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What Time-Frame Should You Trade?Hey Traders! One of the reason new traders don't do as well as what they first perceived is sometimes they could be trading a multitude of different things in the wrong style. That doesn't suit the way they are attempting to attack the market, or even their personality. Today I wanted to have a look into trading the different time frames, what's required? What are the pros and what the cons of each time frame? Now there's a million different ways to trade the financial markets. The time frame you're trading is one of the most important. I wanted to jump in and provide clarity for some of the newer traders that perhaps are trading the wrong market based on what they are actually trying to achieve. I see a lot of people coming into the market to earn profits (obviously) and they come in because they want time freedom, yet they all seem to gravitate towards the scalping one minute, 5 minute and 15 minute charts, which are not going to provide time freedom even when you are successful. I understand the adrenaline pumping in the intraday setups and then it can help people have and feed that get rich quick feeling that gravitates so many people to the market. But it's time we take it seriously. Let's seriously dive into the pros and the cons and analyze what's actually going to benefit you as a trader moving forward. INTRADAY Intraday trading is definitely the most frequent out of all the traders that come into the Forex market. The Forex market advertises intraday trading a lot more because the commissions and spreads are extremely affordable compared to trading other markets. Intraday traders, also known as scalpers, trade the markets on the lower timeframes, usually between the one minute and 15 minute, and trades are held throughout a day session and usually closed by the end of the day. You usually see these traders have your typical eight or nine hour window in which they sit in front of the charts and trade. There's plenty of pros to intraday trading the high frequency of trades, the great adrenaline pumping feeling, the more opportunities across a range of different markets, you hold no overnight risk and it's very easy to dodge fundamental news. You also less reliant on those one or two big winners to bring in your yearly profits. In saying that, there's also plenty of cons. Transaction costs are much higher when you're scalping. You have to incorporate spreads and commissions can sometimes eat up your profits. Mentally an emotionally, it is an extremely difficult task. You have to be able to be disciplined enough to make quick reaction decisions with money and risk on the line. As mentioned above, unlike the other trading systems and timeframes, it does require quite a lot of time and concentration throughout a trading session, which is why if you're chasing time freedom, I wouldn't recommend intraday trading. SWING Swing trading is a common way of trading, as a lot of people are able to do it part time away from whatever their main career. Swing traders trade the markets on a mid-range time frame, usually between the one hour to the four hour chart (sometimes going a little bit above). Trades are held for hours to a week and they try to profit from the larger moves in the market. The pros to swing trading? There's plenty of opportunities, plus more than enough time to sit back and thoroughly think through your analysis. The ability to make money while doing something else, which I touched on just before, you can still have your full time job and trade after hours, and then also there are much lower transaction costs compared to intraday trading, as spreads and commissions don't tend to eat up as much as you kind of aiming for those larger moves in the market. The cons? Swing trading of a sudden introduces this overnight risk. You're going to have to sleep at some point and you may have positions open during that time. That right there is a window of risk where you can not react to the market. I have also found that many people tend to lose sleep while they have open positions. Fundamental news releases start affecting your decision making. You're going to have to incorporate the economic calendar. It does require a lot more patience to be able to hold positions over long periods of time. You will have to be making decisions without your emotions affecting and changing your overall bias. LONG-TERM Finally, we start looking at our long-term investors. I call it investing because they tend to trade the markets on a higher range time frame like the daily, weekly or monthly chart. Trades are held throughout week and sometimes months trying to profit from the really large fundamental moves of the market. The pros to long term investing or trading are you do not have to watch the market in today, the lower timeframes mean nothing to your analysis which allows you to step back and think clearly. You have much fewer transactions which relates to much lower transaction costs. You have more time to think about your trades and much more time to react to different news releases or change in market bias. The constant long term trading are the very few opportunities per year. Fundamental knowledge is 100% required. There will be people that say you don't need it, but honestly I highly recommend you have a great deal of fundamental knowledge. It requires exponential amounts of patience and the ability to sit on your hands for weeks or months on end. It does require bigger account for more buying power so you can open multiple positions over long periods of time. Finally you will incur frequent losing months as you do not have many trades to bring that initial balance too profit. I hope that bought a bit of clarity to the multiple timeframe traders and where you're currently sitting. Have a look at what your goals are with actually being involved with trading. Where do you want to get to? Is the time frame you're trading is actually going to allow you to get there? If you're here as a part time trader and you'd love to have that time freedom that so many people advertise. Maybe look for the bigger time frames as you can have that time to go do whatever it is you need, and you don't need to be sitting at a computer desk. If you love intraday trading and scalping and you're willing to put in the hours of work and more or less work a nine to five type role. Your scalp trading is going to be one for you.
Education
by the5erstrading
88
How to fail as a traderHey Everyone! 👋 Over the last few weeks, we've looked at a couple of the best ways to improve your trading, including learning to adjust to market conditions , building a proper trading mindset , and more. Today, we thought it would be fun to do the opposite. Instead of trying to help the community build up solid, professional trading practices - let's try to design a losing trader from the ground up! What attributes/decisions will we have to encourage to get a losing result? Theoretically, the market is just a game of probabilities. How can we guarantee that our trader will lose? As it turns out, there are a couple easy behaviors we can combine to ensure that a losing outcome is a foregone conclusion. Number 1: They never define risk 🤷🏼‍♂️ In trading, people often say things about "Risk management", "Defining your risk" or "Defining your out", but it can sometimes be difficult to determine, as a new trader, what the heck people are talking about. Define my risk? How? What are you talking about? What does this actually mean? Put simply, defining your risk is a process of figuring out *where* you are wrong on a trade/investment. For active traders, it can be as simple as picking a recent low or high, and saying "If this price is hit, then I'm exiting the trade. The short term read I had on this asset is no longer valid. I don't think I know what's going to happen next." For someone who is more of a position trader, it can be as simple as saying "I don't want to lose more than 10% (or some percent) of my capital at any point when I am in this position. I think that I have selected my entry well enough that a 10% drop (or x%) would mean that, for some reason or another, my thesis is no longer valid." From a cash management / portfolio management perspective, defining your risk has another dimension: How much of your total capital do you want to potentially lose in a worst case scenario? Should each trade risk 50% of your capital? 20%? 5%? 