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Developing Success With PineScript : Building Trigger MechanismsIn my ongoing quest to build better tools for traders, I continue to develop new quantitative trigger logic to improve the working versions I have already created. Trigger logic is complicated for most people because they fail to take the time to "focus on failure." Everyone builds trading systems focused on where the triggers work perfectly (trust me - I've seen/built a few hundred of them). But the most important thing to focus on is where it fails to generate a decent trigger and how you are going to filter it out or protect capital when that failed trigger hits. In this example, I highlight my new "Gun-Slinger" triggers and how my continued development is creating more advanced trading tools for skilled traders. I hope you enjoy it. #trading #research #investing #tradingalgos #tradingsignals #cycles #fibonacci #elliotwave #modelingsystems #stocks #bitcoin #btcusd #cryptos #spy #es #nq #gold
NASDAQ:NVDAEducation
by BradMatheny
False Or Real? How To Determine If A Move Is Real or False!Bitcoin recently produced a major bearish move, the continuation of a bearish trend that started to develop earlier this year. As we arrived at the current market situation, many people are wondering, is this a real or false breakdown? 👉 How to determine if a move is false or real? There are many ways to do so... Let's have a look. 1) Levels of importance. We can determine if a move is false or real, if it cuts through major support or resistance levels. Here we can see Bitcoin moving below the 0.382 and 0.5 Fib. retracement levels after almost five months of bearish consolidation. This would indicate this move being real. 2) Moving averages. If a major move wicks in one direction but ends up closing without conquering/breaking a major moving average, then the move is false. If the major move ends up by closing above (bullish) or below (bearish) a major moving average after the event, it is then considered a real move. Here we can see Bitcoin closing below several major moving averages after a strong bearish move. Indicating that this is a real breakdown. 3) Volume. If a major move is supported by high volume, it indicates the move is real. Really high volume leaves no doubt as to the validity of the move in question. Here we are using TradingView's index and it shows the highest volume since 5-March. 4) Continuation. If the move in question is the continuation of an already developing situation, the move can be considered real. Here we can see a lower highs and lower lows pattern (downtrend) developing, making the last drop a continuation of this pattern. This indicates that this is a real move. These are just some of the ways to determine if a market move is real or false. Thank you for reading. Namaste.
GEMINI:BTCUSDEducation
by MasterAnanda
18
Fibonacci : The Best Trading Tool, How To Use It Correctly in this video i am sharing with u all my secrets in using the Fibonacci Tool. in my trading journey this was the best most precise trading tool i have ever used. it has so many advantages such as: 1- giving u the entry point. 2- easy and precise stop loss placements. 3- early indication if the wave has failed. watch the video and an don't forget to take a screenshot of the levels settings, Good luck all.
Education
by Forex_Wealth_Factory
4
5 Strategies for Traders in 20245 Strategies for Traders in 2024 Trading strategies are essential tools for navigating financial markets. They provide a structured approach to trading decisions, leveraging technical indicators and patterns to identify opportunities. This article explores various potentially effective trading strategies, offering insights into how traders can apply them to improve their performance and achieve their trading goals. Understanding Different Types of Trading Strategies Trading strategies are essential for traders aiming to navigate the financial markets with precision and discipline. These strategies provide a structured approach for varying trading styles, helping traders make informed decisions based on specific criteria and market conditions. Here are some key types of trading strategies: - Trend Following: Traders aim to identify and get involved in trends, exploiting the trending nature of markets. Common indicators include moving averages and trendlines. - Mean Reversion: Based on the idea that prices will revert to their mean or average level over time. Traders use indicators like Bollinger Bands and RSI to identify overbought or oversold conditions. - Momentum: Focuses on assets that are moving strongly in one direction with high volume. Momentum traders use indicators such as the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI). - Breakout: Involves entering positions when the price breaks through a predefined level of support or resistance. Breakouts can be confirmed using volume data. - Scalping: Aims to take advantage of small price changes over short periods. Scalpers typically rely on technical indicators like order flow data. Types of Indicators and Patterns Used in Traders’ Strategies In trading, various indicators and patterns are utilised to analyse market conditions and identify potential trading opportunities. These tools can be broadly categorised into several groups, each serving a specific purpose across different trading strategies. 1. Trend Indicators Trend indicators offer a way for traders to identify a trend’s direction and strength. Some popular trend indicators include: - Moving Averages (Simple, Exponential) - Moving Average Convergence Divergence (MACD) - Average Directional Index (ADX) - Parabolic SAR 2. Momentum Indicators Momentum indicators measure the speed or strength of price movements. They are crucial for identifying overbought or oversold conditions. Common momentum indicators include: - Relative Strength Index (RSI) - Stochastic Oscillator - Rate of Change (ROC) - Commodity Channel Index (CCI) 3. Volatility Indicators Volatility indicators gauge the degree of price variation over time, providing insights into market turbulence. Key volatility indicators are: - Bollinger Bands - Average True Range (ATR) - Keltner Channels - Standard Deviation 4. Volume Indicators Volume indicators analyse the trading volume to confirm the strength of a price movement or trend. Notable volume indicators include: - On-Balance Volume (OBV) - Chaikin Money Flow (CMF) - Volume Weighted Average Price (VWAP) - Accumulation/Distribution Line 5. Reversal Patterns Reversal patterns signal potential changes in market direction, allowing traders to anticipate trend reversals. Some reversal patterns are: - Sushi Roll Reversal - Megaphone - Diamond - Three Drives 6. Continuation Patterns Continuation patterns help traders understand whether a current trend is likely to continue. Popular continuation patterns include: - Flags and Pennants - Cup and Handle/Inverted Cup and Handle - Rectangles - Wedges 7. Candlestick Patterns Candlestick patterns are formed by one or more candlesticks on a chart and provide insights into market sentiment. Some candlestick patterns are: - Hook Reversal - Kicker - Belt Hold - Island Reversal These indicators and patterns form the foundation of many top trading strategies, enabling traders to analyse market behaviour and make entry decisions. Below, we’ll use some of these indicators and patterns in several different trading strategies. Five Strategies for Traders Now, let’s examine five trading strategies that may work if you modify them in accordance with your trading plan and common trading rules. While we’ve used the EUR/USD pair to demonstrate the examples, they can also be applied as commodity, crypto*, and stock market trading strategies. Head over to FXOpen’s free TickTrader platform to access the indicators discussed in these strategies and more than 1,200 trading tools. VWAP and RSI - Volume Weighted Average Price (VWAP): An indicator that shows the average price a security has traded at throughout the day, based on both volume and price. - Relative Strength Index (RSI): A well-known momentum indicator that gauges the magnitude and change of market movements. It also indicates overbought and oversold market conditions. The VWAP and RSI trading method leverages mean reversion, which assumes that prices will revert to their mean value over time. This strategy may be potentially effective because it combines VWAP’s price-volume insight with RSI’s momentum analysis, providing a clear picture of potential price reversals. According to theory, it’s best used on intraday charts, typically the 5m or 15m, given the VWAP resets between trading days. Entry - Traders often look for RSI values above 70 (overbought) or below 30 (oversold) to indicate potential reversals. - A short entry is typically considered