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Probability Blueprint: Building a Winning Trading StrategyUnderstanding Probability in Trading Probability is a fundamental tool in assessing the success of a trading system and making informed decisions. In simple terms, probability tells us how often we can expect a system to succeed relative to the total number of trades executed. Imagine you have a trading system with specific rules that are repeated over and over again. Each time we apply these rules and execute a trade, we're making an attempt. The probability of success is calculated by dividing the number of successful trades by the total number of attempts, giving us a kind of "success rate" or probability of success. It's important to understand that a good measure of probability is only achieved after a large number of individual trades. It's akin to flipping a coin many times and counting how many times it lands on heads. The more flips you make, the more accurate your estimate of the probability of the coin landing heads on the next flip becomes. Probability also helps us anticipate the future performance of our trading system. Imagine that individual observations of gains and losses are the input for this process. Statistical inference allows us to predict the future value of our account based on past results. The intuitive concept of probability is simple but has significant implications in trading because it allows us to quantify randomness, essentially enabling us to eliminate uncertainty from our business. Here it's important to differentiate between the uncertainty of the outcome of a single trade and the certainty of the average result projected into the future. Since probability represents the average likelihood of an event occurring after numerous repetitions, considering the variability of individual observations, it allows us to estimate our potential profit or loss, establishing upper and lower limits of our returns and providing insight into the future performance of our trading system. In summary, probability in trading is a powerful tool that helps us evaluate the success of our system and make informed decisions. The better we understand probability, the better equipped we will be to manage our risk and achieve our trading goals.
AMEX:GLDEducation
by CF_444
Mind the Gap: How to Trade Price GapsThe Power and Beauty of Price Gaps Price gaps represent a clear imbalance in supply and demand, making them one of the purest representations of momentum in financial markets. These gaps occur when there is a significant disparity between the closing price of one period and the opening price of the next, indicating a sudden surge in buying or selling pressure. How to Trade Price Gaps: 3 Different Strategies 1. Gap & Go: Description: This strategy involves trading in the direction of the gap, anticipating that the momentum will continue. Execution: Enter trades as soon as the market opens, aiming to capture the initial momentum surge. Timeframe: Typically applied on shorter timeframes, such as intraday charts. Risk Management: The gap can be used for stop less shelter, hence stops can be placed above (below) the gap. Example: Tesla (TSLA) 5min Candle Chart In this example, Tesla gaps lower at the open – breaking below a key level of support and signalling the breakdown of a sideways range. The gap follows through to the downside during the remainder of the trading session. Past performance is not a reliable indicator of future results 2. Gap Fill: Description: In contrast to the Gap and Go strategy, this approach involves fading the initial price movement and trading in the opposite direction of the gap. Execution: Wait for price to retrace back to pre-gap levels before entering trades, anticipating that the gap will eventually be filled. Timeframe: Can be applied on various timeframes, depending on the magnitude of the gap and market conditions. Risk Management: Implement stop-loss orders to manage risk, as price may continue to move against the trade. Example: Barclays (BARC) Hourly Candle Chart Barclays gap above key resistance on the hourly candle chart. The gap is filled and broken resistance turns to support prior to the uptrend resuming. Past performance is not a reliable indicator of future results 3. First Pullback: Description: This strategy combines elements of both Gap and Go and Gap Fill, focusing on entering trades after the initial momentum surge but waiting for a pullback or consolidation before entry. Execution: Wait for the first pullback or consolidation after the gap before entering trades in the direction of the prevailing momentum. Timeframe: Suitable for both shorter and longer timeframes, depending on the magnitude of the gap and market dynamics. Risk Management: Utilise stop-loss orders to protect against adverse price movements and adjust position sizing based on volatility. Example: Arm Holdings (ARM) Hourly Candle Chart Arm’s share price puts in a large price gap which breaks decisively above a key level of resistance on the hourly candle chart. Given the size of the gap, optimal entry requires waiting for the market pullback. Past performance is not a reliable indicator of future results Additional Factors to Consider Catalyst Behind the Gap: Look for stock-specific news events that recalibrate market expectations, such as earnings surprises or changes in outlook. Mechanical events like dividends or corporate actions are less likely to sustain momentum. Size of the Gap: Larger gaps indicate stronger momentum but also carry a higher risk of mean reversion. Assess the magnitude of the gap relative to historical price action and volatility. Levels Broken: Consider the significance of key support and resistance levels broken by the gap, as they may influence the strength and direction of the price movement. Prevailing Trend: Analyse the prevailing trend before the gap and assess whether the gap aligns with the overall market direction. By incorporating these factors into your analysis and selecting the most suitable strategy based on market conditions, you can effectively trade price gaps and capitalise on momentum opportunities in the financial markets. Remember to exercise proper risk management and adapt your approach as market conditions evolve. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
NASDAQ:TSLAEducation
by Capitalcom
1
what currencies to buy in times of geopolitical tensions. In times of geopolitical turmoil or war, investors often seek refuge in currencies perceived as safe havens. several currencies are considered safe harbors due to their stability, liquidity, and low risk of depreciation. Some of the notable safe-haven currencies include: 1-US Dollar (USD): The US dollar is often regarded as the ultimate safe-haven currency due to the size and stability of the US economy, as well as the liquidity of USD-denominated assets. During times of uncertainty, investors tend to flock to the USD, driving up its value. 2-Swiss Franc (CHF): Switzerland's reputation for political neutrality and its strong banking system make the Swiss Franc a popular safe-haven currency. Investors view the CHF as a stable and reliable asset during periods of geopolitical tension. 3-Japanese Yen (JPY): The Japanese Yen is considered a safe-haven currency due to Japan's status as a net creditor nation and its large current account surplus. During times of crisis, investors often repatriate funds into the JPY, driving up its value. 4-Euro (EUR): Despite occasional uncertainties surrounding the Eurozone, the Euro is still considered a safe-haven currency by many investors. The Euro's status as the second most traded currency in the world and the stability of major Eurozone economies contribute to its safe-haven appeal. 5-Gold-Backed Currencies: Some countries, particularly those with significant gold reserves, may issue currencies backed by gold or pegged to the price of gold. These currencies offer stability and are perceived as safe havens during times of crisis.
OANDA:XAUUSDEducation
by JoeChampion
12
Prop Trading - All you need to know ‼️A proprietary trading firm, often abbreviated as "prop firm," is a financial institution that trades stocks, currencies, options, or other financial instruments with its own capital rather than on behalf of clients. Proprietary trading firms offer several advantages for traders who join their ranks: 1. Access to Capital: One of the most significant advantages of working with a prop firm is access to substantial capital. Prop firms typically provide traders with significant buying power, allowing them to take larger positions in the market than they could with their own funds. This access to capital enables traders to potentially earn higher profits and diversify their trading strategies. 2. Professional Support and Guidance: Many prop firms offer traders access to experienced mentors, coaches, and support staff who can provide guidance, feedback, and assistance. This professional support can be invaluable for traders looking to improve their skills, refine their trading strategies, and navigate volatile market conditions. 3. Risk Management Tools: Prop firms typically have sophisticated risk management systems and tools in place to help traders monitor and manage their exposure to market risks. These systems may include real-time risk analytics, position monitoring, and risk controls that help traders mitigate potential losses and preserve capital. 4. Profit Sharing: Some prop firms operate on a profit-sharing model, where traders receive a share of the profits generated from their trading activities. This arrangement aligns the interests of traders with those of the firm, incentivizing traders to perform well and contribute to the overall success of the firm. Overall, prop firms provide traders with access to capital, technology, support, and learning resources that can help them succeed in the competitive world of trading. By leveraging these advantages, traders can enhance their trading performance, grow their portfolios, and achieve their financial goals.
