When price broke down you could have easily entered at the rejection or at the pullback. Another zone of no interest is the light purple area, which has been established by big bars breaking through it and where one side has been swept. When price broke through and traded above, you could've used the pullback to go long (in the middle of the range though) or when it broke below to go short or to finally close your losing long position. Quick cheat number 1 on applying support and resistance: Switch to a line chart, check for the prominent highs and lows, switch back to candle or whatever your preference is and adjust (or don't ;) ). 3 different types of charts, all displaying the same. It is not perfect, it is not a pin point "you will always win and never lose" system, but markets consist of humans which aren't perfect either; and as long as machines are made by men, they aren't neither. And this is the reality of trading: nothing is a one-shot, a bullseye; nothing is perfect. At last, there is more to trading than placing a limit order into a chart and get rich quick. Quick cheat number 2 (that no one will tell you because it is too simple to sell it): Look to the left! Markets have memories, because - and I'm repeating - markets consist of humans, and the only reference points others may use are not any calculations, extensions or fantastic AI structures: at the end it is all derived from history. How did price react at the last reference point? What happened next? Let's quickly example this: Think of it yourself: do you want to re-evaluate every tick hunting for signals on a vast amount of indicators or are you just keeping it simple (stupid)? Key Takeaways Don’t trade somewhere in nowhere! Future price action depends on past action! Switch your perspective if a change has become evident! Trade less, earn more! ___ Note: As I’m writing a book about reading a chart, I am going to post a couple of short articles on this topic and others related to it, e.g. trend, volume , Dow theory, auction theory and behaviorism. If you are spotting some errors or if you like to add something, feel free to comment or pm. Cheers, Constantine - p.s.: This article is not intended as any kind of trading advice. If anything concerning this topic remains unclear, drop a message or a comment. I've also linked a previous analysis of a trade where you can see a walk-through of the principles as described above
Education
by constantine_trading
What is a Cup and Handle Pattern? GBP/USD Real ExampleGood morning, traders! Today we will make an educational post about a specific behavior in the market in certain circumstances, and we wanted to take advantage of the situation in GBP/USD that is currently happening. The pattern we are talking about is the CUP AND HANDLE PATTERN . This pattern is widely used in stocks or indices since they are trend instruments by their essence, and it serves to catch a potential rise in price after a correction. The premise for this pattern to be valid is that the asset is in a CLEAR trend, either bullish or bearish, and has initiated a corrective process. A cup and handle is a technical chart pattern that resembles a cup and handle where the cup is in the shape of a "u," and the handle has a slight downward drift. There are three key things to consider when forming these patterns: 🔸Length: Generally, cups with longer and more "U" shaped bottoms provide a stronger signal (this case). Avoid cups with sharp "V" bottoms. 🔸Depth: Ideally, the cup should not be overly deep. Avoid overly deep handles, as handles should form in the top half of the cup pattern. 🔸Volume: Volume should decrease as prices decline and remain lower than average in the bowl base; it should then increase when the stock begins to make its move higher, back up to test the previous high. 🔸In addition, it is also an important factor that the handle is a clear corrective pattern and has some point of support or support. In this situation, we see that in the daily chart, the price is touching the uptrend line, and also in the published chart, we see how it is also testing the broken zone of the range. The current reversal point is solid.
Education
by ThinkingAntsOk
2
Power of compounding interest, but why do traders still fail ? Hello everyone: Welcome to this quick educational video on Compounding interest in trading. Today I want to break down the benefits of compounding a trading account while keeping good risk management at bay. The reason why compounding interest is so lucrative is due to investing interest on top of interest, and your trading account can grow much faster than traditional investment returns. The important note is that, by having strict risk management rules, proper trading plan, the account can grow over time. But why do many traders fail to do so ? Let's take a deeper look into this: Many new/beginner traders often get involved in trading due to its profitable potential. However, most of them do not learn about risk management, trading psychology on mindset and emotions. They tend to over trade, over leverage their accounts in hope to double it in a short period of time. This almost always leads to traders to blow their accounts, and re-deposit more money to “chase/revenge” their losses, and the cycle continues. The truth is, growing the account by compounding can eventually double a trading account, but only in time and with strict risk management rules. However, the greed, emotion and mindset often become the tread stone for the traders’ success. It's important to understand that having a consistent, sustainable approach in trading can lead to profits and growth over time, but it's not something that is instantaneous, which is what most new/beginner traders often misunderstood. This can be due to social media, and lots of typical trading “guru” out there promising guaranteed results and easy money. Take a step back and think about compounding interest in time and scale. 5-7.5% return per month may not seem much for a small trading account, but it is sustainable and consistent by not over-risking and over-trading. In time when the account is at a larger scale, a few % return with compound effect in a year can generate very sizable return and growth. In today’s trading industry, there are many prop firms out there that allow you to trade their funds, if you can be consistent and sustainable. Understand these firms are not looking for traders to double their larger capital, rather, to have consistent return and proper risk management. When you can prove you can be consistent to compound a small account, then when you actually do trade a larger account, the % return would be the same. Last Note: Build up the right habits from the start. Your job in the beginning of trading is not to make massive returns, rather to focus on risk management, control emotion, and understand trading psychology. Once all these are checked, then you will be miles ahead of other traders who are still struggling to understand the concept. Any questions, comments or feedback welcome to let me know. Thank you Jojo
BITSTAMP:BTCUSDEducation
by jojofang0901
149
