UFO revelations could rock the world's financial markets. This is under the category of 'Beyond Technical Analysis'. It is about systematic risk i.e. something previously unrecognised that causes major upset in markets. What's *UFOs* got to do with this? Just about everything.
Your world has been built on a sense of security that we are alone in the universe. People's religious beliefs, their sense of who is in power and so on has depended on that for the last few hundred years.
Now as World *UFO* day - 2nd July 2018 - approaches there is emerging evidence that *UFOs* are real. I do not say that everybody will suddenly change their belief systems overnight. What a lot of people do is, avoid or ignore hard evidence - especially the kind that causes them anxiety. But some people in a minority are different - they are swayed by evidence.
What does it mean if *UFOs* are real - and no longer a joke. For starters it means that there is a power greater than governments and financial institutions. That is then likely to cause fear and uncertainty in the minds of some. What if the *UFO* people decide to take control - for example - is a thought that will cross the minds of some.
Read around and see how secret files due to be released from the National Archives were withheld.
Further references:
See this article: Are we alone? Scientists revisit the question of aliens before National UFO Day
And
Secret dossier reveals British spies spent half a century trying to catch a UFO so they could use its alien technology to build SUPERWEAPONS
Dr David Clarke's guide - 15 pages cross-referenced to the National Archives.
There's something going on out there and they don't want you to know about it.
Risk!!!
Risk management demystified, examples and facts proven.Greetings, I've spent a considerable amount of time trying to find the magic formula to stay profitable, I've read books, I've heard speeches, I've talked to pros, and I've stayed profitable, BUT... I've also lost quite a bit, I tried coding my strategy to see how it would really perform without sentiments, as executed by a machine and I was really suprised, no strategy surpassed the 40% profitability mark, so I decided to write down the axioms of my trading strategy and code them the best I could, these 5 axioms are:
1- Direction of the entry, two ways to do it, follow the trend or pick a reversal point.
2- Entry point, if following the trend use momentum indicators, if reversing, candlestick patterns, S&R or trailing stop buy/sell orders are good.
3- Risk management, specially trailing stop loss.
4- News handling (this might be included in point 3, since it's mostly updating your stop loss before big news.
5- Favor the most likely trades out of the 29 pairs. (this one can't be done on trading view obviously)
For point 1 there are a lot of AWESOME indicators out there:
RSI, MACD, Stochastics, EMA, ALMA, BB, ichiomoku, renko, heikin ashi, and many many others, including my own SCSM indicator.
Point 2 isn't as important as many may think, and I will prove it later, however in order to avoid unnecessary risk I would say to avoid opening positions near major news releases.
Point 3 is the core of this idea and I will explain it in detail later.
Point 4 is important too, but not crucial for longer term trading, the really important thing about news announcements are the price spikes and the SL hunts, meaning you need to either widen your SL or close and reopen or tighten your SL considerably.
Point 5 is one of the most important points, there are many symbols to trade, and while I don't encourage trading everything at the same time, diversification helps reduce risk and why trade two weak currencies when you can trade a strong against a weak?
Now, to point 3, take a look at the chart of the idea, a profitable GBPUSD strategy on the daily candle over 10 years, blue arrows mean buy at the open, purple arrows mean either SL or trailing stop loss close or condition close (such as too tight BB for example), red arrows mean sell at the open.
Now, take a look at this chart:
imgur.com
I need to use external sources since TV doesn't show the strategy results in the snapshots, sorry for that.
Anyways, the strategy IS profitable even taking the opposite signals, HOW!?!?!?!, that makes no sense, or does it?
The trick is simple, though the number vary on each symbol, for this particular case (GBPUSD) the strategy opens a trade and places a SL 2400 ticks away from the price. Now, if price reaches 750 ticks in profit it activates a trailing stop loss of 750 ticks, meaning it will breakeven or earn cash no matter what. This may sound a little weird at first, since the risk is higher than the reward in theory, but remember that markets are VERY volatile, it's very possible for a trade to hit those 750 ticks in profit in one or two days if we're in a range, not to mention if we are in a trend. Let's tweak those numbers and set the signals normally but with a 200 ticks SL and see what happens...
