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Options Blueprint Series: Calendar Spreads - Timing the MarketIntroduction to Calendar Spreads Calendar spreads, also known as time spreads or horizontal spreads, are advanced options strategies that involve buying and selling two options contracts on the same underlying asset, such as the S&P 500 Futures, but with different expiration dates. The strategy aims to profit from the differing time decay rates of the short-term and long-term options. Traders often deploy calendar spreads to capitalize on expected stable or sideways market conditions. Why S&P 500 Futures Options for Calendar Spreads? The S&P 500 index, encapsulating the performance of 500 of the largest companies listed on stock exchanges in the United States, serves as a premier gauge of U.S. equities. Its derivative products, notably the S&P 500 Futures Options, present traders with a fertile ground for executing calendar spread strategies. These options inherit the index's broad market exposure and liquidity, making them an ideal candidate for such strategies. Let's delve into the contract specifications and characteristics that make S&P 500 Futures Options and Micro Options particularly suited for calendar spreads. Contract Specifications: S&P 500 Futures Options (Standard): These contracts are based on the E-mini S&P 500 futures. Each contract represents an agreement to buy or sell the futures contract at a set price before the option expires. The standard option contract size typically mirrors the underlying futures contract, which is valued at $50 x S&P 500 Index. Micro S&P 500 Futures Options: Introduced as a more accessible variant, Micro S&P 500 Futures Options are 1/10th the size of their standard counterparts. This smaller contract size reduces the capital requirement, making it more appealing for individual traders and those looking to fine-tune their market exposure. The contract size for Micro Options is $5 x S&P 500 Index, maintaining the leverage and flexibility of the standard options but at a scale more manageable for a wider range of investors. Characteristics Beneficial for Calendar Spreads: Liquidity: Both standard and micro contracts benefit from high liquidity, ensuring tight bid-ask spreads. This liquidity facilitates easier entry and exit from positions, a critical factor when managing calendar spreads that require precision in timing and the ability to adjust positions quickly in response to market movements. Volatility Patterns: Understanding and anticipating volatility patterns is crucial for the success of calendar spreads. The S&P 500's inherent volatility, influenced by economic indicators, corporate earnings, and geopolitical events, can affect options pricing and the optimal structuring of calendar spreads. Strategic Flexibility: The availability of both standard and micro contract sizes provides traders with flexibility in managing their market exposure and tailoring their strategies to match their risk appetite and investment goals. Incorporating S&P 500 Futures Options into calendar spread strategies not only leverages these inherent characteristics but also taps into the dynamic interplay of time decay and market movements. Traders must, however, remain vigilant of the underlying market conditions and adapt their strategies to align with evolving market dynamics. Constructing a Calendar Spread To construct a calendar spread with S&P 500 Futures Options, a trader needs to undertake a series of thoughtful steps. Initially, one must select an appropriate strike price that aligns with their market outlook. Typically, at-the-money (ATM) or slightly out-of-the-money (OTM) options are preferred due to their sensitivity to time decay, which is a pivotal component of this strategy. Example Setup: Buying a Long-term Option: Consider purchasing a long-term put option on the S&P 500 Futures with an expiration date 30 days from now. The selection of a long-term option is strategic, as it retains its time value better compared to shorter-term options. Selling a Short-term Option: Simultaneously, sell a short-term put option on the S&P 500 Futures with the same strike price as the long-term call but with an expiration date 5 days away. This option is expected to lose time value rapidly, which is beneficial for the seller. As seen on the below screenshot, we are using the CME Options Calculator in order to generate fair value prices and Greeks for any options on futures contracts. Underlying Asset: S&P 500 Futures (Symbol: ES1! or MES1!) Strategy Setup: o Buy 1 OTM put option with a strike price of 5260 (Cost: 44.97) o Sell 1 OTM put options with a strike price of 5260 (Credit: 7.78) Net Debit: 37.19 (44.97 – 7.78) Maximum Profit: Achieved if prices are at 5260 at expiration. Maximum Risk: Limited to the net debit of 37.19. The essence of this setup lies in capitalizing on the accelerated time decay of the short-term sold option relative to the slower decay of the long-term bought option. Ideally, the underlying asset's price will be close to the strike price at the short option's expiration, maximizing the profit from its time decay while still benefiting from the long-term option's retained value. Adjustments for Market Movements: f the market moves significantly, the spread can be adjusted by rolling the short-term option forward to the next month, potentially locking in gains or reducing losses. A successful calendar spread hinges on precise timing and a keen understanding of volatility. The trader must monitor the implied volatility of the options, as an increase in volatility can enhance the spread's value, while a decrease can diminish it. Potential Market Scenarios and Responses Optimal Market Condition : The calendar spread thrives in a market exhibiting minimal price movement, particularly around the strike price of the options involved in the spread. This stability allows the trader to exploit the differential time decay effectively. Market Moves Against the Position : In the event of adverse market movements, the trader might need to adjust the strategy. This could involve rolling the short option to a different strike or expiration date, or possibly closing the position early to mitigate losses. Flexibility and proactive risk management are paramount, as market conditions can change rapidly. The construction and management of a calendar spread with S&P 500 Futures Options involve a delicate balance of market prediction, timing, and risk management. By judiciously selecting strike prices, expiration dates, and adjusting in response to market movements, traders can navigate the complexities of calendar spreads to seek profit from the nuances of time decay and implied volatility in the options market. Risk Management Effective risk management is crucial when trading calendar spreads, particularly with S&P 500 Futures Options, due to the potential for rapid changes in market conditions. Identifying and mitigating potential losses involve several strategies: Position Sizing: Keeping each trade to a reasonable proportion of the total portfolio reduces the impact of any single trade's loss. Diversification across different strategies and assets can also help manage systemic risks. Stop-Loss Orders: Implementing stop-loss orders for the position can help limit losses. This is especially important if the market moves sharply in an unexpected direction, affecting the spread unfavorably. Continuous Monitoring and Adjustments: The calendar spread requires regular monitoring and potential adjustments to respond to changes in the underlying asset's price or volatility. This may involve rolling out the short position to a further expiration date or adjusting strike prices to better align with the market conditions. Hedging: In some scenarios, traders might consider using additional options strategies or the underlying futures contracts themselves to hedge against significant market moves. This approach can help protect the portfolio from large, unexpected shifts in the market. Conclusion Calendar spreads offer a sophisticated strategy for traders looking to profit from the nuances of time decay and volatility in the options market, particularly with S&P 500 Futures Options. This strategy suits those with a nuanced understanding of market movements and the patience to monitor and adjust their positions over time. While calendar spreads can offer attractive opportunities for profit, especially in sideways markets, they also require diligent risk management and an active trading approach. Encouraging further education and risk-aware trading practices is essential for success in options trading. Traders should continually seek to expand their knowledge of market conditions, options strategies, and risk management techniques to refine their trading approach and better navigate the complexities of the financial markets. By embracing a disciplined approach to trading calendar spreads, investors can explore the potential of this strategy to enhance their trading arsenal, leveraging the dynamic nature of S&P 500 Futures Options to tap into market opportunities while managing the inherent risks of options trading.   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.
