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Forex-trading

SIX LESSONS FROM THE "TRADING IN THE ZONE"The book Trading in the Zone, written by Mark Douglas, is a financial trading classic. It explores the psychological aspects of trading and how they can be used to improve your trading performance. Douglas emphasizes the importance of having a clear understanding of the psychology of trading and how it affects your trading decisions. He also stresses the importance of having an edge in the markets and understanding the risks associated with trading. Douglas argues that traders must also be prepared for the emotional roller coaster associated with trading. He encourages traders to remain calm and focused on the task at hand and not to give into emotional responses. Douglas also stresses the importance of having a plan and sticking to it, no matter what the markets are doing. He believes that having a plan allows traders to focus on the task at hand and reduce the risk of emotional trading. Here 6 lessons from the book “Trading in the Zone”: 1. A trader's edge is the set of core beliefs and methods that he relies on to make decisions about when to enter and exit trades. Understanding your edge and following it with discipline is essential to successful trading. A trader's edge is the set of core beliefs and methods that he relies on to make decisions about when to enter and exit trades. Understanding your edge and following it with discipline is essential to successful trading. 2. Risk management is the key to success in trading. It involves understanding the risks associated with each trade, setting stops and limits accordingly to protect your capital, and limiting your trading exposure to the most optimal level. There are a number of different risk management strategies you can use when trading, including stop-loss orders, stop-limit orders, and position limits. You can also use risk management tools, such as risk gauge monitors and stop-loss calculators, to help you understand your trading risks and measure your success. 3. Managing your emotions is crucial to being a successful trader. Emotions can lead to poor decisions and increased risk-taking, and if you're not aware of this, you could end up losing trades and money. To be a successful trader, you must be able to control your emotions and make rational, objective decisions. 4. Focus on Process, Not Outcome: To be successful in trading, you must focus on the process of making good trading decisions, not on the outcome of the trade. This will help you remain consistent and disciplined, and it will also help you to optimize your chances of success. 5. It's crucial to accept responsibility for your own actions as a trader. You must be willing to take full responsibility for your decisions, no matter how good or how bad they may be. You need to constantly be learning and improving your trading skills in order to succeed as a trader. 6. Have a Plan and Stick to It: Developing a trading plan and following it with discipline is essential for success. A good trading plan should include your entry and exit points, money management rules, and risk management strategies. A trading plan is a roadmap that helps you stay on track by detailing your desired outcome and the steps you will take to get there. In the end, Douglas' main message is that trading is a game of probabilities and that traders must learn to understand and manage the risks associated with trading. He encourages traders to remain disciplined, have a plan, and focus on the long-term. He also emphasizes the importance of controlling emotions and having an edge in the markets.
Education
by DeGRAM
13
HEAD and SHOULDERS PATTERN Hello my friends! The most famous figure of technical analysis in the world. It consists of three tops, where the middle one is the highest. Accordingly, two shoulders and one head. The neckline in this case connects the two minimum values of the extreme top. ✳️ Pattern Breakdown The Head & Shoulders pattern is a common psychological pattern of market players that hasn't changed for decades. Each new price is the result of bulls and bears struggle, but on the relatively long-time interval this struggle gets the more correct recognizable form. Since all traders see the same chart, their behavior is synchronized when a familiar pattern is identified the emotion factor kicks in. The pattern itself consists of three parts a high peak in the middle and two smaller peaks on the sides. Thus, the first and the second tops form shoulders of the pattern, while the peak in the middle is the head. Support line drawn on the pattern minimum is also a signal line. is also a signal line - its breakdown defines the change of the trend? The first small peak and the subsequent fall mean the weakening of the upward impulse the loss of the bulls' enthusiasm. However, maintaining the momentum, the price continues to move upwards, forming a higher maximum. At this stage there is still the possibility of a continuation of the bullish movement. But as soon as the price goes down to the previous low, the future development is already predetermined. The bulls make one last attempt to go up, but the price usually only reaches the nearest resistance level, the level of the first peak, and then it has to wait for the support level to be broken down to enter the downside. There is also an inverted Head & Shoulders pattern that creates a buy signal. In this case instead of three peaks we have three lows, with the lowest one in the middle. The pattern signals completion of the downtrend and formation of a new movement direction. ✳️ Application in practice Having received a signal about the formation of a new pattern, the first thing we need to determine is the presence of a continuous unidirectional movement. Further, having determined that the trend is bullish, we wait for the formation of a pattern. At the beginning of formation of the second arm we draw a support line by the swing minimums. This will be a signal line, breakthrough of which will indicate a price reversal. It is necessary to enter the market after breaking through the support level. Confirmation is the closing of the candle behind the level at the opening of the next one, we open a market order to sell. Stop loss is placed just above the peak of the second shoulder. In some cases, the price may try to test the nearest resistance level again, and this moment should be taken into account when setting a stop. ✳️ Conclusion Head and Shoulders is a time-tested figure, which, if identified correctly, allows you to enter the market at the beginning of a long-term trend. All you have to do is analyze the set-up and make a final decision about entering the trade.
Education
by DeGRAM
10
HOW TO TRADE 1-2-3 PATTERNHello everybody! 👋 🤗. Today we are going to learn about the 123 chart pattern. The 123 pattern is a typical reversal pattern that traders use to identify if an existing trend might change. These patterns can be a signal to enter the market. At the peaks or bottoms of the market trend, you can see 123-patterns, which signal a change in the trend. Sometimes they form after the completion of corrections in the current trend and may also occur in sideways markets. The Pattern Formation 📈 1. The price makes a pullback following the rally 2. The price hardly shows a new maximum/minimum. No sign trend continuation 3. A breakout the previous high/low, shows a change in market trend This happens as a result of traders opening positions when they anticipate the rally is going to continue. Furthermore, these traders will immediately close their trades and enter in the opposite direction if their stops are taken out. How to Identify a Solid Pattern ✔️ 1. The first step in trading the 123 pattern is to determine the existing trend by analyzing and identifying the highs and lows of the price action. The chart below shows one of the setups; it is labeled 1, 2 and 3. The trend was bullish. The market reached a peak. Then a pullback occurred. The result was point 2. Price then attempted to retest the high which was not successful. The price started a bearish movement and then reversed. We should not open the sell trade until we get confirmation of the breakout of line 2. 2. Look for a potential reversal. After identifying the existing trend, the next step is to look for a potential reversal point. This is done by looking for high or low points on the chart. Once a potential reversal point is identified, we can then look for signs that the reversal is actually happening. These signs can include things like a change in price momentum or candlestick patterns. The candlestick that represents the first point should have a wick, and the longer it is and if the wick is directed against the main price movement. 3. Once a potential reversal point has been identified, the we should wait for confirmation that the reversal is happening before taking any action. This confirmation can be provided by a subsequent candlestick close above or below the reversal point 2. 4. Finally, we should place stop-loss and take-profit orders to manage out risk and lock in profits. A breakout of the previous high (or low, depending on the context) is the area to place the orders. Depending on whether the pattern is bullish or bearish, the stop loss should be placed at level 1 below or above. Price should be given breathing room to avoid hitting the stop loss. Determine the distance between the low at point 3 and points 1 and 2 in this formation. As you can see from the previous example, the price initially was in the bullish trend. After the pullback, the price breaks the support line of the trend, signaling a trend shift which indicates that price doesn’t have enough momentum to move above the previous high. Stops should be placed above point 1 of this formation. This illustration shows how easily the price exceeds price target, providing an opportunity to successfully open a sell trade with R:R ratio 1 to 1. The 123 pattern can be a great tool for traders looking for a simple yet effective way to open trades in the markets. It is important to remember that no trading strategy is perfect, and traders should always use risk management to protect their capital. With practice and experience, traders can learn to identify the 123 pattern and use it to trade successfully in the forex market.
Education
by Lingrid
10
DOW THEORY OR HOW TECHNICAL ANALYSIS EVOLVEDSometimes it's useful to go back to the basics in order to fully comprehend the progress achieved. Today technical analysis is taken for granted, and very few people think about what is really behind the well-known market terms. The Dow Theory, and Charles Dow himself in particular, we can say, were at those very basics. In this case, at the present moment the postulates of the theory have not lost their relevance. How they can be applied in practical work on the market, particularly in Forex, is presented in today's post. Dow Theory and Technical Analysis At the beginning of the formation of financial markets there were no suitable automatic tools, and most of the work on the analysis was done manually for a long time. That's why you can notice a great attention to detail in the description of the theory, when nowadays many details are usually omitted. A brief biography of Charles Dow Dow's first job in the financial environment was as a reporter for the Wall Street news bureau. It was there that he met his partner, Edward Jones. Unlike most other journalists, their work was characterized by straightforwardness - Doe and his partner did not take bribes as a matter of principle. In 1882 Doe and Jones felt the need for a separate publication. So, they founded their own company, Dow Jones & Company, which at first issued daily financial reports. Later the two-page booklet grew into a full-fledged newspaper, The Wall Street Journal, which is now one of the most authoritative publications in the financial environment. The publication's slogan stated that its main purpose was to tell the news, but not opinions. By 1893, there were many mergers taking place, which increased the proportion of speculation in the markets. At this time Dow saw the need for some indicator of market activity. Thus, he created the Dow Jones Industrial Average, which at that time was a simple arithmetic average of the prices of 12 companies (it now included the 30 largest U.S. companies). Dow drew attention to the fact that prices capture much more information than many people assume. That is, by analyzing prices alone, we can predict their future behavior with great probability, which eventually became the basis of his theory. Principles of the Dow Theory The Market Discounts Everything Of course, the market cannot take into account events which, by definition, cannot be predicted. However, the price takes into account the emotions of participants, economic data of some companies and states, including inflation and interest rates, and even possible risks in case of unforeseen developments. This does not mean that the market or its participants know everything, even future events. This only means that all what has happened has already been recorded in the price, and any new information will also be taken into account. On this basis, a huge number of technical indicators have been created, and today you can find an indicator for the analysis of literally anything. But while indicators are often used thoughtlessly, Dow analyzed the entire market, relying on the natural segmentation of market players. An extreme reflection of his work is the industry and transportation indices. The very composition of the index plays an important role. It is not fixed and is periodically reconsidered taking into account changes of the situation on the markets. The essence is that shares of enterprises working in one field are analyzed. As a result, the index is in some way a closed system, where the major part of funds is distributed between the participants and does not go beyond the portfolio. Three Market Trends A straight-line market movement is a science fiction. In fact, price almost always moves in a zigzag pattern, forming characteristic ascending/descending highs/minimums. In other words, forming an uptrend or a downtrend. There is a major initial trend in the market. It is the most important to find out, because the basic trend reflects the real price movement direction, when all the lower trend levels depend on the basic one. The duration of the initial trend is from 1 to 3 years. The most important thing is to determine the direction of the initial trend and trade in accordance with it. The trend remains in force, as long as there was no confirmation of its reversal. The price closing below the previous extremum, for example, can be a prerequisite for trend reversal. So, the initial trend determines the main market direction. In turn, the secondary trend moves in the direction opposite to the main trend. In fact, it is a correction to the main trend. The secondary trend has one interesting characteristic - its volatility is usually higher than the initial movement. The last, the smallest trend is nothing more than a secondary trend pullback. Such movement lasts no longer than one week. The classical representation pays the least attention to it. It is considered that there is too much price noise on this time period, and fixation on the smallest movements can lead to irrational trade decisions. Trend phases The next principle of the theory of Dow the phases of the trend formation: The first phase is usually characterized by price consolidation. This is a period of market indecision, when the previous trend is at exhaustion. In other words, this period is marked by the accumulation of forces before the spurt and is also the most attractive entry point (although risky). As soon as the new direction is confirmed, the participation phase begins. This is the main trend phase, the longest of the three, which is also marked by a large price movement. When the motivating conditions have been exhausted, the saturation phase begins. During this period, savvy players begin to exit positions as soon as there are signs of instability, such as increased corrections. This phase can be described as "irrational optimism", when the price may continue to rise by inertia, despite the lack of clear prerequisites. Identification of trend movements In order to identify both trends and reversals on a chart, it is necessary to understand the techniques used by Dow. The main technique in identifying reversals a sequential analysis of extremes. For example, in the picture, points 2, 4, and 6 mark the maximum of the upward movement, while points 1, 3, and 5 mark the minimum. An uptrend is formed when each successive top and trough is higher than the previous one. A downtrend, on the contrary, is characterized by descending highs/minimums. The Dow Theory states that until we get a clear signal for a reversal, the trend remains in force. Here we can draw a parallel with Newton's law of inertia, where a moving object tends to move in the intended direction until another force interrupts its movement. The formation of a lower minimum (5) within the upward movement is an obvious signal of the coming reversal. In the case when the trend is directed downward, the situation is the opposite. If the price failed to form a lower low and still closed above the current high, it means that the market is influenced by a force opposite to the original movement. Conclusion The Dow Theory, as many hope, does not answer the question "how to enter the market at the stage of trend formation?" It is a long-term reversal strategy aimed at minimal risk. Nevertheless, the theory helps us better understand technical analysis in general, and why it works at all because price and is a derivative of all the factors affecting it.
