Due to popular demand I've decided to bring this series back for a week 2 and I'll continue to release 3-5 trading ideas every Saturday. How do you guys feel about the name of this series? Would you like me to change the name to something like "Setup Saturdays" or are you guys cool with the current naming scheme?submitted by AD3133 to Forex [link] [comments]
So this week I wanted to be a lot more in depth in my analysis and setups since I didn't think I was super clear last week with my reasoning on some the setups. I want these posts to be as beginner friendly as possible because there's a lot more beginners in this Subreddit than I had realized. I want you to use this as an educational tool and not as a signal service as a result I'm going to give you possible trade setups and I want you to be the judge of whether you should enter once/if price gets to that point since I feel like that will benefit beginners in the long run. I got a couple questions about top down time frame analysis so that'll be a focus of today's post. Scroll down to NZDJPY if you really want an in-depth look at how I perform top down time frame analysis.
I'll include a picture of a chart and my TradingView chart so if you want to zoom in and out of the chart you'll have that ability to do so.
Quick Disclaimer: Some of the charts pricing might be off by a bit since I started working on this during the New York session on Friday. If any of the charts are impacted in a way that alters the setup I'll be sure to update the charts before I post this on Saturday. Just gotta hope that hope that Powell doesn't break the market or else I might have to redo this entire post.
TradingView Link For Daily: https://www.tradingview.com/chart/AUDUSD/Wb5K2bS8-AUDUSD-Daily-For-Reddit-Post-6-20-U-AD3133/
Analysis: Which way is the trend pointing? It looks like it's pointing up which we can see with the green trend line but how about we zoom in to the 4 hour char to see if that's actually the case.
Tip: When drawing a trend line, especially on the daily and higher time frames, remember to hit as many wicks as possible since they are relevant and not just some anomaly you can ignore.
AUDUSD 4 Hour
TradingView Link For 4 Hour: https://www.tradingview.com/chart/AUDUSD/aah8294z-AUDUSD-4-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: When we got close to where we are with price and we draw a Fibonacci Retracement from the point where price took off to the point where price peaked we can see that price came down to .5 Fibonacci level where it then started going up again. Coincidence? Possibly. As a result I believe that price could continue higher and it would be justified if it did. However, if we look at the trend lines we can see that price appears to have broke put of of our major trend line (Green) which means that price could fall to the downside if it's actually a breakout. Price then appears like it would then adhere to the new minor trend line (Red). There's also the possibility that this was just a fake breakout and price could go up and adhere to green trend line. I'm going to have a selling bias on this trade since price looks like it double topped at the highs of this year and it looks like we could see price fall. I'm leaning towards the drop of price due to the symmetrical triangle pattern created by the major and minor trend line and looks like price is going to get pushed down which we should get an idea of soon.
Tip: Every time price makes a large move and falls/rises after making a peak/valley always pull out the Fibonacci retracement tool to see if price will bounce from the .382, .5, or .618 levels as they are the most significant levels. This can tell you if you're going to likely get a trend continuation.
AUDUSD 1 Hour
TradingView Link For 1 Hour: https://www.tradingview.com/chart/AUDUSD/IHgrnfYs-AUDUSD-1-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: I drew out multiple different scenarios which I think can play out since like I said before we're not trying to predict a single movement but we're preparing to be reactive to an ideal condition which may be thrown at us. Remember that major trend line we drew in on the daily chart well it's going to play a large role here. This trend line has been in the making since March so we're not just going to brush it off. The trend line appears to have been broken and we seem to be sticking that minor trend line after the break of the symmetrical triangle pattern. After the break of the symmetrical triangle pattern price usually gets pushed heavily to one side and it looks like price is wanting to get pushed to the downside. As a result, I'm going to really keep on eyes on scenario the blue arrows display since I think it's the most probable. Looking at the scenario there are going to be two potentially good entry points for a sell. The first being when price goes up to retest the green trend line which would also serve as a bounce from our red trend line. Once we get that bounce we could enter in for a sell with a take profit hopefully somewhere around the .66 area. Another good entry would be when price breaks the zone of support of .68 and after it retests it. Wait for a confirmation candlestick pattern showing price will fall when retesting (i.e. railroad track, bullish engulfment candle, evening star, shooting star, etc.). Look for these candlestick patterns on the 15 minute chart. Once you got the confirmation take the sell and ride price down to the .66 zone. The other scenario that could occur is we could see price go back into the green trend line by breaking the red trend line (Orange Arrows). If this occurs we want to catch the retest bounce of the red trend line and ride price up to the high of the year which is at .702. At that point price could break the resistance at which point we could catch the retest of the zone and ride price up. Or it could go up to .702 create a triple top and fall. If you get a candlestick confirmation saying it'll fall then take a sell at the high of the year.
If there's something I really like in Forex it's definitely got to be harmonic patterns due to their high accuracy. NZDUSD just recently completed one of them and this is a really good indicator of what price is going to do.
TradingView Chart For Daily: https://www.tradingview.com/chart/NZDUSD/zQpHzUcK-NZDUSD-Daily-For-Reddit-Post-6-20-U-AD3133/
Analysis: Yes, we have trend line that says that price is going up however I make exceptions for Harmonic patterns since they are accurate about 80%-90% of the time. The pattern you see above is know as a Bearish Bat Pattern. Like the name says it's an indicator that price is going to go Bearish so although the trend line is going up I'm going to have a bearish bias on this trade.
NZDUSD 4 Hour
TradingView Chart For 4 Hour: https://www.tradingview.com/chart/NZDUSD/C29kpCyO-NZDUSD-4-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Not really much to add here just tossed on a Fibonacci retracement tool from where price took off to the peak just to check for any potential support from any of the major levels which we don't appear to have. We'll go a lot more in-depth on this pair on the 1 hour chart since that's where things get interesting.
NZDUSD 1 Hour
TradingView Link For 1 Hour: https://www.tradingview.com/chart/NZDUSD/dKJatcM7-NZDUSD-1-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Looking at price we can see that since June 11th price has been trading in a boxed consolidation range. Again I drew out the possibilities I believe could be ideal for us. Remember that I said Harmonics work 80%-90%. Well that means that they fail 10%-20% of the time which is definitely not something we can neglect. We can see that there's a descending triangle which price is reaching the end of. This means that price is getting ready to move to one direction since big moves always come after consolidation. If it moves to upside wait for price to close above the the spot marked D then you can enter for a buy and ride price up to the .67525 zone where price could break to upside or bounce back down (Orange Arrow). Remember to wait for it to actually close above point D since it could create a triple top and drive price back down. It's the same procedure as AUDUSD here if it makes this move where if it breaks it then catch the retest and if it looks like it's wanting to fall down wait for a confirmation pattern. If it breaks the box to the downside and breaks the support zone then take a sell and ride price down to the trend line at which point you should close the trade as there's a chance price could move against you and it's best to secure profits while you can. Once at the trend line it could bounce and if it does you should be able to ride price up to that .67525 zone (Green Arrow). If price breaks the trend line then wait for the retest and you should be able to ride price down pretty far (Red Arrows). I think you should be able to ride it down to .5918 zone but you'll have to keep your on it.
TradingView Link For Daily: https://www.tradingview.com/chart/EURNZD/jzgmGcRe-EURNZD-Daily-For-Reddit-Post-6-20-U-AD3133/
Analysis: Well we got a pretty clear descending channel and price looks like it's at the top part of the channel currently so we're going to want to look for some optimal selling conditions due to the down trend.
EURNZD 4 Hour
TradingView Link For 4 Hour: https://www.tradingview.com/chart/EURNZD/YzOpvcH7-EURNZD-4-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Looking at the 4 hour chart we can see that there appears to be a symmetrical triangle coming to it's end meaning price is getting ready to get pushed to a side. I believe it'll break the triangle and fall to the downside so once you see it break it would be a good idea to take a sell and ride price down to that support zone at 1.7187. Price could also briefly break to the upside then bounce off the top of the channel and it does take a trade from the bounce and ride price down to the same support zone. At that point, I'll leave it up to you to determine how you think price will go and what you should be looking for. Consider it to be a little quiz if you want to think of it like that. You've got my charts so use them as a reference since I've already marked some crucial support/resistance zones which we should keep our on for the next couple weeks.
EURNZD 1 Hour
TradingView Link For 1 Hour: https://www.tradingview.com/chart/EURNZD/ICWvgEsg-EURNZD-1-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: There's nothing that special on the one hour chart that I have to point out since I think we pretty much got all the big stuff out of the way on our analysis of the 4 hour chart. Be sure to get a good sell in there since there are two potentially good setups which I've outlined for you. Also be sure to be careful and wait for the bounce of the channel if price goes that way since there's a chance price could break the channel and I don't want you to take a loss because you were impatient.
This pair is going to be really fun since we're going to be looking through a lot of time frames so if you really want to learn about a top down approach to analyzing time frames and trends then pay very close attention to how I break down this trade.
