Calibrating Trading Indicators for Different MarketsCalibrating Trading Indicators for Different Markets: A Beginner's Guide
(Simple Steps to Adjust RSI , MACD , and Other Tools for Better Results)
Key Idea : Just like you'd tune a guitar differently for rock vs. classical music, trading tools like RSI or MACD need adjustments depending on what you're trading (stocks, crypto, forex) and how it moves. This guide shows you how to tweak these tools using price swings (pivot points) to make them work better for your specific asset.
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Why "One Size Fits All" Doesn't Work
Most traders use default settings for indicators (like RSI's 14-day period). But these defaults were created for "average " markets. Real markets aren't average!
Example:
- Crypto ( CME:BTC1! ) : Super volatile → Needs faster, more sensitive indicators.
- Blue-Chip Stocks ( NASDAQ:AAPL ) : Less wild swings → Needs slower, smoother indicators.
If you use the same RSI settings for both, you'll get bad signals. Calibration fixes this.
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The Pivot Point Method for Calibration
One effective approach to calibration is measuring the natural rhythm of price swings between high and low points. Here's how to do it step by step:
Step 1: Find Pivot Points on Your Chart
Pivot points are like "price turning points." Use TradingView's ZigZag indicator (or draw them manually) to spot these swings.
How to Add ZigZag on TradingView :
1. Open your chart.
2. Click "Indicators" → Search " ZigZag " → Select it.
3. Adjust settings (defaults work fine for starters).
The ZigZag will draw lines between significant highs (peaks) and lows (valleys).
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Step 2: Measure the "Rhythm" of the Market
Count the bars (candles) between pivot points to find the market's natural cycle.
Example :
- If Bitcoin swings from peak to peak every 14 bars on average, its "cycle" is 14 bars.
- If Apple does this every 16 bars, its cycle is 16 bars.
In the picture above, we used the Williams Fractal to identify pivots.
Formula for Indicator Settings :
- RSI Period = Half the average cycle → If cycle = 16 bars → RSI = 8 days.
- MACD Settings : Fast EMA = ¼ cycle, Slow EMA = ½ cycle → Cycle = 16 → Fast EMA = 4, Slow EMA = 8
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Step 3: Test Your Calibrated Indicators
Backtest on TradingView :
1. Add your indicator (e.g., RSI) with the new settings.
2. Use the Strategy Tester (click "Add to Chart" → " RSI Strategy ") to see if signals improve.
Look For :
- Fewer false signals (e.g., RSI saying "oversold" too early).
- Clearer trends (MACD crossovers matching price moves).
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Calibrating Popular Indicators (Simple Rules)
1. RSI (Relative Strength Index)
- Default : 14 days.
- Calibrated : Half the average cycle length.
- Example : Cycle = 16 bars → RSI = 8 days.
Why It Works : Shorter RSI reacts faster to volatile markets (like crypto).
2. MACD
- Default : 12, 26, 9.
- Calibrated :
- Fast EMA = ¼ of cycle.
- Slow EMA = ½ of cycle.
- Signal Line = ⅙ of cycle.
- Example : Cycle = 20 → Fast = 5, Slow = 10, Signal = 3.
Why It Works : Matches the asset's natural momentum shifts.
3. Williams %R
- Default : 14 days.
- Calibrated : Same as RSI (half the cycle).
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How to Avoid Common Mistakes
Mistake 1 : Overfitting (Making It Too Perfect for the Past)
- Problem : If you calibrate too precisely to old data, it might fail in the future.
- Fix : Test on 2 types of data:
1. Training Data : First 70% of your chart (to calibrate).
2. Testing Data : Last 30% (to check if it still works).
Mistake 2 : Ignoring Market Changes
- Problem : What works today might not work next month.
- Fix : Recheck your settings every 3 months or after big news (e.g., Fed rate hikes).
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Free Tools to Help (No Coding Needed)
1. TradingView's "Auto-Detect Cycle" Scripts
Search for indicators like "Cycle", "RSI Adaptive" or " Rainbow Adaptive RSI " in TradingView's public library. These automatically calculate cycle lengths (Not tested).
2. Adaptive MACD/RSI Indicators
Try pre-built adaptive indicators like:
- Adaptive MACD : Adjusts itself based on volatility.
- Dynamic Pivot : Uses pivots to set stop-loss and take-profit levels.
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Building a Simple Pivot Calibration System
Basic ZigZag Calibrator Method :
1. Add ZigZag to your chart.
2. Manually count the bars between 5 recent swings.
3. Calculate the average → Divide by 2 → Use that number for your RSI/MACD.
Example :
- Swings: 12, 14, 16, 10, 8 bars → Average = 12.
- Calibrated RSI = 6 days.
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Why This Works (Without the Math)
Markets move in waves. By matching your indicator's speed to the wave length, you "surf" the trend instead of fighting it. Research shows adaptive methods like this beat default settings.
The Science Behind It
When you calibrate to an instrument's natural rhythm:
- Oscillators (RSI, %R) catch extremes at the right time
- Trend indicators (MACD) signal changes faster
- Volatility bands (Bollinger Bands) expand and contract appropriately
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A Step Further: Multi-Timeframe Calibration
For even better results, calibrate across timeframes:
1. Calculate cycles on daily charts for swing trading
2. Calculate cycles on 4-hour charts for day trading
3. Use both calibrated indicators together for confirmation
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Final Tips for Beginners
1. Start Small : Calibrate one indicator (like RSI) first.
2. Use Free Tools : TradingView has thousands of free scripts to automate calculations.
3. Keep Records : Document what settings work for which assets.
4. Be Patient : Finding the right calibration takes time, but the results are worth it.
Calibration isn't about being perfect—it's about making your tools work better for specific markets . Happy trading!
Wave Analysis
Trend Changing Pattern (TCP) ExplainedIntroduction
One of the most important skills in forex trading is learning how to read price action and understand what the market is telling you. Price is not just numbers — it’s the collective perception of traders, making it the most reliable leading indicator available.
Today, I want to explain a powerful concept known as the Trend Changing Pattern (TCP) — a crucial tool for identifying potential market reversals and shifts in trend direction.
📈 What Is a Trend Changing Pattern?
In any trending market, whether it's an uptrend or downtrend, the trend won’t change easily. The strength of the trend and the timeframe you're trading on will determine how long it takes for a true reversal to occur.
One key signal of a trend change is a shift in momentum:
In an uptrend, when a momentum low forms during a pullback, it can be a sign that the trend is beginning to reverse.
In a downtrend, a momentum high during a pullback can signal a potential bullish reversal.
These are what we refer to as Trend Changing Patterns (TCPs) — moments where the structure of the market starts to shift.
⚠️ Watch for Manipulation After the TCP
After a TCP appears, it's common to see price manipulation before the new trend fully takes hold:
In an uptrend, price may return to manipulate the previous high before continuing down.