Education
by DeGRAM
18
WHAT IS ATR AND HOW TO USE IT?Investing and trading in the stock market can be a daunting task, especially for those new to the game. With so many different indicators and metrics to consider, it can be difficult to know which ones to focus on. One key metric that traders often use to measure market volatility is Average True Range (ATR). In this blog post, we’ll explore what ATR is, how it’s calculated, why it’s important for analysis, and how it can be used as an exit strategy. We’ll compare ATR with other popular technical indicators as well, so you have all the information you need to make informed decisions about your trading strategies. Defining ATR Average True Range (ATR) is an important metric used by traders to measure market volatility. It’s a technical indicator that can provide insight into strength or weakness in the markets, and can be used to identify breakouts and set stop-loss points for trades. ATR is calculated as an exponential moving average of true range values over a given period. True range is defined as the maximum of three values: the current high minus the current low, the absolute value of the current high minus the previous close, and the absolute value of the current low minus the previous close. This calculation provides a more accurate reading than simply measuring one day’s trading range or attempting to track changes in individual stock prices. ATR values are generally presented in decimal form (e.g. 0.1 or 0.3) rather than percentage form (e.g. 10% or 30%). This allows for more precise measurements when tracking market movement, which can be especially important for day traders who need to act quickly on market changes and opportunities. Traders use ATR to gauge overall market volatility as well as individual stock movements over time; it can also be used for trend identification and momentum strategies when combined with other technical indicators such as moving averages and Bollinger bands. And because ATR takes into account both recent highs and lows, it can also help traders set stop-loss points for their trades – at least until they become comfortable enough with markets to make decisions without them. Whether you’re new to trading or seasoned professional, ATR is an invaluable tool that should be incorporated into your analysis strategy if you want to stay ahead of markets and take advantage of opportunities when they present themselves. How to Calculate ATR In conclusion, ATR is a valuable tool for traders and investors alike. It helps measure market volatility and can be used to set stop-loss points as well as combine with other technical indicators to get a more accurate picture of where the markets are headed. Understanding and employing ATR can help traders become better informed about their investments, allowing them to make more informed decisions when entering or exiting positions. Analyzing ATR in Trading When it comes to analyzing the markets for trading decisions, Average True Range (ATR) is an invaluable tool that helps traders gain insight into market volatility. By understanding how ATR works, investors can measure the current conditions of a stock or index in comparison to its past performance, allowing them to identify trends and set stop losses accordingly. It also provides them with an effective exit strategy so they can take advantage of opportunities while minimizing their risk exposure. Ultimately, having a good grasp of this indicator will allow traders to make more informed decisions when engaging in securities markets globally. Using ATR as an Exit Strategy Using ATR as an Exit Strategy Average True Range (ATR) is a powerful technical indicator that can be used to measure market volatility and identify trends. It can also be employed as an exit strategy in trading, allowing traders to determine when the best time is to exit their positions and take profits or minimize losses. When using ATR as an exit strategy, it is important for traders to set the parameters for their strategy correctly. The most common approach is to set a multiple of ATR for both profit taking and stop loss levels. For example, if a trader sets the multiple at two times ATR, then they will take profits when the price moves by two times the average true range from their entry point and cut their losses if it moves against them by two times the average true range. In addition to setting up these parameters in advance, traders should also consider any potential rewards and risks associated with using ATR as an exit strategy. On one hand, it can help protect capital from large losses due to quick market movements, but on the other hand, it may cause traders to miss out on larger gains if prices move further than expected. There are various types of ATR-based exit strategies that traders can employ. Some of these include: fixed percentage or dollar exits; trailing stops; dynamic exits; time-based exits; or support/resistance exits based on chart patterns or technical indicators such as moving averages. Each type of strategy has its own advantages and disadvantages depending on market conditions so it is important for traders to understand which one will work best for them before implementing it into their trading system. Finally, traders should look at real-world examples of profitable trades made using ATR as an exit strategy. By studying these examples they can gain insight into how successful trades were managed and use this knowledge when formulating their own strategies going forward. With enough practice and experience, traders will eventually become adept at using ATR as part of their trading system and be able to capitalize on profitable opportunities more effectively in future investments. ATR vs Other Technical Indicators Average True Range (ATR) is a technical indicator used to measure market volatility and identify trends. Unlike other indicators, ATR measures the degree of price movement instead of the strength or weakness of a trend; this makes it ideal for spotting trading opportunities in volatile markets. Compared to indicators like Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), ATR offers traders a greater understanding of market volatility so they can more easily recognize good entry and exit points. In addition, ATR allows traders to set stop-loss points that are tailored to their individual risk tolerance levels. This helps them reduce losses when prices move against them but still provides an opportunity for profits if prices turn back in their favour. Ultimately, ATR is not meant to be used as an isolated indicator when making decisions about trades, but combining it with other indicators will improve accuracy when entering and exiting positions. Overall, ATR is a powerful tool designed for those looking to gain insight into market volatility and make informed decisions about their trades. By using this indicator in combination with others, such as RSI and MACD, traders can better understand the kind of environment they are working with which can help them maximize profits while minimizing losses. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
16
HOW TO IDENTIFY ORDER BLOCKSHello traders! Today we are going to look at the pattern Order Blocks, what this pattern means and how to trade it. ✳️ What is Order Block? The largest (from open to close) closest bearish candle to support before a strong impulsive bullish move (last sell candle before the buy candle). The last falling candle before the impulse growth. The high of this candle must be broken by the next candle to confirm it is an order block. The largest (from open to close) closest bullish candle to resistance before a strong impulsive bearish move (the last buy candle before the sell candle). The last rising candle before the impulsive decline. The low of this candlestick must be broken by the next candlestick to confirm that it is an order block. Order blocks are those areas/zones where financial institutions have manipulated the price and where some of their orders are in drawdown. This "footprint" they are leaving is clearly visible in the order block. Price will usually return to these areas and we will react to this in some way. Order block is a sign of big players in the market. ✳️ The idea behind the pattern and why it works The movements triggered by big players leave open positions which must be closed. And in order to do that, the price has to test those levels. Smart money works according to certain algorithms, and we are trying to make money on this. Behind these candlesticks are financial institutions: they deliberately move the market, themselves falling into a drawdown, so they need to return the price to the order block with an imbalance, to reduce losses (to return their open positions to breakeven levels). Why not close manipulative positions earlier? There is no one to cover them. When we close large positions, the price automatically moves in the direction of the order block, and it is convenient for the large capital to close the previous manipulated positions, which causes a bounce which we want to jump into. In other words, we find a liquidity gathering point and wait for the return to it. Order Block is a level to enter or exit. ✳️ Order Block Trading Strategy Mitigation is a test of a supply/demand area. In our case a block of orders. Closing of old manipulative positions. 1) We are looking for a block of orders. 2) Were the stops pulled out (collecting liquidity, breaking through the obvious highs and lows)? If no, then it is not an order block, let it go. You are not sure? Do not enter. 3) If yes, we consider entering. A bullish block of orders: We enter - on price returning to this candle (at least to the high). Stop - for low. Take - the nearest level. A bearish block of orders: Entry - on the return of the price to this candle (at least to the low). Stop - behind the high. Take - the nearest level. Each Order block can be tested only once.