when RSI crosses back below 70 and the price is above the VWAP. - Conversely, a long entry is common when RSI crosses back above 30 and the price is below the VWAP. - A divergence between RSI and the price can add confluence to the trade. Stop Loss - Stop losses are usually set beyond the recent swing high for short positions or swing low for long positions. Take Profit - This approach capitalises on the mean reversion principle, aiming for prices to return to their average level. Therefore, it is common for traders to take profits at the VWAP. - However, take profits might also be placed at a suitable support or resistance level. Breakout and Retest The Breakout and Retest trading technique focuses on identifying horizontal ranges or consolidation phases in the market. This strategy aims to capitalise on price movements that occur after the breakout of these ranges, leveraging the potential for substantial trend formation. Entry - Traders observe a horizontal range or consolidation period with a directional bias in mind. - A strong movement or candle closing beyond the range signals a breakout. - Traders typically set a limit order at the range's high (for a bullish breakout) or low (for a bearish breakout) after the breakout occurs. Stop Loss - Stop losses are generally placed below the range's low for bullish breakouts or above the range's high for bearish breakouts. This risk management approach potentially helps protect against false breakouts and reversals. - However, a trader can also place a stop loss above or below the nearest swing point, which may provide a more favourable risk/reward ratio. Take Profit Given that breakouts from consolidation ranges often lead to prolonged price moves, traders commonly set take-profit levels at key support or resistance levels. Fibonacci and Stochastic - Fibonacci Retracement: A tool used to identify potential support and resistance levels by measuring the distance between a significant high and low. - Stochastic Oscillator: A momentum indicator comparing a security’s closing price to its price range over a specified period, typically used to identify overbought or oversold conditions. The Fibonacci and Stochastic strategy combines Fibonacci retracement levels with the Stochastic Oscillator to identify potential price reversals in trending markets. This approach leverages key retracement levels and momentum signals, offering traders a precise method for timing entries and exits. Entry - Traders typically observe a new low in a bear trend or a new high in a bull trend. - A Fibonacci retracement is then applied between the prior high and low, focusing on the 0.382, 0.5, or 0.618 levels. - As the price approaches these levels, traders look for signs of rejection, such as candlestick patterns like a shooting star or hammer. - Additionally, traders watch for the Stochastic Oscillator to cross back below 80 (in a bear trend) or above 20 (in a bull trend). - When the Stochastic moves beyond these levels, an entry is sought. Stop Loss - Stop losses may be set just beyond the entry swing point or the next Fibonacci level. Take Profit - Profits might be taken at a valid support or resistance level. Bollinger Band Squeeze and MACD - Bollinger Bands: A volatility indicator consisting of a middle band (usually a simple moving average) and two outer bands set at standard deviations from the middle band. - Moving Average Convergence Divergence (MACD): A momentum indicator valuable in trending markets, designed to measure the relationship between two moving averages. The Bollinger Band Squeeze and MACD strategy combines Bollinger Bands' volatility analysis with MACD's momentum confirmation. This approach identifies potential breakouts above/below the Bollinger band following periods of low volatility, providing a robust framework for trading such events. The strategy is used in a solid trend and in the direction of the trend. Entry - Traders look for Bollinger Bands to constrict, indicating reduced volatility. - The MACD is used to confirm the breakout direction. Traders typically watch for the MACD signal line to cross above the MACD line for a bullish breakout or below for a bearish breakout. - The breakout is generally confirmed by a strong price movement in the direction of the MACD crossover. Stop Loss - Stop losses may be set beyond the opposite edge of the Bollinger Bands. Take Profit - Profits might be taken when the price closes near or beyond the opposite edge of the Bollinger Bands. This method allows traders to capitalise on the full extent of the breakout move. Keltner Channel and RSI Momentum - Keltner Channels (KC): A volatility-based indicator consisting of bands set around an exponential moving average, typically using a multiplier of 1.5 times the Average True Range (ATR). The Keltner Channel and RSI Momentum strategy leverages volatility and momentum to identify potential trade opportunities. This approach focuses on price movements outside the Keltner Channel, confirmed by RSI, to signal entry points. The strategy is applied within the strong trend. Entry - Traders observe RSI to be above 50 but below 80 for bullish setups, indicating upward momentum without being severely overbought. For bearish setups, RSI should be below 50 but above 20. - A decisive close outside the Keltner Channel signals a potential trade. For a bullish entry, the price should close above the upper channel, with RSI confirming by staying within the bullish range. Conversely, for a bearish entry, the price should close below the lower channel, with RSI confirming by staying within the bearish range. Stop Loss - Stop losses may be set beyond the midpoint of the Keltner Channel. - Alternatively, stop losses may be placed on the other side of the channel, depending on the trader's risk tolerance. Take Profit - Profits may be taken at key support or resistance levels, providing logical exit points based on market structure. - Additionally, traders might exit when the price closes beyond the opposite side of the Keltner Channel. - Another potential exit strategy is to take profits when RSI reaches overbought (above 80) or oversold (below 20) levels, indicating potential exhaustion of the current move. The Bottom Line Understanding and applying different trading strategies can potentially enhance your trading performance and help you achieve your financial goals. By leveraging tools like VWAP, RSI, and Fibonacci retracements, traders can make more informed decisions. Open an FXOpen account today to access these strategies and more with a broker that supports your trading journey. FAQs What Is the Most Basic Trading Strategy? The most basic trading strategy is the moving average golden and death cross strategy. This approach involves using two moving averages, typically 50-day and 200-day, to identify potential buy and sell signals. A golden cross occurs when the short-term 50-day moving average crosses above the long-term 200-day moving average, signalling a bullish market trend and a potential buying opportunity. Conversely, a death cross happens when the 50-day moving average crosses below the 200-day moving average, indicating a bearish trend and reflecting a potential selling opportunity. What Strategy Do Most Day Traders Use? Most day traders use momentum trading. This strategy involves identifying assets that are moving significantly in one direction on high volume. In a stock trading strategy, for instance, a day trader might buy a stock climbing strongly backed by higher-than-average volume. They might rely on technical indicators like Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) to make decisions. How to Backtest a Trading Strategy? To backtest a trading strategy, traders use historical data to simulate the performance of a strategy over a specified period. This involves applying the strategy's rules to past data to see how it would have performed. Traders typically use backtesting software or platforms that allow for detailed analysis and visualisation of results. How to Create My Own Trading Strategy? Creating a potentially successful trading strategy involves several steps. First, identify your trading goals and risk tolerance. Then, choose the market and timeframe you want to trade. Develop specific entry and exit rules using technical indicators and patterns. Finally, test your strategy using historical data to ensure its effectiveness before applying it to live trading. Also, ChatGPT provides numerous opportunities, including the creation of a trading strategy. Read our article ‘How to Use ChatGPT to Make Trading Strategies.’ *At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
3