TradingView Link For Monthly: https://www.tradingview.com/chart/NZDJPY/jZh4F2Jv-NZDJPY-Monthly-For-Reddit-Post-6-20-U-AD3133/
Analysis: Yes, we're actually going to be looking at the monthly chart. I bet you guys don't do that very often. Looking at it we can see that price has been following a clear down trend line since late 2014. If you look at the wick of this month's candle you can see that it appears to have touched the trend line meaning we could see a good opportunity to catch a sell since it had just recently bounced off. Let's take a look at lower time frames to see if this continues to be true.
TradingView Link For Weekly: https://www.tradingview.com/chart/NZDJPY/dpvI29BB-NZDJPY-Weekly-For-Reddit-Post-6-20-U-AD3133/
Analysis: When zooming into the weekly we can see that using the wicks of the candles we can actually draw a channel for the low portion that runs pretty much in parallel to the trend line we drew on the monthly chart. We can see that price clearly bounced from the trend line and I think this gives us good reason to believe in the coming weeks we could see the price drop. Also looking at the Bollinger Bands we can see that price also bounced from the top band which also supports a drop of price. Let's go into the daily to see if we can get a better idea.
TradingView Link For Daily: https://www.tradingview.com/chart/NZDJPY/NbWLURkU-NZDJPY-Daily-For-Reddit-Post-6-20-U-AD3133/
Analysis: Looking at the daily time frame we can see that price is currently consolidated and remember big moves always come after consolidation. If you look closely however you can see that price looks like it's about to break the 200 day EMA (Orange line). If it breaks the EMA we could see price drop pretty far at an accelerated rate. Besides those couple observations there's not much else going on with the daily chart.
NZDJPY 4 Hour
TradingView Link For 4 Hour: https://www.tradingview.com/chart/NZDJPY/d1kaogH5-NZDJPY-4-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Would you look at that, it looks like we got a descending triangle on the 4 hour chart which looks like it's coming to an end. Looking at price it looks like it's wanting to push to the downside. Once you get a break below the lows of the day of June 11th I think it would be a safe bet to take a sell trade and ride it down for 66.825 for this week. If it breaks the 66.825 support zone then I'll definitely take a sell and try to ride price down to the bottom of the channel which we drew on the weekly chart. There's also the possibility that price could take support at any of these support zones and then head back up to test the top of the channel. At which point I'll be looking to get into a sell at the top of the channel but I won't ride price up to the channel since at this current point in time I feel like there's a large amount of risk in that.
NZDJPY 1 Hour
TradingView Link For 1 Hour: https://www.tradingview.com/chart/NZDJPY/83b47mFS-NZDJPY-1-Hour-For-Reddit-Post-6-20-U-AD3133/
Analysis: Not much more to add here since I think by this point we got the entire story so I'm not going to say much more about the 1 hour chart since I think the analysis for the 4 hour chart also sums this up pretty well.
Well that was a lot of information to go through and I hope you found some value in this since it took me quite a few hours to put this together for you guys. Truth be told, I spent most of Friday working on this so I hope at least one person finds some value in which case I'll consider it a win.
So you guys tired of me yet or do you want me to continue this series for a week 3? It takes a lot of time and effort to put this together so I'll only do it if people want it or else I'll pretty much feel like I wasted my time. I might put together a little lesson on how to use the COT in order to catch some big reversal moves in the market since the COT pretty much tells you what the hedge funds are doing and you also want to trade with the hedge funds and institutions. It'll probably take a couple weeks since I'll have to compile some data together and wait for a setup before putting that out but I'll be working on it. Are there any other things you may want explained? Let me know and I'll try to find setups which contain the topic you may want more details on. I hope you have a great trading week!
Part Onesubmitted by whatthefx to Forex [link] [comments]
It will benefit your understanding of this to take some time to read through at least all of these post, and also my other ones. Over the last weeks I've introduced some concepts I think are useful, demonstrated how a person could use them to make profit and presented for consideration ways you can go and test if what I am saying is true in your trading. Now I am going to start to bring this all together to show you how a person can plan well ahead and be well prepared to profit in Forex.
Three weeks ago I gave a swing analysis on GBPUSD (as part of speaking about a broader idea of trend following). It said this.
Long term bearish picture here of 1.190. An area I expect us to have a big move in possibly feature a 100 plus pip candle (dare I speculate ... news event, or random fundamental). We got into 1.199s, and then price started to stall.
I then explain by "ping swing" theory and pointed out all the indicators this ping swing was coming.
When explaining what the ping swing was all about, I said it set up the really big move in the other direction. The breakout. What I more commonly refer to as the impulse leg.
So based upon all of these factors I am prepared to trade a move that may be surprisingly strong from a really specific area (will get into trades later). Everything in my analysis form and strategies design allow me to be ready and position my trades to profit from some wild event there may be in the coming week or two weeks (maybe three ... four, eeek. I'm hedging). Now I'm not saying I know there is going to be a certain type of Brexit news ... I do not care. I'm not saying we should think it's very possible the FOMC spikes high and then fucking crashes (surely something to do with that illusive "pricing in" thing) ... I do not care. I am not predicting these fundamental events.
What I am saying is based upon the information I have shared with you so far, a person can design a trade plan that would position them for this sort of price action, and this sort of price action almost always happens when there's a news event. Got that? Think it's very possible there is a huge swing coming, entirely unrelated to any news events that may happen in the future that I could not know about now.
What sort of price action could we expect ... ?
We already have the trade plan for that last week.
GBPUSD closed near the high on some of my brokers but crashed 30 pips in the last minute of the day on another, and this probably means it's opening up gap low. Exactly what we'd expect.
Do this experiment, find this double top pattern. Find the "confirmation" move I explained, and then honestly think where you'd set a stop "safe above the highs" here. Count how many pips it went past that. Probably about 5 - 7 and then crashed. That's the trap.
Lays the next trap. For this let's recap the traps I've shown you and see where we are in the cycle of possible mistakes.
Last week I said we were at the transition from black to blue. Then "the news" made that happen. Then late in the week I said look for spike out trend continuations. All this happened.
So selling into that event was either devastatingly unlucky, there was nothing you can do about it and it is what it is if it happens again (frequently). Or, it was selling mistake #2 (shown as 4 here near the low)
What do we have after selling mistake number #2. Selling mistake number #3 (no need to re-invest the wheel).
#3 is a 5 (just to be confusing), and this is "deep correction" selling mistake. Would you think it would be fair to agree anyone selling the double top like move we've discussed here would have made the mistake of thinking a deep correction was a trend continuation? People will have. They do every cycle. This is why I can "predict" it. Or, it's lucky and there's no way you can know. Pick your flavor.
Mistake #4 . Single candle price action. In this case I am forecasting this to be the crash pre-close (on some brokers) or the gap down (a gap is just a big swing). This looks like the real deal on the trend continuation. People will sell into this early in the week. It may be in the form of a big gap down, it making it's low early in the week and then people sell the gap fill (or part retrace). Anyway, the better trade is on the other side of this. We have not yet hit the 61.8 fib and this sort of sell off would be a "known" seller trap.
#5 tends to form when price first hits the 61.8, There is an immediate and dramatic sell off. Then there is a spike out of the 61.8 and the real trend move begins. We should watch for this sort of action Tue/Wed and should expect to be seeing it (very specifically) close to 1.2343.
Which is no surprise to see shaping up since this specific PA is what I started speaking about when it was at the lows.
So if we see these further confirms;
1 - Price spikes/gaps down and then returns aggressively to the high
2 - Price hits 61.8 and falls quickly
3 - These things happen in the immediate foreshadow of a news event (FOMC?)
All of these things would be consistent with things that happen before the following scenario:
1 - News is released. It's unexpected. Either the number is off, it was random (tweet etc) or the market just moved totally different from how it would be expected to (cue theories to fill gaps).
2 - Price moves rapidly up. It makes a "new breakout" of a "key level", and then capitulates. 100 + pips can be moved in very short periods of time.
3 - After this move has happened, there is a sharp low made and we uptrend for the next few weeks.
I am not "predicting the future", but this is a viable trade plan for the coming week(s). We sell GBPUSD 1.2340 area. Stop 1.2410 or so. We target 1.1900. Then we look for the market to make a low (after a very volatile fall) in the 1.1850 sort of area. As a rule of thumb (and I am not being flippant, this is true), if you see people in forums asking what just happened, that will probably be your cue to go and find this trade on your chart. This is a regular indicator.
I think if this is to happen this week, the high will be made Wed/Thurs and crash late week. If it's not to happen this week, a ranging week may be ahead. Even a couple weeks. These would not invalidate the analysis, for the market to range a few weeks to form a "strong high" and then do this take out move I've described is also something to be expected. I would be surprised to not see GBPUSD drop 300 pip from the high in coming month.
Prepare for the Impulse!
TL;DR - I will try and flip an account from $50 or less to $1,000 over 2019. I will post all my account details so my strategy can be seen/copied. I will do this using only three or four trading setups. All of which are simple enough to learn. I will start trading on 10th January.submitted by inweedwetrust to Forex [link] [comments]
As I see it there are two mains ways to understand how to make money in the markets. The first is to know what the biggest winners in the markets are doing and duplicating what they do. This is hard. Most of the biggest players will not publicly tell people what they are doing. You need to be able to kinda slide in with them and see if you can pick up some info. Not suitable for most people, takes a lot of networking and even then you have to be able to make the correct inferences.