OANDA:XAUUSDEducation
by Snick3rSD
AI vs. AGI: The Race for Performance, Battling the Cost?Artificial intelligence (AI) has become ubiquitous, transforming industries and powering everything from facial recognition to self-driving cars. However, the dream of Artificial General Intelligence (AGI) – machines with human-level intelligence and understanding – remains elusive. Let's delve into the key differences between AI and AGI, particularly regarding their performance and the immense computational cost that hinders AGI development. AI: The Specialized Powerhouse Current AI excels in specific tasks. Deep learning algorithms trained on massive datasets can identify objects in images with superhuman accuracy, translate languages with remarkable fluency, or play games at a level surpassing even the most skilled humans. This specialization, however, comes at a cost. AI systems often struggle with tasks outside their narrowly defined domain. For example, an image recognition AI trained on cat pictures may misidentify a dog as a cat due to a lack of broader understanding. Computationally, AI can be quite efficient. While training complex models requires significant resources, once trained, they can run on relatively inexpensive hardware. This efficiency is crucial for real-world applications where cost is a major factor. AGI: The Elusive Generalist AGI represents the holy grail of AI research – a machine that can learn, reason, and adapt to new situations just like a human. Such an intelligence would have applications beyond our wildest dreams, revolutionizing every aspect of society. However, achieving AGI presents a significant challenge. The human brain, with its intricate network of neurons and complex processes, is a marvel of biological engineering. Replicating this level of intelligence artificially requires immense computational power. Training AGI models on the vast amount of data needed for general knowledge would require massive computing clusters, consuming enormous amounts of energy. This not only raises practical concerns about cost but also environmental ones. The Road Ahead The quest for AGI continues, with researchers exploring various avenues. Neuromorphic computing, which attempts to mimic the structure and function of the brain, holds promise for more efficient learning algorithms. Additionally, advancements in hardware, such as specialized AI chips, could help reduce the computational burden. While the development of true AGI might still be far off, the ongoing research paves the way for more powerful and versatile AI. By optimizing existing algorithms and developing new computational architectures, we can bridge the gap between specialized AI and the dream of a general artificial intelligence. This journey will require innovation not just in AI research but also in sustainable energy solutions to power these future advancements. 1Current AI vs. Non-existent AGI: By definition, there is no true AGI (Artificial General Intelligence) yet. So, in that sense, current AI excels in its specific field because AGI wouldn't have a "field" in the same way. Specialized AI vs. Hypothetical General AGI: If an AGI ever emerges, it's unlikely to directly compete with specialized AI in their narrow domains. Here's why: Specialization is Key: Current AI thrives because it's laser-focused on specific tasks. An AGI, with its broader intelligence, might not be as efficient for these tasks. Different Tools for Different Jobs: Imagine needing to hammer a nail. You wouldn't use a Swiss Army knife (the AGI) when a simple hammer (the specialized AI) is perfect for the job. Outperform in Unfamiliar Situations: While a specialized AI might struggle with anything outside its training data, an AGI could potentially adapt and learn new tasks more readily. Revolutionize the Field: An AGI might not directly "beat" a specialized AI, but it could completely redefine how a task is approached, leading to even more powerful AI solutions. DeepMind, a leading AI research lab owned by Google, is tackling a wide range of ambitious projects. Here are some highlights: Healthcare: DeepMind Health is applying AI to medical challenges. They've collaborated with hospitals to develop algorithms for analyzing eye scans for early signs of blindness and differentiating healthy from cancerous tissues. Scientific Discovery: DeepMind's AlphaFold project has made significant strides in protein folding prediction, a critical step in understanding diseases and developing new drugs. Efficiency and Sustainability: A collaboration with Google AI led to WaveRNN, a method for improving audio call quality, even with dropped packets. Their AlphaFold project itself has the potential to accelerate discoveries in clean energy and materials science. Gaming and Robotics: DeepMind's AI agents have achieved superhuman performance in complex games like StarCraft II. Their AlphaFold project demonstrates the potential for AI-powered robotics in scientific experimentation and materials creation (Project A-Lab). AI for the Future: DeepMind's efforts extend beyond specific applications. Their Visualising AI program commissions artists to create thought-provoking pieces that challenge how we perceive AI. Additionally, their recent release of Gemma, a state-of-the-art open model, promotes responsible AI development by making research tools more accessible. These are just a few examples. DeepMind is constantly pushing the boundaries of AI research, aiming to use this technology for positive impact across various fields. You can find more details on their latest projects on their website
NASDAQ:GOOGEducation
by Moshkelgosha
Let's Not Be Blind to our Blindness..!Nassim Taleb's: “My lesson from Soros is to start every meeting at my boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it.” He also said: "The only economic research that seems to replicate out-of-sample is the work of Daniel Kahneman on behavioral biases." This phrasing reflects Taleb's critique of traditional economics and his acknowledgment of Kahneman's work on human decision-making, which can be tested and applied in real-world scenarios. Taleb has discussed Daniel Kahneman's research on behavioral economics, particularly Prospect Theory, which studies how people make decisions under uncertainty. A Wisdom from Daniel Kahneman: Not only are we sometimes “blind to the obvious,” but also we are “blind to our blindness.” We all have our own unique experiences and ways of thinking. This can make it hard to see things from a different viewpoint and recognize our own blind spots. Here are some things you can do to overcome this blindness: Be open to feedback: Ask trusted friends or colleagues for their honest opinions. Seek out diverse viewpoints: Read books and articles from people with different backgrounds. Challenge your assumptions: Actively question your own beliefs and biases. By being aware of our limitations, we can start to see the world a little more clearly. Prospect theory is a behavioral economics model developed by Daniel Kahneman and Amos Tversky in 1979. It challenges the idea that people make decisions based solely on logic and maximizing expected utility (total value of possible outcomes). Instead, Prospect Theory argues that: Decisions are relative: We judge gains and losses relative to a reference point, often our current wealth or situation. Loss aversion: People feel losses more intensely than equivalent gains. A $100 loss might feel worse than a $100 gain is satisfying. Diminishing sensitivity: The impact of gains and losses diminishes as the amount increases. A $10 gain might feel more significant than a $100 gain. Here's how these ideas influence decision-making: Risk aversion for gains: When faced with choices involving gains, people tend to be risk-averse. They might prefer a guaranteed smaller gain over a risky chance of a larger gain. Risk-seeking for losses: When faced with choices involving losses, people might become risk-seeking. They might choose a gamble with a chance to avoid a loss, even if the odds are not in their favor. Prospect theory has numerous applications in understanding human behavior in various fields, including: Investment decisions: Investors might be more likely to hold onto losing stocks to avoid the pain of realizing a loss. Marketing and sales: Framing promotions around avoiding losses can be more effective than highlighting potential gains. Public policy: Policymakers can use prospect theory to understand how people respond to incentives and risks. Is it possible to be wrong and right at the same time??? My answer is Valid Yes..! look at the following chart published 70 days ago it moved in the opposite direction: Now we can see why Claude Shannon said: “We know the past but cannot control it. We control the future but cannot know it.”