For starters, THIS happens: i.imgur.com
Meaning we get stopped too often, causing serious psychological damage, so I'm going to reduce the test to only 3 years and look the results...
imgur.com
Wow... just wow, too tight SL is a sure formula to losing, but what about tight TP?, let's do the math again, increasing the SL and using a small TP, for 200 ticks TP and 1000 ticks SL this is the result:
imgur.com
I've reached the limit of characters for this idea, but I'm not done.
RIsk management with REAL trades not examples from past dataThis is a sequel to our first post on risk management with trades we have actually executed and not using examples from past market data.
In this chart, we show how seven trades would be executed and with said trades increase our profits while minimizing our risk.
Closing our trades early protect us from any possible "flash crash" situations.
You can have a 30% trade success rate and still be profitable, or even have a 90% winrate and not be profitable.
We use real trade examples in this chart, with all of the details below. Even the losing ones. Make sure to browse them if you like by clicking them below.
POST 1
POST 2
POST 3
Take note that no matter what, we stick to our original trade plan and once our stops get hit we'll just take the loss then sit on the sides waiting for a new trading opportunity.
POST 4
POST 5
Closing our position at a high price when we see an indication of price reversal allows us to re-enter at a lower price and buy more with our initial position.
In these specific trades, we use resistance, support, candlestick patterns, and flag patterns as our confirmations.
Closing our position at a high price when we see an indication of price reversal allows us to re-enter at a lower price and buy more with our initial position.
With every trade that is made, stops and take profits are adjusted with each position.
Hover your mouse cursor over each area to see why a trade was executed!
There are trading opportunities every day. Don't be in such a rush to always have a position open. Trading emotionally is an easy way to get burnt.
These calculations are based on the starting principle of $1,000 USD
** We actually lost less on the trades that didn't go through, because we can adjust our stops to our entry so we'd lose nothing but thats a post for another day! **
FAQ
Now how can you use this strategy to your benefit?
When you open a position and have your stops in place, and when you're in profit keep a close eye out for reversals; when the price begins to reverse
close your position and continue to observe the price. When the price is done correcting and is lower, watch for a bullish reversal to continue its run.
When this is done re-enter with new stops.
I don't trade flags or some of the techniques used to predict a movement. What should I do?
Regardless of how you predict price movements, you can refer to this as a way to trade a market consistently in order to make more profit while minimizing your risk.
This is merely one example of how you as a trader can create a trading plan that you stick to consistently to make pips!
What if you closed it and it kept going up?
At times it's better safe than sorry. we do this
Why not just hold?
In some markets, a price can reach a certain point and not return to it for months or even years.
I definitely don't have the time to be watching charts constantly to be able to do this!
Anything worth doing is worth overdoing. Besides, Tradingview has very nice tools available for all of us to enjoy.
Simply setting an alert on a trend line will help!
We appreciate all feedback and suggestions if you have any feel free to comment below!
Wish you all the best. Have a great weekend everyone!
Today's Lesson (#4) : Adjusting the leverage to volatilityIn this educational content video I had to cover one the biggest noob trader mistake, trading with too much leverage.
That's basically what flushes out almost 80% of the noobs. Getting the margin call, putting more money into trading than you initially expexted.
All of this is well known as gambling problems. And the recent flow of beginners who went to the markets with hopes of easy gains, most are now feeling the painful experiment of what the market is doing to fools.
So I hope you'll learn something important today with that lesson. Cause if you don't, then you'll probably have to learn it the hard ways later...
Risk management. How much to risk per trade?While not much is happening, remember to improve on your system more than anything else I believe.
Reading every book on TA doesn't matter if you have a dumb system where you're guaranteed to blow your account sooner or later.
Here's a friendly reminder on how much to risk on every trade.
Suppose a 50,000$ starting account.
*** Win 8 trades out of 10 on average. ***
2 losses in a row has a 4% chance of happening. Expect it to happen.
5 losses in a row has a 0.032% chance of happening. If that happens come on...
Calculations.
A/ Risking 10% account on each trade (starting 5k then 4500 etc).
2 losses in a row ==> Down to 40500. Down 9500.
5 losses in a row ==> Down to 29524. Down 20500.
B/ Risking 2% account on each trade ($1000 then $980 etc).
2 losses in a row ==> Down to 48020. Down 2000.
5 losses in a row ==> Down to 45200. Down 4800.
*** Let's say win 7 out of 10. ***
2 losses in a row has a 9% chance of happening. Will definitely happen regularly.