In a downtrend, price often dips to manipulate the previous low before reversing higher.
Being aware of this common liquidity grab helps traders avoid being trapped and instead position themselves in alignment with the new trend.
🧠 Final Thoughts
Understanding how to spot and interpret a Trend Changing Pattern gives you a major edge in forex trading. It helps you stay ahead of the market and make informed decisions based on price action, not emotion.
🎥 In the video, I go into more detail about momentum highs and lows, and how to recognize these key patterns in real time. Be sure to check it out if you want to sharpen your trend reversal strategy.
Wishing you success on your trading journey! 🚀
A Closer Look at Bitcoin's Elliot Wave PatternHello friends, today we'll attempt to analyze the Bitcoin chart using Elliot Waves. Our approach will involve using Elliot Wave theory and structures, which involve multiple possibilities. The analysis we present here focuses on one potential scenario that seems possible to us.
Please note that this information is for educational purposes only and should not be considered trading advice or investment tips. There's a risk of being completely wrong, so never trade based solely on this post. We're not responsible for any profits or losses. Individuals should consult a financial advisor before making any trading or investment decisions.
Now, let's discuss the Bitcoin chart. On the daily chart, we can see that a black primary degree wave has completed its ((4th)) wave, and the ((5th)) wave has started. Within the fifth wave, an intermediate degree wave is unfolding, which will have its own set of waves (1), (2), (3), (4), (5). The primary black degree wave five will be complete once the intermediate degree wave is finished.
We've drawn accounts on the chart, illustrating the entire structure, including the nearest invalidation level at around $76,666 and the real invalidation level below $50,000.
I hope this analysis based on Elliot Wave theory has helped you understand the chart better and learn something new. Please keep in mind that this is for educational purposes only.
I am not Sebi registered analyst.
My studies are for educational purpose only.
Please Consult your financial advisor before trading or investing.
I am not responsible for any kinds of your profits and your losses.
Most investors treat trading as a hobby because they have a full-time job doing something else.
However, If you treat trading like a business, it will pay you like a business.
If you treat like a hobby, hobbies don't pay, they cost you...!
Hope this post is helpful to community
Thanks
RK💕
Disclaimer and Risk Warning.
The analysis and discussion provided on in.tradingview.com is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.
Master the Market with These 5 Wave Trading RulesHello,
In any business, rules are the backbone of success, providing the structure and discipline needed to thrive. Trading and investing are no exceptions—they must be treated with the same seriousness and rigor as any entrepreneurial venture.
As a wave trader, I rely on a refined set of rules that blend technical analysis with Wave Theory to understand market behavior. Wave trading is a powerful strategy that analyzes price patterns to uncover the cyclical nature of market trends, enabling traders to predict future movements and seize profitable opportunities.
Understanding Wave Trading
Markets don’t move randomly—they ebb and flow in predictable waves. According to Elliott Wave Theory (a type of wave theory), trends unfold in a series of five waves (known as impulses) followed by three waves (corrections). Mastering this rhythm allows you to anticipate where the market is headed next, giving you a strategic edge.
Our Trading Rules
Here’s a breakdown of the essential rules I follow as a wave trader, designed to guide you through the process with clarity and precision:
Identify Impulse & Correction
Impulse: A robust, directional price surge made up of five sub-waves, signaling the dominant trend.
Correction: A smaller, counter-trend move consisting of three sub-waves, acting as a pause or pullback.
Recognizing these phases reveals the market’s underlying structure. For example, spotting a five-wave impulse upward suggests a bullish trend, while a three-wave correction might signal a temporary dip—perfect for planning your next move.
Identify the Pattern Formations
Look for patterns that can help you anticipate the next moves e.g. the expanding triangle, Bullish flag or even reversal patterns.
Identify Entry Points
Timing is everything. Pinpoint the perfect moment to enter a trade based on your wave and pattern analysis.
Wait for confirmations like a breakout above a flag pattern or a signal from indicators such as moving averages or MACD that align with your wave count.
Look for Targets
Set clear profit targets to stay disciplined and secure gains.
Wave projections, like the expected end of wave 5 in an impulse.
Look for Exits in Case the Trade Doesn’t Go Your Way
Not every trade is a winner, and that’s okay. Protect your capital with stop-losses placed at logical levels.
Where to set them: Choose points that invalidate your analysis—like below a key support level or a wave pattern’s critical threshold. If the market breaks that level, your trade idea’s likely wrong, so exit calmly.
This removes emotion from the equation, safeguarding your account for the long haul.
The Power of Discipline
These rules aren’t just guidelines—they’re your shield against the emotional rollercoaster of trading. Write them down, pin them up, or keep them handy on your trading desk. Reviewing them before every trade reinforces your commitment to a systematic, objective approach. Discipline turns good strategies into great results.
Wishing you success on your trading journey!
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Mastering Market Movements: Understanding Impulses and CorrectioHello,
Navigating the stock market successfully isn’t just about luck—it requires a keen understanding of market trends and the ability to spot price patterns. One of the most useful concepts traders rely on is the interplay between impulses and corrections. Recognizing these alternating phases can provide valuable insights into potential price movements, allowing you to make more confident and informed trading decisions.
In this article, we’ll break down what impulses and corrections are, how to identify them, and how you can use them to improve your trading strategy.
Understanding Impulses and Corrections
Stock prices move in cycles, alternating between strong trends (impulses) and temporary retracements (corrections). These movements are driven by market psychology, where shifts in supply and demand dictate price action.
Impulses: The Driving Force of Trends
Impulses are powerful, directional moves in the market that reflect strong momentum. These often occur when sentiment aligns with fundamental catalysts, such as positive news, strong earnings reports, or broader market trends. Impulses are the backbone of trends and can provide great opportunities for traders who know how to recognize them.
To spot impulses, look for:
Strong Price Movement: Impulses are characterized by significant and sustained price shifts, indicating a surge in buying or selling pressure. This is as shown in the
Volume Expansion: When an impulse occurs, trading volume typically increases, confirming that more market participants are involved and supporting the price movement.
Break of Key Resistance or Support Levels: Impulses often push through important technical levels, signaling strength and the continuation of a trend.
Corrections: The Market Taking a Breather
Corrections, also called retracements or pullbacks, are temporary price reversals within an ongoing trend. They provide opportunities for the market to pause before resuming its dominant direction.
To identify corrections, watch for:
Counter-Trend Price Movement: Corrections move against the main trend but usually retrace only a portion (25% to 50%) of the previous impulse.
Lower Volume: Unlike impulses, corrections occur on decreased trading volume, suggesting a temporary decline in market participation.
Support and Resistance Levels: Corrections often find support or resistance at previously established price levels, which can serve as potential reversal zones.