1%? How much of your total bankroll will you lose before you stop? In order to ensure that we have a losing trader, it's important that they doesn't have a plan for position sizing, setting stop losses, or setting account stop losses. This way, they won't have any consistency and will inevitably take a few big losses that knock the out of the game forever. Number 2: They use lots of leverage 🍋 When combined with Number 1, using lots of leverage is a great way to accelerate the process of losing money. Given that a strategy that wins 50% of the time will statistically face a 7 trade losing streak in the next 100 trades, sizing up and using leverage is a great way to ensure that when a rough patch strikes, you lose all your capital. Letting trades go past how much you expected to lose is a great way to speed this process, because with the addition of leverage, things only need to go against you 50%, 20%, 10%, etc, before you're wiped out. You can't risk to zero. Considering that the most aggressive hedge funds in the world typically don't use an excess of 5-8x leverage, even in FX trading, we will need our losing trader to use at least 10-20x leverage in order to speed up their demise. Number 3: They hop from strategy to strategy 🐰 Bruce lee once said, “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.” In this example, sticking to one strategy, even if suboptimal, is the man who has practiced one kick many many times. The trader who strategy hops is the one who has tried almost every kick out there, but mastered none. In order to ensure that our trader is a losing trader, we need to ensure that they never develop any mastery and keep switching from strategy to strategy. We need to constantly dangle a new strategy, indicator, or trading style constantly in front of our trader. Thus, no matter what strategy the trader picks, they will lack the hours necessary to have anything but suboptimal trade execution, poor overall market sense, and a general lack of nuance & understanding. Combined with number 1 and number 2, it's going to be nearly impossible for this trader to be profitable. -- So there you have it; 3 ways to ensure that the trader will fail. Recognize any of them? Our hope in writing this is not to discourage anyone from getting involved in the markets, but rather to continually shine a light on some of the bad habits we can get in when starting out. Avoiding rookie mistakes and bad practices that can stunt a career as a trader & create bad habits - no bueno! Let us know if you enjoyed, and we will continue to make more of these posts that go through some trading "best practices". Have a great week! -Team TradingView ❤️
BITSTAMP:BTCUSDEducation
by TradingView
221
How To Analyze Any Chart From Scratch - Episode 2Hello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst. Today we are going to go over a practical example on XRP, but you can apply the same logic / strategy on any instrument. Feel free to ask questions or request any instrument for the next episode. Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
BITSTAMP:XRPUSDEducation
by TheSignalyst
77
Your strategy will inevitably go through a Drawdown!Your strategy will inevitably go through a Drawdown. And there's nothing you can do about it to stop that. However, you can learn how to survive it! Today I will give you actionable steps, that you can use for the next time the market hit your strategy and you feel that everything is going wrong. Let's start with an idea of what a drawdown is, and why drawdowns happen. There are an infinite amount of trading strategies and tools that people use to trade and take advantage of specific market conditions. Some traders are better in trending markets, they trade breakouts. Other traders feel more comfortable in ranging markets, where they trade quick reversals on key levels. The Math is simple here. Trending strategies will have a poor performance on ranging markets, while reversal strategies will have a poor performance on trending markets. Detecting the beginning and end of trending cycles or ranging cycles, is blurry. So, if you agree with that, as I do, you can expect your strategy to start failing at some point. And that's the beginning of the drawdown. (This is true for the best traders in the world, as for the worst traders in the world. Nobody scape drawdowns, the quickest you accept this, the faster you can learn how to handle them properly) So let's start by saying that drawdowns are situations where your strategy experiences a lasting decline in performance, even if you are doing everything perfectly. Drawdowns, happen because strategies are made to take advantage of specific anomalies that can be found in one part of the market cycle, and when that market cycle finishes, or changes, your strategies become less accurate. -------------------------------------------------------------------------------------- It's important that you become aware of the Psychological consequences of Draw Downs , so you can have a countermeasure for this. Let's take a look at the most common ones: 1) Decrease in confidence (constant negative thoughts about your system) 2) Fear of entering the next trade. 3) Thinking about changing things in your strategy (deviations from the original plan) 4) Thinking about modifying the risk you are using to cover losses quicker. 5) Ceasing your trading execution, and looking for a new strategy. ALL THESE ITEMS, are the main situations you may start feeling when going through a drawdown. IF you are going through that, it's important that you understand that you are under a delicate emotional state, where your confidence is low, and you are prone to make more emotional decisions that 99% of the time, tend to increase the drawdown. So the way we handle drawdowns is by having logical and systematic processes in place instead of emotional ones. -------------------------------------------------------------------------------------- Here you have actionable steps to handle drawdowns: STEP 1 : You handle drawdowns by getting ready before they happen, not when they are happening. This is true for almost all disciplines, not only for trading. Airplanes have clear plans in case things start going wrong, instead of figuring out the problem at the moment, pilots go to the manual book, and use the template for this situation, plus the fact that they trained those situations several times in simulations. So, if you want to understand what a drawdown situation looks like in your strategy, you MUST go into the past, and when I say this, I'm not saying making a 3 week backtest. You need to go as far as you can in the past, to find that exact moment where your strategy is not working as expected. How many consecutive stop losses do I have? 3? 5? 15? 20? How long does this period last until everything goes on track again? 1 month? 3 months? or a year? These are the kind of answers you are trying to solve. When doing a backtest you are trying to understand two things. The first one is if your strategy has an edge. The second one is how hard you get hit when things go wrong! STEP 2: Work your risk management around the stats of your system. Imagine we reach the following conclusion "I have a system, that executes 10 setups per month" and the worst-case scenario I have found is 20 consecutive stop losses during 2 months. What I would personally assume is that 20 consecutive stop losses can be 30. So how much capital percentage should I risk on this system so I don't get knocked out if this TERRIBLE scenario happens. The answer for me would be 1% per setup. Under the assumption of this unique scenario, I would be 30% down, which is something acceptable, compared to the drawdown of conventional investment vehicles like S&P500 where we observed those kinds of declines, in the last years. The main point here is that you need to adapt the risk you are using on the strategy, to the stats of it, and your risk tolerance. -------------------------------------------------------------------------------------- Let's recap the key aspects of this post. 1) Drawdowns are inevitable, your strategy will be hit by this scenario eventually. 2) Drawdowns cause an emotional disturbance and are the main reason why people make really bad decisions. 3) We handle drawdowns by getting ready in advance. Through backtest, we can understand the edge of our strategy and the worst-case scenarios. 4) We adapt the risk of our strategy, by considering a terrible scenario, like 30 consecutive losses. This will not eliminate the feeling during this period, but it will bring you a work frame to make logical decisions based on data, instead of emotions. Implementing this type of thinking will make your strategy more robust, it will help you go through these situations, and most importantly it will protect you from making stupid things with a strategy that has an edge, and actually works! Thanks for reading!
BITSTAMP:BTCUSDEducation
by ThinkingAntsOk
129
Bond - Equity Correlation: The Most Important Question?TVC:US10Y TVC:NYA A reminder that falling bond yields are synonymous with higher bond prices. In other words, a downtrend in yield equates to a bull market in bonds. In January, bonds were still in a technical bull market as defined by the broad declining channel that had contained the 40 year bull market. In March the break of that downtrend turned the macro trend from bullish to neutral. Now, all that is left to define a bearish trend is a substantive violation of the 3.25% pivot zone. More recently, after testing the major macro pivot in the 3.25% zone, ten year Treasury yields have fallen sharply. The decline begs the question: Is the decline the result of the decades long negative correlation between equity and fixed income reasserting itself on the back of equity weakness or is it simply the beginning of a relief rally created by the combination of major support and a deeply oversold condition? While it is too soon to answer the question with any degree of certainty, it is clear that the outcome will have vitally important macro/portfolio implications. My guess is that if equities continue to weaken, that the bonds will continue to do better, but that without the bid provided by flight-to-quality that the outlook for bonds will quickly deteriorate as the oversold condition is alleviated. In future posts I will provide a deeper dive into the shorter term technical and fundamental outlook for bonds, but the posts from January 2, 11, and February 9 should provide adequate background for now. Early in the year I published a five part market overview detailing my macro technical and fundamental views of the "Big 4" asset classes: Equities, Rates, Commodities