NASDAQ:TLTEducation
by Moshkelgosha
In a world of chances, Probability is the KingThe Uncertainty and Probability in Trading In a world where uncertainty reigns and the future is always unknown, trading becomes a realm where probability plays a crucial role. Throughout history, no one has been able to predict the future of financial markets with complete accuracy. This uncertainty is inseparable from trading, as we can never fully anticipate market movements. Uncertainty is necessary in trading, as it is the origin of opportunities. Each trader may have a different view of the market, creating a balance between buyers and sellers, thus generating the possibility of closing deals. Recognizing uncertainty allows us to enter a world of probabilities. We understand that no tool enables us to accurately predict the future value of an asset. Therefore, each operation carried out in the market has an expected success rate that is never 100%. Any unexpected event, such as relevant news or surprising economic data, can alter market conditions and turn an apparently perfect trade into a loss. Uncertainty, therefore, is the foundation upon which trading is built. If it were possible to predict the future with absolute certainty, risk would disappear, and any trader would take every possible trade, becoming the richest person in history. However, in the real world, we know that success in trading is based on understanding and managing uncertainty. Probability in Trading: Probability in trading can be understood as the frequency of our successes. That is, the number of successful trades relative to the total number of trades made. Any trading system, no matter how sophisticated, is subject to successes and failures. Therefore, the most we can do is assign each trader an expected percentage of successes, understanding that there is always the possibility of loss due to the constant presence of uncertainty. In previous post , I have explained how uncertainty leads to risk, thanks to the quantification of return dispersion. Now, we are in a position to intertwine uncertainty, probability, and risk and better understand the nature of trading. This is a world where success is not guaranteed, but where risks can be managed intelligently. Ultimately, accepting uncertainty allows us to make informed decisions and maximize our chances of success by managing our risk, all in such a volatile and uncertain field as trading. In summary, probability is the king of a kingdom where risk is the queen, both becoming the two fundamental pillars of any successful trading system, whether done consciously or unknowingly. King and Queen in the world of uncertainty. Recognizing their influence allows us to manage them and navigate better in this world of opportunities and risks. Long live the King!
AMEX:GLDEducation
by CF_444
No FOMO when you trade - 5 ReasonsSo you missed a trade. Or you are you often gripped by the fear of missing out (FOMO) in the trading world? It’s a common feeling. But let me tell you. You might miss a train, but the next one is always on the way. And the stock market will always be there for you to pump out more profit opportunities for you. Today, I want you to not worry to much about FOMO. And I don’t want you to kick yourself and here’s why… Impulsive Decisions: The Enemy of Rational Trading Ever jumped into a trade just because it ‘felt right’? It’s like grabbing a chocolate bar at the checkout – it’s tempting, but not always a good idea. You need to get rid of the idea of wanting to impulse trade (trade for the sake of it). Rather have your trading plan and stick to it by all means. If you miss a trade – LOOK for the next one. Not a low probability trade. Wait for the next high chance of success trade and you’ll be happy you did so. Research: Your Secret Weapon Trading without research is like driving with your eyes closed. You might get lucky and not crash, but it’s a risky gamble. You need to put in the time to research and analyse the markets accordingly. Understand the why behind your trades. Research is your crystal ball in the trading world. Chasing the Market: A Fool’s Errand Ever seen a stock skyrocket and felt like you’re missing the party? You might feel the same with Bitcoin or a stock that has underperformed in a while. The worse you can do, is try to chase the market. If you missed the trade. Move on and find the next perfect trade that is linin up. Patience is your ally. Precision analysis is also the key. Remember, markets move in cycles. Wait for your moment. Big Risks: Big Rewards or Big Regrets? It’s like betting all your chips on red. It can pay off, but it’s a rollercoaster ride. So you need to remember that risk and money management is key. Balance optimism with realism. Use stop-loss orders, adjust with trailing stop losses – get out with time stop losses. And most importantly – Protect your capital – it’s your trading lifeline. High Emotions: The Trader’s Kryptonite The infamous emotional rollercoaster might make you take the wrong trades. It will result in you making rash, quick and irresponsible decisions. So try to keep emotions at bay, stay calm to trade. Develop a mindset that is calm and collected. Remember, the market doesn’t care about your feelings. Final words: So you know that FOMO is another dangerous habit to develop as a trader. Rather, say to yourself this mantra. There is always another and better trade on the way, and I don’t have to catch every single trade that presents itself. Let’s sum up the reasons why FOMO is dangerous. Impulsive Decisions: The Enemy of Rational Trading Research: Your Secret Weapon Chasing the Market: A Fool’s Errand Big Risks: Big Rewards or Big Regrets? High Emotions: The Trader’s Kryptonite
JSE:J200Education
by Timonrosso
Post-trade psychology! In the trading market, being anxious cannot solve the problem. But be prepared for a long time, don't rush for success, and don't be afraid of being a late bloomer. Take your time and master the process, don’t rush the results. Whether it is the trading market or other industries, it all requires a process, and it requires step by step and continuous efforts to achieve it. Give the process time, and please give yourself time. I think time will definitely give you a better answer. Accumulation over time will make you gain more and more. Don't be anxious, just take it step by step. Although the process is slow, if you keep going, slow and perseverant, you will eventually reach the goal you want. Usually the more anxious you are in trading, the easier it is to deviate from your original intention, and most of the results are counterproductive. In nature, you will find that a lot of life is slow. The sun rises little by little and sets little by little, the flowers bloom one by one and wither petals. The flowers will not bloom before the season, and the fruits cannot be picked if they are not ripe. The journey of life is very long, you don’t have to seize the day, persistence is the only way to win in the end.