How to make someone else's chart your ownHello, traders. If you "Follow", you can always get new information quickly. Please also click "Boost". Have a nice day today. ------------------------------------- Sometimes, people ask how to use indicators displayed on the chart. You can add public indicators by clicking "Indicators" and searching for indicators. However, since not all indicators are public, you can use private indicators by sharing published ideas. I will take the time to explain how to share them. - In order to make someone else's chart your own, you need to share the chart from an idea published by someone else. To do this, you must be a paid member of TradingView. --------------------------------------- 1. Click on the idea of ​​someone else whose chart you want to share and click "Share" near the bottom of the chart. 2. In the next window, click "Make it mine". You can do it as above. ---------------------------------------- However, the idea poster must have the layout of the chart "Sharing". - Since there is a limit to the number of indicators supported depending on the paid level, it is recommended to check your paid level to see if you can use all the indicators of the chart you want to share. I briefly looked into how to make someone else's chart mine. - Have a good time. Thank you. --------------------------------------------------
Education
by readCrypto
8-5-24 Developing Pinescript Tools For TradersPart of my learning process with TradingView has been to delve a bit into Pinescript. I've been programming for a while now - more than 20 years. But I focus on developing modeling systems, adaptive AI types of solutions, and fully automated trading systems for clients. Pinescript has been fun. Overall, I believe there are many advanced capabilities achievable in Pinescript as long as one sticks to simple principles. _ a focus on core elements as separate script components _ remember to clean/document up your processes/arrays as you go _ develop core logic functions first, then go back and address display features _ remember to organize your code in a way you can clearly address version changes In this example, I started with the idea of building a tool based on Fibonacci Price Theory, then came up with an idea to measure price pressure differently than others had done. Once I started playing with the display features (plot) I was able to see how my initial scripts worked and how the calculated data represents price trends/changes. For me, seeing is the biggest part of the process. If I can't see how the data looks - then it is almost unusable for me to build more advanced logical features. That's why I suggest building each component of your system out as unique indicators. I want to see the data/indicator work before I try to build some additional trading logic with it. Overall, I'm very happy with what I've built. It has taken me about 2 weeks to build all of this (only really applying a few hours every other day or so). One last thing, use the newbar feature to control persistent variable features. Otherwise, you may end up creating something that processes every tick. More soon. #toolsfortraders #trading #spy #qqq #btcusd #strategy #systems #coding
AMEX:SPYEducation
by BradMatheny
1
Zero Spread Milestone: Strategic Trade in Micro Yield FuturesIntroduction The current market scenario presents a unique potential opportunity in the yield spread between Micro 10-Year Yield Futures (10Y1!) and Micro 2-Year Yield Futures (2YY1!). This spread is reaching a critical price point of zero, likely acting as a strong resistance. Such a rare situation opens the door for a strategic trading opportunity where traders can consider shorting the Micro 10-Year Yield Futures and buying the Micro 2-Year Yield Futures. In TradingView, this spread is visualized using the symbol 10Y1!-CBOT_MINI:2YY1!. The combination of technical indicators suggests a mean reversion trade setup, making this a compelling moment for traders to act on such a potential opportunity. The alignment of overbought signals from Bollinger Bands® and the RSI indicator further strengthens the case for a reversal, presenting an intriguing setup for informed traders. All of this is following last Wednesday, July 31, 2024, when the FED reported their decision related to interest rates where they left them unchanged, adding further context to the current market dynamics. Yield Futures Contract Specifications Micro 10-Year Yield Futures (10Y1!): Price Quotation: Quoted in yield with a minimum fluctuation of 0.001 Index points (1/10th basis point per annum). Tick Value: Each tick is worth $1. Margin Requirements: Approximately $320 per contract (subject to change based on market conditions). Micro 2-Year Yield Futures (2YY1!): Price Quotation: Quoted in yield with a minimum fluctuation of 0.001 Index points (1/10th basis point per annum). Tick Value: Each tick is worth $1. Margin Requirements: Approximately $330 per contract (subject to change based on market conditions). Margin Requirements: The margin requirements for these contracts are relatively low, making them accessible for retail traders. However, traders must ensure they maintain sufficient margin in their accounts to cover potential market movements and avoid margin calls. Understanding Futures Spreads What is a Futures Spread? A futures spread is a trading strategy that involves simultaneously buying and selling two different futures contracts with the aim of profiting from the difference in their prices. This difference, known as the spread, can fluctuate based on various market factors, including interest rates, economic data, and investor sentiment. Futures spreads are often used to hedge risks, speculate on price movements, or take advantage of relative value differences between related instruments. Advantages of Futures Spreads: Reduced Risk: Spreads generally have lower risk compared to outright futures positions because the two legs of the spread can offset each other. Lower Margin Requirements: Exchanges often set lower margin requirements for spread trades compared to single futures contracts because the risk is typically lower. Leverage Relative Value: Traders can take advantage of price discrepancies between related contracts, potentially profiting from their convergence or divergence. Yield Spread Example: In the context of Micro 10-Year Yield Futures and Micro 2-Year Yield Futures, a yield spread trade involves buying (or shorting) one contract (10Y1! Or 2YY1!) while shorting (or buying) the other. This trade is based on the expectation that the spread between these two yields will move in a specific direction, such as narrowing or widening. The current scenario (detailed below), where the spread is reaching zero, suggests a significant resistance level, providing a unique trading opportunity for mean reversion. Analysis Method Technical Indicators: Bollinger Bands® and RSI 1. Bollinger Bands®: The spread between the Micro 10-Year Yield Futures (10Y1!) and Micro 2-Year Yield Futures (2YY1!) is currently above the upper Bollinger Band on both the daily and weekly timeframes. This indicates potential overbought conditions, suggesting that a price reversal might be imminent. 2. RSI (Relative Strength Index): The RSI is clearly overbought on the daily timeframe, signaling a possible mean reversion trade. When the RSI reaches such elevated levels, it often indicates that the current trend may be losing momentum, opening the door for a reversal. Chart Analysis Daily Spread Chart of 10Y1! - 2YY1! The main article daily chart above displays the spread between 10Y1! and 2YY1!, highlighting the current position above the upper Bollinger Band. The RSI indicator also shows overbought conditions, reinforcing the potential for a mean reversion. Weekly Spread Chart of 10Y1! - 2YY1! The above weekly chart further confirms the spread's position above the upper Bollinger Band. This longer-term view provides additional context and supports the likelihood of a reversal. Conclusion: Combining the insights from both Bollinger Bands® and RSI provides a compelling rationale for the trading opportunity. The spread reaching the upper Bollinger Band on multiple timeframes, along with an overbought RSI, strongly suggests that the current overextended condition is potentially unsustainable. Additionally, all of this is occurring around the key price level of zero, which can act as a significant psychological and technical resistance. This convergence of technical indicators and the critical price level points to a high probability for a potential mean reversion, making it an opportune moment to analyze shorting the Micro 10-Year Yield Futures (10Y1!) and buying the Micro 2-Year Yield Futures (2YY1!) as the spread is expected to revert towards its mean. Trade Setup Entry: The strategic trade involves shorting the Micro 10-Year Yield Futures (10Y1!) and buying the Micro 2-Year Yield Futures (2YY1!) around the price point of 0. This is based on the analysis that the spread reaching zero can act