Profitable forex strategy: it is a type of instruction for the trader, which helps to follow a clearly verified algorithm and safeguard his deposit from emotional errors and consequences of the unpredictability of the Forex currency market.
Thanks to her, you will always know the answer to the question: how to act in certain market conditions. You have the conditions of opening a transaction, the conditions of its closing, likewise, you do not guess if it is time or not. You do what the trading strategy tells you. This does not mean that it cannot be changed. A healthy trading scheme in the forex market must be constantly adjusted, it must comply with the realities of current market trends, but there must be no unfounded arguments in it. >>> Forex Signals With Unbeatable Performance: Verified Forex Results And 5° Rated OnInvesting.com|Free Forex Signals Trial:CLICK HERE TO JOIN FOR FREE
Profitable Forex Strategy Reddit
Types of trading strategies The forms of a trading strategy can combine a variety of methods. However, several of the most commonly used options can be highlighted.
Trading strategy based on various complementary technical indicators
Trading strategy using Bollinger Bands
Moving Average Strategy
Technical figures and patterns
Trading with Fibonacci levels
Candlestick trading strategy
Trend trading strategy
Flat trading strategy
Fundamental analysis as the basis of the strategy
Three most profitable Forex strategies
Important!These strategies are the basis for building your own trading system.Indicator settings and recommended pending order levels are for consultation only.If you do not get a satisfactory outcome in the test result or in a live account, that does not mean that the problem is the strategy.It is enough to choose individual parameters of indicators under a separate asset and under the current market situation.
1. “Bali” scalping strategy
This strategy is one of the most popular, at least its description can be found on many websites. However, the recommendations will be different. According to the author's idea, "Bali" refers to scalping tactics, as it facilitates a fairly short stop loss (SL) and take profit (TP). However, the recommended time frame is high, because the signals appear not very often. The authors recommend using the H1 interval and the EUR / USD currency pair. Indicators used:
Linear Weighted Moving Average. Period 48 (red line).
Important!Note that the indicators for the “Bali” strategy are chosen in such a way as to ultimately give an early signal.This gives the trader time to confirm the signal and check the fundamentals.
MA is one of the basics on MT4, the other two indicators can be found in the archive for free here. To add them to the platform, click on MT4: "File / Open data directory". In the folder that opens, follow the following path: MQL4 / Indicators. Copy the flags to the folder and restart the platform. Also Read: Make Money With Trading Conditions to open a long position:
Price penetrates the orange Trend Envelopes line from the bottom up. At the same time in the same candle there is a change of the orange line that falls to a growing celestial.
The candle is above LWMA. Once the above condition has been met, we wait for the candle to appear above the moving one. It is important that it closes above the LWMA red line. It is mandatory to have a Skyline Trend Envelopes on a signal candle.
The additional DSS of momentum line on the signal candle is green and is above the dotted line of the signal (that is, it crosses or crosses it).
We open a trade at the close of the signal candle. The recommended stop level is 20-25 points in 4-digit quotes, take profit at 40-50 points. https://preview.redd.it/t48d55s8faw51.jpg?width=1000&format=pjpg&auto=webp&s=1e93863745e74dec536178539817225767cbeb1c The arrow indicates a signal candle where a Trend Envelopes color change occurred. Note (purple ovals) that the blue line is below the orange line and goes upwards (in other cases the signal should be ignored). In the signal candle, the green DSS of momentum line is above the dotted line. Conditions to open a short position:
Price penetrates the Trend Envelopes sky line from top to bottom. At the same time in the same candle there is a change from the increasing celestial line to the falling orange.
The candle is below LWMA. Once the above condition has been met, we wait for the candle to appear below the mobile. It is important that it closes below the LWMA red line. It is mandatory to have an orange Trend Envelopes line on a signal candle.
The additional DSS of momentum line on the signal candle is orange and is below the dotted line of the signal (i.e. crosses or crosses it).
This profitable Forex strategy is weekly and can be used on different currency pairs. It is based on the spring principle of price movement, what went up quickly, sooner or later must fall. To trade you will only need a schedule on any platform and W1 time frame (although the daily interval can be used).
The bearish candle, which signifies last week's movement, has a relatively large body.
Open a long position early next week. Make sure to place a stop loss at 100-140 points and a take profit at 50-70 points. When it is midweek, close the order if it has not yet been closed at take profit or stop loss. After that, wait again for the beginning of the week and repeat the procedure, in any case do not open operations at the end of the current week. https://preview.redd.it/vuihnqspfaw51.jpg?width=1000&format=pjpg&auto=webp&s=7641e9d7701911cc255c4f0c8a53e1660c35c9fe On this chart it is clearly seen that after each large bearish candle there is necessarily a bullish candle (although smaller). The only question is what period to take where it makes sense to compare the relative length of the candles. Here everything is individual for each currency pair. Note that a rising candle was observed followed by a few small bearish candles. But when it comes to minimizing risks, it is best not to open a long response position, as the relatively small decline from the previous week may continue. Conditions to open a short position:
The bullish candle, which signifies last week's movement, has a relatively large body.
We open a short position early next week. https://preview.redd.it/tv4zmf5ufaw51.jpg?width=1000&format=pjpg&auto=webp&s=61cd1dcfc4aebfa6f80343b6c51f7a6e46358602 The red arrows point to the candles that had a large body around the previous bullish candles. Almost all signals turned out to be profitable, except for the transactions indicated by a blue arrow. The shortcomings of the strategy are rare signs, albeit with a high probability of profit. The best thing is that it can be used in several pairs at the same time. This strategy has an interesting modification based on similar logic. Investors with little capital opt for intraday strategies, as their money is insufficient to exert radical pressure on the market. Therefore, if there is a strong move on the weekly chart, this may indicate a cluster of large strong traders. In other words, if there are three weekly candles in one direction, it is most likely the fourth. Here you also have to take into account the psychological factor, 4 candles is equal to one month, and those who "push" the market in one direction, within a month will begin to set profits. Strategy principle:
A "three candles" pattern (ascending and descending) formed on the weekly chart.
It is preferable that each subsequent candle was larger than the previous one. Doji is not taken into account (disembodied candles).
Stop is placed at the closing level of the first candle of the constructed formation. Take profit at 50-100% of the last candle, but it is often better to manually close the trade.
This strategy is universal and is usually given as an example for novice traders. It uses classic EMA (Exponential Moving Average) indicators for MT4 and Parabolic SAR, which acts as a confirmatory indicator. The strategy is trend. Most sources suggest using it in "minutes", but price noise reduces its efficiency. It is better to use M15-M30 intervals. Currency pairs - Any, but you may need to adjust the indicator settings. Indicators used:
EMA with periods 5, 25 and 50. EMA (5) in red, EMA (25) and EMA (50) in yellow. Apply to Close (closing price).
Red EMA (5) crosses the yellows from bottom to top.
Parabolic SAR is located under the sails.
Conditions to open a short position:
Red EMA (5) crosses the yellows from top to bottom.
Parabolic SAR is located above the candles.
The transaction can be opened on the same candle where the mobile crossover occurred. Stop loss at the local minimum, take profit at 20-25 points. But with the manual management of transactions you can extract great benefits. For example, close at the time of the transition from EMA (5) to a horizontal position (change of the angle of inclination of the growth to flat). https://preview.redd.it/4un92jlegaw51.jpg?width=1000&format=pjpg&auto=webp&s=406a700c00722349622d031e20d0858e4196d18b This screen shows that all three signals (two long and one short) were effective. It would be possible to enter the market on the candle by following the signal (in order to accurately verify the direction of the trend), but you would then miss the right time to enter. It is up to you to decide whether it is worth the risk. For one-hour intervals, these parameters hardly work, so be sure to check the performance of the indicators for each period of time in a minimum span of three years. And now that you know the theory, a few words about how to put these strategies into practice. Ready? Then let's get started!
