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Recommendations for new tradersNo matter the size of your deposit, begin trading with small amounts: $10, $100. As you gain experience, you can increase your deposit, but be ready to lose it. This will help you understand market participant behavior. - Trade only with funds you can afford to lose; losing them shouldn't affect your quality of life. - Don't rush to leave your main job; let trading be a hobby initially. It might turn into something more over time, but that's not guaranteed. - More trades don't equal more profit. Sometimes fewer trades can be more profitable than many daily trades. Without experience, it can be challenging to know when to stay out of the market. - Traders spend 90% of their time analyzing instruments and circumstances. Forget rushing; opportunities appear and disappear daily. Learn to wait. Begin with paper trading to get accustomed to the process. - Note the time spent as well as profit or loss. Regardless of your preferred timeframes, start with longer ones like monthly, weekly, and daily charts for an overall view. - Markets are cyclical; they don't rise or fall indefinitely. Reversals often happen unexpectedly. Base decisions on a well-thought-out plan, not emotions. - Develop your own strategy based on your data and temperament. Don't ask others where to buy or sell; they don't know. If an instrument has risen several hundred percent from the bottom, entering without stops is irrational. - If it has gained several thousand percent, avoid entering without waiting for a significant pullback. Even if indicators suggest a specific direction, always consider a 1% chance of the opposite happening to avoid significant losses. Always manage risks. - Regularly withdraw a portion of your profits. Understand why you're investing your time. Ideally, withdraw all your initial investment over time to make operating the deposit easier psychologically. - There are no universal strategies. Your strategy should be proven but flexible to market conditions. What works in a rising market may not work in a falling one, and vice versa. Adapt quickly and manage risks skillfully to make money.
CRYPTO:BTCUSDEducation
by Crypto4light
8
Brilliant Basics - Part 5: Pre-Trade ChecklistWelcome to the fifth and final instalment of our Brilliant Basics series. Here, we provide you with a powerful Pre-Trade Checklist that can be applied to any trading strategy on any timeframe. Pre-Trade Checklist: A Platform For Success Our Pre-Trade Checklist involves asking yourself five simple yet crucial questions before committing your hard-earned money to the market. These questions cover the fundamentals of good trading, emphasising psychological discipline, risk management, and trade management. 1. Does your trade REALLY match your entry criteria? • This may sound obvious, but before entering your trade, it is essential that you triple check if the trade matches your entry criteria. The emotional rollercoaster of trading often starts at the inception of a trade idea. It’s easy to become attached to a trade that doesn’t actually meet your trading plan. Example: Imagine you’re a momentum trader who has been patiently waiting for a stock to break out from a wedge pattern for weeks. Your trade plan clearly states that you must wait for a close above the breakout zone on the daily chart before entering. On the day the breakout finally occurs, your excitement takes over, and you decide to break your entry criteria "just this once" because the breakout was moving so fast. Regardless of the outcome, the "just this once" mentality will prevent you from achieving consistency in your trading. Key Takeaway: Good trading hinges on consistently applying your edge across a large dataset. Therefore, ensure your trade strictly aligns with your predefined entry criteria. 2. Have you checked the economic calendar? • Always check the economic calendar before entering a trade. Scheduled news events like earnings announcements or central bank policy statements can trigger significant volatility. While some strategies may thrive on volatility, effective risk management requires awareness of potential market-moving events. Example: Suppose you’re trading EUR/USD. Without checking the economic calendar, you might miss an upcoming ECB meeting that could drastically impact the pair’s movement, causing unexpected volatility and potential losses. Key Takeaway: Serious traders prioritise risk management and should never overlook scheduled economic events that could impact their trades. 3. Where will you exit if you’re wrong? • Pre-trade enthusiasm often leads to us underweighting the potential to be wrong. If you know exactly where you are getting out of the market if the trade goes wrong, you are already miles ahead of most retail traders. There are two elements to this question: A. Stop Placement: This is an essential hard line in the sand and a stop should be placed that allows for market noise and confirms that your initial trade thesis is wrong. B. Pattern Failure: The second, more subjective element, is failure of pattern or catalyst behind the trade prior to the market hitting the stop. Example: Imagine you’re a swing trader buying a breakout from a descending channel. You place your stop loss below the nearest swing low. The market breaks higher but then retreats back below the descending channel. The breakout pattern, which was the catalyst behind the trade, has failed, but you’re still in the trade. Do you wait and hope for the trade to turn around before your stop is triggered, or do you take a proactive approach and close the trade on pattern failure? Key Takeaway: Exiting on pattern failure prior to your stop can help to reduce the size of your average loser and therefore boost your trading edge. 4. Have you adjusted your position size? • Consistency in position sizing is key to trading success. Adjust your position size according to your risk management strategy—whether fixed monetary amounts per trade or a percentage of your total account size. Example: Imagine you are a swing trader who risks £100 per trade and places a stop loss below a key swing low. Trade A has a stop loss of 100 points, and Trade B has a stop loss of 50 points. To ensure each trade has consistent monetary risk of £100, you risk £1 per point on Trade A and £2 per point on Trade B. Key Takeaway: Equal weighting of trades ensures that your edge is applied consistently over time, regardless of market conditions or trade outcomes. 5. Where will you exit if you’re right? • Planning your exit strategy before entering a trade is crucial for consistent trading performance. Avoid impulsive decisions influenced by profit-induced dopamine rushes. Example: You’ve entered a short position on Tesla (TSLA) after identifying a bearish head-and-shoulders pattern. You plan to take profits at the next major support level. By setting this target in advance, you avoid the temptation to exit prematurely as the stock begins to fall. Key Takeaway: Determine your profit-taking strategy—whether exiting at key support/resistance levels, taking partial profits, or trailing stops to capture potential further gains. Summary: Before entering a trade ask yourself the following five questions: 1. Does your trade REALLY match your entry criteria? 2. Have you checked the economic calendar? 3. Where will you exit if you’re wrong? 4. Have you adjusted your position size? 5. Where will you exit if you’re right? These simple questions, if answered honestly and consistently have the potential to make a real positive impact on your trading regardless of you style or experience. Thank you for following our Brilliant Basics series. We hope these insights have provided you with the tools and confidence to improve your trading strategy. Remember, disciplined trading is the key to long-term success. Happy trading! 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. 80.84% 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:DE40Education
by Capitalcom
3 technical reasons for the growth of #Bitcoin ?!This post has an educational aspect, and in it I checked the reasons and conditions for the growth of Bitcoin based on different time frames 1-The first reason (daily time frame): Hitting two key daily time frame supports 1- Daily timeframe pivot level (pivot indicator) 2- Midline of the descending channel Hitting support, especially support of higher timeframes, can lead to positive reactions and growth. Important note: Pay attention to the shadows involved. As you can see in the photo above, after hitting the pivot support, the daily candle formed a long lower shadow. which must be closed under this shadow to fall. That is a difficult thing 2- The second reason (4 hours time frame): Formation of a falling wedge pattern on the support of a higher timeframe (previous photo) Important point: when the downward trend before the wedge pattern consists of 3 waves, the validity of the wedge pattern for reversal is higher 3- The third reason (4-hour time frame): Triple divergence: If the orange and blue lines of the MACD indicator cross again, the triple divergence is confirmed and the possibility of forming a bottom doubles. This post is educational in nature and you are responsible for any investment decisions. Thank you for your support
Education
by Eldorado_Land
RSI Indicator LIES! Untold Truth About RSI! The Relative Strength Index (RSI) is a classic technical indicator that is applied to identify the overbought and oversold states of the market. While the RSI looks simple to use, there is one important element in it that many traders forget about: it's a lagging indicator. This means it reacts to past price movements rather than predicting future ones. This inherent lag can sometimes mislead traders, particularly when the markets are volatile or trade in a strong bullish/bearish trend. In this article, we will discuss the situations when RSI indicator will lie to you. We will go through the instances when the indicator should not be relied and not used on, and I will explain to you the best strategy to apply RSI. Relative Strength Index analyzes the price movements over a specific time period and displays a score between 0 and 100. Generally, an RSI above 70 suggests an overbought condition, while an RSI below 30 suggests an oversold condition. By itself, the overbought and overbought conditions give poor signals, simply because the market may remain in these conditions for a substantial period of time. Take a look at a price action on GBPCHF. After the indicator showed the oversold condition, the pair dropped 150 pips lower before the reversal initiated. So as an extra confirmation , traders prefer to look for RSI divergence - the situation when the price action and indicator move in the opposite direction. Above is the example of RSI divergence: Crude Oil formed a sequence of higher highs, while the indicator formed a higher high with a consequent lower high. That confirmed the overbought state of the market, and a bearish reversal followed. However, only few knows that even a divergence will provide accurate signals only in some particular instances. When you identified RSI divergence, make sure that it happened after a test of an important key level. Historical structures increase the probability that the RSI divergence will accurately indicate the reversal. Above is the example how RSI divergence gave a false signal on USDCAD. However, the divergence that followed after a test of a key level, gave a strong bearish signal. There are much better situations when RSI can be applied, but we will discuss later on, for now, the main conclusion is that RSI Divergence beyond key levels most of the time will provide low accuracy signals. But there is one particular case, when RSI divergence will give the worst, the most terrible signal. In very rare situations, the market may trade in a strong bullish trend, in the uncharted territory, where there are no historical price levels. In such cases, RSI bullish divergence will constantly lie , making retail traders short constantly and lose their money. Here is what happens with Gold on a daily. The market is trading in the uncharted territory, updated the All-Time Highs daily. Even though there is a clear overbought state and a divergence, the market keeps growing. Only few knows, however, that even though RSI is considered to be a reversal, counter trend indicator, it can be applied for trend following trading. On a daily time frame, after the price sets a new high, wait for a pullback to a key horizontal support. Your bullish signal, will be a bearish divergence on an hourly time frame. Here is how the price retested a support based on a previous ATH on Gold. After it approached a broken structure, we see a confirmed bearish divergence. That gives a perfect trend-following signal to buy the market. A strong bullish rally followed then. RSI indicator is a very powerful tool, that many traders apply incorrectly. When the market is trading in a strong trend, this indicator can be perfectly applied for following the trend, not going against that. I hope that the cases that I described will help you not lose money, trading with Relative Strength Index. ❤️Please, support my work with like, thank you!❤️
Education
by VasilyTrader
34
Intraday Trading Strategy With Breakout FilterIntraday Trading Strategy With Breakout Filter Overview: This strategy is the combination of two scripts: 1. Intraday Trading Script : It exclusively for M1 and M15 timeframes. 2. Breakout Filter Script: It works at all timeframes. Note: Please read the explanation details about the script respectively. EMA lines help to understand market sentiment and identify potential support or resistance levels. MACD indicator is added to help confirm potential entry points based on momentum. Setup: Use TradingView's multi-chart layout feature, setting a minimum of two charts per layout (M1 and M15). Three charts (M1, M15, and DTF) are preferable. Add the Intraday Trading Script and Breakout Filter scripts to the layout. Note: In this example, the lowest timeframe to publish the trading idea publicly is M15. Therefore two chart in the layout is chosen for M15 and DTF. The optimum setup is M1, M15 and DTF. During Market Hours: Check the TOP GAINERS list for active counters. In TradingView: 1. Verify if the price has already broken the SnR line on the M15 chart. 2. The Breakout Filter must also appear, with a minimum of Filter 2. If Filter 3 appears at M1, M15, or DTF, it shows even stronger upward momentum. 3. If these two are valid, long entry can be considered. TAYOR. EMA 9 can represent a strong support at M15. Intraday trading requires high discipline. Follow the planned Risk to Reward ratio for entry/exit. TAYOR.