COMEX:GC1!Education
by cdfxcdfx
BITCOIN HALVING MYTHSIn a week, another bitcoin halving is expected to take place, which is expected by many cryptocurrency traders. Cryptocurrencies are still a dark horse for traders: sharp price fluctuations in both directions, high volatility attract traders with the supposed simplicity of making money. And although many consider the industry a bubble, there are still enthusiasts willing to take risks. What Is Halving In Simple Words? 📜 Halving is a reduction for rewarding miners for performing operations on the bitcoin blockchain network. Currently, the reward for solving equations for a block of data on the blockchain is 6.25 bitcoins. After halving, it will be cut exactly in half to 3.125 bitcoin. Basically, miners act as accountants in the blockchain network or as an equivalent of the collective Central Bank in the blockchain and serve as a guarantee of transparency and veracity of information: it is impossible to fake it in one block without other miners noticing it, but it is necessary to fake the entire chain of operations in the entire blockchain, which is practically impossible. Miners are responsible for processing all transactions: if there were no miners, there would be no new bitcoin transactions. How Bitcoin's Halving In 2024 Will Affect The Price? 📈📉 Bitcoin's halving in 2024 is one of the most expected and discussed events of the first half of this year. In most cases, analysts cannot clearly explain why the price of BTC (and subsequently other alts) changed, finding unconvincing reasons in hindsight. Therefore, the upcoming event is a reason to try to predict the future behavior of the price before it happens. Halving is a halving of miners' profits. That is, a miner bought expensive equipment, spends electricity in the hope that each block will be rewarded with 6.25 BTC. But then halving occurs and now the reward per block is 3.125 BTC. In theory, halving means that fewer coins will be mined and some miners will leave the market altogether. This will be followed by an increase in the scarcity of BTC, and therefore an increase in its price. At least, this is how optimists explain the growth of BTC price after halving. But the question is: how will the reduction in the volume of its production contribute to its price increase? 1️⃣ The Approaching Halving Is Already Priced In . This myth is taken from the fundamental analysis of stock market if investors are sure that, for example, if the Fed's interest rate is going to be exactly changed in a month, they buy or sell dollars in advance. However, this does not work in cryptocurrencies for several reasons: ✔️ Halving is embedded in the blockchain and for BTC it is done every 4 years. But that doesn't mean it is already factored into the pricing. ✔️ There are very few people involved in mining. And it is not a fact that investors are basically aware of what halving is and when it will take place. Short-term speculators may still be interested in this information. Those who bought BTC with the expectation that someday it will rise again (or did not sell it after a fall) are hardly interested in it. ✔️ The role of mining in the share of speculative circulation is not high. Market makers rule the market, which can simply squeeze miners with capital. 2️⃣ Bitcoin's Price Will Fall. The halving of bitcoin in 2024 may indeed affect the prices, but not as drastically as many investors would like. An argument in favor of a fall is the example of LTC, which got cheaper before halving profits. Compare the volumes of LTC and BTC, which occupies more than 54% of the entire cryptocurrency circulation. LTC is a speculative instrument, whereas BTC has a large share of long-term capital. 3️⃣ Halving Will Lead To The Annihilation Of The Mining Industry . Supporters of this myth argue that mining is becoming less and less profitable. In addition, more and more startups are being developed on more modern algorithms that do not involve mining. In reality, existing miners aren't going anywhere. Those who have already invested money in it will continue to "recoup" their costs. There will be no influx of new miners, so the mining industry will eventually disappear on its own. But halving will definitely not be to blame for this. ✅ Conclusion Halving bitcoin's price can affect the price significantly. The price may shift to one side or the other, but there are enough fundamental factors for growth, but not for a fall in price. Therefore, it is very likely that this event will be noticed.
Education
by Lingrid
4
Trading Psychology and Your Losses Hey traders, In this post, we will discuss a common fallacy among struggling traders: overestimation of a one single trade . 💡The fact is that quite often, watching the performance of an active trading position, traders quite painfully react to the price being closer and closer to a stop loss or, alternatively, coiling close to a take profit but not being managed to reach that. Fear of loss make traders make emotional decisions : extending stop loss or preliminary position closing. The situation becomes even worse, when after the set of the above-mentioned manipulation, the price nevertheless reaches the stop loss . Just one single losing trade is usually perceived too personally and make the traders even doubt the efficiency of their trading system. They start changing rules in their strategy, then stop following the trading plan, leading to even more losses. ❗️However, what matters in trading is your long-term composite performance . A single position is just one brick in a wall. As Peter Lynch nicely mentioned: “In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.” There are so many factors that are driving the markets that it is impossible to take into consideration them all. And because of that fact, we lose. The attached chart perfectly illustrates the insignificance of a one trading in a long-term composite performance. Please, realize that losing trades are inevitable, and overestimation of their impact on your trading performance is detrimental. Instead, calibrate your strategy so that it would produce long-term, consistent positive results. That is your goal as a trader.
OANDA:XAUUSDEducation
by VasilyTrader
1
What you can do and what you shouldn't do nowThe market is red! Let's figure out what you can do and what you shouldn't do - We have an investment portfolio (investments are not a month or even half a year), we invest for the period of a bullish cycle or until a specific zone of interest for the sale of a certain token! We have an accumulation area and a distribution area! Regardless of what happens in the market, our areas of interest do not change. If, for example, your zone of interest for DYDX is 1-2 dollars and below, then you just sit and wait for your zone of interest, if the token falls into this zone, you decide to buy additional coins, or you’ve already had enough! You buy with the amount that is comfortable for you during this period of your life! If you have already collected enough coins into your investment portfolio and DYDX Now 2.6 you don’t just need to click buttons, you stick to your plan! The market is a place of probabilities, the market owes nothing to anyone, and we can easily update all historical lows on altcoins. What you don’t need to do is sell off your accumulated investment portfolio in a panic in the hope of buying back all the accumulated coins cheaper. The market may not give you a better entry point than you already had! If the entry point was too high and you are ready to buy additional assets, you can DCA your position without fuss! Further, if you have concerns about some asset, or you have an overestimated risk in terms of the volume of invested funds, at +100% of your entry point it will never be a mistake to take your invested money and leave free coins! - As I said earlier, if you trade intraday, you must have an investment portfolio and an amount of money allocated for trading with leverage or just on spot! Every time, no matter what happens in the market, you use the main rule - stop loss! This is what we can control in the market, our losses that we are ready to accept if the market goes against our entry point! 0 emotions, stop loss it’s just part of the job, business costs and expenses! The market is green, you shouldn't care, the market is red, you shouldn't care either, you're looking for intraday entry points for short-term trading! - For coins after listing, the market once again proves to us that you don’t just need to click buttons randomly! You build a strategy and areas of interest for entry! If a coin comes into your zone using this strategy, such as Portal, Nibi, Bbl, Defi, W and dozens of other coins that I showed on the channel, you make a decision whether to buy or not! If you initially targeted this zone for buying, then why should you feel discomfort when the price comes to this price and the market is red! You were waiting for these prices to buy, what has changed now? For swing trading you also have a dedicated capital that you distribute among the coins, you cannot buy all the coins, we do not have an unlimited stablecoins, let's not fool ourselves! You buy the coins that you have chosen and set reminders for yourself! In each video there are 2 zones for purchase, OK zone and Best zone! Nothing changes, I don’t make random clickbait videos, just for views, there is a clear plan, and don’t forget that there is invalidation of the idea, so plan can be right or wrong! Its okay. Alt, Manta, Ena looks like this coins will not drop to my zones of interest and im ok, im skip this coins for swing trade! There are no win-win strategies or super trading plans with a 99% win rate in the world! If it were that easy, everyone would be a trillionaire! We work with our own capital, our own decisions, losses and profits! Therefore, the psychological component is 50% of success! - We are not here for entertainment; any financial market is serious work and you need to work with your discipline, change your attitude towards charts, work more seriously with your capital and educate yourself! 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