From the theory to the practice
Step 1. Open demo account It's free, requires no deposit, takes up to 15 minutes, and no verification required. On the main page of your broker there is for sures a button "Register", click and follow the instructions. An account can also be opened from other menus (for example, from the top menu, from the commercial conditions of the account, etc.). Step 2. Familiarize yourself with the functionality of the Personal Area. It won't take long. It is at the most user friendly and intuitive. You just need to understand the instruments of the platform and understand how the trades are opened. Step 3. Launch the trading platform. The Personal Area has the platform incorporated, but it is impossible to add templates. Hence, the "Bali" and "Parabolic Profit" strategies can only be executed on MT4.
Characteristics of an effective Forex strategy Reddit
And finally, let's see what makes a profitable Forex strategy effective. What properties should it have? Perhaps three of the most important characteristics can be pointed out.
The minimum number of lag indicators. The smaller they are, the greater the forecast accuracy.
Easy. Understanding your strategy is more important than your saturation with complex elements, formulas, and schematics.
Uniqueness. Any trading strategy must be "tailored" to your trading style, your character, your circumstances, and so on.
It is very important to develop your own trading strategy, but it is necessary to test a large number of already available and proven strategies. On the Forex blog you will find trading strategies available for download. Before using a live account, test your chosen strategy on the demo account on the MetaTrader trading platform. Conclusion. To successfully trade the Forex currency market, create your own trading strategy. Learn what's new, learn out-of-the-box trading schemes, and improve your individual action plan in the market. Only in this case, the trading results will satisfy you to the fullest. Success, dear readers! >>> Forex Signals With Unbeatable Performance: Verified Forex Results And 5° Rated OnInvesting.com|Free Forex Signals Trial:CLICK HERE TO JOIN FOR FREE Join the community for more articles on trading and making money on the Forex and Stock market. ------------------------------------------------ ------------------------------------------------ Disclosure: This post contains affiliate links, if you click and make a purchase I may receive a commission - This has NO extra cost for you.
Some trading wisdom, tools and information I picked up along the way that helped me be a better trader. Maybe it can help you too.
Its a bit lengthy and I tried to condense it as much as I can. So take everything at a high level as each subject is has a lot more depth but fundamentally if you distill it down its just taking simple things and applying your experience using them to add nuance and better deploy them. There are exceptions to everything that you will learn with experience or have already learned. If you know something extra or something to add to it to implement it better or more accurately. Then great! However, my intention of this post is just a high level overview. Trading can be far too nuanced to go into in this post and would take forever to type up every exception (not to mention the traders individual personality). If you take the general information as a starting point, hopefully you will learn the edge cases long the way and learn how to use the more effectively if you end up using them. I apologize in advice for any errors or typos. Introduction After reflecting on my fun (cough) trading journey that was more akin to rolling around on broken glass and wondering if brown glass will help me predict market direction better than green glass. Buying a $100 indicator at 2 am when I was acting a fool, looking at it and going at and going "This is a piece of lagging crap, I miss out on a large part of the fundamental move and never using it for even one trade". All while struggling with massive over trading and bad habits because I would get bored watching a single well placed trade on fold for the day. Also, I wanted to get rich quick. On top all of that I had a terminal Stage 4 case of FOMO on every time the price would move up and then down then back up. Just think about all those extra pips I could have trading both directions as it moves across the chart! I can just sell right when it goes down, then buy right before it goes up again. Its so easy right? Well, turns out it was not as easy as I thought and I lost a fair chunk of change and hit my head against the wall a lot until it clicked. Which is how I came up with a mixed bag of things that I now call "Trade the Trade" which helped support how I wanted to trade so I can still trade intra day price action like a rabid money without throwing away all my bananas. Why Make This Post? - Core Topic of Discussion I wish to share a concept I came up with that helped me become a reliable trader. Support the weakness of how I like to trade. Also, explaining what I do helps reinforce my understanding of the information I share as I have to put words to it and not just use internalized processes. I came up with a method that helped me get my head straight when trading intra day. I call it "Trade the Trade" as I am making mini trades inside of a trade setup I make from analysis on a higher timeframe that would take multiple days to unfold or longer. I will share information, principles, techniques I used and learned from others I talked to on the internet (mixed bag of folks from armatures to professionals, and random internet people) that helped me form a trading style that worked for me. Even people who are not good at trading can say something that might make it click in your head so I would absorbed all the information I could get.I will share the details of how I approach the methodology and the tools in my trading belt that I picked up by filtering through many tools, indicators strategies and witchcraft. Hopefully you read something that ends up helping you be a better trader. I learned a lot from people who make community posts so I wanted to give back now that I got my ducks in a row. General Trading Advice If your struggling finding your own trading style, fixing weakness's in it, getting started, being reliably profitable or have no framework to build yourself higher with, hopefully you can use the below advice to help provide some direction or clarity to moving forward to be a better trader.
KEEP IT SIMPLE. Do not throw a million things on your chart from the get go or over analyzing what the market is doing while trying to learn the basics. Tons of stuff on your chart can actually slow your learning by distracting your focus on all your bells and whistles and not the price action.
PRICE ACTION. Learn how to read price action. Not just the common formations, but larger groups of bars that form the market structure. Those formations carry more weight the higher the time frame they form on. If struggle to understand what is going on or what your looking at, move to a higher time frame.
INDICATORS. If you do use them you should try to understand how every indicator you use calculates its values. Many indicators are lagging indicators, understanding how it calculates the values can help you learn how to identify the market structure before the indicator would trigger a signal . This will help you understand why the signal is a lagged signal. If you understand that you can easily learn to look at the price action right before the signal and learn to watch for that price action on top of it almost trigging a signal so you can get in at a better position and assume less downside risk. I recommend using no more than 1-2 indicators for simplicity, but your free to use as many as you think you think you need or works for your strategy/trading style.
PSYCOLOGY. First, FOMO is real, don't feed the beast. When you trade you should always have an entry and exit. If you miss your entry do not chase it, wait for a new entry. At its core trading is gambling and your looking for an edge against the house (the other market participants). With that in mind, treat as such. Do not risk more than you can afford to lose. If you are afraid to lose it will negatively effect your trade decisions. Finally, be honest with your self and bad trading happens. No one is going to play trade cop and keep you in line, that's your job.
TRADE DECISION MARKING: Before you enter any trade you should have an entry and exit area. As you learn price action you will get better entries and better exits. Use a larger zone and stop loss at the start while learning. Then you can tighten it up as you gain experience. If you do not have a area you wish to exit, or you are entering because "the markets looking like its gonna go up". Do not enter the trade. Have a reason for everything you do, if you cannot logically explain why then you probably should not be doing it.
ROBOTS/ALGOS: Loved by some, hated by many who lost it all to one, and surrounded by scams on the internet. If you make your own, find a legit one that works and paid for it or lost it all on a crappy one, more power to ya. I do not use robots because I do not like having a robot in control of my money. There is too many edge cases for me to be ok with it.However, the best piece of advice about algos was that the guy had a algo/robot for each market condition (trending/ranging) and would make personalized versions of each for currency pairs as each one has its own personality and can make the same type of movement along side another currency pair but the price action can look way different or the move can be lagged or leading. So whenever he does his own analysis and he sees a trend, he turns the trend trading robot on. If the trend stops, and it starts to range he turns the range trading robot on. He uses robots to trade the market types that he is bad at trading. For example, I suck at trend trading because I just suck at sitting on my hands and letting my trade do its thing.
Trade the Trade - The Methodology
Base Principles These are the base principles I use behind "Trade the Trade". Its called that because you are technically trading inside your larger high time frame trade as it hopefully goes as you have analyzed with the trade setup. It allows you to scratch that intraday trading itch, while not being blind to the bigger market at play. It can help make sense of why the price respects, rejects or flat out ignores support/resistance/pivots.