Another way is to know the most common trades of losing traders and then be on the other side of their common mistakes. This is usually far easier, usually everyone knows the mind of a losing trader. I learned about what losing traders do every day by being one of them for many years. I noticed I had an some sort of affinity for buying at the very top of moves and selling at the very bottom. This sucked, however, is was obvious there was winning trades on the other side of what I was doing and the adjustments to be a good trader were small (albeit, tricky).
Thus began the study for entries and maximum risk:reward. See, there have been times I have bought aiming for a 10 pip scalps and hit 100 pips stops loss. Hell, there have been times I was going for 5 pips and hit 100 stop out. This can seem discouraging, but it does mean there must be 1:10 risk:reward pay-off on the other side of these mistakes, and they were mistakes.
If you repeatedly enter and exit at the wrong times, you are making mistakes and probably the same ones over and over again. The market is tricking you! There are specific ways in which price moves that compel people to make these mistakes (I won’t go into this in this post, because it takes too long and this is going to be a long post anyway, but a lot of this is FOMO).
Making mistakes is okay. In fact, as I see it, making mistakes is an essential part of becoming an expert. Making a mistake enough times to understand intrinsically why it is a mistake and then make the required adjustments. Understanding at a deep level why you trade the way you do and why others make the mistakes they do, is an important part of becoming an expert in your chosen area of focus.
I could talk more on these concepts, but to keep the length of the post down, I will crack on to actual examples of trades I look for. Here are my three main criteria. I am looking for tops/bottoms of moves (edge entries). I am looking for 1:3 RR or more potential pay-offs. My strategy assumes that retail trades will lose most of the time. This seems a fair enough assumption. Without meaning to sound too crass about it, smart money will beat dumb money most of the time if the game is base on money. They just will.
So to summarize, I am looking for the points newbies get trapped in bad positions entering into moves too late. From these areas, I am looking for high RR entries.
I call this one the “Lightning Bolt correction”, but it is most commonly referred to as a “two leg correction”. I call it a “Lightning Bolt correction” because it looks a bit like one, and it zaps you. If you get it wrong.
Once I see price making the first sell-off move and then begin to rally towards the highs again, I am waiting for a washout spike low. The common trades mistakes I am trading against here is them being too eager to buy into the trend too early and for the to get stopped out/reverse position when it looks like it is making another bearish breakout. Right at that point they panic … literally one candle under there is where I want to be getting in. I want to be buying their stop loss, essentially. “Oh, you don’t want that ...okay, I will have that!”
I need a precise entry. I want to use tiny stops (for big RR) so I need to be cute with entries. For this, I need entry rules. Not just arbitrarily buying the spike out. There are a few moving parts to this that are outside the scope of this post but one of my mains ways is using a fibs extension and looking for reversals just after the 1.61% level. How to draw the fibs is something else that is outside the scope of this but for one simple rule, they can be drawn on the failed new high leg.
I am looking for a few specific things for a prime setup. Firstly, I am looking for the false hope candles, the ones that look like they will reverse the market and let those buying too early get out break-even or even at profit. In this case, you can see the hammer and engulfing candle off the 127 level, then it spikes low in that “stop-hunt” sort of style.
Secondly I want to see it trading just past my entry level (161 ext). This rule has come from nothing other than sheer volume. The amount of times I’ve been stopped out by 1 pip by that little sly final low has gave birth to this rule. I am looking for the market to trade under support in a manner that looks like a new strong breakout. When I see this, I am looking to get in with tiny stops, right under the lows. I will also be using smaller charts at this time and looking for reversal clusters of candles. Things like dojis, inverted hammers etc. These are great for sticking stops under.
Important note, when the lightning bolt correction fails to be a good entry, I expect to see another two legs down. I may look to sell into this area sometimes, and also be looking for buying on another couple legs down. It is important to note, though, when this does not work out, I expect there to be continued momentum that is enough to stop out and reasonable stop level for my entry. Which is why I want to cut quick. If a 10 pips stop will hit, usually a 30 pips stop will too. Bin it and look for the next opportunity at better RR.
Another setup I am watching for is harmonic patterns, and I am using these as a multi-purpose indicator. When I see potentially harmonic patterns forming, I am using their completion level as take profits, I do not want to try and run though reversal patterns I can see forming hours ahead of time. I also use them for entering (similar rules of looking for specific entry criteria for small stops). Finally, I use them as a continuation pattern. If the harmonic pattern runs past the area it may have reversed from, there is a high probability that the market will continue to trend and very basic trend following strategies work well. I learned this from being too stubborn sticking with what I thought were harmonic reversals only to be ran over by a trend (seriously, everything I know I know from how it used to make me lose).
A method of spotting these sorts of M/W harmonics is they tend to form after a second spike out leg never formed. When this happens, it gives me a really good idea of where my profit targets should be and where my next big breakout level is. It is worth noting, larger harmonics using have small harmonics inside them (on lower time-frames) and this can be used for dialling in optimum entries. I also use harmonics far more extensively in ranging markets. Where they tend to have higher win rates.
Next setup is the good old fashioned double bottoms/double top/one tick trap sort of setup. This comes in when the market is highly over extended. It has a small sell-off and rallies back to the highs before having a much larger sell-off. This is a more risky trade in that it sells into what looks like trending momentum and can be stopped out more. However, it also pays a high RR when it works, allowing for it to be ran at reduced risk and still be highly profitable when it comes through.
From these sorts of moves, I am always looking for a follow up buy if it forms a lightning bolt sort of setup.
All of these setups always offer 1:3 or better RR. If they do not, you are doing it wrong (and it will be your stop placement that is wrong). This is not to say the target is always 1:3+, sometimes it is best to lock in profits with training stops. It just means that every time you enter, you can potentially have a trade that runs for many times more than you risked. 1:10 RR can be hit in these sorts of setups sometimes. Paying you 20% for 2% risked.
I want to really stress here that what I am doing is trading against small traders mistakes. I am not trying to “beat the market maker”. I am not trying to reverse engineer J.P Morgan’s black boxes. I do not think I am smart enough to gain a worthwhile edge over these traders. They have more money, they have more data, they have better softwares … they are stronger. Me trying to “beat the market maker” is like me trying to beat up Mike Tyson. I might be able to kick him in the balls and feel smug for a few seconds. However, when he gets up, he is still Tyson and I am still me. I am still going to be pummeled.
I’ve seen some people that were fairly bright people going into training courses and coming out dumb as shit. Thinking they somehow are now going to dominate Goldman Sachs because they learned a chart pattern. Get a grip. For real, get a fucking grip. These buzz phrases are marketeering. Realististically, if you want to win in the markets, you need to have an edge over somebody.
I don’t have edges on the banks. If I could find one, they’d take it away from me. Edges work on inefficiencies in what others do that you can spot and they can not. I do not expect to out-think a banks analysis team. I know for damn sure I can out-think a version of me from 5 years ago … and I know there are enough of them in the markets. I look to trade against them. I just look to protect myself from the larger players so they can only hurt me in limited ways. Rather than letting them corner me and beat me to a pulp (in the form of me watching $1,000 drop off my equity because I moved a stop or something), I just let them kick me in the butt as I run away. It hurts a little, but I will be over it soon.
I believe using these principles, these three simple enough edge entry setups, selectiveness (remembering you are trading against the areas people make mistakes, wait for they areas) and measured aggression a person can make impressive compounded gains over a year. I will attempt to demonstrate this by taking an account of under $100 to over $1,000 in a year. I will use max 10% on risk on a position, the risk will scale down as the account size increases. In most cases, 5% risk per trade will be used, so I will be going for 10-20% or so profits. I will be looking only for prime opportunities, so few trades but hard hitting ones when I take them.
I will start trading around the 10th January. Set remind me if you want to follow along. I will also post my investor login details, so you can see the trades in my account in real time. Letting you see when I place my orders and how I manage running positions.
I also think these same principles can be tweaked in such a way it is possible to flip $50 or so into $1,000 in under a month. I’ve done $10 to $1,000 in three days before. This is far more complex in trade management, though. Making it hard to explain/understand and un-viable for many people to copy (it hedges, does not comply with FIFO, needs 1:500 leverage and also needs spreads under half a pip on EURUSD - not everyone can access all they things). I see all too often people act as if this can’t be done and everyone saying it is lying to sell you something. I do not sell signals. I do not sell training. I have no dog in this fight, I am just saying it can be done. There are people who do it. If you dismiss it as impossible; you will never be one of them.
If I try this 10 times with $50, I probably am more likely to make $1,000 ($500 profit) in a couple months than standard ideas would double $500 - I think I have better RR, even though I may go bust 5 or more times. I may also try to demonstrate this, but it is kinda just show-boating, quite honestly. When it works, it looks cool. When it does not, I can go bust in a single day (see example https://www.fxblue.com/users/redditmicroflip).
So I may or may not try and demonstrate this. All this is, is just taking good basic concepts and applying accelerated risk tactics to them and hitting a winning streak (of far less trades than you may think). Once you have good entries and RR optimization in place - there really is no reason why you can not scale these up to do what may people call impossible (without even trying it).