and the Dollar. As part of that series I discussed the importance of the correlation between equities and bonds and the central role falling inflation played in creating the relationship. This inverse correlation is a historical anomaly, yet it drives much modern portfolio construction. The idea is that when equities decline sharply, flight to quality in bonds pushes rates lower (bond prices higher). In other words, gains in the bond portion of the portfolio partially hedge losses in the equity portfolio. Variations of the 60/40 portfolio construction (60% equities and 40% bonds) and risk parity strategies are intended to shield investors from the worst of equity declines and indeed have had an admirable track record of reducing return volatility. After decades of success, the amount of assets devoted to this strategy, both overt and passive, is staggeringly huge. If the historic positive correlation is reasserting itself due to a change in the trend of inflation (stocks down and bonds down), the subsequent unwind has the potential to create massive dislocation. In my view, the combination of extremely negative real rates (nominal rates less inflation), an inflation cycle that has turned from virtuous to vicious, and equity markets, that at least at the index level, are extremely overvalued, may be setting the stage for a polarity switch in which bond prices and equity prices fall and rise together. That has clearly been the case so far this year. Year-to-date (YTD) the bond composite has returned approximately -12% while the S&P has returned approximately -1%. In other words, both sides of 60/40 and risk parity portfolios have lost considerable value. If the year were to end now, it would be a historically bad year for the strategy. Is the switch in correlation a short term phenomenon or the start of something much larger? To my mind, this is the central question for the remainder of this year. I think the next few months will be telling. There is also the tension between high inflation and the growing odds of a significant recession. Not only does high inflation serve as an inhibiter to real economic growth, but so will the Federal Reserves (Fed) effort to return inflation to its long term trend. Paul Volcker had to create twin recessions to beat the great inflation. I doubt very much that this Fed will escape without having to make a similar choice. Notes: It is worth remembering that in an economy that is overly financialized and debt burdened, rising rates often break the weakest link in the economic chain. Weak links can be systemically important institutions, sectors or simply a dramatic sell off in the equity markets. That markets are currently in distress is clear. What isn't clear is that the distress is enough to create a systemic risk event. Bonds and equities frequently move into and out of positive and negative correlation in shorter time frames. When I talk about historical correlation I am referring to the very long term. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
TVC:US10YEducation
by CMT_Association
26
SETTING REALISTIC GOALSHey Traders, Traders whether they are new to the world of finance or have been involved for a while can benefit greatly from setting specific goals in correlation to what it is they actually want to achieve. There's a million different ways on focusing and goal setting in trading and a lot of people get it wrong straight out of the gates. To this day I still see some professional traders still setting their goals wrong. Traders need to get to focusing on the process of trading, including strategies, structures, journaling, whatever it may be. You have to focus on these processes set in place for yourself regardless of results. This can be so much more effective with getting to an area of consistency compared to just focusing on returns. One key takeaway I want you to get from this post is all traders, whether novice or whether you're experienced, you should be basing your trading results off of how well thought out the trading plan was, which includes how the trades will be entered, exited, how the money will be managed. That right there is how you measure performance, not the Profit and Loss that comes from the trades. Process Goal Setting - Initially, when getting into trading, most traders look for some kind of goal surrounding numbers. We are all here to make money, to make percentage gains. So we tend to gravitate towards setting our goals based on what we want to return, what type of money we want to make, what time are percentage yield we want to bring in. This is damaging in its own right. It's very easy for people to say, OK, I'm going to try an make 1% per day and I'm going to do all my trading to make 1% per day. Then all of a sudden they start planning in the future. "Okay, I make 1% per day everyday for the rest of the year," and then all of a sudden they start calculating what they're expected to return and they give themselves these high hopes in achieving that. But The thing is, what they're not understanding is given their strategy, 1% per day might not be possible. We can't say yes. I'm going to make 1% per day and our strategy not allow that to happen. We may only find one opportunity per week given our strategy, we might only find three opportunities, but we have a 33% win rate. So having these unrealistic, number focused goals are really damaging because no matter how much work you put into it, it may not be possible. Just like any other business, we need to develop a process. Anna system and our goals need to be set on doing that process an working that system correctly and consistently. So rather setting goals for, I want to make 5% this month. Set goals like I want to only take trades which are an A-Grade set-up in accordance to my strategy. I want to journal every trade for the next 4 weeks. Goals like these make you focus on the process, and I don't know a single business that is successful without a good process. Most businesses don't get profitable for a set period of time. Some even just fail. Without a process and without setting goals aligning with those processes will make your results be based on chance and not based on skill. Aim for consistency - When it's early on and you may still be demo trading or trading with a small amount of money, I want you to start aiming for consistency. Now I know that can be hard when running in drawdowns or perhaps even trading a strategy that isn't profitable, but what you can do is aim to be consistent in your process aim to be consistent in your decision making. Aim to be consistent in your risk management. What you will learn is whether your strategy is profitable or not. You will learn a lot about the market. What you will notice after a long period of consistency (Trade for at-least three months) is your areas that need improvement. let's stay consistent and every single day you do the same thing, you trade the same setups, you trade exactly the same way, which a lot of people don't have the self discipline to do. You will notice areas where you can improve on based off of those results. Most people give up and fail because they're not disciplined enough to remain consistent in a strategy which isn't providing them with the unrealistic returns that they're aiming for. If you sit down and you take it seriously for three months, win or lose, I guarantee you will take about 18 steps forward in the right direction compared to just sitting on the balance rope jumping from strategy to strategy. It is okay to not trade - This is where consistency and discipline delivers the reality check. The market is constantly moving, sometimes slow, sometimes fast, and that gives people the impression that their strategy is always valid and they always have to be risk on and always have to be trading. This isn't the case. Trading during slow times or making impulsive trades outside of the scope of your plan is such a common issue that I feel the need to point it out in today's message. So many people will try and force their strategy or force themselves to get in and make money when the opportunity isn't there. Have a plan. Understand what it is you want to see. Understand what it is you want to trade and wait patiently until that opportunity arises. Do not try and force trading. It will only result in one way and it will not result in you achieving the goals that you want to achieve. Start small, then grow - I witness day in day out, traders just trying to get onto big accounts because they believe if they had more money they would achieve better results. They build the most complex strategies and trade four different strategies across 12 different assets straight out of the gates. This is not an easy game. This is not an easy money grab. It can generate thousands and thousands of dollars if done right. But it has to be done right. The learning process is the exact same. Start small, be a niche trader focused on a few manageable goals. Results will come in time. If you trade according to your trading plan you've remained disciplined and you do everything I spoke about today, you will see improvements and progress. Set goals, realistic goals that have nothing to do with profit and loss, but have everything to do with being a consistent, self disciplined trader and you will see returns come in the long run. If you develop the foundations to being a profitable trader, the profits will be delivered once you get a greater understanding of what needs to be done. I wish you all great success and cannot wait to hear about your consistency in trading!