Applying Impulses and Corrections in Trading
Understanding these market phases can significantly improve your trading approach. Here’s how:
Identifying Trends: By observing a sequence of impulses and corrections, you can determine the overall market direction and align your trades accordingly.
Finding Entry and Exit Points: Impulses signal strong trends, while corrections present opportunities to enter trades at better prices before the next move higher or lower.
Managing Risk: Setting stop-loss levels strategically—such as below key support levels during corrections—can help minimize losses while allowing room for potential gains.
Final Thoughts
Recognizing and utilizing impulses and corrections can make a huge difference in your trading success. By learning to identify these patterns, you’ll gain deeper insights into market behavior, improve your timing, and enhance your ability to make smart, strategic moves.
Take a look at the US500FU chart—it clearly illustrates impulses and corrections in action.
Good luck, and happy trading!
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Vanguard - “We are the invisible hand of Adam Smith” John BogleIf anyone ever thought of erecting a monument to the person who did the most for American investors — the choice would fall on John Bogle. These words are not from a promotional brochure but a quote from Warren Buffett himself.
Book summary
But most people don’t even know who Bogle is. And certainly don’t realize that he didn’t just “create index funds.” He built an invulnerable power machine disguised as client care.
📈 From a thesis to $10 trillion under management
Bogle’s story begins with an ordinary guy born during the Great Depression. Through poverty, scholarship-based education, and working from age 10 — he makes his way into Princeton, where he writes a thesis on a topic that would change the industry: "mutual funds."
Over the years, his philosophy turned into what we now know as "passive investing." From day one, the Vanguard he created operated on the principle: "maximum benefit to the investor, minimum — to the managers." No fees, no speculation, no marketing. And it worked. But here’s the paradox: ▶ Vanguard gave up profit for the mission.
▶ The world responded — investors were tired of the noise.
▶ As a result — "Vanguard grew into a monster capable of managing the economies of entire nations."
🧠 A revolutionary idea: a fund owned by investors
Bogle built a structure where "the fund owners are the investors themselves."
Sounds beautiful: no shareholders, no profit pressure — only long-term client interests. But then who de facto manages these trillions?
⚠️ Vanguard is not a public company.
⚠️ Its shares are not traded.
⚠️ The real ownership mechanism — a black box.
It’s the perfect system for... "invisible control." And this isn’t a conspiracy theory, but logic:
If you can’t find the ultimate beneficiary — it means they’re either too big, or hiding for a reason.
🕸️ The “Big Three” and the invisible hand effect
Vanguard, BlackRock, and State Street — three funds that hold between 3% to 8% of shares in most of the world’s largest corporations. It seems small, but only 15–20% of shares are in free float.
❗ This gives the Big Three “real power”: from voting at meetings to influencing media narratives and climate policy.
📌 They own stakes in CNN, Fox, and Disney.
📌 Invest in oil companies that violate human rights.
📌 And at the same time — push the “green transition” agenda.
Conflict of interest? No. It’s “total control over both sides of the conflict.”
🤫 Why Vanguard is impossible to destroy
If you think Vanguard is just an investment fund, here are a few facts:
🔒 No company shares → can’t buy a controlling stake.
🔒 Over 400 legal entities → can’t file a single lawsuit.
🔒 Every investor essentially becomes a “co-owner” → responsibility is blurred.
🔒 All stakes split below 10% → bypass antitrust laws.
You can’t sue a ghost.
You can’t attack a network if you don’t know where its center is.
🧭 What’s next?
Today, Vanguard manages over $10 trillion, which is more than the GDP of Germany, India, and Brazil combined.
Though the fund’s founder passed away as “the conscience of Wall Street,” his creation became an "architecture of global control" that even the U.S. Federal Reserve couldn’t handle.
🎤 “We are the invisible hand of Adam Smith,” John Bogle once said.
A more detailed book review will follow below. I understand how important this is in our time and I appreciate it.
📘 General Concept of the Book:
The book is at once the autobiography of John Bogle, the story of the founding and development of Vanguard, and a manifesto of index investing philosophy. A runaway waiter, Princeton graduate, and "Wall Street rebel," Bogle creates Vanguard — a company that changed the investment world by making it more fair and accessible.
📑 Structure of the Book:
The book is divided into four parts:
Part I — The History of Vanguard.
Part II — The Evolution of Key Funds.
Part III — The Future of Investment Management.
Part IV — Personal Reflections, Philosophy, and Values of the Author.
💡 Key Ideas of the Book (Introductory Chapters, Preface):
- Index investing is the most important financial innovation of the 20th century.
- Passive management beats active managers in returns and costs.
- Vanguard’s mission is not to make money off investors, but to serve them.
- Criticism of Wall Street: high fees, conflicts of interest, short-term thinking.
- Financial revolution — a mass shift of investors from active to index funds.
🧠 Bogle's Values:
- Long-term thinking. Don’t give in to market “noise.”
- Honesty and transparency in investing.
- Minimal costs = maximum return for the investor.
- Fiduciary duty: protecting the client’s interest comes first.
📗 Part I: The History of Vanguard
🔹 Chapter 1: 1974 — The Prophecy
Context:
John Bogle is in a difficult position — he’s fired as head of Wellington Management Company.
During a trip to Los Angeles, he meets John Lovelace of American Funds, who warns: if you create a truly mutual investment company, you’ll destroy the industry.
Main Idea:
⚡ Bogle decides to go against the profit-driven industry and creates Vanguard — a company owned by investors, not managers.
Key Moments:
- Vanguard is founded in 1974 — in the middle of a crisis.
- The company has no external shareholders — all “profits” are returned to investors through lower fees.
- In 1975, the first index fund for individual investors is launched — a revolutionary idea, initially ridiculed as “Bogle’s madness.”
Important Quotes:
"Gross return before costs is market return. Net return after costs is lower. Therefore, to get the maximum, you must minimize costs."
– Bogle’s fundamental rule
🔹 Chapter 2: 1945–1965 — Background: Blair Academy, Princeton, Fortune, and Wellington
Early Life:
Bogle studies at Blair Academy on a scholarship, works as a waiter.
He enters Princeton. Struggles with his economics course, but…
In the library, he accidentally finds the Fortune article “Big Money in Boston” — about mutual funds.
Turning Point:
This article inspires Bogle to write his thesis:
“The Economic Role of the Investment Company”, where he argues:
- Funds should work for investors;
- Don’t expect them to beat the market;
- Costs must be minimized;
- Fund structure must be fair and transparent.
Career Start:
Work at Wellington Management (Philadelphia).
Starts from scratch, rising from junior analyst to president of the company.
Under Walter Morgan’s leadership, he learns the principles of discipline and serving investors.
✍️ Interim Summary
What’s important from these early chapters:
- Vanguard was born from the ruins of Bogle’s former career — an example of how failure can be the beginning of greatness.
- Already in college, Bogle saw the issue of conflicts of interest in the industry.