Education
by DeGRAM
39
What is Heiken Ashi and how to use it?Are you looking for a new way to analyze the markets and identify trends? Heiken Ashi is a powerful charting technique that can help you do just that. It provides traders with an easy-to-read visual representation of price movements that can be used to make more informed trading decisions. In this blog post, we'll cover what Heiken Ashi is, why it's so beneficial, how to read the candlesticks, when to use it, and offer tips for trading with it. With this knowledge, traders can use Heiken Ashi to take their trading to the next level. Definition of Heiken Ashi Heiken Ashi is a charting technique used to identify trends and smoothen out price fluctuations. It was derived from the Japanese candlestick charting techniques, and it is based on open, high, low and close prices from the previous session. When these prices are averaged, they form Heiken Ashi candlesticks which can be used to analyse market movements. The colors of the Heiken Ashi candlesticks are determined by the relationship of the current open and close prices compared to the previous session's open and close price. If the current open price is greater than or equal to that of the previous session, then a green or blue candle will appear on your chart; conversely if the current open price is less than that of the previous session, then a red or yellow candle will appear. By using this information traders can make informed decisions about when to enter and exit positions in order to maximize profits. Heiken Ashi also helps reduce volatility in comparison with regular Japanese candlesticks as it takes into account both recent and historical information when plotting candles. This allows traders to see a clearer picture of what’s going on in their chosen markets without being overwhelmed by too much noise or irrelevant data points. Additionally, since Heiken Ashi plots values over time rather than simple one-time snapshots like traditional candlestick charts do, traders can use this information to better predict future trends in their chosen markets. Overall, Heiken Ashi is an incredibly useful tool for any trader who wants to accurately identify trends in their chosen markets and make more informed trading decisions based on real-time data analysis. By leveraging its capabilities traders can gain insight into market movements more quickly and accurately than ever before. Benefits of Heiken Ashi The Heiken Ashi charting technique is a valuable asset for traders of any skill level. It can help investors easily identify trends, smoothing out the price action to offer a clearer picture of the market. This strategy is especially useful in range-bound markets, where it can signal when trends are likely to change direction. Heiken Ashi also assists in identifying potential entry points with greater accuracy by recognizing patterns earlier on. In volatile markets, this technique can be even more beneficial as it helps traders prepare for sudden price movements before they occur. By combining Heiken Ashi with other strategies such as Fibonacci retracements and Elliot Wave Theory, traders have a better chance at predicting market direction and making sound trading decisions for increased profits. Overall, Heiken Ashi's ability to smooth out price action and recognize potential entry points gives investors an advantage in their chosen markets that unassisted candlestick charts cannot offer. With its multitude of benefits, traders of all levels may find this tool very advantageous when trying to achieve success in their investments and trades. How to read Heiken Ashi Candlesticks? Heiken Ashi candlesticks are constructed using open, high, low and close prices from the previous session. The colors of the Heiken Ashi candles indicate whether the current open and close prices are higher or lower than the previous session’s open and close price. Red/black Heiken Ashi candles indicate a bearish candle, while green/white Heiken Ashi candles indicate a bullish candle. If the red/black candle is followed by a green/white candle - this indicates an uptrend, while if the green/white candle is followed by a red/black one - it indicates a downtrend. The Doji candlestick is another type of Heiken Ashi candle which occurs when the opening and closing prices of a session are equal to each other - this typically indicates some indecision in the market. When trading with Heiken Ashi, it is important to always be aware of support and resistance levels as they can help you identify potential entry points in your chosen markets. Support levels occur when there is enough buying pressure to push prices back up after they have dropped below them, while resistance levels occur when there is enough selling pressure to push prices back down after they have risen above them. A break of either support or resistance could signal an impending trend reversal, so traders should always pay attention to these levels when trading with Heiken Ashi. Finally, traders should also be aware that false signals may appear on their charts due to lagging indicators like moving averages or oscillators; therefore it's important to use additional strategies such as Fibonacci retracements or Elliot Wave Theory in order to confirm any potential trade opportunities before entering them into your chosen markets. With this knowledge about how to read Heiken Ashi candlesticks combined with other strategies like Fibonacci retracements or Elliot Wave Theory, traders can make more informed decisions when trading with Heiken Ashi. When to use Heiken Ashi? When it comes to trading with Heiken Ashi, timing is key. The Heiken Ashi technique can be used to identify trends and trend reversals, allowing traders to make more informed decisions about when to enter or exit the markets. It is especially useful in volatile and ranging markets, where traditional analysis techniques may not provide enough information to accurately predict price movements. Heiken Ashi candles can also help traders identify entry and exit points. By looking at the color of the candles, traders can determine whether a trend is likely to continue or reverse. For example, if the most recent candle is red, indicating a bearish trend, then this could signal an upcoming reversal in price. Similarly, a green candle indicates that the current bullish trend may continue for some time longer. However, it’s important to remember that Heiken Ashi signals should only be used as part of a larger trading strategy; they should not be relied upon alone as they do not always accurately indicate future market direction. Many traders use additional indicators such as Fibonacci retracements or Elliot Wave Theory in combination with Heiken Ashi candles for even more accurate signals. When combined with other analysis techniques such as support and resistance levels or moving averages, Heiken Ashi can provide valuable insight into potential entry and exit points in any given market. Additionally, traders should pay attention to volume when using Heiken Ashi candles; if there is an unusually high volume on a particular day this could indicate that there are larger players at play who may influence future market direction. Finally, it’s worth noting that although Heiken Ashi works on all timeframes from one minute up to monthly charts, it tends to be more accurate on longer timeframes such as daily or weekly charts due to its smoothing effect which reduces noise from shorter-term fluctuations in prices. Ultimately however which timeframe you choose depends on your personal trading preferences and goals; so experiment with different settings until you find something that works for your particular situation. Tips for Trading with Heiken Ashi Using Heiken Ashi in trading can be a great way to identify and take advantage of market trends. Here are some tips for using Heiken Ashi in trading: Utilizing Trend Lines: Utilizing trend lines is an important part of trading with Heiken Ashi. When the candles begin to form a pattern, traders should draw trend lines to better understand the direction of the market. These trend lines can help traders identify potential entry and exit points, as well as any potential stops that need to be set. Pay Attention To Color and Direction: Traders should pay close attention to changes in color and direction of the Heiken Ashi candles. When there is a change in color or direction, this could be an indication of a potential reversal or continuation of a trend. Multiple Time Frames: Using multiple time frames can help traders get an overall picture of the trend they are looking at. For example, looking at both daily charts and hourly charts may give traders an idea of whether current trends will continue or if they have reached their peak. Risk Management: Practice risk management when trading with Heiken Ashi. Risk management includes setting stop loss orders to protect against possible losses due to sudden price movements, utilizing proper position sizing according to your current account balance, and keeping emotions such as fear and greed out of your trading decisions. Setting Stop Loss Orders: Setting stop loss orders can help protect against unexpected losses due to sudden price movements. By setting these orders ahead of time, it allows traders to minimize their losses if the trade does not work out as expected. By following these tips for trading with Heiken Ashi, traders can use this technique effectively when making more informed decisions about their trades. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
19
TRADING ON THE WEEKLY CHARTToday we're going to talk about how to trade on the weekly timeframe. Trading on the weekly chart makes it clear that this trading strategy is for those who are patient, do not rush anywhere, and are willing to wait for signals for weeks or even months. The idea behind the trading system So, it is designed for those who have no hurry, or vice versa, for those who have very little time, and they can check the charts for a minute on weekends at most. Trades on this strategy are made once a week. It is possible to enter at the opening of the market, but the best entry will be on Monday morning; at this time prices are more attractive, and the entry time does not make any sharp moves in the weekly timeframe. The strategy is very simple, and it is possible to trade "anything that moves", because the system is based on a simple and plain idea. We wait until the weekly chart shows three candlesticks in a row in the same direction, either bullish or bearish, and then we enter in the same direction. That's it. That's how easy it is. The fact is that this pattern of three consecutive weekly candlesticks in one direction shows that there are a large number of big traders buying or selling. Because it takes a lot of money to move the price three weeks in a row in one direction, when that happens, it means that someone really needs the price to move. And this impulse attracts other participants into the market. Not necessarily a very strong trend is formed. But one can count on the continuation of the movement equal to the found formation from the opening of the first candle to the closing of the third one, without tails. It is often possible to see stronger movements. Once again, the idea is very simple: if we see three weekly candlesticks in a row in one direction, it means that there is a lot of money in the market, which pushes the price in this direction. Strategy Rules The basic rules you've probably already figured out are: we wait for three one-way candlesticks in a row, and then we enter on Monday morning in the same direction. The candlesticks must be obvious and clean; their bodies should be visible to the naked eye without zooming in on the chart. The doji with practically no body is not considered. Moreover, if the candle's body is not visible on the distant chart and interrupts our formation, then we start the counting of three candles in a row again. In other words, it should be obvious even to a child who has won this week with the bulls or the bears. A stop-loss should be placed right after the formation. It will not trigger very often because the strategy is very reliable, but sometimes it still happens. Take profit is set at a distance equal to the formation. As a result, it turns out that the stop-loss and take-profit ratios in the strategy are approximately 1 to 1. You can, of course, experiment with your own variations, but this approach is the most effective in terms of winrate. If, after the signal is worked out, we see three candles in a row in the same direction again, it may be too risky to re-enter. It is more reliable if there is at least one opposite candle between two unidirectional signals that the market still needs to correct. If the price missed taking profit just a bit and started to correct, you'd better exit. The profit may be somewhat smaller, but it will still be there. This method protects not only from losing profits but also from triggered stop-losses. Those who use classic price action can also monitor strong levels, and if the price hits one of them, they can exit with a smaller profit. In case the opposite entry signal for this strategy was formed before our trade closed at take profit or stop loss, it is better not to argue with the market. Close the current trade and enter immediately on the new signal. Money Management Strategy Money management is very important in this system. The strategy uses large take and stop positions, so the lots should be small. Fortunately, small capital allows for competent money management even with a $100 deposit. The trade volume should not exceed 1% of the capital. For an exact calculation, it is better to use the lot calculator. Examples of trades On the weekly timeframe of the GBP, three bearish candles were formed in a row. We wait for Monday morning to enter; the quotes open with a gap, but taking into account the target take level of 382 pips, the order accuracy does not play a big role in the trade. After selling GBPUSD, set a take profit equal to the distance from Friday's closing price to the opening price of the first of the three candles of the pattern. We put a stop just above the upper tail of the first candle. Despite the long fall, the quotes have not reached take-profit. This is exactly the case when it is worth going out and not waiting. As described above in the strategy rules, if a candle visually misses the take-profit mark, we exit the trade. The trader who left the short would have to close the trade with a loss due to the opposite signal. Three rising candles are a signal to close any opposite positions and open a long position in GBPUSD. As we can see from the chart, the pound did not go up, and the trade was closed with a stop loss. The rules of the trading system do not override the principles of technical analysis, which can be seen in another example of using this strategy when trading gold. Three candles in a row, the first of which passed the minimum "body visibility" requirements, gave a buy signal. After one week of fall, quite far from the set take profit, a reversal pinbar is formed. In favor of fixing the position at the support level. The trader would have received a stop if he had not exited the position. On the same chart later, the quotes again give a signal to go short, but in this case, the bears manage to break the support. On the next wave, the traders break through the suppport with momentum, and the price eventually reaches our take profit. Above are specially cited examples of complex cases; as the setups can be seen with the naked eye, you can find more simple examples on your own. Conclusion The strategy works flawlessly on the major currency pairs. Even on such volatile days. The weekly strategy is also suitable for very aggressive instruments, such as gold. Stop-losses, of course, will be knocked out a bit more often than on more "calm" instruments, but the trading system remains effective. In addition, it perfectly protects against a flat, as three unidirectional candles clearly indicate the end of the consolidation and the formation of a trend.