Education
by the5erstrading
69
Traders gaining momentum: Spring edition!Hey everyone! 👋 Grab your warm beverage of choice: it's time to sit back, relax, and take a look at some of the hottest up and coming authors on TradingView. All of these folks deserve a follow, so be sure to show them some love! ❤️❤️ If you think we’re missing someone, be sure to make it known below in the comments. Also, we’ll be doing these roundups from time to time so be sure to follow us so you don’t miss any of them! Let’s jump in. We’ve sorted each Author by the asset class they focus on. Click on their profile, and see if you like what they're putting out! Multi-Asset: gb50k/ forker goodguy FortunaAlgoAnalytics LotusTrading20 huglue CrashWhen Mendenmein-Capital TradeAutomation fringe_chartist Skipper86 Stocks & Indices: BrecherTrading DoctorFaustus AngD1899/ oliverrathbun Yogigolf Steve666 liberatedstocktrader Unlogan Commodities: inspirante vexxly Crypto: Stratex1 Wolf_Of_Alt_Street laterrasanta AmarPearson Theperfectionist maikisch JavadisHere Currencies: the_MarketWhisperer TradeTrio the5erstrading iNtuNeFXMarkets DarrenHill And there you have it! Our roundup. Don’t forget to follow TradingView for regular educational content. Think we missed any up-and-coming accounts? Point them out in the comments! Obviously, don’t shill yourself. 😉 Cheers! - Please remember Editors' Picks and all the authors we mention are our attempt to show undiscovered traders, unique market insights, and interesting educational material. Anyone can be featured in Editors' Picks or in posts like this. All it takes is publishing an idea from your account. We try to be as fair as possible, following many of you, and reading all the different ideas published daily. That's it! High quality content, consistency, clarity, and the will to help others is what we look for. You can read all of our guidelines below: www.tradingview.com www.tradingview.com www.tradingview.com
NASDAQ:AAPLEducation
by TradingView
32
4 things to remember about bear marketsHey Everyone! 👋 Whew, what a week. Assets across the board got smoked, and the Nasdaq officially ended the week in bear market territory. For crypto traders, Bitcoin, Ethereum, and some other crypto assets have been cut in half, or more. Despite the S&P 500 being down only 13-14% from highs, only 25% of all listed stocks are above their 200 day moving average. It's safe to say that after the massive bull run in nearly everything we've seen over the last two years, we are now officially in a bear market. Because this may be the first bear market experienced by many in our community, we thought it would be helpful to put out a little guide of key things to remember about bear markets, to help people navigate this new market regime. Let's jump in! 1.) Volatility makes your positions feel bigger in P/L terms 💥 Bear markets typically bring about more volatility in asset prices than bull markets. Over the last 20 days, we've seen an average daily move in the indices of about 3%, which is much larger than the rolling 20 day average in 2021 of about 0.9%. With the same amount of capital, this pickup in average range means that in $$ terms, your P/L moves have likely gotten much bigger than "normal". In March 2020, the average daily range in the S&P 500 was over 5%! This is important to remember, because P/L can have a huge impact on trader psychology. Lots of professional money managers and hedge funds control for this factor, reducing exposure to keep daily portfolio volatility close to their target. Some funds are mandated to do this. While you're free to do what you like in following your trading plan, this is a key expectation to hold! Expect bigger moves than normal. 2.) The average bear market lasts about 2 years 📉 The 2 year number mostly refers to how long the average *stock* bear market lasts. So far in Crypto, the average bear market has lasted about 9 months. For comparison, in stocks, the average bull market lasts more than 6 years. So, while bear markets tend to be much quicker than periods of growth in equities, they also tend to be more memorable. Recently, bear markets have been getting shorter and shorter - the last bear market in 2020 lasted barely a few months. Some attribute this to the Fed stepping in more and more, while others often claim that the better communications infrastructure we now enjoy in the 21st century is allowing information to be priced in much faster. While the trend is certainly towards shorter and shorter bear markets, they can still oftentimes last much longer than one expects. Adjust expectations accordingly! 3.) Cash is a position 💵 While USD inflation is currently high, running at about 7-10% (depending on which numbers you're looking at), the buying power of one U.S. Dollar doesn't actually change that much, day to day. The buying power of one share of SPY changes MUCH more rapidly, per day, and, recently, it's been losing buying power a LOT quicker. The most important thing to remember for bear markets is that staying alive is *THE* most important thing. As long as you don't blow up, you can live to fight another day. Fleeing poorly performing assets for cash is an option. This has been happening recently. If you look at the major asset classes, people seem to be fleeing to cash. Bonds, Stocks, Gold, Crypto - it's all getting sold for cash. In a "Risk off" environment, typically conservative players will rotate from risk assets like stocks into "safer" stuff like Treasury bonds. That said, with the fed hiking and inflation running high, it seems people are skipping the 3% yield they can get in a bond in favor of the total flexibility you get with cash. Another option for hedging is to sell short assets you think will underperform, or buy puts on your portfolio (if available). You can directly see the price of sleeping well in the options market. 4.) Bottom picking is hard 🎣 While it is our job as traders to find opportunities that have a positive expected value, bottom picking has been historically very challenging. In the crash of 2020, many prominent hedge funds were under-hedged going into the crash, and over-hedged coming out of it. Effectively, some of the smartest people in the world did a poor job of picking where the likely bottom was. Unless you have a very long term strategy that allows for consistent deployment of capital over time (DCA), trying to pick bottoms in downtrending markets can be a very low bat rate% strategy. Well. That's it. 4 things to remember for newbies to bear markets. As we mentioned, the most important thing to do in a more difficult market is to stay alive! 🐻 Have a great weekend! 😄 -Team TradingView
NASDAQ:QQQEducation
by TradingView
98
📊How to use HORIZONTAL VOLUMES? Tutorial with examples!Horizontal Volume Indicator or Volume Profile is a simple indicator that helps to identify: value areas (support or resistance zones) and liquidity gaps. In this idea I will explain how to use the indicator and mark these areas to make trades and why it works. Let's start at the beginning. 💹What are value areas (support and resistance zones)? 🔶The value zone is the price range at which the most trades are made. On the chart we can mark the value zones: 33600-41000, 46000-49500, 54600-58200. I also marked how these zones were support or resistance to price. The value zone becomes a support for price if the price, when it is tested, does not continue its downward movement. A value zone becomes a resistance if price does not continue to rise above that zone. The zone simply doesn't let the price go higher because there aren't enough buyers. 🔶Liquidity gaps are called that way because no trades were made in that zone and there is no liquidity for traders (buyers or sellers), and price, as we know, goes from liquidity to liquidity (from one zone to another). On the chart I have marked for you the liquidity gaps and we can see that the price can' t stay in these zones for a long time. ✅Why do horizontal volumes work? Price reacts to these zones for a simple reason. Many traders pay attention to these areas and put their limit orders to buy or sell or when the area is tested, so the price moves up or down. If there are more sellers than buyers, the price will go lower and lower ; if there are more buyers, the price goes higher and higher. 🚩How can I add this indicator to my chart? 3 steps to add the indicator to your chart: 1. open "prediction and measurement tools" at the left part of chart 2. choose the "Fixed Range Volume Profile" 3. choose the price range from some date till another date. I chose from Dec 10, 2021 till May 6, 2022. So now you can see and mark all areas on your chart. 🏁This indicator helps to identify areas and can suggest stop points or price reversal, but it should be used with different methods. If the market is in a strong rising trend (UPTREND), it is unlikely to be stopped by a local zone of value, but a global zone may stop it. Also, the support zones can be good entry point. Be more tricky than the market and use different tools. You can use the indicator on different timeframes for scalping or swing trading and with different ALTCOINS. Also, pay attention to the volume indicator, trend lines and key levels that I show in my ideas. 💻Please write in the comments if you still have questions about Horizontal volumes! I`ll try to explain you additional tips 🎇 Press the "like"👍 button, write comments and share with your friends - it will be the best THANK YOU. P.S. Personally, I open an entry if the price shows it according to my strategy. Always do your analysis before making a trade.
Education
by Yuriy_Bishko
54
How I Day Trade The E-mini NasdaqSimplicity is King when it comes to day trading futures. One of the keys for me when I am day trading futures is to find one side of the market to trade on and stick with it throughout the day. I think too many people get caught up trading both sides of the market and get themselves over trading. In today's video I show you a simple strategy using a 3 minute opening range along with an Anchored VWAP to help you determine if the day is going to be choppy, or a trend day. This strategy is something I use to determine direction for the day and can easily be used as an addition to your strategy to give you confirmation of trend. Past Performance is not indicative of future results. Derivates trading is not suitable for all investors. This is not investment advice.