as a strong resistance level. Target: As we expect the 20 SMA to move with each daily update, instead of targeting -0.188, we aim for a mean reversion to approximately -0.15. Stop Loss: Place a stop loss slightly above the recent highs of the spread. The daily ATR (Average True Range) value is 0.046, so adding this to the entry price could be a way to implement a volatility stop. This accounts for potential volatility and limits the downside risk of the trade. Reward-to-Risk Ratio: Calculate the reward-to-risk ratio based on the entry, target, and stop loss levels. For example, if the entry is at 0.04, the target is -0.15, and the stop loss is at 0.09, the reward-to-risk ratio can be calculated as follows: Reward: 0.19 points = $190 Risk: 0.05 = $50 Reward-to-Risk Ratio: 0.19 / 0.05 = 3.8 : 1 Importance of Risk Management Defining Risk Management: Risk management is crucial to limit potential losses and ensure long-term trading success. It involves identifying, analyzing, and taking proactive steps to mitigate risks associated with trading. Using Stop Loss Orders: Always use stop loss orders to prevent significant losses and protect capital. A stop loss order automatically exits a trade when the price reaches a predetermined level, limiting the trader's loss. Avoiding Undefined Risk Exposure: Clearly define your risk exposure to avoid unexpected large losses. This involves defining the right position size based on the trader’s risk management rules by setting maximum loss limits per trade and overall portfolio. Precise Entries and Exits: Accurate entry and exit points are essential for successful trading. Well-timed entries and exits can maximize profits and minimize losses. Other Important Considerations: Diversify your trades to spread risk across different assets. Regularly review and adjust your trading strategy based on market conditions. Stay informed about macroeconomic events and news that could impact the markets. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CBOT_MINI:10Y1!Education
by traddictiv
What Is a Whipsaw, and How Can One Trade It?What Is a Whipsaw, and How Can One Trade It? A whipsaw occurs when a market exhibits sharp price movements in one direction, followed by a sudden reversal. This pattern can mislead traders and often leads to significant losses if not managed properly. This article explores the causes, identification, and approaches to navigating whipsaws. Understanding a Whipsaw in Trading A whipsaw pattern occurs when a market exhibits sharp price movements in one direction, followed by a sudden reversal. This pattern can be particularly challenging for traders, as it often leads to significant losses if not properly managed. In essence, a whipsaw is a series of rapid, unexpected price changes that can quickly lead to a loss. Whipsaws are common in volatile markets and can be triggered by a variety of factors, including sudden economic news, unexpected geopolitical events, or shifts in market sentiment. In a whipsaw example, the EUR/USD pair broke through a new high, attracting buyers who believed the uptrend would continue. However, the price then reversed sharply, causing those traders to incur losses. After, the price turned around and set a new high but turned down again. Understanding whipsaws is crucial for traders because these patterns can occur across various timeframes, from intraday charts to weekly or monthly ones. Still, those who trade on low timeframes are more susceptible to losses due to smaller capital and tighter stop-loss levels. Recognising the potential for a whipsaw helps traders remain cautious and avoid over-committing to a position based solely on initial price movements. Understanding Whipsaw Trading Recognising a whipsaw involves identifying its distinct characteristics and understanding the market conditions that typically accompany it. Characteristics of a Whipsaw A whipsaw is recognised by its sharp and rapid price movements in opposing directions, usually within a short timeframe. The key characteristics include: - Sudden Price Reversals: Prices often spike up or down, quickly followed by a reversal in the opposite direction. - High Volatility: Whipsaws occur in highly volatile markets where prices are sensitive to news and events. - False Breakouts: A common feature is a false breakout, where prices breach a support or resistance level briefly before reversing. - Stop-Loss Triggers: These patterns frequently hit traders' stop-loss levels due to abrupt reversals, causing unexpected exits from trades. Identifying a Whipsaw To spot a whipsaw, traders typically look for the following indicators and conditions: - Chart Patterns: Whipsaws are visually apparent on charts as sharp zigzag patterns. Traders often see a price move beyond a support or resistance level, followed by a swift reversal. - Momentum Indicators: For example, traders use RSI to gauge momentum. Whipsaws may be identified when the RSI shows overbought or oversold conditions followed by rapid corrections. - Candlestick Patterns: Specific candlestick formations, such as doji or spinning tops, can indicate indecision in the market, which is a precursor to a whipsaw. - Moving Averages: When short-term moving averages cross above or below long-term moving averages briefly before reversing, it may signal a whipsaw. To access these tools and identify patterns in real time, head over to FXOpen’s free TickTrader platform to get started with live charts. Examples and Timeframes Whipsaws can occur across different timeframes, from one-minute to daily or weekly charts. For instance, in intraday trading, a whipsawed stock might break out during the first hour of trading due to news, only to reverse sharply by midday. On hourly charts, earnings announcements can trigger whipsaws as initial investor reactions swing prices sharply before settling. Causes of Whipsaws A whipsaw, meaning a sharp and rapid price reversal, can occur due to several market events. Understanding these causes can help traders navigate and anticipate these volatile movements. Market Volatility High market volatility is a primary cause of whipsaws. When prices react intensely to news, economic data, or geopolitical events, the market becomes highly volatile. This rapid reaction can cause significant price swings in both directions, creating the whipsaw effect. Sudden News or Events Unexpected news or events, such as earnings reports, economic indicators, or geopolitical developments, can trigger whipsaws. For instance, a positive earnings report might initially drive prices up, only for a negative market sentiment or broader economic concern to quickly reverse this movement. Liquidity and Market Depth Low liquidity and shallow market depth often contribute to whipsaws. In markets with fewer participants or limited order sizes, large trades can disproportionately impact prices, causing sharp movements and subsequent reversals as the market absorbs these orders. Algorithmic Trading High-frequency trading and algorithmic trading can amplify whipsaws. These automated systems execute large volumes of trades at high speeds, often reacting to the same market signals simultaneously. This can lead to exaggerated price movements followed by rapid reversals. Trader Behaviour Emotional reactions from traders, such as panic selling or greedy buying, can cause whipsaws. When traders react impulsively to market movements, they contribute to the rapid up-and-down price swings characteristic of whipsaws. This behaviour is often driven by fear of missing out (FOMO) or fear of loss. How to Approach Whipsaws Navigating whipsaws requires a combination of strategic planning and disciplined execution. Traders can potentially mitigate risks and manage their positions by following several key principles. Higher Timeframe Bias Maintaining a higher timeframe (HFT) bias is crucial. By analysing longer-term charts, traders can identify the broader market trend, which can help maintain confidence during short-term whipsaws. This perspective may prevent knee-jerk reactions to minor fluctuations and align decisions with the overall market direction. Confluence of Factors When in a trade, seeking multiple factors of confluence is essential. This includes aligning technical indicators, chart patterns, and volume analysis with the HTF bias. A strong confluence of signals may provide greater confidence, reducing the likelihood of emotional reactions during volatile whipsaw events. Risk Management Strategies During a whipsaw, traders use three primary risk management options: Do Nothing Traders might choose to do nothing if they can justify that the whipsaw is a minor swing relative to their trade idea. If the price is already far from their stop loss, holding the position might be justified. This approach requires a solid rationale to avoid emotional decisions. Trim