Trade Setup: Find a trade setup using high level time frames (daily, 4hr, or 1hr time frames). The trade setup will be used as a base for starting to figure out a bias for the markets direction for that day.
Indicator Data: Check any indicators you use (I use Stochastic RSI and Relative Vigor Index) for any useful information on higher timeframes.
Support Resistance: See if any support/resistance/pivot points are in currently being tested/resisted by the price. Also check for any that are within reach so they might become in play through out the day throughout the day (which can influence your bias at least until the price reaches it if it was already moving that direction from previous days/weeks price action).
Currency Strength/Weakness: I use the TradeVision currency strength/weakness dashboard to see if the strength/weakness supports the narrative of my trade and as an early indicator when to keep a closer eye for signs of the price reversing.Without the tool, the same concept can be someone accomplished with fundamentals and checking for higher level trends and checking cross currency pairs for trends as well to indicate strength/weakness, ranging (and where it is in that range) or try to get some general bias from a higher level chart that may help you out. However, it wont help you intra day unless your monitoring the currency's index or a bunch of charts related to the currency.
Watch For Trading Opportunities: Personally I make a mental short list and alerts on TradingView of currency pairs that are close to key levels and so I get a notification if it reaches there so I can check it out. I am not against trading both directions, I just try to trade my bias before the market tries to commit to a direction. Then if I get out of that trade I will scalp against the trend of the day and hold trades longer that are with it.Then when you see a opportunity assume the directional bias you made up earlier (unless the market solidly confirms with price action the direction while waiting for an entry) by trying to look for additional confirmation via indicators, price action on support/resistances etc on the low level time frame or higher level ones like hourly/4hr as the day goes on when the price reaches key areas or makes new market structures to get a good spot to enter a trade in the direction of your bias.Then enter your trade and use the market structures to determine how much of a stop you need. Once your in the trade just monitor it and watch the price action/indicators/tools you use to see if its at risk of going against you. If you really believe the market wont reach your TP and looks like its going to turn against you, then close the trade. Don't just hold on to it for principle and let it draw down on principle or the hope it does not hit your stop loss.
Trade Duration Hold your trades as long or little as you want that fits your personality and trading style/trade analysis. Personally I do not hold trades past the end of the day (I do in some cases when a strong trend folds) and I do not hold trades over the weekends. My TP targets are always places I think it can reach within the day. Typically I try to be flat before I sleep and trade intra day price movements only. Just depends on the higher level outlook, I have to get in at really good prices for me to want to hold a trade and it has to be going strong. Then I will set a slightly aggressive stop on it before I leave. I do know several people that swing trade and hold trades for a long period of time. That is just not a trading style that works for me.
Enhance Your Success Rate Below is information I picked up over the years that helped me enhance my success rate with not only guessing intra day market bias (even if it has not broken into the trend for the day yet (aka pre London open when the end of Asia likes to act funny sometimes), but also with trading price action intra day. People always say "When you enter a trade have an entry and exits. I am of the belief that most people do not have problem with the entry, its the exit. They either hold too long, or don't hold long enough. With the below tools, drawings, or instruments, hopefully you can increase your individual probability of a successful trade. **P.S.*\* Your mileage will vary depending on your ability to correctly draw, implement and interpret the below items. They take time and practice to implement with a high degree of proficiency. If you have any questions about how to do that with anything listed, comment below and I will reply as I can. I don't want to answer the same question a million times in a pm. Tools and Methods Used This is just a high level overview of what I use. Each one of the actions I could go way more in-depth on but I would be here for a week typing something up of I did that. So take the information as a base level understanding of how I use the method or tool. There is always nuance and edge cases that you learn from experience.
I keep a general high level Macro outlook for currencies. I dont get too deep into Fundamentals and just keep an eye out for news. If I am already in a trade I will hold it if its far enough away from my entry. However, I wont enter right before/during news as it can invalidate your setup.
I started with the basics of learning the standard price action formations/patterns and candles. You can find tons of free info on that online, google is your friend. Then I stared at charts and said "why did the price do that or do this etc" then after a while I started to understand what's happening without having to think about it and I can see the market structure without having to look as closely as I did in the past.
After many many hours of staring at 5 min charts for 15 hours a day 5 days a week I learned how to look at 5 min charts and be like "Oh that's a hammer on the 15 min etc. If you keep track of time you can do the same for hourly candles as well and you will start to see market structure naturally. However I typically trade in a two chart panel window so I have a 15 min and 5 min chart up when trading intra day so I dont have to think too hard about it.
Draw support resistance lines on Daily/4hr timeframes. I prefer to use body of the candle instead of the wick for support/resistance.
You can find support/resistance liquidity levels through out the day as well and trade those if the price retraces back through levels its already been through that same day.
It would be a bit length to explain exactly the best place to draw them. If your unsure there is plenty of free resources on the internet. Just try to use your head and look for price levels where the price was "Supported" or it "Resisted" that price level then slap a line on it. Draw as few or as many lines as you feel helps you and your style. I tend to lean on the side of fewer. I typically do about 6 lines main support/resistances (3 of each).
Draw two Fibonacci Extensions. One on the daily timeframe, and then one on the 4hr time frame. Then you can trade the Fibonacci levels and use them for TP targets or entry zones if price action respects the level. Also you can use it along with support/resistance and pivots if they happen to line up or are very close.
I cannot really figure out how to put it into words how to draw a Fib if you dont know how. I will have to make a picture to demonstrate it. If your interested post below and I will draw one up and post a link. Probably the easiest way to understand. Just keep in mind the Fib you draw on the 4hr time frame will be inside the daily timeframe one.
The TradeVision2020 dashboard that I use just helps me keep a tab on the current market post plus any swing strength/momentum a currency might have on higher time frames. Helps me look for shifts in the market or confirmation that the bias it already has in momentum is continuing. I have found that often currencies when they get really/weak or strong might continue for several days or even longer like a full week or more. We recently had what felt like 1 week or so of flat out Yen weakness which was making some things wonky. All it does is allow me to look at the dashboard instead of a million other charts.
I use two that work well for my intra day style. The Stochastic RSI is just like a RSI but its faster. The second is the Relative Vigor Index which I use to detect swings in momentum and divergences in bullish/bearish momentum. I have used many others in the past, but as I have grown and got better as a trader I have found making my analysis simpler has improved my trading.I dont like the whole idea of have 43 different indicators on 32 different time frames light up a dashboard to be green for me to enter a trade. With how I do it now, I have a clear understanding of what I expect to happen and why. That way when it does happen I understand the move and dont get freaked out if the market moves funny after I am in the trade.
Conclusion I use the above tools/indicators/resources/philosophy's to trade intra day price action that sometimes ends up as noise in the grand scheme of the markets movement.use that method until the price action for the day proves the bias assumption wrong. Also you can couple that with things like Stoch RSI + Relative Vigor Index to find divergences which can increase the probability of your targeted guesses. Trade Example from Yesterday This is an example of a trade I took today and why I took it. I used the following core areas to make my trade decision.
Fundamental Bias: I already had a bullish fundamental outlook on EUUSD with expecting the markets to price in future similes due a higher an higher chance of Biden winning on paper as the election closed in and a "Blue wave" coming which would lead to a weaker dollar. Also, the Euro Zone is getting hammered with COVID pretty hard plus Brexit drama so I had a strong Euro bias.NOTE: As frame of reference, all the other pairs I trade I traded as if they were ranging and trade a range. Markets are messed up right now.