CME_MINI:NQ1!Education
by anthonycrudele
34
Good analysts are not always good traders [Principle vs Emotion]#TommyLecture #PrincipleofTrading #TheoryofTrading #Emotion #Management Hello traders from all over the world. This is Tommy. How were your trades lately? The market was quite unpredictable recently showing high level of fluctuation which makes it harder for us retail traders to follow up. It sort of seems like a sideway trend in a big horizontal box but also within that, it also keeps surprising us time to time by showing extensive bullish or bearish rallies at unexpected price and time zones. In this foggy arena, we traders make decisions to minimize risks based on strict criteria and standards of our own. Whether you are a long-term holder, a swing trader, a daily trader, or a scalper, we must take at least some risk for reward(return) and there is no complete risk-free strategy, market, or product in this world. Despite all these uncertainties in the market, as long as proper risk reward ratio and win-rate are secured in every trade, traders eventually will end up profiting theoretically and this is what makes trading different from gambling. To some people, what we do might seem like gambling on certain direction of trends and price action zones, but it surely is different from that we deal with numbers and consistency based on a highly reliable source called ‘Technical Analysis’. Since all of us are humans carrying emotions, we often tend to narrow our sights desperately expecting only the best scenario. We easily get disturbed just by thinking about the unwanted results or potential losses and ignore the risks that we have to face every time. However, there are thousands of possible scenarios that can happen, and the market is not always on our side. Just remember that there can only be two possible outcomes for every trade we take; we either win or lose. There is nobody on Earth who can win every trade maintaining 100% win-rate (Even you, Elon Musk!). Whether you like it or not, we are destined to encounter circumstances when market is just totally not on your side and if you are a wise trader, you would normally admit this very situation as soon as possible. Just because market did not flow as expected, it doesn’t mean that you suck trading. Good traders are not the ones that win every single trade but are the ones that can maximize their profit when market is on their side and minimize the losses when market is against their side. Nevertheless, there are some traders, many actually, who just hate to admit the fact that they are losing during position and they start to let their emotions kick in. Unfortunately, now or later, these types usually end up being in worse situation. In this world, establishing and following consistent principles is much more important than analyzing the market (TA or FA). No matter how good you are at analyzing market, if you keep breaking promises to yourself, you eventually won’t be the survival in this market. I have seen so many traders thriving but end up losing all their money with just one tiny mistake. Always keep in mind that there are many traders who win 99 times and lose everything just by one simple mistake, letting their emotions be involved. Emotion in fact, is the biggest risk here. For example, if you designed your stoploss and target price, execute your trade as you have planned. Don’t change your mind being agitated by lowering your stoploss or exiting position before reaching the target price. Also, if you have set your daily profits and losses, do comply! I have seen so many traders who could not just admit their loss and become irrational, insisting to take more trades and eventually losing much more. You should be familiar with calling a day if the maximum loss for the day, week, or month has been reached. I know very well more than anyone that you desperately want to recover all the losses and I even know that by 50% chance, you will successfully restore all the loss. However, by 50% chance you won’t. This terrible situation will seduce you to lose control, make biased judgement, and you will probably end up regretting. Observing many of my fellow traders, students, and followers, I have performed some researches deeply about psychology and mentality of traders. When and where do most of the retail traders start to not obey their principles and in what process? Compared to the past, in recent market with numerous untraditional patterns and phenomenon, there are much more variables that easily lure traders to trade with emotions. In technical perspective, widening/broadening pattern, V-shaped bounce, long-tailed candle, double SR flip and master pattern, etc. are some of the major occurrences that weren’t quite common in the past. From these unfamiliar price momentum and flow, traders are highly likely to lose their temper and break their principle especially when they face these cases: stoploss hunting, bull/bear trap, target price missed closely, entry price missed closely, and breakout entry hunting, etc. To illustrate in depth about the fundamental process why emotions are regarded as poisons when trading, I developed a simple model that depicts the relationship between trade setup phase and performance. In this world, ideally, if we can manage emotions perfectly like robots, our trading performance (profit or loss) should not affect the trading preparation/setup phase (Designing EP, SL, TP based on the deducted trend) and thus it would be a causal relationship where an independent variable (preparation phase) affects the dependent variable (performance) only in one-way. However, the more we let emotions kick in by breaking our principles, the more it becomes correlated between these two variables. In other words, as we fail to control our emotions, the performance will no longer be independent, and start to affect our judgement when setting up our next trades, either positively or negatively. This will eventually create a vicious cycle where factor A affects B, B affects A, and A affects B again, getting worse and worse just like sinking into a swamp. Therefore, as a wise trader whose task is to manage risk, it is integral to be able to cut this cycle before things get worse. We should know how to stop with a small loss, before it becomes a big loss due to that cycle. Hence, it is extremely critical for us to properly design and obey the strategies consistently and carefully and regardless of the latest trading outcome, we should be as neutral, objective, and prudent as possible. Which set of principles, strategy, and mindset should be adopted to effectively eradicate emotional trades? I hate to say this, but the answer would be different depending on your trading preferences and your economical/technical/physical conditions. So first you need to know yourself. Here’s a fun fact; this thing called ‘trading’ lets you learn deeply about yourself that you did not even know before. Pretty cool huh? It explicitly lets you know how greedy, fearful, doubtful, and jealous you are under this social system called capitalism. Once you find out about yourself through decent self-reflection, you then need to figure out your trading propensities and the strategies you are fond of. It is definitely going to be different for everyone. For some traders, a high RR ratio & low win-rate strategy might suit and vice versa for some else. Some long or short, some short-term or long-term, and some high or low leverage. It is significant to find the optimal combination of trading strategies, theories, and indicators as well as trading products and platforms, that fits your trading preferences and behaviors. To give you a tip, make habit to always consider the risk first, before the reward. Consider the status when you lose money rather than thinking about the profit. In this way, you will naturally get a sense of weighting risks that you are facing. By prioritize risk over rewards, you will be less affected by negative emotions when you actually lose trading and will also help you efficiently manage your risk in advance. Let's all become a wise and smart trader who are always prepared for the worst possible scenario. Remember, it’s not the win-rate that makes you a successful trader. It’s all about minimizing loss and maximizing profit. Thanks for reading my post. Your subscription, comments, and likes are the biggest inspiration for me.
BITMEX:BTCUSD.PEducation
by Tommy_Trader
77
3 tips for building a professional trading mindset 🎯Hey Everyone! 👋 Today, we're going to be talking about building a professional trading mindset. While this topic has been the subject of countless books and trading literature over the years, we thought it would be cool to break down a few of the most important takeaways for the TradingView community. Let's jump in! 1.) Start thinking in Probabilities 🔢 Let's take a quick look at one of the most important concepts in Trading and in life: Expected Value. Expected Value is simply a number which indicates, based on probabilities, the value of executing a certain action. It can be positive or negative. Will this trade make money? Should I change careers? Should I marry my partner? It all comes down to Expected Value. Now - What makes up Expected Value? 2 things: Bat Rate% and Win / Loss. Bat rate is the percentage of wins vs total outcomes. Win / Loss is the size of the average winner divided by the size of the average loser. In other words; What is the chance this works? How big is a win? How big is a loss? When you combine these numbers, you can much more clearly understand whether or not it makes sense to take a certain action. Let's say, for example, that a certain trade idea has a 50% chance of working. A win earns you $2, while a loss loses you $1. Should you take the trade? Let's find out. In this example, you take this trade 100 times. 50 times, you win $2, and 50 times you lose $1. You'd end up with a total profit of $50! ((50x2)-(50x1)). Clearly, this trade has positive expected value! So, even if you take the trade and end up with a loss, you still made the right decision, from an EV standpoint . The tricky business with Expected Value is that Bat Rate and Win / Loss aren't hard numbers. They are estimates. Thus, building a feel for the likelihood of something happening, and building an understanding of the amplitude of wins and losses is a key skill to build for trading and life. An easy way to better calibrate your antennae for this is simply making a note of what you expect to happen in your trading journal. Over lots of repetitions, your ability to guess outcomes should improve. 