MYX:ANNJOOEducation
by hayan500
Four Factors Driving Gold Prices Relative to Silver2600 years ago, the Anatolian Kingdom of Lydia minted the world’s first gold and silver coins. In doing so, the Lydian King Alyattes and his successor Croesus introduced the world’s first exchange rate: the gold-silver cross. Like any cross rate, the amount of silver that can be purchased with an ounce of gold is driven by both demand and supply-side factors, and the cross rate is anything other than stable. Sadly, we don’t have the time series of the gold-silver ratio dating back to ancient times, but we do have data going back to the launch of gold futures on December 31, 1974. Since the mid-1970s, one ounce of gold bought anywhere from 17 ounces to as many as 123 ounces of silver (Figure 1). Figure 1: The amount of silver an ounce of gold can buy has been highly variable In addition to the impact of monetary policy, which we have covered here, the gold-silver ratio appears to be governed by four other factors: Relative volatility and the silver beta Fabrication demand and technological change Gold’s use as a monetary asset Supply-side dynamics Relative volatility and beta To borrow an expression from the equity markets, silver is the high-beta version of gold. First, silver and gold prices usually have a strong positive correlation. Since 2004 the one-year rolling correlation of their daily price moves has hovered around +0.8 (Figure 2). Second, silver is more volatile than gold. As such, when gold prices move up, silver tends to move up more, thereby lowering the gold-silver price ratio. By contrast, during bear markets, the gold-silver ratio tends to rise. Figure 2: The correlation of gold and silver price changes has hugged +0.8 since 2004. For example, when gold and silver prices peaked in September 2011, one ounce of gold bought fewer than 32 ounces of silver (Figure 3). In the ensuing bear market, the ratio rose to as high as 124 ounces of silver per ounce of gold. The ratio snapped back to 64 in 2020 as gold and silver rallied early in the pandemic. In 2024, as both metals have rallied, silver has outperformed, rising 23% in the first five months of the year compared to 12% for the yellow metal. Figure 3: Positive correlation plus much higher volatility give silver a high beta to gold Fabrication Demand and the Impact of Technological Change What is curious is that while gold and silver have rallied thus far in 2024, gold broke to new record highs of nearly $2,500 per ounce whereas silver prices remain 40% below their twin 1980 and 2011 peaks despite having outperformed gold since 2020 (Figure 4). The reason may lie in technological advances. Figure 4: Gold has hit records in 2024 while silver is still 40% below its 1980 and 2011 record highs Even before the Lydians minted the first gold and silver coins around 600 BCE, both metals had been used to make jewellery: silver since around 2500 BCE and gold since 4500 BCE. Some things don’t change. Even today, the primary use of both metals is to make jewellery. Yet, thus far this century, silver has been buffeted by two sets of technological developments: the digital revolution and the energy transition. Both have impacted the relative gold-silver ratio. In 1999, photography used 267.7 million troy ounces of silver which accounted for 36.6% of that year’s total silver supply. By 2023 photography used only 23.2 million ounces of silver or about 2.3% of 2023’s total supply due to the rise of digital photography. Meanwhile, silver’s use in electronics and batteries grew from 90 million ounces to 227.4 million ounces or from 12.3% to 22.7% of silver’s total annual supply, partially offsetting the decline in traditional photography, which may partially explain why silver has struggled to hit new highs in recent years even as gold has set records. The good news for silver, however, is that it is finding new use in the energy transition. Over the past few years silver has seen strong growth coming from solar panels, which accounted for 20% of 2023 silver demand, up from essentially nothing in 1999 (Figure 5). Solar panels may explain in part why silver has recovered relative to gold since 2020. Figure 5: Battery and solar panel demand have grown as photography demand has shrunk If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By contrast, gold fabrication demand has shown itself to be immune from recent technological developments and is still overwhelmingly dominated by jewellery demand, with electronics, dental and other uses absorbing just 17% of annual gold mining supply (Figure 6). The differences in silver and gold fabrication demand underscores that gold is considered the purer of the two precious metals. Figure 6: Gold fabrication demand has remained little changed Gold and global monetary policy Indeed, central banks around the world treat gold as money while they largely ignore silver (Figure 7). They hold a combined 36,700 metric tons of gold, the equivalent of 1.2 billion troy ounces or 13 years of global mining output. Moreover, central banks have been net buyers of gold every year since the global financial crisis. Figure 7: Central banks have been net buyers of gold since the global financial crisis Central bank buying of gold since 2009 contrasts sharply with their tendency to be net sellers from 1982 to 2007. Central banks’ accumulation of gold suggests that they want a hard asset to complement their foreign exchange reserves of dollars, euros, yen and other fiat currencies, a view that appears to have been reinforced by on-and-off quantitative easing since 2009 and increased use of financial sanctions. Central bank buying impacts gold prices directly, but only boosts silver prices indirectly via the gold market. The supply side of the equation Central bank gold buying reduces the amount of gold available to the public. Over the past decade, central bank buying has removed the equivalent of 8%-20% of new mining supply from the gold market each year (Figure 8) which may also explain why the gold-silver ratio rose significantly from 2011 to 2020 and why, even today, it remains at 2x its 2011 level. Figure 8: Net of central bank buying, gold supply has stagnated since 2003 Total gold supply net of official purchases has stagnated since 2003. Meanwhile, silver mining supply peaked in 2016 and gold mining supply peaked the next year (Figure 9). The fact that new supply is arriving on the market more slowly than in the past may be bullish for both gold and silver. Figure 9: Gold and silver respond negative to changes in each other’s mining supply. Our econometric analysis shows that gold and silver prices are negatively correlated with changes to one another’s mining supply. A 1% decrease in gold mining supply, on balance, boosted gold prices by 1.9% and silver by 3.0% from 1974 to 2023. A 1% decease in silver mining supply boosted the prices of the metals by 1.3%-1.6% (Figure 10). Secondary supply appears to respond to price rather than drive it. Higher prices incentivize more recycling, but recycled metal doesn’t appear to depress prices as it doesn’t bring any new metal onto the market. Figure 10: Secondary supply responds to price rather than drives it What connects the two markets is jewellery. Because gold is 70x as costlier than silver, when prices rise, demand for gold jewellery falls while silver’s jewellery demand is relatively unresponsive to price because it costs much less. Gold and silver can be seen as a sort of binary star system where the two stars orbit a common center of gravity or barycenter. Gold is the larger, more stable and more influential of the two, but it is by no means immune from silver’s pull. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By Erik Norland, Executive Director and Senior Economist, CME Group *CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
CME_MINI:ES1!Education
by CME_Group
4
COGNITIVE DISSONANCE IN TRADING: GAP BETWEEN FANTASY AND REALITYToday we are going to tackle one of the bad habits - illusions in trading. It will be painful, not everyone will be able to face reality, but it is necessary to go through it if you want to be profitable in the markets steadily, not from time to time. Cognitive dissonance is a psychological term used to describe the discomfort a person experiences when two contradictory beliefs are present at the same time. The theory states that people like to keep all their beliefs and experiences in harmony and avoid disharmony (dissonance). When we experience this conflict and discomfort, our thoughts will immediately attempt to restore balance by changing our beliefs and attitudes and, justifying our actions and behaviors. Ultimately, we all want our expectations to match reality in such a way that we can experience a sense of control. We all experience cognitive dissonance on an almost daily basis. In everyday life, it can be quite harmless and even fun to recognize its presence, but for traders it can be disastrous. 💡 HOW DOES THIS RELATE TO TRADERS? The vast majority of ambitious amateur traders approach their profession with deeply unrealistic expectations such as: ➡️ You can learn to trade the market fairly quickly. ➡️ One can quickly and regularly recoup the lost money in large quantities. ➡️ Rapid attainment of abundance and wealth. ➡️ Daily, steady, reliable results. ➡️ One can quickly quit a job and work from home. Anyone who has ever tried trading has quickly learned through experience that none of the above statements are true. This instantly creates a conflict between what you believed and what you experienced, and thus your thoughts quickly try to erase the discomfort and restore harmony. The reasonable and logical thing to do in this case is to recognize and accept that your original beliefs were incorrect, and then revise your beliefs so that they can accurately reflect reality. However, admitting that you were wrong and that you made a mistake is in itself emotionally painful, although it must be done. No one likes to admit they were wrong; it is much easier and quicker to just try to rationalize and justify your original beliefs. People generally try to justify their own mistakes because, by doing so, they feel better about themselves. And it doesn't matter that your beliefs are false, and they will continue to be false for as long as you continue to believe that everything that happens is normal. It goes without saying that this is completely irrational and can be extremely destructive to traders. 