Currency Strength/Weakness: I use a tool that gives me a currency strength/weakness dashboard called TradeVision2020. Helps me track individual currency strength/weakness intra day. Took me about a month to get used to it, but helps me keep track of intra day strength/weakness that can add a bias to trade direction as the day unfolds. Like "Will this run have a 2nd or 3rd push higher" or "I should look to TP at the first sign of weakness in the push" type bias data. You still got to use your brain and figure out the best decision. It wont make choices for you, its only a guide.NOTE: I am not trying to adverse the tool (if providing the code is against sub rules let me know), its just a tool I use every day that helps me with directional bias calls. I am sharing the coupon code that was given to me when I found out about the tool in the TradingView forex chatroom and the guy gave me the code to use when I signed up. I dont want someone to read the name and want to try it out then overpay for no reason. The coupon will give you 40% off. Coupon Code: 3F7A0T5T
Higher Timeframe Analysis: Detected some early signs of Bearish Divergence on the 1hr chart using a on a higher time frame using a Stochastic RSI. Then I saw more confirmation on 5 min charts using Relative Vigor Index to help time my entry mid session.
Pivot Points: I treat pivot points like support/resistance and trade them as such using price action to give me some idea how its being treated by the market. Pretty straight forward.
It may seem like a lot of stuff to process on the fly while trying to figure out live price action but, for the fundamental bias for a pair should already baked in your mindset for any currency pair you trade. For the currency strength/weakness I stare at the dashboard 12-15 hours a day so I am always trying to keep a pulse on what's going or shifts so that's not really a factor when I want to enter as I would not look to enter if I felt the market was shifting against me. Then the higher timeframe analysis had already happened when I woke up, so it was a game of "Stare at the 5 min chart until the price does something interesting" Trade Example: Today , I went long EUUSD long bias when I first looked at the chart after waking up around 9-10pm Eastern. Fortunately, the first large drop had already happened so I had a easy baseline price movement to work with. I then used tool for currency strength/weakness monitoring, Pivot Points, and bearish divergence detected using Stochastic RSI and Relative Vigor Index. I first noticed Bearish Divergence on the 1hr time frame using the Stochastic RSI and got confirmation intra day on the 5 min time frame with the Relative Vigor Index. I ended up buying the second mini dip around midnight Eastern because it was already dancing along the pivot point that the price had been dancing along since the big drop below the pivot point and dipped below it and then shortly closed back above it. I put a stop loss below the first large dip. With a TP goal of the middle point pivot line Then I waited for confirmation or invalidation of my trade. I ended up getting confirmation with Bearish Divergence from the second large dip so I tightened up my stop to below that smaller drip and waited for the London open. Not only was it not a lower low, I could see the divergence with the Relative Vigor Index. It then ran into London and kept going with tons of momentum. Blew past my TP target so I let it run to see where the momentum stopped. Ended up TP'ing at the Pivot Point support/resistance above the middle pivot line. Random Note: The Asian session has its own unique price action characteristics that happen regularly enough that you can easily trade them when they happen with high degrees of success. It takes time to learn them all and confidently trade them as its happening. If you trade Asia you should learn to recognize them as they can fake you out if you do not understand what's going on. TL;DR At the end of the day there is no magic solution that just works. You have to find out what works for you and then what people say works for them. Test it out and see if it works for you or if you can adapt it to work for you. If it does not work or your just not interested then ignore it. At the end of the day, you have to use your brain to make correct trading decisions. Blindly following indicators may work sometimes in certain market conditions, but trading with information you don't understand can burn you just as easily as help you. Its like playing with fire. So, get out there and grind it out. It will either click or it wont. Not everyone has the mindset or is capable of changing to be a successful trader. Trading is gambling, you do all this work to get a edge on the house. Trading without the edge or an edge you understand how to use will only leave your broker happy in the end.
Access Part I here: https://www.reddit.com/Forex/comments/h0iwbu/part_i_my_10_minuteday_trading_strategy/ Welcome to Part II of this ongoing series. How many parts will there be? No idea. At least 4-5, I guess. I'd rather have this broken down into digestible chunks than just fire hose you with information. Part I was really just a primer. If I'm using the whole baking a cake analogy, then in Part I we covered what kind of cake we're baking. I will not cover in this post where we look for entries and exits, that's coming next. Part II is going to cover what ingredients we need and why we need those ingredients in greater detail. What Kind Of Strategy Is This Again?It's my 10 minutes per day, trading strategy. I think the beauty of this strategy is that it allows you to take a good number of trader per week without having to commit an inordinate amount of time to the screens. This is both a mean reversion and trend-continuation based strategy. It is dead simple to learn and apply. I'd expect a 10 year old to be able to make money with this. The List Of Ingredients & Why We Use These Particular Ingredients *I will have an image at the end of the post showing a textbook long and short setup* Bollinger Bands: Bollinger Bands (BB) have a base line (standard is the 20SMA, which is also what we will use for this strategy) and two other trend lines (known as the upper Bollinger band [UBB] and lower Bollinger band [LBB]) plotted 2 standard deviations away from the 20SMA. The idea behind BB is deviously simple - the vast majority of price action, approx. 90%, takes place in between the two bands. In other words, when price trades off the UBB or LBB, you could consider prices to be overbought/oversold. However, just because something is OVERbought does NOT mean its run is OVER. Therefore we need additional tools to make sure we are using the BB as effectively as possible. TLDR: BBhelp contextualize where to look for our technical setups using this strategy. Finding the candle/bar pattern is not enough. We need to make sure the setup is in the 'right' part of the chart. We accomplish that using the BB. Stochastic Oscillator: The Stochastic Oscillator (Stochs) is a secondary momentum indicator. Because it is an oscillator that means the signals it generates are range-bound between 0 and 100. There are tons of momentum indicators out there. Theoretically you could swap out the Stochs for RSI or MACD. My hunch is that you won't see a measurable statistical difference in performance if you do. So why Stochs? Because I like the fact you have the %K and %D lines (you can think of them as moving averages) and the fact that the %K and %D lines crossover is a helpful visual aid. Like any other momentum indicator, the Stochs will generate overbought and oversold signals. We use the Stochs to help back up what the BB are telling us. If price is trading at, or even broken out of, the UBB and Stochs are also veeeery overbought that can be potentially useful information. It doesn't mean we have a trade necessarily, but it is a helpful piece of data. Fibonacci Retracement & Extension Tool: This tool is OPTIONAL. The only reason I use this tool for this strategy is to integrate a mechanistic means of entry and exit. In other words, we can use fibonacci levels to place limit orders for entry and profit taking, and a stop order to get us out for our pre-defined risk allocation to each particular trade. If you DON'T want to use the fibs, that is perfectly okay. It just means you will add a more discretionary layer to this strategy Candlestick/Bar Patterns: There isn't a whole lot to say here. We look for ONE formation over, and over, and over again. An indecision bar (small body, doesn't close on its highs or lows) followed by the setup bar which is an outside bar or an engulfing bar. It doesn't particularly matter if the setup bar is an engulfing bar or outside bar. What matters is that for a long trade the setup bar makes a HIGHER HIGH and has a HIGHER CLOSE relative to the indecision bar. The opposite for a short trade setup. The bar formation is what ultimately serves as the trigger for placing orders to take a trade. *MOVING ON* Now We Get Into The Setup Itself:There are 3 places where we look for trades using this strategy:
Short off the UBB (Here we want to see Stochastics overbought and crossing down. Bearish divergence is even better)
Long off the LBB (Here we want to see Stochastics oversold and crossing up. Bullish divergence is even better)
Long/Short off the Middle Bollinger Band (Here if you are looking for a short trade off the MBB you ideally want Stochs overbought. Vice versa for a long trade. NOTE: Often when taking trades off the MBB, Stochs WON'T go overbought/oversold. Because this doesn't happen often, I don't let it stop me from taking trades off the MBB.)