2.) Self awareness 😵‍💫 In trading, actions of all market participants at all times are driven by 2 fears: The fear of missing out and the fear of loss . In other words, fear and greed. The thing is, depending on your brain chemistry and life experience, it's likely that one of these fears impacts you more strongly than the other. Think of the following scenario: You put on a trade, and the position begins moving in your direction. The asset then begins trading sideways. Let's examine two ways this could go: a - you close your position. Then, the asset begins ripping in your direction once more, tripling in price. You've missed this extra move, now that you've taken your position off for a small gain. b - you don't take the position off, and the asset round trips back down to your stop loss, and you take an L on the trade. Which of these scenarios is more painful to you? There's no *right* or *wrong* answer, but it's important to know which fear has a stronger hold on the decision making complex in your brain. If you find that you're more prone to FOMO, then try to figure out a strategy where you can squeeze every last drop of a winning trade. If you're more prone to the fear of losing, then try to figure out a strategy where the possibility of taking big or consistent losses is much less likely. 3.) Strategy fit is extremely important ✅ This tip piggybacks off of the last tip about self awareness, and really underscores the importance of consistency in interacting with the markets. When you interact with the markets, having a written out, well understood trading plan is key to success. The biggest and most elite hedge funds in the world have clearly defined investment mandates, best practices, and business plans. What makes you think you don't need a plan? That said, not all trading plans are created equal, and even the best laid plans of mice and men...etc. When designing a trading plan, many new or intermediate traders focus solely on the money making aspect. As in, 'which strategy is going to earn me the highest amount of profit over a given period of time.' How can I gain some edge? Typically backtests, fundamental research, vision, and more play a part in helping define the criteria for a profitable strategy. However, expert traders know that there's something even more important than defining your edge; ensuring consistency . For example, let's say that you come up with a perfect trading strategy that should, in theory, in the future, allow you to trade extremely efficiently. The plan lays out a perfect set of criteria for buying market bottoms, and selling market tops. For newbies, this is the holy grail. However, just because you *understand* a strategy doesn't mean that you will be able to *execute* the strategy. You could test this perfect strategy in real life, and if you're unable to execute the set of rules you've laid out for yourself in the heat of the moment due to your psychological makeup, then it doesn't matter how much edge the strategy has. You can't execute. Thus, finding a strategy you can will yourself to execute with consistency, no matter what is happening in the markets, is of paramount importance. In terms of expected value and self awareness, having a strategy that's 30% efficient but you can execute with 100% certainty is much more valuable than a strategy that's 70% efficient that you can only execute accurately about 40% of the time. Not being stressed from a loss is the real flex. Design around preventing mistakes, not losses. - Anyway, thanks again for reading, and have a great weekend! Let us know with a comment below if you learned anything, and we'll consider doing a full series on applied trading psychology. Cheers! - Team TradingView
AMEX:SPYEducation
by TradingView
232
Trader comfort zone journey 🥴➡️😊Let's end the week on a thoughtful note. On the chart is a visual I see the other day that I feel relates to trading massively. It's called the comfort zone map. This can be applied to many situations in a person's life as a generic visual map. But I really do think it represents the journey every trader must take in order to become successful. COMFORT ZONE It's where we all start any journey Sat in the comfort zone not wanting to leave as we dont want to fail or get hurt. Some will stay in this zone forever but will never progress. If you are on TradingView looking at this idea then chances are leaving this zone is already being explored. We all like this zone put you have to take the leap of faith in order to progress. As traders we all have to leave our comfort zone in order to start our trading journey. FEAR ZONE This is the worse zone for any human on any sort of journey but more so for traders. Things are really uncomfortable in this zone and pain will be felt. Mistakes will made, as traders money well be lost but key bit is learn from those mistakes. Plenty of people will turn their backs at this point and jump back into the comfort zone. Those who carry on trying to achieve will have other people questioning what are they doing. Don't let opinions sway you and find a way to find your feet in this zone. You will lack knowledge, You will lack skills at the start but traction comes with hard work and persistence. LEARNING ZONE The traction gained and hurdles overcome in the fear zone leads you to this zone. Once in this zone it's now all in the eye of the beholder. This is now the new comfort zone but don't drop the ball you can end up dropping back in this zone. Now's the time in this zone to really kick on but it can take time. You are now laying the foundations of an exciting future. Take the base knowledge gained and gain even more in this zone. Problems are no longer holding you back as you are able to overcome. You enjoy the challenges and tackle them head on while still learning. Putting the time in here takes you to the next step but also stands you in good stead for rest of lives hurdles. GROWTH ZONE This where the fruits of your labour are felt but not just in trading profits. Mindset and contentment are on point. Due to the above continued learning never stops. Objectives are now smashed. Purpose and fresh identic is now found within yourself. Continued Personal growth as well as financial growth is now a element of life. In this zone the end game is infinite but shouldn't be taken for granted. Hard work has got you here but don't get complacent. Treat everyday as an opportunity to fulfil your life even more in many ways not just money. You earnt the right to be in this zone so enjoy. But be grateful in this zone and take nothing for granted. Stay level headed and with the right mindset this becomes your new comfort zone to enjoy forever. Enjoy the weekend folks and see you next week 👍 Darren✌️
Education
by pow_removetheguesswork
52
Economic data that a trader should be able to understand.Part 3. Turnover or retail volumes, orders and inventories This type of data measures retail trade turnover. As a rule, the retail business is, in simple words, a place where you and I go to shop to buy basic necessities and luxury goods. It is important because it is an excellent indicator of consumer demand within a particular economy. In certain countries, especially in the G8 countries, retail trade volumes may account for two-thirds of all consumer spending. They are a key indicator of consumer confidence. If consumers are confident in their economic situation, additional demand for goods and services is created. Economists track the growth of trade turnover – it helps to determine whether the economy is doing well. If the trade turnover falls, things are bad in the economy. Turnover or volume of wholesale trade, orders and stocks This type of data measures the turnover of wholesale businesses. It is important because it is an indicator of consumer demand – which, as we know, is a serious thing. A decrease in wholesale sales or inventories may imply or confirm a decrease in business activity and retail demand. This means that there are free resources that are not currently being used, but they will be used if demand increases again. This type of data is not as important as retail trade volumes, but most economists believe that it is still worth keeping an eye on. Import of goods and services In this type of data, purchases of domestic companies from companies from abroad are measured. If, for example, you are a Canadian company that buys raw materials from China, then this is considered an import of goods to Canada. This type of data is important, since imports may eventually replace domestic production, which may cause tension in financial resources. For example, if everyone in the United States starts buying only German car brands, such as BMW and Audi, this will lead to a lack of demand for cars manufactured in the United States, such as Ford and GM. Which will have a negative impact on domestic car manufacturers in the United States. As a rule, a country imports those goods and services that it is not able to produce on its own. But, of course, this is not always the case. Often people and companies buy abroad because prices are lower there. Another reason is that there may be goods of the desired quality abroad that are not available at home. For example, if you live in the United States and have a strong desire to drive around in a Rolls Royce or Bentley that has just rolled off the assembly line, you will have to buy your car in the UK. Oil is often not taken into account in the US data, as it has developed that the states are always forced to import it – the country does not produce enough oil to meet domestic demand. However, thanks to the new drilling technology in the US, oil production is growing – there are chances that over time it will be enough to cover the demand. You may have to do a little independent research on this topic – it depends on when you read this material. Export of goods and services This type of data measures the country's trade turnover with other countries around the world. Simply put, this is the direct opposite of importing goods and services. It is important because exports generate an influx of foreign currency, which can have a good effect on economic growth. It happens that a foreign currency is more valuable than a local one – this creates additional profit in the balance sheet of a local company. For example, if a company from Canada sells its product to the UK, it receives British pounds as payment. This is a very attractive deal, since (at the time of writing this article) 1 pound can be exchanged for 1 Canadian dollar 75 cents. Export growth can boost GDP, which will have a positive impact on the economy. The higher the ratio of a country's exports to its GDP, the faster its economic output will grow. Trade balance, the balance of trade in goods In this type of data, the balance or the difference between all exported goods and all imported goods for a certain time period is measured. The main question is – what is more in the country, exports or imports? It is important because it is an indicator of a country's fundamental trading position in relation to other countries. Obviously, most countries prefer their exports to be higher than imports. A large foreign trade deficit may suggest to economists that there are difficulties with the supply – companies are unable to meet the demand coming from abroad. The trade balance reflects the ratio between national savings and investments of