💡 WHO IS TO BLAME FOR FOREX FAILURES? A typical situation with the belief that trading can be learned quickly, and that one can earn X amount of money daily and quit their job within a month or two. When reality conflicts with this belief or expectation, the trader will make excuses, trying to find justification for their actions, why they were right, telling themselves something like "I just haven't found the right system yet". Instead of accepting their mistakes from their faulty judgments and then taking action to align their behavior with reality, which will ultimately lead to success, they prefer to find excuses for their beliefs. The situation described above leads to so many traders constantly switching from one forex system to another. One of the truly destructive characteristics in this situation is that as a result of cognitive dissonance, the original false belief is actually further reinforced, the exact opposite of what would be most beneficial. In order to restore emotional harmony in such a situation, something needs to change. Either we need to change our beliefs or reduce the importance of one of the conflicting issues. Very often the broker or trading platform is blamed for trader's failures. After all, it is so easy to shift the blame onto someone else. Most people do is maintain an existing belief (rather than admit error), introduce new beliefs to justify the first, and then diminish the importance of real events (disregarding the facts). The end result is that they continue even more passionately down the false path. 💡 CHASING ELUSIVE PROFITS This, however, easily leads to unrealistic expectations and beliefs of traders, viz: They expect to get big returns quickly. When reality shows them that their expectation is false, they ignore the facts and look for something to help prove that their belief is correct. It is common to see traders switching from one trading system to another every few months. They add forex indicators, add rules, change timeframes, test different methods, learn different theories, trade on different instruments, change their money management system, change risk profiles, buy different software, etc. They may even find a profitable strategy, but discard it because, in their opinion, it doesn't give them the 100% return. These people will spend the rest of their lives in a futile search to find something that in reality does not exist. This is quite obvious not only from their own experience, but also from the documented experience of any other trader who has previously traveled this path. And yet they ignore this evidence. They ignore reality. Their beliefs collide with harsh reality, which causes emotional discomfort. Instead of admitting they are wrong, which would cause even more discomfort, they simply ignore reality, find excuses for their original belief (e.g. the strategy is bad, or the trading platform is slow, or the market is wrong, etc.), and find harmony again, convincing themselves that they were right, but just haven't found a solution yet. And they think it's better to keep looking for them next! 💡 THE CHOICE: IGNORING REALITY OR ADAPTING TO ACHIEVE SUCCESS Traders are faced with tough choices that they need to make. We all at some point face the discomfort of cognitive dissonance when our beliefs go against reality. We can either restore our mental harmony by ignoring the evidence of reality and continue to make excuses. Or we can accept that our beliefs were false, and then realign them and change our actions and behavior in a way that works in parallel with reality. The former path is the easiest and most convenient, but it certainly represents an option that leads to guaranteed and lasting delusion. The latter path is more difficult and less comfortable, but it naturally represents the option that will eventually lead the trader to success. Here is the question that all traders should ask themselves and answer honestly: What is more important to me? Being right or being successful? Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment 📣
Education
by Lingrid
5
The Wisdom of Pro Traders vs. Newbie Naivety Hey traders, In this article, we will discuss the perception of trading by individuals . We will compare the vision of a professional trader and a beginner - trading vs gambling. Most of the people perceive trading performance incorrectly. There is a common fallacy among them that win rate is the only true indicator of the efficiency of a trading strategy. Moreover, newbies are searching for a strategy producing close to 100% accuracy. Such a mindset determines their expectations. Especially it feels, when I share a wrong forecast in my telegram channel. It immediately triggers resentment and negative reactions. Talking to these people personally and asking them about the reasons of their indignation, the common answer is: "If you are a pro, you can not be wrong". The truth is that the reality is absolutely different. Opening any position or making a forecast, a pro trader always realizes that there is no guarantee that the market will act as predicted. Pro trader admits that he deals with probabilities , and he is ready to take losses . He realizes that he may have negative trading days, even weeks and months, but at the end of the day his overall performance will be positive. Remember, that your success in trading is determined by your expectations and perception. Admit the reality of trading, set correct goals, and you will take losses more easily. I wish you luck and courage on a battlefield.
OANDA:XAUUSDEducation
by VasilyTrader
3
Seeing others make profitable trades can lead to envyFor new traders, market decisions are often driven by emotions like fear and greed, rather than well-established trading strategies. While much has been written about this, there are other significant factors that influence traders' decisions: Social Pressure: Traders often make trades based on the opinions and actions of others, rather than their own strategies and the real market situation. This social influence can come from chat rooms, online communities, or social media, where opinions are frequently voiced by other inexperienced traders. Envy: Seeing others make profitable trades can lead to envy. This emotion pushes traders to make impulsive decisions, such as entering trades without proper analysis, hoping to replicate others' successes. Instead of waiting for their own signals, they act on impulse and lose control. Common Mistakes Among New Traders: Reacting to News and Opinions: Rather than following their own trading vehicle (strategy), novice traders often react to news or opinions from others. This leads to decisions that are not grounded in their own analysis. Overactivity: Many mistakes stem from the feeling of needing to always be active in the market. New traders see others trading successfully and feel pressured to do the same. This can result in excessive trading and taking positions without proper signals. Paralysis from Fear: When a genuinely good opportunity arises, traders who have been overly active may be too paralyzed by fear to act. Their energy is wasted on meaningless transactions, and negative emotions cloud their judgment. Impact on Trading Performance: Wasted Energy: Excessive, impulsive transactions deplete a trader’s energy and focus, leading to poor decision-making when real opportunities present themselves. Negative Emotions: Constantly reacting to others and not following a personal strategy can result in frustration and dissatisfaction, which negatively impact self-esteem and confidence in one’s trading vehicle. Loss of Control: Acting out of fear, greed, social pressure, or envy leads to a loss of control over trading decisions, causing more losses and missed opportunities. Key Takeaways for New Traders: Develop a Personal Strategy: Rely on your own trading plan and analysis. Stay Patient: Wait for your entries and avoid impulsive trading. Manage Emotions: Keep emotions like fear, greed, envy, and social pressure in check to maintain control over your trading decisions. Focus on Long-Term Success: Avoid excessive trading and focus on making informed, strategic trades. By being aware of these psychological factors and actively working to mitigate their impact, new traders can make more informed and rational trading decisions. ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
Market Makers in Crypto: Who Controls the Cryptocurrency Market?Functions of Market Makers Market makers perform several essential functions in the cryptocurrency market, including: Providing Liquidity: They ensure there is enough liquidity between buyers and sellers to maintain active market participation. Providing Quotes: They offer bid and ask prices at any given time, facilitating trades between market participants. Risk Management: Market makers manage trading risks and maintain a balanced risk-return ratio to protect their interests and those of their clients. Providing Advice: They supply market information and analysis to assist clients in making informed trading decisions. Improving Market Efficiency: By reducing the spread between buyers and sellers, market makers enhance overall market efficiency. Market makers in the crypto industry operate similarly to traditional market makers. They provide market liquidity, execute buy and sell orders instantly, and earn profits from the spreads between these orders. However, due to the relatively unregulated nature of the cryptocurrency market, there is no stringent code of conduct for market makers, and the technical demands for ensuring transaction security are higher. Market makers follow a simple principle: "buy low, sell high." This approach requires handling large volumes of transactions, sometimes up to tens of thousands per second. They use advanced algorithmic programs to monitor numerous parameters and recalculate forecast prices multiple times per second, thus providing market liquidity without incurring losses. Despite this, even sophisticated trading algorithms can falter due to rapid trade speeds or incorrect price predictions. During periods of high volatility, market makers might incur losses while trying to stabilize the market. Therefore, a stable or slightly fluctuating market is ideal for them, while days with significant price movements can lead to substantial losses. In essence, while regular market participants react to past events, market makers anticipate future market movements to set optimal buy and sell prices and determine order volumes. Cryptocurrency exchanges and market makers often collaborate closely. Some exchanges maintain their own market-making teams, while others partner with third-party market makers. This cooperation can take two forms: Direct Cooperation with Crypto Exchanges: Exchanges offer special programs for market makers, providing personalized trading terminals. Through APIs, exchanges share order book information and market depth with market makers, facilitating pricing and matchmaking. Indirect Cooperation with Crypto Exchanges: Market makers provide over-the-counter (OTC) market-making services through intermediaries or platforms. Market makers are crucial but not mandatory for liquidity provision on crypto exchanges. They must negotiate terms such as commission distribution and trading volumes with exchanges to ensure profitable and smooth cooperation. Additionally, they must adhere to exchange rules and external regulations to ensure legal compliance. From a trading mechanism perspective, market makers with internal exchange connections play a significant role in price determination, which can help prevent price manipulation to some extent. Their presence enhances exchange liquidity, improving user experience and loyalty, and making the exchange more profitable. Consequently, exchanges often offer discounts to market makers for their activities. ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