CME_MINI:ES1!Education
by traddictiv
FULL LIST OF OANDA-AVAILABLE INSTRUMENTS ON TRADINGVIEWIt is nearly impossible to find, online, what the TRADINGVIEW symbols are, for all the instruments offered by OANDA (a broker). After finally finding that list on TRADINGVIEW (by writing "OANDA:" in the TRADINGVIEW search box, without the quotation marks), I decided to compile the results and create my own list in a document. Here are the results. We don't see all 3 images in full size (some areas were cropped)... Look at the COMMENT section at the bottom of this TRADINGVIEW IDEA, for the full list. Wishing you a great trading week. @ADX-BRIEFING _____________
OANDA:SPX500USDEducation
by Pine_Academy
1
Exploring Renko Charts: Simple Trading Strategies for Success Today, I'm excited to introduce you to two effective trading strategies designed for Renko charts. Renko charts, unlike traditional Japanese candlestick charts, focus solely on price movements, offering traders a unique perspective on market trends and opportunities. Before diving into the strategies, let's first understand the basics of Renko charts and how they differ from Japanese candlestick charts. Renko charts are renowned for their: Absence of time: Renko charts disregard time intervals, concentrating solely on price movements. This feature helps filter out market noise, allowing traders to identify clear trends. Uniformity: Each brick on a Renko chart represents a fixed price movement, ensuring uniformity across the chart. This consistency aids in trend identification and reversal spotting. Trend identification: Renko charts excel at identifying trends due to their focus on price movements. Traders can swiftly discern trend reversals or continuations by analyzing brick patterns. Reduced noise: By filtering out minor price fluctuations, Renko charts offer cleaner data, making it easier for traders to identify significant price movements and trends. In contrast, Japanese candlestick charts focus on time intervals and include all price movements within the selected period. Both chart types have their advantages, but for our strategies, we'll be using Renko charts. Now, let's delve into the strategies: 1. Buy Green, Sell Red (with and without 13 EMA): This straightforward strategy involves buying when a green candle appears and selling when a red candle emerges. Option 1: Implement this strategy with a 13 EMA (Exponential Moving Average). Buy when a green candle closes above the 13 EMA line and sell when a red candle touches the 13 EMA line. Option 2: Execute the strategy without the 13 EMA. Simply buy on green and sell on red. While Option 1 may yield slightly delayed entries and exits, it provides additional confirmation, especially during volatile market conditions. Consider automating this strategy with an algorithmic trading bot for seamless execution. 2. Strategy that forecasts the market?: This strategy tells you if the market will go up or down after a important for example economic meeting! So, if you are interested in this strategy than write down in the comment and like (boost) this educational idea, if we get 100 likes (boosts) than I will make Part 2. Please note: When you have a basic plan, than you can just open Renko chart above 1 day time frame, you can also work good on 1 day, but if you want to see Renko chart on Intraday time frame than you need to have Premium plan. Upgrade now for intraday best experience using RENKO chart: Upgrade now
Education
by smarttrader012
4
10 EMA strategy ^BEST TREND-FOLLOWING STRATEGY^Welcome! Today, I'm excited to share with you one of the most effective trend-following strategies that is adaptable to any timeframe and asset class ( OANDA:XAUUSD , NSE:NIFTY , FX:USDCHF ), boasting a remarkable risk/reward ratio of up to 1:10. Let's dive right in. As mentioned, this strategy revolves around the Exponential Moving Average (EMA), specifically the 10-period EMA. For those unfamiliar, the EMA places greater emphasis on recent price data compared to a Simple Moving Average (SMA), providing a dynamic view of market trends. When the price on your chart is above the 10 EMA, it signifies a bullish trend; conversely, when the 10 EMA is above the price, it indicates a bearish trend. Let's illustrate with an example: Imagine a bullish trend with four consecutive green candles followed by a red candle. Our entry point occurs when this red candle, the trigger candle, fails to touch the 10 EMA. Subsequently, when a green candle crosses above the high of the trigger candle, we enter the trade. Setting our stop loss (SL) just below the EMA line beneath the trigger candle, we establish our take profit (TP) based on a risk/reward ratio, starting at 1:2 and potentially reaching an impressive 1:10. Trailing the 10 EMA line allows us to stay in the trade longer, albeit experiencing initial stop-loss hits. However, perseverance reveals the strategy's efficacy over time. Now, for short positions, such as during a downtrend characterized by three red candles followed by a green candle, our entry occurs when the low of the green candle is breached by the subsequent red candle. Setting the SL just above the EMA line above the trigger candle and TP based on the risk/reward ratio, we execute the trade. For those interested in trailing stops, there are two options: firstly, trailing along the 10 EMA line; secondly, utilizing the Average True Range (ATR) for algorithmic trading enthusiasts. With this strategy's flexibility and potential for significant returns, it offers traders a robust approach to navigating diverse market conditions. ***Here are 2 examples of Long & Short: Long position in BINANCE:SOLUSDT www.tradingview.com Short in FOREXCOM:EURCAD It's crucial not only to grasp the concept of this strategy but also to put it into practice. 💼 Start by implementing it with small capital or utilize paper trading, which platforms like TradingView offer. 📝 Additionally, don't hesitate to experiment. For instance, try using an 11-period EMA and assess its effectiveness. You might find that it better suits your trading style and objectives. 🧪💡 Remember, trading is a journey of discovery! 🚀 Don't be afraid to explore new strategies and techniques along the way. 🌟 Like (boost), follow, comment, and share this strategy to spread the knowledge and empower fellow traders! 📈🚀👍 For the optimal TradingView experience, upgrade now to unlock the platform's full potential: www.tradingview.com
NASDAQ:TSLAEducation
by smarttrader012
Understanding Trends: Indicators, Trendlines, and PivotsIn this video I describe trends, what the are, what a proper trend should look like and ways of indentifying a trend. I cover the following tools to identify trends: Trendlines (with consistency) Internal Trendlines Indicators: Linear regression, EMA, Channels/Bands Pivot swings I think no matter how YOU define a trend, it should be the following things: Consistent Measurable - so you can analyze it later Fit your trading style I hope you learned something new in this video. Please drop a comment if you like the content.