Education
by DeGRAM
17
GOLD vs CRYPTOAre you an investor looking to make the best of your money? If so, you may be wondering if gold or cryptocurrency is the right investment for you. In this article, we will take a look at both gold and cryptocurrency and compare their pros and cons for investing. We will begin by defining and characterizing each asset, followed by examining the reasons to invest in them. Finally, we will provide a comparison of the pros and cons of investing in gold versus cryptocurrency, helping readers make an informed decision on which asset to invest in. So let’s get started! Definition and Characteristics of GOLD Gold is a precious metal with a yellow hue that is used for jewelry and coins. Its chemical element is Au (Aurum), and has an atomic number of 79. Gold is a soft metal, with a melting point of 1064.43 degrees Celsius, making it relatively easy to work with when crafting into jewelry or coins. It also has the distinct advantage of being chemically inert, meaning it resists corrosion and tarnishing over time, which allows it to retain its original beauty even after years of use. The price of gold can be influenced by many factors, such as supply and demand in the market, as well as geopolitical events. For example, when there are wars or political unrest in certain regions of the world, investors tend to flock to gold as a safe haven asset which drives up the price due to high demand. Conversely, when markets are stable and economies are doing well, investors may prefer other assets such as stocks or bonds since they provide higher returns than gold does during these times. Furthermore, changes in technology can influence the price of gold; if there is an advancement that makes extracting gold easier or more efficient then this may result in lower prices for consumers due to increased supply. In conclusion, gold has stood the test of time as one of the most valuable commodities on earth thanks to its characteristics such as its yellow hue, softness and resistance against corrosion and tarnishing. Additionally, its price can be influenced by various factors such as supply and demand in the market or geopolitical events. Investors should take all these factors into consideration before deciding whether or not to invest in gold. Reasons to Invest in GOLD Gold has been a reliable source of currency and value for centuries, making it a desirable option for those interested in diversifying their portfolios and protecting their wealth. With its intrinsically high liquidity, gold is also an excellent safe-haven asset that can provide stability in times of economic or political unrest. Additionally, gold often does well during periods of high inflation, providing investors with the means to safeguard themselves from financial losses in volatile markets. Moreover, gold offers diversification benefits due to its low correlation with other assets such as stocks and bonds. This allows investors to spread out their risk across different types of investments while still maintaining strong returns on investments. The convenience to buy and sell gold quickly makes it an attractive asset for those seeking rapid access to cash without having to divest from other holdings first. Furthermore, gold's accessibility makes it suitable for all kinds of investors regardless of budget size or experience level. There are many ways one can invest in gold including physical bullion coins, ETFs (exchange traded funds), or even owning stock in companies involved with mining or processing precious metals such as gold and silver. All these factors make investing in gold a viable choice for anyone looking for long-term portfolio growth and protection against market volatility. Definition and Characteristics of CRYPTO Cryptocurrency is a digital or virtual currency that is secured by cryptography, making it nearly impossible to counterfeit or double-spend. It uses decentralized control, with no central authority or government controlling it. Cryptocurrency transactions are secure and anonymous, making them attractive to investors who value privacy. The most popular cryptocurrency is Bitcoin, created in 2009. Other cryptocurrencies use blockchain technology and are often referred to as altcoins. Blockchain technology provides a secure and transparent way of storing transaction records which cannot be modified or tampered with. Transactions are also processed quickly and securely due to the distributed ledger system used by many cryptocurrencies. Cryptocurrencies have several unique characteristics that make them an attractive choice for investors. They are highly liquid assets as they can be bought, sold, and exchanged for other currencies at any time of day. They also have low transaction costs compared to traditional payment methods such as credit cards and bank transfers. Additionally, since cryptocurrencies are not tied to any country’s economic conditions or policies, they provide greater stability than fiat currencies can offer in times of economic unrest or political turmoil. However, there are some drawbacks associated with investing in cryptocurrencies that should be taken into account before investing in them. Cryptocurrencies are highly volatile assets due to their speculative nature; prices can rise and fall sharply at any time without warning as traders attempt to profit from short-term price movements rather than long-term trends. Additionally, cryptocurrency exchanges do not offer the same level of consumer protection as traditional financial institutions; if you invest in a cryptocurrency exchange you should ensure it has sufficient security measures in place before entrusting it with your money. Finally, because of their pseudonymous nature – meaning users’ identities remain anonymous – cryptocurrencies can be used for illegal activities such as money laundering which could put off potential investors from entering the market altogether. Reasons to Invest in CRYPTO Cryptocurrency has become an increasingly sought-after investment option due to its unique properties. Decentralization of the network allows users complete control over their funds and transactions, making it more secure than traditional methods. Low transaction costs and fast processing times give cryptocurrencies an edge in terms of efficiency compared with other payments systems. By investing in crypto, investors can diversify their portfolios and reduce the risk of market volatility associated with physical commodities like gold or silver. Moreover, depending on timing and individual decisions, cryptocurrency can offer high returns; many digital coins have seen huge gains due to their limited availability and strong demand. Finally, there is potential for impressive capital appreciation in cryptocurrency due to its global acceptance and capacity for growth. Open markets around the world make price movements accessible at any given time - allowing savvy traders to capture profits from various markets if managed correctly. As a relatively new form of investment asset, those who choose to invest early are presented with greater opportunity for growth compared to other options available. In summary, investing in cryptocurrency provides investors with a range of advantages that could lead to long-term portfolio growth or protection against inflationary risks. As such, it is important that all prospective investors conduct thorough research before committing funds into this asset class as there are both risks and rewards involved in this type of investment. Comparative Pros and Cons of Investing in GOLD vs CRYPTO Weighing up the pros and cons of investing in gold or cryptocurrency is a key factor to consider when it comes to making an informed decision on which asset type would best suit one's individual needs. Gold has traditionally been seen as a reliable source of currency and value, offering stability during times of economic or political unrest. Additionally, gold provides diversification benefits due to its low correlation with other assets while also having high liquidity and accessibility for all types of investors. Conversely, crypto investments have become increasingly popular due to their unique properties such as decentralization of the network, low transaction costs, fast processing times, and potential for high returns. Investing in cryptocurrency can help diversify portfolios and reduce risk associated with market volatility; furthermore, crypto is not affected by inflationary pressures like gold is. However, it's important to be aware that both gold and cryptocurrency have their own set of drawbacks that should be factored into any investment decision. For example, gold prices are more volatile than cryptocurrencies but also more stable over long periods of time; additionally, gold has higher liquidity than crypto meaning it’s easier to liquidate investments quickly if needed. Ultimately investors should conduct thorough research into both asset types before deciding which will best meet their own personal goals when investing money. By being aware of the advantages and disadvantages outlined here they will be able to make an educated choice when selecting either gold or cryptocurrency as part of their portfolio. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
OANDA:XAUUSDEducation
by Lingrid
6
CONFLUENCE IN TRADINGHave you ever wondered what confluence in trading is? How can you combine several elements into one to increase your chances of making significant profits? Regardless of what type of trader you are or what your trading goals are, a confluence is always a great choice for many reasons, which we will discuss below in this post. A definition of confluence in trading is the combination of more than one trading technique or analysis to increase the chances of winning a trade when you use multiple trading indicators that give the same "signal" as the best way to confirm the validity of a likely buy or sell signal. This applies to any situation where you see multiple trading signals lining up on a chart and signaling you to take a trade. ✳️ WHEN DOES THIS HAPPEN? It occurs when several technical analysis methods give the same trading signal. Often, these are technical indicators. They can also, however, be combined with the following things: Price action Chart patterns Indicators or oscillators ✳️ A BRIEF EXAMPLE OF CONFLUENCE IN TRADING Suppose you use one technical analysis tool that provides 40% accuracy in predicting the correct price movement. In addition, you use a second, correlating technical analysis tool to better filter your decision. In this way, you increase your chances of making a profit. In this way, you use the concept of synthesis to find a trading setup using multiple technical analysis methods. Keep in mind that all of these analyses signal the same price direction. This can occur when support and resistance levels are closely related to expansion levels and Fibonacci retracements. The following things can also act as areas of interest: Dynamic support and resistance levels such as Moving average Bollinger bands Previous highs and lows Psychological levels When these levels follow each other, they form more significant resistance and support levels. All of these can be used as take profit levels or entry points. ✳️ FOUR METHODS OF PRICE ACTION FOR TRADING The main four levels or areas in which a confluence can occur are as follows: Resistance levels Support levels Fibonacci levels Trend Lines In short, price action confluence trading is a technical analysis method for observing. To trade on price action, it is important to have the ability to detect price "confluence" as soon as resistance levels, support levels, trend lines, Fibonacci lines, etc. bring the price to a confluence point. So, what are some of the most effective confluence trading strategies that every trader should know about? ✳️ BASIC STRATEGIES FOR CONFLUENCE Here are some of the most valuable confluence strategies in trading that you can consider for your trading goals and objectives: ▶️ Market Structure (Support and Resistance) Market structure is a collective reference to support and resistance. These areas in the market act as walls, especially ceilings and floors, that try to prevent price swings up and down. ▶️ Areas of supply and demand Supply and demand areas are another useful example of trading. They represent a more prominent form of resistance and support and act as a solid barrier to price. In most cases, these are reversals or complete trend reversals. ▶️ Direction of the primary trend One of the most favorable variables for this type of trade is the direction of the main trend. ▶️ Price action patterns If you, as a Forex trader, know the different price action patterns, this will allow you to predict and assess the trend reversal. Keep in mind that this is a crucial variable in the confluence list in trading. ▶️ Candlestick Patterns When it comes to candlestick patterns, it is important to understand that they are important as patterns of price action or even more. If you understand what price is doing and the fundamental philosophy behind the various candlesticks, you can gain an advantage over the market. Thus, this is one of the basic methods of the confluence trading strategy. ▶️ Trend Lines The trend line and moving averages are also defined as "market structure." The reason for adding market structures to the list is the same as for adding trend lines and/or moving averages. Remember, the main reason for all of this is the underlying market structures, which are horizontal. However, they can also be diagonal in the form of a trend line or dynamic in the form of a moving average. ▶️ Price reversal zones with Fibonacci retracement Fibonacci retracement zones represent the most important confluence of trading variables that traders should consider, especially when the trading structure has 61.8%, 50%, and 38.2% levels. ▶️ Price rejection A price rejection indicates that the market is having difficulty breaking through one particular structure. In this case, the price is likely to rebound from the structure, while all price rejection candlesticks come in different shapes. ▶️ Indicators Nevertheless, the list of confluence trading strategies is complemented by forex indicators, which are generalized graphical representations of past candle data. Traders mostly use these indicators to help themselves understand exactly what the market is doing. ✳️ How can you use confluence to place a good trade in forex? Suppose you use price patterns formed by candles on your chart, and then you see a pattern that is a buy signal. You may have found that pattern confirmation and confluence may help you be right 70% of the time. Also, if you have tested and found that Fibonacci retracement levels can help you in the right context, you can expect the following. If your price pattern signals to buy and coincides with a Fibonacci level, this is a great example of an "A" trade. All you can see are price patterns. You only overlay an indicator when you want to check for the right context around a price pattern. If you notice that the pullback level confluences with the pivot point you have been following, keep in mind that this is another form of confluence and that there are numerous other examples of confluences that result in great forex trades. ✳️ Some examples: USD/CHF 1H AUD/JPY 4H UKOIL D NZD/JPY 4H GBP/AUD 4H EUR/NZD 4H
Education
by DeGRAM
6
HOW TO INCREASE TRADING EDGETrading in the financial markets is a highly competitive and ever-changing landscape, where the difference between success and failure can be razor-thin. To succeed as a trader, you need to have a trading edge, which is essentially an advantage that gives you a higher probability of success in the markets. In this post, we will discuss three ways to increase your trading edge. ✳️ Define Your Trading Strategy If you want to up your trading game, there are a few things you can do to improve your approach. First off, make sure you take the time to define your trading strategy. This means getting a clear understanding of the markets you'll be trading in, the timeframes you'll be working with, and the trading styles you'll be using. By doing this, you can focus on the markets that work best for your approach and avoid making rash trades based on emotions or incomplete information. But that's not all. Having a solid trading strategy is just one part of the equation. You also need to have a solid risk management plan in place to help you manage your risk and protect your capital. This can include setting stop-loss orders to limit your downside, keeping tabs on your trades to catch any potential issues early, and adjusting your position size based on market volatility to stay on top of market movements. There are also some other things you can do to give your trading edge a boost. For example, doing some in-depth market research can help you stay up-to-date on the latest trends and developments. You could also invest in some advanced trading tools and software to help you make better decisions. And don't forget about tapping into the knowledge of other traders and industry experts by networking, attending trading seminars or workshops, or getting some guidance from a professional trading coach or mentor. In the end, there are loads of ways you can improve your trading edge. By taking a comprehensive approach that includes strategy, risk management, research, and ongoing learning and development, you can set yourself up for long-term success in the markets. ✳️ Stay Informed and Educated The second way to increase your trading edge is to stay informed and educated about the markets. You need to have a deep understanding of the factors that affect the markets you trade, such as economic data, geopolitical events, and market sentiment. Keeping up to date with financial news and events will help you to make informed trading decisions and adjust your strategy accordingly. Moreover, you need to invest in your education and continuously improve your trading skills. Read trading books, and follow trading blogs and maybe forums. By doing so, you will learn from experienced traders, gain insights into market trends, and develop new trading strategies. ✳️ Keep a Trading Journal There are several ways you can improve your trading edge, and one of the most effective is to keep a trading journal. By maintaining a record of your trades, including the reasons for entering and exiting each trade, the market conditions at the time, and the outcome of each trade, you can gain valuable insights into your trading patterns and behavior. In addition to helping you identify patterns and learn from your mistakes; a trading journal can also help you develop discipline and consistency in your trading. By reviewing your journal on a regular basis, you can identify areas where you need to improve and adjust your strategy accordingly, ultimately leading to better trading results. But the benefits of a trading journal don't stop there. By keeping a detailed record of your trades, you can also track your progress over time and monitor your overall performance. This can be especially helpful when evaluating the effectiveness of a new strategy or approach to trading. In short, if you're serious about improving your trading edge, keeping a trading journal is a must. It's a simple yet powerful tool that can help you gain a deeper understanding of your trading habits and ultimately make better, more informed trading decisions. ✅ Conclusion To succeed as a trader, you need to have a trading edge, which is essentially an advantage that gives you a higher probability of success in the markets. In this post, we have discussed three ways to increase your trading edge. By defining your trading strategy, staying informed and educated about the markets, and keeping a trading journal, you can improve your chances of success in the financial markets. Remember, trading is a journey, and the key to success is to keep learning, adapting, and improving your skills.