citizens and companies of the country in question. The deficit is an indicator that investments exceed savings in their volumes, and the use of real monetary resources exceeds the overall economic result of the country. Index of export and import prices, unit price of the product This type of data measures the prices of goods that one country trades with others. It is important because it is an indicator of pressure on prices, possible problems with the exchange rate and changes in competition. Economists compare export prices with price indicators on the domestic market to get an idea of the pressure on prices for foreign buyers exerted by domestic producers. Economists also monitor import prices to determine the level of external pressure on prices and evaluate these indicators. Manufacturer's prices and wholesale prices In this type of data, factory prices are measured – that is, how much it costs the manufacturer to manufacture goods without adding extra charges. It is important because it can be used as a leading indicator of price pressure affecting domestic production volumes. It should be borne in mind that during a recession, the industrial Price Index (Producer Price Index, PPI) may exaggerate the pressure on prices. On the other hand, during periods of inflation, PPI can downplay prices, because contracts and purchases of raw materials are usually negotiated in advance long before production and release of products. Price expectations: surveys The purpose of these surveys is to study the opinion of manufacturing companies regarding inflation. In simple words, this type of data sums up what company directors think about the impact of inflation on their business at the moment and in the near future. It is important because it allows you to look into the heads of people working in the trenches of production. It can serve as a warning about possible changes in prices. Economists, as a rule, track changes in the trend of this indicator in order to predict a possible increase or decrease in pressure on prices. Wages, labor income, labor costs Salaries and labor incomes give us an idea of how much people earn from their jobs. Labor costs are how much the labor of workers costs the manufacturer. All these indicators reflect labor costs and the impact on consumer incomes. They are important because they reflect the pressure on prices and demand within the economy. Salaries and incomes are closely related to the current phase of the economic cycle. If incomes are growing faster than consumer price inflation, it means that real spending is growing, which is an indicator of the health of the economy. Unit labor costs In this type of data, the cost of labor per unit of output is measured. In other words, how much the labor costs for the production of one unit of goods cost the manufacturer. It is important because it is an indicator of the competitiveness of businesses and pressure on prices within the country. For example, if a company is engaged in production in a country with cheap labor, and sells its goods abroad, these are large potential profits. Conversely, if a company's production is located in a country with expensive labor, then it probably will not be able to withstand competition with foreign companies using cheaper labor. This is a key indicator of labor efficiency. If unit labor costs decrease, it means that the same amount of products can be produced for less money, since manufacturers will need to pay their workers less for the output of each unit of production. Which, of course, makes the manufacturer more competitive. If labor costs start to rise, then this can pose a threat to the viability of companies, because the production of products will start to cost them too much. Obviously, companies need to earn money to stay in business, so cheap labor is always preferable. Consumer or retail prices This type of data measures the price of a basket of goods and services consumed by an ordinary family to maintain the current standard of living. It includes clothing, food, rent, transportation expenses, and so on. In general, everything you need for food, sleep and earning enough money to survive. It is important because it reflects the inflation experienced by a typical family of a particular country. Here you need to ask yourself this question – are ordinary goods in general more expensive or cheaper for consumers? Will the consumer have more money in his pocket at the end of this year than at the end of the previous one? The answer can tell us a lot about whether the standard of living is rising or falling and what part of the economic cycle we are in now. Conclusion As you can see, when it comes to publishing fundamental economic data, many key concepts have to be taken into account. If you have difficulty assimilating or remembering all this information – try not to overload yourself! Use all the information and then you will earn more than the rest! Good luck!
Education
by DeGRAM
29
How do earnings releases affect PA?Lately, we have been seeing some dramatic sell offs from earnings. NFLX earnings tanked the stock and they weren't all that bad. TSLA's most recent earnings caused just over a 100 point sell off and they were positive. TSLA and SNAP's earnings are coming up today/tomorrow and we see some sustained selling. So this made me wonder, how do earnings really affect a large cap stock like FB and NFLX? Thanks to the miracles of quant trading and being a statistics based trader, I can isolate my data based on earnings releases to see what actually happens to the stock upon earnings releases and run some tests to determine significance. I am doing this with FB. Analysis: Since FB's history, there have been a total of 117 earnings releases. 87 have been positive releases (74%); and 30 have been negative releases (26%). What about price action? Okay, before I give the results I have to briefly explain what I did here. I isolated earnings day to the day immediately before the earnings release, the day of the earnings release and the day immediately after earnings release. So, earnings releases constitute a 3 day period in the data, this is because I know as a trader that the day leading up to, the day of, and the day following tend to have some dramatic reactions in PA. So what I did was I subtracted the close price of these earnings days from the close price of the day immediately proceeding the earnings days. As an example, if earnings were released on the 20th, then the 19th, 20th and 21st were all included as "earnings days" and their close price was subtracted from the 18th. Okay, now on the to the results: Of the positive earnings, the mean increase in price was 0.443. That means, on average, when there were positive results, FB closed an average of 0.44 cents higher on the earnings period. Of the negative earnings, the average increase in price was -2.93 with a Standard Deviation of 17.25. Meaning the average price dropped by $2.93. The chart below shows the degree of sell off by earning release date. Keep in mind, a NEGATIVE value means that the price INCREASED and a Positive value means that the price DROPPED: Whether earnings were negative or positive correlated to whether it sold off were in fact statistically significant when analyized via paired sample T-test. However, these numbers may interest you: Of the positive releases: 41% of the time there was actually a sell off and just over 58% had a marginal increase in price. The increase in price generally happened on the day AFTER the release. Of the negative releases: 26% had a sell off and 73% did not have a sell off (This is interesting, right?). Conclusion: - Earnings do correlate to PA; however, these correlations are not predictable - Negative earnings have resulted in a sell off 26% of the time - Positive earnings have resulted in a sell off 41% of the time That's it, leave your questions, comments and criticisms below! Trade safe everyone!
NASDAQ:METAEducation
by Steversteves
27
The Dunning–Kruger effectAfter recently doing a review of my last 6 months of trading, I recognized that my portfolio value over this period looked very similar to the Dunning–Kruger effect curve. (a psychological phenomenon that suggests people are not always the best evaluators of their own performance). The theory is often applied to trading because most retail traders experience a similar effect. After spending 3 months of a practice simulator, I deposited real funds into a trading platform. Within the first week I saw a 24% increase which was shortly followed by loosing half my account value in the coming months. I then decided to take two weeks out and reflect on my performance. It was in these two weeks where I stumbled across an article called "5 steps to becoming a trader" (which I have linked to this post). I came to realize that I was completely incompetent. I didn't follow my trading plans, I got caught up in emotions and I was almost gambling money away in the hopes of getting rich quick. The harsh reality is trading is hard. After a total of 9 month, I have only just managed to see a net positive return. I have spent thousands of hours only to be outperformed by an Index fund. One article won't change your performance, but these are some things that I learnt which could get you closer to conscious competence: 1. Don't trade with emotions, trade with your plan 2. Keep your risk/reward >1.75 3. Never risk enough money to loose sleep (enter each trade as if you have already lost the money you placed) 4. Reflect on performance and learn from mistakes 5. You don't need to win lots, you just need a mathematical edge As a trader gains more experience, they become increasingly confident and more likely to see positive returns. Stay dedicated!!!
NASDAQ:AAPLEducation
by UnknownUnicorn32021811
59
LET'S GET REAL: Stop Strategy Jumping!Hey Traders, This one is going to be a little bit different, a little bit deeper and a little bit harder to listen to rather than usual technical analysis. I recommend you sit down and listen to this. Have a think whether it relates to you or whether you found yourself in this position, or even if you've gone through this position and share your experience on how you go through it. A lot of traders struggle with their strategy, jumping from aspects of trading and that's why so many educators out there make a lot of money off of them. It is time to stop. In this video I outlay a challenge that I put to all the traders who may find themselves in this position to sit down and to thoroughly test their current or previous strategies and understand them on a deeper level. No more jumping around, no more looking outwards. Let's start looking inwards. Let's see the data that we have handed to us and what we can do to improve that data. If you enjoyed this video, please leave a comment. Leave a like, if we do get enough likes and comments, I will make a Part 2 on how to go about this with a more depth avenue while using different resources. As always, have a fantastic training week.