How to go through a LOSING STREAK better? 🍏1. Everything starts with preparation and true expectations. Losing streaks will happen from time to time, accept it if you want to be a good trader. Even the best traders on the planet have them. But it’s the reaction to them that separates good and bad traders. Know your probability of losing streak, based on your own backtesting and accept them before they even happen. Keep longterm focus! 🍋2. Make sure you’re practicing process based trading, not outcome based. Before every trade, ask yourself if anyone in the whole worlds can say the outcome of any individual trade? The answer is obvious - no one can do it. So is it rational to build expectation of a specific market moves in this individual trade, or nearest several trades - that they are completely uncertain and you are working with random distribution of your edge. 🥥3. Once in a streak, remind yourself about your testing. See that over the past 200 or more trades, you were profitable, at least RR wise. These 5-6 losing trades you’re having now are just a very small part of a huge data collection you did before, and they are part of random distribution. 🍈4. In a losing streak, there’s usually an urge to trade more to earn the lost $ amount back. It’s a mistake, as overtrading will lead to only one outcome - even more loss in short or longterm perspective. 🍎5. In the past, I wanted to reach some state of unbreakable consistency, "once and for all", and when I thought I did it, I started to expect things to be easy from now on and not to struggle or put effort, cause now I'm fully consistent. And that was exact moment when everything fell apart. The truth is, at least for me and for now, is that I need to make good decisions - mentally and technically - EVERY DAY and EVERY MOMENT, to actually prove I'm consistent. And consistency is dynamic, I'll continue to work on it, it's like gardening, when you need to put some effort everyday and it's never fixed or done, at least for me.
OANDA:XAUUSDEducation
by Yelli_trades
3
Request for Tradingview for feature expansion.I do not understand why specific country search is not available in the "All" category search. Someone based in Japan may be interested in trading only Japanese securities and may not want to search for any other symbols. But every time he searches, he will see other irrelevant securities. I request TradingView to add a country search to the "All" category as well. Sorry I do not understand how my drawings shifted wrongly in my charts. But I hope you guys understand what I want to show you.
NSE:RELIANCEEducation
by Am_ContentCreator_
4
Control of EmotionsTrading in the cryptocurrency market often resembles a marathon where everyone aims to be the first. Unlike running, where there's only one winner, multiple traders can succeed in the crypto marathon. However, success in trading involves serious psychological work, which we'll discuss today. Everyone aspires to achieve their goals and be successful. Beginners in any field need to go through a learning curve, gradually honing their skills. The crypto market is not about luck; it requires constant self-improvement, learning from mistakes, and analyzing actions. The psychology of crypto trading involves a set of rules, methods, and actions to ensure successful trading, profit-making, and minimizing unavoidable failures. A professional trader approaches trading with a focus on results and a realistic assessment of risky situations. Financial success, in the form of net profit, is the ultimate goal. Let's explore the basic psychological tools used by professionals for successful trading: Always at Hand The whole world of cryptocurrencies is in your pocket. Don't Think About Defeat When starting a trade, don't focus on potential losses. Such thoughts set you up for failure from the outset. Be confident and avoid dwelling on the fear of making mistakes. While mistakes will happen, treat them as valuable lessons and continue improving your trading skills. Visualize Although not a scientific method, psychologists emphasize the importance of visualization. By visualizing success, you can block out fears of making mistakes and focus on achieving your goals effectively. Visualize yourself executing your strategy professionally and accurately, then act accordingly. Be a Recluse Cryptocurrency trading is a solitary activity. Ignore other people's opinions and avoid external interference. Your forecast accuracy will improve when you analyze market situations independently, without relying on others' advice. Self-Realization Comes First While trading in the crypto market is finance-related, view it as a creative process that should bring you satisfaction. Be confident in yourself and your success, and see trading as a means of self-fulfillment. This mindset will help you navigate the chaotic and unpredictable market as a tool for success. Think About the Risks Never risk funds you aren't prepared to lose. Consider potential losses when creating your strategy. Stick to your loss limits, even if the temptation for larger trades is high. Sometimes, multiple small trades can be more profitable than one big trade. Discipline Avoid reacting to sudden emotions or news. Trade according to your pre-developed plan without deviation. In trading, discipline is synonymous with success. This is particularly crucial for novice traders, as the volatile market often puts psychological pressure on them. Control of Emotions Monitor your emotional state and avoid trading when influenced by certain news or events. Emotional trading leads to losses. If you notice impulsive decision-making, take a break to calm down. Vacation Everyone needs breaks. If emotions and feelings drive you, take a break and avoid thinking about trading, assets, or cryptocurrencies. Engage in activities you enjoy and spend time with loved ones to recharge. Statistics Keep detailed statistics. This advice is valuable for both beginners and experienced traders. Record the number of transactions per day, profit and loss balance, positions, and other indicators. Analyze this information weekly. Statistics are a great way to create an effective strategy. By incorporating these psychological tools, traders can navigate the cryptocurrency market more effectively, enhancing their chances of success and minimizing losses. Hope you enjoyed the content I created, You can support with your likes and comments this idea so more people can watch! ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
Crypto Coins Heatmap: The Ultimate Guide for Beginners (2024)Discover the easiest way to track, group and sort your favorite tokens in one place — the TradingView Crypto Coins Heatmap. Everyone — from the aspiring crypto enthusiast to the professional digital asset fund manager — needs it. Meet the ultimate cryptocurrency tracking and monitoring tool, the TradingView Crypto Coins Heatmap. What Is Crypto Coins Heatmap? Slick-looking, feature-rich, and aesthetically pleasing, the Crypto Coins Heatmap is a visual tool developed by TradingView. It displays the performance of crypto coins plastered over a single interface that allows users to keep tabs on price movements through color coding and percentage performance. Key Features Let’s start off with the basic features of the Crypto Coins Heatmap. 1. Color-Coded Performance Indicators Green indicates positive performance (coin go up — good.) Red indicates negative performance (bad coin — goes down.) Grey indicates slim to no price movement, typical for stablecoins. 2. Real-Time Price Data The heatmap is updated in real-time and shows the most current information so crypto geeks could know the price of everything all the time. 3. Market-Cap-to-Size Ratio The size of each crypto coin corresponds to its market capitalization, i.e. the more room it takes on the screen, the bigger the market value. Bitcoin ( BTCUSD ), the original cryptocurrency , takes up over half the entire screen because its dominance is over 50% of the total market’s worth. Key Functionalities What can you actually do with that data and can you customize it? Yes — let’s find out how. 1. Select Source At the top left, select “Crypto coins” and choose your preferred grouping. Crypto coins Crypto coins (Excluding Bitcoin) Crypto coins (Excluding Stablecoins) Coins DeFi 2. Size By Next up, hit the “Market cap” menu to arrange the digital assets by various sizes and parameters. Also, for a more detailed look, make sure to check the dedicated crypto market cap corner on the TradingView website. Market cap FD market cap Volume in USD 24h Total value locked Volume 24h / Market cap Market cap / TVL (total value locked) 3. Color By The third option from the top bar menu — “Performance” — shows you the tokens’ percentage return on various time frames. Performance from 1-hour to 1-year time frame. 24-hour volume change, measured in %. Daily volatility, measured in %. Gap, measured in % (previous day’s closing price to today’s opening price). 4. Toggle Mono Size The grid icon allows you to display all tokens in the same size. 5. Filter The filter icon is where it gets really precise — fine-tune your results by various size and performance metrics. 6. Settings The gear icon displays the layout settings and allows you to add or remove certain visual elements. Add or remove Title (by Description or Symbol). Add or remove Logo. Add or remove First value, measured in %. Add or remove Second value, measured in price or market cap. Color scheme: Classic, Color blind, Monochrome. 7. Share Icon Tell your crypto friends or cool uncle about this nifty interface by clicking on the Share icon to: Save image Copy link Share on Facebook Share on Twitter (X) 8. Heat Multiplier The x1 (by default) icon is the Heat Multiplier, which narrows down your search based on the percentage return on a given time frame. Play around with it to find out the biggest losers and winners in the crypto world. Why You Need the TradingView Crypto Coins Heatmap Interactive Charting Click on any token on the screen to bring up a detailed chart with all the key data you could want. Here’s an example of Ethereum’s ( ETHUSD ) interactive chart: Quickly grasp market conditions, sentiment, and trends with the intuitive interface. Comprehensive Market Overview Make precise comparisons between different cryptocurrencies to see how price performances stack up against each other. Final Considerations The TradingView Crypto Coins Heatmap is your gateway to current price data spanning all over cryptoland. Be sure to check it whenever you need a glimpse into the digital asset market and its volatile prices. And finally, maximize the heatmap’s potential by transferring the insights into your trading plan . Let us know if you use the Crypto Coins Heatmap — leave your comments below!