Education
by DeGRAM
4
HOW WILL AI AFFECT FINANCIAL MARKETS?Artificial Intelligence (AI) is revolutionizing the financial markets, with its algorithms and automated systems allowing for faster and more accurate trading decisions. AI technology has already seen success in stock market trading, but it is now being used to analyze data from all areas of finance, including banking and investments. In this article, we will explore the advantages and challenges posed by AI-based trading systems, as well as potential opportunities for AI in the future of financial markets. Finally, we will provide guidance on how to prepare for the impact of AI on financial markets. 1. Understanding AI and its Impact on the Financial Market Artificial Intelligence (AI) is an advanced technology that has been used in a variety of industries to automate tasks and make decisions. In the financial markets, AI can be used to analyze large amounts of data quickly and accurately. It can recognize patterns, identify trends, and even predict outcomes in order to generate trading signals for investors. The potential implications of AI in the financial markets are vast. AI-based systems can be used to streamline trading processes, reduce risk, and increase profitability. However, there are also drawbacks associated with using AI in finance that must be considered. For example, AI systems may lack the human intuition needed to make sound decisions during volatile market conditions or when dealing with complex security types. AI-based systems have already demonstrated their ability to recognize certain trends and patterns in financial data. For instance, AI has been used successfully by traders to detect price movements before they occur and capitalize on them accordingly. Similarly, these systems can also identify correlations between different asset classes or sectors over time, allowing investors to diversify their portfolios more efficiently. Finally, there are a number of examples of successful applications of AI in finance already taking place around the world. Hedge funds have adopted machine learning algorithms for portfolio optimization; banks have leveraged natural language processing (NLP) technologies for customer service; and stock exchanges have implemented automated surveillance solutions for fraud detection. All of these examples demonstrate how powerful AI can be when it comes to making decisions within the financial markets. 2. Advantages of AI in Trading AI has the potential to revolutionize how trading is conducted in financial markets. By leveraging the power of AI, traders can gain an edge in the markets and improve their chances of success. Here are some of the main advantages of using AI in trading: 1. Quick and Accurate Analysis: AI-based systems are capable of quickly analyzing large amounts of data and providing accurate market insights. This helps traders make faster, more informed decisions about when to buy or sell a particular asset. It also reduces the risk associated with manual analysis, as there is less chance for human error to enter into decision making processes. 2. Identifying Profitable Opportunities: AI-based systems are able to identify profitable opportunities that may otherwise be overlooked by manual analysis. This allows traders to capitalize on positive trends and maximize returns from their investments. 3. Identifying Risks: AI-based systems can also help identify risks associated with certain trades or investments, allowing traders to mitigate these risks before acting on them. This helps reduce losses and improves overall profitability for investors and traders alike. 4. Automated Decision Making: AI-based systems can automate certain aspects of trading decisions, eliminating the need for manual input or assistance from a human trader/investor. This reduces errors associated with manual decision making processes, while increasing efficiency and accuracy when it comes time to execute trades or invest in assets. 5. Lower Overall Costs: Finally, using an AI-based system helps reduce overall costs associated with trading due to its ability to automate certain processes and eliminate errors associated with manual decision making processes. This can help improve profitability for investors/traders over time by reducing expenses related to trading activities such as commissions, fees, etcetera 3. Future Opportunities for AI in Financial Markets The potential of Artificial Intelligence (AI) in the financial markets is immense. It has the power to revolutionize how traders and investors make decisions, identify new opportunities, and reduce risk. AI-based systems are able to automate processes and improve accuracy in decision making - providing a competitive advantage to those who utilize it. Additionally, algorithmic trading can give an extra edge by increasing efficiency when predicting market trends and stock prices. Synthetic assets are another way that AI is being employed in the financial sector. These products can provide investors with exposure to investments not typically offered on traditional markets or products. Furthermore, AI helps organizations create effective risk management strategies by recognizing potential risks quickly and offering guidance on how to prevent them from occurring. AI has already been utilized by some of the world's largest banks as a way to gain insight into the complexities of financial markets; giving businesses access to innovative investment strategies and new growth prospects within their organization. As this technology develops further, now is the perfect time for corporate entities to prepare for its impact on their operations so they can take full advantage of its many advantages when they arise. In summary, AI offers a great opportunity for traders and investors alike in terms of achieving higher returns while minimizing losses through improved decision making processes, enhanced analysis effectiveness, and more precise predictions about stock prices and market trends. With its rapid evolution continuing apace, it’s essential for companies operating in the financial industry to start preparing now for what lies ahead so they can capitalize on all that this powerful technology has to offer them in future years! 4. Challenges Faced by AI in Financial Markets AI is a powerful tool for understanding and predicting financial markets, but it does come with certain challenges that must be addressed in order for it to become a viable tool. Below, we will explore the five main challenges facing AI when applied to financial markets. Developing Reliable Algorithms: Developing reliable algorithms is essential for successful AI trading systems. It is important to ensure that investors are not exposed to unnecessary risks due to inaccurate predictions or unreliable models. In order to minimise such risks, developers need to carefully tweak existing AI algorithms and develop new ones that can accurately predict market outcomes. This requires complex mathematical models as well as an in-depth understanding of the data being analyzed. Ensuring System Security: Financial markets involve sensitive information which needs to be kept secure at all times. As such, security should be one of the top priorities for any organization utilizing AI in finance. Strong passwords and authentication protocols should be implemented and regularly tested, while any vulnerabilities should be actively monitored and patched immediately. Additionally, organizations should use encryption techniques such as Secure Socket Layer (SSL) or Transport Layer Security (TLS) whenever possible when transmitting or storing data on their servers or networks. Predicting Ethical Implications: The ethical implications of using AI in finance also need to be considered before integrating these technologies into existing systems and processes. This includes analyzing how decisions made by these systems could affect individuals or groups of people – both positively and negatively – as well as exploring potential legal ramifications of using AI-based trading systems. Organizations must consider these issues carefully before deploying any new technology in their operations and ensure they have the necessary safeguards in place if needed. Responding To Unstructured Data: Another challenge associated with using AI in finance is its ability to handle unstructured data accurately in real-time. Unstructured data can come from sources such as news stories, social media posts, customer feedback surveys etc., all of which can offer valuable insights into current market trends and conditions that may not otherwise be apparent from structured numerical data alone. As such, developing algorithms which can effectively interpret this type of data is an important area of research for financial institutions looking to utilize the power of AI in their operations. Exploring Long-Term Implications: Finally, organizations must consider the long-term implications of utilizing AI technologies when making decisions related to their financial operations. This includes considering whether there will be any unintended consequences associated with relying too heavily on automated decision making processes; whether there are sufficient safeguards against manipulation by malicious actors; and whether there are strategies in place which enable companies to remain competitive over time without sacrificing customer privacy or other ethical considerations.. Ultimately, organizations need to think carefully about how they integrate AI into their existing infrastructure before taking action so they can make informed decisions about how best utilize this technology going forward 5. How to Prepare for the Impact of AI on Financial Markets As AI continues to gain prominence in financial markets, companies must be proactive in understanding the risks and benefits of incorporating it into their trading strategies. To get ready for the impact of AI on financial markets, a strategic approach is necessary that includes comprehending how regulatory bodies interact with this technology, identifying potential partners who can help navigate its complexities, and remaining aware of advancements with AI. Here are several tips to prepare: 1. Assess Risks & Benefits: Investigate current trends in AI to detect both possibilities and drawbacks. Additionally, familiarize yourself with rules or laws related to using AI in finance industries so you can ensure following regulations while still gaining from its benefits. 2. Design Strategies: Develop tactics that maximize advantages while minimizing risks. This may include automating processes or creating algorithms that enable you to recognize opportunities quickly and make wise decisions faster than before. Consider partnering up with experts who understand integrating AI into existing infrastructure and procedures. 3. Stay Updated: Companies running finance businesses must be cognizant of new technologies like artificial intelligence so they remain competitive without compromising customer privacy or other ethical standards--this entails subscribing to industry news sources, attending conferences such as FinTech Connect Live!, reading industry blogs such as FintechToday or TechCrunch’s Fintech section among other options! 4. Analyze Regulatory Bodies: Organizations operating within the finance sector should have an idea on how regulatory bodies view machine learning applications when it comes to making decisions within the organization--this data will help them stay compliant without sacrificing customer confidentiality or other moral considerations by providing guidance on acceptable usage policies or suggesting alternate options if one is disapproved by a certain body plus researching various jurisdictions' regulations depending where services need be offered globally.. 5. Find Partnerships: Experienced partners may be essential when introducing artificial intelligence into your operations--not only they provide technical support but also share advice on merging machine learning applications into existing infrastructure and processes as well as helping produce suitable usage policies meeting all applicable regulation standards across global locations.. Cooperating allows leveraging resources more efficiently plus benefiting from shared experiences thus increasing success chances! By taking these steps, companies operating within financial sectors can benefit from any opportunities presented by artificial intelligence while avoiding associated risks—ensuring their compliance is met without endangering customer confidentiality or other ethical issues along the way! Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
SP:SPXEducation
by Lingrid
14
DEVELOPING A CONFIDENT TRADING MINDSET✳️ One of the key ingredients to successful trading is confidence, but many people lack it. Why? I'll be talking about this in this post. Having a plan is the fundamental cornerstone of confidence. Fear and hesitation are caused when you are unsure about what to do. I'm surprised by how many traders just work without a defined strategy. Your trading plan should be written down as the first phase. It should be as simple as, "If A occurs, I will do B; if B does not occur, I will do C." You must eliminate every assumption. This is the strength of pre-established rules, and after they have been tested and proven, they will support your future confidence and discipline. ✳️ Backtesting and optimization of the system You won't have any confidence moving forward if you haven't tested your plan, established its historical viability, and optimized it to the best of your ability using the data. This is because you need to know what you're doing and what to anticipate. Your confidence will be built on the basis of a strategy's study, testing, and optimization steps. By missing this step, you are demonstrating a lack of dedication to your trading business and, thus, are not treating it like a business. Starting with the company comparison. Would you launch a company and sell a random product before spending the time and effort to demonstrate its viability? Obviously not. And it needs to be similar to trading. If you don't test, you simply don't want it badly enough, and I encourage you to stop right away. There is no fast way to success; you must be prepared to put in the time to test, develop, and comprehend all of the system's elements. ✳️ The source of confidence is the outcome Results provide extra confidence, so you must see your strategy in action before you can follow it. As a result, you must be able to stick to your method until you have a large enough sample size to notice the benefits. You must proceed gently and progressively raise your exposure as your method establishes itself. This is one way to build confidence, but how will you get there if you give up after a couple of losses, particularly big losses, all because you got into live trading too much early on? So, this is an important one thing: you must let the strategy show you that it works. As the method works, gradually increase the exposure. You want to start live trading with the smallest amount affordable. My advice is to increase up in increments of 0.05% 0.10% 0.25% 0.5% 0.7% every time the technique produces X- Amount, for example, 10%, and so on until you find the risk that you are most comfortable with trading. Remember that the ultimate amount should be one that you can afford to lose no matter how much you lost. You should be able to get a good night's sleep. Confidence is gained gradually through testing and allowing the system to give proof, as well as gradually increasing exposure to your acceptable risk limit. Taking the right risk that will not cause you feelings of anxiety is critical to maintaining your confidence. If you lose 50% of the amount you have in a single losing trade, you're unlikely to be very confident, and if you're diving into trading with full risk, it's an indication of a lack of emotional control and an attempt to speed up the process. You must ask yourself why. And how badly do you want to be a trader? Because failing to complete the homework indicates a lack of dedication. ✳️ Evidence gives you confidence in trading Starting into trading with no past performance or live data is one of the main reasons most people lack confidence. However, if you go in with a well-researched and tested plan, you will have something to refer to in your live trade. Are you experiencing a drawdown? So, what does my data indicate? Oh, that's completely typical. Okay, keep going. Instead of rejecting the plan or altering the system, as 95% of people do. Instead, you are now confidently pushing forward because you have the data and statistics to back you up. Once you have the statistics, you will have confidence, and when you are going through a difficult period, such as a drawdown, you will only have to ask yourself these two questions. ▶️ Am I sticking to the trading plan? ▶️ Am I controlling my risk? If you can respond yes to both questions, you are safe. Continue your trading journey.