As a trader, how can you train your mental endurance? Trading psychology is actually a very complex subject. It should be said that subjects related to human nature have a certain degree of complexity and dialectics. Trading is actually a chain of links. If you do not realize the profound impact of human nature on trading and its results, then there is a high probability that you will be out with a loss in future transactions. Loss is actually not terrible. What is terrible is that there is still no objective, fair and comprehensive analysis during the review afterwards. For novices who are new to the market, which one is more important, technology or mentality? This is a topic that may never be avoided. The important thing is not the technology, but the belief in trading. Of course, being a supporter of technology does not deny the role of technology in the market, but we must look at trading objectively. The vast majority of traders come here to make quick money. They are like empty-handed wolves. Think about it, they are already empty-handed. What skills and mentality are needed? ...This will cause people to deviate from the way to make money and choose to take "shortcuts." As for whether they can make money, that is a matter for the future. Details determine success or failure, and attitude determines destiny. The same is true in trading. A trader's mentality is often determined by his or her own values, and each person's life values are developed from childhood and acquired through experience. Therefore, the trading methods of some of our traders are more like a condensed portrayal of their own lives, or everyone's trading system has some of their own life trajectories. Objectively speaking, if trading is indeed a craft, the quality of the craft can directly determine whether the "handicraft" produced is defective. There is a difference between "reckless doing" and "doing it methodically". There are methods and reasons to be found in any field, and I believe there are no exceptions to this. Remember not to be too impatient in the early stages of trading. Don’t forget that you are just a newcomer. As a trader who wants to survive in the market for a long time, you still need to give yourself a certain amount of flexibility and time. After all, it proves that long-term profits are not a short-term thing. Here are a few common mental issues that can help you: Under the condition that your own trading methods are relatively mature, (1) Place orders not in accordance with trading rules or indiscriminately. (2) I want to place an order every time I open the trading software. (3) I always feel that if I don’t trade at all times, I will miss the big market trend. (4) After a slight floating profit, you will be afraid of a slight correction in the market and want to close your position immediately. (5) Facing missed opportunities, I feel angry and unwilling, always wanting to pursue them. (6) You hit the stop loss that was buried or set in advance but you don’t believe it, thinking that you can come back if you resist. (7) Always eager to make back previous losses. (8) It is easy to be influenced by traders or friends around you, and what others say will be whatever you say. (9) When trading loses money, keep blaming the market and never looking for reasons in yourself. The biggest misunderstanding in trading is "what if". Many immature traders always fall into the trap of self-delusion. When they trade, they often imagine that if I intervene in the correct market early, I may make 50% or more more profits. Although it is difficult to develop a good trading mentality, it will be beneficial to our future transactions, and it will also be beneficial to manage our funds later when we increase the amount of funds; although bad trading behavior will make you very happy in the moment, But it is accompanied by long-term pain and repeated suffering, and the final result can only be a loss. You see, there are actually many questions and logic behind a simple decision and operation. Since we can form our own trading system through many years of trading experience, it proves that our trading logic is compact and reasonable. If it is unreasonable, It is necessary to adjust the trading method in a timely manner and not to place orders blindly. What you need most is deep thinking about trading. Thinking is a valuable behavior for traders, and it is also the freest way to improve one's level. We actually make orders with our eyes closed most of the time, and the improvement of transactions without repeated consideration and summary is close to zero, or even negative growth. Only by continuous learning and summary, the longer your trading level improves, the faster it will be. Only by learning to think deeply can you know which stage of trading you are currently in, and then you can reasonably analyze how funds should be used and how to utilize the existing trading strategies in hand. In fact, the problem of mentality will definitely accompany the entire transaction process, but as traders, we cannot abandon human nature, and there is no need to abandon human nature. Well, you can't avoid the psychological ups and downs, so don't have any delusions. If you think that your trading will be completely free from interference and influence of mentality, this is impossible and not objective. What we ultimately have to learn is to live in harmony with this mentality. When emotions rise and fall, you just need to know that the emotion is coming and don't let it control your thinking and behavior. This is the key to profitability in trading.
TVC:GOLDEducation
by cdfxcdfx
What's in a Trading Plan? Here's All You Need to Include.Ready, set… plan? In this guide, we discuss why you need to plan your trading before trading your plan. Let’s roll. Table of Contents: »Importance of a Trading Plan »The Successful Trading Plan Doesn't Exi... »What's in a Typical Trading Day? »Markets, Strategies and Styles »Summary Venturing into trading without a plan is akin to setting sail on the ocean without a compass. Or taking the leap without looking first 😉. We can keep the metaphors rolling but if there’s one thing you must remember from this word salad of an article, it’s this: success in trading is possible with a plan. Without a plan, not so much. In this guide, we'll talk about the importance of creating a trading plan, what you should include in it, and how to follow it. 📍 Importance of a Trading Plan A trading plan is not just a list of dos and don’ts; it's the roadmap to trading success. Here's why it matters: ➡️ Streamlines Your Actions : Much like a roadmap, a trading plan outlines your objectives, time frames, strategies, and risk management techniques, and offers a clear path forward. ➡️ Limits Emotional Swings : By defining rules and parameters in advance, a trading plan helps to keep emotions in check, limiting impulsive actions that could lead to financial pitfalls. ➡️ Fosters Discipline : Sticking to a plan holds you accountable for your actions and allows you to see where you jump out of your rule book and into undisciplined FOMO-driven pump-chasing revenge trading. 📍 The Successful Trading Plan Doesn't Exi... Many traders believe that you can be successful by buying and selling random selections of stocks, forex pairs, or commodities. However, the reality is that the most — if not all — successful traders have one thing in common: a well-defined trading plan. Here's what makes for a successful trading plan: ☝🏽 Adaptability : A successful trading plan is not rigid but flexible, allowing for adjustments in response to changing market conditions. ☝🏽 Consistency : A plan helps you stay on track toward your goals as a trader, allowing you to stick to predefined rules and strategies, especially when things get hot and volatile. ☝🏽 Continuous Improvement : A successful trading plan is a work in progress. The more time you use it, the higher probability you will have to refine it as you drift along diverse assets, all swayed by different factors. 📍 What's in a Typical Trading Day? A typical trading day is a blend of preparation, execution, and reflection. And while you should leave room for new ideas, fresh approaches, and some surprises, there are mainstay components that you need to have in your trading plan. 📰 Reading the News : Staying in the know is always a good idea. For many successful traders, the first thing to do is check what’s the latest on the news front. Known as fundamental analysis, reading the news and doing your research will help you get a sense of investor sentiment. Moreover, you can stay ahead of the curve and anticipate big market moves by following the economic calendar. Lots of those sharp swings you see in forex or stocks are caused by regular data dumps such as the monthly US nonfarm payrolls report. The Federal Reserve’s decisions on interest rates or the monthly Consumer Price Index are also keys to anticipating volatility. And what better place to follow all that’s moving markets than the TradingView News section ? 📈 Following the Charts : if you’re here, this one won’t be too new to you. Chart reading, known as technical analysis, is one of the oldest ways to analyze anything — from stocks to crypto and even frozen orange juice. Think of a chart as your trading canvas. It’s your space to be creative, draft ideas, look for technical patterns and formations, and anticipate potential moves. Observing the chart and watching how prices behave will help you spot where a trend may form, extend, or reverse. Some of the most popular technical formations include double tops and bottoms, head and shoulders, cup and handle, and more. And some of the most popular technical indicators include the Simple Moving Average (SMA), the Relative Strength Index (RSI), and the Fibonacci sequence. All of that, and much more, is readily available for you almost anywhere you click on the TradingView platform. ⚒️ Work on Your Skills : Trading doesn’t have to glue you to the screen in constant monitoring of every blip. If you don’t see anything to trade, don’t trade just for the sake of it. Sometimes the best trading position is no position at all. Instead, use some of your idle time to build out your knowledge base. Grab some books on technical analysis or trading psychology. Or watch interviews of successful traders and investors and gain that educational edge to help you become a more aware, informed, and confident trader. 