BITSTAMP:BTCUSDEducation
by TradingView
5
US CPI Report Set to Influence Fed Decision and Market SentimentUS CPI Data Expected to Show Moderating Price Pressures Ahead of Fed Decision Key Highlights: Expected CPI Rise: The US Consumer Price Index (CPI) is forecast to rise by 3.4% year-over-year (YoY) in May, maintaining the same pace as in April. Core CPI Inflation: Annual core CPI inflation is anticipated to slightly decrease from 3.6% in April to 3.5% in May. Impact on US Dollar and Fed Rate Cut Expectations: The upcoming inflation data could influence the US Dollar value and market expectations regarding a September rate cut by the Federal Reserve (Fed). Detailed Analysis: Upcoming CPI Data Release: The Bureau of Labor Statistics (BLS) is set to publish the highly anticipated Consumer Price Index (CPI) inflation data for May on Wednesday at 12:30 GMT. This report is expected to bring intense volatility to the US Dollar, as any surprises in the inflation figures could significantly impact market expectations for the Federal Reserve's rate cut decisions in September. Inflation Expectations: Overall CPI: Expected to rise by 3.4% YoY in May, consistent with April’s rate. Core CPI: Forecast to inch down to 3.5% YoY from 3.6% in April. Month-over-Month (MoM) Changes: The CPI is anticipated to increase by 0.1% in May, down from a 0.3% rise in April. Core CPI is likely to hold steady at a 0.3% MoM increase. Federal Reserve’s Stance: In a recent moderated discussion, Federal Reserve Chairman Jerome Powell adopted a dovish stance, expressing lower confidence in inflation moving back down and suggesting it is unlikely that the next move would be a rate hike. Powell's comments came just before the April CPI data release, which showed softened headline and core inflation. Labor Market Impact: A strong US labor market report, showing a substantial increase in Nonfarm Payrolls and higher-than-expected Average Hourly Earnings, has tempered market expectations for a September rate cut. Despite earlier optimism for rate cuts, the robust labor data has led markets to reassess the likelihood of such cuts. Banks' Expectations for CPI: Goldman Sachs: Predicts CPI to be at 3.3% year-over-year, slightly lower than the previous month. JP Morgan: Expects CPI to remain stable at 3.4%, indicating no significant change. Morgan Stanley: Anticipates a slight decline to 3.2%, reflecting easing inflation pressures. Bank of America: Foresees CPI at 3.3%, aligning with a gradual slowdown in inflation. Analysts’ Forecasts: According to TD Securities analysts, core inflation is expected to slow to a "soft" 0.3% MoM in May, with the headline likely rising by a softer 0.1% due to a significant decline in energy prices. They also noted a potential for a dovish surprise with an unrounded core CPI forecast of 0.26% MoM. Conclusion: The upcoming US CPI data release is crucial, with potentially significant impacts on the US Dollar and market expectations for Federal Reserve rate cuts. A CPI reading in line with expectations could reinforce current market positions, while any deviation could trigger substantial market volatility. This comprehensive analysis outlines the expectations and potential impacts of the upcoming CPI data, providing valuable insights for market participants.
OANDA:XAUUSDEducation
by SroshMayi
Profitable Multiple Time Frames Smart Money Strategy Revealed In this post, I will share with you a very accurate SMC strategy that combines top-down analysis, liquidity, imbalance, order block and inducement. Step 1 - Identify liquidity zones on a daily Liquidity zones are the areas on a price chart, where big players are placing their orders. From such areas, significant bullish and bearish movements initiate. Liquidity zones that are above the current price will be the supply zones, while the liquidity zones that are below the current price will be the demand zones. We will look for shorting opportunities from supply areas and for buying opportunities from demand zones. Here are the liquidity zones that I identified on EURJPY. Step 2 - Wait for a test of one of the liquidity zones Let the market test the liquidity zone. For buying, the price should reach a lower boundary of a demand zone. For shorting, the price should test an upper boundary of a supply zone. I underlined the exact levels that the price should test on EURJPY. Here is the test of the lower boundary of the demand zone. Step 3 - Look for inducement on an hourly time frame With the inducement, smart money make the market participants think that the liquidity zone that the price is testing doesn't hold anymore. When the price tests a supply area, an hourly candle close above its upper boundary will be a bullish inducement. With that, the smart money incentivize buying orders. When the price tests a demand area, an hourly candle close below its lower boundary will be a bearish inducement. With that, the smart money incentivize selling orders. The price closed below a lower boundary of a demand zone on EURJPY on 1H time frame. Step 4 - Look for imbalance on an hourly time frame After a violation of a supply area on an hourly time frame, look for a bearish imbalance. Bearish imbalance is a strong bearish candle with wide range and big body. With that candle, the market should return within a supply zone and closed within or below that. After a violation of a demand area on an hourly time frame, look for a bullish imbalance. Bullish imbalance is a strong bullish candle with wide range and big body. With that candle, the market should return within a demand zone and closed within or above that. Here is the example of a bullish imbalance on EURJPY. After a bearish inducement, the price formed a high momentum bullish candle and closed within the demand zone. The imbalance signify that a liquidity zone violation was a trap . With that, smart money simply was trying to grab the liquidity. That will be a signal for you to open an order. Step 5 - Look for an order block After the formation of the imbalance, the market becomes locally week and quite often corrects to an order block. Order block will be the closest hourly liquidity zone. After a formation of a bearish imbalance, look for a supply zone on an hourly time frame. That will be your perfect zone to sell. After a formation of a bullish imbalance, look for a demand zone on an hourly. That will be your area to buy from. Here is the order block on EURJPY. Step 6 - Set a limit order Set a sell limit order within a supply area after a formation of bearish imbalance on an hourly time frame. Set a buy limit order within a demand area after a formation of a bullish imbalance on an hourly. Here is your buy entry level on EURJPY. Step 7 - Select the target If you sell, your target should be the closest daily structure support: horizontal or vertical one. If you buy, your target should be the closest daily structure resistance: horizontal or vertical one. In our example, our closest structure resistance if a falling trend line. Step 8 - Set stop loss If you sell, stop loss will lie above a bullish inducement. If you buy, stop loss will lie below a bearish inducement. Here is a perfect point for a stop loss for a long trade on EURJPY. Step 9 - Trade Let the price trigger your entry, and then be prepared to wait. It took many days for EURJPY to reach the target. Trading Tips: 1. Make sure that you have a positive reward/ratio. It should be at least 1.2 2. Risk no more that 1% of your trading account per trade Being applied properly, that strategy shows 70%+ accuracy. Try it by yourself and let me know your results. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
1
Brilliant Basics - Part 4: Multi-Timeframe AnalysisWelcome to the fourth instalment of our Brilliant Basics series, where we help you achieve consistency and discipline in foundational concepts that create a platform for long-term success. Today, we’re diving into the world of Multi-Timeframe Analysis (MTFA) . We will explore how to use different timeframes effectively and consistently to gain a deeper understanding of market dynamics can improve your trading decisions. The Power of Multi-Timeframe Analysis Multi-Timeframe Analysis is the practice of examining the same market on multiple timeframes to get a more comprehensive view of its behaviour. This technique has no time lag and ultimately allows traders to refine their entry and exit points. Why Multi-Timeframe Analysis Matters: • Context and Clarity: By looking at multiple timeframes, traders can see the bigger picture and understand the broader market trend. This context is crucial for trade selection and management. • Precision: Lower timeframes provide detailed price action information, which helps in timing entries and exits more precisely. • Confirmation: Using multiple timeframes helps to confirm signals, reducing the risk of false breakouts or reversals. How to Perform Multi-Timeframe Analysis 1. Select Your Timeframes: Choose three different timeframes: a higher timeframe for context, an intermediate timeframe for your core analysis, and a lower timeframe for precise entries and exits. The timeframes you select will depend on your trading style. For example, you might use the following: • Higher Timeframe: Weekly chart for the long-term trend (top right) • Intermediate Timeframe: Daily chart for the medium-term trend (left) • Lower Timeframe: Hourly for short-term price action (bottom right) Past performance is not a reliable indicator of future results 2. Analyse the Higher Timeframe: Start with the higher timeframe to understand the bigger picture market structure. Is the market trending, range bound or in a random whipsaw structure? 3. Refine with the Intermediate Timeframe: The intermediate timeframe is your core analysis timeframe. It should provide key levels of support and resistance and more detail on the current trend and momentum in the market. Trend continuation traders can look for pullbacks, consolidations, and continuation patterns that align with the higher timeframe. While reversal traders can look for reversal patterns that align with key levels on the higher timeframe. 