AMEX:SPYEducation
by JoeRodTrades
Education chart - SIMPLE ZIGZAGS in WXY DOUBLE ZIGZAGI started to assemble own ibrary of ElliottWave patterns and rules. Here simple zigzags occured in: wave W and wave Y of WXY double zigzag Zigzag 1 - wave W Wave A - leading diagonal Wave B - double zigzag Wave C - ending expanding diagonal ending at the top line of the parrallel channel Zigzag 2 - wave Y Wave A - impulse Wave B - double zigzag Wave C - ending expanding diagonal ending at the middle of the parrallel channel ----------------------------------------- ## Rules for Simple ZigZag - Subdivide into three waves. - Wave A is always an impulse or leading diagonal (expanding or contracting) - Wave C is always an impulse or ending diagonal (expanding or contracting). - Wave B is any corrective pattern. - Wave B never moves beyond Wave A start - Wave B always ends in Wave A territory - Wave A and C cannot be both diagonals of the same type (contracting/contracting or expanding/expanding), other combinations are possible ## Norms - Waves A and C are frequently impulse waves but even more often they alternate between impulse and diagonal modes. Waves A and C may occasionally alternate between contracting and expanding diagonals - Waves A and C cannot be diagonals of the same type - Wave C must travel past Wave A's top. In Elliott Wave Theory, failure to do so is referred to as truncation - Wave C should not go below 90% of Wave A ## Guidelines - Wave C is typically equal to 0.618 (occasionally 1.618 or 2.618) of wave A - Wave B typically retraces 38-79% of Wave A - in case B is a triangle it retraces **38-50%** of Wave A - in case B is a running triangle, the retracement can be **10-40%** - in case B is zigzag, the expected retracement is **50-79%** - The parallel channel that connects Wave A's start and Wave B's finish may provide a hint of where Wave C might conclude by extrapolating the other line from Wave A's end - If waves A and C are both strong, wave C will reverse at the channel's top line - If wave C appears weaker than wave A, it may reverse at the channel's middle - If Wave C performs stronger than A, a double channel will be used as a target of the reversal point. ## Occurs in Wave 2 Wave 4 (unless happened in wave 2) Wave W, Y of WXY double zigzag Wave W or Y of a combination Wave B of ABC flat Waves 1, 2, 3, 4, 5 in contracting diagonal Wave B of ABC zigzag Wave X of WXY double zigzag
TVC:USOILEducation
by Energeia_Charta
3
A Renko Trading Strategy with Multiple Indicators (Update 3)An update from the last summary: Stating the obvious but the recurring pattern did not play out. This was a painful past couple of days but some realizations that I will walk through here for anyone who may be on a similar journey or realizations. “Buy high and sell low” or “buy support and sell resistance” are simple words to speak, to walk through in back testing, but, in the heat of the moment with live data and markets unfolding in ways you weren’t expecting make these phrases an near impossible accomplishment. As for the chart setup, I’ve with the following for the Renko WTI/CL chart: 25 tick block size and a 15-minute timeframe (more on this later) DEMA at 12 and 20 MA at 20 with a 9 period (or block in case of Renko) WMA Stoch of 5,3,3 and 25,3,3 DMI of 5,5 Bull Bear Power at 25 (this is new and seems to provide good insights) Wednesday and Thursday had me watching the Renko charts waiting for an opportunity to go short (remember, my trading style is to buy either Calls or Puts as near to the money as possible and at least 3 to 4 months out). From the patterns I saw on the Renko, I firmly believed that the market was ready to sell off and I wanted to be in. As an aside, I cap my losses at 10% of the price I pay for the option. In my losses this week, I realized that my strategies for every period of time that I’ve tried to trade had basically been a breakout trader. It wasn’t that I made a definitive statement of “Hey, my methodology is that of a breakout trader” but more like “Hey, I need to see confirmation of the price movement before I enter”. The problem is that the confirmation I was looking for was well after price had started moving and, as I looked at it, it was what could be classified as a breakout. And it was in my 3rd loss for the week, that I realized what I was doing wasn’t working. Sure, I could find points in time where it would have seemed to work but not this week. As closed out my 3rd loss, I read back through some items I had highlighted in the “Pivot Boss” book referenced earlier and in it found the pages were I had marked up the callout that you have to buy at support and sell into resistance if your going to succeed. It seem intuitive but in reality, it goes completely against my nature while trying to find an entry point with live data flying by. By now, if you’ve read this far, you may have picked out some items that resonate with you or you may be finding this as a serious source of entertainment :D For the discussion that continues, you’ll need to reference the previous article I wrote to see the specific charts before the price action on Thursday. The following link will give you view of how price played out. The red rectangle outline on the chart is where I was looking for price to repeat a similar pattern noted in the related article. How simple (and unrealistic) could this be. What played out was a price movement that I didn’t know how to handle and took me some time to figure out where to get in. As price continued to go up, I realized this was where I would usually just try to get in and then, I would get in at a intra-day high, have price pull back and 10-20% of my option value hit and I’d be out just to watch the market reverse. So, on this day, I resolved myself not to make a trade unless I could figure out this “buy support and sell resistance” thing. In my resolve, I agreed to some points: I will only buy at support and will sell into resistance: (the hardest concept known to man, not in understanding but execution) The key must be in the Camarilla Pivots so use them and the system that is outlined in the book. Or, as close as you can with how you want to trade. Renko chart setting will stay at 25 ticks for a block size and 15 minutes for a timeframe. What does this mean for Renko in TV? It means that price of a 25 tick increment must be held for 15 minutes before the block is committed or printed. Because volume profile and camarilla pivots are not a natural fit on the Renko charts, I’ll create a candle chart side-by-side to the Renko chart and then place all of these indicators on it. Additionally, all of the mark-ups I do for projecting the volume area on the chart and the opening range will be done on the candle chart The Renko chart will continue to have the indicators I track on it but they will be for confirmation and helping to form an opinion of the market and nothing to do with entry