I know there are a lot of people who do not think these things are possible and tend to just troll whenever people talk about these things. There used to be a time when I’d try to explain why I thought the way I did … before I noticed they only cared about telling me why they were right and discussion was pointless. Therefore, when it comes to replies, I will reply to all comments that ask me a question regarding why I think this can be done, or why I done something that I done. If you are commenting just to tell me all the reasons you think I am wrong and you are right, I will probably not reply. I may well consider your points if they are good ones. I just do not entering into discussions with people who already know everything; it serves no purpose.
I want to talk a bit more about using higher percentage of risk than usual. Firstly, let me say that there are good reasons for risk caps that people often cite as “musts”. There are reasons why 2% is considered optimum for a lot of strategies and there are reasons drawing down too much is a really bad thing.
Please do not be ignorant of this. Please do not assume I am, either. In previous work I done, I was selecting trading strategies that could be used for investment. When doing this, my only concern was drawdown metrics. These are essential for professional money management and they are also essential for personal long-term success in trading.
So please do not think I have not thought of these sorts of things Many of the reasons people say these things can’t work are basic 101 stuff anyone even remotely committed to learning about trading learns in their first 6 months. Trust me, I have thought about these concepts. I just never stopped thinking when I found out what public consensus was.
While these 101 rules make a lot of sense, it does not take away from the fact there are other betting strategies, and if you can know the approximate win rate and pay-off of trades, you can have other ways of deriving optimal bet sizes (risk per trade). Using Kelly Criterion, for example, if the pay-off is 1:3 and there is a 75% chance of winning, the optimal bet size is 62.5%. It would be a viable (high risk) strategy to have extremely filtered conditions that looked for just one perfect set up a month, makingover 150% if it was successful.
Let’s do some math on if you can pull that off three months in a row (using 150% gain, for easy math). Start $100. Month two starts $250. Month three $625. Month three ends $1,562. You have won three trades. Can you win three trades in a row under these conditions? I don’t know … but don’t assume no-one can.
This is extremely high risk, let’s scale it down to meet somewhere in the middle of the extremes. Let’s look at 10%. Same thing, 10% risk looking for ideal opportunities. Maybe trading once every week or so. 30% pay-off is you win. Let’s be realistic here, a lot of strategies can drawdown 10% using low risk without actually having had that good a chance to generate 30% gains in the trades it took to do so. It could be argued that trading seldomly but taking 5* the risk your “supposed” to take can be more risk efficient than many strategies people are using.
I am not saying that you should be doing these things with tens of thousands of dollars. I am not saying you should do these things as long term strategies. What I am saying is do not dismiss things out of hand just because they buck the “common knowns”. There are ways you can use more aggressive trading tactics to turn small sums of money into they $1,000s of dollars accounts that you exercise they stringent money management tactics on.
With all the above being said, you do have to actually understand to what extent you have an edge doing what you are doing. To do this, you should be using standard sorts of risks. Get the basics in place, just do not think you have to always be basic. Once you have good basics in place and actually make a bit of money, you can section off profits for higher risk versions of strategies. The basic concepts of money management are golden. For longevity and large funds; learned them and use them! Just don’t forget to think for yourself once you have done that.
Okay, I have thought this through a bit more and decided I don't want to post my live account investor login, because it has my full name and I do not know who any of you are. Instead, for copying/observing, I will give demo account login (since I can choose any name for a demo).
I will also copy onto a live account and have that tracked via Myfxbook.
I will do two versions. One will be FIFO compliant. It will trade only single trade positions. The other will not be FIFO compliant, it will open trades in batches. I will link up live account in a week or so. For now, if anyone wants to do BETA testing with the copy trader, you can do so with the following details (this is the non-FIFO compliant version).
Account tracking/copying details.
IC Markets MT4
Account number: 10307003
Investor PW: lGdMaRe6
(Not FIFO compliant)
Valid and Invalid Complaints.
There are a few things that can pop up in copy trading. I am not a n00b when it comes to this, so I can somewhat forecast what these will be. I can kinda predict what sort of comments there may be. Some of these are valid points that if you raise I should (and will) reply to. Some are things outside of the scope of things I can influence, and as such, there is no point in me replying to. I will just cover them all here the one time.
Valid complains are if I do something dumb or dramatically outside of the strategy I have laid out here. won't do these, if I do, you can pitchfork ----E
“Oi, idiot! You opened a trade randomly on a news spike. I got slipped 20 pips and it was a shit entry”.
Perfectly valid complaint.
“Why did you open a trade during swaps hours when the spread was 30 pips?”
“You left huge trades open running into the weekend and now I have serious gap paranoia!”
These are examples of me doing dumb stuff. If I do dumb stuff, it is fair enough people say things amounting to “Yo, that was dumb stuff”.
“You bought EURUSD when it was clearly a sell!!!!”
Okay … you sell. No-one is asking you to copy my trades. I am not trading your strategy. Different positions make a market.
“You opened a position too big and I lost X%”.
No. Na uh. You copied a position too big. If you are using a trade copier, you can set maximum risk. If you neglect to do this, you are taking 100% risk. You have no valid compliant for losing. The act of copying and setting the risk settings is you selecting your risk. I am not responsible for your risk. I accept absolutely no liability for any losses.
*Suggested fix. Refer to risk control in copy trading software
“You lost X trades in a row at X% so I lost too much”.
Nope. You copied. See above. Anything relating to losing too much in trades (placed in liquid/standard market conditions) is entirely you. I can lose my money. Only you can set it up so you can lose yours. I do not have access to your account. Only mine.
*Suggested fix. Refer to risk control in copy trading software
“Price keeps trading close to the pending limit orders but not filling. Your account shows profits, but mine is not getting them”.
This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours.
* Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Buy limit orders will need to move up a little. Sell limit orders should not need adjusted.
“I got stopped out right before the market turned, I have a loss but your account shows a profit”.
This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours.
** Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Stop losses on sell orders will need to move up a bit. Stops on buy orders will be fine.
“Your trade got stopped out right before the market turned, if it was one more pip in the stop, it would have been a winner!!!”
Yeah. This happens. This is where the “risk” part of “risk:reward” comes in.
“Price traded close to take profit, yours filled but mines never”.
This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours.
(Side note, this should not be an issue since when my trade closes, it should ping your account to close, too. You might get a couple less pips).
*** Suggested fix. Compare the spread on your broker with the spread on mine. Adjust your orders accordingly. Take profits on buys will need to move up a bit. Sell take profits will be fine.
“My brokers spread jumped to 20 during the New York session so the open trade made a bigger loss than it should”.
Your broker might just suck if this happens. This is brokerage. I have no control over this. My trades are placed to profit from my brokerage conditions. I do not know, so can not account for yours. Also, if accounting for random spread spikes like this was something I had to do, this strategy would not be a thing. It only works with fair brokerage conditions.
*Suggested fix. Do a bit of Googling and find out if you have a horrific broker. If so, fix that! A good search phrase is; “(Broker name) FPA reviews”.
“Price hit the stop loss but was going really fast and my stop got slipped X pips”.
This is brokerage. I have no control over this. I use a strategy that aims for precision, and that means a pip here and there differences in brokerage spreads can make a difference. I am trading to profit from my trading conditions. I do not know, so can not account for, yours.
If my trade also got slipped on the stop, I was slipped using ECN conditions with excellent execution; sometimes slips just happen. I am doing the most I can to prevent them, but it is a fact of liquidity that sometimes we get slipped (slippage can also work in our favor, paying us more than the take profit would have been).
“Orders you placed failed to execute on my account because they were too large”.
This is brokerage. I have no control over this. Margin requirements vary. I have 1:500 leverage available. I will not always be using it, but I can. If you can’t, this will make a difference.
“Your account is making profits trading things my broker does not have”
I have a full range of assets to trade with the broker I use. Included Forex, indices, commodities and cryptocurrencies. I may or may not use the extent of these options. I can not account for your brokerage conditions.
I think I have covered most of the common ones here. There are some general rules of thumb, though. Basically, if I do something that is dumb and would have a high probability of losing on any broker traded on, this is a valid complain.
Anything that pertains to risk taken in standard trading conditions is under your control.
Also, anything at all that pertains to brokerage variance there is nothing I can do, other than fully brief you on what to expect up-front. Since I am taking the time to do this, I won’t be a punchbag for anything that happens later pertaining to this.
I am not using an elitist broker. You don’t need $50,000 to open an account, it is only $200. It is accessible to most people - brokerage conditions akin to what I am using are absolutely available to anyone in the UK/Europe/Asia (North America, I am not so up on, so can’t say). With the broker I use, and with others. If you do not take the time to make sure you are trading with a good broker, there is nothing I can do about how that affects your trades.
I am using an A book broker, if you are using B book; it will almost certainly be worse results. You have bad costs. You are essentially buying from reseller and paying a mark-up. (A/B book AKA ECN/Market maker; learn about this here). My EURUSD spread will typically be 0.02 pips or so, if yours is 1 pip, this is a huge difference.
These are typical spreads I am working on.
Check the full range of spreads on Forex, commodities, indices and crypto.