- His philosophy is idealism in action: don’t play guessing games — just invest in the market and reduce costs.
📘 Chapter 3: 1965–1974 — Rise and Fall
🚀 Appointed President of Wellington Management:
In 1965, at just 35 years old, John Bogle becomes president of Wellington.
He decides to modernize the business and bring in young star managers from Wall Street, especially from the firm Thorndike, Doran, Paine & Lewis.
⚠️ Risky Alliance:
Bogle makes a fatal mistake — he merges with the new management company without ensuring value alignment.
The new partners are focused on profit and short-term gains, not building a strong long-term foundation.
This leads to internal conflict, loss of trust, and poor fund performance.
💥 Dismissal:
In 1974, after a series of conflicts, the board removes Bogle.
He loses control of the company he built for nearly 25 years.
Bogle’s comment:
"I was fired, but I was still chairman of the Wellington mutual funds — and that turned out to be a lifeline."
📘 Chapter 4: 1974–1975 — The Birth of Vanguard
🧩 A Unique Legal Loophole:
Though Bogle was fired from the management company, he remained head of the Wellington Fund trustees — giving him the opportunity to build a new independent structure.
🛠 Creating Vanguard:
In December 1974, he launches The Vanguard Group — a company owned by the investors (shareholders) themselves.
Model: the fund belongs to the investors → the fund owns the management company → no outside profit, only cost recovery.
⚙️ "Vanguard" as a Symbol:
The name was inspired by Admiral Horatio Nelson’s ship — HMS Vanguard.
A symbol of leadership, courage, and moving against the tide.
Key Idea:
Vanguard would be the only truly mutual investment organization — a model where clients = owners.
📘 Chapter 5: 1975 — The First Index Fund
🤯 Revolution: The Indexing Approach
Bogle decides to create the first index mutual fund for retail investors.
Name: First Index Investment Trust (later — Vanguard 500 Index Fund).
Idea: invest in all S&P 500 stocks to reflect the market’s return instead of trying to beat it.
🪓 A Blow to the Industry:
The financial world reacts harshly:
- “Bogle’s madness”;
- “This is a failure”;
- “Who would want to just match the market?”
🔧 Humble Beginning:
The goal was to raise $150 million, but only $11 million was collected — tiny by industry standards.
But Bogle didn’t give up:
"It was a small step, but with a powerful message."
💡 Summary of Chapters 3–5: How Vanguard Was Built
🔑 Event 💬 Meaning
Loss of control at Wellington ----- Collapse of the old model, beginning of a new path
Creation of Vanguard------------- Innovative, investor-first structure
Launch of index fund--------------Start of the indexing revolution, Bogle’s core philosophy
📝 Quotes for Thought:
"All I did was apply common sense. I just said: Let’s leave the returns to the investors, not the managers." — John Bogle
"This is a business where you get what you don’t pay for. Lower costs = better results." — Bogle’s favorite saying, debunking “more is better”
📘 Chapter 6: 1976–1981 — The Survival Period
⏳ Tough Start:
After launching the index fund, Vanguard faces slow growth and constant skepticism.
For 83 straight months (nearly 7 years!), Vanguard sees net outflows — investors are hesitant to trust this new model.
🧱 Laying the Foundation:
Bogle and his team focus on:
- Transparency
- Lowering costs
- Investor education (they explain what it means to “stay the course”)
💬 The Core Dilemma:
"All investors want to beat the market. But no one wants to pay the price: high fees, taxes, risks. We offered an alternative — reliability, simplicity, and low cost."
📈 Small Wins:
Despite modest volume, Vanguard starts building a reputation as an “honest player.”
It becomes evident: investors using Vanguard achieve better long-term results than those chasing trendy funds.
📘 Chapter 7: 1982–1991 — Growth and Recognition
💡 The Power of Philosophy:
Bogle keeps repeating: “Stay the course” — don’t try to predict the market, don’t fall for fear and greed.
This message becomes especially powerful after the 1982 and 1987 market crises.
🏆 The First Fruits:
A slow but steady increase in assets begins.
Vanguard launches new index funds:
- Total Stock Market Index
- Bond Index
- International Index
📣 Educational Mission:
Bogle writes books, articles, gives interviews.
He isn’t just running a fund — he’s changing how people think about investing.
A community of followers emerges — the Bogleheads.
📊 Key Stats:
By 1991, Vanguard's assets reach around $130 billion.
Index funds begin receiving positive reviews from analysts, including Morningstar.
📘 Chapter 8: 1991–1999 — Industry Leadership
🚀 Explosive Growth:
In the 1990s, index funds go mainstream.
Investors realize that most active funds underperform the market — and they vote with their money for Vanguard.
🧰 Expanding the Product Line:
Vanguard introduces:
- Retirement funds
- Bond funds
- International and balanced funds
- Admiral Shares — low-cost funds for loyal investors
📢 Open Fight with the Industry:
Bogle continues to harshly criticize Wall Street:
- For greed, manipulation, and lack of transparency
- For prioritizing company profit over client interest
"The industry hates Vanguard because it proves you can be honest and still succeed."
⚠️ Internal Challenges:
In the late 1990s, Bogle’s health declines.
He passes leadership to Jack Brennan but retains influence on company strategy.
📊 Midpoint Summary (Chapters 6–8)
📅 Phase 📈 Essence
1976–1981 Quiet survival: building the model, fighting for trust
1982–1991 Slow growth: philosophy attracts investors
1991–1999 Recognition and leadership: indexing becomes dominant
💬 Bogle Quotes from These Chapters:
"Investing is not a business. It’s a service. Those who forget this lose everything."
"Every dollar spent on fees is a dollar lost to your future."
"Volatility is not the enemy. The real enemy is you, if you panic."
📘 Chapter 9: Leadership as a Calling
💡 A Leader ≠ A Manager:
Bogle contrasts a true leader with just an efficient executive.
A real leader:
- Puts others’ interests above their own
- Has a moral compass, not just KPIs
- Makes hard, unpopular decisions
🛤 His Leadership Style:
"Don’t ask others to do what you wouldn’t do yourself."
"Always explain why — people follow meaning, not orders."
He genuinely believes Vanguard should be more than a successful business — it should be a force for good in the market.
"Leadership is loyalty to an idea bigger than yourself."
🔄 Feedback Principle:
Bogle constantly interacts with clients, employees, and journalists.
He never isolates himself in an “ivory tower” — he believes this openness is a leader’s true strength.
📘 Chapter 10: Client Service — Vanguard’s Mission
🧭 The Mission:
"Maximize investor returns — not company profits."
Vanguard is built around fiduciary responsibility: every decision must pass the test — is this in the investor’s best interest or not?
🧾 How It’s Implemented:
- Fees below market average → investors keep more
- No ads for “hot” funds → Vanguard sells stability, not trends
- No sales commissions → no one profits off pushing funds to clients
- Ethical code — “Don’t do anything you wouldn’t want on the front page of the newspaper.”