What up folks Have you ever thought one day instead of doing all the technical analysis shit just randomly choose a direction and that's it. I think they way we trade most of the times is doing a daily/weekly analysis. Like in the weekend you look at a certain currency pair and start putting support/resistance, trend lines, fibonacci, indicators, price action, watch economic calendar, etc. Sometimes actually works and sometimes not and then you wonder "what did i do wrong?". We've recently seen markets are moved by manipulation and who the fuck knows what else. When economic news are released we don't know how market is reacting. Before, if the news/reports were negative, market is bearish, if they were positive it was bull. Apparently now that shit doesn't work anymore. Sooo, imagine just one day at the market opening look at what you wanna trade and buy or sell based on nothing, just your intuition or because you've seen in the chart it's been going up/down. And just close your position at the end of the week or because you're comfortable with your profit/loss. Cheers and luv. Edit: This might apply to forex, options, crypto, stocks, you name it. ;)
Slightly different flavour here, which I hope will be insightful to those who take the time to read. Tonight I'm going to talk about my learnings in this market so far; my biggest mistakes; how you can avoid making them yourself; and the strategy I intend to follow from now on. It’s a long old read, but it contains months worth of knowledge, which could only be gained from first-hand experience. So pour yourself a drink, settle in, and let me take you through a brief history of my first two months in crypto.
TL;DR: Been in crypto 2 months, after years trading forex. Learnt a lot, and passing on the knowledge. Hope it helps some of you to become better investors.
CHAPTER 1: New market; new opportunity
I came into crypto with a real excitement. Finally a market that resonates with me. The ability to buy into something I believe in - something that could change the world for the better - and to make money along the way. I was excited that I could apply my trading background, something that not many in the market possess, to my advantage. I was excited at the prospect of being on the curve of early adoption, in a market that had demonstrably meteoric potential. But I was patient. I knew that I would be risking a substantial amount of money in this space, and potentially other peoples’ too, so I had to approach it sensibly. I was going to invest (hold long-term) the vast majority and day trade just a small portion. I spent many weeks researching before considering pulling the trigger even once. I didn’t come into this without a plan. But looking back on it now, it really was only scratching the surface on what a serious investment strategy should be.
CHAPTER 2: Early Strategy
In brief, my plan was to research a load of coins that I’d heard have good potential – solid projects which make unique & warranted use of blockchain technology; are disruptive to their industry; are developed by a competent & active team; and are backed by a loyal community. I shortlisted maybe 40 coins through articles, videos and general conversation, and I added them to my watchlist. Admittedly I became a bit lax in completing the deep level of research I told myself I’d do for each – scrutinizing the whitepaper became skimming the whitepaper, which then became watching a video analysis, which then became “oh that sounds interesting I’ll keep an eye on it”. But this was just a watchlist. And still an educated one.
I knew that I wanted to wait for an inevitable dip in Bitcoin’s value to enter the market, but it just wasn’t coming. $6k, $8k, $10k… the bullish momentum couldn’t be tamed. Was I missing out? Was Bitcoin going to continue its parabolic move while I sit here waiting for a dip that could never come?
LEARNING 1: There are an unlimited number of opportunities
At this stage I was ready to get involved, and I’d scouted a few alt coins that had good technical entry points approaching. Do I need to keep waiting for a good Bitcoin price even when there’s a good alt price? In short, if you’re confident enough about a trade, it doesn’t really matter what price you pay to get the BTC (or other major alt coin) needed to trade it, as long as you believe that your trade will outweigh any potential drop in Bitcoin’s value. If your trade goes up 100% and BTC’s value drops 50%, at that point you’re break even. Plus if you keep holding and BTC returns back to its previous value, now you’re in 100% profit. For me this meant that even after buying some Bitcoin at its ATH (all-time high) and having it correct over 40%, I was still in profit, because this particular trade was up over 100%. More on this later.
So I bought some Bitcoin! Not all at once – generally a decent strategy is called dollar-cost averaging. In essence, buying a little bit every week at whatever the price at the time is, so that your entry price averages out over time. A better strategy is to only buy if it’s at a good price, or when you need it for a trade setup – not just arbitrarily every week even if the price is high. But I digress, I had some Bitcoin now and I wanted to diversify. Time to buy some alts.
LEARNING 2: Every trade is a decision to have the coin you’re buying instead of the coin you’re using to buy it
If an alt coin is gaining value against Bitcoin, it’s better to be holding that alt coin than Bitcoin. And if it’s losing value against Bitcoin, you’d be better off keeping it as BTC. Simple, but easy to forget when you load up Coinmarketcap and see all of the price changes in USD. You’ve gone up by 4% today – great! But BTC went up 10%, so you’d have been better off holding BTC. Buying a coin is an active decision that you make to hold the coin you’re buying instead of the coin you’re selling for it, for the period of time until you close that position. So if I buy 1000 XEM using BTC, that XEM/BTC trade is me saying “I think that XEM will increase in value at a greater rate than BTC will”. If both of them increase in value but BTC does it faster, that was a sub-optimal decision.
LEARNING 3: Satoshis are your friend. Accumulate as many of them as possible
So how does one measure profit on a trade? It’s intuitive to think of it in fiat terms – how many £££ did I make? Something tangible. But really everything should be measured in the smallest unit of Bitcoin (1 satoshi = 0.00000001 BTC). It’s easier to migrate to this way of thinking if you think of your total investment as the total amount of BTC (or the other major alt coin) that you were able to buy with it. Say I invested £1000 in crypto, and with that I managed to buy 0.1 BTC – that’s my total investment. If I want to diversify and put 10% of that into each of my favourite alt coins, I’d buy 0.01 BTC worth of each of them. Let’s say Litecoin was one of them and I got 1 LTC for my 0.01 BTC. Litecoin’s rocket then fuelled up and started on its journey to the moon, and I decide to bank my profit. I now trade it back for 0.015 BTC. From 0.01 BTC to 0.015 BTC is a profit of 0.005 BTC, or 500,000 satoshis!
“But why not just measure it in £££ - that’s far less complicated?!”
Well here’s the kicker. Let’s say Bitcoin’s value plummeted over the course of that trade. I’ve got more BTC, but because the value of each one decreased, I may still have lost money. So does that mean that trade was a bad decision? Not at all. That trade was a decision between BTC and LTC, and you made the right call. LTC held its value better than BTC did, so you would have lost more if you didn’t take the trade. Profit measured in satoshis allows you to strip away the financial layer and answer the most important question – “was it a good decision to make that trade?” A gain in satoshis is always a win. A gain in £££ is not.
Taking that same scenario in which I’ve got an equal amount of my 10 favourite alt coins. Let’s say 9 out of 10 of them stay at exactly the same value, but the other one shoots to the moon on a lambo all the way to 100%. Woohoo! Shame that was only 1/10 of my portfolio - overall it’s worth 10% more now – but if I’d have invested all my money in that one coin I’d be up 100% overall. Now I’m certainly not advocating putting all your eggs in one basket. Rather, in reference to my previous learning, this helped me realised another very important point.
LEARNING 4: Understanding opportunity cost is a must
Any trade I make is not only a decision between the two coins I’m trading; it’s also a decision to buy that coin instead of any of the other coins I might be interested in. I have 0.1 BTC to spend and 10 alts I want to spend it on – should I just divide it equally? Not necessarily. If you’re super confident about a couple of them, but not so much on the others, spreading it equally doesn’t sound like such a good plan after all does it? Take your time analysing each trade / investment and rank them in order of confidence. In order of potential (risk:reward if you’re a trader). Invest more in the ones you’re more confident in. It’s a really basic point, but one that’s so often forgotten when there are so many exciting prospects out there. Holding a particular coin doesn’t just cost the price that you paid for it, it costs the opportunity to buy something else instead. One of the first things I learnt in trading was to cut your losers short and let your winners run. Why should crypto be any different? Even when you’re in a trade, every moment is an active decision to keep holding it instead of trading it for something else. Don’t blindly HODL hoping for a bad decision to improve, when there are better decisions you can take to re-coup that loss. Equally, don’t sell for a loss just because the value goes down. Re-analyse. Has anything changed? If every reason you had to buy it in the first place still applies, HODL. If something’s changed, including your confidence in it compared to other cryptos, consider switching it for a better opportunity.