or exit. Remember, I want to buy support and sell resistance and not breakouts. I wanted to have multiple periods of levels on my candle chart so I included 3 sets of camarilla, a daily, weekly, and monthly set of levels. The next big decision I had to make was the timeframe for the candle chart itself. After much experimentation and debate with myself, I landed with the following: Start with an hourly chart. The first general notion of entry and if at support or resistance will come from the hourly chart. I will continue with my volume area and opening range markup but it will be for a weekly timeframe. Meaning that the volume profile indicator is set to weekly and I use the first 5 hours of the week to set the opening range. From these markups I’ll create an opinion of the coming week and a trading plan based on what I see. Then, I’ll let price movement between the camarilla pivots prove out my opinion or lead me to adjust it. Once I find a potential trigger, I will switch the 1hr candle chart to a 5 minute candle chart and look for candle setups to trigger the actual trade. What do I use for triggers and how to I decide where to look? The following chart is a bit of an eye chart but you get the idea. With the 3 camarilla pivots plus a year pivot, you can see the various levels. While it may seem like a confused mess, there is some method to the madness. The Camarilla pivots in TV allow you to color code the levels plus set the size or pixel width of the lines of the levels. For all periods, I set the pivot to black, R1/S1 and R2/S2 to purple and then based on the book’s recommendation, R3/S4 to red, R4/S3 to green, and R5/S5 to blue. For the daily, week, monthly, and yearly pivots, I set their pixel width to 1px, 2px, 3px, and 4px respectively. This is how I get a visual clue on what timeframe price is approaching (by the width) and the type of triggers or market behavior I should be looking for based on the color. I will use the weekly, monthly, and hourly pivots to look for price levels of support or resistance. It will be at these levels that I’ll look for price action to provide insight as to what the market wants to do with the level (there is a good discussion in the “Pivot Boss” book on identifying candle patterns that distills a lot of complexities of endless chapters of concepts into a few simple ones in one chapter). Once I see some type of candle pattern on the 1 hour chart that could indicate a trigger to enter, I change it to a 5 minute chart to find a pattern in the price movement of the next candle to make the entry. In theory, this should provide me with an entry at support; don’t wait for a confirmation via a breakout. So, why mess with the Renko charts then? Fair enough of a question; I believe that the Renko chart setup will filter noise out of the view and provide a cleaner view of support and resistance lines due to the nature of its makeup. If you follow along with any of this in your own charts, you will begin to see that the pivots begin to form identifiable lines of support and resistance in the Renko chart. And, back to the point that the Renko setup I have with the specific indicators and their settings seem to provide a good path toward confirmation of trends and positions. Another key issue I was struggling with was how to correlate the Renko chart with the candle chart. This is where I came up with the 5-minute chart which, after thinking about it, I realized that the 5-minute chart would reconcile nicely with the 15-minute Renko chart. If you look at how Renko charts are printed, they will print on the time frame that you set so, if a brick prints, it should do so on a :15-minute boundary. And, the 5-minute candle will correlate to it. The next chart shows the Renko with the 1hr candle side-by-side with the same rectangle. The rectangle on the 1hr is a reasonable estimate but squarely in the middle is an interesting candle formation that happens to be near the daily S5 and the weekly R1. I looked at this for awhile in real-time and thought, how do you really decide to make this trade? It seems like price has moved further from the trigger before you have the nerve to pull the trigger on the trade. Plus, if you look at the DEMA on the Renko at this time, it’s still set bearish with 20 above the 12 and the -DI was still swapped above the +DI. All things I’ve used in the past and now causing paralysis in pulling the trigger in a “buy at support” trade. The next is the same chart setup but I’ve switched to the 5 minute view and have adjusted the red rectangle in the candle chart a little. The candle chart shows the boundary of the lowest red brick, the one red brick to the left and the two green bricks to the right. In this price action, candle on the one hour chart (engulfing is corroborated by the extended wick of the green brick that is the first reversed color in the down move. However, with the DEMA swapped bearish, what would lead you to look to buy on this. There are valid cases where price continues down from the one green brick. This is where the importance of the camarilla pivots along with the 5 minute chart come in. With the engulfing candle on the 1-hour chart and the green brick on the Renko, what I should have done is use the 5-minute chart with the various pivots to find support and candle patterns to enter the market long. This would have been fulfilling the mantra of “Buy Support; Sell Resistance”. The following chart zooms in to both the Renko and the 5-minute candle in hopes to show details of how to get from potential triggers to confirmations and physical entries with tighter reins on the stops to guard more on the ‘Hope this will work’ strategy. By using the 15-minute Renko and the 5-minute chart, I can now see exactly what’s going on in the Renko bricks to get a better feel of what the market is doing. The blue double arrow on the Renko correlates with the 5-minute candle. With the first green brick being a trigger, then the key is to look at what is going on once that brick prints to see how price behaves around the Camarilla pivots. The green dashed line is the time that the first green brick printed (committed, good to go). So, what is important is to now watch the price to find a setup to enter. Or we see the market push through the support of the camarilla pivots that are in close proximity and begin the search for an entry short. The chart below is zoomed in even more on the candle chart with the daily Camarilla S4 which, from a daily context, is the last level of support before more sellers hop in and drive price lower. I’ve outlined this pivot in a green rectangle and here you can see price action and find some interesting setups. I’ve put some black arrows at some of the more interesting candles and those which are probably some type of reversal patters of 2 or 3 in nature. I’ll end this here but have more in my notes that I’ll include in a future update.