Please understand I want nothing from you if you benefit from this, but I am also due you nothing if you lose. My only term of offering this is that people do not moan at me if they lose money.
I have been fully upfront saying this is geared towards higher risk. I have provided information and tools for you to take control over this. If I do lose people’s money and I know that, I honestly will feel a bit sad about it. However, if you complain about it, all I will say is “I told you that might happen”, because, I am telling you that might happen.
Make clear headed assessments of how much money you can afford to risk, and use these when making your decisions. They are yours to make, and not my responsibility.
Crazy Kelly Compounding: $100 - $11,000 in 6 Trades.
$100 to $11,000 in 6 trades? Is it a scam? Is it a gamble? … No, it’s maths.
Common sense risk disclaimer: Don’t be a dick! Don’t risk money you can’t afford to lose. Do not risk money doing these things until you can show a regular profit on low risk.
Let’s talk about Crazy Kelly Compounding (CKC). Kelly criterion is a method for selecting optimal bet sizes if the odds and win rate are known (in other words, once you have worked out how to create and assess your edge). You can Google to learn about it in detail. The formula for Kelly criterion is;
((odds-1) * (percentage estimate)) - (1-percent estimate) / (odds-1) X 100
Now let’s say you can filter down a strategy to have a 80% win rate. It trades very rarely, but it had a very high success rate when it does. Let’s say you get 1:2 RR on that trade. Kelly would give you an optimum bet size of about 60% here. So if you win, you win 120%. Losing three trades in a row will bust you. You can still recover from anything less than that, fairly easily with a couple winning trades.
This is where CKC comes in. What if you could string some of these wins together, compounding the gains (so you were risking 60% each time)? What if you could pull off 6 trades in a row doing this?
Here is the math;
This shows years, substitute years for trades. 6 trades returns $11,338! This can be done. The question really is if you are able to dial in good enough entries, filter out enough sub-par trades and have the guts to pull the trigger when the time is right. Obviously you need to be willing to take the hit, obviously that hit gets bigger each time you go for it, but the reward to risk ratio is pretty decent if you can afford to lose the money.
We could maybe set something up to do this on cent brokers. So people can do it literally risking a couple dollars. I’d have to check to see if there was suitable spreads etc offered on them, though. They can be kinda icky.
Now listen, I am serious … don’t be a dick. Don’t rush out next week trying to retire by the weekend. What I am showing you is the EXTRA rewards that come with being able to produce good solid results and being able to section off some money for high risk “all or nothing” attempts; using your proven strategies.
I am not saying anyone can open 6 trades and make $11,000 … that is rather improbable. What I am saying is once you can get the strategy side right, and you can know your numbers; then you can use the numbers to see where the limits actually are, how fast your strategy can really go.
This CKC concept is not intended to inspire you to be reckless in trading, it is intended to inspire you to put focus on learning the core skills I am telling you that are behind being able to do this.
submitted by JalelTounsi to ethfinance [link] [comments]
1. BreakoutBreakout strategies center around when the price clears a specified level on your chart, with increased volume. The breakout trader enters into a long position after the asset or security breaks above resistance. Alternatively, you enter a short position once the stock breaks below support.
After an asset or security trades beyond the specified price barrier, volatility usually increases and prices will often trend in the direction of the breakout.
You need to find the right instrument to trade. When doing this bear in mind the asset’s support and resistance levels. The more frequently the price has hit these points, the more validated and important they become.
Entry PointsThis part is nice and straightforward. Prices set to close and above resistance levels require a bearish position. Prices set to close and below a support level need a bullish position.
Plan your exitsUse the asset’s recent performance to establish a reasonable price target. Using chart patterns will make this process even more accurate. You can calculate the average recent price swings to create a target. If the average price swing has been 3 points over the last several price swings, this would be a sensible target. Once you’ve reached that goal you can exit the trade and enjoy the profit.
2. ScalpingOne of the most popular strategies is scalping. It’s particularly popular in the forex market, and it looks to capitalise on minute price changes. The driving force is quantity. You will look to sell as soon as the trade becomes profitable. This is a fast-paced and exciting way to trade, but it can be risky. You need a high trading probability to even out the low risk vs reward ratio.
Be on the lookout for volatile instruments, attractive liquidity and be hot on timing. You can’t wait for the market, you need to close losing trades as soon as possible.
3. MomentumPopular amongst trading strategies for beginners, this strategy revolves around acting on news sources and identifying substantial trending moves with the support of high volume. There is always at least one stock that moves around 20-30% each day, so there’s ample opportunity. You simply hold onto your position until you see signs of reversal and then get out.
Alternatively, you can fade the price drop. This way round your price target is as soon as volume starts to diminish.
This strategy is simple and effective if used correctly. However, you must ensure you’re aware of upcoming news and earnings announcements. Just a few seconds on each trade will make all the difference to your end of day profits.
4. ReversalAlthough hotly debated and potentially dangerous when used by beginners, reverse trading is used all over the world. It’s also known as trend trading, pull back trending and a mean reversion strategy.
This strategy defies basic logic as you aim to trade against the trend. You need to be able to accurately identify possible pullbacks, plus predict their strength. To do this effectively you need in-depth market knowledge and experience.
The ‘daily pivot’ strategy is considered a unique case of reverse trading, as it centers on buying and selling the daily low and high pullbacks/reverse.
5. Using Pivot PointsA day trading pivot point strategy can be fantastic for identifying and acting on critical support and/or resistance levels. It is particularly useful in the forex market. In addition, it can be used by range-bound traders to identify points of entry, while trend and breakout traders can use pivot points to locate key levels that need to break for a move to count as a breakout.
Calculating Pivot PointsA pivot point is defined as a point of rotation. You use the prices of the previous day’s high and low, plus the closing price of a security to calculate the pivot point.
Note that if you calculate a pivot point using price information from a relatively short time frame, accuracy is often reduced.
So, how do you calculate a pivot point?
ApplicationWhen applied to the FX market, for example, you will find the trading range for the session often takes place between the pivot point and the first support and resistance levels. This is because a high number of traders play this range.
It’s also worth noting, this is one of the systems & methods that can be applied to indexes too. For example, it can help form an effective S&P day trading strategy
6. Moving Average CrossoverYou will need three moving average lines:
So, You’ll open a position when the moving average line crosses in one direction and you’ll close the position when it crosses back the opposite way.
How can you establish there’s definitely a trend? You know the trend is on if the price bar stays above or below the 100-period line.
the source : https://www.daytrading.com/strategies
(This post is mainly for beginners in Forex that are struggling in support and resistance levels, although you more experienced guys might also learn a thing or two, this also doesn't go over how to use them to enter trades, although I could make a post about it if it is requested)submitted by indicasFinest to Forex [link] [comments]
How to correctly mark support & resistance in most marketsFirst thing to realise is that s&r levels are not really levels, they are zones, sometimes the price just misses the level and other times it goes just over, but it still reverses/breaks out off the general level. You will rarely find the exact level of where the price will reverse. There is no exact criteria on what makes a level significant levels, but you will eventually get better as you pipe in more experience into the market.
What even is a support/resistance zone?
Simply put a support or resistance zone is a price the market has had experience with before. In the book "Naked Forex" Alex Nekritin puts perfectly that s/r zones are just market scars. Market scars that the price has visited before and will try to stay away from as best as it can (but sometimes breakouts occur, more on that later).
Do zones expire?
This is very subjective, some say the older the level the less valid it may be, and others vice versa. I personally believe they don't expire and significant zones stay valid unless disapproved by appropriate price action. Your answer may be completely different, everyone's experience with the market is different
What are these "breakouts"?
Breakouts are when the price doesn't respect the level. Most of the time the price respects a level and reverses off it, however that can only happen for some time, (if this happens for a period of time where the price is bouncing off a support and resistance it is known as consolidation). Of course it can't keep trading in a range forever, breakouts have to happen. Breakouts mostly happen within high volatility, either from news or just the time the market is open, however the price can also just wonder through the zone, creating a less volatile breakout. You may also experience the price going over a zone and then returning into it;
On chart 1 below you can see a bland chart, just load up any trading software and you should see something like this. We can see the price recently has been on a decline on the last four candles.
EURUSD H1 (Chart 1)
To the untrained trader, this looks like guess work to place a good significant level. Wicks flying everywhere, this is where tip #1 comes in.
Tip #1: Change your candlestick chart into a line graph
EURUSD H1 (Chart 2)
This very simple tool removes all of the wick clutter and just gives a nice line of how the price has been moving (Keep in mind this only shows the close of the time frame and doesn't include wicks). Thus it makes marking s/r lines way way easier. Just off this you can place lines where the price has reversed, don't add too many as that could also be too bad for you (check tip #2)
Another thing to keep in mind is that if a price curves and reverses, this usually shows a stall on the zone and is an important level to manage. (Check Chart 3)
On Chart 3 you can see some levels I've added in that respond to the recent price on the line chart:
EURUSD H1 With S/R (Chart 3)
After you've added your s/r you can switch back to normal candle sticks to further evaluate your zones.