Key Patterns Of Price ActionKey patterns of price action. Below I will describe several key patterns, but on the diagrams you can see the analysis from a technical point of view. And also please pay attention to the rules, which I do not advise to ignore. The Cup with a handle pattern is formed according to the following logic: - On an upward movement, the bulls cannot push through the next resistance level , a correction begins. It is undesirable that there were impulses during a rollback, a moderate downward movement should be observed; -By basic rules, the bottom of the cup should be formed in the area of correction levels. A deeper rollback is allowed in modified models. In case of a deep correction after entering the market, the position is transferred to breakeven as soon as possible, the probability of the trend continuation is lower, it is better to insure; Double bottom It all starts with the formation of a new low on a downtrend, after which a rollback against the trend occurs. Then, the price goes down again and rests against the previous low. And finally, after pushing off from this level, an upward movement begins, which breaks through the level of the previous local maximum. It is after the breakout of this level (confirmation line) that the final formation of the 'Double Bottom' occurs and you can start buying. The same is with a reversal in an upward market. After the first high, the price should fall by at least 10%. Otherwise, it will mean that the bears are not strong enough. Saucer Let's start with the shape of the figure. Contrary to its name, the correct shape of the 'Saucer' figure rather resembles a bowl. As you can see, the figure is formed by a smooth price movement along a parabolic trajectory. The first half of the figure (the left side of the saucer) is a smooth descent from the edge of the saucer to its bottom. The second half of the figure (the right side of the saucer) is the same smooth rise from the bottom to the edge. Ideally, the second half should be a mirror image of the first. And the bottom should in no case be sharp . The classic 'Saucer' is formed, as a rule, on large timeframes from D1. But you can also find him on H1. Flat base In trading, the term flat means an area on the chart, without a clearly defined direction of price movement, that is, a trend. In other words, flat is the opposite of a trend. Misc Rules -all BP = 10 pips -ideal prior uptrend >30% -for wks abv avg vol: #up>#down -up 20% for new base - undercut base resets base count - 66% or 3rd stage base fails - 80% of 4th stage base fails - in base bottom look for - shakeout - tight closes - volume dryout - accumulation
Education
by DeGRAM
18
Key Patterns Of Price ActionKey patterns of price action. Below I will describe several key patterns, but on the diagrams you can see the analysis from a technical point of view. And also please pay attention to the rules, which I do not advise to ignore. The Cup with a handle pattern is formed according to the following logic: - On an upward movement, the bulls cannot push through the next resistance level, a correction begins. It is undesirable that there were impulses during a rollback, a moderate downward movement should be observed; -By basic rules, the bottom of the cup should be formed in the area of correction levels. A deeper rollback is allowed in modified models. In case of a deep correction after entering the market, the position is transferred to breakeven as soon as possible, the probability of the trend continuation is lower, it is better to insure; Double bottom It all starts with the formation of a new low on a downtrend, after which a rollback against the trend occurs. Then, the price goes down again and rests against the previous low. And finally, after pushing off from this level, an upward movement begins, which breaks through the level of the previous local maximum. It is after the breakout of this level (confirmation line) that the final formation of the 'Double Bottom' occurs and you can start buying. The same is with a reversal in an upward market. After the first high, the price should fall by at least 10%. Otherwise, it will mean that the bears are not strong enough. Saucer Let's start with the shape of the figure. Contrary to its name, the correct shape of the 'Saucer' figure rather resembles a bowl. As you can see, the figure is formed by a smooth price movement along a parabolic trajectory. The first half of the figure (the left side of the saucer) is a smooth descent from the edge of the saucer to its bottom. The second half of the figure (the right side of the saucer) is the same smooth rise from the bottom to the edge. Ideally, the second half should be a mirror image of the first. And the bottom should in no case be sharp. The classic 'Saucer' is formed, as a rule, on large timeframes from D1. But you can also find him on H1. Flat base In trading, the term flat means an area on the chart, without a clearly defined direction of price movement, that is, a trend. In other words, flat is the opposite of a trend. Misc Rules -all BP = 10 pips -ideal prior uptrend >30% -for wks abv avg vol: #up>#down -up 20% for new base - undercut base resets base count - 66% or 3rd stage base fails - 80% of 4th stage base fails - in base bottom look for - shakeout - tight closes - volume dryout - accumulation
Education
by DeGRAM
79
japanese candlestick patterns (pin bar)The pin bar: It is candlestick pattern that consists of just one candle, it has a long lower wick and short body and little or no upper wick. Strictly speaking, the lower wick should be at least two times longer than the body, the longer, the better. There are two types of pin bar , the bullish pin bar which is a reversal candle that occurs at the end of downtrend and reverse the trend. A bearish pin bar which is also a reversal candle that happens at the end of an uptrend and revers it As you can see this chart, almost pin bar appear the trend will change reversal. This is one of the best in price action.
Education
by tradeplanprofit
japanese candlesstick pattern (doji)The Doji is a candlestick where the opening and closing prices are the same (or almost the same). It can take many forms; as shown here; depending of what the trading activity was in that period. The Doji candlestick indicates that neither sellers or buyers have gained control, and that price has ended where it began. It is a sign of indecision in the market. Let me show you an example below : In the chart above, you can see different types of the Doji candlestick pattern. This candlestick gives us a clear image about what happened in the market during the specific time period. In this hourly chart above, the formation of the Doji means that buyers and sellers are equal, no one is in control of the market during one hour, which is the time of the Doji candlestick formation. You can't use the Doji alone to make your trading decision, my goal in this first lesson is to help you read charts by being able to identify and understand candlestick patterns formation, so when you see the Doji candlestick pattern for example, you know that during that period of time the market was in an indecision phase and sellers and buyers are equal. This is the most important information that the Doji gives us when it forms in the market.
OANDA:XAUUSDEducation
by tradeplanprofit