4. Pinpoint Entries and Exits on the Lower Timeframe: Finally, use the lower timeframe to time your trades with precision. Look for reversal patterns, breakouts, or pullbacks that align with the higher and intermediate timeframe analysis. Examples Example 1: FTSE 100 MTFA Weekly candle chart (top right): The FTSE is trending higher having broken through key resistance and prices are pulling back from trend highs. Daily candle chart (left): The FTSE’s pullback from trend highs has formed a descending retracement line. It has also formed a clear swing low. Hourly candle chart (bottom left): Whilst the hourly candle chart has a bearish bias, given the bullish context of the higher timeframes, swing traders could potentially look to buy bullish reversal patterns at swing support or wait for the market to break above the descending retracement line. Past performance is not a reliable indicator of future results Example 2: EUR/GBP MTFA Weekly candle chart (top right): EUR/GBP’s dominant structure on the weekly timeframe is rangebound. However, we can see that the market has just broken a level of support. Daily candle chart (left): The daily timeframe highlights the significance of the break below support – the market gapped lower and a descending trendline has formed. Hourly candle chart (bottom left): Momentum on the daily and hourly timeframes are aligned, and this momentum is not contradicted by the weekly candle chat. In this scenario, traders could look to sell into pullbacks on the hourly candle chart. Past performance is not a reliable indicator of future results Example 3: Gold MTFA Weekly candle chart (top right): Gold’s weekly candle chart displays a well-established uptrend. Daily candle chart (left): The daily timeframe shows that the market has entered a period of sideways consolidation – marking clear support and resistance. Hourly candle chart (bottom left): While the hourly timeframe shows negative momentum, the established uptrend on the weekly and daily timeframes provides the context to look for bullish reversal patterns at support. Past performance is not a reliable indicator of future results Practical Applications of Multi-Timeframe Analysis Aligning Momentum: MTFA helps you to understand the alignment of momentum across multiple timeframes. This alignment increases the probability of success. Conversely, mis-alignment of momentum could be a red flag which would help you to avoid taking a trade. Enhancing Risk Management: By understanding the broader market context, you can set more effective stop-loss levels and profit targets. This approach minimises the risk of being stopped out by market noise on the lower timeframes. Improving Trade Timing: MTFA allows you to enter and exit trades at optimal points. For example, entering a trade after a pullback on the daily chart that aligns with a breakout on the hourly chart can improve your risk-reward ratio. Summary Multi-Timeframe Analysis is a powerful technique that provides a comprehensive view of the market. By examining an asset across different timeframes, traders can gain deeper insights, confirm signals, and make more informed trading decisions. In our final instalment, Part 5, we will outline a Pre-Trade Checklist that can be applied to any trading strategy on any timeframe. 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. 80.84% 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:GOLDEducation
by Capitalcom
Traders, managers and loss aversion in investment banking█  Traders, managers and loss aversion in investment banking In investment banking institutions, traders and managers exert immense pressure to maximize gains while minimizing losses. In fact, loss aversion, the tendency to prefer avoiding losses over acquiring equivalent gains, is what influences most of their decision-making. If not managed effectively, this bias can lead to suboptimal trading decisions and significantly impact the overall performance of financial institutions. This comprehensive field study by Willmana et al., "Traders, Managers, and Loss Aversion in Investment Banking," examines how loss aversion manifests among traders and managers in four major investment banks. The study integrates insights from agency theory and prospect theory to explore the risk management strategies employed by both groups. █  Background and Theory Two critical theories, agency theory, and prospect theory, help explain how individuals within these institutions make decisions. Agency Theory: This theory deals with the relationship between principals (e.g., shareholders) and agents (e.g., managers and traders). It posits that agents employed to make decisions on behalf of principals may not always act in the principal's best interests due to differing goals and risk appetites. For instance, if you're a trader, you might engage in riskier behavior to maximize your bonuses. At the same time, your managers might prioritize stability and risk mitigation to protect their positions. Prospect Theory: Introduced by Daniel Kahneman and Amos Tversky, prospect theory describes how people choose between probabilistic alternatives that involve risk. It highlights two main biases: loss aversion and the framing effect. Loss aversion is the tendency to prefer avoiding losses over acquiring equivalent gains, and the framing effect shows that the way a problem or decision is presented can significantly impact choices. █  Explanation of Risk Aversion and Loss Aversion Risk Aversion: It is the preference for certainty over uncertainty. In the context of trading, risk-averse individuals prefer investments with lower risk and potentially lower returns over those with higher risk and higher potential returns. Loss Aversion: A central component of prospect theory, loss aversion suggests that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. This bias can lead traders to hold onto losing positions longer than is rational and to sell winning positions too quickly, seeking to lock in gains and avoid realizing losses. █  Methodology The study by Willmana et al. utilizes a qualitative research approach, focusing on detailed interviews to gather insights into the behaviors and attitudes of traders and managers in investment banking. The researchers interviewed 118 traders and managers across four leading investment banks. These interviews included questions about motivations, emotions, trading strategies, organizational culture, and experiences with gains and losses. Additionally, 10 senior managers participated in the management interview section, providing a broader perspective on organizational practices and controls. █  Key Findings Managers are primarily concerned with mitigating losses rather than maximizing gains. Position holders tend to intervene more aggressively when traders experience losses, emphasizing the need to cut losing positions quickly to prevent further deterioration. The study found that managers used veto power primarily to reduce risk. As one manager said, "My veto works only one way—to reduce risk." Managers frequently highlighted the importance of controlling downside risk. One manager noted, "My role as a manager is to cover the downside rather than the upside. I try to enforce the discipline of cutting losses rather than pushing them to add to positions." ⚪ Differences in Risk Management Strategies The study revealed traders often operate with significant autonomy and tend to take on more risk, particularly in pursuing higher bonuses. Conversely, managers focus on ensuring that risk levels remain within acceptable limits, stepping in mainly to curtail losses. The research showed that managers are generally ex-traders who understand the technical complexities of trading. However, their managerial role shifts their focus towards risk containment. One trader mentioned, "95% of the time, managers are traders who have been in the business a long time and they have no real management skills." Traders have a strong ethos of autonomy, with managers intervening only when necessary. A manager noted, "I consider I have a veto on any positions my traders take, even when they are within their limits. But, to give you an idea, I think last year I used it once, the year before twice, and this year, not at all." ⚪ Impact of Bonus Structures and Incentive Systems The study found that these systems often drive traders to take on higher risks to achieve performance targets, especially as the year-end approaches. Over half of the traders in the sample earned over £300,000 per annum, with bonuses constituting a significant portion of their total compensation. The direction of risk-bearing behavior varied among traders toward the end of the compensation year. Some traders became risk-averse to protect their gains, while others increased their risk tolerance. One trader stated, "Risk tolerance becomes infinite at the end of the year because we don't have any personal exposure to our results in the last couple of months; we can almost become less discriminating in the trades we put on." █ Practical Implications for Retail Traders Retail traders can draw several practical implications from the findings of this study: ⚪ Awareness of Loss Aversion: Retail traders should recognize their own tendencies towards loss aversion and implement strategies to manage this bias. This might include setting predefined stop-loss limits and adhering to them strictly to avoid letting losses run. ⚪ Structured Risk Management: Just as investment bank managers focus on controlling downside risk, retail traders should establish clear risk management frameworks. This includes setting risk limits for each trade and not deviating from these limits based on emotional responses. ⚪ Balanced Focus on Gains and Losses: While avoiding losses is crucial, retail traders should also develop strategies to maximize gains. This involves identifying opportunities for larger positions when the probability of success is high, without succumbing to undue caution after achieving small gains. ⚪ Bonus and Reward Systems: Retail traders should design their own reward systems to align with their trading goals. For instance, setting incremental performance targets and rewarding themselves upon achieving these can help maintain motivation and discipline. ⚪ Continuous Learning and Adaptation: Managers in investment banks often act as mentors, providing guidance based on their experience. Retail traders should seek out mentorship or peer support to learn from more experienced traders. Participating in trading communities and continuous education can help improve trading performance over time. █ Applying Knowledge from the Study Retail traders can apply the knowledge derived from this study in several ways: ⚪ Develop a Trading Plan: Create a comprehensive trading plan that includes risk management rules, entry and exit strategies, and guidelines for handling losses. Regularly review and update this plan based on trading performance and market conditions. ⚪ Implement Risk Controls: Use tools such as stop-loss orders, position sizing strategies, and diversification to manage risk effectively. Ensure that these controls are strictly followed to prevent emotional trading decisions. ⚪ Monitor Performance and Adjust: Regularly review trading performance to identify patterns of loss aversion or risk-seeking behavior. Use this analysis to adjust trading strategies and improve decision-making processes. ⚪ Seek Continuous Improvement: Engage in ongoing education through books, courses, and trading simulations. Stay updated on market trends and behavioral finance insights to refine trading strategies continuously. By understanding the dynamics of loss aversion and the importance of structured risk management, retail traders can enhance their trading discipline and improve their chances of long-term success. █  Reference Willman, P., Fenton-O’Creevy, M., Nicholson, N., & Soane, E. (2002). Traders, managers and loss aversion in investment banking: A field study. Accounting, Organizations and Society, 27(1-2), 85-98. doi:10.1016/S0361-3682(01)00029-0. ----------------- Disclaimer This is an educational study for entertainment purposes only. The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs. My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