Education
by the5erstrading
222
What is a breakout? #breakout #Candlestick #TA #Tocademy Hello. This is Tommy. The lecture material I prepared today is a concept that must be well informed by TA(Technical Analysis) traders, especially in recent market where untraditional patterns, price actions and trends, as we call ‘scam moves’ occur all the time. I bet you are familiar seeing retail traders or chart analysts shouting “breakout!”. In order to derive market trends and price action/momentum, we find millions of technical variables such as trendline, channel, Fibonacci retracements, pivot levels, and other indicators, etc. Then we seek for behavior of price action by observing whether these variables are kept valid (not broken) or become invalid as soon as they are broken. Understanding and utilizing this behavior, we make trading decisions by deducting optimal zones to enter position(support/resistance), set stoploss/target price(bottom/top), and statistically giving weights on particular scenarios. In TA world, breakout means that the price has pierced through certain variables. It is commonly known that when the technical factors are broken, additional price momentum is expected towards the direction of the breakout. As the example above, let’s say that we found a falling trendline that are being formed, meaning that at certain point or area, trendline keeps pushing the price down forming LH(Lower High)s. As soon as the price pierce through the trendline, meaning that the trendline failed rejection, we say “trendline is broken above” and can expect more bullish rally. The direction of the trend would be vice versa when trendline under the price is broken below. So, we buy when PA is broken above and sell when PA is broken below. That sounds so simple huh? If it was that easy, everyone would be rich right now. I'm sure most of you reading this post are already aware that it's never easy. Why? It’s simple. In this world, there is no such thing as 100% “breakout”. To put it simply, everything we do based on the technical chart is somewhat relative, abstract, and subjective concept. It’s not like breakout has 100% succeeded, or failed but rather is more like breakout has succeeded in 60~70% chance. In other words, there are more than two possible future cases when we search and utilize breakout behavior. So, we traders need a reliable standard to statistically quantify the ‘degree of breakout’. The most basic way according to the ‘textbook’ is to consider closing price of candlestick firstly crossing the variable. As the price of the candlestick closes above the trendline as case 3, we give a decent weight on breakout scenario. However, case 2 is the one that confuses us every time. This is when the price did pierce through the trendline but closes below, usually leaving a long tail as a trace which sometimes is interpreted as a whipsaw. As soon as this happens, we have to admit that the chances and reliability is definitely lower than the case 3. It might be regarded as a false breakout or a noise if the trend continues afterwards and it might not actually. It’s a 50:50 call I would say. When you encounter case 2, to give you a little tip, try waiting a little more to observe next following candles. If the next following candlesticks keep closing prices below, I would raise the probability that the breakout is a false one. In fact, it is best to just not give any meaning on breakout in case 2. It itself is a risk to confirm whether the breakout is successful, not successfully, or false and thus try not take aggressive trades in this very case. Thank you for reading my posts. Trade Well! Your likes, comments, and subscriptions are the greatest motivations for me to upload more posts.
BITMEX:BTCUSD.PEducation
by Tommy_Trader
192
Not having a position is also a position - When trading is bad?Every day we start by choosing between long and short. Sometimes you wake up, look at the btc chart - and clearly see your setup. And sometimes you don't see it. But you still saw how many of your friends traded shorts successfully and decide to enter a hostile market. Bottom line: Lost profit, exhausted nerves, stress, a blow to self-esteem. Most traders forget that there is a third option - to stand aside. Let's discuss when such position can be useful and why most people use it so rarely. Pro traders can be split into 2 types: Bulls and bears. They trade for profit only in one direction, because they have a trained eye to see only their kind of setups. When a bull finds himself in a bear market, he either trades in the red or breakeven. The same true for the bear. And yet, even knowing this, the trader continues to trade unfriendly setups. Fueled by success that he carries from his market, he is sure that just a little more, a LITTLE LITTLE more, and he will be able to trade profitably in this market as well. "And if I can trade for profit in both directions, then I will become an absolute terminator and even Warren Buffett himself will personally beg me to share my market forecast with him!" I don’t know if you woke up with such thoughts in the morning, but I definitely had a couple of times. The answer to this phenomenon is GREED (for money or fame). And the easiest way to get rid of such incidents is to write the following rule in your trading algorithm (I hope you have it): • Trading during correction is prohibited. Just one sentence will save you a huge amount of money and help you increase your capital much faster. Instead of losing money trading corrections, it is better to: • Relax and spend part of your honestly earned profit on yourself and your loved ones. • Patiently wait for your market and return to the game. Do this - and trading will bring you much more pleasure, and you will earn even more and enjoy your life! If this article was useful to you, please like and leave a comment so that I understand that it has value to you and will continue to write educational material in the future✌️
Education
by Artem_Dishel
277
Making A Signal In Tradingview Pinescript In Under 20 MinutesHave you ever wanted to combine two technical analysis indicators into a single signal to find your own way of making profit? This video is a tutorial where I take two stock Tradingview Pinescript indicators and combine them into a signal that makes it easier for the user to spot with their eyes when an even occurs on a chart. By following along I hope the viewer can learn the basic process of repeating this for their own research!
SP:SPXEducation
by norok
26
How To Become A Profitable Trader: Part 1Hey guys! Today, I'm launching a video series about how to actually make money in the markets. This is the first video. At this point, it's a cliche, but I'll say it anyway: The first step to making money is not losing money. So many people lose money by committing unenforced errors. This video is simply about helping people see the obvious mistakes they are making, from the perspective of a professional trader who's been at this for 6+ years. One note: when talking about leverage, obviously with FX you may want to use some leverage because the %ATR is so low. But keep it under 10x. In the following videos, I will touch on: - How to understand trading any market on any timeframe - The basics of how to make a trade decision - Simple strategies I know work, and have seen work over a long period of time Hopefully you find this useful. LMK in a comment! -AW
NYSE:SQEducation
by PropNotes
123
HOW TO: Find the money making stocks, cryptos and FX pairsToday I'm going to be looking to something a little bit different than our normal analytics! We're going to dive into the tradingview screener! The Forex Screener specifically, but everything I do talk about does also apply to the crypto Screener and the stock Screener. What I want to explain is how I use it to find pairs, stocks and cryptos which are setting up the way I want them to, in order for me to day trade. I show how I use a range of different Bollinger bands to moving averages to overall technical aspects, like growth statistics or reaching all time highs. The Forex Screener and the tradingview tools that they offer is top of the range stuff. I recommend trying to figure out how to use them and how to utilize them to benefit you in your trading. Have a listen. Have a look yourself through the Tradingview screener and the different technical aspects in which you can change. I guarantee it'll streamline your process in finding the right pairs that you're going to choose when it comes down to day trading. I hope you enjoyed it. If you did, please leave a comment and a like. As always, have a very successful week of trading guys. Thank you.
Education
by the5erstrading
55
What's the worst trading advice you've ever heard?Hey everyone! 👋 Last year, we asked the community to share some of the best trading advice they’ve ever heard, and we got a ton of great (and hilarious) responses . This week, with a slow and choppy market across almost all asset classes, we thought it would be fun for people to list some of the WORST trading advice they’ve ever heard. It can be an individual call, or broader trading "principles”. No matter what it is, we’d love to hear it. The best two replies get a TradingView mug. Contest ends Wednesday at noon EST when we will announce the winners. Have a great week! -Team TradingView.
NASDAQ:TSLAEducation
by TradingView
652