🏖️ Take a Break : Not everything you do needs to be related to productivity gains and trading improvement. Stare into space or read a great novel. Take your mind off trading and unwind, let the steam off, and recharge your batteries. Go out, enjoy a walk or do some people-watching. Taking time to zone out every now and then will help you get back to trading sharper, smarter, and more balanced. 📍 Markets, Strategies and Styles The world of trading is as diverse as it is dynamic, offering a flurry of markets, strategies, and trading styles to explore. Here's a glimpse into the landscape: 💹 Markets : Traders can choose from a variety of financial markets, including stocks , forex , and cryptocurrencies , each with its unique characteristics and opportunities. When you set out to create your trading plan, think carefully whether you want your portfolio to be concentrated into any one market or asset class. Or maybe you’d like to go for a diverse approach to trading and pull in assets from several markets. Knowing what your asset preference is will help you phase out markets so they don’t distract you. 🎯 Strategies : From technical analysis to fundamental analysis, you can adopt various strategies to identify trading opportunities and manage risk, ranging from trend following to mean reversion. News trading is a popular approach to markets as it allows you to bet on economic reports, geopolitical events, central bank updates, and more. On the other hand, technical traders tend to stick to the chart in efforts to gauge price movements and trends. Every chart tells a story. Deciphering it is the tough part. 🌈 Styles : Trading styles are equally important and they’re all tied to a specific time frame of holding your positions. If you’re more into short-term trading, you may pick scalping and target a few pips of gains before jumping out of your trade. Day trading and swing trading are two popular time-sensitive trading strategies that you may want to explore when building out your trading plan. 📍 Summary Your trading plan should be exactly that — yours. Tailor it to your specific goals, risk orientation, asset preference, and find out how it stacks up against market conditions. That way, you can navigate the markets with confidence and direction, instead of letting markets sway your decision making and lead you into uncharted waters. Embark on your trading journey armed with a well-crafted plan, and let it be your roadmap to trading success. 📣With that said, let us know in the comments: do you have a trading plan? What’s the most important element of it and are you always sticking to it?
COINBASE:BTCUSDEducation
by TradingView
40
Making your first million is the hardestAfter that, it's leverage. The issue for me as a long-time trader, is people these days don't seem to have time, patience or the ability to absorb information. They read an article or watch a few seconds of a stream and assume they know! I am not just talking crypto, I mean in general. The attention span of a fish. I read a pretty decent article by this guy @holeyprofit He talked about Bitcoin Mania with a lot of truth, most people won't want to hear. Article here The issue is the whole market right now are currently hinging on or near their all-time highs, Gold, Bitcoin, SPX (S&P500) stocks such as Meta, NVIDIA and loads of others. Instead of shouting for even greater highs, the question should be "what is sustaining the rally?" For the majority of retail traders, they assume it's different this time. Gamestop was up until it was not. The issue is that they never learn. They have no concept of time factors and the assumption that markets only ever go up is the very reason the majority of traders stay broke. Crypto is a really interesting space, when I first got involved in 2011, it was a punt. I got lucky, but buying cheap and selling high is what most people strive for. Yet, reading posts and social media content - nobody sells, they all buy low, stacking sats when the price drops. So where is the profit? Well paper gains I assume. Game stop... Not to focus on Crypto; the markets as a whole can be profitable and just like Kenny Rogers said - "if you're going to play the game boy, you got to learn to play it right. know when to hold, know when to fold, know when to walk away and know when to run" Every hand's a winner - every hand's a loser. Key message there!!! Trading vs investments - if you are looking to make it big on one deal, that's different than profiting from the market every week, every month and every year. Risk management is key, scaling your account, cutting losers quickly and adding to winners. Many won't understand this concept. Markets go up and everyone is a genius in a bull market. Once you start scaling an account, the trade percentages in terms of rewards you seek don't matter the same. You don't need 10x returns on your thousand dollars. A 3% win on your million-dollar account is a different game. Back in 2021; I wrote this educational post about the psychology of the markets. I used the Simpsons as a way to get the message over. Markets breathe and the rise and fall, rise and fall. Once you realise you can take from the market consistently, you will see the stress disappear, and the care of price up or down matters less. Your investment criteria changes and the scope gets wider. This is how you scale from that first million, into the second and third. Not having all eggs in one basket and hope it goes up forever. What if gold drops 10% and you are long? can you afford a 5 year spell on the investment you have? These are the kinds of questions you need to be asking yourself. What if Bitcoin's halving is a buy the rumour, sell the news and we take another 3 years to get back to a new ATH? "ah it's different this time" - yeah I heard all that in 2021 when certain influencers were calling for $135,000 worse case within a month. We are 2024 and still roughly half of the way to 135k?? I know for you guys who want to learn and progress you would have read this far; for those who "already know" they have stopped reading about 4 lines in and seeing a picture or 2. They leave a comment due to their keyboard warrior mindset and fish-like capacity for thinking. The point is to ensure you deploy proper risk management, especially here near the tops of a lot of these markets, trail your stop losses, and don't forget to cash out your profits. Paper gains can quickly become paper losses. If you're serious about money making, be prepared to diversify, be prepared to sit on your hands, keep cash in your pocket as well as be prepared to take calculated risks. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
FX:XAUUSDEducation
by Mayfair_Ventures
4
CHoCH, BOS(Break of Structure), and Pullback ExamplesCHoCH, BOS(Break of Structure), and Pullback Examples Multi Timeframe Analysis Daily ----> 4H 4H ----> 1H 1H ----> 15 min 30m ----> 5m Market Structure Simplified "Ultimate Market Structure Course - Smart Money Concepts" by Smart Money Concepts 1. First Step: Find Valid Pullbacks - Signal Trends - Valid Breaks - Reversals Pullbacks are defined by when a low of a candle is below previous candle low 2. Identify deepest point of pullback - That will be the unconfirmed low/high 3. Look for BOS or CHoCH to confirm valid lower/higher high or low
CME_MINI:ES1!Education
by EaszzzyE
Handling Risk: Differentiating Gamblers from TradersFrom Uncertainty to Risk, from the Casino to Strategy In our previous post, we explored the distinction between uncertainty and risk, underscoring how the ability to measure risk serves as the bedrock of a successful trading system. Now, let's delve deeper into this foundational concept. Understanding the difference between risk and uncertainty is paramount. It illuminates how uncertainty often leads us into the realm of chance, transforming each trade into a gamble where outcomes are shrouded in mystery and subject to randomness. In contrast, statistics offers us a beacon of clarity, providing a framework to comprehend and quantify risk. Armed with statistical insights, we can construct trading systems capable of estimating the probabilities of success and failure. The significance of this cannot be overstated. Imagine knowing today whether you'll emerge victorious or defeated in the trading arena twelve months from now. The time and resources saved would be invaluable. Indeed, this foresight is precisely what statistics affords us. By quantifying risk, we gain the ability to forecast our financial trajectory over the coming months and years. In essence, the stock market is both a casino and not a casino simultaneously. Its resemblance to a game of chance hinges on your approach to trading. If you diligently measure and manage risk, overseeing the entire process, then it ceases to be a gamble. You possess the foresight to anticipate the outcomes of your trades. But what exactly is risk, and how do we measure it? Risk, within the context of trading, denotes the potential deviation of investment returns from expected outcomes, which could result in financial losses. Ask any seasoned trader about measuring risk, and tools like VaR (Value at Risk) or sensitivity tests will likely spring to mind. While others may consider conducting a backtest, it's worth noting that while useful for risk assessment, backtesting lacks the predictive power necessary to quantify future risks. The distinction lies in their temporal orientation: while some tools focus on future projections, others reflect on past performance. Those who look ahead can make informed statistical inferences, while those confined to historical data lack such foresight. For retail traders, sophisticated risk measurement tools like VaR may seem daunting. However, utilizing standard deviation to gauge risk is often sufficient for the majority. Rest assured, both VaR and standard deviation serve the same function: quantifying risk methodically by measuring dispersion around a central value. With a firm grasp of what risk entails and how to measure it, we are equipped to navigate the uncertain terrain of future market movements. In our next installment of this journey beyond technical analysis, probability will take center stage, harnessing the potent groundwork laid in quantifying risk. But that's a tale for another post.