OANDA:BCOUSDEducation
by Zeiierman
The Trading Matrix: 14 Vital Lessons DecodedThe Matrix is a movie where no matter what age you watch it, you’ll gain a different perspective from it. And there is a wealth of knowledge and ideas that you can unlock when you dig deep into the movie. A world where the line between reality and illusion blurs, much like the iconic film. The Matrix, with its deep philosophical underpinnings and action-packed storyline. It isn’t isn’t just a cult classic; it’s a treasure trove of lessons for traders. Let’s decode a few trading lessons you can learn from The Matrix. Building Confidence: The Neo Path Remember Neo’s metamorphosis? From Thomas Anderson, a man riddled with doubt, insecurity and worry. To Neo, the confident savior of humanity. This journey is similar to one that a trader takes. You begin with uncertainty, doubt and worry. You then develop greed and ego. The market disciplines and humbles you again and again and again. But then you develop the edge. You adapt to the trading world with gains, losses, drawdowns and different streaks. And then you develop self confidence and resilience as a trader. Like Neo, you might stumble, but remember, every setback is a setup for a comeback. Confirmation Bias: Dodging the Bullet Much like Neo’s iconic bullet-dodging scene, traders must learn to dodge the deadly bullet of confirmation bias. Neo created some form of movements and hand gestures in order to stop the bullets. But what he truly did was create confirmation bias that he was beyond the physics and laws of the universe. And this system is how he was able to go beyond the normal. Create or adopt a trading system that with Confirmation bias, you can identify high probability trades. And even though, you’re using some pseudo system that no one knows about. You’re simply turning chaos into financial order, to have a mechanical process involved – to grow a consistent account. Only by actively seeking diverse viewpoints can you dodge the bias bullet and make decisions that are truly informed. Take the Red Pill: Embrace Reality Taking the red pill is about confronting the brutal truths of the market. The trading world is not a bed of roses; it’s volatile, unpredictable, and sometimes harsh. Those traders who take the blue pill – Only look to win. Only look to build their portfolio with an insane win rate. Only look to go all in on certain positions. When you take the red pill, you take on the realities of trading. You acknowledge the risks. You prepare for the drawdowns. You know you’re going to take inevitable losses. You understand that your past trading does not indicate future results. Those oblivious traders – get destroyed. Like Neo, when you choose the red pill, you choose to see the market for what it truly is, warts and all. There Is No Spoon: The Power of Perspective The “There is no spoon” scene teaches us the power of perspective. In trading, the market isn’t your enemy; it’s your perception that needs adjusting. Bend your mind, not the spoon. Adopt a system which has a flexible mindset. Be ready to pivot your strategies in response to market dynamics. Success comes not from forcing the market to your will, but from adapting your will to the market. Understand the Code – Understand the Matrix Trading involves deciphering patterns, much like understanding the Matrix’s code. The market moves up, down and sideways. Given. But with Price, Volume and probabilities – there is a proliferation of world of opportunities with each market. Develop the ability to read charts, trends, and indicators. Recognize that behind every market movement, there’s a code to be cracked. Agent Smith and Market Manipulators Just as Agent Smith represents a threat within the Matrix, market manipulators pose real dangers. Stay away from markets with: Too much volatility Too many gaps Unusual trading activity Stay vigilant, and don’t be swayed by pump-and-dump schemes or misinformation. They will disrupt your trading journey. Training Simulation: Practice Makes Perfect Remember the scene where Neo was practice fighting in simulations with Trinity and Morpheus? He was testing, improving, adapting and learning. You should do the same before you risk your hard earned money. Test, Test, Test, Forward Test and Real Test. Use demo accounts and simulations to hone your skills. Make mistakes where it’s safe to do so, and learn from them without risking your capital. Morpheus’s Faith: Belief in Yourself Morpheus believed in Neo before he believed in himself. Cultivate self-belief. Trust in your analysis, your strategy, and your decisions. Without belief, fear and doubt will cloud your judgment. The Architect’s Plan: Strategy is Key Understand the market’s architecture. Develop a trading plan and stick to it. Adjust as necessary, but always with the structure of your overall strategy in mind. Free Your Mind: Emotional Control Neo’s journey was as much about freeing his mind as it was about saving the world. In trading, emotional control is paramount. You need to learn to let go of Ego, Fear and Greed. These are your greatest enemies. You can do this by: Having a strong back tested track record to prepare for what is to come. Risk even less until you don’t feel the losses. Real trade with the smallest positions to get an idea on how the markets work and will operate when you incorporate costs. Train yourself to remain calm and objective, regardless of the market’s ups and downs. FINAL WORDS: The Path to Financial Awakening Trading, is much like deciphering the Matrix. It is an ongoing journey fraught with challenges, revelations, and the need for constant adaptation. The key points to remember with the Trading Matrix are: Building Confidence: The Neo Path Develop self-belief through education and resilience. Confirmation Bias: Dodging the Bullet Seek diverse viewpoints to make informed decisions. Take the Red Pill: Embrace Reality Embrace the reality of the markets with all its risks. There Is No Spoon: The Power of Perspective Adjust your perspective and adapt to market dynamics. Understand the Code – Understand the Matrix Understand the code behind market movements. Agent Smith and Market Manipulators Stay vigilant against market manipulation. Training Simulation: Practice Makes Perfect Use simulations to hone your trading skills. Morpheus’s Faith: Belief in Yourself Cultivate self-belief and trust in your decisions. The Architect’s Plan: Strategy is Key Develop and stick to a well-thought-out trading plan. Free Your Mind: Emotional Control Master your emotions to remain calm and objective.
TVC:SA40Education
by Timonrosso
Social Media - and its danger!Social Media... the part of the Internet that is very dangerous when it comes to promises, money, and wealth. We've all seen it: on social media, you can supposedly make millions in under 15 minutes. Pictures with a Lamborghini and a TradingView chart above it... Let's go through some thoughts new traders may not be aware of and how to look at them with a critical mind! (🚩 -> Red Flag) 📍 MetaTrader / Think or Swim / NinjaTrader / cTrader 📍 There are more, but let's focus on the more popular ones. Pictures of winning trades are useless when it comes to trading. Trading is done over years in a consistent manner, not over a few trades. Pictures of MT5, NT, or any other platform can easily be faked. You can set up your own little server for MetaTrader, play it out, and you have your fake trades. 📍 Fancy Cars / Travels / Houses 📍 Showing a fancy lifestyle is another big 🚩. All those people with fancy cars have leased or rented them for the image of being successful. It's to lure you in with false promises! (Although trading can be very fulfilling if you are willing to put in the work!) 📍 New Setup Every Few Weeks 📍 If a channel has a new setup every few weeks, this is only made for scamming new traders, not to have a setup that works. (Think about it, if you have a setup that works, why would you change?) Explore their profile, look for this pattern, and sometimes you will find it. Simple step :) 📍 Selling Courses / Mentorship 📍 You can learn all of trading for free. TradingView has a very nice paper trading feature that you can use and a very unique ideas section where you can find all the information you need! Here we come to a golden rule when it comes to starting trading: NEVER buy a course or mentorship. Never! You don't need it! (And also, TradingView's paper trading is free!) 📍 Very Basic Information Available Only 📍 Trading is hard; trading needs a lot of concepts fitting together like RR-System, Money Management, Multi-Timeframe Analysis. If you see a social media post with 1 chart with some boxes and another picture with a money screenshot, this is 100% fake. You need A LOT more than 1 chart and a lot more knowledge than you can ever show on even 3 charts. 📍 AI 📍 Oh, we all love AI, but I'm afraid that AI is not in the picture (yet). Pine can't code it, and the current state of "AI" is a "guessing" game. (AI just guesses what comes next, in the form of vectors... it's extremely complex, but it doesn't exist in trading.) 📍 Indicators 📍 Indicators are a very nice thing to have AFTER you have your strategy down, not before. There is no indicator that works on its own; you plug it in and it makes money... that doesn't exist! (Think about it critically: if that existed, why wouldn't we solve world hunger?) 📍 Typical Selling Point Sentences 📍 "Learn trading in 15 minutes" or "This is all you need" or "Only trade for 10 minutes a day" are the typical scam titles that you see, and with those, you know 100% they are fake. Trading is not done in 15 minutes, trading is hard work, and trading takes a long time to learn. There are no shortcuts. 📍 Things You Can Ask Them 📍 Typically speaking, they will not answer any of these questions because they can't. Like "How do you calculate your position size with your current RR setup?" This means they studied this, and you can be sure they didn't :) Or "How does leverage exactly work?" and like 99.99% of the YouTubers got it wrong. But a very nice thing to ask is a simple "Can I have a broker statement of your account?" and boom, they are gone. 🏆 Golden Rules 🏆 Never buy anything (you can learn 100% everything for free). Ask critical questions and follow up on them. Trading is hard; there is no 15-minute setup. Trading can't be 100% automated.