"We’re not trying to be the best for Wall Street. We’re trying to be the best for you."
📘 Chapter 11: The Market Should Serve Society
📉 Critique of Modern Wall Street:
Bogle argues that finance has drifted from its original purpose.
Investing has turned into trading.
The investor became a cash cow, not a partner.
"The market now serves itself — and we’re still paying the price."
🌱 What the System Should Look Like:
- Companies should serve society
- Investors should be owners, not speculators
- Funds should be transparent, accountable, and honest
📢 Call for Reform:
Bogle calls for a rethinking of finance:
- Restore the human element
- Make mission more important than profit
- Protect long-term interests of millions of ordinary investors
"If we want capitalism with a human face, we must return finance to serving society."
📊 Summary of Chapters 9–11: Bogle's Philosophy
📌 Direction------------💬 Essence
Leadership-------------Morality, leading by example, purpose-driven
Business---------------First and foremost — service to the client
Financial System-------Must work for society, not just for profit of the few
✨ Inspirational Quotes:
"The most important thing you can invest is not money — it’s your conscience."
"Honesty in business is not a competitive edge. It’s a duty."
"I’m not against capitalism. I’m against capitalism without morals."
📘 Chapter 12: The Future of Investing — Where the Industry Is Headed
🌐 Bogle sees three main trends:
Victory of Passive Investing:
- Index funds continue to displace active management
- Their share of assets under management is growing rapidly
- More investors are realizing the power of simplicity
Fee Pressure:
- Fees are approaching zero (some funds are effectively free)
- Winners: investors. Losers: traditional management companies
The Role of Technology:
- Rise of robo-advisors (automated investment advisors)
- But Bogle warns: Technology without philosophy is just a tool, not a solution
🚨 Threat #1 — Hyperfinancialization:
"The market is turning into a casino. And the fewer the players, the more the house wins."
Bogle reminds us: the goal of investing is owning businesses — not gambling.
The higher the turnover, the more you lose on fees and taxes.
📘 Chapter 13: The Power of Indexing — Threat or Blessing?
📈 Strength in Scale:
The biggest index providers (Vanguard, BlackRock, State Street) own large shares in nearly all companies in the indexes.
This raises the issue of concentrated power — is too much influence in too few hands?
⚖️ The Indexing Paradox:
Index funds don’t actively vote on corporate governance issues.
So the more power they hold, the less oversight there is over company management.
📣 Bogle’s Proposals:
- Establish a code of conduct for index providers
- Require them to vote in investors’ interests
- Mandate transparency in how they use their voting power
"We fought for the democratization of investing. We cannot let it end in a new monarchy."
📘 Chapter 14: Personal Reflections — On Life, Mission, and Faith
🧬 Personal and Eternal:
Bogle shares his core life principles:
- To serve, not to own
- To leave a mark, not accumulate
- To do what’s right, not what’s profitable
He talks about his battle with heart disease — both as a personal journey and a metaphor for resisting the system.
🙏 Gratitude:
He dedicates the book to his family, colleagues, and investors.
Emphasizes: every day is a chance to be useful.
"I created Vanguard, but Vanguard created me. My career isn’t a triumph — it’s a thank you to fate for the chance to be heard."
📊 Summary of Chapters 12–14: Looking Ahead and Within
📌 Theme-----------------💬 Essence
Future of Investing---------Indexing is the new standard, but needs responsible stewardship
Concentration of Power----Index giants must be accountable to society
Personal Legacy-----------Life is about service, honesty, and setting an example
💬 Final Inspirational Quotes:
"Life isn’t about making more money. It’s about doing more good."
"One day, someone will say: ‘Bogle was stubborn. He never compromised his conscience.’ That will be the best reward."
🧩 Bogle’s Principle Summary (from the book):
- Lower costs — pay less = keep more
- Don’t chase returns — be realistic
- Be a long-term investor — ignore market noise
- Invest broadly, passively, regularly
- Don’t try to beat the market — own the market
- Focus on goals, not trends
- Finance = service. Not a business for profit
💡 Investment Philosophy
🟨 “This is a business where you get what you don’t pay for.”
🟨 “Don’t try to beat the market. Just own it.”
🟨 “In the stock market, investors are rewarded for patience and punished for frenzy.”
🟨 “Gross return minus costs = market return. After costs — less. So: reduce costs — and you win.”
🟨 “The problem isn’t that investors know too little. The problem is they know too much of what doesn’t matter.”
🧭 Principles & Morality
🟩 “Investing is not a business. It’s a service.”
🟩 “Honesty isn’t a strategy. It’s an obligation.”
🟩 “The goal of Vanguard isn’t to make more, but to return to the investor what’s rightfully theirs.”
🟩 “If your investments keep you up at night, change them. Or better — change yourself.”
🧠 On Leadership and Mission
🔷 “A leader isn’t the one in front. It’s the one responsible for the rest.”
🔷 “Respect isn’t bought. It’s earned when you do what’s right, even if it’s unpopular.”
🔷 “We didn’t build Vanguard for glory. We built it to leave something better than what was.”
💬 On the Market and Industry
🔴 “Today's stock market isn’t a place for investors. It’s a casino with a shiny sign.”
🔴 “We’re not against capital. We’re against capitalism without a conscience.”
🔴 “The people selling investments always say they can pick the best. But what if the best is just paying less?”
❤️ On Life and Legacy
💠 “I created Vanguard, but Vanguard created me. It’s not my victory — it’s gratitude for the chance to serve.”
💠 “Every day is a chance to do something not for yourself.”
💠 “You can measure success with money. Or with a conscience, you don’t have to justify.”
It was a lot of work!
Click to like + Write in the comments your favorite books about the financial market
Best regards, EXCAVO
_____________________
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Engulfing Candles: The Power ShiftIf there’s one candle pattern that represents an immediate shift in balance between buyers and sellers it is the engulfing candle.
Today we take a deep dive into some of the key nuances of this pattern and explain how context and confirmation are essential elements to making this pattern a useful tool in your trading toolkit.
Understanding the Engulfing Pattern
The Engulfing candle pattern occurs when a single candlestick completely engulfs the body of the previous candle. In a bullish engulfing, a large bullish candle fully covers the smaller previous bearish candle, while in a bearish engulfing, a large bearish candle engulfs the previous bullish one.
Within the space of a signal candle, the market has completely erased the previous candles price action and sometimes multiple prior candles price actions. This step change in momentum, is why it is often known as the ‘power shift pattern’ – when it is identified correctly can represent a key inflection point.
Bullish Engulfing: A bullish engulfing suggests that after a period of selling, buying pressure has taken over, overpowering the bears in one strong move. This may indicate a potential reversal, from a bearish trend to a bullish one.