NYMEX:CL1!Education
by mxb1961
Learning Post : Risk to Reward Ratio IndicatorThe Risk to Reward Position tool allows Traders to set the Entry/Exit points and Caclculate a long position from the Specific Point. Adjusting above and below the price level will be two boxes; Green box is for the profit zone and Red Box is for the Loss zone. The zones are manually adjusted as the Traders to change the Risk/Reward Ratio. This is an Important Tool to Practice your Risk / Reward Ratio for the Particular Strategy 👍
NSE:MARUTIEducation
by Himanu_HATradeTalk1
Swing Mapping Part 1: Key Principles Welcome to the first instalment of our 3-part series on swing mapping – a highly underestimated technique that can be applied to any market on any timeframe. In Swing Mapping Part 1: Key Principles you will learn: Why it’s the bedrock of all market structure analysis How to swing map in four simple steps Why it’s so important to do it yourself rather than use an automated tool Other key benefits of swing mapping What is Swing Mapping? As the name suggests, swing mapping involves identifying swings within market structure to understand the dynamics of price movement. This may seem too simple to be of much real-world value, but as is often the case in trade, seemingly simple and robust tools can be highly effective and highly nuanced. When done correctly on a real-time forward-looking basis, swing mapping has the potential to be integrated into many different trading strategies. Defining a Swing A swing is simply an uninterrupted high or low. At its core a swing is a three-bar sequence in which the middle bar represents a turning point in the market. Past performance is not a reliable indicator of future results Not all swings are equal. The more bars either side of the swing high or low, the larger the peak or trough in the market – the more significant the turning point. Swings are the bedrock of all market structure analysis. Swings define support and resistance, they define if a market is trending higher or lower, they define if a market is in a range, and they help to define if volatility is contracting or expanding. Swing Mapping in Action Swing mapping is at its most useful when it’s conducted in real-time on a bar-by-bar basis. For the purposes of outlining the method, we will use the 1min candle chart and map every potential swing. Swing mapping is a 4-step forward looking process: Identify Swing: Identify a swing using the definition provided above (a three-bar sequence in which the middle bar represents a turning point in the market). Past performance is not a reliable indicator of future results Draw Market Structure Line: Once a swing is identified draw a solid horizontal line on your chart. The line remains solid until the market has broken and closed above it. Past performance is not a reliable indicator of future results Monitor Response: Should the market break through the solid line you have drawn, change the style of line from solid to dotted. If the market fails to break through your line, keep it on you chart as a solid line for as long as you deem to be valid. Past performance is not a reliable indicator of future results Past performance is not a reliable indicator of future results Draw conclusions: Once you’ve repeated steps 1-3 on your chosen trading timeframe, you can then draw important conclusions regarding the market’s current structure. In our example (below), we followed the S&P 500 as it failed to break to new highs for the day then briefly started to trend lower before moving higher to retest the swing highs which has clustered to form a clear resistance level. Past performance is not a reliable indicator of future results Here are just some of the other insights we can gather from mapping swings: Market Bias: Swing mapping allows you to quickly see where the balance of power lies. A sequence of dotted swing high lines indicates that the market is consistently breaking to new highs on the day – signalling a bullish bias. Conversely, if a sequence of dotted swing low lines form, then the market has been consistently breaking to new lows – signalling a bearish bias. And finally, if we start to see full lines for both swing highs and swing lows, this signals that a range is developing. Failure Tests: Failure to break through a swing high or low is the first sign that the market’s current momentum is changing and a new turning point is potentially in place. In our prior examples we saw a small failure test which led to a pullback, here’s the same chart again: Past performance is not a reliable indicator of future results Trend Health: As an uptrend starts to wane, the distance from swing high to swing high tends to shorten. The opposite is true of downtrends. Swing mapping is a great way to identify the health of a trend. As you become better at swing mapping, you will become more adept at recognising the subtle changes in market structure. Past performance is not a reliable indicator of future results DIY - Do it Yourself There are many tools on the Trading View platform that can do swing mapping for you in real time set to your parameters. However, to maximise the benefits of swing mapping it is highly recommended that you do this process manually yourself as it will quickly build intuition and rapidly improve your knowledge of market structure. Drawing the swing lines, waiting for the market to break them and turning them dotted if broken, drawing conclusions as you build a map of broken and unbroken swings, deciding how long to keep unbroken turning point lines solid and valid on your chart. These are all hugely powerful active learning tasks that have the potential to make you a much better trader. Other Benefits of Swing Mapping Any Market Any Timeframe: Versatile across diverse markets and timeframes, enabling rapid skill acquisition. Real-Time Analysis Without Lag: Provides immediate insights into market structure and price action, facilitating timely decision-making. Enhanced Trade Timing: Identifying responses to market swings in real-time optimises trade entries and exits, maximizing profit potential. Effective Risk Management: Precisely identifies support and resistance levels, aiding in strategic placement of stop-loss orders and risk assessment. Adaptability Across Market Conditions: Versatility to adapt to various market conditions ensures consistent performance. Development of Trading Discipline: Fosters discipline and patience, promoting adherence to predefined rules and strategies. In Swing Mapping Part 2, we delve into precise trade entry techniques leveraging swing mapping without additional indicators. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
CAPITALCOM:US500Education
by Capitalcom
2