So I learnt all of this in my first month – December 2017. Did I make optimal decisions all the time? Absolutely not, but with cryptos riding to all-time highs, my investors were very happy, as was I. It’s not often that you can get a 100% return on investment in just one month in a market. But it’s easy to profit in a bull market.
CHAPTER 3: It’s not all sunshine and lambos
It was around the end of December in which things started to get a bit too parabolic, and I was naturally suspicious of how long this could last. But you find yourself, inexperienced in a new market, eager to see how far you can ride the wave. The fear of missing out on further exponential gains becomes as much of a psychological challenge as taking a loss. In short, you get greedy. Highs that I had once been ecstatic with, a few days later became lows. I told my investors not to expect anything like this in future months. In my monthly summary I said “we are in perhaps the most bullish market the world has ever seen”, and I estimated that we had “a maximum of 1-2 more weeks to ride this momentum”. Prophetic, no? Well it’s easy to make predictions that come true – even a broken clock is right twice a day. What’s difficult is having enough conviction to take your own advice.
LEARNING 5: Make your rules and stick to them, no matter what
This is without a doubt the biggest thing I’ve learnt over the months. If one day you set yourself a target of £X profit – a level you’d be really happy to achieve, be that on a trade or overall – take it. Cash out as soon as you reach it and buy yourself something nice. Make it tangible. It’s easy for the world of online trading to feel gamified, but remember what you’re staking – this is real money. But it’s easier said than done. If you rise suddenly to that target I can tell you your first thought will be “whoa look at it go, I’m gonna see how much further it can get before I cash in”, rather than “mission accomplished, time to get out”. Humans are greedy. We want to take shortcuts – to our dreams, to wealth – but this isn’t a get rich quick scheme. If someone told you they could get you 10%/month gain on your savings (that triples your money every year) you’d probably bite their hand off. So why in crypto would you not be chuffed with 50%, or 20%, or 10%? Don’t move the goalposts. Decide in advance when to take profit and take it.
First off, it’s always a good idea to take out your initial investment at a level after which you’d be psychologically happy if the market goes down or up. For example, if I took out my initial investment (say £1000) when it went up 50% to £1500, and then the market went lunar and doubled the next month, I’d personally feel a bit annoyed at myself for not leaving more money in. That £1000 would’ve been £3000 had I kept it invested…shit. However if I took out my initial investment when it went up 200% - I’d now have £2000 left of my £3000 investment, and if it doubled the next month, I’d be happy with the stake I had remaining, not regretting my decision. That level can only be decided by you, based on your attitude towards risk. Obviously the higher that value is before you cash out your profits, the greater the risk you’re taking since it may never reach that level. Taking out your investment as soon as you’re happy to is a good move because from then on in you’re riding on pure profits. If the market were to crash to zero, you’d still be break even, so it’s much easier to detach yourself from the emotions involved (and we all know how emotional this market is). And if you’re a technical trader, rejoice at the fact that this market is hugely technical, and you can very often predict good levels to get out at – often doubled with buying back in cheaper. I highly recommend for everyone to spend some time learning to analyse charts - even at a basic level. It works. And for heaven's sake if you're day trading don't do what I did and "neglect" to apply basic trading principles like setting a stop loss and sizing each position at maximum ~1% risk. You can call it investing; you can call it speculative buying; but at the end of the day that's just gambling. Don't be lazy. Don't be wreckless. Apply what you've learnt in other markets - crypto is no different.
And for context, no I did not take my own advice. The correction shocked me. Not the fact that it happened, but the fact that it happened so hard and fast. At first I thought it was a healthy dip, and that the uptrend would resume soon enough – no reason to sell. But then the bears took over, and we were in a full on downwards movement. News emerged from South East Asia which caused a great deal of negative sentiment, and Bitcoin’s value tumbled (even when some of the speculation was later deemed invalid), and with that I realised how inherently linked to Bitcoin that all other cryptocurrencies are. You may dislike Bitcoin - the slow transactions; the high fees – but you can’t argue how critically important it is to this market.
LEARNING 6: 40+% market corrections are normal in crypto, but they still hurt
I neglected to mention earlier, but I have a background in trading forex. I understand market patterns, cyclicity and technical analysis such as Elliott Wave Theory and Fibonacci ratios. It is foolish to think that charts will continue indefinitely in a given direction – there will always be corrections and reversals. All through the correction we’ve started this year with, I have remained very optimistic. Nothing at all has changed to make any of the leading crypto projects less credible or via as future industry disruptors. This is why it’s important to do your own research on coins you invest in – so that you’re psychologically happy holding them long term through price corrections. But I’ll be honest, when Bitcoin broke down through several technical support levels a few days ago, I became apprehensive. Not even close to panic, or tempted to sell. After all I am investing long term, and I still see this as a requisite correction in a much larger up-trend. Or at least the upside potential of that outcome is comfortably worth the risk for me – it’s the opportunity of a lifetime. But even as an experienced trader, doubts can set in. All of the profits I had gained in month 1 were gone, and I have now slightly dipped into loss. As I say, I’m not selling, and my analysis is still very bullish. But HODLing is not always the best strategy.
LEARNING 7: When things are looking bearish, consider the trade to fiat
With the benefit of hindsight, and now having dedicated substantially more time to learning Elliot Wave Theory and studying crypto charts, there were a number of points at which you could have predicted a big ol’ correction was on the cards, before it fully developed. A quick ‘n dirty rule of thumb, for those of you who don’t know how to read charts, is: “Don’t buy into a parabolic market or at an all-time high – it’ll likely correct soon”. But I’d also like to add an addendum to what is a common mantra in the crypto community: “Buy the dip” – this is for day trading. If you’re intending to hold a coin long term, zoom right out and look at the entire coin’s price history. Wait for a macro scale correction, not a micro scale dip. A lot of people got excited the other day at Bitcoin rising 10% - I saw tonnes of calls saying “the correction is over” or “Bitcoin to the moon” – but when you zoom out, we’re still in a downtrend with room to go lower, and substantial resistance to get through before we can rise to new highs. Play the long game and look for long-term signals. And if you are in that subset of people who can predict an imminent correction, or indeed if you’re halfway through a correction with a good chance of it continuing, the best decision may well be to get out of the market until it’s over. Trade your positions back to fiat, and wait for clear recovery to the upside. It’s much more difficult to trade profitably in a down-trend. Most of us could have doubled our BTC holdings just by getting out of crypto before the correction and buying back in cheaper now. So make sure you have an exit plan. Know the steps that you’d need to take to get your money off exchanges / wallets and back into your bank account. Getting out of crypto doesn’t have to be a permanent move. There’s no harm in waiting things out until you’re confident again. After all, refer back to Learning 1 – there are always more opportunities.
CHAPTER 4: Moving forwards
At last, filled with learnings and plenty of inactive time spent refining my strategy, I’ve gone back to my technical analysis roots and really analysed why I’m in my positions.
LEARNING 8: Never stop analysing. You will make mistakes. Learn from them.
Does my portfolio need to be this diverse? Are my invested amounts proportional to my confidence in them? Probably not, so I’ve taken this opportunity to start shifting around. Don’t be precious about losses – losing is a natural part of trading – you only need one 10:1 winning trade to offset ten losing ones. So take some losses and make some mistakes. I’m sure glad I did, because it’s made me a much more confident and competent investor today.