Position Size Reducing the position size, typically by half, decreases exposure to potential losses while remaining in the trade. This strategy allows the trade more time to work out without the full risk of a volatile market. Move the Stop Loss Moving the stop-loss level to a potentially safer, more distant level can potentially avoid being stopped out by volatility. However, this should be accompanied by reducing the position size to maintain consistent risk. For example, if a trader initially risks 1% with a 10-pip stop loss, moving the stop to 20 pips should be matched by closing half the position to continue risking only 1%. Exiting or Staying Flat In some cases, traders prefer to exit the position or stay flat until more confidence in the market direction is achieved. If a whipsaw is occurring, exiting around breakeven or at a slight loss might prevent the mental stress of watching a position swing back and forth. This approach can potentially preserve capital and emotional stability, enabling a clearer mindset for future trades. Common Mistakes to Avoid Navigating whipsaws can be challenging, and traders often make several avoidable mistakes. Understanding these pitfalls might help in managing trades more effectively. Overtrading in Volatile Markets Overtrading during high volatility is a common error. Traders often react impulsively to sharp price movements, entering and exiting positions too frequently. This can lead to increased transaction costs and reduced overall returns. Ignoring Fundamental Analysis Relying solely on technical analysis without considering fundamental factors can be detrimental. Economic data, news events, and geopolitical developments can drive whipsaws. Ignoring these elements can result in unexpected and adverse price movements. Misinterpreting Market Signals Traders sometimes misinterpret market signals, confusing a whipsaw with a genuine trend reversal. This misinterpretation can lead to premature exits from effective trades or entry into losing positions. Careful analysis and confirmation across multiple indicators can help potentially mitigate this risk. Neglecting Risk Management Failing to adjust risk management strategies during a whipsaw is a critical mistake. Traders might leave stop losses too tight, leading to unnecessary exits, or fail to reduce position sizes, increasing potential losses. Effective risk management, including appropriate stop-loss placement and position sizing, is crucial. Emotional Trading Emotional reactions to market volatility can cloud judgement. Panic selling or greedy buying often exacerbates losses. Maintaining discipline and sticking to a well-thought-out trading plan can help in avoiding decisions driven by fear or greed. The Bottom Line Whipsaws are challenging yet common patterns in volatile markets, characterised by sharp price movements and sudden reversals. Understanding their causes, identifying their characteristics, and employing strategic approaches can help traders navigate these turbulent conditions. Open an FXOpen account to access advanced trading tools and resources that might enhance your trading strategies and help you navigate market volatility with confidence. FAQs What Is a Whipsaw in Trading? In trading, a whipsaw refers to a scenario where the price of a security moves in one direction but then quickly reverses direction, resulting in rapid and often unexpected gains and losses. This phenomenon can be highly frustrating and costly for traders, particularly those who employ trend-following strategies, as it makes it difficult to analyse market trends. What Does Whipsawed Mean in Stocks? Being whipsawed in stocks means a trader experiences a sharp price movement in one direction followed by an immediate reversal. This often results in triggering stop-loss orders and causing traders to exit positions at a loss, only for the price to revert to its original trend shortly after. How to Avoid Whipsaws in Trading? To avoid whipsaws, traders typically maintain a higher timeframe bias, seek the confluence of multiple indicators, and employ robust risk management strategies. Reducing position size, carefully placing stop-loss orders, and avoiding impulsive trading decisions are essential techniques to mitigate the effects of whipsaws. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
4
Trade out of balance markets like a pro (simple TPO concept)Educational video explaining in simple terms how to identify out of balance markets and use that in your day trading. It simplifies the concepts of James Dalton from "Mind over Markets" using volume profile and TPO charts and breaks it down into actionable steps. It also covers the thinking of Stacey Burke, with price always "trading in a box". You learn the meaning of value area, point of control, other timeframe traders and out of balance markets. You learn how institutional traders act in the market and how to observe and identify what they are doing and how to follow them. This can lead to massively profitable setups and trades
OANDA:XAUUSDEducation
by TC888
Trading EURUSD | Judas Swing Strategy 30/07/2024Risk management ought to be a trader's closest ally, as the previous week demonstrated the practical significance of incorporating risk management into every trader's toolkit. Last week, we executed four trades; despite having only one win and three losses, we concluded the week with a mere 1% loss on our trading account. This has heightened our excitement for the opportunities that this week may present. As is customary, at 8:25 AM EST, we commenced the day by reviewing the essential items on our Judas Swing strategy checklist, which comprises: - Setting the timezone to New York time - Confirming we're on the 5-minute timeframe - Marking the trading period from 00:00 - 08:30 - Identifying the high and low of the zone The next 5 minute candle swept liquidity resting at the low of the zone, which meant our focus would be on identifying potential buying opportunities for the trading session. To increase the likelihood of success of our trades, we wait for a break of structure (BOS) towards the buy side. Once the BOS occurs, we anticipate price to retrace to the initial Fair Value Gap (FVG) created during the formation of the leg that broke the structure. We patiently waited for price to retrace into the created Fair Value Gap (FVG), and executed our trade upon the closing of the first candle that entered the FVG, as all the conditions on our checklist for trade execution were satisfied. Please note that our stop loss is set at the low of the price leg that broke structure, and we implement a minimum stop loss of 10 pips. The minimum stop loss value was not chosen randomly; it was determined through extensive backtesting. This allows trades sufficient space to fluctuate, avoiding premature stop-outs and trades later moving in our anticipated direction. After 15 minutes, a large bearish marubozu candle formed, which could have exited us from the trade if we had set our stop loss solely based on the low of the price leg that broke structure, without including a minimal stop loss in our checklist. By using that price leg, our stop loss would have been around 6 pips, whereas a 10 pip stop loss provides the trade with sufficient breathing room. We are aware that our strategy does not guarantee a 100% win rate but rather hovers around 50% on EURUSD, indicating that some losses were inevitable. To avoid becoming emotional over the position, we used only 1% of our trading account with the goal of achieving a 2% gain. Upon checking our position later, we observed that the position was a few pips away from hitting SL. We remained calm despite the drawdown we were experiencing and were prepared for any outcome of the trade. All that was left was to wait for either our stop loss or take profit to be triggered to determine the result of our trade. A few hours later, the trade began to move in our favor. After 13 hours, our Take Profit was triggered, and our patience paid off as we hit our target on EURUSD, resulting in a 2% gain from a 1% risk on the trade.
Education
by CleoFinance
Example of Divergence - USDJPYIn a forex chart, one expect the price on the chart and the value of the indicator to move in same direction. Well, sometimes the price and the indicator may show different movements. For example : On This Chart : The price movement on the main chart is clearly falling as the price keeps forming lower lows. Indicator Window : The indicator window(RSI in this case, any oscillator may be used) is moving upwards as it keep having higher highs as compared to the main chart. This is known as DIVERGENCE and in many cases I have seen, the price corrects after it's occurance. It helps keeping any eye on such. Please do your own analysis before placing any trades. Cheers and happy trading !!!!