Bearish Engulfing: A bearish engulfing indicates that after a period of buying, selling pressure has overwhelmed the bulls. This could signal a shift from an uptrend to a downtrend.
Example: Nvidia Daily Candle Chart
In this example, we see bullish and bearish engulfing candles form at the parameters of a range that formed on Nvidia’s daily candle chart.
Past performance is not a reliable indicator of future results
The Importance of Location and Context
Like any chart pattern, the Engulfing candle is most effective when it occurs in the right context. Its location is crucial to its reliability. Trading the pattern within a range or consolidation zone can be misleading, as there may not be a clear prevailing trend for the pattern to reverse.
For a bullish engulfing to be meaningful, it should ideally appear near a key support level, where buyers are likely to step in. In contrast, a bearish engulfing is more reliable when it appears near a key resistance level, where selling pressure may be about to take control.
In short, location is everything. An engulfing pattern at a support or resistance level holds more weight than one formed in the middle of a range or without a clear market direction.
Example: USD/CAD Daily Candle Chart
In this example, we see small bearish engulfing candles form within a consolidation range. These are not significant signals as the location and context is sub-optimal. We then see a large engulfing candle form at the parameter of resistance – creating a clear bearish signal.
Past performance is not a reliable indicator of future results
Confirmation: The Next Candle is Key
A major element to watch for with the Engulfing candle is confirmation. The next candle after the engulfing one should trade in the direction of the engulfing candle.
For a bullish engulfing, the next candle should ideally close above the high of the engulfing candle. This confirms that the buying momentum is likely to continue.
For a bearish engulfing, the next candle should ideally close below the low of the engulfing candle. This suggests that selling pressure is likely to persist.
Without this confirmation, the pattern can be less reliable, and the initial move may not hold. The following candle helps validate whether the momentum shift is real or just a short-term fluctuation.
Stop Placement
Stop placement is a crucial aspect of trading the Engulfing pattern. Stops should generally be positioned just beyond the high or low of the engulfing candle, depending on the direction of the trade.
For a bullish engulfing, place the stop below the low of the engulfing candle to allow for some movement without being stopped out prematurely.
For a bearish engulfing, place the stop above the high of the engulfing candle to protect against any potential reversal or false breakouts.
Placing stops in these locations helps manage risk while giving the trade enough room to develop, without exposing the position to unnecessary losses.
The Engulfing Pattern Across Timeframes
One of the advantages of the Engulfing candle is its versatility. It can be used effectively on any timeframe, from short-term intraday charts to long-term daily or weekly charts.
On shorter timeframes, the Engulfing pattern may act as a signal for intraday trades, indicating a quick shift in momentum.
On longer timeframes, the pattern could signal a larger, more sustained trend change, suggesting a longer-term move in the market.
Regardless of the timeframe, the Engulfing candle remains an important pattern because it highlights a significant change in market sentiment, whether on a micro or macro scale.
Final Thoughts
The Engulfing candle is an effective pattern for identifying a shift in market momentum, either from bullish to bearish or vice versa. However, its effectiveness is heavily influenced by location and confirmation. When the pattern forms at a key support or resistance level and is followed by confirmation from the next candle, it can offer valuable insight into where the market may be headed. By combining these elements with good stop placement, traders can better manage risk and increase the reliability of the signals this pattern provides.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Liquidity Grab eurusd Supply & Demand Zones:
🔻 A major supply zone (resistance) is marked above 1.09618, where institutional selling pressure may appear.
🔹 A demand zone (support) is established below 1.09064, providing potential entry opportunities.
📈 Trading Plan & Targets:
✅ Expecting a bullish move from the demand zone as price reacts positively.
🎯 Target 1: 1.09064 – Mid-level liquidity area.
🎯 Target 2: 1.09618 – Major resistance & supply zone.
📌 Smart Money Concept (SMC):
🔹 Price is forming a liquidity sweep before a potential bullish push.
🔹 The structure suggests an accumulation phase, with a breakout confirmation above key levels.
💡 Key Takeaways:
🔹 Bullish bias unless price invalidates the demand zone.
The Two-Faced Market: The Truth Behind Trend Reversals!🎭 The Two-Faced Market: The Truth Behind Trend Reversals! 📊🚀
📢 Ever entered a trade thinking you caught the perfect trend , only to get stopped out as the market reversed?
You're not alone. The market has a way of fooling traders—but if you understand its “two-faced” nature, you can stay one step ahead.
🔥 Why Trends Reverse (and How to Catch It Early!)
Most traders believe trends reverse due to "news" or "randomness." But in reality, the market gives signals long before the turn happens. Here’s what to watch for:
🔹 Momentum Divergence: The price makes a new high, but indicators like RSI/MACD don’t.
🔹 Volume Anomaly: The trend continues, but volume dries up—a sign of weakness.
🔹 Failed Breakouts: Price breaks a key level, only to fall back inside—trapping traders.
🔹 Candlestick Clues: Reversal patterns like engulfing candles or wicks rejecting key levels appear.
🚀 Mastering these signals can put you ahead of 90% of traders.
📊 Real Example: XAU/ USD Trend Reversal in Action
🔎 Breakdown of the setup:
✅ Step 1: Identify a trend (through market structure, trendline or moving average).
✅ Step 2: Look for failed breakouts against the trend
✅ Step 3: Look for trend-following setups
🎯 The Market’s Game: Recognizing The Shift
Trends don’t die suddenly—they fade before reversing. The best traders spot the early signs and position before the crowd.
💡 Have you spotted these reversal signs before? Drop a comment with your experience! 👇🔥
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Predicting sell off, 30"++ in advance of a head and shouldersLet's examine how a head and shoulders is usually formed by a wave 4 and 5 and an A & B wave, the C wave is the sell off after the head and shoulders.
I use this pattern to predict a head and shoulders AT THE RIGHT NECKLINE. In this case 90 minutes in advance.. So 6 X 15 minute candles in advance we can predicted a H & S and a selloff, sound valubale?
if you understand this concept please give a thumbs up.
To go over price action again, we are going up on 5 waves. Wave 4 creates the left shoulder. After wave 5 we come down on an A wave, that is the right neckline.
This is where You can predict an B wave UP, and if it doesn't go higher than the previous wave 5, we will get a typical head and shoulder sell off after the wave B up.
Two Stock Market Crashes explained in one chart(ELLIOTT)The first is the Dot-Com Bubble that happened in Early 2000. This was the end of Wave 1(Black) and a retest was on the horizon. The market corrected with a zigzag marked in Red late in March 2000. What followed was a sharp drop Wave A(Red), B correction, and a 5 Wave move to complete Wave C of the zigzag. The 5 Wave move to Red Wave C is supported by Math as it retests at exactly at the 423% of the Fibonacci and 161.8% of Red Wave A on a Monthly time frame.