Education
by DeGRAM
5
What influences the price of OIL?In today’s volatile global market, the price of oil can be affected by a variety of factors. From wars and international trade agreements to financial market dynamics and global economic outlook, understanding what influences the price of oil is essential for both governments and individuals alike. In this post, we will look at how geopolitical factors, financial market dynamics, the global economy, oil producers’ strategies, and weather events all play a role in determining the cost of one of our most valuable resources. By examining each factor in turn, we can gain insight into why prices fluctuate so drastically over time and how to respond appropriately when they do. Read on to learn more about what influences the price of oil. Geopolitical Factors: Geopolitical factors have a major impact on oil prices, as the global demand for oil is heavily influenced by political events and decisions. The instability of certain regions and countries can reduce their production levels, leading to a rise in prices. International trade agreements can also affect oil prices: the recent US-China trade war has had a significant impact on oil markets, with supply chain disruptions causing uncertainty and increased volatility. The presence or absence of certain governments in oil-producing nations can also influence prices dramatically. For example, the toppling of Muammar Gaddafi's regime in Libya caused a sharp spike in global crude prices due to its immediate effect on oil production levels. Similarly, political unrest in Iraq and other Middle Eastern countries have resulted in supply disruptions that have pushed up prices. Lastly, global political events such as wars, coups, and other acts of aggression can disrupt the production of oil and drive up its price. For instance, when the US imposed sanctions on Iran following its nuclear program activities, it caused an immediate jump in crude prices due to fears about potential supply disruptions from Iran’s fields. In addition to these direct effects on production and supply levels, geopolitical events often lead to market speculation which further drives up prices even if there is no actual disruption to supplies. Supply and Demand The balance between global supply and demand for crude oil plays a key role in determining the price of oil. Changes in global supply can cause shifts in prices, such as when OPEC (Organization of the Petroleum Exporting Countries) countries agree to reduce production, or natural disasters affect output from offshore rigs or refineries. On the other hand, changes in global demand can also have an impact on oil prices. For example, economic booms can cause an increase in demand for fuel, while recessions tend to weaken it. When demand is high and supply is low, then oil prices tend to be higher as customers are willing to pay more for limited resources. Conversely when supplies are plentiful and demand is low, then prices decrease as suppliers compete with each other by offering lower rates. The interplay between these two factors is what drives the price of oil. It's important to note that both short-term and long-term forces influence the price of oil; geopolitical events may create temporary disruption but underlying trends are always at play too. For instance, if there's a sudden increase in production due to new technologies used by producers or a drop in consumption due to changing energy needs, then this could result in long-term changes to the price of crude oil. In addition to this kind of market fundamentals affecting the cost of oil on a macro level, some countries may choose to manipulate their own domestic supplies which can have significant implications on regional markets as well as global ones. Some governments even use subsidies or taxes on petroleum products as part of their fiscal policy strategies – practices which can help cushion consumers against fluctuations in international markets but could also lead to imbalances over time if left unchecked. Overall, understanding how supply and demand dynamics interact with one another helps explain why prices may go up or down depending on current events and market conditions – knowledge which provides valuable insight into how companies should approach pricing strategies for their goods and services around energy costs. Economic Sanctions Economic sanctions are a strategic tool wielded by governments to implement international law or force compliance. This approach can take the form of trade restrictions, investment prohibitions, financial transaction limitations, travel bans and technological access constraints. The application of economic sanctions can have a major effect on global oil prices - as evidenced in 2018 when US-imposed sanctions caused Iranian exports to plunge, with an ensuing surge in oil prices across the world. Similarly, US-driven sanctions against Venezuela had a similar effect on pricing the following year. It is not only reductions in production that influence price movement; sentiment can also play a role. Sanctions against Iran saw market sentiment affected, resulting in increased volatility and more expensive oil for consumers. If an embargo were imposed on a major producer such as Saudi Arabia or Russia there could be widespread disruption to supplies and increased pricing for everyone involved. Even if production isn't hit directly by particular sanctions then long term trends may still be affected: An embargo on Saudi Arabia would likely lead to reduced crude inventories over time as production levels adjust accordingly causing higher prices across the board down the line. This could stimulate demand for renewable energy sources like solar or wind power which would decrease global demand for fossil fuels while bringing down crude costs overall. Overall it is clear that economic sanctions can have both short term and long lasting effects on global oil prices - depending upon their scope, duration and severity. Therefore businesses tied up with energy trading or others parts of the industry should stay vigilant regarding these types of events so they are prepared for any disruptions that may arise from them ahead of time. Political Unrest Political turmoil can have a significant influence on the cost of oil, producing instability in the market and creating price volatility. Elections, uprisings, strikes or civil wars can cause disruptions to supply chains, resulting in higher costs for purchasers. Additionally, alterations to United States foreign policy and government regulations can also affect the oil industry. For instance, when the US exited the Iran nuclear deal in 2018 and placed sanctions on Iranian oil exports, international petroleum prices rose significantly. Oil is traded globally so unrest in one country may cause an impact on oil costs around the world. In 2019, demonstrations against fuel tax hikes precipitated a global crude oil increase due to worries about supply interruptions from Total SA's leading refinery in France. Similarly, Yemen’s civil war has caused upheaval across the globe - with Saudi Arabia stopping most of its crude shipments via the Red Sea due to safety issues connected to Houthi rebels. Political turbulence could also lead to a decrease in investment into energy infrastructure projects such as pipelines or refineries - meaning that even if there is demand for petroleum products they might not reach customers because of logistics issues. This could result in shortages of certain goods and consequently greater fees for buyers. Overall it is evident that political unrest has wide-reaching consequences for the price of oil both locally and internationally. It is crucial for businesses working within this sector to keep up with current events so that they are better prepared for any potential disturbance or cost variations that may occur as a result of political instability around the world. Financial Market Dynamics: Financial markets play an important role in influencing the price of oil. Large institutional investors, such as pension funds and hedge funds, often make decisions based on short-term trends in the energy sector. When these investors buy or sell futures contracts for oil, it can affect the supply and demand balance of crude oil and thus its price. The futures market is another factor that affects the price of oil. Futures traders purchase contracts to buy or sell oil at a later date, which impacts crude supply and demand levels. Speculation on OPEC production cuts can also have an effect on oil prices, as can political unrest or economic sanctions against certain countries. Weather and natural disasters are another important factor to consider when discussing financial market dynamics. In some cases, extreme weather conditions can lead to disruptions in production, supply chain issues, or increased demand due to cold snaps or heatwaves. Natural disasters such as hurricanes or floods can also cause major disruption to infrastructure and temporarily reduce supplies of certain commodities including crude oil. Finally, global economic outlooks may influence both investor sentiment and consumer spending patterns which could lead to changes in demand levels for commodities like oil over time. As such it is important for businesses in the energy trading industry to stay up-to-date with global developments so they can make informed decisions when it comes to pricing strategies related to energy costs. Hedge Funds and Speculators Hedge funds and speculators are influential participants in the energy market. They are responsible for buying and selling oil contracts as well as futures to take advantage of price fluctuations. By doing so, they can make profits from their trades but also assume risk if markets turn against them. Moreover, their activities may be affected by external developments such as geopolitical events or economic sanctions imposed by governments. Therefore, it is important for investors to keep a close eye on these factors in order to make informed decisions about pricing strategies for oil-related goods and services. Futures Markets Futures markets are an important factor in influencing the price of oil, as they can provide a platform for buyers and sellers to make profits or protect against price fluctuations. A futures market is a type of financial market that enables participants to buy and sell commodities, such as oil, at predetermined prices for delivery on a future date. In the energy sector, large institutional investors and hedge funds use futures markets to speculate on the direction of oil prices. By buying contracts today with an expectation that prices will rise in the future, these investors can increase their profits from rising oil prices. On the other hand, hedgers use futures markets to protect themselves from unexpected drops in price by locking in current prices for delivery at a later date. Speculative activity in futures markets can lead to large swings in the price of oil because participants have greater influence on pricing than actual demand and supply. This means that speculation can cause oil prices to move independently of actual supply shortages or excesses. Regulatory bodies also use futures markets to set limits on trading and production levels, which impacts prices and volatility levels. For businesses involved in energy trading it is important to keep track of developments in futures markets as these movements can have significant impacts on pricing strategies. Businesses should also be aware of speculation by large institutional investors who are looking to profit from changes in oil prices over time. Understanding how these activities are impacting market sentiment will help businesses make informed decisions about pricing strategies related to energy costs. Global Economy: The global economy is a major factor in the fluctuating price of oil. Investor confidence, currency values, GDP growth and trade disruptions all have an impact on pricing. Additionally, as alternative energy sources become more accessible and affordable they can contribute to a decrease in demand for traditional fossil fuels such as oil. Companies involved in energy trading must stay informed of these developments to ensure their goods and services related to energy costs remain competitively priced. Currency Values The value of a country’s currency can have a direct impact on the price of oil, with fluctuations in exchange rates influencing import costs and buying power. A stronger currency will enable an importing nation to buy more oil for less money, whereas a weaker currency will require more of the local currency to purchase the same amount of oil from other countries. Currency devaluation can also affect the cost of imported goods, as it reduces the buying power of a nation’s citizens and businesses. This means that each dollar or euro is worth less on the global market and makes it more expensive to purchase foreign-made goods, including oil. If countries devalue their currencies, they may have to pay higher prices for imports, which could cause oil prices to rise as well. On the other hand, when a country’s currency appreciates in value, it can help reduce import costs and increase buying power. This makes imported goods cheaper for consumers and businesses alike, which could lead to lower prices for oil in those countries. In addition, appreciation of a nation’s currency can make its exports more attractive to foreign buyers who can now obtain them at relatively lower prices than before. This could help drive up demand for domestically produced crude oil and result in increased revenues for exporting nations. When considering how currency values can influence the price of oil, it is important to remember that these effects are often short-term in nature and only apply when purchasing from abroad. Furthermore, changes in exchange rates are not necessarily an indication that domestic production costs have changed significantly - rather they reflect shifts in market sentiment towards one particular currency compared with all others around the world. Therefore companies should remain aware of current exchange rate trends while also monitoring their own costs over time so they are able to adjust pricing strategies accordingly depending on changing market conditions Oil is now the biggest staple on the world stage. Its importance is difficult to overestimate. The entire economy is based on indicators related to oil. But time passes and the economy changes its face and new favorites enter the arena. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
TVC:UKOILEducation
by Lingrid
10
Price Action: How to Trade ReversalsTrading on key levels is one of the basic principles of Price Action trading in the financial markets. There are two main ways to trade on levels: on the breakout and on the reversal. How to distinguish a correct signal to enter the market from a false one, how to set stop-losses and take-profits and what other nuances should be considered when trading in this style? 🔷 Specifics of trading from levels Key price levels are present in any financial market, including Forex. Often, these horizontal lines act as either support or resistance to further price movement, which is why traders are so interested in them. These key lines are formed due to the large accumulation of buy and sell orders. When the price reaches such a congestion, the current strength of the trend, as a rule, is not enough to close all these orders and move the price further. Therefore, if the movement does not get support, the price will turn in the opposite direction. If there are new volumes that are able to break through a great accumulation of orders, it is likely to happen that the trend strength is enough for the further movement, i.e. a strong breakout level will occur. Of course, events do not always develop only according to these scenarios, but these are the two most likely variants. There are big players at the market whose orders influence the price due to big volumes. Because of this, experienced traders only need to correctly identify such levels and signals that the price is most likely to reverse. The classic level is an area based on the opening or closing candlestick prices (not the high/low), which the chart has already touched before. That is, if the chart, having risen to a certain level, rolled back and then approached that level again, the price value at the extreme point will be that level. 🔷 Entering the market The main condition for entering the trade at the reversal from the level, it is necessary to make sure that it is exactly the reversal. If the price is just approaching the key level, it is too early to open a trade. The trader must form a reversal pattern of Price Action in order to be sure that the position opening is correct. It may be the following patterns: 1. A Pinbar (a candlestick with a long shadow, level breakout and a small body); 2. Engulfing (the next candlestick is directed in the opposite direction, its body and shadows are bigger than those of the previous candlestick); 3. Tweezer top/bottom pattern (alternation of bullish and bearish candlesticks with the same lows and highs); Once the pattern is formed, a trade can be opened. For example, the screenshot above shows a pin bar with a large upper shadow breaking through the resistance level, then rolls back down and the candle closes in bearish status. At the opening of the next candle you can enter the sell trade. 🔷 Setting Stop Losses and Take Profits Stop Loss should be set in such a way that a random movement against the direction of the trade, such as a level retest with a false breakout, does not knock the trader out of the market. It is impossible to set a specific value (e.g. 10 pips) for this trading style, the stop should be set based on the chart and "tails" of the candles in the visible proximity. As for take profit, there are no strict rules for its setting. You can use the standard technique, multiplying the value of the stop-loss by 3 or 4 and set a TP on the resulting distance. This is correct from the money management point of view. However, in each situation there may be conditions for greater profits than the standard stop-loss. For example, you can focus on the next key level in the direction of the trade. However, unlike a stop, a TP should be set so that the price is guaranteed to hit it when approaching the key level. 🔷 Important points 1. It is worth paying attention to the strength of the level and the likelihood that it will break or hold. There is a common misconception that the more price reversals from a level, the more likely it is that the level will remain intact. In fact, if the price keeps testing a certain level over and over again without going into the opposite trend, it means that it is likely to be broken. In practice this means that it is better to skip the third and the next attempts of a level bounce, trading on the second one only. 2. One should not draw a distinction between a classic reversal from a level and a retest of the level after it has been broken, when, for example, support becomes resistance. Such a retest is an even stronger signal than a simple reversal. The probability of a successful trade is even higher if we obtain a clear signal for reversal after an unsuccessful attempt to break through the level in the opposite direction. 3. The probability of a reversal or breakout of the level can be assessed based upon the movement towards the key level. If the previous candlesticks were small and differently directed, but the price has still reached the level, a breakout is quite probable. If the trend was strong and confident and the level was reached in just a few candles, but was not broken through, most likely, it won't be broken through. This phenomenon can be explained by the fact that market makers are trying to mislead small traders, playing on visual triggers. Seeing a strong movement, the trader unconsciously waits for a breakout and as a result suffers losses giving his money to the market maker. According to this logic, the conclusion can be made that if a big candle has reached a level, stopped in it, and closed without breaking through it, a breakout will probably never happen. But if a powerful candle has broken through the level, passed some more points (or tens of points), and closed on the other side, the breakout can be considered to have taken place. 4. When opening a trade, attention should be paid to the extrems of the nearest candlesticks. If the maximums (when testing the resistance) are approximately equal, or differ by 1-2 points, this supports the signal for the reversal and the pullback. The same is true for candlestick minimums when testing support. 🔵 Conclusion All other things being equal, a reversal of the level is more probable than its breakthrough. Such statistics gives a trader the reason to count on more signals and following the strategy rules will ensure profitable trading. However, one should keep in mind that trading from levels is a tactic that requires a trader's experience to be able to make decisions according to the situation. Despite the presence of rules, there is no clear algorithm that would regulate the actions in any situation. And due to this, a trader who uses the analysis of levels in his trading system, can count on the success of his trade. Most trading systems, allowing to open trades on an automatic basis, very quickly lose their validity, as well as trading robots based on these algorithms. The market is constantly changing, and only the ability to adjust to these changes and make decisions depending on the situation provides professional traders with a stable and high income.