5 losses in a row has a 0.24% chance of happen. Should be a rarity but can happen! Very unlucky.
Calculations same as previously.
*** Win 5 out of 10 (rip). ***
2 losses in a row has a 25% chance of happening. Evertiem!
5 losses in a row has a 3% chance of happening. Enjoy!
10 losses in a row has 0.1% chance of happening. Unlucky!!!
A/ Risking 10% account on each trade.
2 losses in a row ==> Down to 40500. Down 9500.
5 losses in a row ==> Down to 29524. Down 20500.
10 losses in a row ==> Down to 17433. Down 33000. Hey whattap baggy?
B/ Risking 2% account on each trade.
2 losses in a row ==> Down to 48020. Down 2000.
5 losses in a row ==> Down to 45200. Down 4800.
10 losses in a row ==> Down to 40850. Down 9150.
What about an aggressive but still not too insane 5%
5 losses in a row ==> Down 11 grans.
10 losses in a row ==> Down 20 grans 40% loss.
Pretty harsh. Find your best strategy.
Most trading education sites recommend 1 or 2%.
If possible, it would be better to look at your past trades and calculate your hit rate figure how much you can risk BUT be conservative, for example you might be drunk at some time and start underperforming. Then you can easilly lose 5 times in a row so make sure you never go too crazy.
Also the better the trade the more you can risk, but that can be subjective and I bet alot of people would screw it up, so if unsure just stick to your plan.
Like buying a break at the top when overbought is way less good than buying at a monthly support with 5 min 15 min 1 HR and 4 HR RSI oversold...
On lurking, trading, emotions and risk. This is about psychology - that 'no-go' area. In this video I explore negative emotions from different aspects. I look at how emotions are connected to risk and risk management.
Avoidance is connected both to risk and emotions.
I say that the biggest part of trading is about separating emotions from the objective assessment of risk
Lesson on trading, TA and RiskG'day Cobbers and Shobbers,
How are we this morning, did many of you manage to make so profit yesterday?
I will start with a quick talk about Edges and trading strategy and how to be profitable from your charts.
First if you take a look at the chart linked below from yesterday you will notice I flipped outlooks as the day progressed, I also traded on these calls, some I got stopped out on at small losses, a few I made breakeven or small profit after fees, the last one I made a massive profit on, none of those trades were any better than the other. Seriously!
You have to look at your trades in the same way a Casino runs, lets look at the Roulette table for example on a black/red bet, now the "Edge" the Casino has in this situation is the 0 00 on the wheel, which gives the player a 47% chance of winning , the house at 47% plus the edge (Around 6%%) This edge over 10 bets this edge won't net the Casino much or anything at all but over millions of games, you can see the potential for profit.
Trading is the same, once you have a strategy and find an edge, weigh up the risk to reward ratio and it fits your plan, you trade it, win or lose it does not matter, because if you have a good solid strategy and solid risk and money management plan in place, the profit will come. Taking the emotion out of trading is the first thing you need to do to last, this also relates to doing Technical Analysis.
To be good at TA, you need to do more than just study and draw lines, you need to take out any preconceived Bias you have towards the market, be fluid and not stubborn. Big Egos and know it alls always fail, they are unable to admit when they are wrong and end up missing subconsciously the triggers and patterns that are going against their analysis, they filter out all the noise that is not in their favor and look for that which confirms their biases.
Just remember The Market can do anything. you can do your research, analyze and be confident in your trade to go in a certain direction but you can not expect it to, which is why we trade on probabilities, when you see an opportunity ( set by your strategy / Edge) you need to factor in all the data in front of you, decide if it fits your R/R ratio, find an entry and set an exit and stick to it, if you miss the entry then let it go and wait for the next opportunity, it may come back and you will get another chance. Know your exit (look for resistance/support) levels, factor these in with your strategy (be it breakouts or simple MA crosses) before you set you buys/sells and take profits along the way.