Education
by FX_Wize
What Lot Size to Use in Forex for $10, $100, $1000 Account I will share with you a simple guide, that will help you to calculate a lot size for your forex trading account easily. In brief, let me explain to you why you should calculate a lot size for your trades. If you trade Forex with Fixed lot, you should be extremely careful. Too big lot size may lead too substantial losses or even blown trading account, while with a too small lot you may miss good profits. To calculate the best lot size, follow these 5 simple steps. 1. Make a list of all Forex pairs that you trade Let's say that you trade only major forex pairs: EURUSD, GBPUSD, USDJPY, USDCAD, NZDUSD, AUDUSD 2. Back test every pair and identify at least 5 past trading setups on each pair Above, you can see 5 last trades on each 6 major forex pairs. 3. Measure stop losses of each trade 4. Find the trade with the biggest stop loss in pips In our example, the biggest stop loss in on GBPUSD pair. It is 34 pips. Remember this number and the name of a currency pair. Why we need to do that? Your lot size will primarily depend on your risk in pips. For example, scalpers may have 10/15 pips stop losses, while swing traders may have even 100 pips stop losses. 5. Open a Forex position size calculator You can use any free calculator that is available. They are all the same. 6. Input your account size, 2% as the risk ratio and a currency pair with the biggest stop loss (GBPUSD in our example) In "stop loss in pips" field, write down the pip value of your biggest stop loss - 34 pips in our example. For the account size of 1000$, the best lot size to use 0.05 standard lot. The idea is that your maximum loss should not exceed 2% of your account balance, while the average loss will be around 1%. Remember to carefully back test your strategy and now exactly your maximum risks in pips, to make proper calculations! ❤️Please, support my work with like, thank you!❤️
Education
by VasilyTrader
10
Problems of Technical AnalysisProblems of Technical Analysis Trading is a complex endeavour that involves many factors. The ability to analyse markets is something that allows traders to overcome trading difficulties. Technical analysis is widely used by traders to make informed decisions about the price movements of various assets, including stocks, currency pairs, and cryptocurrencies*. Technical analysis and trading are inextricably linked, but while this method provides valuable insights, it also comes with a set of challenges. This FXOpen article discusses the challenges associated with technical analysis and suggests how traders can effectively overcome these challenges. Three Main Assumptions of Technical Analysis Technical analysis is based on the Dow Theory, which includes three basic principles and assumptions, namely: 1. The market discounts everything. Technical analysis assumes that everything that happens and can affect the market is reflected in its price. This means that the price will tell you everything you need to know. 2. Prices move in trends. According to technical analysts, even when the market is not moving in a uniform manner, prices will show trends, and this is independent of the time frame in question. 3. History tends to repeat itself. Technical traders try to identify recurring patterns in price because they have made the assumption that what has happened before in its formation is likely to happen again. Although technical analysis follows predetermined rules and principles, the interpretation of the results is not always right. Technical analysis is limited to the study of market trends and does not delve deeply into an instrument or industry to understand how it works. Critics of technical analysis argue that these assumptions may not be accurate. Below, you will learn more about the complexities of the analysis. Subjectivity in Analysis One of the main technical analysis problems is its inherent subjectivity. Traders often rely on various tools and indicators, such as moving averages, MACD, and Fibonacci retracements, to interpret price charts. The issue arises when traders misread patterns or interpret these tools incorrectly, leading to inconsistent results and trading decisions. To mitigate this challenge, traders typically establish clear and objective criteria for their analyses. This includes identifying specific entry and exit points based on predetermined trading rules. In addition, referring to experienced traders or using algorithmic trading strategies can help reduce the impact of subjectivity. Data Quality and Reliability Forex, stock, and crypto* markets are known for their high volatility, which can result in irregular price movements and gaps in historical data. Traders often rely on past price movements to make predictions about future developments. When the historical data is incomplete or inaccurate, practical technical analysis becomes less effective. Traders should be cautious about data quality, ensuring that they have access to reliable sources. The use of multiple data sources and cross-referencing will help identify and eliminate inconsistencies. In addition, the limitations of historical data should be recognised and not relied upon exclusively. Over-Reliance on Indicators Many traders become over-dependent on technical indicators, believing they hold the key to successful trading. Of course, technical analysis learning is important, and indicators are valuable tools, but relying solely on them can lead to trading errors. The problem is exacerbated when traders use too many indicators simultaneously, leading to information overload and conflicting signals. The possible response to this challenge is to select a few key indicators that align with your trading strategy and combine their signals with other analysis tools, including price action and fundamental events. Over time, traders develop the ability to interpret price action without relying only on indicators. This is a skill that can provide a more holistic view of the market. Limited Predictive Power Technical analysis primarily focuses on historical price data and patterns to predict future price movements. However, it’s crucial to acknowledge that past performance is not always indicative of future results. The markets are influenced by a wide range of factors, including economic data releases, geopolitical events, and central bank policies, which can override technical signals. To address this issue, traders should combine exploring technical analysis graphs with evaluating fundamental factors. Considering both technical and fundamental factors helps traders make more informed trading decisions and reduce the risk of being blindsided by unexpected market events. Traders need to stay informed and adaptive, even if they base their strategies on chart analysis. Emotional Trading Emotions play a significant role in trading, and technical analysis can sometimes exacerbate emotional decision-making. For example, if emotions overwhelm you during technical forex analysis, it may lead to mismanagement of trades and losses. Those who become too emotionally attached to their technical analysis may hesitate to cut their losses or take profits. System hopping is another common problem that stems from excessive impulsiveness. Traders may switch from one system or strategy to another in search of quick profits. However, this can result in confusion and inconsistency. Sticking to a trading plan and avoiding impulsive decisions can help mitigate emotional challenges. To overcome stress and prevent emotional decision-making, traders adopt disciplined risk management strategies, such as setting stop-loss orders and take-profit levels in advance. Traders calculate their risk-reward ratio to determine how much loss they can bear for the reward they are expecting. Time-Consuming Process Technical analysis can be time-consuming, especially for traders who engage in short-term trading strategies. Analysing charts, identifying patterns, and monitoring technical indicators in technical analysis is a demanding task. It could be difficult for traders with limited time to spare. The first method is to use clear and reliable trading tools with user-friendly UI. Consider the TickTrader trading platform, where you can find both simple and advanced tools and trade various assets. Another solution is to consider longer timeframes, as they require less frequent monitoring. Additionally, using automated trading systems helps traders save time while still benefiting from technical analysis insights. Final Thoughts Technical analysis is an invaluable tool in the trader’s arsenal, providing a structured approach to analysing price movements. However, it’s essential to be aware of the challenges associated with this method and take proactive steps to address them. Minimising subjectivity, using reliable data, avoiding over-reliance on indicators, and managing emotions help traders perform better in the market. Now that you know some valuable insights about trading, you can open an FXOpen account and start your journey with us. *At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
2
Silver (XAGUSD) how to construct a trade:Medium bullish take: OANDA:XAGUSD is trading around the $30 price level for the first time in years. Is there a trade here? Could we see $40 by EOY? Let’s draw some charts: We're trading in a Bullflag at the $30 level Triple top, we're not quite ready to hold above the level Find nearby price targets Establish long term support lines Use momentum indicators and price action to draw a reasonable path which engages the price structures you've established. So according to our charts, we should expect a bounce above $27 Be mindful, there are exogenous events that push the price around. Shifts in the macro landscape will impact the path price takes. For details, I've included a fun GIF, animating the construction of this chart. Check out my twitter for more! NOTE: Original idea posted 7/23
TVC:SILVEREducation
by dawsonMoonshot
Reverse Bearish Divergence(I made a mistake, posted the wrong chart for the Reverse BULLISH Divergence, it was a reverse BEARISH one). Sorry :) Reverse Bearish Divergence , often referred to simply as "bearish divergence," occurs in technical analysis when the price of an asset makes higher lows while an oscillator (such as the Relative Strength Index (RSI), Stochastic, or MACD) makes lower lows. This situation suggests that a reversal of a bigger trend can happen soon.