The second Stock Market Crash is the Financial Crisis of 2008 which by the way is the largest Stock Market Crash in the last 80 yrs. Historically, it is only second to the Great Depression of 1929. Can it be explained in terms of Elliott Wave? Yes. It was part of Wave 5 after Green Wave C ended. In fact, from Blue Wave 4/C there is a clear 5 wave move with a zigzag as its first correction and a flat as its second. The Financial Crisis is Wave 5 after the mentioned second flat but is called a Stock Market Crash!!
All this is avoidable.
Bitcoin and Elliott Wave Principles This is a good example showing how Bitcoin adheres to Elliott Wave Rules, as does everything in the Market. As stated other publications, the Elliott Wave Theory is more than just a Theory but how the market works. Bitcoin won't always buy, there will be ups and downs. Timing is key. If there is an over-investment just before the top of Wave B, ''Buy The Dip'', this would lead to unimaginable losses. This is what people call ''Stock Market Crash''. To Elliott Wave Theorists, this is a simple Wave 4.
3 Best Entry Points For Swing Trading (Forex, Gold)
What is the best entry point for swing trading?
You will learn 3 safest places/zones to buy or sell the market from, best swing trading time frame, and the most accurate swing trading setups.
Best Entry 1
Swing Trading After a Confirmed Trend Reversal
It can be a bearish trend violation and a start of a new bullish trend.
Look at a price action on WTI Crude Oil on a daily.
The market violated a bearish trend and started to trade in a new bullish trend, confirming the reversal.
In such a case, your best entry will be the closest daily support.
Alternatively, it can be a bullish trend violation and an initiation of a new bearish trend.
USDCAD was in an uptrend, steadily growing within a parallel channel.
Its violation confirmed the change of sentiment and start of a downtrend.
In this situation, your safest entries will be from the closest daily resistance.
Best Entry 2
Swing Trading with the Trend After Pullback
In a bullish trend, you should wait for
a completion of a bullish movement,
wait for a pullback
swing buy the market after it completes.
AUDCAD is in a rising trend.
A pullback tends to complete on a key support.
That will be your zone for buying.
Otherwise, in a bearish trend, you should let the price:
finish a bearish impulse
start a correctional movement
sell the market after the correction ends.
USDCHF was in downturn and updated the low. A local bullish movement started then.
It usually completes after a test of a key resistance. That will be the area where you should look for swing selling.
Best Entry 3
Swing Trading After Key Level Breakout
Bearish violation of a key daily support is a perfect signal to sell.
It is an important sign of strength of the sellers and a strong indication that the price will continue falling.
NZDUSD broke and closed below a key daily support cluster. After a breakout, it turns into a potentially strong resistance.
For us, the best entry is a retest of a broken structure.
Bullish breakout of a key daily resistance is a reliable signal to buy.
After a violation of a horizontal resistance, it became a support on USDCHF Forex pair on a daily.
Your perfect entry for swing buying is its retest .
The entry zones that we discussed will provide the safest trading opportunities.
Learn to combine that with your trading strategy, it will help you to dramatically increase the profitability of your swing trading.
❤️Please, support my work with like, thank you!❤️
I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
An Easy Method for Identifying Wave and Cycle Endings! :)Hello, you don’t need to discover anything else to make money in this market. Simply by identifying peaks and valleys at the same level, which align in terms of numbers, degrees, and angles, you can easily earn a lot of money. Don’t get caught up in vague and useless information, my friends. Much respect, Ehsan :)
The Beauty of Elliott Wave.Wave 3 corrects in a Flat formation that is exactly 100% of Green Wave A. Upon completion, there is beautiful retest and a big move downwards to complete Blue Wave C and hence Wave 4 of the Flat. Wave 4 also corrects at 50% of the Red Wave 3. This whole Flat occurs between 161.8% and 261.8% of the main Wave. This is a weekly time frame and these are some massive moves showing that the market obeys Elliott Wave Principles at all levels of time.
Options Blueprint Series [Intermediate]: Optimal Options StrikesI. Introduction
Options on futures offer traders a flexible way to participate in market movements while managing risk effectively. The Japanese Yen Futures (6J) market provides deep liquidity, making it a preferred instrument for options traders. In this article, we will explore how to optimize Bull Call Spreads in Yen Futures (6J) by understanding price equivalency and strike selection.
One of the most critical aspects of trading options on futures is recognizing that continuous futures charts and contract-specific charts display different prices. This discrepancy must be accounted for when setting up trade entries and exits. Additionally, strike price selection significantly impacts the reward-to-risk ratio, breakeven price, and probability of profitability.
By identifying key support and resistance levels (UFO), we will define trade setups that likely align with market structure, targeting precise entry and exit points. We will also compare different Bull Call Spread variations to understand how adjusting the strike selection impacts risk and potential reward.
II. Understanding the Japanese Yen Futures Contract
Before diving into the options strategy, it is essential to understand the specifications of the CME-traded Japanese Yen Futures (6J) contract:
Contract Size: Each futures contract represents 12,500,000 Japanese Yen
Tick Size: 0.0000005 USD per JPY (equivalent to $6.25 per tick)
Trading Hours: Nearly 24-hour trading cycle with short maintenance breaks
Margin Requirements: Currently $2,900 (varies through time).
For this article, we focus on December 2025 Yen Futures (6JZ2025). Since the market price displayed on continuous charts (6J1!) differs from contract-specific charts, we need to establish price equivalencies to align our trade analysis.
III. Price Equivalency Between Continuous and Contract-Specific Futures
Futures traders commonly use continuous charts (such as 6J1!) for analysis, but when trading options, it is crucial to reference the specific futures contract month (such as 6JZ2025). Due to roll adjustments and term structure variations, prices differ between these two charts.
In this setup, we identify key UFO-based support and resistance levels and adjust for contract-specific price equivalency:
Support Level Equivalency: 0.0066325 (6J1!) = 0.0068220 (6JZ2025)
Resistance Level Equivalency: 0.0069875 (6J1!) = 0.0072250 (6JZ2025)
These adjusted price levels ensure that the trade is structured accurately within the December 2025 contract, aligning option strikes with meaningful technical levels.
IV. The Bull Call Spread Strategy on Yen Futures
A Bull Call Spread is a vertical options spread strategy used to express a bullish outlook while reducing cost and limiting risk. This strategy involves:
Buying a lower-strike call (gaining upside exposure)
Selling a higher-strike call (reducing cost in exchange for capping maximum profit)
This setup provides a defined risk-reward structure and is particularly useful when targeting predefined resistance levels. Given that we identified 0.0068220 as support and 0.0072250 as resistance, we will structure multiple Bull Call Spreads to compare strike selection impact.
Now that the trade structure is established, let’s explore how different strike selections affect risk, reward, and breakeven prices.