Risk
You will hear people talking about Risk all the time and it seems pretty simple but it isn't. A simple explanation can be setting Stops and not risking more than a percentage of your account equity but it is more than that and it also part of what makes markets move. Risk = Pain. Pain is what causes big runs, first goes the stop losses in a big move, then the overleveraged and then those whose pain threshold is pushed beyond the limits, you know this to be true, its why you end up selling off your position at the bottom and then it magically moves up again. This is why you don't risk more than you are willing to lose, and you really got to believe it or this pain will cause you to sell at the bottom, good traders don't deal with this pain because they trade within Risk, they trade without emotion, knowing that a loss matters not, they are a part of trading, your strategy, if followed properly will profit over time. Many fail because they don't follow their strategy, they over-leverage, the place position sizes way to large and small moves against there position causes pain, pain causes loss of confidence. You can see where I'm going with this.
G'day
Thanks for dropping by, hopefully, you garner something valuable from my post, be it educational or an idea towards a trade of your own. Please share, like and comment and engage with me, I am here to help.
How it's all connected upIn this video I explore how the US Dollar strength affects stock markets and the EURUSD.
When I was very new to trading I had not known about all this - and late in the game I wished that somebody would have told me sooner.
Shorter term bounces of the US dollar can cause traders to exit positions too soon.
Around this time day traders could find that spikes in the US dollar causes them to be bounced out of trades that are long or short on other instruments.
Volatility is what we need in trading, but there is a kind of love-hate relationship with it.
POLITRICKS: Avoid it in your tradingI briefly mention the political situation in the world that affecting many stock markets.
I'm seeing wide swings on a daily time frame, whenever their is good or bad news.
Traders would be wise to avoid gambling in these sorts of volatile markets. Those with large accounts can of course take a position and ride out the volatility in following a trend.
Core rules to trade with Sinewave & MomentumHope this educational content will help you make a better use of the indicators.
Remember that these rules are just ground rules. Positions sizes and stops positionning will depend on your own risk profile.
This is up to you to find your comfort zone on these parameters.
Indicators used in this video are : PRO Sinewave & PRO Momentum
Don't forget to hit the like/follow button if you feel like this post deserves it ;)
You can check my indicators via my TradingView's Profile : @PRO_Indicators
Kindly,
Phil
Risk Parity - Finance lesson 1 Warning Long Macro Post ahead!
The aim of this post is to open the discussion on risk parity and add insight into why some of the largest macro funds in the world use the strategy of risk parity .
... It is basically an asset allocation concept.
-> At what point do we have our portfolio 100% in these really safe securities (safest of all is inflation protected securities... which are bonds issued by sovereign entity without inflation return) Yields are very small.. sub 1% usually.
-> Then you have normal bonds, these can be any kinds of bonds . They don't have to be treasuries they can be corporate bonds.
-> And then you have mixed portfolio , which is maybe 60% stocks and 40% bonds...
-> Or perhaps a really risky portfolio with 100% stocks
-> Or EVEN riskier with 100% Emerging Market Equities .
+++++ The question is what kind of returns do we expect? +++++
One of the ways people employ Risk Parity is a re-balancing concept;
"Money is made by SITTING, not TRADING" - Jesse LivermoreOne of the major reasons why traders lose money is because they ride out their losses and close profitable trades too early.
While being patient can help us to achieve our maximum profit potential, being patient on the wrong side of a trade can be costly.
This is a great insight into why we are naturally predisposed to riding out losses and not quitting while we are ahead. It's an exert from a book that I recommend you all read called "Trading For A Living" by Elder Alexander.
"Roy Shapiro, a New York psychologist from whose article this subtitle is borrowed, writes:
'With great hope, in the private place where we make our trading decisions, our current idea is made ready....one difficulty in selling is the attachment experienced toward the position. After all, once something is ours, we naturally tend to become attached to it....This attachment to the things we buy has been called the "endowment effect" by psychologists and economists and we all recognize it in our financial transactions as well as in our inability to part with that old sports jacket hanging in the closet.
The speculator is the parent of the idea....the position takes on meaning as a personal extension of self, almost as one's child might....Another reason that Johnny does not sell, even when the position may be losing ground, is because he wants to dream....For many, at the moment of purchase critical judgement weakens and hope ascends to govern the decision process.'
Dreaming in the markets is a luxury that nobody can afford. If your trades are based on dreams, you are better off putting your money into psychotherapy."
If your trades, before you enter them, do not have predetermined take levels and stop loss levels, then you are setting yourself up to fail.
Sitting really does make money, but before we sit, we must first SET and FORGET.
Happy trading,
AvidTrader