And since everyone always looks around for opinions on the market, I will leave you with one bit of bullish technical insight on our King, Bitcoin. Basic Elliot Wave Theory says that markets move in ebbs and flows – 5 waves in the direction of the trend, followed by 3 waves of correction. And these waves are fractal in nature, meaning that a full 5-wave pattern forms a single larger wave within a higher degree pattern. All that being said, IF Bitcoin’s run up to its ATH in December constitutes a completed 5-wave pattern, we could consider that history as Wave 1 of a larger up-trend. Using Fibonacci extension ratios that appear in all markets (including crypto, very prominently, even with BTC), we can project the likely extensions of the Wave 3 that would come after we’re done correcting here. Based on analysis run by eSignal, a popular trading platform, the length of Wave 3 will likely reach either 1.62, 2.62 or 4.25 times the length of Wave 1. That means our Wave 3 high would take the price of a single Bitcoin to roughly $32,000, $64,000 or $98,000.
Technical analysis is very subjective, this is merely one possible outcome. But ask yourself, if you had the chance to invest in something with global reach that could make a 5x or even 10x return on your investment, what would you risk for that opportunity?
Thanks for taking the time to read, and I hope this helps some of you.
[educational] Technical analysis, patterns, and charts analysis for the day trader
Chart patterns form a key part of day trading. Candlestick and other charts produce frequent signals that cut through price action “noise”. 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 Trading
Used 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 & Reversals
In the patterns and charts below you’ll see two recurring themes, breakouts and reversals.
Breakout – A breakout is simply when the price clears a specified critical level on your chart. This level could by any number of things, from a Fibonacci level, to support, resistance or trend lines.
Reversal – A reversal is simply a change in direction of a price trend. That change could be either positive or negative against the prevailing trend. You may also hear it called a ‘rally’, ‘correction’, or ‘trend reversal’.
Candlestick 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 Candlestick
This 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. https://preview.redd.it/gf5dwjhbrdh31.png?width=300&format=png&auto=webp&s=437ff856bfd6ebc95da34528462ba224d964f01f
One 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. https://preview.redd.it/4yo650lcrdh31.png?width=300&format=png&auto=webp&s=b2aa3cdeef23e44e1e3e3047bbe2604fce0a4768
This 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. https://preview.redd.it/7snzz8qdrdh31.png?width=300&format=png&auto=webp&s=f83ff82f0980dd30c33bc6886ae7e7ed3a98b72f
More Popular Day Trading Patterns
Using Price Action
Many 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.
This 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 Zone
This 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 Zone
This 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.
Put 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. https://preview.redd.it/ey997b2irdh31.png?width=300&format=png&auto=webp&s=c938aac51e3b3bbf1f45a11c46f4ae3dfd1b6dd4 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 Frames
When 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.
Our 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
Learning Bitcoin Trading? Here's some Basic Technical Analysis Tools & Essential Knowledge to help!
Getting Started Back when I was learning more about Forex trading, I went to Forex school at Babypips (http://www.babypips.com/school), and learnt some of the fundamentals of chart reading and trading, such as reading candles and trading concepts. Unfortunately, I dropped out somewhere through Elementary School, after they lost me with all kinds of different indicators I could not see the use for. On the other hand, I still do think Babypips is a fantastic resource, especially for beginners who are keen to learn how to trade and better understand the Bitcoin market. More recently, since I made my first few panic buys and sells and lost some Bitcoins trading, I have been picking up again on Technical Analysis and Trading strategies. I’m not an expert at this, and neither should you take my words as investment advice, but I’m here to share some of my thoughts on Bitcoin trading, and I hope it is of great help to you! If you have any questions, feel free to tweet me at @onemanatatime. Learn the Basics of Trading If you’re a beginner trader, first thing you should learn is to read charts. Chart patterns (http://www.investopedia.com/university/charts/charts1.asp) signal to traders that the price of a security is likely to move in one direction or another when the pattern is complete. I’d like to bring your attention three chart patterns that will appear very often. I also took the time to show you how these relate to Bitcoin trading with the charting tools I use on TradingView (https://www.tradingview.comonemanatatime). Enjoy!
Secondly, another analysis tool I think is very useful, is the Fibonacci Extension (http://www.youtube.com/watch?v=dsomgrotZUg). Fibonacci is pretty tough to understand, and more so to chart with Bitcoin due to the lack of available tools which allow for it. But in essence, the Fibonacci sequence is a unique string of numbers which adds the sum of the two numbers before it, and is the deravitive of the Golden Ratio. People like to call them the “magic” numbers, and very aptly so, as they’re present all throughout Nature. Lastly, I’d like to share a trading pattern called the Elliott Wave Principle (http://en.wikipedia.org/wiki/Elliott_wave_principle). It emphasizes an understanding of Investor Psychology, and explains why prices fluctuate in zig-zag patterns. If you thought Fibonacci was tough to understand, let’s have Babypips put this in perspective. Babypips teaches Fibonacci in Elementary school Grade 3, whereas Elliott Wave is taught in “Summer School”. In that sense, Eliott Wave would be a great concept to learn and understand, as a supplement to your foundational understanding. Click on the links above to read and learn more about both theories! Bitcoin Trading By now, you’d probably be saying: “Sure, these resources all give me a good basic understanding of trading markets, but how does that apply to Bitcoin?” Since learning the fundamentals, I’ve been looking around for good resources to learn Bitcoin Trading from but with not much luck. Here I’ll be sharing some handy videos to guide you on your Bitcoin trading journey. I didn’t get around to learning proper Bitcoin trading strategies, until early December when I chanced upon ... Abstract from my personal blog post on www.CryptoCoinsNews.com and on www.AlunaCrypto.blogspot.com. http://www.cryptocoinsnews.com/2014/01/08/embarking-bitcoin-trading-journey-learn-basic-technical-analysis/ http://alunacrypto.blogspot.nl/2014/01/embarking-on-my-bitcoin-trading-journey.html Click the links to read the rest of the post, including past Bitcoin price analysis examples, as well as today's prediction. EDIT: I've been asked a few times about which platform I'm using day trade on Bitcoin. So here's for those of you interested: "I use BitFinex, they offer Margin Trading and Liquidy Swaps ontop of a normal Exchange. I just started yesterday but its great and I'm so excited about the Margin Trading options available, and been playing around with it all day long! Made 0.11 BTC on my first trade. ;) Sign up with my referral code now and enjoy 10% off your trading fees for the first 30 days! With Referral Code: [REMOVED -- ask me for referral code to enjoy offer] Without Referral Code: https://www.bitfinex.com/ Also follow me on twitter @onemanatatime for my latest Bitcoin predictions. Cheers & trade safe."