BITSTAMP:BTCUSDEducation
by orbborisson
Predicting Bitcoin's Cycle Using the Elliott Wave Theory, Part 2Hello traders. In this article, we dive deeper into another detailed way of seeing Bitcoin's potential end-of-cycle pattern. This is the 2nd part to the previous post that discusses Bitcoin's cycle using the Elliott Wave Theory - a comprehensive and subjective theory. Here, we will be exploring an alternative scenario that builds on our previous concept of Bitcoin fractals since its inception in 2009. By addressing some of the subjectivity in the wave theory and leveraging market psychology and algorithmic fractals, this post is aimed to provide another organized and insightful look at the structure of Bitcoin's price movements.
If you are interested in seeing the first scenario, here is a link for your convenience: For this alternative scenario, as mentioned above, it addresses some of the subjectivity that arises from the Elliott Wave Theory, specifically the observation of multiple 1-2 scenarios presented in our previous idea. Although the idea was supported by evidence from market psychology and algorithmic fractals, the problem arises by having the possibility of infinite 1-2 nested structures that works upon extending each internal wave - which is a pretty rare observation in any markets; however, Bitcoin has been able to withstand year by year and work on a pretty timely schedule. Based on the expectations, we used that observation to create the scenario of nested 1-2's. Nevertheless, due to its possible subjective count, this idea focuses more on the structural integrity of the basic 5-wave pattern and being able to fit the whole price action from inception as a 5-wave pattern.
 Simply put, this thesis aims to create a more organized structure. As many are still eager to determine how far Bitcoin might correct after this bull run ends, I hope this idea can also give you confidence to help build your own thesis.
 There is one thing that is for sure, however: the evidence portrayed from both of these scenarios strongly suggests that we will see higher levels before lower levels, though no theory can be 100% accurate, we could technically see a reversal even now. But my duty is to make sure to narrow down the scenarios as best as I can.
 For this specific idea, we have structured this whole move up as 5 waves since inception, sticking as closely as possible to the basic Elliott Wave model of the 5-wave impulse. To achieve this, we made some simple adjustments from the first thesis in the previous post.

The challenge for many arises when trying to fit a wave 3 that must be the longest or second longest wave compared to waves 1 and 5. In this chart, since primary wave 1 in yellow is the longest, wave 5 must be technically shorter than wave 3, which is a strict rule and must be obeyed.
 To accomplish this, we can use the 2017-2020 price action as a range initself for wave 4. Previously, we considered the pandemic crash as a technical bottom. If we use that as a sideways range, the only viable sideways patterns are triangles and flats (as we have exhausted the zigzag family correction patterns for wave 4 already). For more details on these patterns, please refer to the previous guide on triangle and flat patterns in my Elliott Wave Theory guide on my main page. By using the 2017-2020 range as a triangle, our subwave E has resulted in an extremely short subwave, known as a failure or truncation. After breaking out of the triangle, the next step is to figure out on how to form wave 5, which is the final part of the 5-wave motive impulse.
 Currently, the only way we can see wave 5 concluding is through a possible diagonal given the current data. Why? We would typically expect a basic 5-wave move for wave 5, but since wave 5 has to be short and wave 1 was extended, we do not expect the last primary wave 5 in yellow to be extended. Thus, the only remaining option is a possible diagonal pattern to complete wave 5, since we have also assumed it will be short due to wave 1 already being the longest wave and wave 3 being the 2nd longest wave.

This Ending Diagonal, which consists of 5 waves (unlike a Leading Diagonal, which appears in waves 1 or A), they are only observed in wave 5s or wave Cs.
 To construct our Ending Diagonal, the five subwaves must be zigzags (simple ABCs) or complex zigzags (WXYs). We are currently observing a mix of these, which is normal in diagonals: 
 * Subwave (1): ABC. Observed as a long wave A and short wave C. This can be debated, but longer wave As compared to wave Cs are not uncommon. * Subwave (2): WXY. A WXYXZ could fit as well like we observed in our previous post, but that deviates significantly from the traditional structure. A WXY is the next best alternative, and even that can be subjective as we typically observe simple ZigZags (ABCs) within diagonals. * Subwave (3): Currently being created. With the available data, it could be an ABC, though it may become more complex going forward. * Subwave (4) / (5) : To be determined. Must belong to the zigzag family.

 As we are still working on subwave (3) within the ending diagonal, the interest level for a pullback remains the same as in our previous idea, THAT IS THE KEY. This significant pullback could validate this idea, so we will monitor it up to that point.
 This larger picture presents a wide range between subwaves 4 and 5, similar to waves 1 and 2.
 Once subwaves 4 and 5 are created, it will technically terminate the larger degree wave 5 of the entire 5-wave impulse cycle. After termination, a significant downside correction is possible, potentially reaching levels as low as $3,000. Alternatively, we also have a completely different count where this cycle wave 1-2 may be already in play, and it can be achieved by using a larger flat idea that may also help with separation and further deepend subjectivity. Here is that approach: In conclusion, while the evidence strongly suggests that Bitcoin will reach higher levels before any significant correction, it is crucial to remain adaptable as market conditions evolve. The analysis presented here offers merely a potential roadmap. No theory can predict market movements with absolute certainty. By staying informed and considering multiple scenarios, investors can better navigate the complexities of the cryptocurrency market. I invite EVERYONE to share your thoughts and engage with this post in the comments below.
INDEX:BTCUSDEducation
by XForceGlobal
110
Reverse bullish divergence on BTCUSDReverse bullish divergence detected. Reverse Bullish Divergence, often referred to simply as "bullish divergence," occurs in technical analysis when the price of an asset makes lower lows while an oscillator (such as the Relative Strength Index (RSI), Stochastic, or MACD) makes higher lows. This situation suggests that despite the asset's declining price trend, the momentum or underlying strength is increasing, indicating that the selling pressure may be easing and a potential reversal to the upside could occur. Traders often look for this pattern as a signal to consider entering a long position, as it may indicate that a bottom is forming and that a bullish trend may follow. It's important to combine this signal with other technical indicators and analysis to confirm the potential reversal and to manage risk appropriately.