A Renko Trading Strategy with Multiple Indicators (update 1)This will serve as an update to the previous discussion specifically to some of the chart settings and the approach. Going into the open on 25-March-2024, I was looking for price to move lower to test the monthly and yearly Camarilla R3. My reasoning was that neither seemed to have been tested yet and that these two together would provide a good level for support. My long term view on crude oil is bullish and I believed this type of action would provide a good entry point. However, this plan did not come through so I stood aside to let the market playout to determine another entry strategy. While watching the market in the charts I had published earlier, I decided to make some adjustments to see if I would have detected the market’s plan sooner providing an entry point. The following are the changes that I’ve made: Changed the timeframe of the Renko chart from 15 minutes to 1 minute. Without paying for a higher subscription in TV, 1 minute is as low of a timeframe as you can go with Renko. This alone changed the dynamics of the chart with a different view on the DMI and Stoch. Changed the slower Stoch from 25,3,3 to 50,3,3 (which is a setting I’ve experimented with in the past. The DMI remained the same as did the levels of importance for the ADX of 35 and 20. Added the BPP (Bull Bear Power) indicator and set it to an interval of 50. I’ve not used this indicator before but was experimenting with some items yesterday and found this. I set the line to a step line and you can see the results here. Added a 2-hour candle chart next to the Renko and will use it in conjunction with the Renko chart to make entry/exit decisions. Removed the manual Linear Regression from the Renko chart and have added them to the 2hr chart. This is a more natural fit and have maintained the default settings. I have added two LR indicators with one at 1 STD and one at 2 STD. Removed the manual drawings of the Camarilla pivots and have added them as indicators to the 2hr chart. Removed the volume profile from the Renko chart and have added it to the 2hr chart with a week timeframe. All markup for volume area, opening range, etc. will be put on the 2hr chart and will be for a weekly view. The Renko chart will remain to work for timings of entry and exits. Considering the 1-minute chart, you can see that there was a buy signal across several of the setups. As noted earlier, the consolidation on the 1 minute/25 tick Renko chart provided a signal that a breakout was coming. The slower Stoch set to 50,3,3 provided some insight into the direction with the break of the %k up over the %d and lastly, the new BBP gave an indication that the down move was a correction and that higher prices could be coming. A long wick and breakout of consolidation would have been a trigger to enter a trade of buying a Call option (see green arrow on Renko). Looking at the 2hr candle chart with the 2 linear regressions (1 and 2 STD respectively), then you can see where the support was formed then then where resistance was hit. The monthly and the weekly R4 provided resistance and now support is at the median of the current LR. Because the break of the weekly R3 was with a force with no test, my plan now is to find an entry long (an August Call) along this line which is also the same proximity of the weekly Pivot and the top of the week’s opening range (where the opening range for the week is defined as the first 5 2hr candles of the week. With a red brick in place on the 1 minute/25 tick chart, a green brick now would be a buying opportunity. I’ve added a consolidation channel across levels of what could be support for any pullback and could see another 25-tick brick in place before the green brick to the upside.
NYMEX:CL1!Education
by mxb1961
A Comprehensive Guide to Fibonacci Retracements (Updated)Hello traders, in this post, we will be going over one of the most commonly used tools in all asset classes - the "Fibonacci Retracement" (or Fib for short). For a better viewing experience, please view this on your desktop/PC, as the mobile and tablet versions of the charts are harder to read. Although I have briefly touched on how to use the Fibonacci Retracement tool in my previous Elliott Waves series, we are now going to go over it in depth, and talk about how this tool can help you find entries and exits within an existing trend with or without the use of the Elliott Wave Theory, which also helps identify whether you are in a bullish or bearish trend. The Fibonacci Retracement tool, although widely used by many traders, is almost always not correctly used by new traders. Most traders will often connect the wrong points, indicating the wrong Fibonacci retracement levels. Here, I will be explaining the proper way to use the Fibonacci Retracement tool in a very simple translated friendly guide in one post. ------- What Is the Fibonacci Retracement? Fibonacci Retracements (Fib(s) for short), are a set of 'ratios', defined by mathematically important Fibonacci sequence. This allows traders to identify key levels of support and resistances for price action. Unlike other indicators, Fibonacci retracements are FIXED, making them very easy to interpret. When combined with additional indicators, Fibs can be used to identify potential entry and exit points with high probability to trade on trending movements. Fibonacci retracements are used to indicate levels of support and resistance for a stock’s price. Although they are similar to moving averages in this respect, Fibonacci retracements are set by the extent of the previous bullish or bearish run and do not change each day in the current trend as moving averages do. Therefore, it can be significantly easier to identify and anticipate support and resistance levels from Fibonacci sequences. How Is the Fibonacci Retracement Calculated? (You don't need to calculate it yourself - It's already done for you!) Fibonacci retracements are based on what is known as the 'Fibonacci sequence', where each number in the sequence can be added to the previous number to produce the following number within the sequence. Now, you might be confused here, but don't! - I am just explaining the concept on how it's calculated. You do not need to personally calculate the actual sequence of the Fibonacci Retracement, as everything is already pre-determined and calculated within the tool itself on TradingView. To put it simply, dividing any number in the sequence by the following number yields 1.6180 – known as the "Golden Ratio" – while dividing any number by its predecessor yields 0.6180. Dividing any number in the sequence by two positions in advance yields 0.382, while dividing any number by a number three positions in advance yields 0.236. These ratios originated from the Fibonacci sequence are found throughout nature, mathematics, and architecture - such as flowers, buildings, and so forth. Yes, if you search for Fibonacci sequence examples, you can find these within daily uses, not only in trading. ------ Retracement levels for an asset are drawn based on the prior bearish or bullish movement. Don't forget this - you need to know whether you are in a bullish or bearish trend. Is the stock or coin going up? or down? To plot the retracements, draw a trendline from the low to the high (also known as the swing low to the swing high), or vice versa, high to low, within a continuous price movement trend – Fibonacci retracement levels should be placed at 61.80%, 38.20%, and 23.60% of the height of the line for you by the tool itself. Again, these numbers are already calculated for you within the tool itself. In a bullish trend, the retracement lines start from the top of the movement (i.e. the 23.60% line is closest to the top of the movement), whereas in a bearish movement the retracements are calculated from the bottom of the movement (i.e. the 23.60% line is closest to the bottom of the movement). ------ How to Trade Using the Fibonacci Retracement Once you have drawn a set of Fibonacci retracements on a chart of your liking, it is possible to anticipate potential reversal points where support or resistance will be encountered. If the retracements are based on a bullish trend, the retracements should indicate potential support levels where a downtrend will reverse bullishly. So to put it simply, the pre-determined Fibonacci levels, should in theory and practicality, act as support if in a bullish trend, and resistance in a bearish trend. There will always be some form of price reaction at each Fibonacci level just based on Market Psychology. If the retracements are based on a bearish movement, the retracements should indicate potential resistance levels where a rebound will be reversed bearishly, which is vice-versa for the bullish movement trend. The most common reversals based on Fibonacci retracement levels occur at the 38.20%, 50%, and 61.80% levels (50% comes not from the Fibonacci sequence, but from the theory that on average, stocks retrace half of their prior movements - so this is considered a 'psychological level'). Although retracements do occur at the 23.60% line, these are less frequent and require close attention since they occur relatively quickly after the start of a reversal. In general, retracement lines can be considered stronger support and resistance levels when they coincide with the overall trend, meaning, that if you know that you are in an established bullish or bearish trend, you will most certainly get some form of reaction at the most common reversal levels within the Fibonacci level, which is shown in the image below. Whenever applying Fibonacci retracements, keep in mind that retracement lines represent only potential support and resistance levels, they are NOT 100% set in stone – they represent price levels at which to be alert, rather than hard buy and sell signals; however, they have HIGH PROBABILITY. It is important to use additional indicators, in particular MACD, to identify when support or resistance is actually being encountered and a reversal is likely. The more that additional indicators are pointing towards a reversal, the more likely one is to occur. Also note that failed reversals, especially at the 38.20% and 50% retracement levels, are common.
COINBASE:BTCUSDEducation
by XForceGlobal
37
How to confirm Buy/Sell recommendations?As a trader, I meticulously review recommendations from brokerage firms regarding potential stock purchases daily. Despite this, I am frequently confronted with the challenge of accurately predicting profit probabilities, as well as determining precise entry, exit, and stop-loss points. My preference for the Ichimoku strategy means I conduct extensive analyses on my portfolio, a process that, while thorough, is also notably time-consuming. Moreover, in the midst of trading, I find myself eager to predict the characteristics of the forthcoming bar. To address these challenges, I integrate a variety of indicators into my strategy, including VWAP, Stochastic RSI, MACD, OBV, RedK Everex, SVP, and, crucially, volume analysis. Yet, even with these tools, predicting the next price level—as a target price within my Ichimoku trading framework—remains elusive. In my quest for a more comprehensive understanding, I discovered a user-friendly and exceptionally effective indicator that enhances my VWAP framework: the BREAKOUT PROBABILITY (EXPO) by ZEIIRMAN. It offers a nuanced perspective that could markedly improve trade decision-making. I highly recommend watching the educational video provided by ZEIIRMAN. It has the potential to add significant value to your portfolio. Best of luck in your trading endeavors. Mohamed Mahmoud
EGX:SWDYEducation
by ICHIMOKUontheNILE
A Renko Trading Strategy with Multiple IndicatorsThis study will walk through several concepts in analyzing crude oil. The primary chart type will be a Renko chart with the block size (ticks) set to 25 (0.25 in TV) and with a timeframe set to 15 minutes. The significance of timeframe is that in TV, it will take this amount of time for the price to maintain a full block change (25 cents) in order for it to be ‘printed’. In times of high volatility, a 15-minute window can allow for more than one block to print at the same time. While this may be a disadvantage in trading CL futures either day or swing trading, it helps filter out noise in the type of trading I do. The basic strategy I’m wanting to establish using this setup is the buying of options, either puts or calls, that are as near to the market as possible and to limit risk to a % of the value of the purchase price of the option. So, for example, if I pay $2,500.00 USD for a CLQ24 85 Call, I will limit my loss to 10% of that price should the market go against what I had expected. The chart setups and scenarios in this study will be based on Renko charts along with various indicators that will be discussed (for the most part individually). A view of 2024 based on the Renko setup. I will start with this basic view that has the Renko chart configured as outlined above with two linear regression drawings manually drawn on it. There is an indicator for LR which will follow each block change and change accordingly based on the lookback configuration. With the drawing tool, you can start and end the LR based on your strategy. In mine, I want to base the LR on price from a major low to a major high and then adjust based on if a new high or low is obtained. In this chart, I picked the low as that of late December (the first long black arrow). As an exercise, you can hit the new highs from this point to see how the LR adjusted and how future price flowed within it. There are two LR drawings on this chart; one with an upper and lower deviation set to 2/-2 and the second with a upper and lower deviation set to 1/-1 (these are the ones with dots for a boundary). In this specific chart, I’ve started with the latest high to be that on 01-March and with the LRs both extended to the right, you can see the price movement against these LR into the future. As price broke through the top of the LR recently, a new high was put in on 24-March and the adjustment of the LR will be shown next. With this new high confirmed, the LRs are both move to end at this high while keeping the original starting point the same. In this view, price pulled back to the top of the LR 1std and close here. With the LR extended, you can see where the mean is and a potential price target if just considering the LR itself. An expanded view of above: Next, I’ll introduce the DEMA and simple MA on the chart. There are two DEMAs added to the chart with one set to a period of 12 and one set to a period of 20. The significance of the two is that when the 12 (black on this chart) is above the 20 (red on this chart), then the trend is bullish and when the opposite, the trend is bearish. I use these two more for confirmation than for timing. If you study these, you’ll see that