Education
by DeGRAM
42
How Much Time Do You Need For Trading?Hello trader! How much time do you usually need to spend studying charts and watching the currency markets? I'm sure many of you at the beginning of your trading career literally stuck to your computer screens for days on end, obsessing over charts, drinking large amounts of coffee and constantly placing orders throughout the day, but is this the only, realistic approach we have? In this post, I will show you an alternative way to track your charts, using various methods and tools to develop a much more nimble, calm and productive approach to trading. I will show you that you shouldn't be stuck at your computer screens all day, while still using your time rationally. ✳️ Timeframes and Currency Pairs The timeframes that you use when trading determine the frequency with which you check the charts. So, it goes without saying that if you trade on a 5-minute chart, you have to check the charts much more often than if you trade on a daily timeframe. Your workload is also affected by the number of currency pairs you trade, i.e. the more currency pairs you will use to trade, the more charts you have to analyze. This does not mean that you cannot trade on 20 currency pairs or more, it simply means that you have to have a ready-made system in which you can monitor each currency pair effectively. Say, when trading on M15 it is difficult to keep track of 20 currency pairs, but when you work on D1 it is quite convenient. ✳️ Analysis Over time, you will develop your own expertise and confidence in being able to analyze markets consistently and quickly. Knowing where and when to "hunt" for a trade and when to properly use lower timeframes will help you save a tremendous amount of time for looking at charts. Having a clear idea of where you will look for price signals to open positions will allow you to plan ahead and choose your desired positions, and will prevent you from having to constantly monitor the markets. On the other hand, traders who monitor the markets carefully and for long uninterrupted periods of time can fall prey to opening positions that they probably tend to find unreasonable, this may be due to the fact that traders feel pressure: because they HAVE to open a position to justify their time sitting behind the monitor. So, you need to know where and when to look for trading signals. For example, if you trade the cross of the 200th Average, of course, if the price is very far from this average, you understand that the next ten candles do not make sense to look into the terminal. And you do not waste your time and attention. ✳️ Price Alerts and Pending Orders Price alerts play a great role in saving the time needed for analyzing charts. The way they work is very simple: as soon as you have analysed every currency pair you wish to trade, you can set up an alert signal at a price level you think is good for opening a position in that particular pair. When the price reaches the desired level, a price alert is triggered and you are notified by email or text, after which you can check the pair for any price movement signals. Trading signals also play a role in position management: you can set alerts for stop loss level, entry level, profit taking, which means that you can leave your position and make changes to it only when the price reaches your targets. ✳️ Trading on the go Before the rise of smartphones and tablets, trading on the go was not an option, however, modern technology and communication tools make trading on the go very easy. The ability to open and close positions or reduce a stop loss wherever you are generally meaning that you don't have to stick to your computer screens to trade. As a result, this has led to traders being able to trade almost anywhere they like from now on. Getting all the latest information and staying up to date with current market movements, thanks to advances in technology and global access to the Internet, has freed traders from their screens and given them a degree of freedom that we all long for. Due to the fact that each broker offers its own application for trading, which you can download to your phone or tablet, trading has now become a fairly universal and accessible business, which can be engaged anywhere. ✳️ Have a trading routine If you treat trading like a real business, you'll find that an important and necessary issue is having a set routine and appropriate working hours, as well as understanding when to work and when to rest. It is very easy to get caught up in the markets and feel as if you have to monitor the charts 24/7 so that you don't miss a single trade. This is a dangerous habit to develop because getting too involved in the markets will burn you out and exhaust you very easily. If you find that the markets are starting to dictate your lifestyle (a classic example is when you stay up all night just to catch a good time to enter the market), then you've gotten too deep into trading. You should know when to turn off the trade, be able to turn off the charts, and get a good night's sleep. Be reasonable, set your own working hours and stick to them, even if trading is your main occupation, set aside a certain amount of time every day during which you would have worked in the markets and try to stick to it consistently. ✳️ Take a day off Once a week you should take a day off from trading. No reading on forums, no studying strategies, no browsing charts, no testing Expert Advisors. Nothing related to trading at all. The best thing would be to go to the nature, go for a walk in a strange place, read a fiction book, visit the theater, spend time with family or friends. Such "days of unloading" help our brain to rest, process the accumulated information and experience to work more productively in the future. ✳️ Do you spend too much time analyzing charts? The purpose of this post is to show you how flexible trading can be and that you don't have to be glued to your computer monitor working 24/7 to get results. Even if trading is your main occupation, it can be scheduled in parallel with your other activities. It shouldn't look like an all-or-nothing proposition, because the forex market allows us to choose when to trade, so you can appropriately structure your trading hours to suit your own needs. You can't get around the fact that you need to spend a tremendous amount of time constantly learning the aspects of forex trading in order to execute effective trading, but once you have accumulated the necessary skills and confidence in your own skills, you will actually need a much smaller amount of time needed to directly trade. Trading may even seem like something boring to you, but that's only because you just understand and accept what the markets really are, realizing that it's not a game, but just a business. The main goal that attract people to trading is the promise of financial freedom and an attractive lifestyle, but trading can have the opposite effect and can sometimes become an obsession that completely drains the trader. You must know when to work and when to play. Setting in place a set order/trading clock brings into your daily life the routines every trader needs to maintain a healthy and productive workload. Time is a very valuable commodity, in our modern lives the day is already filled to the brim with so many other commitments and activities, and managing it wisely is key to success. So, if you find yourself spending too much time on charts, there are things you can do to reduce your trading load, it will give you the freedom to step away from your screens. These include the following: 1. Using price alerts and pending orders, which are probably the biggest time-saving factor. 2. Focusing on higher timeframes while carefully using lower timeframes as well. 3. Having a fixed schedule of trading hours which you should stick to. 4. Using trading applications that allow you to stay connected when you are away from your computer. Applying these recommendations to trading will allow you to stay in contact with the markets without physically sitting in front of charts for days on end. What is the point of looking at charts if currency pair prices are not in a zone where you are not waiting for a signal? Why waste your time watching the price movements, if you are not going to trade any time soon anyway? Instead, let price do its thing, and on occasion enter the market in the area where you are waiting for a signal, that would be exactly the time when you should switch to the charts and hunt for pips. Remember, you are the main figure (not the markets!) and you are the one who keeps the trading procedure consistent and tight, be patient.
Education
by DeGRAM
6
PULLBACK TRADINGTrading on a pullback is one of the options for trading in Price Action patterns. Like trading on a breakout, this style implies the use of pending orders. Trading on a pullback is more popular than on a chart breakout. If Price Action signals are used correctly, it can bring more profit with less risks. 🔵 Characteristics of the strategy of trading on a pullback This strategy, as well as all other trading strategies based on Price Action, is considered universal and multicurrency, suitable for any asset and timeframe. However, it is recommended to trade on liquid currency pairs, such as EURUSD or GBPUSD on hourly or four-hour charts. The daily D1 is also suitable for trading. When trading on a pullback, traders place limit orders (as opposed to a breakout, where stop orders are used). 🔵 The principle of trading on a pullback and the algorithm of placing orders The basic idea of the strategy is that the price, before it goes in the necessary direction after the formation of the pattern, usually pulls back, and if you catch the moment trend continuation, you can enter the same trade on more favorable conditions, with a smaller stop-loss and larger take-profit. Trading on a pullback is performed as follows: 1. A Price Action pattern appears on the chart. This can be a pattern of engulfing, a doji candle on a trend reversal, etc.; 2. At the opening of the next candle, a Limit pending order is placed (to buy, if an uptrend is expected, and to sell, if a downtrend is in progress). The order is placed approximately in the middle of the signal candle; 3. Stop Loss is set a few points beyond the extremum of the signal candlestick (below the minimum if trading to buy, above the maximum if trading to sell); Take Profit is set at trader's discretion. As an alternative, you can multiply the value of a stop-loss by 3 or 4, or set the take profit at the next key level, so that the price is guaranteed to catch it when it reaches this level. 🔵 Example of pullback trading As an example, we will consider trading on a pullback on the hourly chart of the EURUSD in detail. As an alternative, we will also consider the variant of opening a breakout order in this situation and compare the results. Events have developed as follows: 1. After a bullish move, a bearish doji candle was formed, signaling at least a correction; 2. At the opening of the next candle a Sell Limit order was placed (in this case the order was opened at the market, since the price at that moment was at the level of the supposed pending order); 3. Stop Loss is set above the maximum of the signal candle, Take Profit - in the area of the nearest support level; 4. The stop loss ratio is approximately 1:2.5, which provides a positive mathematical expectation of the trade; 5. After 6 hours the deal closed in profit. In this case both trades would be profitable, but profit on breakout of the support level would be almost twice less, and the stop/stop profit ratio would be 1,5:1 not in favor of take profit, which is considered inappropriate from the money management viewpoint. 🔵 Additional details of pullback trading Despite the fact that, in the example above, trading on a pullback was more profitable than trading on a breakout, it cannot be argued that this style is absolutely better. There are drawbacks to trading on a pullback as well. Unlike trading on a breakout which can be applied to all possible Price Action patterns, limit trading is not possible in every situation. Due to this the number of signals and possible transactions is reduced, and therefore the potential profit will also be less. In spite of the fact that as a rule the take profit at breakthrough trading is less than at limit trading. As we have more trades during the same test period, trading on the breakout can bring more profit. For example, the screenshot above shows the trend continuation pattern of an inside bar. When trading on the breakout, a pending order is placed above the maximum of the parent bullish candle which opens after several hours and the trend goes upwards, bringing profit to the trader. There are no reasons for the limit trade in this situation. It is impossible to place a pending order in the middle of the inside bar, and there is no logical reason to place it in the middle of the mother candle. It happens that the signal not to open a trade on a pullback on the limit order does not work, even when there are all the conditions for it. For example, during the formation of an engulfing pattern on the screen above placing a limit order in the middle of this pattern was quite logical. However, the signal candle turned out to be too strong, the pullback movement has not reached the pending order placed and the trade was not opened. In the same situation when trading on the breakout the trade would have been opened on the next candle, and in a few hours the trader would have fixed the profit. 🔵 Conclusion Trading by Price Action on a pullback has both advantages and disadvantages. On the one hand, this style allows you to make more profits with less risk in the same situation, when trading on the pullback shows less attractive dynamics. On the other hand, not all price action patterns are suitable for this style, in addition even suitable signals sometimes do not work, leaving the trader without profit. The choice of trading style largely depends on the trader's temperament. The pullback method suits the patient and conservative traders who are willing to wait for the signal for days and even weeks. As a result, such waiting will be rewarded with high profits on each of trades. More aggressive traders would be better suited to trading on the breakout which allows them to enter the market more often compensating the small profit and probable losses with the number of profitable trades.