Education
by Swiss_Traders
3
Top 3 Tips on How to Avoid FOMO Trading (Fear of Missing Out)Here you are, casually sipping your coffee and watching the clock go by while you wait for the market to open so you can buy a few shares of your new stock pick. Remember, you chose that one after deep research and careful planning. And then “ WHAM! ” Twitter notifications start flying. GameStop (ticker: GME ) is once again rocketing to the moon after some livestream on YouTube unleashes a huge buying spree. “MUST. GET. IN.” — you, probably, after you get your emotions shaken and stirred by something called FOMO. 🔔 What’s FOMO? FOMO is an abbreviation for Fear Of Missing Out. This little four-word phrase can throw your investment rationale, thesis and analysis out the window so it could settle in your prefrontal cortex where your brain goes to make life decisions. In this blog, we’ll talk about that little gremlin FOMO and what steps you can take to prevent it from overriding your emotions and decisions. And for the sake of your time, we’ll keep it short. Let’s go. 💡 Tip 1: Plan Your Trade Plan your trade in advance and don’t sink into the moment. Knowing your entry, take profit and stop loss before you move into your position will eliminate the urge to rush in when things get hot. 🔴 Problem: News Releases, Earnings Reports We all know how intense markets can get when there are news reports coming out. Company data such as earnings reports or some of America's top economic events , such as the widely anticipated nonfarm payrolls , or the Federal Reserve’s market-moving interest rate decisions can spur volatility and cause trading instruments to seesaw and fluctuate in both directions. And because these events are well-known in advance — the Fed only meets eight times a year — these moments can be an attractive invitation to make a profit. 🟢 Solution: Plan your trade and understand that news reports and earnings releases are a double-edge sword and even if the data supports a certain narrative, i.e. lower inflation = higher gold prices, this isn’t always the case. Take a step back, regulate your breathing and keep your emotions in check. Wait it out until the noise tones down. 💡 Tip 2: Avoid Revenge Trading Revenge trading is the trading you do when you want to get back at the market after getting smacked in the face with a loss. Next time you stare at a losing position, notice if you feel the urge to jump right back in and make up what you lost. That's revenge trading. 🔴 Problem: Losses and Missed Opportunities Taking a beating from Mr. Market can be a painful experience. Yet, not taking the loss the right way can lead to even more pain and wiped out funds. Whenever you’re staring at a losing position, you might be tempted to sell out and jump right back in an effort to make back what you lost. 🟢 Solution: Avoid revenge trading. Recognize that pesky feeling, which — whenever you lose money on a trade — makes you want to pare back your losses with one quick trade. That quick trade could be a) more aggressive (for more potential profit), and b) cost you even more money because you’ve been impatient. 💡 Tip 3: Don’t Chase the Pump Any pump usually has a strong pull, because it makes gains look easy. All you need to do is catch the speed train (or get onboard the rocket ship) and, boom, you're in profit. Although, it's not as easy as it looks. 🔴 Problem: Pump and Dump Schemes Quite often we see some little-known stock or a cryptocurrency with a small market capitalization perform some outstanding moves. It may shoot higher by 100% or more and that may trigger some FOMO in you, causing you to panic-buy and then watch your investment evaporate like snow in water. 🟢 Solution: Don’t chase the pump. It’s simple. A pump can play with your decision-making capabilities and cause you to make irrational choices out of the desire to join the volatility train. But many of those pumps end up as dumps. Pump and dump schemes are real — the gains go as quickly as they came and you don’t want any of that. Final Considerations Forming a deep emotional connection with the market isn’t a bad thing. This place is your passion and you’ve chosen to participate in it, together with its ups and down. What you should pay attention to is how you react to its changing moods and whether you behave logically or illogically to get what you want. Acting illogically can lead you to trip up so you want to distinguish that. Use your emotions to get rational inspiration and excitement about what you want to accomplish. 📣 Your Turn! Have you ever tripped up over a FOMO trade that hurt your account? What was your trigger and subsequent result? Let us know in the comment section below!
NYSE:GMEEducation
by TradingView
10
NEW TOKEN LISTING: A Double-Edged Sword for Investors💡 The cryptocurrency market is a realm of endless opportunities, where prices can fluctuate wildly, shooting up 5-10% in a single day in either direction. This volatility can be both exhilarating and intimidating, as it can either wipe out investors or leave them with a quick windfall. However, not everyone is suited to navigate this fast-paced landscape. For those seeking more conservative returns, there are other options available. On the other hand, there are those who are willing to take greater risks in pursuit of substantial profits. One such strategy is to buy coins during the pre-sale period and sell them at their initial listing on the exchange. This approach can be lucrative, as savvy investors can capitalize on the initial hype and sell their coins at a significant markup. To generate buzz and attract attention, many new projects offer their coins for free in exchange for performing simple tasks or purchasing them at a discounted rate. When these coins are listed on the exchange, their value tends to plummet due to oversupply and subsequent sales. However, for those who manage to get in early and sell their coins before the price drops, the potential for significant returns – even 100% or more – is very real. 📍 PRE-LISTING INVESTMENT Recently, a new earning opportunity emerged in the online space, with BINANCE:NOTUSDT being the center of attention. The project's developers cleverly leveraged their marketing expertise to create a buzz around the coin. As a result, it gained widespread visibility, with numerous media outlets and cryptocurrency channels promoting the project. The idea was to generate revenue by simply tapping on your smartphone screen, with active users potentially earning around $300-$400. However, as soon as the coin listed on Binance, its price took a drastic dip. The price recovered after a few weeks, though. In a recent analysis of cryptocurrency tokens listed on Binance, it was found that a staggering 80% of new tokens have lost significant value over the past six months. The notable exceptions to this trend are a few meme coins, including BINANCE:MEMEUSDT and BINANCE:WIFUSDT , as well as tokens associated with the Solana protocol. 📍 THE STUDY HIGHLIGHTS THE FOLLOWING KEY REASONS 1️⃣ Firstly, developers often artificially inflate the cost of their tokens by issuing them at an undervalued price, which creates a surge in demand. Simultaneously, they sell their own share of the tokens, reaping the benefits. 2️⃣ Moreover, many coins lack a genuine long-term investor base and a strong community backing. This lack of support can be a red flag, indicating that these coins may be pre-destined to fail as a potential scam. 3️⃣ Furthermore, listed coins often lack growth potential, failing to meet the criteria for a sound investment instrument. Instead, they tend to attract attention from insiders and retail buyers who are willing to take risks and gamble on their investment. A portfolio comprising newly listed coins suffered an 18% decline in value over the past six months, while the market's blue-chip coins enjoyed significant gains during the same period. This stark contrast has led analysts to sound the alarm, warning that such a phenomenon can have far-reaching implications for the market's integrity. When investors, serving as the primary source of liquidity, inject their funds into poorly performing projects, they become disillusioned with the entire market. As a result, their money migrates towards established coins, leaving new initiatives struggling to secure funding and ultimately forcing them to shut down. Even innovative ideas with great potential are stifled by a lack of interest and resources. The solution to this problem lies in stricter regulation by cryptocurrency exchanges, which currently allow unscrupulous projects to exploit the market. However, exchanges are driven by profit, so this issue remains unresolved for now. 📍 CONCLUSION Identifying a token with potential for significant profit after listing can be a challenging and high-risk endeavor. The key factor in determining success is the interest of investors. If a coin is solely speculative, it is likely to experience a decline in value after listing. Conversely, if a token is backed by developers and has inherent value, it may have a chance to grow. However, with the vast majority of new tokens being scams, the risk of loss is significantly higher than the potential gain from a successful investment. From a risk perspective, this investment model appears unreasonable compared to long-term investments in established coins like BINANCE:BTCUSDT or top-tier cryptocurrencies. Traders, If you liked this educational post🎓, give it a boost 🚀 and drop a comment📣
Education
by Lingrid
5