they lag for the most part but there are key times that they will provide insight to the direction of a market during times of consolidation. The next two indicators that I’ll introduce are the Stochastic and Directional Movement Index (DMI with the ADX). The experience of using these indicators on a Renko chart is like that on a candle chart except that the period is not for time but the number of bars that have been printed or committed. There are two Stochs used (5,3,3 and 25,3,3). The intent of the 5,3,3 is to provide a fast-moving change in momentum while the 25,3,3 is designed to provide insight to the momentum of the longer trend. Insight as to timing the entry and exit of trades may be possible with an in-depth understanding of the crossover of the 25,3,3 between the %k and the %d. The DMI can be used like it is against a candle chart but with settings at 5,5. This provides a faster moving indicator and, with some study, can determine the importance of the interactions between the 3 lines. There is one key aspect of this indicator with the Renko that works similar to the candle and that is of identifying pending consolidation of the market. In a traditional setup of the DMI on a candle chart, the settings are 14,14 and the line of 20 in the indicator is traditionally the line of strength. Meaning that when the ADX falling at or below the 20 line, then the trends are weak and the market is entering consolidation. During this time, the guidance from various sources is to look for patterns on the market and signs of a breakout. For the Renko charts, the are to watch for trend strength and consolidation is between the 35 and 20 area based on the analysis I’ve done. On the following chart, I’ve highlighted some of these areas of consolidation. Additionally, there is a notion of a high-swap of the +/-Dis which is when price has started moving strongly in one direction and then pivots to change direction and build into a strong trend from this. While in hindsight these look compelling, they can be difficult to trade in real-time, it’s difficult to differentiate between a high-swap and a future degradation of the trend that leads to consolidation. I think that the more reliable setup is finding the longer points of consolidation and prepare to trade in the breakout direction. As you can see on the close Friday, price has moved off of a new recent high and could now be trending down into a period of consolidation (if one were to use just the combination of the DMI and ADX). If you’ve not read “Secrets of a Pivot Boss” by Franklin O. Ochoa, I would encourage you to do so as it has many extremely valuable and innovative ideas in trading off volume, value, and pivots. The following discussions will be based on concepts from this book. The first covered will be that of volume area. I will not dig into the specifics of this but to just show one of the many indicators available in TradingView for these concepts. The volume indicators will work with Renko charts and the specific one I’m using allows me to set the increment of volume based on rows or ticks. I’ve chosen ticks and set the number to 5. With a 25 tick Renko chart, this will allow for a granularity of 5 rows per block for displaying the volume profile. In the chart below, I’ve highlighted a concept outlined in the book of the volume area that is extended out to the next trading day and is what forms the basis for 2-day volume area analysis. There are 6 scenarios that go with this analysis and the pink channels on the chart are intended to enable this view. The volume profile I’ve picked in the indicator is for the week so the analysis I do is for the week and not daily. One of the key setups from the book is an ‘inside day’ which you can see at the black arrow. An inside day is a day to watch for breakout (in this case it would be an inside week) and, after support was found, the price went higher. The last set of indicators that I’ll cover is the Camarilla Pivots. These too are covered in depth in the book referenced above as well as a wealth of details on the web. These pivots do not work on Renko charts so I will create a candle chart with an 8hr setting and then set up the monthly and yearly pivots on it. From this chart, I’ll copy key lines over to the Renko chart. This first chart is a view of the 25 tick, 15 minute chart going back to the beginning of 2024. I’ve labeled some of the key lines on this chart for both the year 2024 and the month of March. This is zoomed into the month of March. I believe a key concept that makes these pivots on the Renko with the timeframe powerful is the ability to see the tests that happen around the various pivots for both support and resistance. There is an entire trading strategy that is outlined in the book referenced above. The current price action seems to imply that price should come back to either the March R3 or the 2024 R3 (which is also the top of the value area for 2023). If price action does come back to these lines, careful attention should be paid to how support plays out and if a buying or selling opportunity arises from it. Next, I’ll provide a view with all of the reviewed items in one view. I’m standing aside on trading this for now until the current price action plays out and a cleaning view of potential trade comes into focus. Some observations considering what’s been discussed individually in this study: The DEMA is currently swapped to the bearish trend. The -DI is over the +DI which is a bearish trend. However, The ADX has been dropping to the 35 line but has not dropped in the 35 to 20 range to indicate a consolidation phase. The Stoch has not completely bottomed out long term and could see more downward movement. While price is at the top of the 1std of the LR, it could drop further. A drop and hold of the 2024 R3, March R3, top of the 2023 volume area, and the median of the current LR (all would be within proximity of each other) could be a strong buy setup. A break below these lines with an ensuing test from the bottom could be a strong sell setup. The relationship of the past two weeks’ volume area is bullish.
NYMEX:CL1!Education
by mxb1961
1
💰The #1 Commodity Market Watch📉🎢-- What you will hear in this video: -- 1-Learning how to trade commodities 2-Trend analysis 3-Support levels 4-Resistance levels 5-Market psychology -- And more... Watch this video to learn more -- **Disclaimer:** The information provided above or below is for educational and informational purposes only. -- It does not constitute financial advice, and trading always involves -- a risk of substantial losses, regardless of the margin levels -- used. Before engaging in any trading activities, it is crucial to -- conduct thorough research, consider your financial situation, -- and, if necessary, consult with a qualified financial advisor. Past -- performance is not indicative of future results, and market -- conditions can change rapidly. Trading decisions should be made -- based on careful analysis and consideration of individual -- circumstances. The user is solely responsible for any decisions made -- and should be aware of the inherent risks associated with trading in -- financial markets.
ICEUS:CC1!Education
by lubosi
2