Education
by DeGRAM
13
The fastest area of wealth accumulation in the world-the forexAn investment field where one opportunity is enough to change one's destiny! A market that works miracles every day! Entering the new century, foreign exchange, an investment tool with infinite charm, is attracting the attention of more and more people. This market full of opportunities and challenges is changing our destiny all the time, so much so that it is loved by more and more people. Advantages of the foreign exchange market: 1.Low threshold for investment amount; 2.The investment period can be long or short, buy and sell as you go, and the liquidity is extremely high. 3.The highest return on investment, you can get more than several times the amount of investment funds. 4.The transaction procedures are quick and easy. You only need to enter the transaction procedures, which can be completed in a very short time. 5.Trading flexibility is high, and there are many profit opportunities in the dual-track of buying long and selling short. 6.The impact environment is relatively fair, the information channels are smooth, and it will not be operated by large companies. The principles of fairness, impartiality, and openness are guaranteed. There are many factors that affect it, and the relationship between supply and demand has a great impact. 7.The degree of risk is relatively high, but foreign exchange trading operations are flexible, mobile, rapid, and risks can be controlled and prevented. How to quickly accumulate wealth with small funds: 1. Survival first, development second. 2. Only do short-term intraday trading. 3. Operate no more than 5 times a day, and try not to place orders after the daily profit exceeds US 1,000. 4. Only 2-3 varieties are made every day. In the trading process, at the same time, establish that opportunities are available every day, and you need to maintain the concept of waiting patiently for opportunities, and overcome the impatience of eager to win; at the same time, make rational use of stop losses, establish the concept of safety in the bag, and turn floating profits into real profits in a timely manner.After trading, find the time period when you make the most profit every day, try to give full play to your advantages in this time period, and summarize your experience every day to continuously improve your tactics.
OANDA:XAUUSDEducation
by Short-term-king
WHAT ARE THE FIBONACCI LEVELS? 🔵 We are not going to focus on the Golden Ratio and the Fibonacci sequence in nature or around us. You can read about it in various books or on the Internet if you are interested. We will find out how these numbers can help in forex trading. Now, let's talk about Fibonacci retracement levels. Now let's get straight to the point. Fibonacci retracement levels look like this: 0.236, 0.382, 0.500, 0.618, 0.764 The Fibonacci extension levels are as follows: 0, 0.382, 0.618, 1.000, 1.382, 1.618 And these are the extension levels used in forex to set orders like "take profit". In other words, according to them, the price often reaches these levels, which should be taken into account in the analysis. Let us agree that Fibonacci levels are an instrument for trend analysis and are not suitable for consolidation. The point is that when the trend is upward, Similarly, for a down trend and support. We find the lower swing levels, then the upper swing levels, and draw a grid between them. 🔵 Fibonacci in a downward trend Let's act in the same way and draw the grid between the two candlestick patterns-swings, but downwards. The chart of EUR/USD, 4-hour timeframe. The assumption is that as the price rebounds upwards, it will hit one of the Fibonacci resistance levels, since the general trend is very strong downwards. Let's see what happened next. The pullback really came and the market slowed down below 0.382, an early hint of exhaustion of the bulls' forces. Finally, at 0.500 the bulls ran out of steam and the level worked as a resistance. And these two levels, 0.382 and 0.500, interact with each other. Their main purpose is as temporary support and resistance. We all know about the resistance and support, so do not expect the price to bounce from these levels. No. These are, first of all, the zones of trader's interest. Therefore, the price at these levels likes to consolidate into micro-channels before it moves on. As you well know, price can break both support and resistance. That means it will similarly break through Fibonacci levels. So, these levels are a guideline, but not an absolute guarantee of pullbacks and reversals. Sometimes levels are broken through, sometimes instead of 0.500 a bounce occurs from 0.618 and lots of other examples. Sometimes the price doesn't care about these levels. The price, as such, moves between levels, and some levels are more significant for it at a certain moment in time, and some are less significant for it. So, in using Fibonacci levels, you will benefit from all the tools in your arsenal that we already know about. The tools we use to filter inputs from support and resistance levels, whether it's Fibonacci or conventional. Say, oscillators with their divergences, price action patterns and more. In fact, let's combine Fibonacci levels with support and resistance. 🔵 Fibonacci retracement with support and resistance levels We have already learned that Fibonacci retracement levels are quite subjective. Like everything in technical analysis, we shouldn't just use them. In this case, we need a level enhancer. This is when ordinary support or resistance is well combined with Fibonacci retracement levels. An uptrend, so many green candles. it's all very nice, but where to enter? Especially since the price clearly went with low volatility. We use the Fibo and let's add a mirror level, where resistance has become support. It can be seen very well. Notice how it combines with the 0.5 level. Now we have to wait for the price to interact with this level. As you can see, the price really respected that level, it worked as support and did not let the price go further up. As you understand, support and resistance are, first of all, the zones of interest. The area that triggers the maximum reaction of the price. Not the least of the reasons is that everyone uses these levels. And, consequently, the more institutional traders apply Fibonacci levels, the more these levels influence price behavior. There is a direct correlation. This is why simple support and resistance levels also work. Of course, there's no guarantee that these levels will bounce the price, but we don't need guarantees, because we don't know that they don't exist in trading, do we? We know very well. But here is the zone where the price should be watched closely Fibonacci levels are quite suitable for that. 🔵 Fibonacci levels and trendlines Another way to apply Fibonacci levels is with another basic technical analysis tool. And what tool comes after support and resistance? That's right trendlines. Many traders use Fibonacci retracement levels exactly in an uptrend or downtrend, so combining them with trendlines makes confluence. Let's take a look at the next chart. We should take a trade, if such a situation arises, let's say, when the price touches the trendline. However, let's add Fibonacci retracement levels and see what happens. And we will get a more accurate entry zone. Let's use two swing values and watch what happens. We are especially interested in the levels of 0.500 and 0.618. Here we have it, the level 0.618 (61.8%) worked out as support, and it is right on the trendline. It's time to enter to further increase the trend. Two simple tools sometimes give equally simple results. Similarly, you can use the Fibonacci levels with horizontal support and resistance. In this case, Fibonacci will act as another way to filter entries at support and resistance levels. ✅ Conclusion Keep in mind that Fibonacci levels should not be used alone, you will lose everything. They should be combined with other elements of technical analysis, such as indicators, trend lines, Price Action patterns, etc. They are auxiliary tools and you should always remember about it.
Education
by DeGRAM
1
banks are on fire again...The banking system is bursting at the seams again. It all started with the recent series of bankruptcies of several American banks at once and it happened in just a week, which was an echo of the problems of the 2007 crisis, which, as people hoped, we were able to solve. The main signal of the disaster was a sudden failure in the Silicon Valley bank. On March 9, people's deposits disappeared, losses totaled an incredible $42 billion, which brought out an underestimated risk in the system. The problem was hidden in long-term bonds, in which the bank invested during a period of low interest rates and high asset prices, and when the Federal Reserve System sharply raised rates, the bank began to have problems. As a result, the bank was left with huge losses that were not previously recognized due to the fact that American capital rules do not require most banks to report a drop in the price of bonds that they plan to hold to maturity. 620 billion dollars – that's how many unrecognized losses were in the entire banking system of America at the end of 2022. To understand how much it is: this amount is equal to about a third of the total capital stock of American banks. The pandemic has brought even more problems to the economy, and the banking system has become even more shaky. A large volume of new deposits poured into banks, and the Federal Reserve's stimulus measures pumped cash into the system. These deposits were directed by banks to purchase long-term bonds and government-guaranteed mortgage-backed securities, and all this increased the risk of ruin in the event of an increase in interest rates. Having bought bonds with depositors' funds, the bank essentially used other people's funds, but the problem was not that, but that holding bonds to maturity requires matching them with deposits, and as rates rise, competition for deposits increases. At large banks, such as JPMorgan Chase or Bank of America, rising rates tend to increase their earnings thanks to floating-rate loans. However, in about 4,700 small and medium-sized banks with total assets of $10.5 trillion, rising rates tend to reduce their margins, which helps explain why stock prices of some banks have fallen. Another problem for banks is the risk that depositors will start withdrawing their deposits during the crisis, which will force the bank to cover the outflow of deposits by selling assets. If this happens, the bank's losses loom, and its capital stock may look comforting today, but most of its filling will suddenly become an accounting fiction. That is why the Federal Reserve System acted this way last weekend, being ready to provide loans secured by bank bonds. By providing loans with good collateral to stop the flight, the Fed is right, but such easy conditions come with certain costs. By creating the expectation that the Fed will take on the risks of interest rate changes in a crisis, they encourage banks to behave recklessly. The coming year requires regulators to make the system safer and less risky for the people. It is necessary to abolish some strange rules that do not require reporting and answers for increased risks that relate to small and medium-sized banks, Now the government has announced its intention to rescue depositors of the Silicon Valley Bank, which indicates that such banks carry a systemic risk and they need to be rescued in order not to destroy the entire economy of the country. But saving depositors is only half the job, in order to eliminate the repetition of today's and past problems, it is necessary to introduce the same accounting and liquidity rules that big banks follow, as is the case in Europe, and will have to submit plans to the Fed for their orderly resolution if they fail. These decisions and actions concern not only the United States, these rules should require the entire banking sector to recognize the risks associated with an increase in interest rates. Unrealized losses carry the risk of bankruptcy and banks with such losses should be confirmed by more thorough control and verification than those who do not have such losses. Timely testing will help to avoid bankruptcy, which would simulate a situation in which the bank's bond portfolio is released to the market, while rates rise even more. After that, it would be possible to determine whether the system has sufficient capital to avoid bankruptcy or not. Banks, of course, will resist additional control, increasing capital reserves, but all this will help to improve the quality of system security. Depositors and taxpayers around the world face intense fear, and they should not live with the fear and fragility that they thought had gone down in history many years ago.
SEducation
by Lingrid
7