BITSTAMP:BTCUSDEducation
by CF_444
Bitcoin Halving 2024 – This Time It’s DifferentREPORT HIGHLIGHTS: The fourth bitcoin halving event, scheduled on or around April 19, 2024, heralds a significant transformation in the cryptocurrency landscape. This halving, marked by the reduction of bitcoin supply subsidy, the emergence of a liquid investment ecosystem via CME Group futures and options, the advent of spot Bitcoin ETFs and the introduction of Ordinals, brings forth novel dynamics that could reshape prevailing narratives around bitcoin economics. The Halving Mechanics At its core, the quadrennial halving event entails a reduction in the reward granted to miners for each block mined on the bitcoin blockchain (the block subsidy) as determined by the bitcoin protocol. It is scheduled to occur roughly every four years, or every 210,000 blocks until the entire 21 million bitcoin supply is mined, approximately by 2140. As part of bitcoin's deflationary approach to its capped supply, the upcoming halving will reduce the bitcoin supply subsidy from 6.25 bitcoin per block to 3.125 bitcoin, fostering a more stringent supply landscape. By gradually decreasing the number of bitcoin entering into circulation, and, so long as the adoption of bitcoin grows over time, the halving mechanism ensures that the laws of supply and demand will consistently impact the value of the asset. Satoshi Nakamoto, in the bitcoin whitepaper's Incentives section, noted: “In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes. I’m sure that in 20 years, there will either be very large transaction volume or no volume.” Impact on Price Dynamics Source: CME CF Bitcoin Reference Rate Historically, each halving event has been accompanied by a significant surge in bitcoin price in the months preceding and following the event. Notably, in the 365 calendar days after the November 28, 2012, halving, bitcoin prices rose 8,447%, when the reward was cut from 50 bitcoin to 25 bitcoin. In the year following the July 9, 2016 halving, bitcoin prices rose a more modest, but still impressive, 283%, and the block reward was reduced to 12.5 bitcoin. In the 12 months after the May 11, 2020 halving, where the reward was cut to 6.25 bitcoin per block, bitcoin prices jumped 527%. The pre-halving rally has shown a diminishing trend over time, likely due to miners selling off their bitcoin holdings to secure profits ahead of the impeding reward reduction. Nevertheless, the historical pattern suggests the potential for bitcoin to reach new all-time highs in the aftermath of the 2024 halving. Impact of Bitcoin Spot ETFs The landscape surrounding bitcoin has evolved significantly, particularly with the approval of spot Bitcoin ETFs and the influx of institutional capital into the market. These ETFs have generated substantial daily demand, surpassing the pace of new bitcoin supply even before the halving and have the potential to absorb a considerable portion of the limited new issuance, To put the spot Bitcoin ETF inflows into perspective, at the current rate of block rewards, the bitcoin network produces about 900 new coins per day, or around $54 million worth of bitcoin (assuming an average price per coin of $60k). In April 2024, issuance will fall to 450 coins, or about $27 million worth of bitcoin. During the month of February, net inflows into the U.S.-listed spot Bitcoin ETFs averaged $208 million per day, far outstripping the pace of new supply, even before the halving. This imbalance between new demand and limited new issuance has likely contributed to the strong upward pressure on the price. Evolution of a Large Liquid Derivatives Market The emergence of a robust, regulated derivatives market facilitated by CME Group Bitcoin futures and options marks a fundamental shift in the narrative surrounding the halving for three key reasons: it enables price risks to be hedged, facilitates the management of bitcoin demand risk and provides market participants with actionable price discovery. Miners typically sold their bitcoin for fiat currency as they mined them, to pay for operational costs. This constant selling meant that price appreciation was measured. After a halving event, miners would have fewer bitcoin to sell, meaning the price could go up. Mining is now dominated by larger, often publicly traded, companies and with a liquid regulated derivatives market, it is possible for these firms to hedge and lock in future bitcoin prices to cover expenses without selling their coins. If this is the case, then selling pressure from miners is less likely to act as a drag on bitcoin prices going forward. Through the emergence of a healthy options market, investors can take price signals and consensus estimates about market expectations. Options could allow for additional income to be earned by miners or enhance long bitcoin positions, which would further cushion the impact of the upcoming halving. A higher number of investors and traders means better liquidity and enhanced price stability for bitcoin. It’s worth noting that bitcoin has become less volatile in recent years, with fewer extreme moves both to the upside and to the downside (link to Erik.N’s article). Growing institutional participation drove Bitcoin futures average daily open interest to over $11 billion so far in March (+29,000 contracts). Year- to- date average daily volume in Bitcoin futures at CME Group is roughly $4 billion (+15,400 contracts). Large Open Interest Holders (a LOIH is any entity that holds at least 25 Bitcoin futures or Micro Bitcoin futures contracts) reached a record of 272 holders, indicating growing institutional interest for bitcoin exposure. Impact on Miners The impeding halving poses challenges and opportunities for miners, as evidenced by shifts in miner behavior and industry dynamics. Decreased bitcoin reserves held by miners, coupled with heightened competition and record high hashrates, underscore the need for operational efficiency and strategic adaptation. The number of bitcoin held in wallets associated with miners has dropped to the lowest level since July 2021, suggesting that miners are perhaps capitalizing on bitcoin's recent price surge, running down their inventory ahead of the halving or leveraging them to raise capital for upgrading machinery and mining facilities. The bitcoin hashrate, a measure of network security, is near an all-time high and a sign of high competition, meaning miners need to marshal ever more computing power to earn new rewards. The difficulty in mining a single block is also at a record, and with high energy prices, the mining landscape remains tough. In previous cycles, there weren't many large-scale miners and even fewer publicly traded ones. The halving may catalyze merger and acquisition activities among mining firms, driving industry consolidation and fostering innovation in sustainable mining practices. Several publicly listed mining firms have already indicated they will use the halving to capitalize on strategic opportunities as mining rewards decrease and competition among miners intensifies. Depending on the operational cost of each miner, less efficient, unprofitable miners may be forced to leave the network or merge with larger companies to survive. In a more competitive landscape, miners will be driven to enhance their overall operational efficiency, including machine optimization, enhanced security and best-in-class risk management practices. This could likely spur increased innovation throughout incumbent mining technologies and methodologies, ultimately benefiting the industry