BITSTAMP:BTCUSDEducation
by orbborisson
Occam's RazorEverything should be made as simple as possible, but not simpler. That is a famous quote, sometimes written under "inspirational photos" of influencers on social media. It is attributed to Albert Einstein, he however expressed something more rough than that. Einstein quoted: It can scarcely be denied that the supreme goal of all theory is to make the irreducible basic elements as simple and as few as possible without having to surrender the adequate representation of a single datum of experience. Even though he was not a philosopher, he adopted what William of Ockham proposed hundreds of years ago. He believed that an explanation must come from the simplest set of elements. Occam's Razor is what defeats "Last Thursdayism" aka "the Omphalos hypothesis". Simplicity is stronger than complexity. But enough of history and philosophy, I hear you say. This is an investment platform after all, we are tired of reading about theories. The thing is, if you don't think before you buy, you end up in a loophole. In an investment strategy that has no way in, and no way out. From my mere two years of stock market analysis, I have one rough quote for your social media pics: Clear your mind. Choose wisely your favorite ship, and pick your favorite destination. Now sit back and relax. The time will come when the wind blows fair to your ways. It is not exactly doric, but it will do for now. So basically, there are two things you must decide and believe in. The type and the timing of investment. Contrary to what some may say to you, you actually need both. If you aren't selective of your investment, then you better hope to break-even to inflation. If you don't let the times ripe, then you don't do anything more, or less than a hodler. (or similarly an inflation mitigator) The point I am trying to make is simple. That investing must be simple... ...and charting must be simple. Hence Renko charts! Some time ago, I discovered the interesting properties of these charts. They "normalize" growth, from violent spikes to perfect pyramid fractals. To an untrained investor, this chart is an oversimplification. How on earth Minecraft is better than reality? Answer: Legibility and Indicators Legibility: The violent nature of stocks is tamed from this chart type. This was the original intention of the Japanese inventors. Indicators: The unknown charisma of these charts is their magic behavior with indicators. They give powerful new ways to analyze prices. So how and why do Renko charts surpass candlestick charts? In classic (timed) charts like candle, the baseline is time. Rapid price breakouts and deadly black swans may come incredibly quick. Since most indicators depend on some amount of lookback (the length of a Moving Average for example), they under-weigh rapid events like black swans, and over-weigh slow, and perhaps, insignificant price movements. In timeless charts like Renko, no detail is hidden. The appropriate amount of importance is shown to each point of price history. With candles, momentum is time-based. With cubes, momentum is price-based. Renko charts, even though are a big simplification, provide an entirely new visualization of charts, and all of that without exotic coding. Your indicators still work. DXY shows subtle but important differences in bull-market analysis. More advanced indicators show this even clearer. As a theoretical experiment, a trader waited for two candles of confirmation after KST broke down. NVDA paired with Renko reveals its true face. Divergences hidden in plain sight. And all of that with the most rudimentary of tools, MACD. The point Renko tries to make is simple. A stable growth is a decisive growth. Renko punishes stocks that begin to exhibit backtests / retreats in price. By simplifying technical analysis and price data, the deep ocean becomes a child's pool. Accessible by everyone. The point Grigori try to make is simple. That trading should not be considered to be astrophysics, because it clearly is not astrophysics. We are not Einsteins (some may be), but the majority are not (including me). We, as humans, need clear and simple arguments and data in order to make robust conclusions. Final thought: The investor's mind must keep clear of chaotic charts and concentrate on picking the right ship, at the right time. Select beforehand your ultimate target. The earth is round. If you keep sailing without stopping, the time will certainly come, when you will reach ground-zero. Tread lightly, for this is simple ground. Father Grigori. P.S. I will keep this idea updated with any interesting Renko vs Candle charts I discover.
INDEX:BTCUSDEducation
by akikostas
3
Building Success In PineScript - The Ment Pressure SystemAfter more than two weeks of playing around with Pinescript, I've managed to put together some really cool tools for my followers/subscribers. The idea of price pressure intrigued me, so I decided to create something based on it. Ideally, I planned to build something that helped traders find and execute better trades. It is difficult to identify chop vs. trending in any market/interval. My goal was to create a small suite of tools to help traders identify better trade setups. I still believe I have more work to do with these pressure tools, but I'm very happy with how they work. I did learn some "tricks" with Pinescript related to how variables and processes work (of course, by trial and error). Watching the code run in real-time has been fun (watching a 2 min ES chart). I can't wait to see how my followers use these tools and develop new ways to deploy them efficiently. What are your thoughts? Anything I can do to improve? Get some. #trading #research #investing #tradingalgos #tradingsignals #cycles #fibonacci #elliotwave #modelingsystems #stocks #bitcoin #btcusd #cryptos #spy #es #nq #gold
CME_MINI:ES1!Education
by BradMatheny
Algorithmic TradingAutomated/Algorithmic Trading Automated trading, also known as algorithmic trading or algo trading, has transformed the financial markets over the past few decades. By leveraging computer programs to execute trades based on predefined rules and strategies, traders and investors can achieve greater efficiency, consistency, and profitability. As technology continues to evolve, the future of automated trading looks even more promising. Advances in artificial intelligence (AI) and machine learning (ML) are enabling the development of more sophisticated trading algorithms capable of learning and adapting to new market conditions. Benefits of Automated Trading Automated trading offers numerous advantages over traditional manual trading: Efficiency and Speed: Automated trading systems can execute orders at speeds far beyond human capability. Consistency and Discipline: Automated systems follow a set of predefined rules and strategies consistently. This eliminates human error and emotion from trading, ensuring that trades are executed as planned without deviation caused by fear, greed, or other psychological factors. Diversification: Automated trading systems can simultaneously manage multiple strategies across different markets and instruments. This diversification spreads risk and increases the chances of profit. Complex Quantitative Models: Automated trading systems can employ complex quantitative models that integrate vast amounts of data and sophisticated mathematical algorithms to predict market movements and make informed trading decisions. 24/7 Market Opportunities: Automated trading systems can operate around the clock, taking advantage of global market opportunities that arise outside regular trading hours. However, it's important to note that while automated trading offers many benefits, it also comes with risks. Algorithmic errors, technical failures, and market anomalies can lead to significant losses. Therefore, it is crucial for traders to continuously monitor their automated systems and have risk management measures in place. Getting Started with Automated Trading The cycle to ensure that automated trading systems remain effective and responsive to market dynamics: Algorithm Development: Creating a set of rules and strategies that define when to buy or sell an asset. Backtesting: Testing the algorithm on historical data to evaluate its performance and make necessary adjustments. Execution: Automatically placing buy or sell orders when the criteria defined in the algorithm are met. Monitoring and Adjustment: Continuously monitoring the algorithm's performance and making adjustments as needed based on changing market conditions. OKX Signal Bot and TradingView Integration With the integration of OKX and TradingView, TradingView users can now set up an OKX Signal Bot with their or their signal suppliers' TradingView signals (both indicators and strategy scripts) and automate their preferred trading signals and strategies. Here's how to do it: Step 1: Log in to your OKX account and add your Custom Signal -> Name your signal and insert an optional description of the signal -> Create Signal Step 2: Configure TradingView alerts and add the Webhook URL and AlertMsg Specification that is auto-generated by OKX in the first step -> Create Step 3: Set up your Signal on OKX and Create Bot -> Specify the trading pairs, determine the leverage ratio, and decide on the amount of funds you're willing to invest into the bot -> Confirm Congratulations! You've successfully created your Signal Bot. This powerful tool will now listen to signals from your selected signal source and execute your trades instantaneously in real time, taking your trading to the next level. Demo Trading allows OKX users to trade in a simulated environment that mimics real-world market conditions. This enables traders to try out their strategies, gain insights into the markets, and refine their decision-making abilities without any risk of incurring losses.
Education
by dgtrd
5