EURUSD H1 With S/R Candlesticks (Chart 4)
Tip #2: Don't over-add unnecessary levels
This mostly occurs if you don't have patience with the market and want to rush into a trade. Don't try and scavenge for any little s/r zone as they could easily end up failing if they haven't been tested and confirmed. It will also prevent you from finding any valuable trades.
You don't want your chart looking like this, where would you even start looking for an entry?
Jumble of messy lines
Tip #3: Draw major zones on higher time frames
Say you enter your trades mostly on H4, draw your major zones on the D1 chart. As well as this you can draw minor zones in time frames smaller than your usual one, like from H4 to H1.
Just a little tip you could keep in mind.
Those are just three tips that really help me out when drawing my s&r zones (they might not work out for you but it's worth giving them a shot) and I have tried making this post as beginner friendly as possible, so I really hope you all learned something from this post.
This post was heavily inspired by Naked Forex, you can find a PDF of it here
We had a single person voting in the poll of topics to be covered for followers, 6 up-votes. One voter.submitted by whatthefx to u/whatthefx [link] [comments]
So in what can only be described as a very one way vote, we'll cover;
2 - Market conditions strategy tool kit overview
Personally, I think the other one is much more interesting. It usually goes like this, "You seen that candle ... didn't you? Read that on Babypips, right? Hmmm hum. Here are 10 reasons that does not work."
Strategy tool kit is easier to do, though. This is largely a consolidation post since I've already posted much of the material in other posts.
When Right is Wrong
You must understand that you can create spectacular strategies, and no matter how well you've done with them there will be times they will betray you. Firstly, the strategy can only deal with all the variables you have had the foresight and pragmatism to allow it to cope with. You can not account for everything, because you can not know everything. From moment to moment you have no idea what is going to happen in the market. You can prepare for what you're prepared. Nothing more.
This is something that we do with everything. Not just trading strategies. We devise strategies based upon our experience to meet objectives and they work flawlessly as long as no critical aspect of the circumstances change. When you drive somewhere often, you know the strategy to get there fastest. When there are accidents blocking up the roads, this strategy fails. It remains overall a good strategy, but will betray you when critical variables change.
We'll stick with the driving analogy for understanding this. Although accidents by their very nature happen unexpectedly, you can know certain conditions in which there are more accidents. On days like this, if it's important you get somewhere in time you can leave early to account for possible detours, you can check road reports and see if there is anything to be aware of. You may even find out before getting there the road is closed, and in that case you'll take an alternative route (deploying a contingency strategy).
Since you know your strategy for doing this so well, you know the good and bad points of it. You know it's risk factors, and you know contingencies. When it comes to profiting in trading this is the part that is important. A part too often glossed over and neglected. See, anyone can know the best route ... but not everyone can avoid being stuck in a 4 hour pile up when they're late for (insert most important thing).
I can post entire strategies, literally covering everything for you. Starting with things to do before even considering a trade, moving on the specific things needed to make a trade valid for watch list. Precise requirements when price meets "potential entry area". More precise requirements for confirming and placing orders. Specifically how to place stops and targets. Indeed, I already have posted this. This is a Sat Nav. It's reasonably effective, and sometimes it will tell you to take an immediate left while you're driving along a straight bridge.
You have to understand all trading strategies do this, and the better you get at understanding market conditions the more you learn about that, the more it becomes common sense not to take a nose dive off a bridge. You can learn to be discerning. You can find filters. This plugs leaks in your profit/loss and makes you a better trader.
Let's refer to the common trading mistakes setups. Here we can see in a more practical sense how this applies to trading strategies (and although this is a hypothetically mock up, I have shown in other posts very specific practical use of this. It is practical in this market condition).
You can create a really good trend following strategy, have it profit for months and then have it lose everything in a losing streak. This can have a crushing feeling to it. A feeling you were never right, always stupid and back to square one.
When you learn that this consolidation and spike low pattern warns us very clearly there can be strong counter trend action and you learn to wait for a 61.8% retracement before engaging this style of strategy again - your results go linear. I feel I've already extensively shown that the switch of one market condition to another is one that can be seen. I won't be going over that again. It's covered in multiple posts and most recently here.
What I've presented in these setups is what happens in a trend. When the market is ranging for a long time, none of that works. Nothing. Everything I am teaching you with this stuff will lose money in a ranging market. So no matter how good you get at doing that, and no matter how well the strategy is designed; if part of that goodness and design does not involve sitting out of ranges ... got some bad news for you.
We have trending markets now (really easy to make money) , and this is why I am talking about all this stuff now. I am not going to get into range trading strategies because it's largely redundant at this point. There will be some intra day ranges, but probably overall trends. It's best to take advantage of what is there. We're here to make money from the markets - I am, anyway - not just talk about ideas.
I've already shared with you much of my "Strategy Tool Kit" to trade this broad move.
I've explained how I look at things in the perspective of trending week, corrective week or ranging week.
I've explained in detail a template you can use for preparing trade plans going into these.
When following the trend, I've explained a common mistake people make when entering into corrections. I use the inverse of this mistake to follow a trend, entering at the end of corrections.
When the market is in correction I use a rather standard pattern of entering into false trend continuation moves.
I've shown this pattern and how it works in my "Strategy to make 50% -100% a year Trading One Day a Week" series.
I've shown you how I look for certain conditions to occur when price is getting close to the level that I think the trend may start to really continue.
Also, if the analysis I have done suggests that there might be a big candle in the move, I've shown you how without caring about what the news events actually are, I can watch for indicators and design my position placement to trade the move even if it's "unexpected news". It's not unexpected to me. I started to plan three weeks ago.
From this level, there are a few things that can happen.
1 - 'Gasp' drop (the move I am positioning for)
2 - Steady and progressive trend to new lows (the move I'll adapt to position for as it happens if there's no gasp drop)
3 - Strong bullish breakout (I will flip my short term trend trading strategies and trade the other direction)
So with this tool kit of strategies and this overview of the market from my analysis style, I've known from the start of the month what sort of trading I'd be wanting to do this month. I've shown progressively how I made an initial swing analysis on GBPUSD 3 weeks ago, and then from there have slotted in meta analysis and strategies to profit from the price swings.
I've made forecasts of what I think wee'll see in the coming month, and I've also prepared contingency plans so if it turns out my strategies have told me to take the "Left turn" ... I at least know how to swim.
Your greatest enemies in trading can be: Anxiety, confusion and reaction. There are many people to be philosophical about these things but the solid core fact is if you do not remove them, they ruin you. You lose money, or you go through mental hell. It can be easier to bounce back from losing money than the sustained stress of not being prepared and working things out "on the hop".
The best way to deal with this is to understand your battlefield. You need to stop seeing things in overly broad senses based just on what the market is doing right now. Rather you want to be able to try to work out what the "mood" of the market will be in the coming trading sessions. If it is in that mood ... what will that look like, and what do you do when the market looks like that?
There is no such thing as bad weather ... only the wrong choice of clothing.
Chart patterns form a key part of day trading. Candlestick and other charts produce frequent signals that cut through price action “noise”.submitted by JalelTounsi to ethfinance [link] [comments]
The best patterns will be those that can form the backbone of a profitable day trading strategy, whether trading stocks, cryptocurrency of forex pairs.
Every day you have to choose between hundreds of trading opportunities. This is a result of a wide range of factors influencing the market. Day trading patterns enable you to decipher the multitude of options and motivations – from hope of gain and fear of loss, to short-covering, stop-loss triggers, hedging, tax consequences and plenty more.
Candlestick patterns help by painting a clear picture, and flagging up trading signals and signs of future price movements. Whilst it’s said you’ll need to use technical analysis to succeed day trading with candlestick and other patterns, it’s important to note utilizing them to your advantage is more of an art form than a rigid science.
You have to learn the power of chart patterns and the theory that governs them in order to identify the best patterns to supplement your trading style and strategies.
Use In Day TradingUsed correctly trading patterns can add a powerful tool to your arsenal. This is because history has a habit of repeating itself and the financial markets are no exception. This repetition can help you identify opportunities and anticipate potential pitfalls.
RSI, volume, plus support and resistance levels all aide your technical analysis when you’re trading. But crypto chart patterns play a crucial role in identifying breakouts and trend reversals. Mastering the art of reading these patterns will help you make smarter trades and bolster your profits, as highlighted in the highly regarded, ‘stock patterns for day trading’, by Barry Rudd.
Breakouts & ReversalsIn the patterns and charts below you’ll see two recurring themes, breakouts and reversals.
Candlestick ChartsCandlestick charts are a technical tool at your disposal. They consolidate data within given time frames into single bars. Not only are the patterns relatively straightforward to interpret, but trading with candle patterns can help you attain that competitive edge over the rest of the market.
They first originated in the 18th century where they were used by Japanese rice traders. Since Steve Nison introduced them to the West with his 1991 book ‘Japanese Candlestick Charting Techniques’, their popularity has surged.
Below is a break down of three of the most popular candlestick patterns used for day trading.
Shooting Star CandlestickThis is often one of the first you see when you open a chart with candlestick patterns. This bearish reversal candlestick suggests a peak. It is precisely the opposite of a hammer candle. It won’t form until at least three subsequent green candles have materialized. This will indicate an increase in price and demand. Usually, buyers lose their cool and clamber for the price to increasing highs before they realize they’ve overpaid.