I'm Tired of Revisionist History In Chart Analysis
I'm new to the Forex world, and trading in general. So I've been studying a ton of Price Action strategies, web sites, analysis, commentary, recommendations, strategies, and more. And it drives me nuts how the charts and pictures only seem to point out whatever the goal of the article wants to point out. It's like every single PA site goes back and finds the perfect chart for their explanation. For example: 1) The strategy article points out a SR line, and it's like CONCRETE. It's like a Titanium-laced guarantee of a reversal bounce that is ALWAYS reflected in the "lesson". Yet, in the real charts I've been practicing with, these lines are often pierced like water. 2) Fibonacci levels. The article will draw out 3 or 4 Fibonacci lines, and the price will go up to the 4th one, and they will say something like "look at the strong resistance at the 4th line, here's where you sell", and I'm thinking to myself "what about the 1st line, 2nd line, 3rd line"? OK, fine, maybe those lines are easy to pass. Then I'll see another chart where the author says "the price hit the 2nd line and decided it couldn't go further" as if the 2nd line was now an impassable barrier. It's like the articles just make up reasons to explain why a price went from one line to another. There are enough Fibonacci levels to support almost any "theory". 3) Psychological levels? So far, I've seen 1.20000000 act like 3.14159. Seriously? Do the authors find THE CHART that demonstrates their one point? 4) Bollinger Bands. The descriptions of Bollinger Band strategies are the worst. The article will be like "look how the price skirted the bottom band and came out right HERE". The author could point out HERE anywhere in the chart, and they come up with a "reason" it came out of the Bollinger Band range. And every time it's a different reason because that's what was needed to explain the particular chart. Now, I'm not naive. I know the PA strategies work when interpretted with the right confluence, and that no single strategy can be taken out of context and acted on in the absence of other factors. But if I had a nickle for every pinbar that went the opposite way it was supposed to, I wouldn't be here. So then I look at some "trading opportunity" lists on a site like Oanda. I figure lets apply these strategies to LIVE charts. Oanda's stats page show like 65% of the trade opporunities they list succeeding. They show pinbars, channels, ABCD formations, SR lines. I figure their experts have more experience than me, so they must know what they are doing. So I religiously do what their opportunities suggest on a demo account, and lo and behold, I don't win 65%. Are they making their stats up? It's just a little frustrating to read about all these strategies and in live charts see them work far less than any strategy article (or Oanda expert) professes. [/rantover]
Hey all, I'm back for another week so let's dive right into it! Recap from last week 1) GBPUSD: The prediction regarding this pair's consolidation area seems to have been spot-on as we can see the price has moved and adhered to the area between 1.286 and 1.297 quite religiously. There was a brief fake-out that may have netted you a few pips (if you had a good trailing stop), but overall the price has opted to go for the "lower play" and has proceeded to hit the outlined target perfectly for just over 100 pips. I expect the price to rebound back to the consolidation area to retest the "upper play". Graph 2) EURCHF: The expected breakout has continued quite well, going as far as hitting the first target. As expected, there was a brief pullback to the entry price level but I expect it to continue its climb to Targets 2 and 3 over the next few months. Graph New Setups 1) EURJPY: What we have here are signs of a potential rising wedge formation on EURJPY due to the higher highs and higher lows being formed since the 18th of May. Fibonacci levels applied on a larger timescale seem to show the price working well between the 0.5 and 0.618 levels - an idea supported by the recent rejection of a new high on the 16th and on the 24th. If the pair adheres to the rising wedge formation, we can assume that it will hit at least 3 different targets: Target 1 is a relatively new S&R level that seems to have formed at the beginning of May, Target 2 is a strong S&R level that stretches back a few months and happens to coincide with the 0.382 fib level of the yellow retracement lines, and finally Target 3 which is the area between the 0.236 fib level and the price where the rising wedge originated from. In a longer-term view, we can see a double-top forming following a price rejection at 125.82. In keeping with how I usually approach double-top formations, there are two targets: A conservative target that is placed at the neckline and an aggressive target that is equidistant from the neckline. Despite all this analysis, the consensus on the Euro remains bullish . However, now that the French elections are behind us we can position ourselves quite nicely if the Euro ends up cooling off and losing momentum. In the event that it stays bullish and breaks through the 125.82, we have a simpler play worth about 65 pips which should tide us over until things clear up. Rising Wedge Play (Medium Term) Entry:124.965 (Price has already been hit but it is still worth a look) TP: 124.554, 123.813, 123.355 SL:125.643 Double Top Play (Long Term) Entry:124.965 TP: 123.074, 120.704 SL:125.643 Graph 2) USDCHF: I've given this pair another look since my last analysis on USDCHF 0.14% very recently hit its final target. Following that last target, we can now see that the price has been consolidating in the area between the 0.382 and 0.236 levels on the blue fibonacci retracements. From here, the price can push up through the 0.382 level to test the upper level of the channel again. The three targets outlined here are all based on important S&R levels that often coincide quite well with the fibonacci retracements on the larger time intervals. Conversely, the price may opt to break through the 0.236 level with a goal of testing the lower wall of the descending channel . Again, we can 'safely' assume that it will hit three targets that are also derived from a combination of S&R levels and fib levels. What is interesting about this particular idea is that an "upper play" means that there is a strong potential for the formation of a potential wedge (marked by the red triangle). This would mean that the price already hit the wall of the wedge back on the 22nd of May and that the descending channel would be giving way to a falling wedge - which has implications on the long-term plans for this pair. Upper Play Entry: 0.97827 TP: 0.98142, 0.98534, 0.99039 (area) SL: 0.97549 ; Lower Play Entry: 0.96905 TP: 0.96791(area), 0.96286, 0.95503 SL: 0.97145 Graph I truly hope you guys enjoy the read! Getting a lot of feedback goes a long way in helping me improve the quality and frequency of the posts! Previous Weeks: 20th - 24th March 27th - 31st March 2nd - 7th April 17th-21st April 24th - 28th April 8th May - 12th May I wish it was, but this isn't the gospel so please take the necessary precautions when trading Have a good week and good luck!
How to Use the Fibonacci Numbers in Forex Trading? Fibonacci trading is not complicated. By using the Fibonacci numbers on the charts, you can find more supports and resistances. It will be a big help to choose the right direction and avoid taking the wrong positions. They are also so helpful in setting the stop loss and target orders. To use the Fibonacci numbers on the charts, you have to ... If you’re into math, then trading Forex can be quite exciting! This is because the Forex markets are full of cool number sequences. The Fibonacci sequence is used in price swings in FX trading, Forex surfing, and other trading styles.. If you don’t like math, you’ll still be using it when trading online Forex when you apply the rules for using the Fibonacci sequence in the Forex markets. A Fibonacci strategy for day trading forex uses a series of numbers, ratios and patterns to establish entry and exit points. We’ll explain how to use Fibonacci retracement levels and extensions to identify support and resistance areas, plus profit taking targets. Also, we’ll consider what you need from a broker for Fibonacci forex trading, from formulas and analysis software to tutorial ... How to use Fibonacci ratios in Forex trading. Traders know that prices never rise in a straight line. Prices tend to rally or decline, then retrace, and then continue in the direction of the previous trend. By using Fibonacci ratios, you can measure a wave (a rally or a decline) and then anticipate where the price might retrace when it pulls back. The Fibonacci ratios are the key levels where ... You should now feel comfortable with what Fibonacci trading is and how to apply Fibonacci Retracement levels using the MetaTrader platform, as well as having a new Forex Fibonacci trading strategy to try out on either on a demo or live account. There are several other Fibonacci tools available for use with the MetaTrader trading platforms. How to apply Fibonacci lines to trading. The Fibonacci tool is most effective when adjusting the price after trend in trading. Depending on the price movement the levels: 23.6%, 38.2%, 50%, 61.8% perform function of resistance and support lines, at which price can change the motion vector. Fibonacci lines as support and resistance levels Many forex traders focus on day trading, and Fibonacci levels work in this venue because daily, and weekly trends tend to subdivide naturally into smaller and smaller proportional waves.
In this video Edward Ji takes you through 2 and half months of EuroUsd chart to explain one of the techniques to use the Fibonacci Retracement Tool. Trading 212 shows you how to find retracements and identify entry and exit points with Fibonacci numbers.At Trading 212 we provide an execution only service. Th... Fibonacci is a great tool to enhance your trading performance and results. In this video you will learn: 1. How to apply the fibonacci extension tool to a chart 2. How to use fibonacci in forex ... Fibonacci retracement lines are based on the Fibonacci Sequence and are considered a "predictive" technical indicator providing feedback on possible future. ... What do you all think about the fibonacci retracements? Do you personally use them for your trading or investing? Thank you all so much for watching the vide... Want to learn more about how to use this tool in your trading? Well, check out The Fibonacci Retracement Training Series - https://www.forexreviews.info/the-... How to Use Fibonacci Retracements in Tradingview Want to trade like the professionals? Join our Free webinar to get our FREE Order Flow trading strategy. See... Free Training: 3 - Part Reversal Series - https://goo.gl/QKaxzV Advanced EAP Training Program - https://goo.gl/5cP1Z5 - More videos about predictive analysis... A tutorial on how to apply and use the Fibonacci retracement tool on the Oanda Fx Trade platform.