V. Strike Selection and Its Impact on Risk-Reward Ratios
Selecting the appropriate strike prices is crucial when structuring a Bull Call Spread, as it directly affects the breakeven price, maximum risk, and maximum reward. To illustrate this, we compare three different Bull Call Spread variations using December 2025 Yen Futures (6JZ2025).
1. 0.00680/0.00720 Bull Call Spread
Breakeven: 0.006930
Maximum Risk: -0.00013
Maximum Reward: +0.00027
2. 0.00680/0.00750 Bull Call Spread
Breakeven: 0.0069789
Maximum Risk: -0.00018
Maximum Reward: +0.00052
3. 0.00680/0.00700 Bull Call Spread
Breakeven: 0.006879
Maximum Risk: -0.00008
Maximum Reward: +0.00012
Observing these variations, key insights emerge. The 0.00680/0.00750 spread offers the highest potential reward but comes with the highest breakeven and greater risk. Meanwhile, the 0.00680/0.00700 spread minimizes risk but provides a lower profit potential. Strike selection, therefore, becomes a balance between profitability potential and probability of success.
A wider spread (such as 0.00680/0.00750) has a higher reward-to-risk ratio, but it requires the price to move further before generating profits. Conversely, a narrower spread (like 0.00680/0.00700) has a lower breakeven price, increasing the probability of profitability but limiting potential upside.
VI. Trade Plan for a Bull Call Spread
Based on the analysis of strike selection, a balanced trade plan can be structured using the 0.00680/0.00720 Bull Call Spread, which offers a favorable reward-to-risk ratio while maintaining a reasonable breakeven price.
Market Bias: Bullish, expecting a move toward resistance
Selected Strikes: Long 0.00680 call, short 0.00720 call
Breakeven Price: 0.006930
Target Exit Price: 0.0072250
Maximum Risk: -0.00013
Maximum Reward: +0.00027
Reward-to-Risk Ratio: 2.08:1
This setup capitalizes on the previously identified UFO support to define the entry point, while the UFO resistance provides a target for exit. The breakeven price remains at a reasonable level, ensuring a greater probability of the spread moving into profitability.
VII. Risk Management Considerations
While the Bull Call Spread limits risk compared to outright long calls, proper risk management is still necessary. Traders should consider the following:
Using Stop-Loss Orders: If price breaks below the UFO support level at 0.0068220, traders may exit the position early to avoid excessive losses.
Hedging with Puts: If volatility spikes or market sentiment shifts, a put option or put spread can serve as a hedge against adverse movements.
Position Sizing: Adjusting contract size ensures that total exposure remains within acceptable risk limits based on account size.
Time Decay Considerations: Since time decay negatively impacts long call options, traders should monitor the spread's profitability as expiration approaches and adjust positions accordingly.
By implementing these risk management techniques, traders can optimize their Bull Call Spread strategy while mitigating unnecessary exposure.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
HOW TO use the Acceleration Bands HTF indicatorYou can access this indicator HERE:
For details about the indicator, please see the indicator's description.
This idea is about the use of it.
You always want to go with the trend and trade into the direction that "accelerates" according to the indicator.
When the price accelerates, it is more likely to continue than to reverse.
Also, the volatility will be much greater (momentum) to the acceleration direction.
All the explosive moves happen outside of the acceleration bands.
You can go over many charts and see that the indicator methodology is aligned with good trading principles of great traders such as Darvas Box Trading, and Jesse Livermore entries, and also SMC.
How to Trade Ending Diagonal: EURUSDOne of my favorite EW patterns: Ending Diagonal
It usually appears in wave C or 5, we have wave C
It consists of five waves and each of them are three waves
All looks good as wave 5 is over wave 3 and Ending diagonal might be completed
as EWO oscillator already shows Bearish Divergence between wave 3 and 5
This educational post to show trade setup on this pattern
The bottom of wave b in wave 5 is a breakdown trigger (blue) as it means wave 5 is over
Confirmation is on breakdown of wave 4 (orange)
Target is at the start of the Ending Diagonal (green)
Bonus track:
One could consider sell on 61.8% Fib retracement as we see the first impulse down
and now we watch this two-legged pullback.
Bitcoin mining cost and Bitcoin price appreciation RIOT earnings disclosed that 53% decrease in power credits directly affects miners’ operational costs, leading to higher Bitcoin mining costs.
In the broader economic context, this ties into energy market dynamics and inflation control in several ways.
Preventing upward pressure on industrial energy prices.
Power credits or subsidies previously given to miners have kept their costs artificially low, allowing them to consume large amounts of energy without fully bearing the market rate.
By reducing these credits, miners are exposed to real energy prices, discouraging excessive energy consumption and reducing competition for energy resources with industrial sectors (like manufacturing or logistics) that are critical to the economy.
Why it matters
When Bitcoin miners compete with industrial users for power, it can push up energy prices. Since energy is a major input cost for many industries, rising prices can ripple through supply chains, increasing the costs of goods and contributing to inflation.
Aligning with Energy allocation priorities
In many regions, energy regulators aim to ensure that critical industries, those tied to job creation, exports, or essential services, have priority access to affordable energy. Bitcoin mining, often seen as non-essential from a macroeconomic standpoint, might be deprioritized to keep energy-intensive sectors from facing higher costs that could contribute to consumer price inflation.
Market correction & miner attrition
With actual energy costs now directly impacting miners, many less efficient operations (those with older equipment or higher power costs) will struggle to remain profitable and may shut down. This natural market correction helps reduce overall energy consumption by the mining sector, easing pressure on the grid and stabilizing prices for other users.
Survivors :
Only miners with low energy costs, high-efficiency hardware, or renewable energy sources will remain competitive.
The reduction in power credits is a policy lever to discourage energy-intensive activities that don’t directly contribute to broader economic stability. In doing so, it helps control energy costs for industries tied to GDP growth and job creation, ultimately working as an inflation management tool.
For Bitcoin miners, this shift creates a survival-of-the-fittest environment, where only the most efficient operations can withstand real market conditions, while others may exit the market.
As the cost to mine each Bitcoin rises , it establishes a new economic floor for the market. Miners are less willing to sell below their production cost, especially large-scale miners who can influence market liquidity. Historically, when mining costs increase due to factors like halvings, energy price hikes, or network difficulty, Bitcoin tends to gravitate toward or above these higher cost bases over time.
Example: After the 2016 and 2020 halvings, mining costs surged, but Bitcoin’s price followed with significant upward movements in the months that followed, leading to new all-time highs.
How to Count Weekly Waves Using RSI5A valid corrective wave occurs when:
- ABCDE
- ABC (A > C)
Using RSI 5 to count and filter noise: A wave is considered corrective when a reversal candle appears, and the next candle moves in the opposite direction or shows little movement. If the following candle continues in the previous direction and breaks the prior high/low immediately, it is still considered a continuation of the previous wave.