The upper shadow is usually twice the size of the body. This tells you the last frantic buyers have entered trading just as those that have turned a profit have off-loaded their positions. Short-sellers then usually force the price down to the close of the candle either near or below the open. This traps the late arrivals who pushed the price high. Panic often kicks in at this point as those late arrivals swiftly exit their positions.
Doji CandlestickOne of the most popular candlestick patterns for trading forex is the doji candlestick (doji signifies indecision). This reversal pattern is either bearish or bullish depending on the previous candles. It will have nearly, or the same open and closing price with long shadows. It may look like a cross, but it can have an extremely small body. You will often get an indicator as to which way the reversal will head from the previous candles.
If you see previous candles are bullish, you can anticipate the next one near the underneath of the body low will trigger a short/sell signal when the doji lows break. You’ll then see trail stops above the doji highs.
Alternatively, if the previous candles are bearish then the doji will probably form a bullish reversal. Above the candlestick high, long triggers usually form with a trail stop directly under the doji low.
These candlestick patterns could be used for intraday trading with forex, stocks, cryptocurrencies and any number of other assets. But using candlestick patterns for trading interpretations requires experience, so practice on a demo account before you put real money on the line.
Hammer CandlestickThis is a bullish reversal candlestick. You can use this candlestick to establish capitulation bottoms. These are then normally followed by a price bump, allowing you to enter a long position.
The hammer candlestick forms at the end of a downtrend and suggests a near-term price bottom. The lower shadow is made by a new low in the downtrend pattern that then closes back near the open. The tail (lower shadow), must be a minimum of twice the size of the actual body.
The tails are those that stopped out as shorts started to cover their positions and those looking for a bargain decided to feast. Volume can also help hammer home the candle. To be certain it is a hammer candle, check where the next candle closes. It must close above the hammer candle low.
Trading with Japanese candlestick patterns has become increasingly popular in recent decades, as a result of the easy to glean and detailed information they provide. This makes them ideal for charts for beginners to get familiar with.
More Popular Day Trading Patterns
Using Price ActionMany strategies using simple price action patterns are mistakenly thought to be too basic to yield significant profits. Yet price action strategies are often straightforward to employ and effective, making them ideal for both beginners and experienced traders.
Put simply, price action is how the price is likely to respond at certain levels of resistance or support. Using price action patterns from pdfs and charts will help you identify both swings and trendlines.
Whether you’re day trading stocks or forex or crypto with price patterns, these easy to follow strategies can be applied across the board.
Zone StrategySo, how do you start day trading with short-term price patterns? you will likely employ a ‘zone strategy’. One obvious bonus to this system is it creates straightforward charts, free from complex indicators and distractions.
Dead ZoneThis empty zone tells you that the price action isn’t headed anywhere. There is no clear up or down trend, the market is at a standoff. If you want big profits, avoid the dead zone completely. No indicator will help you makes thousands of pips here.
The Red ZoneThis is where things start to get a little interesting. Once you’re in the red zone the end goal is in sight, and that one hundred pip winner within reach. For example, if the price hits the red zone and continues to the upside, you might want to make a buy trade. It could be giving you higher highs and an indication that it will become an uptrend.
This will be likely when the sellers take hold. If the price hits the red zone and continues to the downside, a sell trade may be on the cards. You’d have new lower lows and a suggestion that it will become a downtrend.
The End ZoneThis is where the magic happens. With this strategy, you want to consistently get from the red zone to the end zone. Draw rectangles on your charts like the ones found in the example. Then only trade the zones. If you draw the red zones anywhere from 10-20 pips wide, you’ll have room for the price action to do its usual retracement before heading to the downside or upside.
Outside Bar At Resistance Or SupportYou’ll see a bullish outside bar if today’s low exceeded yesterdays, but the stock still rallies and closes above yesterday’s high. If the complete opposite price action took place, you’d have yourself the perfect bearish example.
Unfortunately, it isn’t as straightforward as identifying an outside candlestick and then just placing a trade. It’s prudent to find an outside day after a major break of a trend.
Spring At SupportThe spring is when the stock tests the low of a range, but then swiftly comes back into trading zone and sets off a new trend. One common mistake traders make is waiting for the last swing low to be reached. However, as you’ve probably realized already, trading setups don’t usually meet your precise requirements so don’t stress about a few pennies.
Little To No Price RetracementPut simply, less retracement is proof the primary trend is robust and probably going to continue. Forget about coughing up on the numerous Fibonacci retracement levels. The main thing to remember is that you want the retracement to be less than 38.2%. This means even when today’s asset tests the previous swing, you’ll have a greater chance that the breakout will either hold or continue towards the direction of the primary trend.
Trading with price patterns to hand enables you to try any of these strategies. Find the one that fits in with your individual trading style. Remember, you’ll often find the best trading chart patterns aren’t overly complex, instead they paint a clear picture using minimal indicators, reducing the likelihood of mistakes and distraction.
Consider Time FramesWhen you start trading with your short term price patterns pdf to hand, it’s essential you also consider time frames in your calculations. In your market, you’ll find a number of time frames simultaneously co-existing. This means you can find conflicting trends within the particular asset your trading. Your stock could be in a primary downtrend whilst also being in an intermediate short-term uptrend.
Many traders make the mistake of focusing on a specific time frame and ignoring the underlying influential primary trend. Usually, the longer the time frame the more reliable the signals. When you reduce your time frames you’ll be distracted by false moves and noise.
Many traders download examples of short-term price patterns but overlook the underlying primary trend, do not make this mistake. You should trade-off 15-minute charts, but utilize 60-minute charts to define the primary trend and 5-minute charts to establish the short-term trend.
Wrapping UpOur understanding of chart patterns has come along way since the initial 1932 work of Richard Schabacker in ‘Technical Analysis and Stock Market Profits’. Schabacker asserted then, ‘any general stock chart is a combination of countless different patterns and its accurate analysis depends upon constant study, long experience and knowledge of all the fine points, both technical and fundamental…’ So whilst there is an abundance of patterns out there, remember accurate analysis and sustained practice is required to fully reap their benefits.
The source : https://www.daytrading.com/patterns
A prerequisite post to this post can be read here; https://www.reddit.com/Forex/comments/clx0v9/profiting_in_trends_planning_for_the_impulsive/submitted by whatthefx to Forex [link] [comments]
It will also be beneficial to read this;
Before getting into the meat of things, you need to understand the 'elastic band' effect of large moves in the market. What this means is most of the time before a market starts to make a big move in the direction it is ultimately going, it will make a strong and usually fast counter move. You know this already in a way. You've been taught from early on (I assume) that pin bars (hammers etc) are indications the market is reversing. You're told the wicks are formed by price pushing into an area and being rejected from it.
In a trend formation, this is what the intra-week price action would tend to look like when there is the formation of reversal candles at the close of the weekly timeframe.
Here we would have been in a down trend and then for a week or two seen bullish momentum. The blue swing is the "elastic band" move. Or what I like to call the "ping swing".
The formation I have drawn here is not arbitrary. A lot of specific things are going on in this chart. Here I've highlighted the relevant ones. When we've seen all of these, we know there is a good chance we have reached the end of a C leg correction (read up on basic Elliot wave theory if you do not understand this terminology).
There can be variance in the 4 and 5 area. I am being polite, I should be honest. This area is often a bitch to trade in. Sometimes there are deep retracements and sometimes they are really shallow. Personally I've not been able to find ways to get strong ideas of how to forecast which is more likely. It tends to be an area I lose money and one I continue to work on trying to develop better ways of dealing with.
Here are examples of each type from trades I've taken recently.
This is explained in more context at https://www.reddit.com/Forex/comments/cks8q1/shorting_noobs_problems_proofs_and_fine_tuning/
This chart is messy because a lot of positions are being taken rather than a specific strategy being followed, but as I've explained in the 'Shorting Noobs' series of posts, I am mot interested in trading off the 61.8% fib.
Here is one with EURUSD that had very shallow sell-off then made the ping swing.
You maybe thinking at this point, "But the range bit looks like it should be the 5". I know! I told you it's a bitch. As you can see here regardless of this I have still sold the best price. I am doing this by having a clear SR level I am forecasting in this sort of move. (Explained in more detail in the shorting noob series   )
Note, it is still entirely possible that this can make another ping swing and slightly spike out this high. If it does, we have a great opportunity. At this point, we are wiser to look for the better RR trade with trend continuation by considering we are possibly in this part of the move and we have the next (usually stronger than previous) sell off coming.
Which actually fits inside another cycle for a ping swing.
Here is a real time forecast of a ping swing we can watch for and set pending orders (or define areas to watch for reversal patterns)
(Ignore the buy trades on this, they are from a different type of strategy)
This is a lot of information, and to intrinsically understand this you'd have to go over a lot of trending charts and watch how they have developed. I have spent a hell of a lot of time on this. I will round up with leaving you just a few simple rules we can take from understanding this general pattern that recurs in trends. Some of them will help you win, others will help to prevent you losing.
1 - When it starts to chop, it's time to stop.