as a whole. As the world becomes increasingly conscious of environmental impact, bitcoin miners that are at the forefront of adopting eco-friendly, sustainable practices and renewable solutions, such as carbon capture and heat waste recycling, will likely ensure that the future of crypto aligns with global sustainability and ESG goals. The rise of Ordinals The recent surge in retail demand can be attributed in part to the rise of bitcoin Ordinals BRC 20 tokens, which are reshaping the crypto landscape. These tokens, often likened to “NFTs for Bitcoin,” have the potential to drive on-chain activity and increase transaction fees, thereby bolstering miners’ revenue streams amidst declining block rewards post-halving. Long Term Outlook Bitcoin’s designation as digital gold underscores its role as a store of value, particularly amidst the scarcity reinforced by halving events. Institutional investors who view bitcoin as a hedge against inflation may find the halving supportive of its perceived value. Shifts in central bank policies, such as prolonged higher interest rates and potential quantitative easing measures, could further bolster bitcoin’s appeal as a hedge against currency devaluation. Looking ahead, the implication of bitcoin’s programmed scarcity intersecting with evolving demand dynamics remains intriguing. With 28 more halving events expected over the next 112 years, the future trajectory of bitcoin adoption and network growth warrants close monitoring – especially when broader retail and institutional access to bitcoin was only made possible in the U.S. less than 90 days ago with the approval of spot bitcoin ETFs. In conclusion, while past having cycles, with the associated price rallies offer valuable insights, the 2024 halving presents a unique confluence of factors that could usher in a new era for bitcoin. As institutional and retail interest converges with regulatory developments and macroeconomic shifts, maintaining a balanced perspective is imperative to navigating the evolving landscape of cryptocurrency. If you have futures in your trading portfolio, you can check out on CME Group data plans available on TradingView that suit your trading needs www.tradingview.com By Payal Shah, Director of Equity Research and Product Development at 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:MBT1!Education
by CME_Group
9
Strategy: Butterfly Continuation Failure. This strategy is intended to be a method to help to differentiate a pullback from reversal. Here we're using the butterfly pattern which is a continuation pattern, but the failure of this continuation pattern can mean the failure of the trend. It's a very useful signal that can be used on all time frames. You can find great examples of this before crashes (Such as 2007 - 2008) and also near the lows of major downtrends. The strategy also works great for day trading. Spotting the breaking of intraday trends. Usually upon the breaking of this pattern the momentum picks up. Meaning a bearish break leads to capitulation and bullish break leads to parabolic move. Very useful for spotting reversals and a method for trailing stop losses. ---- This is a counter strategy to the butterfly continuation.
NYSE:LOWEducation
by holeyprofit
2
Strategy: The Butterfly Reversal. Harmonics are a very useful tool for gaining insight into possible reversal levels after strong trends. "M" shapes are often found at the bottom of trends and "W" shapes at the top. Most often these fit into the rules of the butterfly reversal. A defining characteristic of the butterfly is the final leg (D leg) is always a very strong leg. It's a strong and scary false breakout. Comes out of a range and always tends to look like trend continuation. In the times the butterfly reversal will work, the strong move is terminal. It'll run just far enough to take out the stops and bring in breakout traders and then have a spectacular reversal. Another trait of harmonics is the reversal is at least as strong as the move heading into it, often stronger. Since they have as a defining feature very strong swings at different points, when we have large chart harmonics these are often also accompanied by news that drives the fast moves. In the times they work, harmonics are one of the most accurate forms of forward looking signals for a reversal. However, it should be noted that trading harmonics as a sole strategy against a trend is not expected to have a winning outcome. Typically you'd expected to hit about 1/3 winners on 1:3 RR and come out around even. That's if you do it really well. Otherwise, it's a losing game. Lots of "M" shapes form in a downtrend and lots of "W" shapes form in an uptrend. The formation of these does not always mean reversal, but when there are reversals; you often see these structures signalling them. Harmonic butterflies are a classic false breakout / stop hunt pattern and very useful to know about.
NYSE:LOWEducation
by holeyprofit
1
Don't Trade These Trend Lines | Forex Trading Basics A lot of traders apply trend lines for trading and making predictions on different financial markets. Trend line can also be an important element of price action patterns. However, only few knows that some trend lines are better to be avoided. In this article, I will share with you the types of trend lines that you should avoid and not rely on for making trading decisions. Invalidated Trend Line Even the strongest trend lines may lose their significance with time. Before you take a trade from a trend line, make sure that it still remains valid. If the trend line is not respected by the buyers and then by the sellers, or by the sellers and then by the buyers, we say that such a trend line lost its significance, and it is better to not trade it. Have a look at that rising trend line on USDCAD. We see strong bullish reactions to that, and we may expect a bullish movement from that, once it is tested. However, it was violated and after a breakout it should turn into a vertical resistance. Retesting that, the price easily went through the broken trend line. The trend line lost its significance, and it is better to not trade that in future. 2 Touches Based Trend Line When you are looking for a strong trend line to trade, remember that the trend line should be confirmed by at least 3 touches and 3 consequent bullish / bearish reactions to that. Above is the example of a valid and reliable trend line. However, quite often, newbie trade 2 touches based trend lines. Most of the time, such trend lines are neglected by the market. Moreover, relying on 2-touches-based trend lines, your chart will look like a complete mess. Simply because there are too many trend line meeting that criteria. Receding trend line There are the trend lines that go against your trade with time while remaining valid. Have a look at a major falling trend line on NZDCHF on a daily time frame. You may open a swing long position from that on a daily or a day trade on intraday time frames like an hourly. You can see that the market may easily go against your predictions for a long time, while perfectly respecting a trend line. The price was sliding on that trend line for 6 consequent days before it finally started to grow. Such trend lines are better to be avoided . Make sure that a trend line and your trade have the same direction. Trend lines can provide very safe points for trading entries. However, the trend lines are not equal and while some of them can be very profitable, some of them can lead to substantial losses. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
20