When a trend that has been in a free flowing form starts to get choppy, it's time to stop following the trend for the time being. You should be aware the next breakout(s) can be false ones, and the next shallow correction for a "Retest & continue" type trade is likely a trap.
2 - Big corrections rarely feature only one leg.
When you see a really big move against the trend it gets really tempting to rejoin the trend once it starts to form price action reversal candles. Any time you're entering without the market having previously faked and then spiked out early sellers at least a couple of times, you have a more risky trade.
3 - Forecast where early sellers will lose.
Quite simply, if you see a downtrend and then a spike up and what looks like the continuation of a downtrend you can assume there are sellers into what they think will be the new downtrend move. It's also quite likely these sellers have it very wrong on their stop area. It will be just above the previous highs and the consolation range. This is the very area we'd expect the ping swing to spike into and then make the proper trend move after whipsawing those who sold too early.
Where they are getting stopped out, you want to be entering. Not sure where this is? Look in Forex forums, they'll tell you.
4 - Velocity does not mean victory!
As price comes into the reversal area it will usually be carrying a lot of short term momentum and moving fast. Moving quickly into an area is not in any way an indication of a break of that area or a reversal. In fact, once you've identified where you think the ping swing will end, the more parabolic that move is into that area the better for the reversal trade. Plan ahead, do not be caught up in the moment. The moment will be deceptive.
5 - Have excellent exit plans on both sides of this sort of move.
If the move fails, the counter move running against you can be persistent. Stop losses should be around 78% of the swing. Small spike outs of the 61.8% level are to be expected. Breaks of the 76% level are not. Similarly, profits can come lightening quickly. Which can actually be a problem if you've not planned the areas you want to exit or how to trail your stops. So be well prepared to exit before you enter.
The things I have explained in this post have validity on all timeframes. I scalp with it, and I swing with it. It transfers readily to any market with trending properties. If you were to master this (especially at an intraday level - which is harder) , it would be highly likely you significantly beat what most people would think are "good returns" when the markets are trending.
It would be possible for someone who has sufficient skill in doing this to make themselves substantial profits even starting from a small amount of money and using moderate risk over the course of just trading 4 - 5 major trend moves on daily and weekly charts. This is quite an easy setup in my opinion (once it's been highlighted at least) and for as long as you can find trends to use it, it will outperform most strategies I see on public display.
(All bets are off in ranges. This will make a mockery of you if you try to do it in ranges)
Happy trend following :)
As more people have started bringing in great cash online trading forex, there's been plenty more people searching for information on trading forex. With that in mind, let's look at how forex trading works.The key idea is the same as the stock market.: Buy low and sell high. For example, the dollar from Canada is worth about seventy-five cents US right now. If you have reasons to believe that Canadian dollars will gain in value, it's wise to acquire CDN currency at 75 cents and sell them when the value jumps.Currency traders will take a lot of time probing pairs of currencies the and Canadian dollar are one example of a currency pair, looking for key indicators or economic indicators in order to see buy and sell transactions and make some money.Currency Traders also use forex computer trading programs that automatically the trader spot trading signals. Every professional will utilize this type of software as it will increase their profits by a huge amount.these programs can make be the difference between a profitable trader and someone who loses money. Obviously it's hard to confess that a piece of software is smarter than them, but many of the traders that are making lots of money owe it to some sort of currency program.submitted by rohinimatthew to u/rohinimatthew [link] [comments]
Althought this may seem a bit perplexing or technical - especially for those who are unfamiliar with forex trading. It's nice to know that these programs have been designed - ordinarily by a group of industry professionals and mathematicians - so the programs can analyze the data and recognize money making trades that anyone with the program can make.If you're thinking about getting into forex trading, it's best to purchase some type of forex trading software like this so it can allow you to make money right away. Ordinarily, these programs will return some strong profits for the trader on autopilot. This allows you extra time to do further research on the markets and later on you will use both of the trades the forex program points out and the trading ideas you generate yourself based on you want to learn the best Forex scalping strategy? Scalpers in the currencies market usually find themselves making 6 or more trades per day, depending on the volatility of the markets on that day. It is very different from other methods of trading like swing and day trading. It requires a completely different set of strategies and mindset in order to profit successfully from it.
It is very easy to lose money and get frustrated if the trader does not have the right scalping skills. There will also be times when the market is very difficult to scalp due to huge volatility; therefore it is a good idea to use scalping strategies together with breakout strategies and not just relying on scalping alone.The best time to make money is when the price of the currencies are not making significant up or down movements. This usually happens in about 70% to 80% of the time, and also depends on the inherent volatility of the currency pair.This period of time is also known as consolidation, and they usually range for a few hours and can last the entire day. The consolidation pattern ends when the price breaks up or down significantly above the resistance or below the key support levels.Looking for a review of the Forex Invasion online trading system? Many traders who have read about this brand new currency trading system are very curious to find out more about how it works and whether they can really benefit from it.There are many screenshots on its website showing how the owner, Steven Lee Jones, made consistent 5 figure profit trades weekly. It seemed too good to be true to me at first, and eventually I decided to purchase this new trading system to test it out for myself.
Basically, you must first learn to understand the logic behind the system when you first read the written guide. The entire logic and analysis methods have been listed in formulas and step by step instructions that anyone can start using on the Forex charts to make money immediately Using the rules of the system, I will need to spend about 15 to 20 minutes per day looking at the conditions of the market. The system's rules tell me whether I have any suitable trades to make. If there is a profitable trading opportunity, I also get clear instructions on the amount I need to invest in the trade which depends on the size of my trading capital as well as how much profit and stop loss I should set for it.While everyone goes into the market hoping for forex profits, inevitably near 90% of everyone who jumps into the ring typically end up losing everything which they had invested. Still, if you take the time to school yourself in the market happenings, maybe demo trade with virtual money for a few months, long enough to get a firm grasp on what you're doing, currency exchanging can be a surprisingly strong way to control your own financial independence.
Basic Trading Signals. Signals from the Super Range Breakout MT4 forex indicator are easy to interpret and goes as follows: Buy Signal: Open a buy trade when price reaches the blue super range breakout MT4 indicator bar. Place a stop loss 1 pip below the brown indicator bar or below short-term support. Sell Signal: Open a sell trade when price ... Breakout strategies are some of the most effective types of forex trading strategies. The key to trading these strategies profitably is in identifying the correct strategy for the market condition you are trading in. When trading the range, we try not to “chase the price” on a breakout. Range breakouts can be strong and will take profits along with them. If you are caught the wrong side of the move, it is best to cut the loss and wait for another entry opportunity. Likewise, it is best not to try to trade back towards the range after a breakout. With ... Forex Breakout Box; Breakout Bars Trend Indicator; London Breakout Forex Template; Levels Breakout System; Breakout Trading System; Fractal Breakout System; Kalbo Breakout System; MBFX Breakout System; Trend Plus Forex System; Intraday Breakout Trading System; Forex Trend Profits System; Forex Trend Rush System; Forex Trend Forecast System ; Breakout Zones System for Binary Options; Find more ... Range Breakout Forex Strategy. Breakouts are areas where the price action has left the boundaries of consolidation to find new price direction. Areas of consolidation are found where the price is basically heading sideways. However, this consolidation also creates a different kind of trading opportunity. This opportunity exists within the boundaries marked by the indicator, as long as a ... The Box Breakout MT4 Indicator solves one of the most difficult challenges in breakout trading.Breakout trading can be very frustrating because of the nature of the Forex market to exhibit a lot of false breakouts and also because many times traders don’t necessarily draw the range correctly. By using the Box Breakout MT4 indicator, there is no need to worry much about manually establishing ... Asian Breakout Range Indicator; Max Range Indicator; TRO Range Indicator; Range Indicator; Trend Range Indicator; I-Morning Range; Hi-Lo Range Oscillator; Hi-Lo Range Oscillator; Range Expansion Index; Range Volume Ratio Indicator; TLB Breakout Indicator; MaksiGen Range Move; Breakout RSI Indicator; Range Oscillator with Bands; Range Bars ...
[index]          
#forex #forexindicators #breakout Breakout Signal Forex Indicator. It is very powerful indicator for higher time frame. Use with other Trend Indicators. High... #forex #forexlifestyle #forextrader Want to join the A1 Trading Team? See trades taken by our top trading analysts, join our live trading chatroom, and acces... J. Welles Wilder developed the idea of average true range or ATR indicator. The purpose of the indicator is to measure the volatility. If we decompose the indicator, it is typically derived from ... Day Trading Range Breakout Strategy In 5 Simple Steps - (Intraday Trading Breakout Strategy). In this Intraday Trading Strategies video, discussed about Intr... HOW TO TRADE Opening Range Breakout Strategy And How To Select Stocks (Intraday Trading). In this Intraday Trading Strategies video, I cover Opening range br... #LondonBreakoutTrading Forex Chart Setup and Simple London Breakout Patterns. Overview of my basic chart setup, and the importance of understanding some simp... Amazing Breakout Indicator Trading Forex best indicator to find entry point trading forex Get Indicator Now ! http://bit.ly/breakoutindicator Trade Now ! htt...